Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
My Lords, welcome. Noble Lords know the drill by now, but if there is a vote in the Chamber we will suspend proceedings and allow noble Lords to vote. Let us kick off.
Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2023
(1 year, 3 months ago)
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Baroness Penn
That the Grand Committee do consider the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2023.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, this Government recognise the threat that economic crime poses to the UK and our international partners, and are committed to combating money laundering and terrorist financing. To help respond to these threats, and building on the recently enacted Economic Crime (Transparency and Enforcement) Act, the Government are currently taking through a second Bill, the Economic Crime and Corporate Transparency Bill, which will bear down on kleptocrats, criminals and terrorists who abuse the UK’s financial and services sectors.
The money laundering regulations provide the legislative framework for tackling money laundering and terrorist financing, and set out various measures that businesses must take to protect the UK from illicit financial flows. Under these regulations, businesses are required to conduct enhanced checks on business relationships and transactions with high-risk third countries. These are countries identified as having strategic deficiencies in their anti-money laundering and counterterrorist financing regimes that could pose a significant threat to the UK’s financial system.
This statutory instrument amends the money laundering regulations to update the UK’s list of high-risk third countries. It removes Cambodia and Morocco from the list to reflect changes agreed by the Financial Action Task Force, the global standard setter for anti-money laundering and counterterrorist financing. The FATF found that both Cambodia and Morocco have made the necessary domestic reforms to improve their compliance with FATF standards, which have been confirmed through on-site visits to both countries.
The Government will pass further changes in due course to add to the UK’s list of high-risk third countries those that the FATF added to its own list in February and June 2023. The reason for passing these changes separately is to give time to complete a full impact assessment for these additions.
This is the seventh SI amending the UK’s list of high-risk third countries to respond to the evolving risks from third countries. This update ensures that the UK remains at the forefront of global standards on anti-money laundering and counterterrorist financing. In 2018, the Financial Action Task Force assessed that the UK has one of the toughest anti-money laundering regimes in the world. The UK was a founding member of this international body, and we continue to work closely and align with international partners, such as the G7, to drive improvements in anti-money laundering and counterterrorist financing systems globally.
Lastly, this list of high-risk third countries is one of many mechanisms that the Government have to clamp down on illicit financial flows from overseas threats. We will continue to use other available mechanisms to respond to wider threats from other jurisdictions, including applying financial sanctions as necessary. This amendment will enable the money laundering regulations to continue to work as effectively as possible to protect the integrity of the UK financial system. It is crucial for protecting UK businesses and the financial system from money launderers and terrorist financiers. I therefore beg to move.
Lord Vaux of Harrowden (CB)
My Lords, I thank the Minister for introducing and explaining the regulations. I realise that all they do is follow the recommendations of the Financial Action Task Force, FATF, to change the list of countries designated as high risk and therefore subject to enhanced due diligence requirements in relation to anti-money laundering, counterterrorism financing and counterproliferation financing. In that respect, so far so uncontroversial.
It has to be said, however, that the list is somewhat surprising—both for those on it and, in particular, those not on it. The changes made by these regulations are also somewhat surprising: they remove Morocco and Cambodia from the high-risk list. It seems rather odd that Cambodia, which is generally regarded as among the most corrupt countries in Asia, is no longer treated as high risk. I am very fond of Cambodia and have spent a lot of time in that country, but that does not change the fact that it is extremely corrupt.
According to Transparency International’s Corruption Perceptions Index, Cambodia is ranked 150 out of 180 countries on the index. This is a slight improvement on previous years, but still considerably lower than many countries that remain on the high-risk list, such as Albania at 101, Panama at 101, the Philippines at 116, Barbados at 65, Burkina Faso at 77, Iran—which is on the blacklist—at 147, Jamaica at 69, Jordan at 61 and Mali at 137. I could go on. In fact, Cambodia has a worse corruption score than all but seven of the 27 countries that remain on the FATF high-risk list. It is not only Transparency International that ranks Cambodia badly. With perhaps more relevance to this regulation, the Basel AML Index ranks Cambodia as having globally the seventh worst money laundering and terrorism financing score. Despite that, we are reducing the level of due diligence that the regulated sector will have to apply to it. Seriously, is there anybody in this Room who believes that Cambodia should be treated better than, say, Gibraltar, Barbados or even the Philippines? I should like the Minister to look me in the eye and state that she really believes Cambodia is not a high-risk country for corruption.
This starts to beg the question about the value and legitimacy of the FATF high-risk assessment process, known as the mutual evaluation assessment. That value is called into even greater question when we look at the countries not included in the high-risk designation. I will give a high-profile example: until February of this year, Russia was a member of the FATF. In February, the FATF suspended its membership because of the war against Ukraine—somewhat belatedly, one could say. I emphasise “suspended”; Russia has not been expelled. It is evidently a paragon of virtue when it comes to money laundering and terrorism financing because, unlike the British territory of Gibraltar, Russia is not designated as high risk and therefore not subject to enhanced due diligence. It is odd, then, that we have spent so much time passing Bills in this House specifically to deal with the stolen laundered money coming from Russia. Almost unbelievably, in its last review of Russia in 2019, the FATF praised Russia’s efforts to prosecute terrorist financiers and suggested that AML/CFT is afforded the highest priority by the Russian Government. This is a country that finances and supports organisations such as the Wagner Group, while Putin’s Government is generally regarded as a kleptocracy. Other countries not on the list, and therefore not subject to enhanced due diligence, include such famously uncorrupt ones such as Somalia, Venezuela, Libya, Turkmenistan, Nicaragua and Zimbabwe, to name but a few. All score worse than Cambodia in the corruption index; all are apparently low risk, according to the FATF. The Explanatory Memorandum refers to the FATF’s “robust assessment processes”; frankly, those do not stand up terribly well to scrutiny, if this list is anything to go by.
It is worth quoting the recently departed FATF CEO, David Lewis, who was very highly regarded. He said the agency structure of “mid-level bureaucrats” means that it does not have the scale to take on the big global financial crime issues. He said that they are
“very comfortable dealing with the finest minutiae of technical detail, but aren’t comfortable or able to have big picture discussions and are often only in their jobs for one of two years”.
He stated that genuine reform of the FATF is difficult to achieve, with typically two to four countries blocking consensus, meaning it is rare that you can get any meaningful change, which probably explains the list we are looking at.
Concerns are often raised about the FATF’s lack of transparency. The minutes of plenary sessions that make these risk designations are not published and it is clear that political horse-trading plays a significant role in the decision-making process. To be fair, there is no doubt that the FATF has had a positive impact on global financial crime since its inception in 1989, but there are growing doubts about its ability to cope with the challenging global situation we currently face. In an article for RUSI, Tom Keatinge of the Centre for Financial Crime and Security Studies makes some helpful suggestions about how the FATF could be improved. He suggests, first, greater transparency: it should provide greater assurance of independence and oversight. Its activities should be overseen by an independent board and its evaluation should be independently reviewed, not subject to the evidently politicised horse-trading that occurs currently. The minutes of the plenaries should be published, or the plenaries themselves could be livestreamed. Secondly, it needs to create a dedicated technical-assistance capability to ensure that unintended negative consequences, such as financial exclusion and the use of the FATF recommendations by autocratic regimes against civil society organisations, are addressed.
Thirdly, he suggests that the FATF needs to show greater ambition. Ultimately, the question is whether it is addressing financial crime effectively. It currently evaluates how effectively its recommendations are implemented, but not the extent to which financial crime is addressed as a result. He suggests an independent review of the FATF’s effectiveness, which seems a simple and sensible suggestion 45 years after it was founded.
Fatima Alsancak, also of the Centre for Financial Crime and Security Studies, suggests that Russia is a good
“case study in the deficiencies of the … FATF mutual evaluation process, which allows countries with high levels of institutionalised corruption to complete their evaluations despite the lack of integrity in their AML systems”.
She goes on to say:
“It is essential for the watchdog to revisit its standards”,
and again highlights the need for greater transparency in the decision-making and listing process.
I was going to ask why South Africa, Nigeria, Croatia, Cameroon and Vietnam are not the list, but the Minister answered that in her opening statement. I mentioned earlier that Gibraltar, a British Overseas Territory, is on the high-risk list. Will she please comment on that, too?
There are important questions to answer about the value of the FATF evaluation process. We should not rely passively on what are, frankly, flawed recommendations. Do the Government agree that FATF’s procedures and the high-risk list itself appear to have important deficiencies and, if so, what are they doing about it? Do they agree with the recommendations that I referred to earlier?
Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Vaux, who made a probing and persuasive argument about the deficiencies in some of the process. I have two questions for the Minister.
In a debate on a previous instrument, in which I spoke, the Government made the case that, with the new freedom as a result of Brexit, they would immediately make the decision to remove British sovereignty by having an automatic updated list of the Financial Action Task Force. I thought that rather inconsistent with the argument that we had left the European Union to gain freedom: the very first act was to give that freedom away.
The noble Lord highlighted the inconsistencies, and I will add another. The Minister has heard me talk about the Wagner Group and its lack of proscription, and the fact that it operates almost with impunity in many countries. One of the countries in which it has been operating, which is not on the list, is Sudan. It is beyond me that the UK, having done excellent work through our diplomats, development and security operations in that conflict-afflicted country, would not want the ability to act immediately in putting Sudan on the list, whose two warring parties, the Sudanese Armed Forces and the Rapid Support Forces, are operating across organised crime, including conflict. Why would that not be a high-risk third country? If the Minister is saying that we have made the decision simply to adopt an external organisation for making determinations of what would be high-risk third countries, what was the point of seeking the sovereignty to make decisions ourselves?
My second question relates to the United Arab Emirates, which maintains its position on the list. I have asked for the text of the UK-UAE investment agreement, but it has not been forthcoming. Why not? If there is an investment agreement that binds the UK into certain preferential market treatment for financial vehicles within the UAE, and the UAE is on a UK list of high-risk third countries, we should, as a matter of good governance, be able to see the text of the UK-UAE investment agreement and to consider what elements in it ensure that we comply with all the elements that would be required of our financial relationship with the UAE. This is even more important given that, in Grand Committee debates on the sanctions regime for Russia, we have raised the joint ventures that operate between the UAE, Russia, the Wagner Group and countries such as Sudan. I hope the Minister will be able to respond by saying that new regulations will be brought forward at pace to ensure that these loopholes are now closed.
Lord Wallace of Saltaire (LD)
My Lords, we come to this with several of us having been involved in the economic crime Bill and the National Security Bill, in which we touched on a number of related issues. Some of us, indeed, complained when the economic crime Bill was before us that there was a tendency in that Bill to treat economic crime as if it was entirely domestic, when anyone who knows a small amount about the subject knows that all serious economic crime is transnational and that one has to co-operate actively with other countries to combat it.
There was no reference to the FATF in the discussions on the economic crime Bill, but I thank the Treasury very much for the extensive briefing that my noble friend Lord Fox and I were given the other week on the FATF. It was extremely helpful and detailed, and showed how actively some parts of the Treasury are engaged in—one has to say this in the light of the comment by the noble Lord, Lord Vaux—trying to make the FATF work, or work better.
The FATF is a large, multinational organisation. I used to teach a course in international relations when I was an academic at the London School of Economics. I had to explain that it is a miracle that any international organisation works, because the difficulties are so intense. One has to recognise that there are limits to how far you can get agreement when you have as many member states as the FATF has, many of which are autocracies and systemically corrupt themselves. This creates considerable difficulties.
I was struck, as was my colleague and noble friend Lord Purvis, by the oddity that we have of course regained our sovereignty by leaving the dreadful European Union, which produced regulations that we had to adopt, only to align ourselves entirely with a much larger, looser and more opaque organisation, the FATF, in which we apparently follow what the noble Lord, Lord Vaux, described as its idiosyncratic listings. As I understand it, this is the grey list rather than the blacklist. I will talk a little about who is on the list.
There are two UK overseas territories on the list, which are listed as third countries. I point out to start with that the idea that an overseas territory is a third country is incompatible with the definition of a British Overseas Territory. That corresponds to the deep ambiguity with which the relationship between His Majesty’s Government and the overseas territories is carried on in so many different areas. It is, one would have thought, a scandal of British governance that there are overseas territories on the grey list. When I mentioned some issues to do with Gibraltar on the economic crime Bill, I rapidly received a communication from the Gibraltar Government. I am sure that the noble Lord, Lord Vaux, will shortly receive one in his turn. I understand that the fact that Gibraltar is still on the list relates more to delays in carrying a number of things through the Gibraltar Government than to the depths of the problem. The Cayman Islands, I suspect, is a more serious problem.
The Gibraltar Government said to me, “You have to understand that it is very much part of our position that we are entirely independent in how we carry through our adoption of these various new proposals”. As far as international illicit finance is concerned, the Treasury should be concerned that several British Overseas Territories—not just these two—have some things to answer on this area. They benefit from UK sovereignty and the UK system of law. In turn, that puts obligations on them to follow much more closely than some do, some of the time, British standards in this respect.
I hope that the Treasury has an active dialogue with the FCDO, which is responsible for the overseas territories, and that it pushes the Foreign Office to ensure that the overseas territories do not, as they have in a number of other areas, say that they will meet British standards— I am talking about transparency in beneficial ownership —then spend much longer than we had anticipated bringing their domestic practices in line with what the UK Government recommend.
I follow my noble friend Lord Purvis in asking some questions about the UAE, which is a major financial centre and has close links with the UK. There are 100,000 British citizens living there, some of them wealthy expats. The fact that the UAE is also on the grey list is a matter of real concern. I am sure that the Minister is aware that the largest donation given to the Conservative Party in the first three months of this year came from someone whose financial interests are centred in Dubai; I understand that the donor is also the treasurer of the Conservative Party and a former Minister in an Egyptian Government. This is just one illustration of how we perhaps ought to pay more attention to the delicacy of our financial and political relations with the UAE. On the importance of Dubai and Abu Dhabi as financial centres, as well as the worries and proper concerns that one has about them, I, alongside my noble friend Lord Purvis, note that the Wagner Group has managed its various transactions and financial arrangements through Dubai; this is not something that we should be happy about at all.
There are a number of questions to answer here. I am grateful for the briefing on the FATF that the Treasury provided for us, but Parliament deserves to be told more about this murky area of finance in which not just the overseas territories but, dare one say it, sometimes our Crown dependencies are caught up and which we ought to be more actively engaged in cleaning up as far as we can.
Baroness Chapman of Darlington (Lab)
My Lords, I am aware that we always follow the FATF’s recommendations but, given what we have just heard, it is just as well that we have this procedure as an opportunity to ask the Minister about some issues of concern that arise from the recommendations we are considering. I will not repeat everything that has already been said, because immediately following this we have another SI that took three and a half hours to consider in the Commons and, looking around the Room, I anticipate that it may take a little while this afternoon as well.
This instrument is perhaps relatively straightforward, but I will highlight a couple of the points that have been made in which we are especially interested. On the issue of reputation and our overseas territories, the fact is that Gibraltar and the Cayman Islands are on this list. Do the Government think that this has any reputational impact on the UK? What is the Government’s assessment of that? When this issue was considered in the Commons, providing some kind of support or input from the UK to Gibraltar to move things along was discussed. I do not think that the Minister there gave a particularly expansive response at that point so it might be helpful, if there is an opportunity, to hear from the Minister here today whether a request has been made by Gibraltar and whether any input has been forthcoming from the UK.
I will leave it there for today, given the next SI that we will consider and the fulsome contributions that have already been made by others, which I know the Minister will answer fully.
Baroness Penn (Con)
My Lords, I thank noble Lords for their contributions to this debate. I know that we have also touched on this issue in other Bills progressing through the House.
I will start with the FATF process. As I think I said in my opening speech, the UK is an active member of the FATF. We participate in mutual country evaluations, looking at its processes and rules, which we are fully supportive of. Indeed, we were a founding member of the FATF. The processes are agreed internationally and based on rigorous, detailed and robust technical assessment. The FATF also regularly co-ordinates with other major international organisations.
It is worth saying two further things on the FATF. First, as a member of the FATF, we will always look to improve its work and processes and we will always reflect on those. Secondly, it is an important piece of the picture on setting standards for international action on anti-money laundering and counterterrorist financing, but it is only one piece of the picture when it comes to the UK’s overall approach towards tackling economic crime more broadly and some of the issues raised in today’s debate.
Cambodia being delisted is within the scope of the SI. Cambodia has addressed key deficiencies relating to the legal framework for international co-operation and preventive measures, risk-based supervision, financial intelligence, investigation and prosecution of money laundering, asset confiscation and targeted financial sanctions for proliferation financing. By addressing those deficiencies, Cambodia met the criteria to be removed from the list.
The noble Lord, Lord Vaux, also raised Russia’s membership of the FATF. As he noted, in February 2023 the FATF suspended Russia from the organisation. It continues to call on all jurisdictions to remain vigilant to threats to integrity, safety and security of the international financial system arising from the Russian Federation’s aggression in Ukraine. We are absolutely clear that Russia’s actions run counter to the principles on which the FATF is based and we fully support the ongoing suspension of Russia’s membership of the FATF. We have taken a wide range of measures against Russia, including the most extensive sanctions regime that we have ever put in place. We will continue to bear down on the Russian state in that way.
The noble Lord, Lord Wallace, and the noble Baroness, Lady Chapman, asked about the overseas territories and Crown dependencies. The UK has engaged with both on this issue to share best practice, improve understanding of risks and increase compliance with the FATF standards. I went to the ministerial meeting of MONEYVAL, which is a regional organisation that feeds into the FATF process. Some of the Crown dependencies are members and I met the Ministers responsible for FATF compliance as part of that forum. We will continue doing that, as several of the Crown dependencies have assessments that are either ongoing or upcoming this year.
Gibraltar and the Cayman Islands were mentioned. Gibraltar continues to make good progress against its action plan with only one action remaining—for it to show that it can pursue more final asset confiscation judgments commensurate with its high-risk profile. When it comes to that action, judgments coming through can take time and that timing is not all within Gibraltar’s control.
I met representatives from the Cayman Islands this year and we touched on this area. They have made significant progress in addressing deficiencies since the Cayman Islands were listed in February 2021. In June 2023—just last month—the FATF made the initial determination that the Cayman Islands have substantially completed their action plan. On this basis, it plans to conduct an on-site visit in September to verify this, which is the final stage before delisting. We have a positive story to tell in both those areas.
Lord Purvis of Tweed (LD)
I look forward to the Minister writing to me, because I was a little alarmed to hear her say—if I heard her correctly—that the UK would work with Sudan on this. There is no one to work with in Sudan at the moment and, if a case cannot be made for the UK not to act on Sudan, which has a civil war, with two warring partners and with considerable financial interests on each side—SAF and RSF—then I cannot see a case that would be stronger.
Baroness Penn (Con)
I will write on Sudan to the noble Lord, Lord Purvis, as I committed to do, and I will copy in the Members in this debate.
The UAE is making swift progress on its FATF action plan. It has several actions still to complete, focused on money laundering investigations, transparency of beneficial ownership and the investigation of money laundering cases. We hope to see further progress on those areas, as it looks to deliver on its action plan.
I have not managed to cover in detail all the points raised by noble Lords. They have gone slightly wider than the countries in question on the listing today, but I understand noble Lords’ interest in the process that we use to update these lists, adhering to international standards. I will read Hansard and ensure that I write to noble Lords if I have not addressed any questions.
Postal Packets (Miscellaneous Amendments) Regulations 2023
(1 year, 3 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Penn
That the Grand Committee do consider the Postal Packets (Miscellaneous Amendments) Regulations 2023.
Relevant document: 46th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, this statutory instrument will provide United Kingdom authorities with powers in relation to postal packets—parcels—moving from Great Britain to Northern Ireland. It does nothing more or less than that. It does not itself put in place the wider Windsor Framework arrangements.
These powers are part of delivering what we promised for consumers and businesses in Northern Ireland. They are necessary to ensure that we can implement the Windsor Framework and remove the burdensome regime that the old Northern Ireland protocol would ultimately have required. I am aware of some misunderstanding about what the Windsor Framework requires in respect of parcel movements, so I will attempt to address that also in my opening remarks.
Had it been fully implemented, the Northern Ireland protocol would have required international customs processes for all parcel movements from Great Britain to Northern Ireland. On the new arrangements, it is worth dealing up front with some of the issues where there has perhaps been a misunderstanding about what will be required in future under the Windsor Framework. In short, I would like to provide some reassurances to noble Lords in that regard.
First, someone in Great Britain sending a parcel to their friends and family in Northern Ireland will not need to engage with any customs processes under the Windsor Framework. Nothing will change for those movements, compared with today. Similarly, Northern Ireland recipients of parcels sent by their friends and family in Great Britain will not need to engage with any customs processes. For example, a grandson in Liverpool sending a package to his grandmother in Belfast will not need to do anything new to send the package and his grandmother will not need to do anything new to receive it.
British businesses in Great Britain selling to Northern Ireland consumers will not need to complete customs declarations, international or otherwise, and Northern Ireland consumers buying from sellers in Great Britain, including via online shopping, will not need to engage with any customs processes. They will buy from the seller in Great Britain and receive their goods without doing anything new.
I emphasise that this means the Windsor Framework explicitly removes one of the most onerous requirements on goods being sold to Northern Ireland consumers and, of course, on goods being sent to friends and families. There will be no routine checks or controls applied to parcels, with interventions only on the basis of a risk-based, intelligence-led approach. This means that the overwhelming majority of parcels will not be subject to checks.
I turn to parcels sent from a business in Great Britain to a Northern Ireland business. These will be treated the same as equivalent freight movements: they can be moved through the new green lane where eligible when it is introduced from October 2024. As with freight movements, the green lane will ensure that eligible goods will no longer require international customs processes. They will instead require only the provision of routine commercial information. Movements via the red lane, including goods destined for the EU, will be subject to the customs processes required by the EU, as noble Lords would expect.
The Prime Minister negotiated the Windsor Framework to ensure that consumers and businesses in Northern Ireland—and, indeed, British businesses selling into Northern Ireland—could benefit by protecting internal trade within the UK. The Government need to ensure that the powers of HMRC and Border Force are sufficient to allow them to monitor the rules for movements of parcels and that, where certain requirements are in place, they can be enforced.
The Secondary Legislation Scrutiny Committee’s report suggested that we clarify the rationale for bringing the instrument into force on 31 August. There is a limited range of prohibited or restricted goods that the UK Government accept are required to comply with EU customs rules today—for example, certain drug precursor chemicals or products derived from or associated with endangered species covered by CITES. HMRC and Border Force cannot currently enforce these requirements, which is why this statutory instrument is needed now rather than in a year. The same powers will be used in respect of the new parcels arrangements that will come into force through the Windsor Framework arrangements for parcels from 30 September 2024. This is so that we are able to determine that parcels destined for the EU can be detected and ensure that they follow the requirements of the red lane.
The committee’s report also noted that arguments had been submitted to it that these regulations would contravene the principle of unfettered access within the UK by introducing a customs border. A submission by the Democratic Unionist Party argues that they would be contrary to the Good Friday agreement.
The Government recognise that there are a range of views on the Windsor Framework. Our view as the Government—as the Prime Minister and the Secretary of State for Northern Ireland have made clear—is that the arrangements support and protect the Good Friday or Belfast agreement in all its parts. They protect the integrity of the European Union’s single market and Northern Ireland’s place in the United Kingdom’s internal market. These regulations are discrete and relate solely to powers available to HMRC and Border Force. That said, I hope I have provided some reassurance about what the Windsor Framework does and does not require, and therefore what the powers granted by the regulations will be used to monitor and enforce.
The report also notes the absence of a public consultation. It is the Government’s view that a public consultation on an SI of such limited scope is unnecessary. The instrument implements requirements under the Windsor Framework that have been discussed extensively. The Treasury and HMRC continue to engage with a wide range of businesses and sectors, and indeed with fast parcel operators, on both this SI and the wider Windsor Framework.
In summary, the parcel arrangements set out under the Windsor Framework are a significant improvement when compared with the requirements under the old Northern Ireland protocol. But as well as comparing them with what the protocol would have required, it is vital to understand how little will change compared with the status quo for the vast majority of Northern Ireland parcel recipients and those in Great Britain sending goods to them. This statutory instrument is not a barrier but an enabler to the agreement that we have negotiated. I therefore beg to move.
Lord Dodds of Duncairn (DUP)
My Lords, I thank the Minister for outlining the purposes of the regulations before us. As noble Lords probably know, just the other day this was a matter of some heated debate in a Delegated Legislation Committee in the other place, and was subject to a vote in that House yesterday evening. Some consternation was expressed in the other place about the manner in which the Government had removed Members from that committee and replaced them with those who would vote these regulations through, but that is a matter for another day and it can be followed by reading Hansard on those committee proceedings.
The Minister said probably the most significant thing at the very end of her speech: these regulations facilitate the Windsor Framework. A lot of the debate is about the benefits of the Windsor Framework compared with the protocol as originally agreed, but the regulations before us are not about implementing the Windsor Framework; they are purely about creating the border for parcels between Great Britain and Northern Ireland. After that, we come on to the Windsor Framework, which is all about the EU law in which it decided, after discussions, to reduce the requirements that would normally be in place to move parcels into the EU for Northern Ireland.
But that is not what is before this Committee. Before this Committee is purely the creation of the parcels border. Whatever the EU then decides to do, whether by agreement or unilaterally, is facilitated by that border. It is our job as parliamentarians to examine the actual regulations before us, not necessarily today, although we can comment on them. The Windsor Framework proposals, which are in EU legislation, are separate, but I will reference them and no doubt they will be referenced by other speakers in this Committee.
The regulations treat Northern Ireland as if it is a foreign country for the purposes of moving parcels. They put in place another piece of the jigsaw of the Irish Sea border. They do not ameliorate or remove it; this is a new creation that is not here at present. Their effect is to separate Northern Ireland from the rest of the United Kingdom in the sense of placing it outside the same single market as Great Britain for postal purposes.
They amend the Postal Services Act 2000 and the Postal Packets (Revenue and Customs) Regulations 2011, so that movements from Great Britain to Northern Ireland cease to be unfettered within the same single market and become fettered by a customs barrier that effectively divides them into two single markets. As a consequence of the legislation before the Committee, postal packages destined for Northern Ireland from Great Britain have to be placed in the same group as packages destined for foreign countries. The definition of “export” is changed to include movements from Great Britain to Northern Ireland. Reference to the United Kingdom has to be removed so that the only references in play are Great Britain and Northern Ireland, with the UK single postal market terminated.
Baroness Ritchie of Downpatrick (Lab)
My Lords, I declare my interest as a member of the Secondary Legislation Scrutiny Committee, which has looked at this statutory instrument in some detail. As the Minister said, we had several questions and we are still seeking clarification. I am also a member of the Protocol on Ireland/Northern Ireland Sub-Committee.
I support the Windsor Framework and appreciate that this statutory instrument addresses business-to-business customs checks. For the wholeness of this debate, it is important that we in Northern Ireland can avail ourselves of our unique opportunities, being a member of the UK internal market and able to access the EU single market. There are major economic opportunities there, and the people of Northern Ireland should see them fully utilised and realised in order to underpin our economy.
Recently, I saw some interesting figures about economies within the UK. Northern Ireland was quite far down the scale, but it came up to about number 2 earlier this year. A contributory factor was us in Northern Ireland being able to avail ourselves of both markets.
Although I support this statutory instrument, I have several questions. The noble Lord, Lord Dodds, referred to the burdens being placed on business. We members of your Lordships’ committee on the protocol and the Windsor Framework have just completed our report, which will be published next week. We looked at labelling. Will the parcels have to indicate that they are not for the EU and therefore not going through a certain lane? There are potential burdens and expenses there for businesses in Britain, and that has to be explored. What discussions have taken place with potential businesses? What information is available to them about requirements and practical arrangements?
My queries about the statutory instrument relate to the process of compiling it—the very issues raised by our standing committee on statutory instruments. I have several questions concerning three points. The measures that allow powers in relation to existing requirements, as opposed to those deriving from the Windsor Framework, have not been well explained. Why is this the case? Will a better explanation be provided for businesses? The noble Baroness referred to existing requirements in her concluding remarks about the dates for this to come into force, but what are those existing arrangements? The noble Lord, Lord Dodds, referred to this.
Why do the powers to enforce those arrangements not currently exist? Why are they needed, and what do the “appropriate powers”, which are now being taken, mean in practice? As a consequence of representations made by our committee, a revised Explanatory Memorandum was laid on 6 July and referred to “restricted goods” and better managing “any risks of smuggling”. Can the Minister provide further clarification and elucidation of this?
On the details of this coming into force, which the Minister referred to at the end, I note that the statutory instrument says that it will come into force on 31 August 2023. But others suggest that the arrangements will not come into force until September 2024, so why the urgency in scrutiny before parliamentary recess? What powers are being introduced that have effect before 30 September 2024 and why are they needed now? Do these relate to the existing arrangements and requirements?
Why was there no consultation with businesses, either in Britain or Northern Ireland? Why not consult on how the changes will be implemented? If it will affect only a small sector, would it not have been prudent to have a consultation? Why the lack of an impact assessment? Some who made comments to our committee raised the lack of an impact assessment. From memory, I believe that the Road Haulage Association, which will be directly involved in a lot of this, indicated that.
Lord Weir of Ballyholme (DUP)
The approach taken to this statutory instrument, both in this House and when it was introduced earlier this week in another place, has very much been one of, “No worries, there’s nothing to see here”. As with a car crash at the side of the road, we have been directed that there is nothing really to worry us. Indeed, in another place, the Minister tried to give an assurance that this is
“a very, very small SI”.—[Official Report, Commons, Second Delegated Legislation Committee, 17/7/23; col. 16.]
When this instrument was introduced in the other place, reference was made on four occasions to the fact that no change is being made, or words to that effect. That phrase has been echoed today by the Minister here, yet I suggest that significant changes are being made. For example, as has been mentioned, for the first time ever, parcels moving from Great Britain to Northern Ireland will be put in a separate category and categorised alongside parcels from a foreign third country. For the first time ever, the UK market is being divided between the rest of the United Kingdom and Northern Ireland, but we are told that there is no change. For the first time ever, parcels going from Great Britain to Northern Ireland will be categorised and defined in the same way as exports and imports but, again, we are told that no change is being made. These are not simply changes in processes that could be dropped at the whim of any Minister. These are being put in place directly in the law of the land via legislation.
Similarly, let us look at the wording of the regulations. The Explanatory Note makes reference to the fact that part of the purpose of the regulations is
“to make provision to apply such enactments relating to customs and excise as are for the time being in force to goods contained in postal packets sent from Great Britain to Northern Ireland, and to ensure that duties and other charges payable in connection with such postal packets are recoverable by the postal operator concerned”.
They will give directly a power to impose customs duties and a financial burden, albeit one that will supposedly be reimbursed, yet we are told that there is no real change here.
In their boast, the Government also tell us that this SI is an improvement on the protocol. In some ways it is, although we should always remember who brought about the protocol in the first place. The remarkable extent to which the Government are distancing themselves from the protocol that they negotiated is unusual in and of itself but the great boast of the Government—reiterated in both Houses—is that an individual sending a parcel to a friend or family member in Northern Ireland can do so without having to fill in customs declarations. They say we should be grateful that a granny in Liverpool is able to send something to her grandchild in Belfast. However, we should also remember that that is on the basis, as has been particularly referenced in EU legislation recently, of an exemption. The opportunity for the granny to do this is at the grace and favour of the European Union. There is a clear diminution of sovereignty yet we are told that, like grateful natives, we ought to be suitably delighted that this has been given to us.
Similarly, it has been indicated that if a business is sending a package to an individual consumer there will no customs declarations required, but I seek some information from the Minister. For a business to do that, will it have to be part of a trusted trader scheme? Also, because it is put on the same basis as freight, presumably any business-to-business supply could be only where that business is part of the trusted trader scheme.
Leaving aside the general concerns that we have with that, some movements—particularly if we talk about something that is to be moved in a parcel—may be very infrequent between two businesses in different parts of the United Kingdom. Many businesses will come to the conclusion that going through the bureaucracy of having to join a trusted trader scheme for an occasional movement of goods to Northern Ireland is simply not worth it. What we are likely to see, which is also part of the purpose of what has been put in place, is diversion of trade. People and businesses will simply seek to source from outside the United Kingdom.
It has also been indicated in another House that the new powers to be given to HMRC and Border Force are to stop illicit goods—a very accurate but misleading term—moving from Great Britain to Northern Ireland. Let us remember that we are talking about giving powers to Border Force for movements entirely within the United Kingdom—from one part of it to another. When one talks of illicit goods, it conjures up a mental image of drug packages or another form of something illegal. But the powers already exist to stop movements of those goods, so when we talk about illicit goods we are really talking about goods that contravene what the EU says. This is not for something entering the single market but within the internal UK market.
I note that the Secondary Legislation Scrutiny Committee has mentioned the question, which has not been answered particularly satisfactorily, of why, despite the fact that provisions are due to take place in 2024, these regulations are effectively being brought in now. When pressed on that in another place, the Minister gave two examples. One was: what if hazardous substances were being moved about? If hazardous substances were being moved by parcel, that should be a concern if it was moving from Glasgow to London, let alone coming into Northern Ireland. I am not quite sure why a provision needs to be put in place for that.
The other example given in another place was the risk of blood diamonds being moved. I have not had a recent conversation with my local postman. I am not altogether sure that they would tell me that they are burdened each day with blood diamonds moving from Sierra Leone or Liberia through Great Britain—because it would have to be there—and then on to Northern Ireland, with the risk of them moving into the EU. But supposedly, that is the excuse as to why these additional powers need to be given. Again, we are told there are no real changes.
Finally, in another place there was a subject of much controversy. This statutory instrument is so innocuous that the Government took the unprecedented step of removing five of their own MPs from the committee that was scrutinising it. One of the MPs said that whenever he indicated any level of scepticism towards it, he was first asked whether he would be happy enough to remove himself from the committee. When he said that he was not, he was then told, “Perhaps you want to take a week off—have a week’s holiday”. I think that MP missed a trick because, if they had held out with the Whips, perhaps the soon to be vacant post at the Ministry of Defence could have been lobbed in their direction as a reward for not being on the committee.
That is against the background that we should all be relaxed, as there is no real change. Rather than that argument, there is an equally strong argument that it changes everything for our sovereignty or is the first step towards that. I simply say to the Government that we are opposed to this statutory instrument, but it is high time that they, instead of doubling down and pretending with spin that everything is perfect, actually face the realities and make the changes that need to take place to restore the internal market of the United Kingdom. Once those changes are properly made and the union is restored, we can begin to see proper progress in Northern Ireland.
Baroness Hoey (Non-Afl)
My Lords, in as short a time as a few months, noble Lords will realise just how serious these regulations are. It will be the first of many statutory instruments that result from the Windsor Framework or, indirectly or directly, from the European Union’s attitude to it. As we all know if we read the Windsor Framework, and what the Government and the EU said, they are very different. Even on these postal packets regulations, it is very different.
A number of noble Lords referred to what the Secondary Legislation Scrutiny Committee said about why there is a rush—why the hurry? Why the Government want to rush this through is very straightforward. They know that, as time goes on and there is more detail, scrutiny and need to work with this in, for example, sub-post offices across the country or through customs officials, we will see that this is not right. It is not going to work. They want to get it through.
It has been mentioned, so I do not want to go into what happened in more detail. I sat through the committee on this SI in the other place, and it is absolutely shocking that our Government have so little confidence in their own Members that they had to remove five of them because they knew that they would not get their support. That was because those Members had read it. They had read it and listened, and they knew what they needed to do, because what the Government had decided was not right or good for the people of Northern Ireland and certainly not for the union.
These regulations are, without doubt, changing the status of Northern Ireland such that it is being treated as a foreign country and a foreign part of the administration of the United Kingdom. For some people, that is fine. Some people do not really care about Northern Ireland. Let us face it: there are an awful lot of Members, not necessarily in this House but in Parliament generally, who probably think, “Oh, Northern Ireland—what a nuisance. If only we could forget about it”. This is precisely what many people who do not care about Northern Ireland want to see happening—this dividing, this moving, this drip, drip, drip taking Northern Ireland further and further from the rest of the United Kingdom.
Imagine a young person coming to this country as a student, sending a parcel. The Government are saying that it will not be very different, but we know that the European Union will eventually decide whether even individual parcels from person to person will need authorisation from somewhere. That is not for the person at the moment, but someone in the sub-post office will have to get the authorisation and that is going to cost money. Who is going to pay for that? There are business-to-business costs from that. More and more costs mean more businesses in Great Britain being clear that they will not bother sending things to Northern Ireland. This is happening already and is going to happen even more.
Imagine a young student coming over here to England and deciding to send a parcel to their grandfather. They will be told that they are sending it to a foreign country. That is quite outrageous. The instrument has the same instruction for Regulations 5, 6, 9, 15, 20 and 21, namely to insert
“and all GB-NI postal packets”
after “foreign postal packets”. It is quite outrageous that people in Northern Ireland who have given so much loyalty to this country—so many people died during world wars—are now being repaid by this glibness around how they are treated.
Lord McCrea of Magherafelt and Cookstown (DUP)
My Lords, I thank the Minister for outlining these regulations as she and the Government desire to present them. As we look closer at them, and upon further investigation, we know that the reality for people living in Northern Ireland will be quite different.
What does the Minister think Northern Ireland’s constitutional position is? Is it a part of the United Kingdom or not? In reality, all the Government are doing through this statutory instrument, these regulations, is strengthening opposition to the Windsor Framework within the unionist population in Northern Ireland because people are seeing the unfolding of the reality. The reality is that the Windsor Framework was sold by the Prime Minister and the Secretary of State for Northern Ireland on spin, not reality.
These regulations directly contradict what the Prime Minister stated when introducing the Windsor Framework on 27 February, namely that it
“removes any sense of a border in the Irish Sea”.
That is a very clear statement. So, does it? In reality, the framework deepens the border in the Irish Sea rather than removing it and does so without there being any redeeming upside in the regulations, which the Government claim exist and existed in the Stormont brake SI.
The regulations have been the subject of a critical report from the Secondary Legislation Scrutiny Committee, which called attention to them on the grounds of there being no consultation or impact assessment. It also highlighted the Government’s refusal to answer key questions about the regulations, which creates the clear impression that they are hiding something.
The fact that the Government seek to hide the true implications of these regulations is reflected in the answers that they provided to the Secondary Legislation Scrutiny Committee. Specifically, they claim that the impact of the regulations is modest and that they just need to be able to give HMRC and the border agency powers to detain and seize illicit movements. In an effort to change the subject, they go on to talk about the introduction of a “green lane” for packages on 1 October. Specifically, they say that their purpose is to secure the integrity of the Windsor Framework by
“ensuring that Border Force and HMRC have powers to detain, inspect, and seize goods moved illicitly in parcels from GB to NI”.
It is interesting that, when the committee in the other place discussed this, attention was drawn to the Minister’s reply that she was concerned about “hazardous” substances, “invasive species” and other things mentioned in the Explanatory Memorandum being transferred by post from Great Britain to Northern Ireland. However, would the Minister not be concerned about them being transferred in parcels from London to Scotland or to Wales? If the regulations are all about protecting markets, why are the Government singling out Northern Ireland?
It sounds reasonable that provision should be made so that the requisite authorities can detain illicit movements, for example of drugs, in parcels but, through the deployment of “illicit”, these words conceal the fact that what is in view is not the movement of drugs and the like but, rather, any goods movements across the border created by these regulations that is in violation of them—movements that are perfectly legal today and just part of what being in the same single market means. Therefore, rather than restoring Northern Ireland’s place in the United Kingdom single market, these regulations give effect to the additional sense in which Northern Ireland is placed outside the single market, which is increasingly becoming a Great Britain single market.
The simple effect of these regulations is to build in the Irish Sea a border that currently does not exist, in relation to which full customs requirements can be made. The consequences of this include packets going from Great Britain to Northern Ireland having to be put in the same category as foreign packages. That is why I asked this question: where does the Minister see Northern Ireland? Is it a foreign country, a third country, or is it a full constituent part of the United Kingdom, equal to every other part? The definition of “exporting” is being changed to include movements from Great Britain to Northern Ireland, replacing references to “the United Kingdom” with “Great Britain”. On the question about what the Minister thinks, empty words and rhetoric will not be sufficient because this is reality. These regulations—the statutory instrument—are reality.
The Minister and the Government mentioned the Belfast agreement—I have no doubt that others will before this debate is finished—and how it is so important to protect it. It constitutes international law. At the heart of the agreement is the following statement:
“acknowledge that while a substantial section of the people in Northern Ireland share the legitimate wish of a majority of the people of the island of Ireland for a united Ireland, the present wish of a majority of the people of Northern Ireland, freely exercised and legitimate, is to maintain the Union and, accordingly, that Northern Ireland’s status as part of the United Kingdom reflects and relies upon that wish; and that it would be wrong to make any change in the status of Northern Ireland save with the consent of a majority of its people”.
I believe that the Postal Packets (Miscellaneous Amendments) Regulations 2023 plainly change the status of Northern Ireland such that it is to be treated as foreign with respect to the rest of the United Kingdom for some custom purposes. That is totally wrong and is deeply offensive to the people of Northern Ireland who, as the noble Baroness, Lady Hoey, mentioned a few moments ago, sacrificed so much——many of them gave their lives—to remain part of this great, cherished United Kingdom.
Lord Berkeley (Lab)
My Lords, I rise to speak briefly about another milestone in what I see as the postal service’s disaster this week. I listened very carefully to what noble Lords said about the parcel service, or lack of, between Britain and Northern Ireland, but the other disaster is what many people call the most widespread injustice in British legal history, which is the Horizon IT inquiry. Will we have post offices at all in the future and will they operate properly? It is a very serious issue. The chair of the inquiry, Sir Wyn Williams, published his first interim report on 17 July, which is well documented in the Guardian today. I will give a few highlights of this long-running matter, which has been going on for 20 to 30 years. There are comments that Post Office staff were grouping the suspected postmasters, most of whom have been demonstrated to be innocent, by the colour of their skin. I find it quite extraordinary that this can happen in this century—this was in 2011.
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
My Lords, the Division Bell is ringing, so let us suspend proceedings for eight minutes. Scamper off, rush back, and we will carry on.
Lord Berkeley (Lab)
I shall be quick, my Lords, because we have been at this for some time.
I was just saying that the Post Office has been continuing to prosecute innocent people. Suddenly, it has found 4,767 new documents, which will of course have to go into the inquiry, delaying it further. I suggest that it is not co-operating at all fully with the inquiry. Nevertheless, its chief executive got a bonus of £455,000 last year, so he must be all right. Fifty executives also got bonuses relating to the inquiry. I ask the Minister this, very gently: can the Government finally get a grip of this organisation? Most importantly, will they read the start of Wyn Williams’s report, which was published yesterday and says that the compensation schemes are running late? It also states:
“Under the legislation now in force all payments of compensation … must be made by 7 August 2024. My current view is that this will not be achieved”.
That is a terrible reflection on Ministers over the years—it is not just the present lot but many other people—but I hope that the Minister can give us some comfort that, once and for all, the Government will get a grip of this horrible project.
Lord Purvis of Tweed (LD)
My Lords, it will spare the blushes of the noble Lords, Lord Dodds and Lord Weir, for them not yet to be in their places to hear me say that I agree with everything that they said. The debate that we have had, while more respectful and with more decorum than the extraordinary scenes in the committee of the House of Commons on Monday, does not undermine the seriousness of the measures that we are being asked to approve. “Yes Minister” could probably have had an episode on how to bring forward regulations with considerable impact and long-term consequences, but with an innocuous title, by taking powers very early, before they are necessary, without consulting those who have to implement them and without giving any data on their likely impact and, as a security measure, removing members of a committee which is asked to approve the regulations because you know that they will be significantly concerned about them.
I hope that this is not a trend. As the Minister said, this is not about implementing the Windsor Framework, but I hope that it does not start a precedent for how the Windsor Framework will be implemented. We were told, notwithstanding noble Lords’ concerns in a debate that we had on the Windsor Framework and the view of the noble Baroness, Lady Ritchie, on the wider issue with the framework, that it was starting a new chapter. I hoped that that new chapter would be about transparency, openness, consultation, trying to build consensus, notwithstanding how difficult it would be, and bringing people with the Government on implementation, but this is in stark contrast to the way forward.
Stephen Farry MP intervened on the Minister on Monday calling for support for the business community in GB trading with Northern Ireland. I reiterate that call. It is necessary to carry on the support that is being provided to businesses to overcome some of the difficulties in the Government’s initial protocol so that they can overcome the difficulties that they will face with the implementation of the Windsor Framework. The Road Haulage Association said very clearly that this measure will bring new burdens on business and add to bureaucracy. That is not unfettering. The noble Lord, Lord Dodds, was absolutely correct: this is fettering internal UK trade.
The Minister in the House of Commons said that this SI was the result of “a hard compromise”. That language was not used by the Minister here. It is, to some extent, more honest to say that it results from a hard compromise but when the Government have made that compromise, they then have to own it and act honestly and openly.
Let me give one example of where there is still confusion. I commend the Secondary Legislation Scrutiny Committee’s report. I hope the Minister will have clear responses to its strong recommendations and concerns. They were not made lightly, as the noble Baroness, Lady Ritchie, indicated, but followed proper consideration from a balanced perspective. That should be taken into consideration.
The Government used the example of a granny in GB sending a birthday parcel to her granddaughter in Northern Ireland. That would not be affected by this SI, but if the granny used online purchasing from a company that then used another company to dispatch the parcel to the granddaughter, it would be covered by the SI. We do not live in the 19th century as far as how people send parcels. The Government need to be clear about the estimated number of parcels that are likely to fall under each of the lanes, the percentage that will now be opened for checks and the likely impact on the businesses that would be dispatching and receiving them. The Minister in the House of Commons said that the Government could provide only estimates at this stage, and there is no impact assessment, as there should have been.
On a previous occasion in Committee the noble Lord, Lord Dodds, raised the issue of measures. The Minister said that this is not about implementing the framework agreement but, conveniently, it is about implementing it in order to get out of having an impact assessment. The Government have said that an impact assessment is not needed because, as the Minister said, this is so limited in scope. When it affects all parcels being sent from GB to NI, it is not limited in scope; and when the definition of those will now have to be inserted after “foreign postal packets”, that is not limited in scope either. When will the Government provide the detailed information about the impact of all that is likely to be covered by these regulations?
Baroness Chapman of Darlington (Lab)
My Lords, the noble Lord, Lord Purvis, is correct to emphasise what the Secondary Legislation Scrutiny Committee observed about timing and the lack of consultation and impact assessment; of course, that is important, and I am sure that the Minister will want to respond to it fully. The reason it is so important is not just because it is our job to ask those questions, which we ask frequently; it is because, particularly in the matters before us today—as we heard, issues of Northern Ireland’s place within the union have been raised, as a consequence of the sense that this is being rushed or is not being done adequately—it is beholden on the Government to make an extra effort to make sure that this is done in a way that is beyond reproach, as far as Ministers are able.
These regulations implement part of the Windsor Framework, which we support. The Minister knows this, and we have been clear about it. We think it is a far better solution than that which was arrived at previously with the Northern Ireland protocol. It is also better than the approach that the Government sought to take with the protocol Bill, which we spent many weeks discussing earlier this year. Brexit brought us to this place. A solution needed to be found, and there was always going to be this kind of unsatisfactory compromise on Northern Ireland. This was raised before the vote took place. As we all know and have repeatedly said, Northern Ireland voted to remain and a solution needed to be found. I am afraid that this is probably the least worst option that we can land on at the moment.
Consumer-to-consumer parcels and business-to-consumer parcels will not be subject to regulations, and business-to-business goods intended to remain in the UK will use the green lane, while other goods will be subject to declarations and checks. We know that life will not be that simple and that there will be complications—in the real world, things will not always work as anticipated—and there will have to be some recognition of that as we go forward. The questions raised by the noble Lord, Lord Purvis, will have to be answered—if not today, then in the execution of this. That is life, and that is how we will have to approach this. But, having come to the point of securing an agreement, which was approved by the other place by 515 votes to 29, it is incumbent on the Government to make good on what they agreed.
My noble friend Lady Ritchie spoke of the opportunities for Northern Ireland from its unique position, and she asked important questions about the advice and support for businesses that will have to navigate these new arrangements. Is HMRC adequately prepared and resourced to make this work, and can the Minister explain how the green lane will be policed? The noble Lord, Lord Purvis, described the EU as a foreign power, which it is, but it has our consent and agreement. This is the arrangement that we have come to with our negotiating partners. There were other options: the Northern Ireland protocol was the one that was settled on by Boris Johnson and the noble Lord, Lord Frost. We all agreed that it was unsatisfactory —no one seemed particularly happy with that outcome—and here we have moved on to something that is an improvement.
I completely accept what our friends the noble Lords, Lord McCrea and Lord Dodds, had to say. I understand the challenge, but I find myself searching for an alternative viable solution. I know that one could have been that we all stayed in the customs union or the single market, but that is not the position of any of the main political parties and I believe it is not the position of the DUP. The noble Lord, Lord Dodds, may correct me if I am wrong about that—here he comes now.
Lord Dodds of Duncairn (DUP)
I thank the noble Baroness for giving way. On alternatives, I refer her to the report by our Select Committee on the protocol, on which I have the honour to serve along with the noble Baroness, Lady Ritchie. In July last year, it said—I do not have the precise reference, but I can supply it—that, in relation to parcels, the solution was to continue as with the grace period, and that there should be no fettering of parcel deliveries between Great Britain and Northern Ireland. The cross-party Select Committee did suggest a very good solution—one that, unfortunately, the Government decided not to run with.
Baroness Chapman of Darlington (Lab)
I read that report and I commend the noble Lord for bringing it to our attention, but we cannot arrive at a solution unilaterally, as the United Kingdom. Whatever solution we arrive at must be agreed with our negotiating partners. I was not part of that negotiation but, from what Ministers have indicated, it would seem they were not able, at this point, to settle on that with the European Union. We can regret that, but it is the reality of where we are. We are surely in the business of dealing with reality as we find it, not as we would wish it to be.
It really ought to be a priority for the Government to rebuild trust. I would urge far more candour and a franker approach when we discuss these issues, and not to do anything which would give the impression that we are somehow trying to steamroller these things through. Can the Minister explain exactly what a business would have to do to become part of the trusted trader scheme, so we are clear about exactly what we are asking businesses to do? We completely understand the dissatisfaction that some have with the framework but there is, at the moment, no other viable alternative solution.
I am not going to comment on the mismanagement of the Joint Committee on Statutory Instruments and the debate that took place in the other place. I read Hansard and found the way it was conducted extraordinary, but that is not for me to manage. This is clearly not business as usual; it is different and unique. There have always been differences, which were previously brought to the fore regarding animals and other things, but it is obvious that some contributors this afternoon feel there is somehow a threat to their constitutional position, and we cannot be relaxed about that. We have to recognise that and take it seriously. I disagree; I am British and if I moved to Belfast I would still be equally as British. I might have to fill in some forms if I wanted to receive goods from a business in GB to my business. I could live with that without a threat to my Britishness, but is it not for me to tell other noble Lords how they should feel about it, and they are quite right to bring those points to the attention of the Committee.
I could not agree more strongly with those who said that what we need is a frank and open discussion, and perhaps a change of tone and being a little more relaxed as a Government about all this. I know we have had some torrid debates on these issues in recent years and that the protocol was a disaster. Things have happened and things were said; promises were made, but they should not have been because they were broken knowingly and very quickly. We have damaged our international reputation as a good partner to negotiate with and I regret that very much but, with a change of attitude from the Government, and a more respectful approach to colleagues in Northern Ireland and to this House, we could move forward in a much more positive way.
Baroness Penn (Con)
My Lords, I agree with the noble Baroness, Lady Chapman, on the approach that this Government should, and want to, take to implementing the provisions in the Windsor Framework. The noble Baroness described it as the least worst option for Northern Ireland; the Government describe it as the best option. In reality, there is not a gap between them, because it does restore the smooth flow of trade and protect Northern Ireland’s place in the union. It also delivers a robust framework for solving future issues, as we know they will come up.
The framework delivers by enabling smooth trade between Great Britain and Northern Ireland, resolving the problems that were undermining Northern Ireland’s place in our union and fixing the democratic deficit which has seen Northern Ireland have no say in its laws. It is worth responding at the outset that while we may disagree on the Windsor Framework in this Committee, it is important to be clear that with regard to the approach taken by the Government in the framework and the accusation that it reflects the fact that the Government do not care about Northern Ireland, the opposite is true. The effort put into negotiating for Northern Ireland by my right honourable friend the Prime Minister, and many others across government, is because we care deeply about Northern Ireland and its place in our union.
To provide an answer and reassurance to the noble Lord, Lord McCrea, Northern Ireland is a full part of the United Kingdom in every sense, and we negotiated the Windsor Framework to protect the UK’s internal market and trade between Great Britain and Northern Ireland. We are confident that the framework does this. We reject the claim that the Windsor Framework changes Northern Ireland’s status within the UK.
Nevertheless, while I acknowledge the range of views on the framework in this debate, I encourage noble Lords to recognise the nature of what this statutory instrument provides. It is solely about the powers available to HMRC and Border Force to ensure the improvements in respect of parcels that we have secured through the Windsor Framework are delivered. Focusing on what this SI does provides, in part, some of the answers to the questions put forward to the Committee today. Noble Lords are right that the provisions relating to parcels will come into force at the end of September 2024 and that there is more work to be done in implementing those provisions. That work will be taken forward by the Government, HMRC and the Treasury, working with businesses in Great Britain and Northern Ireland and having discussions with them.
Baroness Ritchie of Downpatrick (Lab)
The Minister was describing the work and who would actually be involved in it. Can she provide the Committee with a little more detail about the type of work? Maybe she could elucidate that.
Baroness Penn (Con)
I was going to come later to ongoing co-operation with businesses in Northern Ireland and Great Britain, in terms of implementing the provisions when it comes to parcels. For example, we are working through in detail with the couriers and the people who take a lot of this traffic on how we can make it as seamless as possible. If I have anything further to add in my speech, I will do so later.
In respect of the point from the noble Lord, Lord Dodds, on this statutory instrument being about creating a border between Great Britain and Northern Ireland, as I said just now and in my opening speech, this instrument does not put in place the Windsor Framework arrangements. The noble Lord is right that that has already happened, but we disagree that the Windsor Framework or these regulations separate Northern Ireland from Great Britain in the way that he describes. The regulations do not treat movements from Great Britain to Northern Ireland as exports or movements from one country to another; they make some powers that are available in respect of international movements available in respect of movements from GB to NI. However, it is not the case that they treat them the same as parcel movements that are international or exports.
As the noble Baroness, Lady Chapman, said, these arrangements are unique. The Windsor Framework is a bespoke set of arrangements. If you move a parcel internationally, such as to your grandmother in France rather than in Northern Ireland, you and she would need to make customs declarations and possibly pay tariffs; that is not the case for the arrangements for GB to NI. Similarly, if you buy from an international retailer, the package goes through customs when it enters the UK; as I set out, that is not the case for GB to NI orders from internet sellers to individuals.
Lord Dodds of Duncairn (DUP)
Does the Minister accept, however, that the reason for what she has set out is in EU law, and that nobody in Northern Ireland is elected and nobody in the EU is accountable to anyone in Northern Ireland—indeed, in the United Kingdom—for those laws? If those laws change—for example, if the EU changes, tweaks or modifies them—that is what will apply. So the Minister cannot give any guarantee or assurance that the position she is outlining will continue to pertain and apply because no Government, nor this Parliament, will have any power in that respect.
Baroness Penn (Con)
The Windsor Framework is a bilateral agreement. To the noble Lord’s point, there are detailed governance arrangements around the Windsor Framework. Either side can raise issues through those mechanisms. It is not the case that the EU could just impose new requirements without consultation. Of course, the Stormont brake will be available to the Northern Ireland Assembly, when it is sitting.
With regards to the lack of an impact assessment, that point takes me back to what this statutory instrument itself does. It does not impose any requirements on businesses; it is solely about the powers for HMRC and Border Force. The Government are dealing with the resources available to those agencies in the normal way. I cannot remember who asked about this—it was the noble Baroness, Lady Ritchie of Downpatrick, I think—but we will of course ensure that resources are available, in particular to HMRC, to ensure that these agencies can engage with businesses in order to ensure that the process is as smooth as possible.
Lord Purvis of Tweed (LD)
I understand the Minister’s point with regards to the powers for HMRC under these regulations, but it assumes that HMRC will not then use those powers to ask businesses to carry out certain procedures. If that is the case, there will be an impact on businesses. Secondly, my reading of Regulation 3 is that, for the first time, a postal packet going from GB to Northern Ireland will now be categorised alongside a foreign postal packet. That is what the regulation says.
Baroness Penn (Con)
Again, that takes me back to what these regulations do versus the wider process around how parcels will move under the Windsor Framework. These powers do not and cannot do anything to impose anything on businesses.
I come to a few of the points made by the noble Lord, Lord Purvis, about understanding and beginning to quantify how the new process will work. It is not possible to give precise numbers on volumes of parcels and how they will fall into the different lanes, because volumes are not consistent year on year. However, based on estimates and commercial information provided by the parcel industry, we understand that about 5% of parcels are sent from business to business, with 90% moving from businesses to consumers and 5% from individuals to individuals. Based on those figures, for 95% of movements no difference will be felt in how customs operate now, under the easement that we have to the protocol. Compared to the protocol itself, they will face significantly fewer burdens.
There will be no routine checks or controls applied to consignments, with interventions made only on a risk-based, intelligence-led approach. This is decided by HMRC and Border Force. We expect a very small proportion of parcels to be checked or opened, only when there is reason to suspect circumvention of the rules.
The 5% of business-to-business goods will be treated the same, as if they were moving in freight. They can access the UK internal market scheme and the green lane, and they will benefit from radically reduced checks and data requirements compared to those under the protocol. Businesses can apply to HMRC to become a trusted trader and access the green lane. It is a simple process. Tens of thousands of traders are already in the scheme, and the Windsor Framework extends eligibility to it further. New arrangements under the framework are being phased in over nearly two and a half years. We will continue to use that time to undertake extensive engagement with stakeholders, including businesses in Northern Ireland and Great Britain, trader support services and parcel operators, to provide support and ensure that everyone is ready.
Baroness Hoey (Non-Afl)
As part of that work, will the Government look at the extra cost to business? There will definitely be an extra cost to businesses in GB that want to send to Northern Ireland, whether they go through the green or the red lane. Those costs will eventually end up with consumers in Northern Ireland. Do the Government agree?
Baroness Penn (Con)
The whole purpose of the Windsor Framework is to reduce any extra costs and burdens from moving from business to business in Northern Ireland. We need to put this in the context of the figures that I gave earlier about personal packages and business-to-consumer packages which, on some estimates, account for around 95% of parcel movements from GB to NI. The aim of our ongoing engagement with parcel operators, in both GB and NI, is to make sure that this process is as easy and seamless as possible for those that rely on existing information and data, where that is possible.
Several noble Lords also raised the question of timing. As I said, provisions under the Windsor Framework are being brought in over two and a half years and will come into effect on 30 September 2024. As I said in opening, although the majority of Northern Ireland protocol requirements on parcels were not implemented as the Government sought to renegotiate arrangements, we accepted that certain categories of goods moved in parcels, as in freight, should require customs declarations to ensure that both their entry to Northern Ireland and possible onward movement to the EU were notified to HMRC.
These requirements related only to a specific list of prohibited and restricted goods that includes, for example, certain drug precursor chemicals, endangered animals, et cetera, covered under CITES. The powers we are taking now will allow those requirements to be monitored and enforced from now, and those same powers will be used in respect of the new parcels arrangements that come into effect on 30 September 2024.
The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)
The Question is that the Grand Committee has considered this instrument. As many as are of that opinion will say “Content”; to the contrary “Not content”.
The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)
The Committee stands adjourned.
The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)
My Lords, it would be very helpful if Members could stay close by. We are just seeking advice on how to proceed, as this is quite an unusual situation.
We have now considered this instrument. It has not been agreed to, and therefore will go to the Chamber as usual.
Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2023
(1 year, 3 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Ahmad of Wimbledon
That the Grand Committee do consider the Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2023.
Relevant document: 46th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, these regulations amend the Russia (Sanctions) (EU Exit) Regulations 2019. This instrument was laid on 29 June 2023, under powers in the Sanctions and Anti-Money Laundering Act 2018. The measures in this instrument entered into force on 30 June 2023.
If I may digress from my script, once again we are debating Russia and its actions. As I came into the Room, I was catching up on some of the news on the Black Sea grain initiative. Yet again, we have seen tragedy; to say it is shocking is perhaps an understatement. According to media reports, Russia has not only scuppered the Black Sea grain initiative but attacked some of the grain ports, destroying much of the grain held in those warehouses. Again, it shows the tragic nature of this illegal war and the importance of our sanctions. I say at the outset that I appreciate the work of both Front Benches opposite and the co-ordination and unity that we have displayed in moving through sanctions at such a pace.
I turn to the SI in front of us. These measures have been co-ordinated with our international partners, while refining the approach to accommodate the particular circumstances of the UK legal sector. By restricting access to additional services from the United Kingdom, they will contribute to increasing pressure on Mr Putin for waging this illegal and brutal war against Ukraine. I know that noble Lords have been focused on this issue in previous debates too. These measures place further constraints on the Russian economy, and therefore Mr Putin’s war machine. They add force to the largest, most substantial package of economic sanctions that Russia has ever faced.
The instrument delivers on the commitment made by the UK Government to ban legal advisory services on specified commercial activities. This will further hamper the ability of Russian businesses to operate internationally. This legislation will make it illegal for any person working in the UK, as well as British nationals working abroad, to advise on or facilitate certain commercial activities that would be sanctioned by the United Kingdom Government if they involved a British national or entity or were taking place in the UK. In practice, this will make it harder for Russia to benefit from the United Kingdom’s world-class legal expertise. This goes beyond prohibitions already in place that cover a range of professional services, including accountancy, architecture and management consultancy. This latest measure demonstrates our continued determination to ratchet up the pressure on Mr Putin for continuing his illegal war.
Although this legislation will close down opportunities for Mr Putin’s associates and supporters to benefit commercially from the UK’s legal expertise, it is important that we ensure that legal services can continue to be provided where they contribute to upholding the rule of law and compliance with our sanctions framework. By protecting the fundamental right to legal representation, we, frankly and directly, distinguish ourselves from Mr Putin’s oppressive regime. By ensuring that legal advice can continue to be provided for the purposes of compliance with our sanctions framework, we enhance the effectiveness of our regulations and intensify the pressure on Mr Putin.
Legal professionals are under a strict obligation to ensure that their services support their clients to be sanctions-compliant and do not stray into enabling them to circumvent restrictions. However, it has become apparent that this legislation can be interpreted as having the unintended consequence of prohibiting persons in the UK and British nationals abroad from providing legal advice to clients seeking to comply with the sanctions regimes of our international partners. Let me assure noble Lords that it is not the intent of these regulations to prohibit this type of legal service. UK lawyers should be able to support their clients to be sanctions-compliant beyond UK law as we work closely with our allies to tighten the net on Russia’s economy.
We have looked at this issue thoroughly. As an immediate response, we are working, first, across government and, importantly, across the legal profession. We have met representatives of the legal sector. My colleagues, the Lord Chancellor and the Justice Secretary, have met members directly; indeed, the Lord Chancellor met the president of the Law Society this morning. I know that this is a concern that anyone would have but I assure noble Lords that we are working closely with the legal sector in this respect to ensure that we implement a general licence that will make it clear that this type of activity can continue. We aim to have this in place in the coming days. I put on record our thanks to the legal sector for its constructive engagement on this important issue.
We have sought here to provide a direct remedy to that possible unintended consequence; the valuable support and input that we have had from the professional legal sector is very much appreciated. Once we have issued the licence, we will consider whether further amendments to the SI to address the issue are appropriate and necessary. Of course, I will update noble Lords, particularly those representing the Front Benches, on this. We will do this in conjunction with the legal sector and, if amendments are deemed necessary, we will bring them forward at the earliest opportunity.
As with our sanctions, this latest package has been developed in co-ordination with our international partners, as I said. In doing this, we will continue to work with the legal community to monitor the effects of this legislation and ensure that it achieves the desired objectives. We will also continue to co-ordinate with our international allies to identify and address any gaps or loopholes that emerge in our respective sanctions regimes.
This latest measure demonstrates our determination to target those who participate in or facilitate Mr Putin’s illegal war of choice. Through our sanctions regime, and those of our allies, Russia is being increasingly isolated, cut off from western markets, services and supply chains. Key sectors of the Russian economy have taken a significant hit and its economic outlook is bleak. The UK Government will use sanctions to intensify the military and economic pressure on Russia until Mr Putin does the right thing and ends his brutal invasion of Ukraine. We welcome the clear and continued cross-party support for this course of action. I beg to move.
Lord Purvis of Tweed (LD)
My Lords, I am grateful to the Minister for introducing these regulations in such a clear and comprehensive way. I will refer briefly to the concerns about unintended consequences in a moment but I will start by strongly agreeing with the Minister about what are likely to be the consequences of the decision on grain in the Black Sea.
Putin will again threaten the expansion to new victims of his aggression to Ukraine across those who are least able to feed and fend for themselves, especially as malnutrition and hunger ravage the Horn of Africa. Those countries that are dependent on the grain will be looking at this with doom. In a way, it is a horrific response to the leaders of countries, when they consider that they can effectively maintain the status quo ante relations with the Putin regime, to know how little he holds in his standing their people, who need this food.
Baroness Lawlor (Con)
I am grateful to my noble friend the Minister for discussing the proposed statutory instrument so thoroughly. I want to follow the noble Lord, Lord Purvis of Tweed, in what he picked up from the Law Society’s briefing. It is certainly the case, as the statutory instrument is framed, that a lawyer who works for an international firm but may be based in New York cannot advise an international client on EU or US law in respect of, say, divesting from activities in Russia. It is really quite important to know how he can be compliant with the law. I note the intention to have general guidance but will it be such that there will be a lack of clarity and a concern that overseas clients consulting UK lawyers will not be able to get advice at the same time about where the law stands in respect of US and EU law?
Lord Collins of Highbury (Lab)
My Lords, one of the issues we need to address is that Russia is highly dependent on western countries for legal expertise. As a country, we previously exported £56 million in legal services to Russian businesses every year, so it is important that we address this issue.
I also welcome the fact that we can use this debate to reiterate our cross-party support for these measures to show our unwavering commitment to and solidarity with Ukraine, its people and its sovereignty. Following last night’s Statement repeat on NATO’s Vilnius summit, I underscored the strength of feeling across our diplomatic and military alliance that we must stand with Ukraine until the war is won. It is vital that Parliament speaks with one voice.
The Opposition fully support the steps that the Government are taking to further strengthen our sanctions regime, prevent evasion and ensure that the Kremlin’s capacity to conduct this war is undermined. I stress that we recognise that this statutory instrument is common sense and prudent. It clearly should not be permissible that, more than 500 days into this conflict, it would be potentially lawful for a UK legal services provider to support commercial activities that advanced Russian interests because said activity did not have a sufficiently tangible connection to the UK, due to the territorial application of the 2019 regulations.
I hope the Minister can tell us what assessment the Government have made of how effective the 2019 regulations were and how we discovered any potential loopholes that people could get through. This leads on to my major point about this: can the Minister account for the delay in addressing these issues from the application of the regulations in 2019? If this loophole has been exploited, why has it taken us so long to address it?
I have read the Law Society’s letter and I appreciate the Minister’s response. I welcome the fact that the law officers and other departments are meeting with the Law Society but, to echo the point from the noble Lord, Lord Purvis, I am keen to support the Government in strengthening these sanctions. I do not want to see any further escape routes for people. It is important that we hear the Minister’s view on how effective these new regulations will be at imposing the sort of sanctions that we believe are necessary to limit Russia’s ability to wage war.
I know that the Minister has heard me say before that it is one thing to adopt particular regulations on sanctions, but how we resource them and how we are satisfied that they can be implemented and monitored is another. Can he tell us how the Office of Financial Sanctions Implementation is resourced? Will it be able to police these regulations? If our sanctions regime truly is a work in progress, we must be capable of reflection and improvement. If exemptions are causing more issues, we need to know about them; the assessment must be based on that.
There is one other question I will briefly raise, which is that the regulations provide exceptions when the Act relates to diplomatic missions or consular posts. Can the Minister give me a practical example of that? I am not sure I understand the purpose of it.
I have addressed the point about the Law Society. Of course, this was also raised with the Secondary Legislation Scrutiny Committee, which expressed the view that this issue needs to be addressed. The committee was approached by an international law firm.
I conclude by saying that we once again fully support the Government’s actions. We want to see the Russian regime sanctioned. The news I have just seen on the BBC website about not only breaking the agreement but bombing the very facilities that could feed Africa is absolutely atrocious. The sooner we bring this regime to account, the better. We fully support the Government in their actions.
Lord Ahmad of Wimbledon (Con)
My Lords, I put on record my thanks to the noble Lords, Lord Purvis and Lord Collins. I am sure I speak for all three of us in saying that, when we embarked on this journey of sanctions, we hoped that our debates and discussions would be limited. However, it is a real tragedy of the consequences of the war on Ukraine that we are continuing to have these debates. As I said in my opening remarks, and as was acknowledged by the noble Lords, Lord Purvis and Lord Collins, the fact that, even as we speak, there continue to be not just acts of aggression but pure violations of international law shows the nature of this war.
One point I would raise is how we amplify these points to the sorts of countries that still sometimes challenge us directly. I was delighted to see the noble Lord, Lord Wallace—I am not tempting him into the debate, but I am sure he will have a view on how we address the issue of influence directly. Quite often on the world stage and as I have travelled, it has been said to us that our sanctions are causing problems of food insecurity. Russia’s actions today demonstrate what is causing the challenges to food security. We have always worked with the UN and other key countries to ensure that the Black Sea grain initiative is kept on the front burner. It is regrettable and tragic that it was not. Further, it is tragic that we have seen the consequences culminating in this Russian aggression on the very areas that store the grain.
That said, I thank noble Lords for their specific contributions. To clarify the point made by my noble friend Lady Lawlor, whose intervention I welcome, what we are seeking to introduce—we have identified this issue—is a general licence as an immediate first step. We are working directly with the legal profession, including the Law Society, to ensure that any other unintended consequences and any other loopholes that we can address directly can also be met first hand. As I said in my opening remarks, we will seek to bring legislation forward at the earliest opportunity. It is important that we continue to do so.
The noble Lord, Lord Collins, raised the issue of identifying, as things are, how we have been working to address particular issues and the delay. As I am sure he would acknowledge, legal services are distinct from other professional services in the constitutional role they play within our country in supporting and upholding the rule of law. Therefore, we carefully consider the implications of different policy options. This is ever evolving. In collecting an evidence base, we also work with legal services to ensure that, as far as possible, the measures we lay have the desired effect.
I am not saying that this is the last time we will have this conversation. As we are imposing these sanctions and taking further steps to restrict Russian activities, I am sure that we will identify areas, as we have on this occasion, that will further address those very issues. As a former person of the City myself, I fully understand the comprehensive scope of not just the banking services but the services industry around them. We have previously addressed consultancy and accountancy firms and today, in conjunction with legal representatives, we have worked through the implications for the legal industry.
Lord Collins of Highbury (Lab)
I am sorry to interrupt but regarding the exemptions, I was going to ask about the provision of professional business services, specifically related to auditing services. I cannot understand why there is an exemption for that.
Lord Ahmad of Wimbledon (Con)
As I understand it, the auditing element of it is a professional and legal requirement, but if I can amplify that further I will of course write to the noble Lord.
The noble Lord, Lord Purvis, and my noble friend Lady Lawlor raised the issue of the general licence and its application. Under the general licence, UK persons will be able to advise on global sanctions regimes, including but not limited to the United Kingdom, USA and EU. In response to my noble friend, the same applies to the scenario she illustrated of a UK person working in the USA. However, I will take all these elements and ensure that there is a specific response because these are understandably issues of concern.
At this juncture, I also say that our rule of law and justice system allow for the provision of representation services. I am sure that the fact that I did not get a question on that means that noble Lords have acknowledged and noted that it is right that a country such as the United Kingdom continues to protect that right of legal representation. We may have our personal views on particular people who seek to take advantage of our professional services but, at the same time, every professional, including legal professionals, will now be bound by the new regulations that we are putting forward.
On the issue raised by the noble Lord, Lord Collins, specific to the Diplomatic Service, I am sure that some areas of privileges and immunities are covered in that. Again, in the interest of completeness, I will cover that in the appropriate letter.
On auditing, as I said, audits apply to the shareholders rather than the companies, in order to ensure that audits can take place where they are a statutory requirement. I have just had that confirmation from the Box—I remember some of my private sector experience quite well. It shows that when you do things off the cuff, you remember things from years past.
In all seriousness, we have sought to address some of the key areas identified as these new regulations and sanctions regimes are applied. While we have worked to ensure that Russia cannot access our legal expertise in relation to certain commercial activities, we have not hindered work that helps to provide judicial rights and access to justice.
These measures are the latest addition to our package of sanctions, which is having a damaging effect on Mr Putin’s war machine and his regime. I know that the UK Government and all Members of your Lordships’ House are united in keeping the pressure on Mr Putin until he ends this horrific and senseless war.
Finally, if, before the House rises, there are further details I can share with noble Lords on the issuance and the date of issuance of the general licences, I will do so. I will write to noble Lords on the areas that I have said I will address, particularly on diplomats. That said, I put on record my sincere thanks to all noble Lords, including my noble friend, who participated in this brief debate. Sadly, and tragically, I am sure that we will have further debates on this.
Official Statistics Order 2023
(1 year, 3 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Neville-Rolfe
That the Grand Committee do consider the Official Statistics Order 2023.
The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)
My Lords, I will begin with the purpose of the order and briefly take the Committee through what we are considering.
The order updates the list of non-Crown organisations that produce official statistics, as defined in the Statistics and Registration Service Act 2007. The Government and the UK Statistics Authority want to see official statistics enabling sound policy decisions and providing a firm evidence base for decision-making both inside and outside government. The role of the authority and the need for timely and high-quality statistics were never more evident than during the Covid-19 pandemic. The code of practice for statistics plays an important role in ensuring that producers of official statistics inspire public confidence by demonstrating trustworthiness, quality and value in the statistics they produce.
The order revokes and replaces the Official Statistics Order 2018, updating the list of UK non-Crown bodies that may produce official statistics. The Statistics and Registration Service Act 2007 established the non-ministerial department, the Statistics Board—known colloquially as the UK Statistics Authority—as an independent statutory body to promote and safeguard the production and publication of official statistics that serve the public good. The Act allows the flexibility to add non-Crown bodies to, or remove them from, the authority’s remit by order. The order provides an updated list of bodies whose statistical activities will be official statistics and so will be monitored by the authority.
The authority will work with bodies designated as producers of official statistics to promote good practice for the production and publication of official statistics, including through the code of practice for statistics; to monitor and report on the production and publication of official statistics; and to assess the treatment by producers of official statistics, at the request of those producers, against the code of practice and publish the results of those assessments. If statistics comply with the code, the authority will designate them as national statistics.
These changes are applied to UK-wide and English organisations. The UK statistical system follows the principle that the devolution of statistics should mirror the devolution of policy areas. This order takes the same approach to devolution as the order it replaces. Regularly updating the orders ensures that the scope of official statistics remains accurate and relevant in light of the establishment, abolition or name changes of public bodies. Section 6 of the 2007 Act provides that Scottish Ministers, Welsh Ministers or Northern Ireland departments can determine that statistics produced by non-Crown bodies are brought into scope. There have been equivalent amending orders for Wales, Scotland and Northern Ireland.
It is important to note that, although the order covers a wide range of bodies, which are listed in the Schedule, the vast majority were already designated under the previous order, so this is a very minor adjustment. It adds five new bodies to the list in the 2018 order: the Equality and Human Rights Commission, the Joint Information Systems Committee, the Regulator of Social Housing, Skills for Care Ltd and the Trade Remedies Authority. It removes five bodies from the list in the 2018 order that are no longer legal entities: the Health and Social Care Information Centre, the Higher Education Statistics Agency, Monitor, the NHS Trust Development Authority and the Natural Environment Research Council.
The order also alters the names of two bodies that were contained in the last order. The NHS Commissioning Board is now recorded as NHS England, and Her Majesty’s Inspectorate of Constabulary is now recorded as His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services—and long may he live.
The UK Statistics Authority was consulted in preparing the order, in accordance with the Act, and is content for it to be laid. My department has laid the order on behalf of other government departments in preference to each department laying an order for the bodies for which it is responsible. That is intended to make the best use of parliamentary time.
Lord Davies of Brixton (Lab)
My Lords, it is important for us to discuss this order. It may appear on the face of it to be simply a technical, procedural or managerial matter, but it does have a political import.
Lord Davies of Brixton (Lab)
My Lords, it is appropriate for us to have a debate on this instrument. It is worth noting that the Commons dispensed with it in seven minutes. Perhaps the Front Bench is hoping for a similar record here but I will delay us for a little bit. Sorry, I am wrong; it was nine minutes.
The debate on postal packages caught me unawares; I thought that we would all be finished by now. Still, this is an important issue and I wanted to have my say about statistics, as I am interested in that sort of thing. Unfortunately—I apologise to the Committee for this—I did not do as much preparation early as I had intended. I shall ask questions that, of their nature, will be fairly technical so I shall indulge the Minister if she is unable to answer everything fully. It would have been a good idea if I had asked for a meeting before this debate; a meeting after the Summer Recess may be a helpful way forward but we will see.
We have these things called official statistics. There are actually two tiers of them because there are national statistics as well. As I read the rules, it has to be an official statistic before it can be a national statistic, and whether something is a national statistic is a matter of practical importance. It is not just a technical clarification; it makes a difference. This is a completely different issue, which I am not seeking to debate today, but the fact that the RPI is not a national statistic but an official one has an impact on the way in which policy is determined.
My problem is that I am still not totally clear what the point of an official statistic is. There is a certain circularity in the definition—important statistics are official statistics and official statistics are important statistics. It is quite difficult to break out of that loop and try to identify from published material what the criteria are by which official statistics are decided, what difference they make to the operation and what impact they have. I saw a claim somewhere in the documentation that there is an overarching policy on the scope of official statistics. If it exists, I have failed to track it down. It would be good to have a clear explanation online.
All this stems from the 2007 Act. In their wisdom, the legislators at that time decided that this order required the affirmative procedure, which to me means that they thought this was an important issue that required political review. I looked at the Explanatory Notes for the Bill; although there is an explanation of Sections 5 and 7, unfortunately there is a gap for Section 6 in the background explaining this legislation. It jumps straight from Sections 1 to 5 to Sections 7 to 21. It is a bit difficult to see what was in the legislators’ minds at the time about what exactly was the point of official statistics.
However, we have them now. We have this list of 40, if I am counting right. One by one, they all look entirely reasonable, although the sorts of bodies vary widely. The difficult thing is to spot which organisations are missing. I turned to the government website and looked up government bodies. Apparently there are 604, and here we have 40. The obvious question is why these 40 were chosen and the others excluded. There may well be good reasons but we do not know what they are, because there is a singular lack of clarity over the criteria and purpose of official statistics.
The Explanatory Memorandum to this order says that there was consultation. The way it is worded implies that it was the department—the Cabinet Office—consulting the UK Statistics Authority, but in practice it was plainly the other way around. This is all generated by the UK Statistics Authority. It consulted the Cabinet Office and all the departments, pulled all the information together and drew up this list. But it does not tell us what it said to departments about why they would want to put forward these public bodies to have official statistics status and not others. We just do not know what the criteria are, as far as I can tell. Maybe I am missing it; I hope the Minister can draw my attention to it.
So I got 604 results, and I looked through them all. We can dismiss the 24 ministerial departments; they are the Government, so they are included automatically. The non-ministerial departments are included—there are 20 of them. But 425 were described as
“Agencies and other public bodies”,
of which 33 are on the list—I went through them, and they raised all sorts of questions. I could go through all 390-odd remaining bodies and ask about them one by one, but I will save your Lordships that. Still, there are some that I do not really understand.
One oddity that I will mention is that the Financial Conduct Authority is included, but it is a subsidiary or part of the Bank of England, which is not. Another one that I was surprised about was the Certification Officer, which is very important as far as trade unions and employers’ organisations are concerned. It is not on the list, but one would have thought that its statistics were of some importance. The Electoral Commission is not on the list, and neither is the Advanced Research and Invention Agency, which has had some controversy. The list does not include the Secret Intelligence Service, but I think we can let them off that one. The Rail Accident Investigation Branch seems an obvious candidate to me. Of course, it is of interest that the Office for National Statistics is not on the list, but that would have been a bit self-referential. So there are questions about why only a limited number are included and many appear to be excluded.
One particular oddity is that included in the list of 40 is the Service Complaints Ombudsman. Why is that ombudsman included in the list when the seven other ombudsmen—whatever the plural of them is; is it “ombudsmen”?—are not? We do not have the Housing Ombudsman, the Legal Ombudsman and so on—noble Lords get the point. Yet another oddity concerns public corporations; should they be included? On the government website, there is a list of public corporations, along with other lists of public bodies and so on. Only one public corporation is included in the SI: the Pension Protection Fund. Others are not. The National Employment Savings Trust Corporation, which in many ways is very similar to the PPF, is not included. The Post Office is not included, nor is the Oil and Pipelines Agency.
Once you start poking and pulling a thread in this tapestry, the whole thing, to my mind, starts to unravel. I have made my point and I hope it is clear. I suggest that the Minister does not try to respond on every single item I included in the list, but it would perhaps be helpful to have a meeting after the Recess to go through this and set my doubts at nil.
Baroness Lawlor (Con)
My Lords, can my noble friend the Minister comment on where, if not under these regulations, one can find out who decides the measures that will be included in official statistics by any of the authorised bodies?
Lord Wallace of Saltaire (LD)
My Lords, I congratulate the noble Lord, Lord Davies of Brixton, on the care and attention he has dedicated to this. I regret that I was not as thorough, although I did discover what JISC was, and one or two other things, as I looked at the list. I start with a confession: I do vaguely remember that there was a point when I understood the difference between national statistics, official statistics and other statistics, but I think I have forgotten. There were some very subtle, but nevertheless significant, distinctions between them. I was a Minister at the time, so I had to understand it.
I echo the recommendation made by the noble Lord, Lord Davies of Brixton, that we might have a fuller briefing when we return. It would be very helpful to know what the Government’s overall strategy on statistics is. I would also welcome, and I think quite a number of us would welcome, a government briefing on where we are now on the use of statistics across departments, as the Government go through the digital transformation.
I recall from my time in the Cabinet Office that there were tremendous barriers to sharing statistics across government, because the laws under which the Department for Work and Pensions operated were different from those of the Home Office. Therefore, when it came to something such as the Windrush scandal, where it was quite evident that there was material in other departments which would have showed whether or not the people concerned had been in Britain, in employment and registered with a doctor over the previous 20, 30 or 40 years, it was not carried through.
The digital strategy within government is extremely important to the future of government. It is also very much a non-party issue. It would be very helpful to have a briefing for all Peers to say where we are with that now. How far have some of those legal barriers been overcome? Is there now appropriate sharing across Whitehall? How far have some of the hesitations that so many people have about privacy and the use of their personal statistics been overcome?
I recall, at the time of the last census, a number of people, including the then Minister, Francis Maude, now the noble Lord, Lord Maude, saying that the question of whether we need future censuses ought to be moot, because one agency or other of our Government is collecting most of those statistics all the time. If one were able to put them all together, it would save us the effort and expense of a census and would provide us with a moving interpretation of what is happening in our schools, our ethnic communities, our ageing population, et cetera. So there were some very large, important questions there.
I welcome what the Minister said about providing a firm evidence base for government. We have, after all, been through a period in which a number of people, including at least one Prime Minister, were not entirely sure that evidence mattered, and one rather senior Minister decried government by experts as something we should get away from. I am very glad that the with the current Government we are getting back towards a concern with evidence-based policy-making.
I too was puzzled by the list of inclusions and exclusions. We would welcome a letter at some point to explain what that might be about, without delaying where we are now much further. From these Benches, we welcome the greater use of statistics. We welcome the wider publication of statistics, and we recognise that effective government for all British citizens precisely does depend on accurate information on what is happening, and on where there are problems which need to be identified. Good governance depends on that.
Lord Collins of Highbury (Lab)
My Lords, I suppose a lot of these questions stem from the 2007 Act and the establishment of the Statistics Board as a non-ministerial department that operates under the name of the UK Statistics Authority. The issue then was, and now is: what stats do we rely on? What has public confidence and what has public policy confidence? Of course, the authority is meant to do that job and draw from a number of sources, not least the bodies that are listed. Apart from the government departments, it can add other bodies to it, which raises the point that the noble Baroness, Lady Lawlor, mentioned. The official statistics from the five new bodies that have been added to the list must be accurate, credible and reliable.
The question for the Minister is: what sort of additional support will be given to the bodies concerned to ensure that they are able to meet the standards required? The Equality and Human Rights Commission is one of the bodies that is being added. I am certainly aware of how much its resources have been reduced recently; its ability to conduct a range of statutory work has been curtailed because of the lack of resources. Is it solely up to the UK Statistics Authority to do that monitoring and evaluation? It must have felt confident to recommend that the Equality and Human Rights Commission be added to the list. The question raised by the noble Baroness, Lady Lawlor, was important: how is that decision made and how do we maintain public confidence in official statistics by the mechanism established in the 2007 Act?
The 2007 Act was designed to have an independent stats authority that can challenge the use of statistics where necessary. If the bodies are receiving government grants or are in any way overreliant on the Government—particularly the five that are being added to the list—will that reduce their capability to challenge the Government where necessary? I suspect that there is always the temptation for Governments of whatever colour to use the principle that he who pays the piper calls the tune. We need to see just what mechanism is involved. Can the Minister assure us that the independence and credibility of these bodies will be properly maintained? That is the main focus of my concern. I would certainly welcome any briefing, but the 2007 Act is a useful starting point to look at the issues that my noble friend raised.
Baroness Neville-Rolfe (Con)
First, I thank all those who have taken part in this debate. I am delighted that it is a bit longer than the equivalent debate that my colleague, Minister Burghart, took in the Commons. He must have been very disappointed.
I thank in particular the noble Lord, Lord Davies of Brixton, for challenging us in such a delightful way. What he does not know is that I am almost as passionate about statistics as he is, so I was delighted when I discovered that statistics was in my portfolio at the Cabinet Office. I would be absolutely delighted to agree to a meeting, where we can take the conversation a little further. That will perhaps save us a little time this evening, especially if the Division Bells ring again.
I draw the Committee’s attention to the code of practice for statistics, which ensures that official statistics serve the public. I find it a very useful document that answers quite a few of the questions that have been asked this evening. It is on the GOV.UK website. Indeed, the definitions of “official” and “national statistics” are on the UK Statistics Authority website. The purpose of official statistics is made very clear in the code.
On why there are 40 bodies and how we consulted, I will explain a little about what we did in the run-up to this order. It is the product of extensive engagement between the Cabinet Office, the UK Statistics Authority, the listed bodies and responsible government departments. The scope of the engagement was to establish whether the list of bodies in the old order was up to date and what changes were required. We contacted the authority, which obviously led this work—as was explained, it is independent—and it contacted senior statisticians at all the departments involved. This involved a review of the schedule in the old order to establish changes. The authority requested input from senior statisticians regarding new bodies under its remit and the changes that might be needed. Its role as the national statistics institute gives the authority a special position in all this.
As we noted, many of the changes are proposed because of the restructuring of the bodies since 2018. It slightly took one down memory lane that some of the bodies that we all dealt with have now been replaced by others. I do not think I can match the brilliant analysis that we heard, but I look forward perhaps to having a more leisurely conversation about some of the reasoning behind the list that we put before noble Lords. On the overarching policy, I hope that noble Lords find the explanations online and in the code of practice helpful.
My noble friend Lady Lawlor asked who decides about the official statistics. All statistics produced by the bodies listed will be official. The ONS does not direct bodies as to what statistics are to be produced and, under Section 12 of the Act, producers of official statistics have the opportunity to request an assessment of their statistics against the code of practice. If the UK Statistics Authority determines compliance with the code, the statistics are designated as national statistics. That also helps with the question that the noble Lord, Lord Collins, asked about the departments’ need for help with statistics—that engagement is helpful there.
The noble Lord, Lord Wallace, talked about barriers to sharing statistics. We have discussed this before in relation to legislation, where we have sometimes taken powers in Bills before this House to make sure that there is better scope for the sharing of statistics, which is important. From having visited the authority, my impression is that it plays an important role in bringing statistics together and sharing important information and consultations on important issues. Some migration statistics recently went out for consultation, and these kinds of things are useful and important.
I very much welcome agreement on the importance of evidence-based policy-making, which is one of the reasons why we have invested in this substantial statistics authority. I do not think that the future of the census is for today, but conversations continue about the terrific material that is now emerging from the last one, which is changing our view of things. We look forward to finding the best possible ways of collecting statistics for the future, which is an important focus of the authority’s work.
The noble Lord, Lord Collins, talked about challenge. Clearly, the UK Statistics Authority contains some of the best statisticians in the world and plays a world-leading role. The noble Lord’s question was about how the organisations supplying data to the authority would challenge. I am not sure I quite understand what he was getting at but, clearly, the code and the UK Statistics Authority’s links with different departments—
Lord Collins of Highbury (Lab)
If I might assist the noble Baroness, it was a general point on statistics: he who pays the piper calls the tune. I suppose all statistics produced by government departments are official statistics. The Civil Service does that job, but we have these additional bodies—quangos and other things.
The point I was making was particularly about the Equality and Human Rights Commission, which has been added. Is that because of its restructuring? I do not think so, but it could be. It does collect important stats on the groups for which it has statutory responsibility, but its resources have been substantially cut. Its ability to do the job that it was given by statute has been undermined by government funding. What mechanism is there to ensure that, when it is asked to produce statistics or statistics are drawn from it, it has the capacity and capability to do the job? I was amplifying the question from the noble Baroness, Lady Lawlor.
Baroness Neville-Rolfe (Con)
Bodies such as the Equality and Human Rights Commission use extensive guidance on official statistics, which is available on the website and elsewhere. The Office for Statistics Regulation engages regularly with producer bodies. The impact of adding bodies to the list in the order is not huge, because various organisations are on this list because they produce interesting statistics. The commission, as we all know, produces very good research reports on a variety of topics relating to equality, race, ethnicity, disability and so on, which will be classed as statistics in the future.
I take the noble Lord’s point about resources, but I do not think the order makes a big difference. I note what he has said, and perhaps we will return to it when we discuss these issues further.
I hope I have responded to at least the spirit of this debate, which I found extremely interesting. The order updates the list of bodies subject to oversight by the UK Statistics Authority. I thank all those who have worked on this order and brought it forward. I hope colleagues will join me in supporting the order, which I now commend to the Committee.
House of Lords
Food: Two-For-One Offers
(1 year, 3 months ago)
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Baroness Walmsley
To ask His Majesty’s Government on the basis of what health evidence, if any, they have postponed the planned ban on two-for-one offers for foods high in fat, salt and sugar.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)
The volume price promotion restrictions have been delayed for two years while we prioritise the implementation of the location restrictions. This is the most impactful policy for reducing children’s calorie consumption, and accounts for 96% of the expected health benefits of the promotions policy. Kantar data suggests that it is working. The evidence suggests that this will have the biggest impact on tackling obesity.
Baroness Walmsley (LD)
I thank the Minister for his reply, but according to the Food Foundation’s most recent Broken Plate report, the most deprived 20% of families would have to spend half of their disposable income on food to comply with the Government’s healthy diet advice. Bearing that in mind, why are the Government continuing to allow retailers to sell HFSS foods, which can make people ill, at a discount? Do the government really want to encourage people to buy cheap food that could, in the end, kill them?
Lord Markham (Con)
First, I thank the noble Baroness for her tireless work in this space. I think we have shown that our restrictions are absolutely placed to inform and educate people so that they can have a healthy diet. I mentioned what we have done on location—the so-called pester power avoidance. It is estimated that these measures will reduce calorific intake by 96%. That is the prize that we are looking at here.
Lord Rooker (Lab)
My Lords, can the Minister confirm that the Secretary of State for Health actually believes in public health policy, because his recent speech at the Centre for Policy Studies—I watched all of it—indicates he does not?
Lord Markham (Con)
He definitely does. He was very much behind these measures. Just look at what we are doing in the smoking space, through the swapping out of cigarettes for vapes—another example of where we are taking action. As I mentioned, the evidence from Kantar suggests that it is working.
Lord Naseby (Con)
My Lords, if a product is marketed legally in the United Kingdom, why should His Majesty’s Government feel they have to interfere at all with the marketing of that product? I understand the point about education and totally accept it, but is it not wrong for His Majesty’s Government to restrict what is a legally marketed product?
Lord Markham (Con)
We are trying to educate, inform and nudge. The best example of all is encouraging the industry to reformulate its foods to be healthier. At this point, I am glad to say that, since we introduced these restrictions, Mars, Galaxy, Bounty and Snickers have reformulated, and even Mr Kipling’s Deliciously Good cakes are compliant.
Lord Allan of Hallam (LD)
My Lords, next week it will be three years since the Government committed to legislate to end the promotion of high-fat, salt and sugar foods by volume. Would a reasonable person think that this commitment has been met when the legislation has been passed but not implemented, and will not be for another couple of years?
Lord Markham (Con)
As I mentioned, the key is giving industry time to adjust so that it can reformulate. We would all agree that, if you can get the same taste but it is a lot healthier, with less fat, salt and sugar, that must be a good outcome. The examples that I just gave show that, and it is working.
Baroness Boycott (CB)
The NHS Food Scanner is promoting to children a number of ultra-processed food items. Do the Government not think that this is quite perverse given the new knowledge about what exactly ultra-processed food means? It is not just about the sugars, salts and fat but about the chemical destruction and reformulation of foodstuffs into something else.
Lord Markham (Con)
As I mentioned in answer to a Question on ultra-processed food yesterday, as a definition that is not particularly helpful because wholemeal bread, baked beans and cereals are all examples of ultra-processed food. The real point is the content of the food, and that is what our regulations should look to.
Baroness Merron (Lab)
My Lords, when the anti-obesity strategy was published, this ban was said to be supporting food affordability, citing evidence that multi-buy offers such as “buy one, get one free” increase the amount that people spend on foods by around 20% but often on foods high in fat, sugar and salt. With the Government now making the opposite argument to support this postponement, do they no longer stand by the evidence? Would a ban on these deals make it easier or harder for those who are struggling to get by?
Lord Markham (Con)
As we have mentioned before, our general direction of travel is to educate, reformulate and give people the best chances through having choices, and a good start in life through the fresh fruit and vegetables that we have in schools. Those are the things that will really make the difference.
Lord Lansley (Con)
Does my noble friend the Minister recall, on that exact point about access to fresh fruit and vegetables, the very successful scheme that we pioneered about 12 years ago with the Association of Convenience Stores so that corner shops would carry fresh fruit and vegetables close to the till and make them accessible, with us carrying the risk of wastage? That led to a significant increase in corner shops selling fresh fruit and vegetables.
Lord Markham (Con)
To me, that is a great example of how working in co-operation to allow people to make the right choices is the best way. For instance, 78% of shoppers have said that they are in favour of not having unhealthy items at the till because they know that they give in to pester power. That is why this has been focus of what we have done.
Baroness Bull (CB)
My Lords, notwithstanding the interesting “legal but harmful” point made by the noble Lord, Lord Naseby, I think that most of the House would agree that reducing high-fat, sugar and salt content is a good idea. However, the Minister has at least twice mentioned reduction of calories. Does he acknowledge and recognise that while one way to address obesity is calorie reduction, it is not an appropriate message for everybody and it certainly is not the sole cause of obesity across this country?
Lord Markham (Con)
The noble Baroness is correct; this is a complicated area, and a number of measures need to be taken. The best thing is the promotion of healthy foods, and the fresh fruit and veg initiatives that we have talked about today are perfect examples of that.
Lord Dubs (Lab)
My Lords, some years ago, the British-Irish Parliamentary Assembly looked at obesity in children, during the course of which we went to Amsterdam to look at what was going on there. Two of the things that were very enlightening were educating children in schools and educating pregnant mothers. What about that?
Lord Markham (Con)
I am aware of the Amsterdam initiative. Off the back of that, the OECD said that there were four main strands to what countries should be doing: first, information and education, such as the good examples I spoke about; secondly, increasing healthy choices through the reformulation of foods, which again is something we are doing; thirdly, the modifying of costs—the sugar tax, which has reduced sugar consumption by as much as 40%, is a perfect example of that; and, fourthly, restrictions on where product placement should take place. I am absolutely familiar with the initiative in Amsterdam, and am pleased to see that we have taken action on a lot of those things.
Lord Brooke of Alverthorpe (Lab)
Is the Minister not ashamed about what has happened to children’s health while the Conservatives have been in power since 2010? We have more obese children than ever before, and a plethora of policies which would work if implemented, yet so many are delayed. Will the Minister give a commitment to go back and look at the regulations governing children’s school meals? They were changed in 2014, with permission granted to give children more sugar. The Government were reviewing this in 2019 and 2020, but that stopped because of Covid. Will the Minister give a commitment again to start a review? Even if they cannot implement it, the next Government could.
Lord Markham (Con)
The noble Lord is correct: good school meals are fundamental to all of this. My understanding is that the review is something that the Government are looking to do, but I will happily provide more details on what the plan is.
Lord Morse (CB)
My Lords, can I just test with the Minister whether there is still a commitment to the policy of banning two-for-one promotions? If there is, is there an effective deal going on with the food producers that they will change certain processes if this ban continues to be pushed backwards and effectively talked out of effect?
Lord Markham (Con)
There is absolutely the commitment for October 2025. The tactic behind that is to give industry the time to make its food healthier. That is exactly what it is doing in the examples I mentioned, including the Deliciously Good cakes. It is good to see industry respond in that way.
Independent Review: Armed Forces Homosexuality Ban
(1 year, 3 months ago)
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Lord Lexden
To ask His Majesty’s Government when they expect to publish the report of the independent review, chaired by Lord Etherton, into the impact on military veterans of the pre-2000 ban on homosexuality in the armed forces, along with their response to the report.
The Minister of State, Ministry of Defence (Baroness Goldie) (Con)
The Government have today published the report of the noble and learned Lord, Lord Etherton, and accepted in principle the vast majority of the recommendations. As the Defence Secretary set out, while we agree with the intent behind them, there are a number which we will deliver in a slightly different way from that described in the report. We will set out these differences when we publish the Government’s full response to the review after the Summer Recess. Earlier today in the other place, my right honourable friends the Prime Minister and the Secretary of State for Defence apologised. Today in this House I repeat those apologies. From this Dispatch Box, I apologise on behalf of the Government and the Armed Forces, and I am profoundly sorry for all that our LGBT personnel suffered.
Lord Lexden (Con)
My Lords, is it not an interesting coincidence that this Question should come up on the very day that the Government finally published the excellent and long-awaited report of the noble and learned Lord, Lord Etherton? Could it possibly be that my little Question, tabled a month ago, helped in some small way to end the delay in releasing this report—so meticulously prepared by the noble and learned Lord, Lord Etherton, and delivered to the Government in May, bang on time—which had distressed many LGBT veterans? I hope that the Statement delivered in the Commons by the Secretary of State for Defence earlier today will be repeated in your Lordships’ House before the Recess. Finally, does not the full apology delivered by our Prime Minister today set the scene quite admirably for the substantial reparation that must be made to LGBT veterans who served their country with devotion, only to have their lives ruined because of their sexuality?
Baroness Goldie (Con)
I much respect the views being expressed by my noble friend. An eminent theologian once said to me that anyone who believes in coincidences must lead a very boring life and I could never accuse my noble friend of that. He makes an important point. There was a desire to bring the report forward and to publish it and I absolutely accept that my noble friend’s Question has been most timely in respect of this Chamber. On the matter of further procedure within the Chamber, he will understand that that is for others—my noble friends the Leader and the Chief Whip, with their counterparts through the usual channels—to determine. However, I am confident that, as the Secretary of State indicated in the other place, this Chamber will want to debate this report and I take this opportunity to pay tribute to the noble and learned Lord, Lord Etherton, for a forensic and meticulously comprehensive report. It is a most informative, extremely disturbing and, at times, appallingly repugnant read. It has shone light where light needed to be shone—there is not a shadow of a doubt—and we are all indebted to the noble and learned Lord for his assiduous work and his contribution to this vital issue.
Lord Cashman (Lab)
My Lords, I too commend this report and congratulate the noble and learned Lord on what, as the Minister has said, is a deeply harrowing yet forensic report. I think it will put right the wrongs that have been done to LGBT service personnel across the generations. I pay tribute to Elaine Chambers and Robert Ely, who set up Rank Outsiders in the early 1990s, which campaigned to end the ban on gays serving in the military. Will the Minister consider setting up an active task force to ensure that the 49 recommendations across government departments are brought forward, not least on service records, pensions and compensation? Further delay will only cause deeper tragedy.
Baroness Goldie (Con)
I thank the noble Lord for his kind remarks, and I think there was a lot of sympathy across the Chamber with what he said. I would observe that, as the Secretary of State was explicit about today in the other place, we are going to look comprehensively at the recommendations but we need to do that in conjunction with organisations such as that to which the noble Lord referred; and I pay tribute to them. They were indeed the founders of the pressure to ensure that at some point this was all laid open, exposed and examined and they deserve credit for their persistence. My right honourable friend the Secretary of State said in the other place that we will work extensively over the summer in consultation with all those who have an interest in this. We want to get it right and ensure that the recommendations so appropriately articulated by the noble and learned Lord get due consideration and we all understand what the consequences are and what the best route for delivery may be. My right honourable friend the Secretary of State said we accept the spirit of the recommendations and I repeat that in this Chamber.
Baroness Smith of Newnham (LD)
My Lords, speaking in the other place, the Secretary of State assumed that Members would have had a chance to read the testimonials. Unless people have done a speed-reading course, I suspect that so far we have not been able to do that. The Secretary of State also said that the Government have implemented six of the 49 recommendations already, without stipulating what they were, other than the apology. Can the Minister elaborate? Can she say also whether there will be an apology to the families of those LGBT veterans who are no longer with us but whose lives were blighted by the ban and whose families were therefore affected?
Baroness Goldie (Con)
I can say to the noble Baroness that already we have taken proactive measures such as implementing various inclusive policies—that was important —including the provision of pre-exposure HIV prophylaxis. We have introduced a guide for parents of LGBT children and LGBT+ allies training. We have several thriving LGBT+ staff networks and a LGBT+ community which regularly parades in Fighting with Pride marches and does so with pride. I had the privilege of meeting them at a reception last year and my right honourable friend the Minister for Defence, People, Veterans and Service Families was with them this year. In addition, we have today launched an “LGBT veterans: support and next steps” GOV.UK page, which is now live and available for anyone who was impacted by the policy to explore the support, services and restorative measures available to veterans. The recommendations also specifically provided for apologies, which we acknowledge as being absolutely necessary. In relation to the successors and relatives of those who have died, I think the apologies of the Prime Minister and the Secretary of State for Defence were all-encompassing. The Prime Minister’s was on behalf of the British state to all affected.
Lord Carlile of Berriew (CB)
Does the Minister agree that my noble and learned friend’s report should be seen as a paradigm across other sectors in both the public sector and the private sector; for example, in banking, where there is still discrimination on the grounds of sexual orientation, often fairly covert?
Baroness Goldie (Con)
I agree with the noble Lord. I think “paradigm” is a very appropriate noun to attribute to the noble and learned Lord’s report. I am disturbed to hear that there are other areas and sectors where such behaviour is lurking. My advice to anybody in those sectors is to call it out, expose it, shine a light on it and make sure that the miscreants, transgressors and culprits are all put into public view and dealt with appropriately.
Lord Coaker (Lab)
My Lords, I congratulate the noble Lord, Lord Lexden, on his Question and the noble and learned Lord, Lord Etherton, on his report, which I have managed to look at. I am sorry that I have not yet read it. It was good to hear the Minister’s apology on behalf of the nation, as well as the apologies of the Prime Minister and the Defence Secretary. I think all of us would wish to join in that apology. It is important for us in the remarks that we make today to pay tribute to those who have had the bravery to come forward and share their testimonies with us. For those who have not read the report, it is horrific, with unscientific methods of investigation into individuals, prejudice, discrimination, bullying and harassment, and Armed Forces personnel having their medals, which were often given for gallantry, taken away. It is an appalling saga, and let us hope that the recommendations are implemented quickly and that we can move forward out of this horror and ensure that in today’s Armed Forces none of that prejudice exists.
Baroness Goldie (Con)
I associate myself with everything the noble Lord has said. I was struck by part of the narrative. At page 53 of the report, the noble and learned Lord wrote:
“In broad terms, the responses to the Call for Evidence paint a vivid picture of overt homophobia at all levels of the armed forces during the period 1967 to 2000 and of the bullying that inevitably reflected it”.
The noble Lord is correct that some of the testimonies are absolutely nauseating and reveal treatment and behaviour that are beyond belief. The noble Lord is absolutely correct that to have the courage to come forward—it is obvious from the report how many people did come forward—was an extraordinary commitment and demonstration of bravery, and I cannot congratulate, commend or thank them too much because without their evidence, despite all the best efforts of the noble and learned Lord, this report would perhaps lack the impact and the undeniable punch which it has had.
Oil and Gas Windfall Tax
(1 year, 3 months ago)
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Lord Bruce of Bennachie
To ask His Majesty’s Government what assessment they have made of the impact of the oil and gas windfall tax on investment and jobs, and the capacity of the energy sector and supply chain to deliver key components of the transition for achieving the United Kingdom’s net zero objectives.
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, the Government introduced the energy profits levy to respond to exceptionally high prices that mean that oil and gas companies are benefiting from extraordinary profits. The Government have been clear that we want to see producers reinvest profits to support the economy, jobs and the UK’s energy security, which is why we have introduced generous investment allowances. Our North Sea transition deal reflects the key role of the sector in that energy transition.
Lord Bruce of Bennachie (LD)
I thank the Minister for that reply. As we increase our efforts to meet net zero, which we clearly must, does he agree that through all the projections to and through net zero, we will continue to use fossil fuel, albeit on a declining basis? Therefore, is it not essential, because Norway has said that it will produce every ounce of oil and gas that is commercial in its sector, that we do nothing to prevent the transition being led by the energy industry, which is increasing its investment in the necessary technology such as carbon capture and storage, hydrogen and green electricity, and that we need to ensure that it can continue to do that?
Lord Callanan (Con)
I am very happy to agree with the noble Lord. I am tempted to observe that he might want to talk to some of his colleagues on his Benches about that message. He is right that it makes much more sense as we go through the transition to obtain those resources from our own fields rather than import them at a much higher carbon content.
Lord Leigh of Hurley (Con)
My Lords, I refer to my interests in the register and to the previous questions I have raised on this matter in Treasury Questions. The point is that the EPL has had a dramatic effect on investment in North Sea oil. The question from the noble Lord, Lord Bruce, asks what assessment the Government have made of it. Would the Minister include in that assessment an analysis of the bids that have been made—for example, for Chevron oil in the Republic of Congo and in the Gulf of Mexico—by North Sea oil companies that are no longer investing in the North Sea?
Lord Callanan (Con)
My noble friend makes an important point. Taxation levels are obviously a matter for the Chancellor and the Treasury. However, there are a number of concerning stories from investors that they have pulled out of investments in the North Sea; in fact, one remarked that parts of Africa were a more stable tax environment.
Lord West of Spithead (Lab)
My Lords, I congratulate the Government on the £20 billion they put into the small modular reactor enterprise, and the work they have done for the STEP fission reactor. Does the Minister agree that the best net-zero way of ensuring that we have energy to provide the electrical baseload is to press ahead rapidly with Hinkley C and Sizewell because, if we do not get this nuclear power online, we are not going to make it?
Lord Callanan (Con)
I do agree with the noble Lord. Nuclear reactors, whether it be Sizewell or Hinkley, and small modular reactors will play an important part in the net-zero transition. Of course, we want a diverse supply mix; we want as much renewable energy as possible, but nuclear will play an important role.
Lord Stern of Brentford (CB)
My Lords, does the Minister recognise that the Paris Agreement implies the use of much less oil and gas in the 2030s than now? Therefore, issuing permits for exploration that usually requires at least seven years to generate flows makes little sense, particularly as the effect on prices and security would be negligible. Does he recognise that issuing such permits is essentially enabling and fostering bets on climate failure?
Lord Callanan (Con)
No, I would not agree with the noble Lord, I am afraid; he is absolutely dead wrong. Even with any new licences that might be issued in the UK, UK production will continue to decline at the rate of about 7% a year. It is estimated that global production decline needs to be about 3% to 4% in order to ensure the net-zero transition, so we will be declining at a faster rate than what is required globally.
Lord Teverson (LD)
My Lords, the windfall tax that the Minister mentions taxes profits but also gives a substantial kickback on investment. On renewables, the levy is against revenue and there is no such kickback. When will the Department for Energy Security and Net Zero stop discriminating against renewables?
Lord Callanan (Con)
My Lords, what the noble Lord refers to as a “kickback” is actually an investment allowance. If I am right, the same noble Lord was asking me about reducing flaring and about introducing electrification of fields. It is those investment allowances that pay for the very policies that he asked me to introduce.
Lord Bellingham (Con)
My Lords, in concurring with the noble Lord, Lord Bruce, in his statement that oil and gas are a vital part of transition to net zero, can I ask the Minister what the situation is with the Rosebank oil project, which is a world-class asset and one of the largest of its kind anywhere in the world?
Lord Callanan (Con)
I thank my noble friend for the kind invitation to respond to that. He will understand that I cannot comment on licensing decisions.
Baroness Blake of Leeds (Lab)
My Lords, analysis of the Office for Budget Responsibility data in May this year showed the extent to which oil and gas firms were able to reduce their energy profits levy while still making record profits. Between this loophole, the decision against a 78% rate and the decision not to backdate to catch all the surging profits, it is estimated that over £10 billion of potential tax will be missed between 2022-23 and 2023-24. I ask the Minister: have the Government given any consideration to fixing the levy to deliver the full benefits proposed since these figures came out?
Lord Callanan (Con)
I do not know where the noble Baroness gets her figures. I responded in my previous answer to the question about investment allowances—policies that the Opposition have called for. The energy profits levy is expected to raise about £26 billion and is set at a rate of 75%, which is one of the highest in the world. I realise that the Labour Party’s policy is to tax firms into extinction, but we need to leave them with some profits. Much of the profits of oil and gas companies goes towards pension funds and other shareholders which many pensioners and others rely on for their income.
Baroness Sheehan (LD)
My Lords, the IEA’s report World Energy Outlook 2022 is clear that the solution to the energy trilemma of economic, climate and security issues is to accelerate the move to greener energy. For us in the UK, among other things, that means urgently equipping our workforce with transferable skills for the energy transition. What are the Government doing to make sure that a single offshore energy skills passport that aligns training standards in all offshore energy sectors is introduced?
Lord Callanan (Con)
The noble Baroness is essentially right: of course we need to transition to renewable energy sources, and that is exactly what we are doing. The North Sea transition deal between the Government and North Sea companies is helping to move them, as far as the transition is going, to transfer their skills to many of the new industries. For example, many drilling companies operating in the North Sea also drill geothermal heat sources to use for renewable energy. The two things are not mutually incompatible.
The Lord Bishop of Bristol
My Lords, what assessment is the North Sea Transition Authority making of the alignment of company commitments, especially on net- zero targets covering scopes 1, 2 and 3, over the short, medium and long term as well as company alignment on capital expenditure towards those targets? Can the Minister assure us that, before licensing any expansion in North Sea exploration, the authority will factor this into consideration when judging projects under alignment with the UK’s net-zero legal commitment?
Lord Callanan (Con)
As I said in response to a previous question, I cannot comment on any licensing decisions—we will know about them before too long—but I can assure the right reverend Prelate that all the appropriate considerations are being taken into account by the Government and the North Sea Transition Authority on the issuing of those licences.
Lord Rooker (Lab)
I agree 100% with the Government’s nuclear policy but, bearing in mind that we want the success of renewables and the end of oil and gas, what assessment has been made of the fact that by 2050—which is not that far away—when the oil and gas is gone, we will be relying on nuclear for intermittency? That will leave the nuclear situation as a stranded asset, because it really does not work that way; it has got to be a formal baseload. Once the rest has gone and we are on renewables and left with nuclear, how can it be intermittent?
Lord Callanan (Con)
I totally understand the point the noble Lord is making. He is right that many renewables are very cheap but intermittent, and nuclear will contribute towards the baseload. He is asking for long-term energy storage; the answer is hydrogen. We can store large quantities of hydrogen—some really exciting projects are coming forward—and it can then be burned, with no emissions, in a power station to provide the supplies that we will need when the wind is not blowing and the sun is not shining.
House Of Lords: Appointments System
(1 year, 3 months ago)
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Baroness Jones of Moulsecoomb
To ask His Majesty’s Government what assessment they have made of the conclusion of the report of the Lord Speaker’s Committee on the Size of the House that recent developments “have brought the appointments system into question”.
The Lord Privy Seal (Lord True) (Con)
My Lords, of course, the Government will carefully note the report. Our view is that the life peerage system works well—
Lord True (Con)
There are certain beneficiaries of the life peerage system who seem to disagree.
We think that members of the House of Lords Appointments Commission do a good job and I have every confidence that new members coming in will do the same. To tweet this morning, as the noble Baroness did, about “ongoing corrupt patronage” from Prime Ministers does not help confidence in the appointments system.
Baroness Jones of Moulsecoomb (GP)
I am very flattered that the noble Lord knows about my tweets. That is very nice. It is obvious that the system of prime ministerial patronage is not working. Various Prime Ministers over the past couple of years have clearly put people into your Lordships’ House who have no intention of contributing to our work and probably do not have the skills to do so anyway. This is not about the House of Lords Appointments Commission, which I admire very much. The Green Party believes that that system is archaic and corrupt. Does the Leader of the House agree with me even a tiny bit?
Lord True (Con)
I very often agree with the noble Baroness, except I have never tweeted in my life, and I recommend her not to. The policy of the Green Party is to replace the system of appointment—which has given us all the excellent noble Lords here on these Benches in their parties—with a PR-democratically elected Chamber. Frankly, that would simply replace an accountable appointments system, where Prime Ministers are openly responsible for who they appoint, with an unaccountable appointments system of lists drawn up by secretive party secretariats.
Baroness Williams of Trafford (Con)
My Lords, we have lots of time. Let us hear from the noble Lord, Lord Wallace, then we very much look forward to hearing from the noble Lord, Lord Grocott.
Lord Wallace of Saltaire (LD)
My Lords, when the last reform of the House took place between 1997 and 1999, the then Government stated clearly that, ad interim, it was the Government’s policy, agreed with the Conservative Opposition and the Leader of the Conservative Opposition in the Lords, that no party should have a disproportionate number of Peers in the Lords.
Lord Wallace of Saltaire (LD)
I remind Conservative Peers that on a current poll basis the Conservatives have exactly twice the poll percentage of public support that we do, so we are not overrepresented.
Particularly under Boris Johnson, the Conservatives have broken that agreement. Do the Government not accept that we are now in a position where any change of government would have to be accompanied either by the voluntary resignation of a substantial number of Conservative Peers or the appointment of a large number of new governmental Peers, which would be bad for the size of the House?
Lord True (Con)
My Lords, I think the question of “disproportionate” was answered by Members of your Lordships’ House rather than me, so I will not add to the pain of those Benches. I think that there needs to be—and I have advocated this publicly in the House and privately—better representation of His Majesty’s Opposition in your Lordships’ House. I do not think it is generally acceptable that His Majesty’s Opposition should have fewer representatives in this House than the Cross Benches. I recognise that, and for all the criticism of the previous Prime Minister, Mr Johnson, he approved the appointment of Labour Peers. I hope that will go forward.
Lord Grocott (Lab)
My Lords, a part of this report that I particularly enjoyed was the piece saying that
“the ending of the hereditary peer by-elections … is crucial”.
There are two more of these wretched men-only by-elections pending as they stand. I appeal to the Leader, who talks about proportionality. It is his responsibility—and he knows the constitution well enough—not just to speak for his party but as Leader of the House to speak for the whole House. The whole House is absolutely clear by an overwhelming majority, repeatedly tested in votes on this issue, that hereditary Peer by-elections should end. I ask him to go to his colleagues in the Cabinet, tell them that there is no defence of this system whatever—I challenge him to provide one—and say that a simple two-clause Bill would scrap them, which would be consistent with the wishes of nearly everyone in this Chamber.
Lord True (Con)
I think the Government have other legislative priorities. The noble Lord knows how highly I esteem him. He is a bit like the elder Cato, who ended every speech in the Roman Senate by saying that Carthage must be destroyed. Unfortunately, Romans later looked back and said that when Carthage was destroyed was perhaps the beginning of the end of Rome. I am sure that, one day, the hereditary peerage will—and that has been long accepted—depart this House. Many will be sad of that. When it does, the full gaze of the public will turn on the life peerage and how that, in its turn, will stand the test of time.
Lord Shinkwin (Con)
My Lords, overall numbers obviously matter, but so does the number of Members of your Lordships’ House with a diversity of lived experience. The greater ethnic diversity of the recent intakes of Members to your Lordships’ House obviously strengthens us hugely in the eyes of the public, but will my noble friend The Lord Privy Seal to draw No. 10’s attention to the fact that, as compared with 20% of the population who are disabled, only 1% of your Lordships’ House has long-term lived experience of disability and encourage the Prime Minister to remedy that disproportionality?
Lord True (Con)
My Lords, my noble friend makes a very important point. I certainly will pass on that message, as indeed others that I have referred to. I think the whole House looks with the most enormous admiration and respect at—and gains tremendously from the presence of—those who have the kind of lived experience that my noble friend refers to.
Baroness Hayman (CB)
My Lords, the Leader said that the Government would take note of the report. Would he go rather further and look at it? It is cogent and carefully argued. If there is not time for legislation, there is time and opportunity for the Prime Minister to take action on issues that the public object to—not the work that this House does, but the size of the House and the method of appointment. The Prime Minister could limit the number of appointments and he could say that the Appointments Commission should look at the suitability and ability to contribute of Members who are nominated by the political parties, as it does for those who are nominated to the Cross Benches.
Lord True (Con)
My Lords, on the size of the House, since January 2022 it has in fact grown by four—plus seven net Conservatives and plus three net Labour. I understand that many noble Lords are agitated about the size of the House. However, I sometimes wish that the House would concentrate on extolling the great and good things that your Lordships do every day and the challenge that your Lordships give to the Government to improve legislation, and not concentrate so much on running down the House. I am not accusing the noble Baroness of that, but the reality is that we have just had in this House one of the most contested pieces of legislation, where 417 Peers voted.
Baroness Smith of Basildon (Lab)
My Lords, the noble Lord will understand that this is the fifth report of the Lord Speaker’s Committee. I am sure he senses the huge exasperation that so little has changed since the first report. Those of us who value—and I concur with him on this point—the work of this House and believe that it matters are frustrated that the two most serious and justified complaints are ones that Members of this House can do absolutely nothing about. As outlined by the noble Baroness, Lady Hayman, the size of the House and the appointments system bring us into criticism. The work of this House, whether people agree or not with our decisions, does not receive criticism; it is often praised—it is the size of the House and the appointments system. We do not have to agree with everything in the Lord Speaker’s report to know that something has to change. There needs to be grown-up, cross-party, serious discussions on these two key issues. I am ready; are the Government?
Lord True (Con)
My Lords, I wanted the noble Baroness to have time to intervene. I repeat with some humility the fact that I think we worry too much about the nominal size of the House. A House which has certain experts in it and people who come here occasionally and make a great contribution has to be larger than a full-time House. I repeat that we had 417 Peers voting on the deeply contested legislation on illegal migration on Monday. The House calls for a limit of 600 Members; we very rarely get that number voting.
As for discussions, the most important things are the role of the House, the way it conducts itself and, if I may say so, the agreements across the House within the usual channels. I am always keen to facilitate the House operating in a sensible mode. Size was not a problem in the late 1940s when the Labour Party was massively outnumbered, because there was an understanding about the way in which the House should operate. The House should concentrate on doing its role in that sort of way, and I am very happy to have those kinds of discussions. We should worry a little less about the nominal size of the House.
Bank Accounts
(1 year, 3 months ago)
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Lord Lamont of Lerwick
To ask His Majesty’s Government, in light of the recent assurances from the Economic Secretary to the Treasury, what action they intend to take to ensure that no person’s bank account should be closed for political reasons.
Lord Lamont of Lerwick (Con)
My Lords, I beg leave to ask a Question of which I have given private notice. In asking this Question, I declare that I have a bank account with NatWest.
The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)
My Lords, the Government unequivocally support the right to lawful free speech and consider it unacceptable for banks or other payment service providers to terminate contracts on these grounds. Earlier this year, the Government launched a call for evidence which included questions on the issue of payment account terminations and freedom of expression. We will soon set out plans for enhanced requirements applying to the termination of payment accounts.
Lord Lamont of Lerwick (Con)
My Lords, I am grateful to my noble friend for confirming that it is the Government’s view that no bank account should be closed for political reasons. Does she therefore agree that it is not for a bank to judge whether someone’s personal or political views accord with the so-called “values” of the bank and that that is not a reason for closing an account? Equally, does she agree that it is not for a bank to judge whether someone’s views are out of tone with wider society and then use that as the pretext for closing an account? Is this not a fundamental issue which ought to concern everyone of every party—left, right, centre or flat earth—who might all be the next person to suffer under what is happening? Will my noble friend ensure that the number of cases that have been reported recently, which, prima facie, seem to indicate that accounts may have been closed for political reasons, are referred to the regulator and investigated? Will she confirm that this a fundamental right of free speech in a free society?
Baroness Penn (Con)
I absolutely agree with my noble friend and reiterate once again that the Government unequivocally support the right to lawful free speech and consider it completely unacceptable for banks or other payment service providers to terminate contracts on these grounds. We issued a call for evidence that covered these issues and will consider all evidence as part of that. As my noble friend noted, I am sure that the regulator will also want to consider these matters.
Lord Hunt of Kings Heath (Lab)
My Lords, does the noble Baroness agree that part of the problem is that her department and the FCA were very slow to take action against the banks for the unwarranted interference in parliamentarians’ lives because they failed to operate the guidelines on PEPs appropriately and proportionately? Can we expect to see the FCA take disciplinary action against the banks that are doing this?
Baroness Penn (Con)
My Lords, it is important to distinguish between any action that may have been taken on freedom of speech grounds, or on the grounds of people’s political views, and the PEP regulations, which are to do with people’s status as politically exposed persons. However, the noble Lord is right, and we have discussed this issue in the House many times: the banks have not always applied those regulations and guidance as they should. That is why we had two amendments to the Financial Services and Markets Act to take action in this area, both to amend the regulations and for the FCA to review its guidance and the banks’ adherence to it. My right honourable friend the Economic Secretary has written to the FCA again recently to reiterate the importance of that review and to say that, if any action can be taken during the conduct of that review, we will expect that to happen also.
Lord Forsyth of Drumlean (Con)
My Lords, I declare an interest as the chairman of a bank. I also have an account with Coutts Bank—although, by the way, I have nothing like the wealth that has been mentioned. I point out to my noble friend that Coutts Bank is owned by NatWest, and the largest shareholder in NatWest by a long way is the Government. Should the Government, as a shareholder, not say to NatWest that this kind of conduct is unacceptable? Also, what is the FCA doing? On the basis of what we read in the newspapers, Coutts Bank has been in breach of rule 4, which requires it to treat customers fairly.
Baroness Penn (Con)
My Lords, as my noble friend has noted, the Government have a shareholding in NatWest Group, but it is managed at arm’s length and on a commercial basis by UK Government Investments and I do think that is the right approach. My noble friend also noted the role of the FCA. He is right that it is for the FCA and other relevant independent bodies to determine whether any breach of regulatory requirements has taken place—so I will not comment on that, but I would expect them to do so.
Baroness Kramer (LD)
My Lords, I gently suggest to the Minister that the issue of PEPs and the issue of people expressing their political views and then being treated badly are in fact entangled one with the other. I am just outraged that Nigel Farage was denied a bank account, but I was also denied a bank account at Chase UK this year because I could not produce physical payslips for my husband, who died 17 years ago. That had to be a specious reason, and I suspect that the real reason is that I am a Liberal Democrat who speaks out on issues in a way that the bank does not particularly like.
So I will just say that the PEP regime has got completely out of hand. It has been outsourced to consultants who make their money from dire and irrational interpretations. Will the Government please press the FCA not just to renew sensible guidance but to make sure that it is followed? Could she please tell it to focus its energies on the real abusers and the real money launderers?
Baroness Penn (Con)
Well, I can reassure the noble Baroness that that is exactly what the amendment to the Financial Services and Markets Act requires the FCA to do. It should look not just at the appropriateness of the guidance but at firms’ adherence to that guidance. We have asked it to get feedback from those who are affected by this guidance and take particular account of the impact on family members, which is an issue that many noble Lords have raised with me. We expect the FCA to follow that rigorously. The FCA is required to provide an update to this House on the progress of that work within a few months of it starting, and I am sure noble Lords will pay close attention to that.
Baroness Deech (CB)
My Lords, I know it is customary for children to blame their parents for everything, but will the Minister extend her concern to credit cards? My daughter, who is a very modest earner and has had the same credit card provider for 20 years, is being investigated in depth, with every piece of financial information needing to be produced, and we can think of no reason other than that I am her mother.
Baroness Penn (Con)
The changes to the regulations that the Government are committed to and the review by the FCA do not just cover banks; they cover the provision of credit cards and all other services that are covered by the anti-money laundering regulations relating to politically exposed persons.
Earl Attlee (Con)
My Lords, on at least two occasions Lords Ministers have indicated that the complete integrity of the money-laundering regulations is more important than facilitating the export of armoured fighting vehicles to Ukraine, even under export licence. In the light of what has happened recently, will the Minister agree either that this matter will be reviewed or to have a further meeting with me?
Baroness Penn (Con)
My Lords, I am not sure that events recently pertain to the particular case raised by the noble Lord. I was pleased to meet with him and as I committed to then and commit to on an ongoing basis, we will continue to engage with the Ministry of Defence to ensure that we have an understanding of the issue and that people do not face a wider systemic barrier.
Lord Macpherson of Earl’s Court (CB)
My Lords, I declare my interest as chairman of C Hoare & Co. Does the Minister agree that customer confidentiality should lie at the heart of banking, and that a bank apparently commenting on the income and wealth of a customer is completely unacceptable?
Baroness Penn (Con)
I agree with the noble Lord on both points. When it comes to assessing whether that has taken place, that is a question for the regulator.
Lord Davies of Brixton (Lab)
My Lords, I have to express a bit of concern about what I take to be the mood of the House. Will the Minister confirm that a PEP regime is essential, albeit one that is properly operated, and secondly, that if people cannot account properly for their income, it is right and proper for banks to refuse to continue an account?
Baroness Penn (Con)
My Lords, that is why it is important to distinguish between the PEP regime, which has caused problems for people, and questions about banks’ actions in relation to freedom of speech or political views. It is important, though, in both circumstances, whether you are a PEP or you have expressed any view that is lawfully held, that you have access to bank accounts. In taking forward our work on PEPs in particular, we are mindful of always maintaining our commitment to international standards in this area, and our amendments to the Financial Services and Markets Act do just that.
Lord Swire (Con)
Has my noble friend had any discussions with her colleagues in the Foreign, Commonwealth and Development Office about the fact that some overseas missions find it impossible to open bank accounts in the UK? This happens the entire time, and it seems rather invidious to ask these people to come here to open embassies and then say they cannot bank when they are here.
Baroness Penn (Con)
FCDO colleagues have not raised this with me but if there is an issue, I will be more than happy to sit down with other departments and discuss what we can do about it.
Lord Livermore (Lab)
My Lords, access to financial services should of course never be determined by a person’s political views, but just as those with assets of £1 million should not unduly be denied a bank account with Coutts & Co., so those with substantially less should not be denied access to basic banking services. Yet the Financial Conduct Authority estimates that more than 1 million people in the UK have no bank account and one in four people will experience financial exclusion at least once in their lives. The Government recently overturned Labour’s amendment to the Financial Services and Markets Act to require the FCA to have regard to financial inclusion. Do the Government now regret that decision?
Baroness Penn (Con)
My Lords, I absolutely agree about the importance of financial inclusion, and we have seen significant progress on that issue in recent years, including through establishing provision of basic bank accounts. That means that anyone in society, whatever their means, has the right to access banking, and we will continue to promote access through our work on financial inclusion.
Lord Cormack (Con)
My Lords, in answer to my noble friend Lord Forsyth, my noble friend the Minister said that the Government had their shareholding handled at arm’s length, or words to that effect. I completely accept that, but the moral fact is that the Government are the largest shareholder, so should they not take a particular interest in this political issue?
Baroness Penn (Con)
My Lords, the Government have taken an interest in this issue, which is why we issued a call for evidence earlier this year that covered freedom of speech and bank account closure. That is the right avenue through which the Government should seek to address this issue, rather than through their shareholding in a particular bank.
Lord Blunkett (Lab)
My Lords, I am fully in favour of the Government protecting the rights of the “Coutts one”, as they should be protecting the rights of the 1 million who cannot get a bank account. But is it not perverse, on the day that the Prime Minister has rightly apologised for the egregious treatment of LGBT people in the Armed Forces, for the Home Secretary to widen this debate into a full-frontal attack on equality, diversity and inclusion? Is that not totally unacceptable as well?
Baroness Penn (Con)
My Lords, I think the point we can all agree on is that the right to lawful freedom of speech is fundamental. Where that has been seen to be brought into question through the provision of services, we have cause to worry.
Lord Fox (LD)
The Minister rightly upheld the need for access. One of the ways people access banks is through bricks and mortar branches in our towns and cities. These continue to be closed; every week banks are closing. What conversations has her department had with banks about their closures and what was the content of those discussions?
Baroness Penn (Con)
This is an issue we have discussed, including during the passage of the Financial Services and Markets Act. The Government legislated in that Act to protect access to cash for consumers and business depositors, which will help people continue to access banking. Banking hubs are also being rolled out in areas that may be seeing closures, and those signed up to banking hubs have given a commitment that, where a hub is due to be opened in an area, the last bank will not shut until it is open.
Baroness Fox of Buckley (Non-Afl)
My Lords, as the Minister will remember, I tabled an amendment to the financial services Bill on this very question—as distinct from PEPs—of political values closing down accounts, and I was told that evidence was being sought. Is the Minister concerned that the only reason we now know this is happening is not because of anything the Government have done, but because a high-profile figure is pursuing the issue and getting a lot of attention? Secondly, can the Minister comment more broadly on the danger of the corporate power of financial services being used to bully customers into accepting certain values of equality, diversity and inclusion that have nothing to do with equality or diversity in any real sense, but with imposing their views on customers, for fear they will get their accounts cut off?
Baroness Penn (Con)
I reassure the noble Baroness that the Government’s commitment to issuing a call for evidence included issues of payment account terminations and freedom of expression. I believe the call for evidence closed before the issue that prompted this Question came to light. The Government are delivering on their commitment.
I close by stating once again that the Government unequivocally support the right to lawful free speech and consider it unacceptable for banks or other payment service providers to terminate contracts on these grounds.
Consumer Rights Act 2015 (Enforcement) (Amendment) Order 2023
(1 year, 3 months ago)
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Baroness Penn
That the draft Order laid before the House on 12 June be approved.
Considered in Grand Committee on 12 July.
Electronic Trade Documents Bill [HL]
Wednesday 19th July 2023
(1 year, 3 months ago)
Lords ChamberRead Full debate Electronic Trade Documents Act 2023 View all Electronic Trade Documents Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 19 June 2023 - (19 Jun 2023)
Viscount Camrose
That this House do agree with the Commons in their Amendments 1 to 6.
“(4A) Subsection (4) does not apply if the regulations are to be made by the Secretary of State and the Scottish Ministers acting jointly.”
“(5A) “The appropriate authority”, in relation to regulations under subsection (2)(b), means—
(a) in any case, the Secretary of State or the Secretary of State and the Scottish Ministers acting jointly;
(b) in a case in which all of the provision made by the regulations is within Scottish devolved competence, the Scottish Ministers.
(5B) Provision is within Scottish devolved competence if it is provision which would be within the legislative competence of the Scottish Parliament if contained in an Act of that Parliament.”
“Regulations under section 5
(1) Any power to make regulations under section 5, so far as exercisable by the Secretary of State acting alone or by the Secretary of State and the Scottish Ministers acting jointly, is exercisable by statutory instrument.
(2) For regulations made under section 5 by the Scottish Ministers acting alone, see section 27 of the 2010 Act (Scottish statutory instruments).
(3) A statutory instrument containing regulations made under section 5 by the Secretary of State acting alone, or by the Secretary of State and the Scottish Ministers acting jointly, may not be made unless a draft of the instrument containing the regulations has been laid before and approved by a resolution of each House of Parliament.
(4) Regulations made under section 5 by the Scottish Ministers acting alone, or by the Secretary of State and the Scottish Ministers acting jointly, are subject to the affirmative procedure (see section 29 of the 2010 Act).
(5) Where regulations are made under section 5 by the Secretary of State and the Scottish Ministers acting jointly—
(a) section 29 of the 2010 Act (affirmative procedure) applies in relation to the regulations as it applies in relation to devolved subordinate legislation (within the meaning of Part 2 of that Act) which is subject to the affirmative procedure, but as if references to a Scottish statutory instrument were to a statutory instrument, and
(b) section 32 of the 2010 Act (laying) applies in relation to the laying before the Scottish Parliament of the statutory instrument containing the regulations as it applies in relation to the laying before that Parliament of a Scottish statutory instrument (within the meaning of Part 2 of that Act).
(6) In this section “the 2010 Act” means the Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10).”
The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)
My Lords, the Government’s intention has always been that this Bill should apply UK-wide. In the process of delivering this ambition, we were able to confirm that legislative consent was not required from Northern Ireland or Wales. However, in the case of Scotland, private property law, as affected by this Bill, is a devolved matter and therefore legislative consent is necessary. As a result of amendments made to the Bill in the other place, we have received legislative consent from the Scottish Parliament.
The Bill has been amended to the effect that it now confers the delegated power in Clause 5(2)(b) additionally on Scottish Ministers both to exercise the power alone within areas of devolved competence and to act jointly with the Secretary of State. By including the option for Scottish Ministers to act alone and also to act jointly with the Secretary of State, the delegated powers can be exercised in a flexible manner that best suits the prevailing need for secondary legislation. Moreover, it avoids any future uncertainty as to whether matters are within the devolved competence of Scottish Ministers, particularly if they cut across devolved and reserved matters. The requirement in Clause 5(4) for the Secretary of State to consult Scottish Ministers before exercising the power in Clause 5(2)(b) will be disapplied in circumstances where the Secretary of State and Scottish Ministers act jointly to make regulations.
As noted earlier, while the Bill is unlikely to need future amendment, we believe that such changes are best delivered through concurrent delegated powers, which will allow both the Secretary of State and Scottish Ministers to make those changes. The amendments will therefore enable Scottish Ministers to make such regulations in a case in which all the provision made by the regulations is within Scottish devolved competence, and to act jointly with, or be consulted by, the Secretary of State in other cases.
The delegated powers previously afforded to the Secretary of State by the Bill are not substantively affected by this amendment. In view of this, Amendment 6 provides for regulations under Clause 5 to be subject to the affirmative resolution procedure at Westminster and in the Scottish Parliament.
In addition to these two substantive amendments, we have also had to include four consequential amendments to update and correct cross-references within the Bill. I hope noble Lords will acknowledge the requirement for the amendment to Clause 5 to change the delegated power and the consequential amendments that allow this new clause to be inserted into the Bill.
I reiterate the thanks that my noble friend Lord Parkinson of Whitley Bay gave at Third Reading to all those involved in the passage of this transformational Bill. I beg to move.
Lord Bassam of Brighton (Lab)
My Lords, I have studied the amendments closely and I can see the beneficial net effect of them. I guess that Amendment 4 is probably the most crucial to the package, and I think the noble Viscount was right to introduce them together in the way he did. I do not have much to say other than that, except to congratulate the Government on having the foresight to bring this legislation forward, and to thank the noble Lord, Lord Parkinson, for the work he did both in the Special Public Bill Committee and on the Floor of the House in considering the legislation.
I have a question for the noble Viscount, which I asked the last time we considered the Bill. This is a very important and significant piece of legislation that will go a long way to making the passage of international trade much easier, considering the impact that it could have. It will make it much easier to trade across international boundaries, and the volume of trade is such that removing the constraint on the use of electronic communication is extremely important. It is estimated that it could save as much as 15% of current transaction costs. That would be a considerable net benefit to the UK economy.
The one thing that worried and troubled me during our consideration was that there did not seem to be an implementation plan. When I quizzed the noble Lord, Lord Parkinson, on this, I was less than convinced by his response; I hope he was more convinced than I was. I do not see a plan yet. There is a role for one of the government departments involved in this to take a lead. It is really important that it does so in a way that works well with business, and consults business and all other interests to ensure that we get the maximum from this legislation; otherwise, I suspect it will lie unused.
We are one of only two jurisdictions that have made advances and progress on this. I know that others are looking at our work in the field and, if we can make a success of it, others will undoubtedly follow—but it needs leadership at the top to make this useful piece of legislation workable in future and to enhance our credentials as an international trading country.
Lord Clement-Jones (LD)
My Lords, I add my thanks to the Minister for moving these amendments from the Commons. He has shown remarkable consistency with the words of his honourable friend Mr Scully in the Commons—I think word for word it is what he said, so that is excellent. I see other members of the committee here; I am only sorry that the noble and learned Lord, Lord Thomas of Cwmgiedd, is not here to see the final process and see this legislation go forward.
I welcome these amendments, because it means that the legislation will cover the whole United Kingdom, and that the exception power in Clause 5 will operate across the UK. Could the Minister say whether anything is in contemplation under Clause 5 to be excepted in using that power across the UK?
I very much agree with what the noble Lord, Lord Bassam, said about a plan for implementation. This is a much more important Bill than it appears at first sight, and we should really speed it on its way in implementation terms.
Lord Holmes of Richmond (Con)
My Lords, I rise briefly to support the amendments as set out. In doing so, I declare my technology interests as set out in the register.
This is the most important Bill that no one has ever heard of. It demonstrates what we can do when we combine the potential of these new technologies with the great good fortune of common law that we have in this country. I particularly support the comments made by the noble Lords, Lord Bassam and Lord Clement-Jones, about the Government’s plan for implementation. Although it is obviously critical that we get Royal Assent to this Bill as soon as possible, that is really where the work begins. As my noble friend the Minister knows, the Bill is rightly permissive in nature; it cannot be that, having done all the work through both Houses of Parliament, the Bill is then just left on the shelf. There needs to be an active plan for implementation, communicating to all the sectors and all the organisations, institutions and brilliant businesses in this space to seize the opportunity that comes from electronic trade documents. Does my noble friend the Minister agree— and will he fill out some more detail on what that implementation plan is?
Viscount Camrose (Con)
I thank all three noble Lords who have commented. The noble Lord, Lord Bassam, and others have rightly raised the issue of how we implement the provision, and I could not agree more strongly that the prospect of such a brilliant and transformational Bill gathering dust on a shelf is rather depressing; it would be a great waste.
Industry is very keen to implement this itself, but it is on us to track how that is going and ensure that it does. On how exactly industry goes about it, I would like to write to noble Lords to explain that, because I very much recognise the importance of the question.
With respect to any actions envisaged in Clause 5, nothing is currently envisaged.
Online Safety Bill
Wednesday 19th July 2023
(1 year, 3 months ago)
Lords ChamberRead Full debate Online Safety Act 2023 View all Online Safety Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 151-V Fifth marshalled list for Report - (17 Jul 2023)
17:42 - Division on Amendment 245 - Ayes: 196 / Noes: 183 - Amendment 245 agreed.
19:10 - Division on Amendment 258ZA - Ayes: 70 / Noes: 178 - Amendment 258ZA disagreed.
“Power to impose duty about alternative dispute resolution procedure
(1) The Secretary of State may by regulations amend this Act for or in connection with the imposition on providers of Category 1 services of an ADR duty.(2) An “ADR duty”—(a) is a duty requiring providers of Category 1 services to arrange for and engage in an alternative dispute resolution procedure in specified circumstances for the resolution of disputes about their handling of relevant complaints, and(b) may include a duty requiring such providers to meet the costs incurred by any other person in using a dispute resolution procedure which is so arranged.(3) Complaints are “relevant” for the purposes of subsection (2)(a) if they—(a) relate to a Category 1 service,(b) are of a specified kind, and(c) are made by persons of a specified kind.(4) Regulations under this section may not be made before the publication of a statement by the Secretary of State responding to OFCOM’s report under section (OFCOM’s report about reporting and complaints procedures)(report about reporting and complaints procedures in use by providers of Part 3 services: see subsection (10) of that section). (5) Before making regulations under this section the Secretary of State must consult—(a) OFCOM,(b) the Information Commissioner, and(c) such other persons as the Secretary of State considers appropriate.(6) If the power conferred by subsection (1) is exercised, the first regulations made under the power must—(a) require the use of a dispute resolution procedure which is impartial, and(b) prohibit the use of a dispute resolution procedure which restricts or excludes the availability of civil proceedings.(7) Provision made by regulations under this section may have the effect that the duties set out in any or all of sections 17, 18 and 19 which apply in relation to duties imposed by other provisions of Chapter 2 of Part 3 are also to apply in relation to the ADR duty, and accordingly the regulations may amend—(a) section 17(6),(b) the definition of “safety measures and policies” in section 18(8), or(c) the definition of “relevant duties” in section 19(10).(8) The provisions of this Act that may be amended by the regulations in connection with the imposition of the ADR duty include, but are not limited to, the following provisions (in addition to those mentioned in subsection (7))—(a) section 6(5),(b) section 94(12)(a), and(c) section 120(2).(9) If the power conferred by subsection (1) is exercised, the first regulations made under the power must require OFCOM to—(a) produce and publish guidance for providers of Category 1 services to assist them in complying with the ADR duty, and(b) consult the Secretary of State, the Information Commissioner and such other persons as OFCOM consider appropriate before producing the guidance.(10) Section 184(1) applies for the purposes of the references to Category 1 services in this section.(11) In this section “specified” means specified in regulations under this section.(12) For the meaning of “Category 1 service”, see section 86 (register of categories of services).”Member’s explanatory statement
This amendment provides that the Secretary of State may make regulations amending this Bill so as to impose a new duty on providers of Category 1 services to arrange for and engage in an out of court, impartial dispute resolution procedure. The regulations may not be made until the Secretary of State has responded to OFCOM’s report about content reporting and complaints procedures under the new clause proposed to be inserted after Clause 147 in my name.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
My Lords, the government amendments in this group relate to content reporting and complaints procedures. The Bill’s existing duties on each of these topics are a major step forward and will provide users with effective methods of redress. There will now be an enforceable duty on Part 3 services to offer accessible, transparent and easy-to-use complaints procedures. This is an important and significant change from which users and others will benefit directly.
Furthermore, Part 3 services complaints procedures will be required to provide for appropriate action to be taken in response to complaints. The duties here will fundamentally alter how complaints systems are operated by services, and providers will have to make sure that their systems are up to scratch. If services do not comply with their duties, they will face strong enforcement measures.
However, we have listened to concerns raised by your Lordships and others, and share the desire to ensure that complaints are handled effectively. That is why we have tabled Amendments 272AA and 274AA, to ensure that the Bill’s provisions in this area are the subject of a report to be published by Ofcom within two years of commencement.
Amendment 272AA places a requirement on Ofcom to undertake a report about Part 3 services reporting and complaints procedures. The report will assess the measures taken or in use by providers of Part 3 services to enable users and others to report content and make complaints. In assessing the content reporting and complaints measures in place, the report must take into account users’ and others’ experiences of those procedures—including how easy to use and clear they are for reporting content and making complaints, and whether providers are taking appropriate and timely action in response.
In this report, Ofcom must provide advice to the Secretary of State about whether she should use her power set out in Amendment 236C to make regulations imposing an alternative dispute resolution duty on category 1 services. Ofcom may also make wider recommendations about how the complaints and user redress provisions can be strengthened, and how users’ experiences with regard to complaints can be improved more broadly. Amendment 274AA is a consequential amendment ensuring that the usual confidentiality provisions apply to matters contained in that report.
These changes will ensure that the effectiveness of the Bill’s content reporting and complaints provisions can be thoroughly assessed by Ofcom two years after the commencement of the provision, providing time for the relevant reporting and complaints procedures to bed in.
Amendment 236C then provides that the Secretary of State will have a power to make regulations to amend the Act in order to impose an alternative dispute resolution duty on providers of category 1 services. This power can be used after the Secretary of State has published a statement in response to Ofcom’s report. This enables the Secretary of State to impose via regulations a duty on the providers of category 1 services to arrange for and engage in an impartial, out-of-court alternative dispute resolution procedure in respect of complaints. This means that, if the Bill’s existing user redress provisions are found to be insufficient, this requirement can quickly be imposed to strengthen the Bill.
This responds directly to concerns which noble Lords raised about cases where users or parents may feel that they have nowhere to turn if they are dissatisfied with a service’s response to their complaint. We believe that the existing provisions will remedy this, but, if they do not, these new requirements will ensure that there is an impartial, alternative dispute resolution procedure which will work towards the effective resolution of the complaint between the service and the complainant.
At the same time, it will avoid creating a single ombudsman, person or body which may be overwhelmed either through the volume of complaints from multiple services or by the complexity of applying such disparate services’ varying terms of service. Instead, if required, this power will put the onus on the provider to arrange for and engage in an impartial dispute resolution procedure.
Amendment 237D requires that, if regulations are made requiring category 1 services to offer an alternative dispute resolution procedure, such regulation must be subject to the affirmative parliamentary procedure. This ensures that Parliament will continue to have oversight of this process.
I hope that noble Lords are reassured that the Bill not only requires services to provide users and others with effective forms of redress but that these further amendments will ensure that the Bill’s provisions in this area will be thoroughly reviewed and that action can be taken quickly if it is needed. I beg to move.
Lord Stevenson of Balmacara (Lab)
My Lords, I am grateful to hear what the Minister has just announced. The scheme that was originally prefigured in the pre-legislative scrutiny report has now got some chance of being delivered. I think the process and procedures are quite appropriate; it does need review and thought. There needs to be account taken of practice on the ground, how people have found the new system is working, and whether or not there are gaps that can be filled this way. I give my full support to the proposal, and I am very glad to see it.
Having got to the Dispatch Box early, I will just appeal to our small but very important group. We are on the last day on Report. We are reaching a number of issues where lots of debate has taken place in Committee. I think it would be quite a nice surprise for us all if we were to get through this quickly. The only way to do that is by restricting our contributions.
Baroness Morgan of Cotes (Con)
My Lords, I will speak briefly to Amendments 272AA and 274AA, only because at the previous stage of the Bill I tabled amendments related to the reporting of illegal content and fraudulent advertisements, both in reporting, and complaints and transparency. I have not re-tabled them here, but I have had conversations with my noble friend the Minister. It is still unclear to those in the House and outside why the provisions relating to that type of reporting would not apply to fraudulent advertisements, particularly given that the more information that can be filed about those types of scams and fraudulent advertisements, the easier it would be for the platforms to gather information, and help users and others to start to crack down on that. I wonder if, when he sums up, my noble friend could say something about the reporting provisions relating to fraudulent advertisements generally, and in particular around general reporting and reporting relating to complaints by users.
Lord Allan of Hallam (LD)
My Lords, I am mindful of the comments of the noble Lord, Lord Stevenson, to be brief. I add a note of welcome to the mechanism that has been set out.
In this legislation, we are initiating a fundamental change to the way in which category 1 providers will run their reporting systems, in that prior to this they have not had any external oversight. Ofcom’s intervention will be material, given that online service providers will have to explain to Ofcom what they are doing and why.
We should note that we are also asking providers to do some novel prioritisation. The critical thing with all these reporting systems is that they operate at such huge volumes. I will not labour the points, but if noble Lords are interested they can look at the Meta and YouTube transparency reports, where it is explained that they are actioning tens of millions of pieces of content each month, on the basis of hundreds of millions of reports. If you get even 1% of 10 million reports wrong, that is 100,000 errors. We should have in mind the scale we are operating at. Ofcom will not be able to look at each one of those, but I think it will be able to produce a valuable system and make sure that quality control is improved across those systems, working with the providers. Having additional powers to create an alternative dispute resolution mechanism where one does not exist and would prove to be useful is helpful. However, the slow and steady approach of seeing what will happen with those systems under Ofcom supervision before jumping into the next stage is right.
I also note that we are asking platforms to do some prioritisation in the rest of the Online Safety Bill. For example, we are saying that we wish journalistic and politician content to be treated differently from ordinary user content. All of those systems need to be bedded in, so it makes sense to do it at a reasonable pace.
I know that the noble Baroness, Lady Newlove, who cannot be here today, was also very interested in this area and wanted to make sure we made the point that the fact there is a reasonable timescale for the review does not mean that we should take our foot off the pedal now for our expectations for category 1 service providers. I think I heard that from the Minister, but it would be helpful for him to repeat it. We will be asking Ofcom to keep the pressure on to get these systems right now, and not just wait until it has done the report and then seek improvements at that stage. With that—having been about as brief as I can be— I will sit down.
Baroness Harding of Winscombe (Con)
My Lords, I promise I will be brief. I, too, welcome what the Minister has said and the amendments that the Government have proposed. This is the full package which we have been seeking in a number of areas, so I am very pleased to see it. My noble friend Lady Newlove and the noble Baroness, Lady Kidron, are not in their places, but I know I speak for both of them in wanting to register that, although the thoughtful and slow-and-steady approach has some benefits, there also some real costs to it. The UK Safer Internet Centre estimates that there will be some 340,000 individuals in the UK who will have no recourse for action if the platforms complaints mechanism does not work for them in the next two years. That is quite a large number of people, so I have one very simple question for the Minister: if I have exhausted the complaints procedure with an existing platform in the next two years, where do I go? I cannot go to Ofcom. My noble friend Lord Grade was very clear in front of the committee I sit on that it is not Ofcom’s job. Where do I go if I have a complaint that I cannot get resolved in the next two years?
Lord Clement-Jones (LD)
My Lords, I declare an interest as chair of Trust Alliance Group, which operates the energy and communications ombudsman schemes, so I have a particular interest in the operation of these ADR schemes. I thank the Minister for the flexibility that he has shown in the provision about the report by Ofcom and in having backstop powers for the Secretary of State to introduce such a scheme.
Of course, I understand that the noble Baroness, Lady Newlove, and the UK Safer Internet Centre are very disappointed that this is not going to come into effect immediately, but there are advantages in not setting out the scheme at this very early point before we know what some of the issues arising are. I believe that Ofcom will definitely want to institute such a scheme, but it may be that, in the initial stages, working out the exact architecture is going to be necessary. Of course, I would have preferred to have a mandated scheme, in the sense that the report will look not at the “whether” but the “how”, but I believe that at the end of the day it will absolutely obvious that there needs to be such an ADR scheme in order to provide the kind of redress the noble Baroness, Lady Harding, was talking about.
I also agree with noble Baroness, Lady Morgan, that the kinds of complaints that this would cover should include fraudulent adverts. I very much hope that the Minister will be able to answer the questions that both noble Baronesses asked. As my noble friend said, will he reassure us that the department and Ofcom will not take their foot off the pedal, whatever the Bill may say?
Lord Parkinson of Whitley Bay (Con)
I am grateful to noble Lords for their warm support and for heeding the advice of the noble Lord, Lord Stevenson, on brevity. We must finish our Report today. The noble Lord, Lord Allan, is right to mention my noble friend Lady Newlove, who I have spoken to about this issue, as well as the noble Lord, Lord Russell of Liverpool, who has raised some questions here.
Alongside the strong duties on services to offer content reporting and complaints procedures, our amendments will ensure that the effectiveness of these provisions can be reviewed after they have had sufficient time to bed in. The noble Lord, Lord Allan, asked about timing in more detail. Ofcom must publish the report within the two-year period beginning on the day on which the provision comes into force. That will allow time for the regime to bed in before the report takes place, ensuring that its conclusions are informed by how the procedures work in practice. If necessary, our amendments will allow the Secretary of State to impose via regulations a duty on the providers of category 1 services to arrange for and engage in an impartial, out-of-court alternative dispute resolution procedure, providing the further strengthening which I outlined in opening.
I can reassure my noble friend Lady Morgan of Cotes that reporting mechanisms to facilitate providers’ removal of fraudulent advertisements are exactly the kinds of issues that Ofcom’s codes of practice will cover, subject to consultation and due process. As companies have duties to remove fraudulent advertising once they are alerted to it, we expect platforms will need the necessary systems and processes in place to enable users to report fraudulent adverts so that providers can remove them.
My noble friend Lady Harding asked the question which was posed a lot in Committee about where one goes if all avenues are exhausted. We have added further avenues for people to seek redress if they do not get it but, as I said in Committee, the changes that we are bringing in through this Bill will mark a significant change for people. Rather than focusing on the even-further-diminished possibility of their not having their complaints adequately addressed through the additional amendments we are bringing today, I hope she will see that the provisions in the Bill and in these amendments as bringing in the change we all want to see to improve users’ safety online.
“Powers to amend sections (“Primary priority content that is harmful to children”) and (“Priority content that is harmful to children”)
(1) The Secretary of State may by regulations amend—(a) section (“Primary priority content that is harmful to children”) (primary priority content that is harmful to children);(b) section (“Priority content that is harmful to children”) (priority content that is harmful to children).But the power to add a kind of content is limited by subsections (2) to (4).(2) A kind of content may be added to section (“Primary priority content that is harmful to children”) only if the Secretary of State considers that, in relation to Part 3 services—(a) there is a material risk of significant harm to an appreciable number of children presented by content of that kind that is regulated user- generated content or search content, and(b) it is appropriate for the duties set out in sections 11(3)(a) and 25(3)(a) (duty in relation to children of all ages) to apply in relation to content of that kind.(3) A kind of content may be added to section (“Priority content that is harmful to children”) only if the Secretary of State considers that, in relation to Part 3 services, there is a material risk of significant harm to an appreciable number of children presented by content of that kind that is regulated user-generated content or search content.(4) A kind of content may not be added to section (“Primary priority content that is harmful to children”) or (“Priority content that is harmful to children”) if the risk of harm presented by content of that kind flows from—(a) the content’s potential financial impact, (b) the safety or quality of goods featured in the content, or(c) the way in which a service featured in the content may be performed (for example, in the case of the performance of a service by a person not qualified to perform it).(5) The Secretary of State must consult OFCOM before making regulations under this section.(6) In this section references to children are to children in the United Kingdom.(7) In this section—“regulated user-generated content” has the same meaning as in Part 3 (see section 49);“search content” has the same meaning as in Part 3 (see section 51).”Member’s explanatory statement
This amendment gives power for the Secretary of State to make regulations changing the kinds of content that count as primary priority content and priority content harmful to children, subject to certain constraints set out in the Clause.
Member’s explanatory statement
This amendment has the effect that regulations made by OFCOM under the Bill must be made by statutory instrument.
Lord Parkinson of Whitley Bay (Con)
My Lords, Amendments 238A and 238D seek to change the parliamentary process for laying—oh, I am skipping ahead with final day of Report enthusiasm.
As noble Lords know, companies will fund the costs of Ofcom’s online safety functions through annual fees. This means that the regime which the Bill ushers in will be cost neutral to the taxpayer. Once the fee regime is operational, regulated providers with revenue at or above a set threshold will be required to notify Ofcom and to pay a proportionate fee. Ofcom will calculate fees with reference to the provider’s qualifying worldwide revenue.
The Delegated Powers and Regulatory Reform Committee of your Lordships’ House has made two recommendations relating to the fee regime which we have accepted, and the amendments we are discussing in this group reflect this. In addition, we are making an additional change to definitions to ensure that Ofcom can collect proportionate fees.
A number of the amendments in my name relate to qualifying worldwide revenue. Presently, the Bill outlines that this should be defined in a published statement laid before Parliament. Your Lordships’ committee advised that it should be defined through regulations subject to the affirmative procedure. We have agreed with this and are proposing changes to Clause 76 so that Ofcom can make provisions about qualifying worldwide revenue by regulations which, as per the committee’s recommendations, will be subject to the affirmative procedure.
Secondly, the committee recommended that we change the method by which the revenue threshold is defined. Presently, as set out in the Bill, it is set by the Secretary of State in a published statement laid before Parliament. The committee recommended that the threshold be set through regulations subject to the negative procedure and we are amending Clause 77 to make the recommended change.
Other amendments seek to make a further change to enable Ofcom to collect proportionate fees from providers. A provider of a regulated service the qualifying worldwide revenue of which is equal to, or greater than, the financial threshold will be required to notify Ofcom and pay an annual fee, calculated by reference to its qualifying worldwide revenue. Currently, this means that that fee calculation can be based only on the revenue of the regulated provider. The structure of some technology companies, however, means that how they accrue revenue is not always straightforward. The entity which meets the definition of a provider may therefore not be the entity which generates revenue referable to the regulated service.
Regulations to be made by Ofcom about the qualifying worldwide revenue will therefore be able to provide that the revenue accruing to certain entities in the same group as a provider of a regulated service can be taken into account for the purposes of determining qualifying worldwide revenue. This will enable Ofcom, when making such regulations, to make provisions, if necessary, to account for instances where a provider has a complex group structure; for example, where the regulated provider might accrue only a portion of the revenue referrable to the regulated service, the rest of which might be accrued by other entities in the group’s structure. These amendments to Clause 76 address these issues by allowing Ofcom to make regulations which provide that the revenue from certain other entities within the provider’s group structure can be taken into account. I beg to move.
Lord Allan of Hallam (LD)
My Lords, we have not talked much about fees in our consideration of the Bill, and I will not talk much about them today, but there are some important questions. We should not skip too lightly over the fact that we will be levying revenues from online providers. That might have a significant impact on the markets. I have some specific questions about this proposed worldwide revenue method but I welcome these amendments and that we will now be getting a better procedure. This will also allow the Minister to say, “All these detailed points can be addressed when these instruments come before Parliament”. That is a good development. However, there are three questions that are worth putting on the record now so that we have time to think about them.
First, what consideration will be given to the impact on services that do not follow a classic revenue model but instead rely on donations and other sorts of support? I know that we will come back to this question in a later group but there are some very large internet service providers that are not the classic advertising-funded model, instead relying on foundations and other things. They will have significant questions about what we would judge their qualifying worldwide revenue to be, given that they operate to these very different models.
The second question concerns the impact on services that may have a very large footprint outside the UK, and significant worldwide revenues, but which do very little business within the UK. The amendment that the Minister has tabled about group revenues is also relevant here. You can imagine an entity which may be part of a very large worldwide group making very significant revenues around the world. It has a relatively small subsidiary that is offering a service in the UK, with relatively low revenues. There are some important questions there around the potential impact of the fees on decision-making within that group. We have discussed how we do not want to end up with less choice for consumers of services in the UK. There is an interesting question there as to whether getting the fee level wrong might lead to worldwide entities saying, “If you’re going to ask me to pay a fee based on my qualifying worldwide revenue, the UK market is just not worth it”. That may particularly true if, for example, the European Union and other markets are also levying a fee. You can see a rational business choice of, “We’re happy to pay the fee to the EU but not to Ofcom if it is levied at a rate that is disproportionate to the business that we do here”.
The third and very topical question is about the Government’s thinking about services with declining revenues but whose safety needs are not reducing and may even be increasing. I hope as I say this that people have Twitter in mind, which has very publicly told us that its revenue is going down significantly. It has also very publicly fired most of its trust and safety staff. You can imagine a model within which, because its revenue is declining, it is paying less to Ofcom precisely when Ofcom needs to do more supervision of it.
I hope that we can get some clarity around the Government’s intentions in these circumstances. I have referenced three areas where the worldwide qualifying revenue calculation may go a little awry. The first is where the revenue is not classic commercial income but comes from other sources. The second is where the footprint in the UK is very small but it is otherwise a large global company which we might worry will withdraw from the market. The third, and perhaps most important, is what the Government’s intention is where a company’s revenue is declining and it is managing its platform less well and its Ofcom needs increase, and what we would expect to happen to the fee level in those circumstances.
Lord Stevenson of Balmacara (Lab)
My Lords, there is very little to add to that. These are important questions. I simply was struck by the thought that the amount of work, effort and thought that has gone into this should not be kept within this Bill. I wonder whether the noble Lord has thought of offering his services to His Majesty’s Treasury, which has difficulty in raising tax from these companies. It would be nice to see that problem resolved.
Lord Parkinson of Whitley Bay (Con)
I am looking forward to returning to arts and heritage; I will leave that to my noble friend Lady Penn.
The noble Lord, Lord Allan, asked some good questions. He is right: the provisions and the parliamentary scrutiny allow for the flexibility for all these things to be looked at and scrutinised in the way that he set out. I stress that the fee regime is designed to be fair to industry; that is central to the approach we have taken. The Bill stipulates that Ofcom must charge only proportionate and justifiable fees to industry. The provisions that Ofcom can make via regulation about the qualifying worldwide revenue aim to ensure that fees are truly representative of the revenue relating to the regulated service and that they will encourage financial transparency. They also aim to aid companies with complex structures which would otherwise struggle to segregate revenues attributable to the provider and its connected entities.
The revenue of the group undertaking can be considered in scope of a provider’s qualifying worldwide revenue if the entity was a member of the provider’s group during any part of the qualifying period and the entity receives during the qualifying period any amount referrable to a regulated service. The regulations provide Ofcom with a degree of flexibility as to whether or not to make such provisions, because Ofcom will aim to keep the qualifying worldwide revenue simple.
I am grateful for noble Lords’ support for the amendments and believe that they will help Ofcom and the Government to structure a fair and transparent fee regime which charges proportionate fees to fund the cost of the regulatory regime that the Bill brings in.
“(3A) The Statutory Instruments Act 1946 applies in relation to OFCOM’s powers to make regulations under this Act as if OFCOM were a Minister of the Crown.(3B) The Documentary Evidence Act 1868 (proof of orders and regulations etc) has effect as if—(a) OFCOM were included in the first column of the Schedule to that Act;(b) OFCOM and persons authorised to act on their behalf were mentioned in the second column of that Schedule.”Member’s explanatory statement
This amendment makes technical provision in relation to regulations made by OFCOM under the Bill.
“(aa) regulations under section (“Regulations by OFCOM about qualifying worldwide revenue etc”)(1),”Member’s explanatory statement
This amendment provides that regulations made by OFCOM under subsection (1) of the new Clause 76 proposed in my name regarding “qualifying worldwide revenue” etc are subject to the affirmative Parliamentary procedure.
“(da) regulations under section (Power to regulate app stores)(1),”Member’s explanatory statement
This amendment provides that regulations made under the new Clause proposed in my name after Clause 194 are subject to the affirmative Parliamentary procedure.
“(da) regulations under section (Power to impose duty about alternative dispute resolution procedure)(1),”Member’s explanatory statement
This amendment provides that regulations made under the new Clause proposed to be inserted in my name after Clause 194, concerning regulations to impose a duty on providers of Category 1 services about using an alternative dispute resolution procedure, are subject to the affirmative Parliamentary procedure.
“(m) regulations under paragraph 5(9) of Schedule 13,”Member’s explanatory statement
This amendment provides that regulations made by OFCOM under paragraph 5(9) of Schedule 13 regarding “qualifying worldwide revenue” etc for the purposes of that paragraph are subject to the affirmative Parliamentary procedure.
Member’s explanatory statement
This amendment ensures that regulations made under the new Clause proposed to be inserted after Clause 195 in my name are subject to the affirmative procedure, except in cases of urgency.
“(7A) A statutory instrument containing the first regulations under paragraph 1(1) of Schedule 11 (whether alone or with regulations under paragraph 1(2) or (3) of that Schedule) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.(7B) Any other statutory instrument containing regulations under paragraph 1(1) of Schedule 11 is subject to annulment in pursuance of a resolution of either House of Parliament.”Member’s explanatory statement
This amendment provides that the first regulations made under paragraph 1(1) of Schedule 11 (regulations specifying Category 1 threshold conditions) are subject to the affirmative Parliamentary procedure.
Lord Parkinson of Whitley Bay (Con)
My Lords, as I was eagerly anticipating, government Amendments 238A and 238D seek to change the parliamentary process for laying the first regulations specifying the category 1 threshold conditions from the negative to the affirmative procedure. I am pleased to bring forward this change in response to the recommendation of your Lordships’ Delegated Powers and Regulatory Reform Committee.
The change will ensure that there are adequate levels of parliamentary scrutiny of the first regulations specifying the category 1 threshold conditions. This is appropriate given that the categorisation of category 1 services will lead to the most substantial duties on the largest and most influential services. As noble Lords are aware, these include the duties on user empowerment, user identity verification, journalistic and news publisher content, content of democratic importance, and fraudulent advertising.
Category 2A services will have only additional transparency and fraudulent advertising duties, and category 2B services will be subject only to additional transparency reporting duties. The burden of these duties is significantly less than the additional category 1 duties, and we have therefore retained the use of the negative resolution procedure for these regulations, as they require less parliamentary scrutiny.
Future changes to the category 1 threshold conditions will also use the negative procedure. This will ensure that the regime remains agile in responding to change, which I know was of particular concern to noble Lords when we debated the categorisation group in Committee. Keeping the negative procedure for such subsequent uses will avoid the risk of future changes being subject to delays because of parliamentary scheduling. I beg to move.
Baroness Morgan of Cotes (Con)
My Lords, I shall speak to Amendment 245. I would like to thank my noble friend the Minister, and also the Minister on leave, for the conversations that I have had with them about this amendment and related issues. As we have already heard, the platform categorisation is extremely important. So far, much of it is unknown, including which sites are actually going to be in which categories. For example, we have not yet seen any proposed secondary regulations. As my noble friend has just outlined, special duties apply, especially for those sites within category 1—user empowerment in particular, but also other duties relating to content and fraudulent advertisements.
Clause 85 and Schedule 11 set out the thresholds for determining which sites will be in category 1, category 2A or category 2B. I am very mindful of the exhortation of the noble Lord, Lord Stevenson, about being brief, but it is amazing how much you have to say about one word to explain this amendment. This amendment proposes to change an “and” to an “or” in relation to determining which sites would fall within category 1. It would move from a test of size “and” functionality to a test of size “or” functionality. This would give Ofcom more flexibility to decide which platforms really need category 1 designation. Category 1 should not be decided just on size; it should also be possible to determine it on the basis of functionality.
Functionality is defined in the Bill in Clause 208. We will get to those amendments shortly, but there is no doubt from what the Government have already conceded, or agreed with those of us who have been campaigning passionately on the Bill for a number of years, that functionality can make a platform harmful. It is perfectly possible to have small platforms that both carry highly harmful content and themselves become harmful in the way that they are designed. We have heard many examples and I will not detain the House with them, but I draw attention to two particular sites which capture how broad this is. The perpetrators of offline hate crimes are often linked to these small platforms. For example, the perpetrator of the 2018 Tree of Life synagogue mass shooting had an online presence on the right-wing extremist social network Gab. In the UK, Jake Davison, the self-proclaimed incel who killed five people in Plymouth in 2021, frequented smaller incel forums after he was banned from Reddit in the days leading up to the mass shooting.
I also want to share with noble Lords an email that I received just this week from a family who had been to see their Member of Parliament, Matt Rodda MP, and also the noble Baroness, Lady Kidron, who I know is very regretful that she cannot be here today. I thank Victoria and Jean Eustace for sharing the story of their sister and daughter. Victoria wrote: “I am writing to you regarding the Online Safety Bill, as my family and I are concerned it will not sufficiently protect vulnerable adults from harm. My sister, Zoe Lyalle, killed herself on 26 May 2020, having been pointed towards a method using an online forum called Sanctioned Suicide. Zoe was 18 years old at the time of her death and as such technically an adult, but she was autistic, so she was emotionally less mature than many 18 year- olds. She found it difficult to critically analyse written content”. She says that “The forum in question is not large and states on its face that it does not encourage suicide, although its content does just that”. The next part I was even more shocked about: “Since Zoe’s death, we have accessed her email account. The forum continues to email Zoe, providing her with updates on content she may have missed while away from the site, as well as requesting donations. One recent email included a link to a thread on the forum containing tips on how best to use the precise method that Zoe had employed”.
In her note to me, the Minister on leave said that she wanted to catch some of the platforms we are talking about with outsized influence. In my reply, I said that those sites on which people are encouraged to take their own lives or become radicalised and therefore take the harms they are seeing online into the real world undoubtedly exercise influence and should be tackled.
It is also perfectly possible for us to have large but safe platforms. I know that my noble friend Lord Moylan may want to discuss this in relation to sites that he has talked about already on this Bill. The risk of the current drafting is a flight of users from these large platforms, newly categorised as category 1, to the small, non-category 1 platforms. What if a platform becomes extremely harmful very quickly? How will it be recategorised speedily but fairly and involving parliamentary oversight?
The Government have run a variety of arguments as to why the “and” in the Bill should not become an “or”. They say that it creates legal uncertainty. Every Bill creates legal uncertainty; that is why we have an army of extremely highly paid lawyers, not just in this country but around the world. They say that what we are talking about is broader than illegal content or content related to children’s safety, but they have already accepted an earlier amendment on safety by design and, in subsections (10) to (12) of Clause 12, that specific extra protections should be available for content related to
“suicide or an act of deliberate self-injury, or … an eating disorder or behaviours associated with an eating disorder”
or abusive content relating to race, religion, sex, sexual orientation, disability or gender reassignment and that:
“Content is within this subsection if it incites hatred against people”.
The Government have already breached some of their own limits on content that is not just illegal or relates to child safety duties. In fact, they have agreed that that content should have enhanced triple-shield protection.
The Government have also said that they want to avoid burdens on small but low-harm platforms. I agree with that, but with an “or” it would be perfectly possible for Ofcom to decide by looking at size or functionality and to exclude those smaller platforms that do not present the harm we all care about. The Minister may also offer me a review of categorisation; however, it is a review of the tiers of categorisation and not the sites within the categories, which I think many of us will have views on over the years.
I come to what we should do on this final day of Report. I am very thankful to those who have had many conversations on this, but there is a fundamental difference of opinion in this House on these matters. We will talk about functionality shortly and I am mindful of the pre-legislative scrutiny committee’s recommendation that this legislation should adopt
“a more nuanced approach, based not just on size and high-level functionality, but factors such as risk, reach, user base, safety performance, and business model”.
There should be other factors. Ofcom should have the ability to decide whether it takes one factor or another, and not have a series of all the thresholds to be passed, to give it the maximum flexibility. I will listen very carefully to what my noble friend the Minister and other noble Lords say, but at this moment I intend to test the opinion of the House on this amendment.
Baroness Finlay of Llandaff (CB)
My Lords, I strongly support Amendment 245. The noble Baroness, Lady Morgan of Cotes, has explained the nub of the problem we are facing—that size and functionality are quite separate. You can have large sites that perform a major social function and are extremely useful across society. Counter to that, you can have a small site focused on being very harmful to a small group of people. The problem is that, without providing the flexibility to Ofcom to determine how the risk assessment should be conducted, the Bill would lock it into leaving these small, very harmful platforms able to pursue their potentially ever-increasingly harmful activities almost out of sight. It does nothing to make sure that their risk assessments are appropriate.
Lord Allan of Hallam (LD)
My Lords, I am pleased to follow the noble Baroness, Lady Morgan of Coates, and her amendment, which tries to help parliamentary counsel draft better regulations later on. I am really struggling to see why the Government want to resist something that will make their life easier if they are going to do what we want them to do, which is to catch those high-risk services—as the noble Baroness, Lady Finlay, set out—but also, as we have discussed in Committee and on Report, exclude the low-risk services that have been named, such as Wikipedia and OpenStreetMap.
I asked the Minister on Report how that might happen, and he confirmed that such services are not automatically exempt from the user-to-user services regulations, but he also confirmed that they might be under the subsequent regulations drafted under Schedule 11. That is precisely why we are coming back to this today; we want to make sure that they can be exempt under the regulations drafted under Schedule 11. The test should be: would that be easier under the amended version proposed by the noble Baroness, Lady Morgan, or under the original version? I think it would be easier under the amended version. If the political intent is there to exclude the kind of services that I have talked about—the low-risk services—and I think it should be, because Ofcom should not be wasting time, in effect, supervising services that do not present a risk and, not just that, creating a supervisory model that may end up driving those services out of the UK market because they cannot legally say that they will make the kind of commitments Ofcom would expect them to make, having two different thresholds, size and functionality, gives the draftspeople the widest possible choice. By saying “or”, we are not saying they cannot set a condition that is “and” or excludes “and”, but “and” does exclude “or”, if I can put it that way. They can come back with a schedule that says, “You must be of this size and have this kind of functionality”, or they could say “this functionality on its own”—to the point made by the two noble Baronesses about some sites. They might say, “Look, there is functionality which is always so high-risk that we do not care what size you are; if you’ve got this functionality, you’re always going to be in”. Again, the rules as drafted at the moment would not allow them to do that; they would have to say, “You need to have this functionality and be of this size. Oh, whoops, by saying that you have to be of this size, we’ve now accidentally caught somebody else who we did not intend to catch”.
I look forward to the Minister’s response, but it seems entirely sensible that we have the widest possible choice. When we come to consider this categorisation under Schedule 11 later on, the draftspeople should be able to say either “You must be this size and have this functionality” or “If you’ve got this functionality, you’re always in” or “If you’re of this size, you’re always in”, and have the widest possible menu of choices. That will achieve the twin objectives which I think everyone who has taken part in the debate wants: the inclusion of high-risk services, no matter their size, and the exclusion of low-risk services, no matter their size—if they are genuinely low risk. That is particularly in respect of the services we have discussed and which the noble Lord, Lord Moylan, has been a very strong advocate for. In trying to do good, we should not end up inadvertently shutting down important information services that people in this country rely on. Frankly, people would not understand it if we said, “In the name of online safety, we’ve now made it so that you cannot access an online encyclopaedia or a map”.
It is going to be much harder for the draftspeople to draft categorisation under Schedule 11, as it is currently worded, that has the effect of being able to exclude low-risk services. The risk of their inadvertently including them and causing that problem is that much higher. The noble Baroness is giving us a way out and I hope the Minister will stand up and grab the lifeline. I suspect he will not.
Lord Clement-Jones (LD)
My Lords, I welcome the Minister’s Amendment 238A, which I think was in response to the DPRRC report. The sentiment around the House is absolutely clear about the noble Baroness’s Amendment 245. Indeed, she made the case conclusively for the risk basis of categorisation. She highlighted Zoe’s experience and I struggle to understand why the Secretary of State is resisting the argument. She knocked down the nine pins of legal uncertainty, and how it was broader than children and illegal by reference to Clause 12. The noble Baroness, Lady Finlay, added to the knocking down of those nine pins.
Smaller social media platforms will, on the current basis of the Bill, fall outside category 1. The Royal College of Psychiatrists made it pretty clear that the smaller platforms might be less well moderated and more permissive of dangerous content. It is particularly concerned about the sharing of information about methods of suicide or dangerous eating disorder content. Those are very good examples that it has put forward.
I return to the scrutiny committee again. It said that
“a more nuanced approach, based not just on size and high-level functionality, but factors such as risk, reach, user base, safety performance, and business model”
should be adopted. It seems that many small, high-harm services will be excluded unless we go forward on the basis set out by the noble Baroness, Lady Morgan. The kind of breadcrumbing we have talked about during the passage of the Bill and, on the other hand, sites such as Wikipedia, as mentioned by noble friend, will be swept into the net despite being low risk.
I have read the letter from the Secretary of State which the noble Baroness, Lady Morgan, kindly circulated. I cannot see any argument in it why Amendment 245 should not proceed. If the noble Baroness decides to test the opinion of the House, on these Benches we will support her.
Lord Knight of Weymouth (Lab)
My Lords, I have good news and bad news for the Minister. The good news is that we have no problem with his amendments. The bad news, for him, is that we strongly support Amendment 245 from the noble Baroness, Lady Morgan of Coates, which, as others have said, we think is a no-brainer.
The beauty of the simple amendment has been demonstrated; it just changes the single word “and” to “or”. It is of course right to give Ofcom leeway—or flexibility, as the noble Baroness, Lady Finlay, described it—in the categorisation and to bring providers into the safety regime. What the noble Baroness, Lady Morgan, said about the smaller platforms, the breadcrumbing relating to the Jake Davison case and the functionality around bombarding Zoe Lyalle with those emails told the story that we needed to hear.
As it stands, the Bill requires Ofcom to always be mindful of size. We need to be more nuanced. From listening to the noble Lord, Lord Allan of Hallam—with his, as ever, more detailed analysis of how things work in practice—my concern is that in the end, if it is all about size, Ofcom will end up having to have a much larger number in scope on the categorisation of size in order to cover all the platforms that it is worried about. If we could give flexibility around size or functionality, that would make the job considerably easier.
We on this side think categorisation should happen with a proportionate, risk-based approach. We think the flexibility should be there, the Minister is reasonable—come on, what’s not to like?
Lord Parkinson of Whitley Bay (Con)
My Lords, I shall explain why the simple change of one word is not as simple as it may at first seem. My noble friend’s Amendment 245 seeks to amend the rule that a service must meet both a number-of-users threshold and a functionality threshold to be designated as category 1 or 2B. It would instead allow the Secretary of State by regulation to require a service to have to meet only one or other of the two requirements. That would mean that smaller user-to-user services could be so categorised by meeting only a functionality threshold.
In practical terms, that would open up the possibility of a future Secretary of State setting only a threshold condition about the number of users, or alternatively about functionality, in isolation. That would create the risk that services with a high number of users but limited functionality would be caught in scope of category 1. That could be of particular concern to large websites that operate with limited functionality for public interest reasons, and I am sure my noble friend Lord Moylan can think of one that fits that bill. On the other hand, it could capture a vast array of low-risk smaller services merely because they have a specific functionality—for instance, local community fora that have livestreaming capabilities. So we share the concerns of the noble Lord, Lord Allan, but come at it from a different perspective from him.
My noble friend Lady Morgan mentioned the speed of designation. The Bill’s approach to the pace of designation for the category 1 watchlist and register is flexible—deliberately so, to allow Ofcom to act as quickly as is proportionate to each emerging service. Ofcom will have a duty proactively to identify, monitor and evaluate emerging services, which will afford it early visibility when a service is approaching the category 1 threshold. It will therefore be ready to act accordingly to add services to the register should the need arise.
The approach set out in my noble friend’s Amendment 245 would not allow the Secretary of State to designate individual services as category 1 if they met one of the threshold conditions. Services can be designated as category 1 only if they meet all the relevant threshold conditions set out in the regulations made by the Secretary of State. That is the case regardless, whether the regulations set out one condition or a combination of several conditions.
The noble Baroness, Lady Finlay, suggested that the amendment would assist Ofcom in its work. Ofcom itself has raised concerns that amendments such as this—to introduce greater flexibility—could increase the risk of legal challenges to categorisation. My noble friend Lady Morgan was part of the army of lawyers before she came to Parliament, and I am conscious that the noble Lord, Lord Clement-Jones, is one as well. I hope they will heed the words of the regulator; this is not a risk that noble Lords should take lightly.
I will say more clearly that small companies can pose significant harm to users—I have said it before and I am happy to say it again—which is why there is no exemption for small companies. The very sad examples that my noble friend Lady Morgan gave in her speech related to illegal activity. All services, regardless of size, will be required to take action against illegal content, and to protect children if they are likely to be accessed by children. This is a proportionate regime that seeks to protect small but excellent platforms from overbearing regulation. However, I want to be clear that a small platform that is a font of illegal content cannot use the excuse of its size as an excuse for not dealing with it.
Category 1 services are those services that have a major influence over our public discourse online. Again, I want to be clear that designation as a category 1 service is not based only on size. The thresholds for category 1 services will be based on the functionalities of a service as well as the size of the user base. The thresholds can also incorporate other characteristics that the Secretary of State deems relevant, which could include factors such as a service’s business model or its governance. Crucially, Ofcom has been clear that it will prioritise engagement with high-risk or high-impact services, irrespective of their categorisation, to understand their existing safety systems and how they plan to improve them.
Member’s explanatory statement
This amendment provides that regulations made by OFCOM about supporting evidence to be supplied by providers for the purposes of Part 6 of the Bill (fees) are subject to the negative Parliamentary procedure.
“(ba) regulations under section 77,”Member’s explanatory statement
This amendment provides that regulations made by the Secretary of State specifying the threshold figure for the purposes of Part 6 of the Bill are subject to the negative Parliamentary procedure.
Member’s explanatory statement
This amendment is consequential on the amendment in my name inserting new subsections (7A) and (7B) into this Clause.
“(8A) As soon as a draft of a statutory instrument containing regulations under section (“Regulations by OFCOM about qualifying worldwide revenue etc”)(1) or paragraph 5(9) of Schedule 13 (whether alone or with provision under section (“Regulations by OFCOM about qualifying worldwide revenue etc”)(2)) is ready for laying before Parliament, OFCOM must send the draft to the Secretary of State, and the Secretary of State must lay the draft before Parliament.(8B) Immediately after making a statutory instrument containing only regulations under section (“Regulations by OFCOM about qualifying worldwide revenue etc”)(2), OFCOM must send the instrument to the Secretary of State, and the Secretary of State must lay it before Parliament.”Member’s explanatory statement
This amendment provides for the Secretary of State’s involvement in the Parliamentary procedure to which regulations made by OFCOM under this Bill are subject.
“Regulations: consultation and impact assessments
(1) This section applies if the Secretary of State seeks to exercise powers under—(a) section 55 (regulations under section 54),(b) section 195 (powers to amend section 35),(c) section 196 (powers to amend or repeal provisions relating to exempt content or services),(d) section 197 (powers to amend Part 2 of Schedule 1),(e) section 198 (powers to amend Schedules 5, 6 and 7), or(f) paragraph 1 of Schedule 11 (regulations specifying threshold conditions for categories of Part 3 services),or where the Secretary of State intends to direct OFCOM under section 39.(2) The Secretary of State may not exercise the powers under the provisions in subsection (1) unless any select committee charged by the relevant House of Parliament with scrutinising such regulations has—(a) completed its consideration of the draft regulations and accompanying impact assessment provided by the Secretary of State; and(b) reported on their deliberation to the relevant House; andthe report of the committee has been debated in that House, or the period of six weeks beginning on the day on which the committee reported has elapsed.”
Lord Stevenson of Balmacara (Lab)
My Lords, this amendment would require the Secretary of State, when seeking to exercise certain powers in the Bill, to provide the relevant Select Committees of both Houses with draft regulations and impact assessments, among other things. I should admit up front that this is a blatant attempt to secure an Online Safety Bill version of what I have called the “Grimstone rule”, established in the international trade Bill a few years ago. Saving his blushes, if the ideas enshrined in the amendment are acceptable to the Government, I hope that the earlier precedent of the “Grimstone rule” would ensure that any arrangements agreed under this amendment would be known in future as the “Parkinson rule”. Flattery will get you many things.
The Bill places a specific consultation requirement on the Government for the fee regime, which we were just talking about, categorisation thresholds, regulations about reports to the NCA, statements of strategic priorities, regulations for super-complaints, and a review of the Act after three years—so a wide range of issues need to be put out for consultation. My context here, which is all-important, is a growing feeling that Parliament’s resources are not being deployed to the full in scrutinising and reviewing the work of the Executive on the one hand and feeding knowledge and experience into future policy on the other. There is continuing concern about the effectiveness of the secondary legislation approval procedures, which this amendment would bear on.
Noble Lords have only to read the reports of the Select Committees of both Houses to realise what a fantastic resource they represent. One has only to have served on a Select Committee to realise what potential also exists there. In an area of rapid technical and policy development, such as the digital world, the need to be more aware of future trends and potential problems is absolutely crucial.
The pre-legislative scrutiny committee report is often quoted here, and it drew attention to this issue as well, recommending
“a Joint Committee of both Houses to oversee digital regulation with five primary functions: scrutinising digital regulators and overseeing the regulatory landscape … scrutinising the Secretary of State’s work into digital regulation; reviewing the codes of practice laid by Ofcom under any legislation relevant to digital regulation … considering any relevant new developments such as the creation of new technologies and the publication of independent research … and helping to generate solutions to ongoing issues in digital regulation”—
a pretty full quiver of issues to be looked at.
I hope that when he responds to this debate, the Minister will agree that ongoing parliamentary scrutiny would be helpful in providing reassurances that the implementation of the regime under the Bill is going as intended, and that the Government would also welcome a system under which Parliament, perhaps through the Select Committees, can contribute to the ways suggested by the Joint Committee. I say “perhaps”, because I accept that it is not appropriate for primary legislation to dictate how, or in what form, Parliament might offer advice in the manner that I have suggested; hence the suggestion embedded in the amendment—which I will not be pressing to a Division—which I call the “Parkinson rule”. Under this, the Minister would agree at the Dispatch Box a series of commitments which will provide an opportunity for enhanced cross-party scrutiny of the online safety regime and an opportunity to survey and report on future developments of interest.
The establishment of the new Department for Science, Innovation and Technology and its Select Committee means that there is a new dedicated Select Committee in the Commons. The Lords Communications and Digital Committee will continue, I hope, to play a vital role in the scrutiny of the digital world, as it has with the online safety regime to date. While it would be for the respective committees to decide their priorities, I hope the Government would encourage the committees in both Houses to respond to their required consultation processes and to look closely at the draft codes of practice, the uses of regulation-making powers and the powers of direction contained in the Bill ahead of the formal processes in both Houses. Of course, it could be a specialist committee if that is what the Houses decide, but there is an existing arrangement under which this “Parkinson rule” could be embedded. I have discussed the amendment with the Minister and with the Bill team. I look forward to hearing their response to the ideas behind the amendment. I beg to move the “Parkinson rule”.
Lord Clement-Jones (LD)
I support the amendment of the noble Lord, Lord Stevenson. Here is an opportunity for the Minister to build a legislative monument. I hope he will take it. The reason I associate myself with it is because the noble Lord, Lord Stevenson—who has been sparing in his quoting of the Joint Committee’s report, compared with mine—referred to it and it all made very good sense.
The amendment stumbles only in the opinion of the Government, it seems, on the basis that parliamentary committees need to be decided on by Parliament, rather than the Executive. But this is a very fine distinction, in my view, given that the Government, in a sense, control the legislature and therefore could will the means to do this, even if it was not by legislation. A nod from the Minister would ensure that this would indeed take place. It is very much needed. It was the Communications and Digital Committee, I think, that introduced the idea that we picked up in the Joint Committee, so it has a very good provenance.
Lord Hope of Craighead (CB)
My Lords, I offer my support to the amendment. I spent some time arguing in the retained EU law Bill for increased parliamentary scrutiny. My various amendments did not succeed but at the end of the day—on the final day of ping-pong—the Minister, the noble Lord, Lord Callanan, gave certain assurances based on what is in Schedule 5 to that Act, as it now is, involving scrutiny through committees. So the basic scheme which my noble kinsman has proposed is one which has a certain amount of precedent—although it is not an exact precedent; what might have been the “Callanan rule” is still open to reconstruction as the “Parkinson rule”. I support the amendment in principle.
Baroness Stowell of Beeston (Con)
My Lords, as the noble Lords, Lord Stevenson and Lord Clement-Jones, have already said, the Communications and Digital Select Committee did indeed recommend a new Joint Committee of both Houses to look specifically at the various different aspects of Ofcom’s implementation of what will be the Online Safety Act and ongoing regulation of digital matters. It is something I still have a lot of sympathy for. However, there has not been much appetite for such a Joint Committee at the other end of the Corridor. I do not necessarily think we should give up on that, and I will come back to that in a moment, but in place of that, I am not keen on what is proposed in Amendment 239, because my fear about how that is laid out is that it introduces something that appears a bit too burdensome and probably introduces too much delay in implementation.
To return to the bigger question, I think that we as parliamentarians need to reflect on our oversight of regulators, to which we are delegating significant new powers and requiring them to adopt a much more principles-based approach to regulation to cope with the fast pace of change in the technological world. We have to reflect on whether our current set-up is adequate for the way in which that is changing. What I have in mind is very much a strategic level of oversight, rather than scrutinising operational decisions, although, notwithstanding what the noble Lord has said, something specific in terms of implementation of the Bill and other new legislation is an area I would certainly wish to explore further.
The other aspect of this is making sure that our regulators keep pace too, not just with technology, and apply the new powers we give them in a way which meets our original intentions, but with the new political dynamics. Earlier today in your Lordships’ Chamber, there was a Question about how banks are dealing with political issues, and that raises questions about how the FCA is regulating the banking community. We must not forget that the Bill is about regulating content, and that makes it ever more sensitive. We need to keep reminding ourselves about this; it is very new and very different.
As has been acknowledged, there will continue to be a role for the Communications and Digital Select Committee, which I have the great privilege of chairing, in overseeing Ofcom. My noble friend Lord Grade and Dame Melanie Dawes appeared before us only a week ago. There is a role for the SIT Committee in the Commons; there is also probably some kind of ongoing role for the DCMS Select Committee in the Commons too, I am not sure. In a way, the fractured nature of that oversight makes it all the more critical that we join up a bit more. So I will take it upon myself to give this more thought and speak to the respective chairs of those committees in the other place, but I think that at some point we will need to consider, in some other fora, the way in which we are overseeing the work of regulators.
At some point, I think we will need to address the specific recommendations in the pre-legislative committee’s report, which were very much in line with what my own committee thought was right for the future of digital regulatory oversight, but on this occasion, I will not be supporting the specifics of Amendment 239.
Baroness Fox of Buckley (Non-Afl)
My Lords, very briefly, I was pleased to see this, in whatever form it takes, because as we finish off the Bill, one thing that has come up consistently is that some of us have raised problems of potential unintended consequences, such as whether age gating will lead to a huge invasion of the privacy of adults rather than just narrowly protecting children, or whether the powers given to Ofcom will turn it into the most important and powerful regulator in the country, if not in Europe. In a highly complex Bill, is it possible for us to keep our eye on it a bit more than just by whingeing on the sidelines?
The noble Baroness, Lady Stowell, makes a very important point about the issue in relation to the FCA and banking. Nobody intended that to be the outcome of PEPs, for example, and nobody intended when they suggested encouraging banks to have values such as ESG or EDI—equality, diversity and inclusion—that that would lead to ordinary citizens of this country being threatened with having their banking turned off. It is too late to then retrospectively say, “That wasn’t what we ever intended”.
Lord Kamall (Con)
I associate myself with the comments of my noble friend Lady Stowell on this whole issue, and I refer to my register of interests. One question we should be asking, which goes wider than this Bill, is: who regulates the regulators? It is a standard problem in political science and often known as principal agent theory, whereby the principals delegate powers to the agents for many reasons, and you see agency slack, whereby they develop their own powers beyond what was perhaps originally intended. For that reason, I completely associate myself with my noble friend Lady Stowell’s comments—and not because she chairs a committee on which I sit and I hope to get a favour of more speaking time on that committee. It is simply because, on its merit, we should all be asking who regulates the regulators and making sure that they are accountable. We are asking the same question of the Secretary of State, and quite rightly, the Secretary of State should be accountable for any measures they propose, but we should also be asking it of regulators.
Lord Parkinson of Whitley Bay (Con)
My Lords, I have always felt rather sorry for the first Viscount Addison, because what we refer to as the Salisbury convention is really the Salisbury-Addison convention. So while I am grateful to the noble Lord, Lord Stevenson, for his flattering speech, I shall insist on calling it the “Parkinson-Stevenson rule”, not least in the hope that that mouthful will encourage people to forget its name more swiftly.
I am grateful to the noble Lord for his attention to this matter and the useful discussions that we have had. His Amendment 239 would go beyond the existing legislative process for the delegated powers in the Bill by providing for parliamentary committees to be, in effect, inserted into the secondary legislative process. The delegated powers in the Bill are crucial for implementing the regime effectively and for ensuring that it keeps pace with changes in technology. Regulation-making powers are an established part of our legislative practice, and it would not be appropriate to deviate from existing processes.
However, I agree that ongoing parliamentary scrutiny of the regime will be crucial in helping to provide noble Lords and Members in another place with the reassurance that the implementation of the regime is as we intended. As the noble Lord noted, the establishment of the Science, Innovation and Technology Select Committee in another place means that there is a new dedicated committee looking at this important area of public policy. That provides an opportunity for cross-party scrutiny of the online safety regime and broader issues. While it will be, as he said, for respective committees to decide their priorities, we welcome any focus on online safety, and certainly welcome committees in both Houses co-operating effectively on this matter. I am certain that the Communications and Digital Committee of your Lordships’ House will continue to play a vital role in the scrutiny of the online safety regime.
We would fully expect these committees to look closely at the codes of practice, the uses of regulation-making powers and the powers of direction in a way that allows them to focus on key issues of interest. To support that, I can commit that the Government will do two things. First, where the Bill places a consultation requirement on the Government, we will ensure that the relevant committees have every chance to play a part in that consultation by informing them that the process is open. Secondly, while we do not wish to see the implementation process delayed, we will, where possible, share draft statutory instruments directly with the relevant committees ahead of the formal laying process. These timelines will be on a case-by-case basis, considering what is appropriate and reasonably practical. It will be for the committees to decide how they wish to engage with the information that we provide, but it will not create an additional approval process to avoid delaying implementation. I am grateful to my noble friend Lady Stowell of Beeston for her words of caution and wisdom on that point as both chairman of your Lordships’ committee and a former Leader of your Lordships’ House.
I hope that the noble Lord will be satisfied by what I have set out and will be willing to withdraw his amendment so that our rule might enter into constitutional history more swiftly.
Lord Stevenson of Balmacara (Lab)
I am very grateful to everyone who has contributed to the debate, despite my injunction that no one was to speak other than those key persons—but it was nice to hear views around the House in support for this proposal, with caution. The noble Baroness, Lady Stowell, was right to be clear that we have to be focused on where we are going on this; there is quite a lot at stake here, and it is a much bigger issue than simply this Bill and these particular issues. Her willingness to take this on in a wider context is most welcome, and I look forward to hearing how that goes. I am also very grateful for the unexpected but very welcome support from the noble Baroness, Lady Fox. It was nice that she finally agreed to meet on one piece of territory, if we cannot agree on some of the others. The noble Lord, Lord Kamall, is right to say that we need to pick up the much broader question about who regulates those who regulate us. This is not the answer, but it certainly gets us a step in the direction.
I was grateful to the Minister for suggesting that the “Parkinson rule” could take flight, but I shall continue to call it by a single name—double-barrelled names are not appropriate here. We will see the results of that in the consultation; the things that already have to be consulted about will be offered to the committees, and it is up to them to respond on that, but it is a very good start. The idea that drafts and issues that are being prepared for future regulation will be shown ahead of the formal process is exactly where I wanted to be on this, so I am very grateful for that. I withdraw the amendment.
Member’s explanatory statement
This amendment omits a reference to regulations made by the Secretary of State. Details about supporting evidence etc to accompany providers’ notifications for the purposes of the fees regime are now to be contained in regulations made by OFCOM (see the new Clause 76 proposed in my name).
“(4) Section (“Regulations by OFCOM about qualifying worldwide revenue etc”) confers power on OFCOM to make regulations about the determination of a provider’s qualifying worldwide revenue, and the meaning of “qualifying period”, for the purposes of this Part.”Member’s explanatory statement
This amendment is a signpost to the new Clause 76 proposed in my name, conferring power on OFCOM to make regulations about the meaning of qualifying worldwide revenue and qualifying period for the purposes of the fees regime.
Member’s explanatory statement
This amendment is consequential on the first amendment of Clause 77 in my name (threshold figure now to be specified in regulations made by the Secretary of State).
Member’s explanatory statement
This amendment omits a provision about procedure for regulations made by the Secretary of State under subsection (3)(b). That is no longer required because details about supporting evidence etc to accompany providers’ notifications for the purposes of the fees regime are now to be contained in regulations made by OFCOM (see the new Clause 76 proposed in my name).
“Regulations by OFCOM about qualifying worldwide revenue etc
(1) For the purposes of this Part, OFCOM may by regulations make provision—(a) about how the qualifying worldwide revenue of a provider of a regulated service is to be determined, and(b) defining the “qualifying period” in relation to a charging year.(2) OFCOM may by regulations also make provision specifying or describing evidence, documents or other information that providers must supply to OFCOM for the purposes of section 74 (see subsection (3)(b) of that section), including provision about the way in which providers must supply the evidence, documents or information.(3) Regulations under subsection (1)(a) may provide that the qualifying worldwide revenue of a provider of a regulated service (P) who is a member of a group during any part of a qualifying period is to include the qualifying worldwide revenue of any entity that—(a) is a group undertaking in relation to P for all or part of that period, and(b) receives or is due to receive, during that period, any amount referable (to any degree) to a regulated service provided by P.(4) Regulations under subsection (1)(a) may, in particular—(a) make provision about circumstances in which amounts do, or do not, count as being referable (to any degree) to a regulated service for the purposes of the determination of the qualifying worldwide revenue of the provider of the service or of an entity that is a group undertaking in relation to the provider;(b) provide for cases or circumstances in which amounts that—(i) are of a kind specified or described in the regulations, and(ii) are not referable to a regulated service,are to be brought into account in determining the qualifying worldwide revenue of the provider of the service or of an entity that is a group undertaking in relation to the provider.(5) Regulations which make provision of a kind mentioned in subsection (3) may include provision that, in the case of an entity that is a group undertaking in relation to a provider for part (not all) of a qualifying period, only amounts relating to the part of the qualifying period for which the entity was a group undertaking may be brought into account in determining the entity’s qualifying worldwide revenue.(6) Regulations under subsection (1)(a) may make provision corresponding to paragraph 5(8) of Schedule 13.(7) Before making regulations under subsection (1) OFCOM must consult—(a) the Secretary of State,(b) the Treasury, and(c) such other persons as OFCOM consider appropriate.(8) Before making regulations under subsection (2) OFCOM must consult the Secretary of State.(9) Regulations under this section may make provision subject to such exemptions and exceptions as OFCOM consider appropriate.(10) In this section—“group” means a parent undertaking and its subsidiary undertakings, reading those terms in accordance with section 1162 of the Companies Act 2006;“group undertaking” has the meaning given by section 1161(5) of that Act.”Member’s explanatory statement
This amendment substitutes Clause 76, which is about what is meant by “qualifying worldwide revenue”. The new Clause provides for OFCOM to make regulations about this and related matters for the purposes of the fees regime, and allows the regulations (among other things) to provide that revenue arising to certain entities in the same group as a provider of a regulated service is to be brought into account.
Member’s explanatory statement
This amendment provides that the Secretary of State must specify the threshold figure in regulations (rather than in a published statement).
Member’s explanatory statement
This amendment is consequential on the first amendment of this Clause in my name.
Member’s explanatory statement
This amendment is consequential on the preceding amendment of this Clause in my name.
Member’s explanatory statement
This amendment is consequential on the first amendment of this Clause in my name.
Member’s explanatory statement
This amendment provides that regulations specifying a threshold figure must be in force at least 9 months before the first charging year for which that figure applies.
Member’s explanatory statement
This amendment is consequential on the first amendment of this Clause in my name.
Member’s explanatory statement
This amendment is consequential on the new Clause 76 proposed in my name.
Member’s explanatory statement
This amendment is consequential on the first amendment of Clause 77 in my name (threshold figure now to be specified in regulations made by the Secretary of State).
Member’s explanatory statement
This amendment ensures that Ofcom is empowered to consider harms presented by features, functionalities, behaviours and the design and operation of services not just by content.
Baroness Harding of Winscombe (Con)
My Lords, if I may, I shall speak very briefly, in the absence of my noble friend Lady Kidron, and because I am one of the signatories of this amendment, alongside the noble Lord, Lord Stevenson, and the right reverend Prelate the Bishop of Oxford. Amendment 240, together with a number of amendments that we will be debating today, turns on a fundamental issue that we have not yet resolved.
I came in this morning being told that we would be voting on this amendment and that other amendments later today would be consequential—I am a novice at this level of parliamentary procedure, so forgive me if I have got myself confused during the day—but I now understand that my noble friend considers this amendment to be consequential but, strangely, the amendments right at the end of the day are not. I just wanted to flag to the House that they all cover the same fundamental issue of whether harms can be unrelated to content, whether the harms of the online world can be to do with functionality—the systems and processes that drive the addiction that causes so much harm to our children.
It is a fundamental disagreement. I pay tribute to the amount of time the department, the Secretary of State and my noble friend have spent on it, but it is not yet resolved and, although I understand that I should now say that I beg leave to move the amendment formally, I just wanted to mark, with apologies, the necessity, most likely, of having to bring the same issue back to vote on later today.
Lord Parkinson of Whitley Bay (Con)
My Lords, His Majesty’s Government indeed agree that this is consequential on the other amendments, including Amendment 35, which the noble Baroness, Lady Kidron, previously moved at Report. We disagreed with them, but we lost that vote; this is consequential, and we will not force a Division on it.
We will have further opportunity to debate the fundamental issues that lie behind it, to which my noble friend Lady Harding just referred. Some of the amendments on which we may divide later, the noble Baroness, Lady Kidron, tabled after defeating the Government the other day, so we cannot treat them as consequential. We look forward to debating them; I will urge noble Lords not to vote for them, but we will have opportunity to discuss them later.
Member’s explanatory statement
Clause 82 is about OFCOM’s general duties. This amendment and the next amendment in my name insert a reference to Chapter 3A, which is the new Chapter containing the new duties imposed by the Clause proposed after Clause 67 in my name.
Member’s explanatory statement
See the explanatory statement for the preceding amendment in my name.
Baroness Morgan of Cotes
Baroness Morgan of Cotes (Con)
My Lords, I wish to test the opinion of the House and I beg to move.
Member’s explanatory statement
This technical amendment is needed because the new notice requiring information in connection with an investigation into the death of a child (see the new Clause proposed after Clause 91 in my name) is also a form of information notice.
“(b) provide information about the use of a service by a named individual.”Member’s explanatory statement
This amendment makes it clear that OFCOM have power by notice to require providers to provide information about a particular person’s use of a service.
“(2A) The power conferred by subsection (1) also includes power to require a person within any of paragraphs (a) to (d) of subsection (4) to take steps so that OFCOM are able to remotely access the service provided by the person, or remotely access equipment used by the service provided by the person, in order to view, in particular—(a) information demonstrating in real time the operation of systems, processes or features, including functionalities and algorithms, used by the service;(b) information generated in real time by the performance of a test or demonstration of a kind required by a notice under subsection (1).”Member’s explanatory statement
This amendment makes it clear that OFCOM have the power by notice to require a provider of a regulated service (among others) to take steps to allow OFCOM to remotely access the service so that they can view the operation in real time of systems, processes, functionalities and algorithms, and tests and demonstrations.
“(iva) any duty set out in section (Disclosure of information about use of service by deceased child users) (deceased child users),”Member’s explanatory statement
This amendment mentions the new duties imposed by the Clause proposed after Clause 67 in my name in the Clause that sets out the purposes for which OFCOM may require people to provide information.
Member’s explanatory statement
This amendment makes it clear that OFCOM’s powers to gather information in relation to a provider’s qualifying worldwide revenue apply for the purposes of Part 6.
Member’s explanatory statement
This amendment is consequential on the new clause proposed to be inserted after Clause 149 in my name expanding OFCOM’s duties to promote media literacy in relation to regulated user-to-user and search services.
Member’s explanatory statement
This amendment is consequential on the new Clause proposed to be inserted after Clause 149 in my name expanding OFCOM’s duties to promote media literacy in relation to regulated user-to-user and search services.
“Information in connection with an investigation into the death of a child
(1) OFCOM may by notice under this subsection require a relevant person to provide them with information for the purpose of—(a) responding to a notice given by a senior coroner under paragraph 1(2) of Schedule 5 to the Coroners and Justice Act 2009 in connection with an investigation into the death of a child, or preparing a report under section (OFCOM’s report in connection with investigation into a death) in connection with such an investigation;(b) responding to a request for information in connection with the investigation of a procurator fiscal into, or an inquiry held or to be held in relation to, the death of a child, or preparing a report under section (OFCOM’s report in connection with investigation into a death) in connection with such an inquiry;(c) responding to a notice given by a coroner under section 17A(2) of the Coroners Act (Northern Ireland) 1959 (c. 15 (N.I.)) in connection with—(i) an investigation to determine whether an inquest into the death of a child is necessary, or(ii) an inquest in relation to the death of a child,or preparing a report under section (OFCOM’s report in connection with investigation into a death) in connection with such an investigation or inquest. (2) The power conferred by subsection (1) includes power to require a relevant person to provide OFCOM with information about the use of a regulated service by the child whose death is under investigation, including, in particular—(a) content encountered by the child by means of the service,(b) how the content came to be encountered by the child (including the role of algorithms or particular functionalities),(c) how the child interacted with the content (for example, by viewing, sharing or storing it or enlarging or pausing on it), and(d) content generated, uploaded or shared by the child.(3) The power conferred by subsection (1) includes power to require a relevant person to obtain or generate information.(4) The power conferred by subsection (1) must be exercised in a way that is proportionate to the purpose mentioned in that subsection.(5) The power conferred by subsection (1) does not include power to require the provision of information in respect of which a claim to legal professional privilege, or (in Scotland) to confidentiality of communications, could be maintained in legal proceedings. (6) Nothing in this section limits the power conferred on OFCOM by section 91.(7) In this section—“inquiry” means an inquiry held, or to be held, under the Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016 (asp 2);“information” includes documents, and any reference to providing information includes a reference to producing a document (and see also section 92(9));“relevant person” means a person within any of paragraphs (a) to (e) of section 91(4).”Member’s explanatory statement
This amendment makes it clear that OFCOM have the power to obtain information for the purposes of responding to a notice given to them by a coroner or, in Scotland, a request from a procurator fiscal, in connection with the death of a child, including a power to obtain information from providers about the use of a service by the deceased child.
“(A1) A notice given under section 91(1) or (Information in connection with an investigation into the death of a child)(1) is referred to in this Act as an information notice.”Member’s explanatory statement
This amendment provides that a notice under the new Clause proposed in my name concerning OFCOM’s power to obtain information in connection with an investigation into the death of a child is called an “information notice” (as well as a notice under Clause 91). This ensures that provisions of the Bill that relate to information notices also apply to a notice given under that Clause.
Member’s explanatory statement
This amendment ensures that the duty to comply with an information notice covers the case where a provider is required to take steps to allow OFCOM to remotely access the service.
Member’s explanatory statement
This amendment is consequential on the next amendment of Clause 94 in my name.
Lord Parkinson of Whitley Bay (Con)
My Lords, these amendments are concerned with Ofcom’s powers under Clause 111 to issue notices to deal with terrorism content and child sexual exploitation and abuse content.
I acknowledge the concerns which have been aired about how these powers work with encrypted services. I want to make it clear that the Bill does not require companies to break or weaken encryption, and we have built in strong safeguards to ensure that users’ privacy is protected. Encryption plays an important role online, and the UK supports its responsible use. I also want to make it clear that we are not introducing a blanket requirement for companies to monitor all content for all harms, at all times. That would not be proportionate.
However, given the serious risk of harm to children from sexual abuse and exploitation online, the regulator must have appropriate, tightly targeted powers to compel companies to take the most effective action to tackle such reprehensible illegal activity which is taking place on their services. We must ask companies to do all that is technically feasible to keep children safe, subject to stringent legal safeguards.
The powers in the Bill are predicated on risk assessments. If companies are managing the risks on their platform appropriately, Ofcom will not need to use its powers. As a last resort, however, where there is clear evidence of child sexual abuse taking place on a platform, Ofcom will be able to direct companies either to use, or to make best efforts to develop or source, accredited and accurate technology to identify and remove this illegal content. To be clear, these powers will not enable Ofcom or our law enforcement agencies to obtain any automatic access to the content detected. It is simply a matter of making private companies take effective action to prevent child sexual abuse on their services.
Ofcom must consider a wide range of matters when deciding whether a notice is necessary and proportionate, including the impacts on privacy and freedom of expression of using a particular technology on a particular service. Ofcom will only be able to require the use of technology accredited as highly accurate in detecting illegal child sexual abuse or terrorism content, vastly minimising the risk that content is wrongly identified.
In addition to these safeguards, as a public body, Ofcom is bound through the Human Rights Act 1998 by the European Convention on Human Rights, including Articles 8 and 10. Ofcom has an obligation not to act in a way which unduly interferes with the right to privacy and freedom of expression when carrying out its duties, for which it is held to account.
If appropriate technology does not exist which meets these requirements, Ofcom cannot require its use. That is why the powers include the ability for Ofcom to require companies to make best endeavours to develop or source a solution. It is right that we can require technology companies to use their considerable resources and expertise to develop the best possible protections for children in encrypted environments.
Despite the breadth of the existing safeguards, we recognise that concerns remain about these powers, and we have listened to the points that noble Lords raised in Committee about privacy and technical feasibility. That is why we are introducing additional safeguards. I am grateful for the constructive engagement I have had with noble Lords across your Lordships’ House on this issue, and I hope that the government amendments alleviate their concerns.
I turn first to our Amendments 250B, 250C, 250D, 255A, 256A, 257A, 257B, 257C and 258A, which require that Ofcom obtain a skilled persons’ report before issuing a warning notice and exercising its powers under Clause 111. This independent expert scrutiny will supplement Ofcom’s own expertise to ensure that it has a full understanding of relevant technical issues to inform its decision-making. That will include issues specific to the service in question, such as its design and relevant factors relating to privacy.
Lord Moylan (Con)
My Lords, I am conscious of the imprecation earlier from the noble Lord, Lord Stevenson of Balmacara, that we keep our contributions short, but I intend to take no notice of it. That is for the very good reason that I do not think the public would understand why we disposed of such a momentous matter as bringing to an end end-to-end encryption on private messaging services as a mere technicality and a brief debate at the end of Report.
It is my view that end-to-end encryption is assumed nowadays by the vast majority of people using private messaging services such as WhatsApp, iMessage and Signal. They are unaware, I think, of the fact that it is about to be taken from them by Clause 111 of the Bill. My amendment would prevent that. It is fairly plain; it says that
“A notice under subsection (1)”
of Clause 111
“may not impose a requirement relating to a service if the effect of that requirement would be to require the provider of the service to weaken or remove end-to-end encryption applied in relation to the service”.
My noble friend says that there is no threat of ending end-to-end encryption in his proposal, but he achieves that by conflating two things—which I admit my own amendment conflates, but I will come back to that towards the end. They are the encryption of platforms and the encryption of private messaging services. I am much less concerned about the former. I am concerned about private messaging services. If my noble friend was serious in meaning that there was no threat to end-to-end encryption, then I cannot see why he would not embrace my amendment, but the fact that he does not is eloquent proof that it is in fact under threat, as is the fact that the NSPCC and the Internet Watch Foundation are so heavily lobbying against my amendment. They would not be doing that if they did not think it had a serious effect.
I shall not repeat at any length the technical arguments we had in Committee, but the simple fact is that if you open a hole into end-to-end encryption, as would be required by this provision, then other people can get through that hole, and the security of the system is compromised. Those other people may not be very nice; they could be hostile state actors—we know hostile state actors who are well enough resourced to do this—but they could also be our own security services and others, from whom we expect protection. Normally, we do get a degree of protection from those services, because they are required to have some form of warrant or prior approval but, as I have explained previously in debate on this, these powers being given to Ofcom require no warrant or prior approval in order to be exercised. So there is a vulnerability, but there is also a major assault on privacy. That is the point on which I intend to start my conclusion.
If we reflect for a moment, the evolution of this Bill in your Lordships’ House has been characterised and shaped, to a large extent, by the offer made by the noble Lord, Lord Stevenson of Balmacara, when he spoke at Second Reading, to take a collaborative approach. But that collaborative approach has barely extended to those noble Lords concerned about privacy and freedom of expression. As a result, in my view, those noble Lords rightly promoting child protection have been reckless to the point of overreaching themselves.
If we stood back and had to explain to outsiders that we were taking steps today that took end-to-end encryption and the privacy they expect on their private messaging services away from them, together with the security and protection it gives, of course, in relation to scams and frauds and all the other things where it has a public benefit, then I think they would be truly outraged. I do not entirely understand how the Government think they could withstand that outrage, were it expressed publicly. I actually believe that the battle for this Bill—this part of this Bill, certainly—is only just starting. We may be coming to the end here, but I do not think that this Bill is settled, because this issue is such a sensitive one.
Given the manifest and widespread lack of support for my views on this question in your Lordships’ House in Committee, I will not be testing the opinion of the House today. I think I know what the opinion of the House is, but it is wrong, and it will have to be revised. My noble friend simply cannot stand there and claim that what he is proposing is proportionate and necessary, because it blatantly and manifestly is not.
Lord Allan of Hallam (LD)
My Lords, the powers in Clause 111 are perhaps the most controversial outstanding issue in the Bill. I certainly agree with the noble Lord, Lord Moylan, that they deserve some continued scrutiny. I suspect that Members of another place are being lobbied on this extensively right now. Again, it is one of the few issues; they may not have heard of the Online Safety Bill, but they will do in the context of this particular measure.
We debated the rights and wrongs of encryption at some length in Committee, and I will not repeat those points today, not least because the noble Lord, Lord Moylan, has made some of the arguments as to why encryption is important. I will instead today focus on the future process, assuming that the Clause 111 powers will be available to Ofcom as drafted and that we are not going to accept the amendment from the noble Lord, Lord Moylan.
Amendments 258 and 258ZA, in my name and that of my noble friend Lord Clement-Jones, both aim to improve the process of issuing a Clause 111 order by adding in some necessary checks and balances.
As we debate this group, we should remember that the Clause 111 powers are not specific to encrypted services—I think the Minister made this point—and we should have the broader context in mind. I often try to bring some concrete scenarios to our discussions, and it may be helpful to consider three different scenarios in which Ofcom might reach for a Clause 111 notice.
The first is where a provider has no particular objections to using technology to identify and remove child sexual exploitation and abuse material or terrorist material but is just being slow to do this. There are mature systems out there. PhotoDNA is very well known in the industry and effectively has a database with digital signatures of known child sexual exploitation material. All the services we use on a daily basis such as Facebook, Instagram and others will check uploaded photos against that database and, where it is child sexual exploitation material, they will make sure that it does not get shown and that those people are reported to the authorities.
I can imagine scenarios where Ofcom is dealing with a service which has not yet implemented the technology—but does not have a problem doing it—and the material is unencrypted so there is no technical barrier; it is just being a bit slow. In those scenarios, Ofcom will tell the service to get on with it or it will get a Clause 111 notice. In those circumstances, in most cases the service will just get on with it, so Ofcom will be using the threat of the notice as a way to encourage the slow coaches. That is pretty unexceptional; it will work in a pretty straightforward way. I think the most common use of these notices may be to bring outliers into the pack of those who are following best practice. Ofcom may not even need to issue any kind of warning notice at all and will not get past the warning notice period. Waving a warning notice in front of a provider may be sufficient to get it to move.
The second scenario is one where the provider equally does not object to the use of the technology but would prefer to have a notice before it implements it. Outside the world of tech companies, it may seem a little strange why a provider would want to be ordered to do something rather than doing the right thing voluntarily, but we have to remember that the use of this kind of technology is legally fraught in many jurisdictions. There have been court cases in a number of places, not least the European Union, where there are people who will challenge whether you should use this technology on unencrypted services, never mind encrypted ones. In those cases, you can imagine there will be providers, particularly those established outside the United Kingdom, which may say, “Look, we are fine implementing this technology, but Ofcom please can you give us a notice? Then when someone challenges it in court, we can say that the UK regulator made us do it”. That would be helpful to them. This second group will want a notice and here we will get to the point of the notice being issued. They are not going to contest it; they want to have the notice because it gives them some kind of legal protection.
I think those two groups are relatively straightforward: we are dealing with companies which are being slow or are looking for legal cover but do not fundamentally object. The third scenario, though, is the most challenging and it is where I think the Government could get into real trouble. My amendments seek to help the Government in situations where a provider fundamentally objects to being ordered to deploy a particular technology because it believes that that technology will create real privacy threats and risks to the service that it offers. I do not think the provider is being awkward in these circumstances; it has genuine concerns about the implications of the technology being developed or which it is being instructed to deploy.
In these circumstances, Ofcom may have all the reasons in the world to argue why it thinks that what it is asking for is reasonable. However, the affected provider may not accept those reasons and take quite a strong counterview and have all sorts of other arguments as to why what it is being asked to do is unacceptable and too high-risk. This debate has been swirling around at the moment as we think about current models of end-to-end encryption and client-side scanning technology, but we need to recognise that this Bill is going to be around for a while and there may be all sorts of other technologies being ordered to be deployed that we do not even know about and have not even been developed yet. At any point, we may hit this impasse where Ofcom is saying it thinks it is perfectly reasonable to order a company to do it and the service provider is saying, “No, as we look at this, our experts and our lawyers are telling us that this is fundamentally problematic from a privacy point of view”.
Baroness Fox of Buckley (Non-Afl)
My Lords, I have put my name to and support Amendment 255, laid by the noble Lord, Lord Moylan, which straight- forwardly means that a notice may not impose a requirement relating to a service that would require that provider to weaken or remove end-to-end encryption. It is very clear. I understand that the other amendments introduce safeguards, which is better than nothing. It is not what I would like, but I will support them if they are pushed a vote. I think that the Government should really consider seriously not going anywhere near getting rid of encryption in this Bill and reconsider it by the time we get to Third Reading.
As the noble Lord, Lord Moylan, explained, this is becoming widely known about now, and it is causing some concern. If passed, this Bill, as it is at the moment, gives Ofcom far-reaching powers to force services, such as WhatsApp, to install software that would scan all our private messages to see whether there is evidence of terrorism, child sexual exploitation or abusive content and would automatically send a report to third parties, such as law enforcement, if it suspects wrongdoing—all without the consent or control of the sender or the intended recipient.
I would just like to state that encryption is a wonderful innovation. That is why more than 40 million people in the UK use it every day. It ensures that our private messages cannot be viewed, compromised or altered by anyone else, not even providers of chat services. It really requires somebody handing them over to a journalist and saying, “You can have my WhatsApp messages for anyone to read them”: beyond that, you cannot read them.
One of the interesting things that we have discussed throughout the passage of the Bill is technologies, their design and functionality and making sure they are not harmful. Ironically, it is the design and function of encryption that actually helps to keep us safe online. That is why so many people talk about civil libertarians, journalists and brave dissenters using it. For the rest of us, it is a tool to protect our data and private communications in the digital realm. I just want to pose here that it is an irony that the technologies being proposed in terms of client-side scanning are the technologies that are potentially harmful because it is, as people have noted, the equivalent of putting video cameras in our homes to listening in to every conversation and send reports to the police if we discuss illicit topics. As I have said before, while child sexual abuse is horrendous and vile, we know that it happens largely in the home and, as yet, the Government have not advocated that we film in everybody’s home in order to stop child sexual abuse. We should do almost anything and everything that we can, but I think this is the wrong answer.
Focusing on encryption just makes no sense. The Government have made exemptions, recognising the importance, in a democracy, of private correspondence: so exempted in the Bill are text messages, MSN, Zoom, oral commentaries and email. It seems perverse to demonise encryption in this way. I also note that there are exemptions for anything sent on message apps by law enforcement or public sector or emergency responders. I appreciate that some government communications are said to be done over apps such as WhatsApp. It seems then that the target of this part of the Bill is UK private citizens and residents and that the public are seen as the people who must be spied on.
In consequence, I do not think it surprising that more than 80 national or international civil society organisations have said that this would make the UK the first liberal democracy to require the routine scanning of people’s private chat messages. What does the Minister say to the legal opinion from the technology barrister Matthew Ryder KC, commissioned by Index on Censorship precisely on this part of the Bill? He compares this to law enforcement wiretapping without a warrant and says that the Bill will grant Ofcom a wider remit of surveillance powers over the public than GCHQ has.
Even if the Minister is not interested in lawyers or civil libertarians, surely we should be listening to the advice of science and technology experts in relation to complex technological solutions. Which experts have been consulted? I noted that Matthew Hodgson, the boss of encrypting messaging app Element, has said wryly that
“the Government has not consulted with UK tech firms, only with huge multinational corporations and companies that want to sell software that scans messages, who are unsurprisingly telling lawmakers that it is possible to scan messages without breaking encryption”.
The problem is that it is not possible to scan those messages without breaking encryption. It is actually misinformation to say that. That is why whole swathes of leading scientists and technologists from across the globe have recently put out an open letter explaining why and how it is not true. They explained that it creates really dangerous side-effects that can be harmful in the way that the noble Lord, Lord Moylan, explained, in terms of security, and makes the online world less safe for many of us. Existing scanning technologies are flawed and ineffective and scanning will nullify the purpose of encryption. I refer noble Lords to the work of the Internet Society and the academic paper Bugs in Our Pockets: The Risks of Client-Side Scanning for more details on all the peer-reviewed work.
I understand that, given the horrific nature of child sexual abuse—and, of course, terrorism, but I shall concentrate on child sexual abuse because the Bill is so concerned with it—it can be tempting for the Government to hope that there is a technological silver bullet to eradicate it. But the evidence suggests otherwise. One warning from scientists is that scanning billions of pieces of content could lead to millions of false positives and that could not only frame innocent users but could mean that the police become overwhelmed, diverting valuable resources away from real investigations into child sexual abuse.
A study by the Max Planck Institute for the study of crime of a similar German law that lasted from 2008 to 2010 found that the German police having access to huge amounts of data did not have any deterrent effect, did not assist in cleaning up crimes or increase convictions, but did waste a lot of police time. So it is important that this draconian invasion of privacy is not stated as necessary for protecting children. I share the exasperation of Signal’s president Meredith Whittaker, who challenged the Secretary of State and pointed out that there were some double standards here: for example, slashing early intervention programmes over the past decade did not help protect children and chronically underfunding and underresourcing child social care does not help.
My own bugbears are that when I, having talked to social workers and colleagues, raised the dangers to child protection when we closed down schools in lockdown, they were brushed to one side. When I and others raised the horrors of the young girls who had been systematically raped by grooming gangs whom the authorities had ignored for many, many years, I was told to stop talking about it. There are real threats to children that we ignore. I do not want us in this instance to use that very emotive discussion to attack privacy.
I also want to stress that there is no complacency here. Law enforcement agencies in the UK already possess a wide range of powers to seize devices and compel passwords and even covertly to monitor and hack accounts to identify criminal activity. That is good. Crucially, private messaging services can and do— I am sure they could do more—work in a wide range of ways to tackle abuse and keep people safe without the need to scan or read people’s messages.
Lord Kamall (Con)
My Lords, I rise to speak in favour of my noble friend Lord Moylan’s amendment. Given that I understand he is not going to press it, and while I see Amendment 255 as the ideal amendment, I thank the noble Lords, Lord Stevenson and Lord Clement- Jones, for their Amendments 256, 257 and 259, and the noble Lords, Lord Clement-Jones and Lord Allan of Hallam, for Amendments 258 and 258ZA.
I will try to be as brief as I can. I think about two principles—unintended consequences and the history of technology transfer. The point about technology transfer is that once a technology is used it becomes available to other people quickly, even bad guys, whether that was intended or not. There is obviously formal technology transfer, where you have agreement or knowledge transfer via foreign investment, but let us think about the Cold War and some of the great technological developments—atomic secrets, Concorde and the space shuttle. In no time at all, the other side had that access, and that was before the advent of the internet.
If we are to open a door for access to encrypted messages, that technology will be available to the bad guys in no time at all, and they will use it against dissidents, many of whom will be in contact with journalists and human rights organisations in this country and elsewhere. Therefore, the unintended consequence may well be that in seeking to protect children in this country by accessing encrypted messages or unencrypted messages, we may well be damaging the childhoods of children in other countries when their parents, who are dissidents, are suddenly taken away and maybe the whole family is wiped out. Let us be careful about those unintended consequences.
I also welcome my noble friend Lord Parkinson’s amendments about ensuring journalistic integrity, such as Amendment 257D and others. They are important. However, we must remember that once these technologies are available, everyone has a price and that technology will be transferred to the bad guys.
Given that my noble friend Lord Moylan will not press Amendment 255, let us talk about some of the other amendments—I will make some general points rather than go into specifics, as many noble Lords have raised these points. These amendments are sub-optimal, but at least there is some accountability for Ofcom being able to use this power and using it sensibly and proportionately. One of the things that has run throughout this Bill and other Bills is “who regulates the regulators?” and ensuring that regulators are accountable. The amendments proposed by the noble Lords, Lord Stevenson and Lord Clement-Jones, and by the noble Lords, Lord Clement-Jones and Lord Allan of Hallam, go some way towards ensuring that safeguards are in place. If the Government are not prepared to have an explicit statement that they will not allow access to encrypted messages, I hope that there will be some support for the noble Lords’ amendments.
Baroness Harding of Winscombe (Con)
My Lords, I promise to speak very briefly. I welcome the Government’s amendments. I particularly welcome that they appear to mirror partly some of the safeguards that are embedded in the Investigatory Powers Act 2016.
I have one question for my noble friend the Minister about the wording, “a skilled person”. I am worried that “a skilled person” is a very vague term. I have been taken all through the course of this Bill by the comparison with the Investigatory Powers Act and the need to think carefully about how we balance the importance of privacy with the imperative of protecting our children and being able to track down the most evil and wicked perpetrators online. That is very similar to the debates that we had here several years ago on the Investigatory Powers Act.
The IPA created the Technical Advisory Board. It is not a decision-making body. Its purpose is to advise the Investigatory Powers Commissioner and judicial commissioners on the impact of changing technology and the development of techniques to use investigatory powers while maintaining privacy. It is an expert panel constituted to advise the regulator—in this case, the judicial commissioner—specifically on technology interventions that must balance this really difficult trade-off between privacy and child protection. Why have we not followed the same recipe? Rather than having a skilled person, why would we not have a technology advisory panel of a similar standing where it is clear to all who the members are. Those members would be required to produce a regular report. It might not need to be as regular as the IPA one, but it would just take what the Government have already laid one step further towards institutionalising the independent check that is really important if these Ofcom powers were ever to be used.
Baroness Stowell of Beeston (Con)
My Lords, I added my name to some amendments on this issue in Committee. I have not done so on Report, not least because I have been so occupied with other things and have not had the time to focus on this. However, I remain concerned about this part of the Bill. I am sympathetic to my noble friend Lord Moylan’s Amendment 255, but listening to this debate and studying all the amendments in this group, I am a little confused and so have some simple questions.
First, I heard my noble friend the Minister say that the Government have no intention to require the platforms to carry out general monitoring, but is that now specific in any of the amendments that he has tabled? Regarding the amendments which would bring further safeguards around the oversight of Ofcom’s use of this power, like my noble friend Lady Harding, I have always been concerned that the oversight approach should be in line with that for the Investigatory Powers Act and could never understand why it was not in the original version of the Bill. Like her, I am pleased that the Government have tabled some amendments, but I am not yet convinced that they go far enough.
That leads me to the amendments that have been tabled by the noble Lords, Lord Stevenson and Lord Clement-Jones, and particularly that in the name of the noble Lord, Lord Allan of Hallam. As his noble friend Lord Clement-Jones has added his name to it, perhaps he could answer my question when he gets up. Would the safeguards that are outlined there—the introduction of the Information Commissioner—meet the concerns of the big tech companies? Do we know whether it would meet their needs and therefore lead them not to feel it necessary to withdraw their services from the UK? I am keen to understand that.
There is another thing that might be of benefit for anyone listening to this debate who is not steeped in the detail of this Bill, and I look to any of those winding up to answer it—including my noble friend the Minister. Is this an end to end-to-end encryption? Is that what is happening in this Bill? Or is this about ensuring that what is already permissible in terms of the authorities being able to use their powers to go after suspected criminals is somehow codified in this Bill to make sure it has proper safeguards around it? That is still not clear. It would be very helpful to get that clarity from my noble friend, or others.
Lord Clement-Jones (LD)
My Lords, it is a pleasure to follow the noble Baroness, Lady Stowell. My noble friend has spoken very cogently to Amendment 258ZA, and I say in answer to the question posed by the noble Baroness that I do not think this is designed to make big tech companies content. What it is designed to do is bring this out into the open and make it contestable; to see whether or not privacy is being invaded in these circumstances. To that extent it airs the issues and goes quite a long way towards allaying the concerns of those 80 organisations that we have heard from.
I am not going to repeat all the arguments of my noble friend, but many noble Lords, not least on the opposite Benches, have taken us through some of the potential security and privacy concerns which were also raised by my noble friends, and other reasons for us on these Benches putting forward these amendments. We recognise those concerns and indeed we recognise concerns on both sides. We have all received briefs from the NSPCC and the IWF, but I do not believe that essentially what is being proposed here in our amendments, or indeed by the amendments put forward by the noble Lord, Lord Stevenson, are designed in any way to prevent Ofcom doing its duty in relation to child sexual abuse and exploitation material in private messaging. We believe that review by the ICO to ensure that there is no invasion of privacy is a very useful mechanism.
We have all tried to find solutions and the Minister has put forward his stab at this with the skilled persons report. The trouble is, that does not go far enough, as the noble Baroness, Lady Stowell, said. Effectively, Ofcom can choose the skilled person and what the skilled person is asked to advise on. It is not necessarily comprehensive and that is essentially the major flaw.
As regards the amendments put forward by the noble Lord, Lord Stevenson, it is interesting that the Equality and Human Rights Commission itself said:
“We are concerned by the extent and seriousness of CSEA content being shared online. But these proposed measures may be a disproportionate infringement on millions of individuals’ right to privacy where those individuals are not suspected of any wrongdoing”.
It goes on to say:
“We recommend that Ofcom should be required to apply to an independent judicial commissioner—as is the case for mass surveillance under the Investigatory Powers Act”.
I am sure that is the reason why the noble Lord, Lord Stevenson, put forward his amendments; if he put them to a vote, we would follow and support. Otherwise, we will put our own amendments to the House.
Lord Stevenson of Balmacara (Lab)
My Lords, this has been—since we first got sight of the Bill and right the way through—one of the most difficult issues to try to find balance and a solution. I know that people have ridiculed my attempt to try and get people to speak less in earlier amendments. Actually, in part it was so we could have a longer debate here—so the noble Lord, Lord Moylan, should not be so cross with me, and I hope that we can continue to be friends, as we are outside the Chamber, on all points, not just this one.
Talk is not getting us to a solution on this, unfortunately. I say to the Minister: I wonder whether there is a case here for pausing a little bit longer on this, because I still do not think we have got to the bottom of where the balance lies. I want to explain why I say that, because, in a way, I follow the noble Baroness, Lady Stowell, in worrying that there are some deeper questions here that we have not quite got the answers to. Nothing in the current amendments gets us to quite the right place.
I started by thinking that, if only because Ofcom was being seen to be placed in a position of both being a part of the regulatory process, but also having the rights to interpose itself into where this issue about encryption came up, Ofcom needed the safety of an external judicial review along the lines of the current RIPA system. That has led us to my Amendments 256, 257 and 259, which try to distil that sensibility into a workable frame for the Bill and these issues. I will not push it to a vote. It is there because I wanted to have in the discussion a proper look at what the RIPA proposal would look like in practice.
Lord Parkinson of Whitley Bay (Con)
I am grateful to noble Lords for their further scrutiny of this important but complex area, and for the engagement that we have had in the days running up to it as well. We know how child sexual exploitation and abuse offenders sadly exploit private channels, and the great danger that this poses, and we know how crucial these channels are for secure communication. That is why, where necessary and proportionate, and where all the safeguards are met, it is right that Ofcom can require companies to take all technically feasible measures to remove this vile and illegal content.
The government amendments in this group will go further to ensure that a notice is well informed and targeted and does not unduly restrict users’ rights. Privacy and safety are not mutually exclusive—we can and must have both. The safety of our children depends on it.
I make it clear again that the Bill does not require companies to break or weaken end-to-end encryption on their services. Ofcom can require the use of technology on an end-to-end encrypted service only when it is technically feasible and has been assessed as meeting minimum standards of accuracy. When deciding whether to issue a notice, Ofcom will engage in continual dialogue with the company and identify reasonable, technically feasible solutions to the issues identified. As I said in opening, it is right that we require technology companies to use their considerable resources and expertise to develop the best possible protections to keep children safe in encrypted environments. They are well placed to innovate to find solutions that protect both the privacy of users and the safety of children.
Baroness Stowell of Beeston (Con)
Just to be clear, am I right to understand my noble friend as saying that there is currently no technology that would be technically acceptable for tech companies to do what is being asked of them? Did he say that tech companies should be looking to develop the technology to do what may be required of them but that it is not currently available to them?
Lord Moylan (Con)
For clarification, if the answer to that is that the technology does not exist—which I believe is correct, although there are various snake oil salespeople out there claiming that it does, as the noble Baroness, Lady Fox of Buckley, said—my noble friend seems to be saying that the providers and services should develop it. This seems rather circular, as the Bill says that they must adopt an approved technology, which suggests a technology that has been imposed on them. What if they cannot and still get such a notice? Is it possible that these powers will never be capable of being used, especially if they do not co-operate?
Lord Parkinson of Whitley Bay (Con)
To answer my noble friend Lady Stowell first, it depends on the type of service. It is difficult to give a short answer that covers the range of services that we want to ensure are covered here, but we are seeking to keep this and all other parts of the Bill technology neutral so that, as services develop, technology changes and criminals, unfortunately, seek to exploit that, technology companies can continue to innovate to keep children safe while protecting the privacy of their users. That is a long-winded answer to my noble friend’s short question, but necessarily so. Ofcom will need to make its assessments on a case- by-case basis and can require a company to use its best endeavours to innovate if no effective and accurate technology is currently available.
While I am directing my remarks towards my noble friend, I will also answer a question she raised earlier on general monitoring. General monitoring is not a legally defined concept in UK law; it is a term in European Union law that refers to the generalised monitoring of user activity online, although its parameters are not clearly defined. The use of automated technologies is already fundamental to how many companies protect their users from the most abhorrent harms, including child sexual abuse. It is therefore important that we empower Ofcom to require the use of such technology where it is necessary and proportionate and ensure that the use of these tools is transparent and properly regulated, with clear and appropriate safeguards in place for users’ rights. The UK’s existing intermediary liability regime remains in place.
Amendment 255 from my noble friend Lord Moylan seeks to prevent Ofcom imposing any requirement in a notice that would weaken or remove end-to-end encryption. He is right that end-to-end encryption should not be weakened or removed. The powers in the Bill will not do that. These powers are underpinned by proportionality and technical feasibility; if it is not proportionate or technically feasible for companies to identify child sexual exploitation abuse content on their platform while upholding users’ right to privacy, Ofcom cannot require it.
I agree with my noble friend and the noble Baroness, Lady Fox, that encryption is a very important and popular feature today. However, with technology evolving at a rapid rate, we cannot accept amendments that would risk this legislation quickly becoming out of date. Naming encryption in the Bill would risk that happening. We firmly believe that the best approach is to focus on strong safeguards for upholding users’ rights and ensuring that measures are proportionate to the specific situation, rather than on general features such as encryption.
The Bill already requires Ofcom to consider the risk that technology could result in a breach of any statutory provision or rule of law concerning privacy and whether any alternative measures would significantly reduce the amount of illegal content on a service. As I have said in previous debates, Ofcom is also bound by the Human Rights Act not to act inconsistently with users’ rights.
Baroness Fox of Buckley (Non-Afl)
Will the Minister write to noble Lords who have been here in Committee and on Report in response to the fact that it is not just encryption companies saying that the demands of this clause will lead to the breaching of encryption, even though the Minister and the Government keep saying that it will not? As I have indicated, a wide range of scientists and technologists are saying that, whatever is said, demanding that Ofcom insists that technology notices are used in this way will inadvertently lead to the breaking of encryption. It would be useful if the Government at least explained scientifically and technologically why those experts are wrong and they are right.
Lord Parkinson of Whitley Bay (Con)
I am very happy to put in writing what I have said from the Dispatch Box. The noble Baroness may find that it is the same, but I will happily set it out in further detail.
I should make it clear that the Bill does not permit law enforcement agencies to access information held on platforms, including access to private channels. The National Crime Agency will be responsible for receiving reports from in-scope services via secure transmission, processing these reports and, where appropriate, disseminating them to other UK law enforcement bodies and our international counterparts. The National Crime Agency will process only information provided to it by the company; where it determines that the content is child sexual abuse content and meets the threshold for criminality, it can request further information from the company using existing powers.
I am glad to hear that my noble friend Lord Moylan does not intend to divide on his amendment. The restrictions it sets out are not ones we should impose on the Bill.
Amendments 256, 257 and 259 in the name of the noble Lord, Lord Stevenson of Balmacara, require a notice to be approved by a judicial commissioner appointed under the Investigatory Powers Act 2016 and remove Ofcom’s power to require companies to make best endeavours to develop or source new technology to address child sexual exploitation and abuse content.
Lord Allan of Hallam (LD)
I appreciate the tone of the Minister’s comments very much, but they are not entirely reassuring me. There is a debate going on out there: there are people saying, “We’ve got these fabulous technologies that we would like Ofcom to order companies to install” and there are companies saying, “That would be disastrous and break encryption if we had to install them”. That is a dualistic situation where there is a contest going on. My amendment seeks to make sure the conflict can be properly resolved. I do not think Ofcom on its own can ever do that, because Ofcom will always be defending what it is doing and saying “This is fine”. So, there has to be some other mechanism whereby people can say it is not fine and contest that. As I say, in this debate we are ignoring the fact that they are already out there: people saying “We think you should deploy this” and companies saying “It would be disastrous if we did”. We cannot resolve that by just saying “Trust Ofcom”.
Lord Parkinson of Whitley Bay (Con)
To meet the expectation the noble Lord voiced earlier, I will indeed point out that Ofcom can consult the ICO as a skilled person if it wishes to. It is important that we square the circle and look at these issues. The ICO will be able to be involved in the way I have set out as a skilled person.
Before I conclude, I want to address my noble friend Lady Harding’s questions on skilled persons. Given that notices will be issued on a case-by-case basis, and Ofcom will need to look at specific service design and existing systems of a provider to work out how a particular technology would interact with that design system, a skilled person’s report better fits this process by requiring Ofcom to obtain tailored advice rather than general technical advice from an advisory board. The skilled person’s report will be largely focused on the technical side of Ofcom’s assessment: that is to say, how the technology would interact with the service’s design and existing systems. In this way, it offers something similar to but more tailored than a technical advisory board. Ofcom already has a large and expert technology group, whose role it is to advice policy teams on new and existing technologies, to anticipate the impact of technologies and so on. It already has strong links with academia and with external researchers. A technical advisory board would duplicate that function. I hope that reassures my noble friend that the points she raised have been taken into account.
So I hope the noble Lord, Lord Allan, will not feel the need to divide—
Lord Stevenson of Balmacara (Lab)
Before the Minister finishes, I posed the question about whether, given the debate and issues raised, he felt completely satisfied that we had arrived at the right solution, and whether there was a case for withdrawing the amendment at this stage and bringing it back at Third Reading, having had further discussions and debate where we could all agree. I take it his answer is “no”.
Lord Parkinson of Whitley Bay (Con)
I am afraid it is “no”, and if the noble Lord, Lord Allan, does seek to divide, we will oppose his amendment. I commend the amendments standing in my name in this group to the House.
Member’s explanatory statement
This amendment is consequential on the new Clause proposed to be inserted in my name after Clause 111. It omits words in Clause 94 (skilled person’s reports) because that new Clause now requires OFCOM to obtain a skilled person’s report before giving a provider a notice under Clause 111.
“(2A) Section (Requirement to obtain skilled person’s report) requires OFCOM to exercise the power in subsection (3) for the purpose of assisting OFCOM in connection with a notice under section 111(1).”Member’s explanatory statement
This amendment is consequential on the new Clause proposed to be inserted in my name after Clause 111. It inserts a signpost in Clause 94 (skilled persons’ reports).
“(iiia) section (Assessment duties: user empowerment) (assessments related to the adult user empowerment duty set out in section 12(2));”Member’s explanatory statement
This amendment ensures that OFCOM are able to require a skilled person’s report about a failure or possible failure to comply with the new duties to carry out assessments (see the new Clause proposed after Clause 11 in my name).
“(xiia) section (Disclosure of information about use of service by deceased child users) (deceased child users);” Member’s explanatory statement
This amendment has the effect that OFCOM may require a skilled person’s report in relation to compliance with the new duties imposed by the Clause proposed after Clause 67 in my name.
“(4A) The power to observe the carrying on of the regulated service at the premises includes the power to view, using equipment or a device on the premises, information generated in real time by the performance of a test or demonstration required by a notice given under paragraph 3.”Member’s explanatory statement
This amendment ensures that during an inspection of a service, OFCOM have the power to observe a test or demonstration of which notice has been given.
Member’s explanatory statement
This is a technical amendment consequential on the preceding amendment in my name.
Member’s explanatory statement
This amendment, and the next two amendments in my name, concern OFCOM giving advance notice to a provider that they will want to observe a test or demonstration during an inspection.
Member’s explanatory statement
See the explanatory statement to the preceding amendment in my name.
Member’s explanatory statement
See the explanatory statement to the preceding amendment in my name.
“(da) to assist an authorised person to view, using equipment or a device on the premises, information demonstrating in real time the operation of systems, processes or features of a specified description, including functionalities or algorithms of a specified description;“(db) to assist an authorised person to view, using equipment or a device on the premises, information generated in real time by the performance of a test or demonstration of a specified description;”Member’s explanatory statement
This amendment makes it clear that the powers of OFCOM during an audit of a service extend to using equipment on the premises to view real time information showing the operation of the service or the performance of a test or demonstration, if specified in advance in the audit notice.
Member’s explanatory statement
This is a drafting change removing a redundant paragraph from the Bill.
“(3A) In subsection (3), after paragraph (h) insert—“(ha) a person appointed under—(i) paragraph 1 of Schedule 3 to the Coroners and Justice Act 2009, or(ii) section 2 of the Coroners Act (Northern Ireland) 1959 (c. 15 (N.I.));(hb) the procurator fiscal, within the meaning of the enactment mentioned in subsection (5)(s);”.(3B) In subsection (5)—(a) before paragraph (d) insert—“(ca) the Coroners Act (Northern Ireland) 1959;”,(b) after paragraph (na) insert—“(nb) Part 1 of the Coroners and Justice Act 2009;”, and(c) after paragraph (r) insert—“(s) the Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016 (asp 2).”.”Member’s explanatory statement
This amendment ensures that it is not necessary for OFCOM to obtain the consent of providers of internet services before disclosing information to a coroner or, in Scotland, procurator fiscal, who is investigating a person’s death.
Member’s explanatory statement
This is a technical drafting change needed because section 24B of the Communications Act 2003 has been amended after this Bill was introduced.
(4) Subsection (2) does not apply to information—”Member’s explanatory statement
This is a technical drafting change needed because section 24B of the Communications Act 2003 has been amended after this Bill was introduced.
“(za) section (Requirement to obtain skilled person’s report), which requires OFCOM to obtain a skilled person’s report before giving a notice under subsection (1),”Member’s explanatory statement
This amendment is consequential on the new Clause proposed to be inserted in my name after Clause 111. It inserts a signpost to the requirement in that new Clause to obtain a skilled person’s report before giving a provider a notice under Clause 111.
“Requirement to obtain skilled person’s report
(1) OFCOM may give a notice under section 111(1) to a provider only after obtaining a report from a skilled person appointed by OFCOM under section 94(3).(2) The purpose of the report is to assist OFCOM in deciding whether to give a notice under section 111(1), and to advise about the requirements that might be imposed by such a notice if it were to be given.”Member’s explanatory statement
This amendment requires OFCOM to obtain a skilled person’s report under Clause 94 before giving a notice to a provider under Clause 111.
“(za) contain a summary of the report obtained by OFCOM under section (Requirement to obtain skilled person’s report),”Member’s explanatory statement
This amendment requires a warning notice given to a provider to contain a summary of the skilled person’s report obtained by OFCOM under the new Clause proposed to be inserted in my name after Clause 111.
“(za) contain a summary of the report obtained by OFCOM under section (Requirement to obtain skilled person’s report),”Member’s explanatory statement
This amendment requires a warning notice given to a provider to contain a summary of the skilled person’s report obtained by OFCOM under the new Clause proposed to be inserted in my name after Clause 111.
“(ga) the contents of the skilled person’s report obtained as required by section (Requirement to obtain skilled person’s report);”Member’s explanatory statement
This amendment requires OFCOM to consider the contents of the skilled person’s report obtained as required by the new Clause proposed to be inserted in my name after Clause 111, as part of OFCOM’s decision about whether it is necessary and proportionate to give a notice to a provider under Clause 111.
“(ia) in the case of a notice relating to a user-to-user service (or to the user-to-user part of a combined service), the extent to which the use of the specified technology would or might—(i) have an adverse impact on the availability of journalistic content on the service, or(ii) result in a breach of the confidentiality of journalistic sources;”Member’s explanatory statement
This amendment requires OFCOM to consider the impact of the use of technology on the availability of journalistic content and the protection of journalistic sources, as part of OFCOM’s decision about whether it is necessary and proportionate to give a notice to a provider under Clause 111.
Member’s explanatory statement
This amendment is consequential on the preceding amendment of this Clause in my name.
““journalistic content” has the meaning given by section 15;”Member’s explanatory statement
This amendment adds a definition of journalistic content to Clause 113.
Lord Allan of Hallam
“Review by the Information Commissioner of notices under Section 111(1)
(1) Where a provider believes that a notice it has been given under section 111(1) will have a material impact on the private communications of its users, it may request a review by the Information Commissioner.(2) The review must consider the compatibility of the notice with—(a) the Human Rights Act 1998,(b) the Data Protection Act 2018,(c) the Privacy and Electronic Communications (EC Directive) Regulations 2003, and(d) any other legislation the Information Commissioner considers relevant.(3) In carrying out the review, the Information Commissioner must consult—(a) OFCOM,(b) the provider,(c) UK users of the provider’s service, and (d) such other persons as the Information Commissioner considers appropriate.(4) Following a review under subsection (1) the Information Commissioner must publish a report including—(a) their determination of the compatibility of the notice with relevant legislation,(b) their reasons for making such a determination, and(c) their advice to OFCOM in respect of the drafting and implementation of the notice.”Member’s explanatory statement
This amendment would give providers a right to request an assessment by the ICO of the compatibility of a section 111 order with UK privacy legislation.
Member’s explanatory statement
This amendment provides that, if OFCOM propose to issue a further notice under Clause 111, it is not necessary to obtain a further skilled person’s report under the new Clause proposed to be inserted in my name after Clause 111.
“Section (Assessment duties: user empowerment) | Assessments related to duty in section 12(2)” |
This amendment ensures that OFCOM are able to use their enforcement powers in Chapter 6 of Part 7 in relation to a breach of any of the new duties imposed by the Clause proposed after Clause 11 in my name.
“Section (Disclosure of information about use of service by deceased child users) | Information about use of service by deceased child users” |
This amendment ensures that OFCOM are able to use their enforcement powers in Chapter 6 of Part 7 in relation to a breach of any of the new duties imposed by the Clause proposed after Clause 67 in my name.
Member’s explanatory statement
This amendment is consequential on the amendments of Clause 125 in my name.
“(ba) specify which of those requirements (if any) have been designated as CSEA requirements (see subsections (5A) and (5B)),”Member’s explanatory statement
This amendment is consequential on the next amendment to this Clause in my name.
Lord Parkinson of Whitley Bay (Con)
My Lords, in moving Amendment 262A, I will speak also to the other government amendments in the group. These amendments address the Bill’s enforcement powers. Government Amendments 262A, 262B, 262C, 264A and 266A, Amendments 265, 266 and 267, tabled by my noble friend Lord Bethell, and Amendment 268 tabled by the noble Lord, Lord Stevenson of Balmacara, relate to senior management liability. Amendment 268C from the noble Lord, Lord Weir of Ballyholme, addresses interim service restriction orders.
In Committee, we amended the Bill to create an offence of non-compliance with steps set out in confirmation decisions that relate to specific children’s online safety duties, to ensure that providers and individuals can be held to account where their non-compliance risks serious harm to children. Since then, we have listened to concerns raised by noble Lords and others, in particular that the confirmation decision offence would not tackle child sexual exploitation and abuse. That is why the government amendments in this group will create a new offence of a failure to comply with a child sexual exploitation and abuse requirement imposed by a confirmation decision. This will mean that providers and senior managers can be held liable if they fail to comply with requirements to take specific steps as set out in Ofcom’s confirmation decision in relation to child sexual exploitation and abuse on their service.
Ofcom must designate a step in a confirmation decision as a child sexual exploitation and abuse requirement, where that step relates, whether or not exclusively, to a failure to comply with specific safety duties in respect of child sexual exploitation and abuse content. Failure to comply with such a requirement will be an offence. This approach is necessary, given that steps may relate to multiple or specific kinds of illegal content, or systems and process failures more generally. This approach will ensure that services know from the confirmation decision when they risk criminal liability, while providing sufficient legal certainty via the specified steps to ensure that the offence can be prosecuted effectively.
The penalty for this offence is up to two years in prison, a fine or both. Through Clause 182, where an offence is committed with the consent or connivance of a senior manager, or attributable to his or her neglect, the senior manager, as well as the entity, will have committed the offence and can face up to two years in prison, a fine or both.
I thank my noble friend Lord Bethell, as well as our honourable friends Miriam Cates and Sir William Cash in another place, for their important work in raising this issue and their collaborative approach as we have worked to strengthen the Bill in this area. I am glad that we have reached a position that will help to keep children safe online and drive a change in culture in technology companies. I hope this amendment reassures them and noble Lords that the confirmation decision offence will tackle harms to children effectively by ensuring that technology executives take the necessary steps to keep children safe online. I beg to move.
Lord Allan of Hallam (LD)
My Lords, I will briefly comment positively on the Minister’s explanation of how these offences might work, particularly the association of the liability with the failure to enforce a confirmation decision, which seems entirely sensible. In an earlier stage of the debate, there was a sense that we might associate liability with more general failures to enforce a duty of care. That would have been problematic, because the duty of care is very broad and requires a lot of pieces to be put in place. Associating the offences with the confirmation decision makes absolute sense. Having been in that position, if, as an executive in a tech company, I received a confirmation decision that said, “You must do these things”, and I chose wilfully to ignore that decision, it would be entirely reasonable for me to be held potentially criminally liable for that. That association is a good step forward.
Lord Weir of Ballyholme (DUP)
My Lords, I will speak to Amendment 268C, which is in my name and that of the noble Baroness, Lady Benjamin, who has been so proactive in this area. The amendment seeks to clarify the threshold for Ofcom to take immediate enforcement action when children are exposed to suicide, self-harm, eating disorders and pornographic materials. It would require the regulator to either take that action or at least provide an explanation to the Secretary of State within a reasonable timeframe as to why it has chosen not to.
When we pass the Bill, the public will judge it not simply on its contents but on its implementation, its enforcement and the speed of that enforcement. Regulatory regimes as a whole work only if the companies providing the material believe the regulator to be sufficiently muscular in its approach. Therefore, the test is not simply what is there but how long it will take for a notice, whenever it is issued, to lead to direct change.
I will give two scenarios to illustrate the point. Let us take the example of a video encouraging the so-called blackout challenge, or choking challenge, which went viral on social media about two years ago. For those who are unaware, it challenged children to choke themselves to the point at which they lost consciousness and to see how long they could do that. This resulted in the death of about 15 children. If a similar situation arises and a video is not removed because it is not against the terms and conditions of the service, does Ofcom allow the video to circulate for a period of, say, six months while giving a grace period for the platform to introduce age gating? What if the platform fails to implement that highly effective age verification? How long will it take to get through warnings, a provisional notice of contravention, a representation period, a confirmation decision and the implementation of required measures before the site is finally blocked? As I indicated, this is not hypothetical; it draws from a real-life example. We know that this is not simply a matter of direct harm to children; it can lead to a risk of death, and has done in the past.
What about, for example, a pornographic site that simply has a banner where a person can self-declare that they are over 18 in order to access it? I will not rehearse, since they have been gone through a number of times, the dangers for children of early exposure to violent pornography and the impact that will have on respectful relationships, as we know from government reports, and particularly the risk it creates of viewing women as sex objects. It risks additional sexual aggression towards women and perpetuates that aggression. Given that we are aware that large numbers of children have access to this material, surely it would be irresponsible to sacrifice another generation of children to a three-year implementation process.
Baroness Benjamin (LD)
My Lords, I want to say “Hallelujah”. With this Bill, we have reached a landmark moment after the disappointments and obstacles that we have had over the last six years. It has been a marathon but we are now in the final straight with the finishing line in sight, after the extraordinary efforts by noble Lords on all sides of the House. I thank the Secretary of State for her commitment to this ground-breaking Bill, and the Minister and his officials for the effort they have put into it. The Minister is one of my “Play School” babies, who has done his utmost to make a difference in changing the online world. That makes me very happy.
We know that the eyes of the world are watching us because legislators around the world are looking for ways to extend the rule of law into the online world, which has become the Wild West of the 21st century, so it is critical that in our haste to reach the finishing post we do not neglect the question of enforcement. That is why I have put my name to Amendment 268C in the name of the noble Lord, Lord Weir: without ensuring that Ofcom is given effective powers for this task of unprecedented scale, the Bill we are passing may yet become a paper tiger.
The impact assessment for the Bill estimated that 25,000 websites would be in scope. Only last week, in an encouraging report by the National Audit Office on Ofcom’s readiness, we learned that the regulator’s own research has increased that estimate to 100,000, and the figure could be significantly higher. The report went on to point out that the great majority of those websites will be based overseas and will not have been regulated by Ofcom before.
The noble Lord, Lord Bethell, raised his concerns on the final day of Committee, seeking to amend the Bill to make it clear that Ofcom could take a schedule of a thousand sites to court and get them all blocked in one go. I was reassured when the Minister repeated the undertaking given by his counterpart in Committee in the other place that the Civil Procedure Rules already allow such multiparty claims. Will the Minister clarify once again that such enforcement at scale is possible and would not expose Ofcom to judicial review? That would give me peace of mind.
The question that remains for many is whether Ofcom will act promptly enough when children are at risk. I am being cautious because my experience in this area with regulators has led me not to assume that simply because this Parliament passes a law, it will be implemented. We all know the sorry tale of the Part 3 of the Digital Economy Act, when Ministers took it upon themselves not to decide when it should come into force, but to ask whether it should at all. When they announced that that should be never, the High Court took a dim view and allowed judicial review to proceed. Interestingly, the repeal of Part 3 and the clauses that replaced it may not have featured in this Bill were it not for that case—I always say that everything always happens for a reason. The amendment is a reminder to Ofcom that Parliament expects it to act, and to do so from the day when the law comes into force, not after a year’s grace period, six months or more of monitoring or a similar period of supervision before it contemplates any form of enforcement.
Many of the sites we are dealing with will not comply because this is the law; they will do so only when the business case makes compliance cheaper than the consequences of non-compliance, so this amendment is a gentle but necessary provision. If for any reason Ofcom does not think that exposing a significant number of children in this country to suicide, health harm, eating disorder or pornographic content—which is a universal plague—merits action, it will need to write a letter to the Secretary of State explaining why.
We have come too far to risk the Bill not being implemented in the most robust way, so I hope my noble friends will join me in supporting this belt-and-braces amendment. I look forward to the Minister’s response.
Baroness Merron (Lab)
My Lords, we welcome the government amendments in this group to bring child sexual exploitation and abuse failures into the scope of the senior manager liability and enforcement regime but consider that they do not go far enough. On the government amendments, I have a question for the Minister about whether, through Clause 122, it would be possible to require a company that was subject to action to do some media literacy as part of its harm reduction; in other words, would it be possible for Ofcom to use its media literacy powers as part of the enforcement process? I offer that as a helpful suggestion.
We share the concerns expressed previously by the noble Lord, Lord Bethell, about the scope of the senior manager liability regime, which does not cover all the child safety duties in the Bill. We consider that Amendment 268, in the name of my noble friend Lord Stevenson, would provide greater flexibility, giving the possibility of expanding the list of duties covered in the future. I have a couple of brief questions to add to my first question. Will the Minister comment on how the operation of the senior manager liability regime will be kept under review? This has, of course, been something of a contentious issue in the other place, so could the Minister perhaps tell your Lordships’ House how confident he is that the current position is supported there? I look forward to hearing from the Minister.
Lord Parkinson of Whitley Bay (Con)
I did not quite finish writing down the noble Baroness’s questions. I will do my best to answer them, but I may need to follow up in writing because she asked a number at the end, which is perfectly reasonable. On her question about whether confirmation decision steps could include media literacy, yes, that is a good idea; they could.
Amendment 268, tabled by the noble Lord, Lord Stevenson of Balmacara, seeks to enable the Secretary of State, through regulation, to add to the list of duties which are linked to the confirmation decision offence. We are very concerned at the prospect of allowing an unconstrained expansion of the confirmation decision offence. In particular, as I have already set out, we would be concerned about expansion of those related to search services. There is also concern about unconstrained additions of any other duties related to user-to-user services as well.
We have chosen specific duties which will tackle effectively key issues related to child safety online and tackling child abuse while ensuring that the confirmation decision offence remains targeted. Non-compliance with a requirement imposed by a confirmation decision in relation to such duties warrants the prospect of criminal enforcement on top of Ofcom’s extensive civil enforcement powers. Making excessive changes to the offence risks shifting the regime towards a more punitive and disproportionate enforcement model, which would represent a significant change to the framework as a whole. Furthermore, expansion of the confirmation decision offence could lead to services taking an excessively cautious approach to content moderation to avoid the prospect of criminal liability. We are also concerned that such excessive expansion could significantly increase the burden on Ofcom.
I am grateful to the noble Lord, Lord Weir of Ballyholme, and the noble Baroness, Lady Benjamin, for the way they set out their Amendment 268C. We are concerned about this proposal because it is important that Ofcom can respond to issues on a case-by-case basis: it may not always be appropriate or proportionate to use a specific enforcement power in response to a suspected breach. Interim service restriction orders are some of the strongest enforcement powers in the Bill and will have a significant impact on the service in question. Their use may be disproportionate in cases where there is only a minor breach, or where a service is taking steps to deal with a breach following a provisional notice of contravention.
“(5A) If the condition in subsection (5B) is met in relation to a requirement imposed by a confirmation decision which is of a kind described in subsection (1), OFCOM must designate the requirement as a “CSEA requirement” for the purposes of section 127(2A) (offence of failure to comply with confirmation decision).(5B) The condition referred to in subsection (5A) is that the requirement is imposed (whether or not exclusively) in relation to either or both of the following—(a) a failure to comply with section 9(2)(a) or (3)(a) in respect of CSEA content, or in respect of priority illegal content which includes CSEA content; (b) a failure to comply with section 9(2)(b) in respect of an offence specified in Schedule 6 (CSEA offences), or in respect of priority offences which include such an offence.”Member’s explanatory statement
This amendment provides that where a confirmation decision imposes a requirement to take steps in relation to a failure to comply with a duty under Clause 9(2)(a), (2)(b) or (3)(a) in respect of CSEA content or an offence under Schedule 6, OFCOM must designate the requirement as a CSEA requirement with the result that failure to comply with it is an offence (see the amendment inserting subsection (2A) into Clause 127 in my name).
““CSEA content”, “priority illegal content” and “priority offence” have the same meaning as in Part 3 (see section 53);”Member’s explanatory statement
This amendment is consequential on the preceding amendment to this Clause in my name.
Member’s explanatory statement
This amendment is consequential on the next amendment in my name.
“(1A) A proactive technology requirement may be imposed in a confirmation decision if—(a) the decision is given to the provider of an internet service within section 71(2), and(b) the decision is imposed for the purpose of complying with, or remedying the failure to comply with, the duty set out in section 72(2) (provider pornographic content).(1B) The following provisions of this section set out constraints on OFCOM’s power to include a proactive technology requirement in a confirmation decision in any case not within subsection (1A).”Member’s explanatory statement
This amendment has the effect that OFCOM may, in a confirmation decision, require a provider to use proactive technology if the purpose is to deal with non-compliance with Clause 72(2) (preventing children encountering provider pornographic content).
Member’s explanatory statement
This is a technical amendment which adjusts the language of this provision.
“(2A) A person to whom a confirmation decision is given commits an offence if, without reasonable excuse, the person fails to comply with a CSEA requirement imposed by the decision (see section 122 (5A) and (5B)).”Member’s explanatory statement
This amendment provides that a person commits an offence if the person fails to comply, without reasonable excuse, with a CSEA requirement imposed by a confirmation decision given to the person (see the amendment inserting new subsections (5A) and (5B) into Clause 122 in my name.)
“(9) Regulations made by OFCOM under section (Regulations by OFCOM about qualifying worldwide revenue etc)(1)(a)(including regulations making provision of a kind mentioned in section (Regulations by OFCOM about qualifying worldwide revenue etc)(3), (4) or (5)) apply for the purpose of determining the qualifying worldwide revenue of a provider of a regulated service for an accounting period as mentioned in this paragraph as they apply for the purpose of determining the qualifying worldwide revenue of a provider of a regulated service for a qualifying period for the purposes of Part 6.”Member’s explanatory statement
This amendment provides that regulations under the new Clause 76 proposed in my name about “qualifying worldwide revenue” for the purposes of Part 6 of the Bill (fees) also applies for the purposes of financial penalties under paragraph 4 of Schedule 13.
“(9) OFCOM may by regulations make provision about how the qualifying worldwide revenue of a group of entities is to be determined for the purposes of this paragraph.(10) Before making regulations under sub-paragraph (9) OFCOM must consult—(a) the Secretary of State,(b) the Treasury, and(c) such other persons as OFCOM consider appropriate.(11) Regulations under sub-paragraph (9) may make provision subject to such exemptions and exceptions as OFCOM consider appropriate.”Member’s explanatory statement
This amendment provides a power for OFCOM to make regulations setting out what is meant in paragraph 5 of Schedule 13 by references to the qualifying worldwide revenue of a group of entities.
Member’s explanatory statement
This amendment is consequential on the new Clause proposed to be inserted after Clause 149 in my name expanding OFCOM’s duties to promote media literacy in relation to regulated user-to-user and search services.
Lord Knight of Weymouth
“Establishment of the Advocacy Body for Children
(1) There is to be a body corporate (“the Advocacy Body for Children”) to represent the interests of child users of regulated services.(2) A “child user”—(a) means any person aged 17 years or under who uses or is likely to use regulated internet services, and(b) includes both any existing child user and any future child user.(3) The functions of the Advocacy Body for Children must include, in relation to regulated services—(a) representing the interests of child users;(b) the protection and promotion of those interests;(c) monitoring implications of this Act’s implementation for those interests;(d) consideration of children’s rights under the United Nations Convention on the Rights of the Child, including (but not limited to) their participation rights;(e) any other matter connected with those interests.(4) The “interests of child users” means the interests of children in relation to the discharge by any regulated company of its duties under this Act, including—(a) safety duties about illegal content, in particular CSEA content,(b) safety duties protecting children,(c) children’s access assessment duties, and(d) other enforceable requirements relating to children. (5) The Advocacy Body for Children must—(a) have due regard to the interests of child users that display one or more protected characteristics within the meaning of the Equality Act 2010,(b) assess emerging threats to child users of regulated services and bring information regarding those threats to OFCOM, and(c) publish an annual report related to the interests of child users.(6) The Advocacy Body for Children may undertake research on its own account.(7) The Advocacy Body for Children is to be defined as a statutory consultee for OFCOM’s regulatory decisions which impact upon the interests of children.(8) To establish the Advocacy Body for Children, OFCOM must—(a) appoint an organisation or organisations known to represent all children in the United Kingdom to be designated with the functions under this section, or(b) create an organisation to carry out the designated functions.(9) The governance functions of the Advocacy Body for Children must—(a) with the exception of the approval of its budget, remain independent of OFCOM, and(b) include representation of child users by young people under the age of 25 years.(10) The budget of the Advocacy Body for Children will be subject to annual approval by the board of OFCOM.(11) The Secretary of State must give directions to OFCOM as to how it should recover the costs relating to the expenses of the Advocacy Body for Children, or the Secretary of State in relation to the establishment of the Advocacy Body, through the provisions to require a provider of a regulated service to pay a fee (as set out in section 75).”Member’s explanatory statement
This new Clause would require Ofcom to establish a new advocacy body for child users of regulated internet services to represent, protect and promote their interests.
Lord Knight of Weymouth (Lab)
My Lords, I am grateful to the noble Baroness, Lady Newlove, and the noble Lord, Lord Clement-Jones, for adding their names to Amendment 270A, and to the NSPCC for its assistance in tabling this amendment and helping me to think about it.
The Online Safety Bill has the ambition, as we have heard many times, of making the UK the safest place for a child to be online. Yet, as drafted, it could pass into legislation without a system to ensure that children’s voices themselves can be heard. This is a huge gap. Children are experts in their own lives, with a first-hand understanding of the risks that they face online. It is by speaking to, and hearing from, children directly that we can best understand the harms they face online—what needs to change and how the regulation is working in practice.
User advocates are commonplace in most regulated environments and are proven to be effective. Leading children’s charities such as 5Rights, Barnardo’s and YoungMinds, as well as organisations set up by bereaved parents campaigning for child safety online, such as the Molly Rose Foundation and the Breck Foundation, have joined the NSPCC in calling for the introduction of this advocacy body for children, as set out in the amendment.
I do not wish to detain anyone. The Minister’s response when this was raised in Committee was, in essence, that this should go to the Children’s Commissioner for England. I am grateful to her for tracking me down in a Pret A Manger in Russell Square on Monday and having a chat. She reasonably pointed out that much of the amendment reads a bit like her job description, but she also could see that it is desirable to have an organisation such as the NSPCC set up a UK-wide helpline. There are children’s commissioners for Scotland, Wales and Northern Ireland who are supportive of a national advocacy body for children. She was suggesting —if the Minister agrees that this seems like a good solution—that they could commission a national helpline that works across the United Kingdom, and then advises a group that she could convene, including the children’s commissioners from the other nations of the United Kingdom. If that seems a good solution to the Minister, I do not need to press the amendment, we are all happy and we can get on with the next group. I beg to move.
Lord Allan of Hallam (LD)
My Lords, I just want to make some brief comments in support of the principle of what the noble Lord, Lord Knight, is aiming at in this amendment.
The Bill is going to have a profound impact on children in the United Kingdom. We hope that the most profound impact will be that it will significantly advance their interests in terms of safety online. But it will also potentially have a significant impact on what they can access online and the functionality of different services. They are going to experience new forms of age assurance, about which they may have very strong views. For example, the use of their biometric data to estimate their age will be there to protect them, but they may still have strong views about that.
I have said many times that there may be some measures in the Bill that will encourage services to become 18-plus only. That is not adult in the sense of adult content. Ordinary user-to-user social media services may look at the obligations and say, “Frankly, we would much rather restrict ourselves to users from the UK who identify as being 18-plus, rather than have to take on board all the associated liabilities in respect of children”—not because they are irresponsible, but precisely because they are responsible, and they can see that there is a lot of work to do in order to be legally and safely available to those under 18. For all those reasons, it is really important that the child advocacy body looks at things such as the United Nations Convention on the Rights of the Child and the rights of children to access information, and that it is able to take a view on them.
The reason I think that is important—as will any politician who has been out and spoken in schools—is that very often children are surprising in terms of what they see as their priorities. We make assumptions about their priorities, which can often be entirely wrong. There has been some really good work done on this. There was a project called EU Kids Online, back in the days of the EU, which used to look at children right across the European Union and ask them what their experience of being online was like and what was important to them. There are groups such as Childnet International, which for years has been convening groups of children and taking them to places such as the Internet Governance Forum. That always generates a lot of information that we here would not have thought of, about what children feel is really important to them about their online experience.
For all those reasons, it really would be helpful to institutionalise this in the new regime as some kind of body that looks in the round at children’s interests—their interests to stay safe, but also their interests to be able to access a wide variety of online services and to use the internet as they want to use it. I hope that that strengthens the case the noble Lord, Lord Knight, has made for such a body to exist in some kind of coalition-like format.
Baroness Fox of Buckley (Non-Afl)
My Lords, I am afraid that I have some reservations about this amendment. I was trying not to, but I have. The way that the noble Lord, Lord Allan of Hallam, explained the importance of listening to young people is essential—in general, not being dictated to by them, but to understand the particular ways that they live their lives; the lived experience, to use the jargon. Particularly in relation to a Bill that spends its whole time saying it is designed to protect young people from harm, it might be worth having a word with them and seeing what they say. I mean in an ongoing way—I am not being glib. That seems very sensible.
I suppose my concern is that this becomes a quango. We have to ask who is on it, whether it becomes just another NGO of some kind. I am always concerned about these kinds of organisations when they speak “on behalf of”. If you have an advocacy body for children that says, “We speak on behalf of children”, that makes me very anxious. You can see that that can be a politically very powerful role, because it seems to have the authority of representing the young, whereas actually it can be entirely fictitious and certainly not democratic or accountable.
The key thing we discussed in Committee, which the noble Lord, Lord Knight of Weymouth, is very keen on—and I am too—is that we do not inadvertently deny young people important access rights to the internet in our attempt to protect them. That is why some of these points are here. The noble Baroness, Lady Kidron, was very keen on that. She wants to protect them but does not want to end up with them being denied access to important parts of the internet. That is all good, but I just think this body is wrong.
The only other thing to draw noble Lords’ attention to—I am not trying to be controversial, but it is worth nothing—is that child advocacy is currently in a very toxic state because of some of the issues around who represents children. As we speak, there is a debate about, for example, whether the NSPCC has been captured by Stonewall. I make no comment because I do not know; I am just noting it. We have had situations where a child advocacy group such as Mermaids is now discredited because it is seen to have been promoting chest binders for young people, to have gone down the gender ideology route, which some people would argue is child abuse of a sort, advocating that young women remove their breasts—have double mastectomies. This is all online, by the way.
I know that some people would say, “Oh, you’re always going on about that”, but I raise it because it is a very real and current discussion. I know a lot of people who work in education, with young people or in children’s rights organisations, and they keep telling me that they are tearing themselves apart. I just wondered whether the noble Lord, Lord Knight, might note that there is a danger of walking into a minefield here—which I know he does not mean to walk into—by setting up an organisation that could end up being the subject of major culture wars rows or, even worse, one of those dreaded quangos that pretends it is representing people but does not.
Lord Clement-Jones (LD)
My Lords, I think the upshot of this brief debate is that the noble Lord, Lord Knight —how he was tracked down in a Pret A Manger, I have no idea; he is normally too fast-moving for that—in his usual constructive and creative way is asking the Government to constructively engage to find a solution, which he discussed in that Pret A Manger, involving a national helpline, the NSPCC and the Children’s Commissioner, for the very reasons that he and my noble friend Lord Allan have put forward. In no way would this be some of kind of quango, in the words of the noble Baroness, Lady Fox.
This is really important stuff. It could be quite a game-changer in the way that the NSPCC and the Children’s Commissioner collaborate on tackling the issues around social media, the impact of the new rights under the Bill and so on. I very much hope that the Government will be able to engage positively on this and help to bring the parties together to, in a sense, deliver something which is not in the Bill but could be of huge importance.
Lord Parkinson of Whitley Bay (Con)
My Lords, first, I reassure noble Lords that the Government are fully committed to making sure that the interests of children are both represented and protected. We believe, however, that this is already achieved through the provisions in the Bill.
Rather than creating a single advocacy body to research harms to children and advocate on their behalf, as the noble Lord’s amendment suggests, the Bill achieves the same effect through a combination of Ofcom’s research functions, the consultation requirements and the super-complaints provisions. Ofcom will be fully resourced with the capacity and technological ability to assess and understand emerging harms and will be required to research children’s experiences online on an ongoing basis.
For the first time, there will be a statutory body in place charged with protecting children from harm online. As well as its enforcement functions, Ofcom’s research will ensure that the framework remains up to date and that Ofcom itself has the latest, in-depth information to aid its decision-making. This will ensure that new harms are not just identified in retrospect when children are already affected by them and complaints are made; instead, the regulator will be looking out for new issues and working proactively to understand concerns as they develop.
Children’s perspectives will play a central role in the development of the framework, as Ofcom will build on its strong track record of qualitative research to ensure that children are directly engaged. For example, Ofcom’s ongoing programme, Children’s Media Lives, involves engaging closely with children and tracking their views and experiences year on year.
Alongside its own research functions, super-complaints will ensure that eligible bodies can make complaints on systemic issues, keeping the regulator up to date with issues as they emerge. This means that if Ofcom does not identify a systemic issue affecting children for any reason, it can be raised and then dealt with appropriately. Ofcom will be required to respond to the super-complaint, ensuring that its subsequent decisions are understood and can be scrutinised. Complaints by users will also play a vital role in Ofcom’s horizon scanning and information gathering, providing a key means by which new issues can be raised.
The extensive requirements for Ofcom to consult on codes of practice and guidance will further ensure that it consistently engages with groups focused on the interests of children as the codes and guidance are developed and revised. Children’s interests are embedded in the implementation and delivery of this framework.
The Children’s Commissioner will play a key and ongoing role. She will be consulted on codes of practice and any further changes to those codes. The Government are confident that she will use her statutory duties and powers effectively to understand children’s experiences of the digital world. Her primary function as Children’s Commissioner for England is promoting and protecting the rights of children in England and to promote and protect the rights of children across the United Kingdom where those rights are or may be affected by reserved matters. As the codes of practice and the wider Bill relate to a reserved area of law—namely, internet services—the Children’s Commissioner for England will be able to represent the interests of children from England, Scotland, Wales and Northern Ireland when she is consulted on the preparation of codes of practice. That will ensure that children’s voices are represented right across the UK. The Children’s Commissioner for England and her office also regularly speak to the other commissioners about ongoing work on devolved and reserved matters. Whether she does that in branches of Pret A Manger, I do not know, but she certainly works with her counterparts across the UK.
I am very happy to take back the idea that the noble Lord has raised and discuss it with the commissioner. There are many means by which she can carry out her duties, so I am very happy to take that forward. I cannot necessarily commit to putting it in legislation, but I shall certainly commit to discussing it with her. On the proposals in the noble Lord’s amendment, we are concerned that a separate child user advocacy body would duplicate the functions that she already has, so I hope with that commitment he will be happy to withdraw.
Lord Knight of Weymouth (Lab)
My Lords, I am grateful to those who have spoken in this quick debate and for the support from the noble Lord, Lord Allan of Hallam, and the noble Baroness, Lady Fox, about children’s voices being heard. I think that we are getting to the point when there will not be a quango or indeed a minefield, so that makes us all happy. The Minister almost derailed me, because so much of his speaking note was about the interests of children and I am more interested in the voice of children being heard directly rather than people acting on their behalf and representing their interests, but his final comments around being happy to take the idea forward means that I am very happy to withdraw my amendment.
“OFCOM’s reports about use of age assurance
(1) OFCOM must produce and publish a report assessing—(a) how providers of regulated services have used age assurance for the purpose of compliance with their duties set out in this Act,(b) how effective the use of age assurance has been for that purpose, and(c) whether there are factors that have prevented or hindered the effective use of age assurance, or a particular kind of age assurance, for that purpose,(and in this section, references to a report are to a report described in this subsection).(2) A report must, in particular, consider whether the following have prevented or hindered the effective use of age assurance—(a) the costs to providers of using it, and(b) the need to protect users from a breach of any statutory provision or rule of law concerning privacy that is relevant to the use or operation of a regulated service (including, but not limited to, any such provision or rule concerning the processing of personal data).(3) Unless the Secretary of State requires the production of a further report (see subsection (6)), the requirement in subsection (1) is met by producing and publishing one report within the period of 18 months beginning with the day on which sections 11 and 72(2) come into force (or if those provisions come into force on different days, the period of 18 months beginning with the later of those days).(4) In preparing a report, OFCOM must consult—(a) the Information Commissioner, and(b) such other persons as OFCOM consider appropriate.(5) OFCOM must send a copy of a report to the Secretary of State, and the Secretary of State must lay it before Parliament.(6) The Secretary of State may require OFCOM to produce and publish a further report in response to—(a) the development of age assurance technology, or(b) evidence of the reduced effectiveness of such technology.(7) But such a requirement may not be imposed—(a) within the period of three years beginning with the date on which the first report is published, or(b) more frequently than once every three years.(8) For further provision about reports under this section, see section 149.(9) In this section “age assurance” means age verification or age estimation.”Member’s explanatory statement
This new Clause requires OFCOM to produce and publish a report about the use of age assurance by providers of regulated services.
“OFCOM’s report about use of app stores by children
(1) OFCOM must produce a report about the use of app stores by children.(2) In particular, the report must—(a) assess what role app stores play in children encountering content that is harmful to children, search content that is harmful to children or regulated provider pornographic content by means of regulated apps which the app stores make available,(b) assess the extent to which age assurance is currently used by providers of app stores, and how effective it is, and(c) explore whether children’s online safety would be better protected by the greater use of age assurance or particular kinds of age assurance by such providers, or by other measures.(3) OFCOM must publish the report during the period beginning two years, and ending three years, after the day on which sections 11 and 25 come into force (or if those sections come into force on different days, the later of those days).(4) For further provision about the report under this section, see section 149.(5) In this section—“app” includes an app for use on any kind of device, and “app store” is to be read accordingly;“content that is harmful to children” has the same meaning as in Part 3 (see section 54);“regulated app” means an app for a regulated service;“regulated provider pornographic content” has the same meaning as in Part 5 (see section 70);“search content” has the same meaning as in Part 3 (see section 51).(6) In this section references to children are to children in the United Kingdom.”Member’s explanatory statement
This amendment requires OFCOM to produce a report about the use of app stores by children, including consideration of whether children would be better protected by greater use of age assurance.
“OFCOM’s report about reporting and complaints procedures
(1) OFCOM must produce a report assessing the measures taken or in use by providers of Part 3 services to enable users and others to—(a) report particular kinds of content present on such services, and(b) make complaints to providers of such services.(2) OFCOM’s report must take into account the experiences of users and others in reporting content and making complaints to providers of Part 3 services, including—(a) how clear the procedures are for reporting content and making complaints,(b) how easy it is to do those things, and(c) whether providers are taking appropriate and timely action in response to reports and complaints that are made. (3) The report must include advice from OFCOM about whether they consider that the Secretary of State should make regulations under section (Power to impose duty about alternative dispute resolution procedure)(duty about alternative dispute resolution procedure).(4) In the report, OFCOM may make recommendations that they consider would improve the experiences of users and others in reporting content or making complaints to providers of Part 3 services, or would deliver better outcomes in relation to reports or complaints that are made.(5) In preparing the report under this section, OFCOM must consult—(a) the Secretary of State,(b) persons who appear to OFCOM to represent the interests of United Kingdom users of Part 3 services,(c) persons who appear to OFCOM to represent the interests of children (generally or with particular reference to online safety matters),(d) the Information Commissioner, and(e) such other persons as OFCOM consider appropriate.(6) The report may draw on OFCOM’s research under section 14 of the Communications Act (see subsection (6B) of that section).(7) The report is not required to address any matters which are the subject of a report by OFCOM under section 146 (report about the availability and treatment of news publisher content and journalistic content).(8) OFCOM must publish the report within the period of two years beginning with the day on which this section comes into force.(9) OFCOM must send a copy of the report to the Secretary of State, and the Secretary of State must lay it before Parliament.(10) The Secretary of State must publish a statement responding to the report within the period of three months beginning with the day on which the report is published, and the statement must include a response to OFCOM’s advice about whether to make regulations under section (Power to impose duty about alternative dispute resolution procedure).(11) The statement must be published in such manner as the Secretary of State considers appropriate for bringing it to the attention of persons who may be affected by it.(12) For further provision about the report under this section, see section 149.(13) References in this section to “users and others” are to United Kingdom users and individuals in the United Kingdom.”Member’s explanatory statement
This amendment requires OFCOM to produce a report about the content reporting and complaints procedures used by providers of Part 3 services, including user experiences of those procedures. OFCOM must specifically advise whether they consider that regulations ought to be made under the new Clause proposed to be inserted in my name after Clause 194 (duty about alternative dispute resolution procedure).
Member’s explanatory statement
This amendment provides that the report that OFCOM must publish under Clause 148 (report about researchers’ access to information) must be published within 18 months of Clause 148 coming into force (rather than two years).
Member’s explanatory statement
This amendment provides that OFCOM must (rather than may) produce guidance about matters dealt with by the report published under Clause 148.
“(8) Before producing the guidance (including revised guidance) OFCOM must consult the persons mentioned in subsection (3).(9) OFCOM must publish the guidance (and any revised guidance).(10) OFCOM must include in each transparency report under section 147 an assessment of the effectiveness of the guidance.”Member’s explanatory statement
This amendment is consequential on the amendment in my name making the production of guidance under Clause 148(7) mandatory.
“OFCOM’s report in connection with investigation into a death
(1) Subsection (2) applies if OFCOM receive—(a) a notice from a senior coroner under paragraph 1(2) of Schedule 5 to the Coroners and Justice Act 2009 in connection with an investigation into the death of a person;(b) a request for information in connection with the investigation of a procurator fiscal into, or an inquiry held or to be held in relation to, the death of a person;(c) a notice from a coroner under section 17A(2) of the Coroners Act (Northern Ireland) 1959 (c. 15 (N.I.)) in connection with—(i) an investigation to determine whether an inquest into the death of a person is necessary, or(ii) an inquest in relation to the death of a person.(2) OFCOM may produce a report for use by the coroner or procurator fiscal, dealing with any matters that they consider may be relevant.(3) In subsection (1)(b) “inquiry” means an inquiry held, or to be held, under the Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016 (asp 2).” Member’s explanatory statement
This amendment makes it clear that OFCOM may produce a report in connection with a person’s death, if the coroner gives OFCOM a notice or, in Scotland, the procurator fiscal requests information, for that purpose.
“(aa) a report under section (OFCOM’s reports about use of age assurance) (report about use of age assurance),”Member’s explanatory statement
This amendment is consequential on the new Clause to be inserted after Clause 145 in my name. It ensures that the usual confidentiality provisions apply to matters contained in OFCOM’s report about the use of age assurance.
“(ca) a report under section (OFCOM’s report about use of app stores by children) (report about use of app stores by children),”Member’s explanatory statement
This amendment is consequential on the new Clause proposed to be inserted after Clause 147 in my name. It ensures that the usual confidentiality provisions apply to matters contained in OFCOM’s report about the use of app stores by children.
“(ca) a report under section (OFCOM’s report about reporting and complaints procedures) (report about reporting and complaints procedures),”Member’s explanatory statement
This amendment is consequential on the new Clause proposed to be inserted after Clause 147 in my name about OFCOM’s report concerning reporting and complaints procedures used by providers of Part 3 services. The amendment ensures that the usual confidentiality provisions apply to matters contained in that report.
“CHAPTER 8MEDIA LITERACYMedia literacy
(1) Section 11 of the Communications Act is amended in accordance with subsections (2) to (5).(2) Before subsection (1) insert—“(A1) In this section—(a) subsection (1) imposes duties on OFCOM which apply in relation to material published by means of the electronic media (including by means of regulated services), and(b) subsections (1A) to (1E) expand on those duties, and impose further duties on OFCOM, in relation to regulated services only.”(3) After subsection (1) insert— “(1A) OFCOM must take such steps, and enter into such arrangements, as they consider most likely to be effective in heightening the public’s awareness and understanding of ways in which they can protect themselves and others when using regulated services, in particular by helping them to—(a) understand the nature and impact of harmful content and the harmful ways in which regulated services may be used, especially content and activity disproportionately affecting particular groups, including women and girls;(b) reduce their and others’ exposure to harmful content and to the use of regulated services in harmful ways, especially content and activity disproportionately affecting particular groups, including women and girls;(c) use or apply—(i) features included in a regulated service, including features mentioned in section 12(2) of the Online Safety Act 2023, and(ii) tools or apps, including tools such as browser extensions,so as to mitigate the harms mentioned in paragraph (b);(d) establish the reliability, accuracy and authenticity of content;(e) understand the nature and impact of disinformation and misinformation, and reduce their and others’ exposure to it;(f) understand how their personal information may be protected.(1B) OFCOM must take such steps, and enter into such arrangements, as they consider most likely to encourage the development and use of technologies and systems for supporting users of regulated services to protect themselves and others as mentioned in paragraph (a), (b), (c), (d) or (e) of subsection (1A), including technologies and systems which—(a) provide further context to users about content they encounter;(b) help users to identify, and provide further context about, content of democratic importance present on regulated user-to-user services;(c) signpost users to resources, tools or information raising awareness about how to use regulated services so as to mitigate the harms mentioned in subsection (1A)(b).(1C) OFCOM’s duty under subsection (1A) is to be performed in the following ways (among others)—(a) pursuing activities and initiatives,(b) commissioning others to pursue activities and initiatives,(c) taking steps designed to encourage others to pursue activities and initiatives, and(d) making arrangements for the carrying out of research (see section 14(6)(a)).(1D) OFCOM must draw up, and from time to time review and revise, a statement recommending ways in which others, including providers of regulated services, might develop, pursue and evaluate activities or initiatives relevant to media literacy in relation to regulated services.(1E) OFCOM must publish the statement and any revised statement in such manner as they consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by it.”(4) After subsection (2) insert— “(3) In this section and in section 11A,“regulated service” means—(a) a regulated user-to-user service, or(b) a regulated search service.“Regulated user-to-user service” and “regulated search service” have the same meaning as in the Online Safety Act 2023 (see section 3 of that Act).(4) In this section—(a) “content”, in relation to regulated services, means regulated user-generated content, search content or fraudulent advertisements;(b) the following terms have the same meaning as in the Online Safety Act 2023—“content of democratic importance” (see section 13 of that Act);“fraudulent advertisement” (see sections 33 and 34 of that Act);“harm” (see section 209 of that Act) (and “harmful” is to be interpreted consistently with that section);“provider”(see section 202 of that Act);“regulated user-generated content” (see section 49 of that Act);“search content” (see section 51 of that Act).”(5) In the heading, for “Duty” substitute “Duties”.(6) In section 14 of the Communications Act (consumer research), in subsection (6)(a), after “11(1)” insert “, (1A) and (1B)”.”Member’s explanatory statement
This amendment inserts provisions into section 11 of the Communications Act 2003 (OFCOM’s duties to promote media literacy). The new provisions expand on the existing duties so far as they relate to regulated user-to-user and search services, and impose new duties on OFCOM aimed at enhancing users’ media literacy.
“Media literacy strategy and media literacy statement
After section 11 of the Communications Act insert—“11A Regulated services: media literacy strategy and media literacy statement(1) OFCOM must prepare and publish a media literacy strategy within the period of one year beginning with the day on which the Online Safety Act 2023 is passed.(2) A media literacy strategy is a plan setting out how OFCOM propose to exercise their functions under section 11 in the period covered by the plan, which must be not more than three years.(3) In particular, a media literacy strategy must state OFCOM’s objectives and priorities for the period it covers.(4) Before the end of the period covered by a media literacy strategy, OFCOM must prepare and publish a media literacy strategy for a further period, ensuring that each successive strategy covers a period beginning immediately after the end of the last one. (5) In preparing or revising a media literacy strategy, OFCOM must consult such persons as they consider appropriate.(6) OFCOM’s annual report must contain a media literacy statement.(7) A media literacy statement is a statement by OFCOM—(a) summarising what they have done in the financial year to which the report relates in the exercise of their functions under section 11, and(b) assessing what progress has been made towards achieving the objectives and priorities set out in their media literacy strategy in that year.(8) A media literacy statement must include a summary and an evaluation of the activities and initiatives pursued or commissioned by OFCOM in the exercise of their functions under section 11 in the financial year to which the report relates.(9) The first annual report that is required to contain a media literacy statement is the report for the financial year during which OFCOM’s first media literacy strategy is published, and that first statement is to relate to the period from publication day until the end of that financial year.(10) But if OFCOM’s first media literacy strategy is published during the second half of a financial year—(a) the first annual report that is required to contain a media literacy statement is the report for the next financial year, and(b) that first statement is to relate to the period from publication day until the end of that financial year.(11) References in this section to OFCOM’s functions under section 11 are to those functions so far as they relate to regulated services.(12) In this section—“annual report” means OFCOM’s annual report under paragraph 12 of the Schedule to the Office of Communications Act 2002;“financial year” means a year ending with 31 March.””Member’s explanatory statement
This amendment requires OFCOM to produce a media literacy strategy every three years (or more frequently), and to include, in their annual report, a statement summarising and evaluating their media literacy activities, so far as they relate to regulated services, during the year.
“(15) For the purposes of subsections (8) and (9), a person who makes available on a service an automated tool or algorithm by means of which content is generated is to be regarded as having control over content so generated.”Member’s explanatory statement
This amendment is about who counts as the provider of a service (other than a user-to-user or search service) that hosts provider pornographic content for the purposes of the Bill. The amendment makes it clear that a person who controls a generative tool on the service, such as a generative AI bot, is regarded as controlling the content generated by that tool.
““Age verification” and “age estimation”
(1) This section applies for the purposes of this Act.(2) “Age verification” means any measure designed to verify the exact age of users of a regulated service.(3) “Age estimation” means any measure designed to estimate the age or age- range of users of a regulated service.(4) A measure which requires a user to self-declare their age (without more) is not to be regarded as age verification or age estimation.”Member’s explanatory statement
This new Clause defines age verification and age estimation, and makes it clear that mere self-declaration of age does not count as either.
Member’s explanatory statement
This amendment is made to ensure consistency of language in the Bill when referring to age verification and age estimation.
“(c) in relation to an internet service within section 71(2), content that is provider pornographic content in relation to the service.”Member’s explanatory statement
This amendment is about what counts as “relevant content” for the purposes of defining “proactive technology” for the purposes of the Bill. The effect is for provider pornographic content to now be included.
Member’s explanatory statement
This amendment revises the definition of “user data” for the purposes of defining “proactive technology” for the purposes of the Bill. The effect is for user data to now include data created etc by providers of all services regulated by the Bill (including providers subject to the Part 5 pornography duties).
“(3A) In this Act “functionality”, in relation to a regulated service, includes the design of systems and processes that engage or impact on users, particularly algorithms.”Member’s explanatory statement
This amendment clarifies the role that system design can impact on outcomes on users in light of the requirement for systems to be safe by design.
Baroness Harding of Winscombe (Con)
My Lords, I note that the noble Lord, Lord Stevenson, is no longer in his place, but I promise to still try to live by his admonition to all of us to speak briefly.
I will speak to Amendments 281BA, 281FA, 286A and 281F, which has already been debated but is central to this issue. These amendments aim to fix a problem we repeatedly raised in Committee and on Report. They are also in the name of the noble Baroness, Lady Kidron, and the noble Lords, Lord Stevenson and Lord Clement-Jones, and build on amendments in Committee laid by the noble Lord, Lord Russell, my noble friend Lord Bethell and the right reverend Prelate the Bishop of Oxford. This issue has broad support across the whole House.
The problem these amendments seek to solve is that, while the Government have consistently asserted that this is a systems and processes Bill, the Bill is constructed in a manner that focuses on content. Because this is a rerun of previous debates, I will try to keep my remarks short, but I want to be clear about why this is a real issue.
I am expecting my noble friend the Minister to say, as he has done before, that this is all covered; we are just seeing shadows, we are reading the Bill wrong and the harms that we are most concerned about are genuinely in the Bill. But I really struggle to understand why, if they are in the Bill, stating them clearly on the face of the Bill creates the legal uncertainty that seems to be the Government’s favourite problem with each of the amendments we have been raising today.
My noble friend—sorry, my friend—the noble Baroness, Lady Kidron, commissioned a legal opinion that looked at the statements from the Government and compared it to the text in the Bill. That opinion, like that of the many noble Lords I have just mentioned, is that the current language in the Bill about features and functionalities only pertains as far as it relates to harmful content. All roads in this game of Mornington Crescent lead back to content.
Harmful content is set out in a schedule to the Bill, and this set of amendments ensures that the design of services, irrespective of content, is required to be safe by design. If the Government were correct in their assertion that this is already covered, then these amendments really should not pose any threat at all, and I have yet to hear the Government enunciate what the real legal uncertainty actually is in stating that harm can come from functionality, not just from content.
Baroness Morgan of Cotes (Con)
My Lords, the hour is late and I will not detain the House for long. However, I hope that the fact that we are all still sitting here at the end of a long Report stage, because we care very much about the Bill and what we are trying to achieve, will be noted by my noble friend the Minister, his officials and others who are watching. I thank my noble friend Lady Harding for so ably introducing the amendments, which I absolutely support. I was, perhaps for the first time, going to agree with something the noble Baroness, Lady Fox, said a day or so ago: that one thing we and Ofcom need to do much better is to understand the transparency of the algorithms. It is not just algorithms—this is where my knowledge ends—but other design features that make these sites addictive and harmful, and which are outside content. The Bill will not be capable of addressing even the next five years, let alone beyond that, if we do not reflect the fact that, as my noble friend Lady Harding said, it has already been amended so that one way its objectives are to be achieved is by services being required to focus on safety by design.
I hope very much that my noble friend will take up the invitation, because everybody is tired and has been looking at this Bill for so many hours and months that we are probably all word-blind. We could all do with standing back and thinking, “With the amendments made, how does it all hang together so that ultimately, we keep those we want to keep safe as safe as we possibly can?” On that basis, I support these amendments and look forward to hearing further from the Government about how they hope to keep safe those we all wish to keep safe.
Baroness Benjamin (LD)
My Lords, I rise to support the amendment in the name of the noble Baroness, Lady Kidron. She has been such a forceful voice throughout the passage of this Bill, driven by her passion to protect children, and no more so than with the amendment in her name. That is why I feel compelled to speak up to support her. So far, we have all worked with the Government to see the safe passage of the Online Safety Bill, with strong protections for children. These amendments would be yet another excellent and unique opportunity to protect children. This is what we have been fighting for for years, and it is so uplifting that the Government have listened to us throughout the passage of this Bill—so why stop now? If the Government are saying that the Bill is being clear about harms, they should have no objection to making it explicit.
These amendments press for safety by design to be embedded in later clauses of the Bill and go hand in hand with the earlier amendment that the House so clearly supported. It is clear that the design of services and algorithms is responsible for orchestrating and manipulating the behaviour, feelings, emotions and thoughts of children who, because they are at a vulnerable stage in their development, are easily influenced. We have all witnessed the disastrous impact of the new technology which is fast encroaching upon us, and our children will not be spared from it. So it is imperative that Ofcom have the tools with which to consider and interrogate system design separately from content because, as has been said, it is not only content that is harmful: design is too. We therefore need to take a holistic approach and leave nowhere to hide for the tech companies when it comes to harms affecting our children.
As I have said before, these amendments would send a loud and clear message to the industry that it is responsible for the design of its products and has to think of the consequences for our children’s mental health and well-being when considering design. What better way to do that than for the Government to accept these amendments, in order to show that they are on the side of our children, not the global tech companies, when it comes to protecting them from harm? They need to put measures in place to ensure that the way a service is designed is subject to the online safety regime we have all fought for over the years and during the passage of this Bill.
If the Government do not accept the amendment, perhaps the issue of harmful design could be included in the welcome proposed review of pornography. It would be good to hear the Minister’s thoughts on this idea—but I am not giving him a let-off. I hope he will listen to the strength of feeling and that the Government will reconsider their position, support the amendment and complete the one main task they set out to complete with this Bill, which is to protect children from harm no matter where it rears its ugly head online.
Baroness Fraser of Craigmaddie (Con)
My Lords, I rise briefly to support my noble friend Lady Harding and to associate myself with everything she has just said. It strikes me that if we do not acknowledge that there is harm from functionality, not just content, we are not looking to the future, because functionality protects vulnerable people before the harm has happened; content relies on us having to take it down afterwards. I want to stress that algorithms and functionality disproportionately harm not just vulnerable children but vulnerable adults as well. I do not understand why, since we agreed to safety by design at the beginning of the Bill, it is not running throughout it, rather than just in the introduction. I want to lend my support these amendments this evening.
Lord Clement-Jones (LD)
My Lords, I can be very brief. My noble friend Lady Benjamin and the noble Baronesses, Lady Harding, Lady Morgan and Lady Fraser, have all very eloquently described why these amendments in this group are needed.
It is ironic that we are still having this debate right at the end of Report. It has been a running theme throughout the passage of the Bill, both in Committee and on Report, and of course it ran right through our Joint Committee work. It is the whole question of safety by design, harm from functionalities and, as the noble Baroness, Lady Morgan, said, understanding the operation of the algorithm. And there is still the question: does the Bill adequately cover what we are trying to achieve?
As the noble Baroness, Lady Harding, said, Clause 1 now does set out the requirement for safety by design. So, in the spirit of amity, I suggested to the Minister that he might run a check on the Bill during his free time over the next few weeks to make sure that it really does cover it. But, in a sense, there is a serious point here. Before Third Reading there is a real opportunity to run a slide rule over the Bill to see whether the present wording really is fit for purpose. So many of us around this House who have lived and breathed this Bill do not believe that it yet is. The exhortation by the ethereal presences of the noble Baronesses, Lady Kidron and Lady Harding, to keep pressing to make sure that the Bill is future-proofed and contains the right ingredients is absolutely right.
I very much hope that once again the Minister will go through the hoops and explain whether this Bill really captures functionality and design and not just content, and whether it adequately covers the points set out in the purpose of the Bill which is now there.
Baroness Merron (Lab)
My Lords, as we have heard, the noble Baroness, Lady Harding, made a very clear case in support of these amendments, tabled in the name of the noble Baroness, Lady Kidron, and supported by noble Lords from across the House. The noble Baroness, Lady Morgan, gave wise counsel to the Minister, as did the noble Lord, Lord Clement-Jones, that it is worth stepping back and seeing where we are in order to ensure that the Bill is in the right place. I urge the Minister to find the time and the energy that I know he has—he certainly has the energy and I am sure he will match it with the time—to speak to noble Lords over the coming Recess to agree a way to incorporate systems and functionality into the Bill, for all the reasons we have heard.
On Monday, my noble friend Lord Knight spoke of the need for a review about loot boxes and video games. When we checked Hansard, we saw the Minister had promised that such a review would be offered in the coming months. In an unusual turn of events, the Minister exceeded the timescale. We did not have to hear the words “shortly”, “in the summer” or “spring” or anything like that, because it was announced the very next day that the department would keep legislative options under review.
I make that point simply to thank the Minister for the immediate response to my noble friend Lord Knight. But, if we are to have such a review, does this not point very much to the fact that functionality and systems should be included in the Bill? The Minister has a very nice hook to hang this on and I hope that he will do so.
Lord Parkinson of Whitley Bay (Con)
My Lords, this is not just a content Bill. The Government have always been clear that the way in which a service is designed and operated, including its features and functionalities, can have a significant impact on the risk of harm to a user. That is why the Bill already explicitly requires providers to ensure their services are safe by design and to address the risks that arise from features and functionalities.
The Government have recognised the concerns which noble Lords have voiced throughout our scrutiny of the Bill, and those which predated the scrutiny of it. We have tabled a number of amendments to make it even more explicit that these elements are covered by the Bill. We have tabled the new introductory Clause 1, which makes it clear that duties on providers are aimed at ensuring that services are safe by design. It also highlights that obligations on services extend to the design and operation of the service. These obligations ensure that the consideration of risks associated with the business model of a service is a fundamental aspect of the Bill.
My noble friend Baroness Harding of Winscombe worried that we had made the Bill worse by adding this. The new clause was a collaborative one, which we have inserted while the Bill has been before your Lordships’ House. Let me reassure her and other noble Lords as we conclude Report that we have not made it worse by so doing. The Bill will require services to take a safety by design approach to the design and operation of their services. We have always been clear that this will be crucial to compliance with the legislation. The new introductory Clause 1 makes this explicit as an overarching objective of the Bill. The introductory clause does not introduce any new concepts; it is an accurate summary of the key provisions and objectives of the Bill and, to that end, the framework and introductory statement are entirely compatible.
We also tabled amendments—which we debated last Monday—to Clause 209. These make it clear that functionalities contribute to the risk of harm to users, and that combinations of functionality may cumulatively drive up the level of risk. Amendment 281BA would amend the meaning of “functionality” within the Bill, so that it includes any system or process which affects users. This presents a number of concerns. First, such a broad interpretation would mean that any service in scope of the Bill would need to consider the risk of any feature or functionality, including ones that are positive for users’ online experience. That could include, for example, processes designed for optimising the interface depending on the user’s device and language settings. The amendment would increase the burden on service providers under the existing illegal content and child safety duties and would dilute their focus on genuinely risky functionality and design.
Second, by duplicating the reference to systems, processes and algorithms elsewhere in the Bill, it implies that the existing references in the Bill to the design of a service or to algorithms must be intended to capture matters not covered by the proposed new definition of “functionality”. This would suggest that references to systems and processes, and algorithms, mentioned elsewhere in the Bill, cover only systems, processes or algorithms which do not have an impact on users. That risks undermining the effectiveness of the existing duties and the protections for users, including children.
Amendment 268A introduces a further interpretation of features and functionality in the general interpretation clause. This duplicates the overarching interpretation of functionality in Clause 208 and, in so doing, introduces legal and regulatory uncertainty, which in turn risks weakening the existing duties. I hope that sets out for my noble friend Lady Harding and others our legal concerns here.
Amendment 281FA seeks to add to the interpretation of harm in Clause 209 by clarifying the scenarios in which harm may arise, specifically from services, systems and processes. This has a number of concerning effects. First, it states that harm can arise solely from a system and process, but a design choice does not in isolation harm a user. For example, the decision to use algorithms, or even the algorithm itself, is not what causes harm to a user—it is the fact that harmful content may be pushed to a user, or content pushed in such a manner that is harmful, for example repeatedly and in volume. That is already addressed comprehensively in the Bill, including in the child safety risk assessment duties.
Secondly, noble Lords should be aware that the drafting of the amendment has the effect of saying that harm can arise from proposed new paragraphs (a) (b) and (c)—
Baroness Harding of Winscombe (Con)
Can I just double-check what my noble friend has just said? I was lulled into a possibly false sense of security until we got to the point where he said “harmful” and then the dreaded word “content”. Does he accept that there can be harm without there needing to be content?
Lord Parkinson of Whitley Bay (Con)
This is the philosophical question on which we still disagree. Features and functionality can be harmful but, to manifest that harm, there must be some content which they are functionally, or through their feature, presenting to the user. We therefore keep talking about content, even when we are talking about features and functionality. A feature on its own which has no content is not what the noble Baroness, Lady Kidron, my noble friend Lady Harding and others are envisaging, but to follow the logic of the point they are making, it requires some content for the feature or functionality to cause its harm.
Lord Parkinson of Whitley Bay (Con)
Yes, even if the content is not harmful. We keep saying “content” because it is the way the content is disseminated, as the Bill sets out, but the features and functionalities can increase the risks of harm as well. We have addressed this through looking at the cumulative effects and in other ways.
Lord Allan of Hallam (LD)
This is the key question. For example, let us take a feature that is pushing something at you constantly; if it was pushing poison at you then it would obviously be harmful, but if it was pushing marshmallows then they would be singularly not harmful but cumulatively harmful. Is the Minister saying that the second scenario is still a problem and that the surfeit of marshmallows is problematic and will still be captured, even if each individual marshmallow is not harmful?
Lord Parkinson of Whitley Bay (Con)
Yes, because the cumulative harm—the accumulation of marshmallows in that example—has been addressed.
Noble Lords should also be aware that the drafting of Amendment 281FA has the effect of saying that harm can arise from proposed new paragraphs (a), (b) and (c)—for example, from the
“age or characteristics of the likely user group”.
In effect, being a child or possessing a particular characteristic may be harmful. This may not be the intention of the noble Baronesses who tabled the amendment, but it highlights the important distinction between something being a risk factor that influences the risk of harm occurring and something being harmful.
The Government are clear that these aspects should properly be treated as risk factors. Other parts of the Bill already make it clear that the ways in which a service is designed and used may impact on the risk of harm suffered by users. I point again to paragraphs (f) to (h) of Clause 10(6); paragraph (e) talks about the level of risk of functionalities of the service, paragraph (f) talks about the different ways in which the service is used, and so on.
We have addressed these points in the Bill, though clearly not to the satisfaction of my noble friend, the noble Baroness, Lady Kidron, and others. As we conclude Report, I recognise that we have not yet convinced everyone that our approach achieves what we all seek, though I am grateful for my noble friend’s recognition that we all share the same aim in this endeavour. As I explained to the noble Baroness, Lady Kidron, on her Amendment 35, I was asking her not to press it because, if she did, the matter would have been dealt with on Report and we would not be able to return to it at Third Reading.
As the Bill heads towards another place with this philosophical disagreement still bubbling away, I am very happy to commit to continuing to talk to your Lordships—particularly when the Bill is in another place, so that noble Lords can follow the debates there. I am conscious that my right honourable friend Michelle Donelan, who has had a busy maternity leave and has spoken to a number of your Lordships while on leave, returns tomorrow in preparation for the Bill heading to her House. I am sure she will be very happy to speak even more when she is back fully at work, but we will both be happy to continue to do so.
I think it is appropriate, in some ways, that we end on this issue, which remains an area of difference. With that promise to continue these discussions as the Bill moves towards another place, I hope that my noble friend will be content not to press these amendments, recognising particularly that the noble Baroness, Lady Kidron, has already inserted this thinking into the Bill for consideration in the other House.
Baroness Harding of Winscombe (Con)
My Lords, being the understudy for the noble Baroness, Lady Kidron, is quite a stressful thing. I am, however, reliably informed that she is currently offline in the White House, but I know that she will scrutinise everything I say afterwards and that I will receive a detailed school report tomorrow.
I am extremely grateful to my noble friend the Minister for how he has just summed up, but I would point out two things in response. The first is the circularity of the legal uncertainty. What I think I have heard is that we are trying to insert into the Bill some clarity because we do not think it is clear, but the Government’s concern is that by inserting clarity, we then imply that there was not clarity in the rest of the Bill, which then creates the legal uncertainty—and round we go. I am not convinced that we have really solved that problem, but I may be one step further towards understanding why the Government think that it is a problem. I think we have to keep exploring that and properly bottom it out.
My second point is about what I think will for evermore be known as the marshmallow problem. We have just rehearsed across the House a really heartfelt concern that just because we cannot imagine it today, it does not mean that there will not be functionality that causes enormous harm which does not link back to a marshmallow, multiple marshmallows or any other form of content.
Those two big issues are the ones we need to keep discussing: what is really causing the legal uncertainty and how we can be confident that unimaginable harms from unimaginable functionality are genuinely going to be captured in the Bill. Provided that we can continue, maybe it is entirely fitting at the end of what I think has been an extraordinarily collaborative Report, Committee and whole process of the Bill going through this House—which I have felt incredibly proud and privileged to be a part of—that we end with a commitment to continue said collaborative process. With that, I beg leave to withdraw the amendment.
Member’s explanatory statement
This amendment is consequential on the next amendment to this Clause in my name.
“(3A) References to harm presented by content, and any other references to harm in relation to content, include references to cumulative harm arising or that may arise in the following circumstances—(a) where content, or content of a particular kind, is repeatedly encountered by an individual (including, but not limited to, where content, or a kind of content, is sent to an individual by one user or by different users or encountered as a result of algorithms used by, or functionalities of, a service);(b) where content of a particular kind is encountered by an individual in combination with content of a different kind (including, but not limited to, where a kind of content is sent to an individual by one user or by different users or encountered as a result of algorithms used by, or functionalities of, a service).”Member’s explanatory statement
This amendment makes clear that references to harm presented by content include cumulative harm that arises or that may arise in the circumstances mentioned and, in particular, covers the case where this occurs as a result of algorithms used by, or functionalities of, a service.
“(4A) References to a risk of harm in relation to functionalities, and references to the risk of functionalities facilitating users encountering particular kinds of content (however expressed), include references to risks arising or that may arise due to multiple functionalities which, used in combination, increase the likelihood of harm arising (for example, as mentioned in subsection (3A)).”Member’s explanatory statement
This amendment makes clear that references to a risk of harm in relation to functionalities and references to the risk of functionalities facilitating users encountering particular kinds of content include references to risks from a combination of those functionalities.
Member’s explanatory statement
This amendment is consequential on the amendment in my name inserting new subsection (3A) into this Clause.
Member’s explanatory statement
This amendment provides that the term “online safety functions” includes OFCOM’s functions under section 11A of the Communications Act 2003 (inserted by the new Clause proposed to be inserted after Clause 149 in my name) regarding OFCOM’s media literacy strategy (as well as OFCOM’s functions under section 11 of that Act).
“(2A) References to OFCOM’s “online safety functions” also include references to OFCOM’s duty to comply with any of the following, so far as relating to the use of a regulated service by a person who has died—(a) a notice from a senior coroner under paragraph 1(2) of Schedule 5 to the Coroners and Justice Act 2009 in connection with an investigation into a person’s death;(b) a request for information in connection with the investigation of a procurator fiscal into, or an inquiry held or to be held in relation to, a person’s death;(c) a notice from a coroner under section 17A(2) of the Coroners Act (Northern Ireland) 1959 (c. 15 (N.I.)) in connection with—(i) an investigation to determine whether an inquest into a person’s death is necessary, or(ii) an inquest in relation to a person’s death.”Member’s explanatory statement
This amendment makes it clear that OFCOM’s online safety functions include the duty of complying with a coroner’s notice or, in Scotland, a request from the procurator fiscal, in connection with the use of a regulated service by a person who has died.
“(4) In subsection (2A)(b) “inquiry” means an inquiry held, or to be held, under the Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016 (asp 2).”Member’s explanatory statement
This amendment defines a term used in the preceding amendment in my name.
Member’s explanatory statement
This amendment removes a definition of “age assurance” from Clause 211 as that term is now defined separately where used.
““automated tool” includes bot;”Member’s explanatory statement
This amendment makes it clear that references in the Bill to automated tools include bots.
““freedom of expression”: any reference to freedom of expression (except in sections 36(6)(f) and 69(2)(d)) is to the freedom to receive and impart ideas, opinions or information (referred to in Article 10(1) of the Convention) by means of speech, writing or images;”Member’s explanatory statement
This amendment inserts a definition of freedom of expression into the Bill.
Member’s explanatory statement
This amendment revises the definition of “information notice” so that it includes a notice under the new Clause proposed in my name concerning OFCOM’s power to obtain information in connection with an investigation into the death of a child.
““pornographic content” means content of such a nature that it is reasonable to assume that it was produced solely or principally for the purpose of sexual arousal;”Member’s explanatory statement
This amendment adds a definition of “pornographic content” to Clause 211 of the Bill.
“(2A) References in this Act to an individual with a certain characteristic include references to an individual with a combination of characteristics.”Member’s explanatory statement
This amendment makes clear that references in the Bill to an individual with a certain characteristic include an individual with a combination of characteristics.
Member’s explanatory statement
This amendment ensures consistency of language in referring to kinds of content.
Member’s explanatory statement
This amendment ensures consistency of language in referring to kinds of content.
(a) software or an automated tool or algorithm applied by the provider of the service or by a person acting on behalf of the provider, or(b) an automated tool or algorithm made available on the service by the provider or by a person acting on behalf of the provider.”Member’s explanatory statement
This amendment revises an interpretative provision relating to the borderline between provider content and user-generated content. The provision is revised to use consistent wording about automated tools/algorithms made available by a provider (such as a generative AI bot), as used in the amendments of Clauses 49, 70 and paragraph 4 of Schedule 1 in my name.
Member’s explanatory statement
This amendment is consequential on the amendment of this Clause in my name adding a definition of “pornographic content” to this Clause.
Member’s explanatory statement
This amendment removes the entry for “age assurance” in the index of defined terms as that term is now defined separately where used.
“age estimation | Section (“Age verification” and “age estimation”) |
age verification | Section (“Age verification” and “age estimation”)” |
This amendment adds definitions of “age estimation” and “age verification” to the index of defined terms.
“automated tool | Section 211” |
This amendment adds a definition of “automated tool” to the index of defined terms.
“freedom of expression | section 211” |
This amendment adds a definition of “freedom of expression” to the index of defined terms.
Member’s explanatory statement
This amendment updates the entry for pornographic content consequential on the amendment to Clause 211 which inserts a definition of that term into that Clause which applies for the purposes of the whole Bill.
Member’s explanatory statement
This amendment updates the entry for pornographic content consequential on the amendment to Clause 211 inserting a definition of that term into that clause.
Member’s explanatory statement
This amendment updates the entry for primary priority content that is harmful to children in the index of defined terms, consequential on the new Clause proposed to be inserted after Clause 54 in my name.
Member’s explanatory statement
This amendment updates the entry for priority content that is harmful to children in the index of defined terms, consequential on the new Clause proposed to be inserted after Clause 54 in my name.
“(aa) section (Sharing or threatening to share intimate photograph or film);(ab) section 171(2);(ac) section (Repeals in connection with offences under section (Sharing or threatening to share intimate photograph or film));”Member’s explanatory statement
This amendment revises the extent Clause so that the provisions mentioned extend to England and Wales only.
Member’s explanatory statement
Clause 215(1) specifies which provisions of the Bill come into force on Royal Assent. This amendment omits subsection (1), but only because it is being moved further down in the section and replaced (see the amendment in my name below).
Member’s explanatory statement
This technical amendment is needed because of the additions to the list of provisions which are to be commenced on Royal Assent (see the next amendment in my name).
“(4A) The following provisions come into force on the day on which this Act is passed—(a) Parts 1 and 2;(b) Chapter 1 of Part 3;(c) section 36, except subsection (4) of that section;(d) section 37 and Schedule 4;(e) sections 38 to 43;(f) section 47(2), (3) and (4);(g) section 48, except subsection (2) of that section; (h) Chapter 7 of Part 3 and Schedules 5, 6 and 7;(i) section 63;(j) section 67;(k) section 70;(l) section 71(4);(m) section 73;(n) sections 81 and 82;(o) section 84;(p) section 85 and Schedule 11;(q) Chapter 3 of Part 7;(r) section 118;(s) section 140;(t) section 143 so far as relating to a duty imposed on OFCOM under Schedule 11;(u) section 174, except subsection (2)(b) of that section;(v) section (Time for publishing first guidance under certain provisions of this Act);(w) section 184(1);(x) section 187;(y) section 192;(z) section 194;(z1) section (Powers to amend sections (“Primary priority content that is harmful to children”) and (“Priority content that is harmful to children”));(z2) sections 197 to 201;(z3) this Part.”Member’s explanatory statement
This amendment specifies the provisions of the Bill that come into force on Royal Assent.
Defence Command Paper Refresh
(1 year, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Coaker (Lab)
My Lords, I am always grateful to the Minister for her co-operation and help when it comes to these Statements. There may be some differences, but our overall objective is the same, particularly at this moment with our support for Ukraine in its war with Russia. Could the Minister initiate talks through the usual channels about a longer debate involving more of your Lordships’ House, perhaps in the autumn, when time allows? A longer debate on all these matters would be helpful for us. Could she consider that?
In the light of the work we have done between us, I particularly ask the Minister to relay our thanks to the Defence Secretary in view of his announcement that he is to step down. At this time, it is particularly important to note his leadership with respect to Ukraine and in building a coalition of support in NATO and beyond for that effort. I know that maintaining public support has been very important to him. He has been a Defence Secretary of integrity who has done all he can to strengthen our defence and that of our allies, including our nuclear deterrent and its modernisation. I would be grateful if the Minister could pass that on; I am sure it is a view held by many in this House.
On public support, can the Minister say what we are doing to continue our support for the Ukrainian people? Maintenance of their morale is crucial, and we can only admire their effort and resolve in the face of Russian aggression. In that vein, continued support in this country is also important. Can the Minister reiterate the measures the Government are taking to explain why we are involved in the conflict in Ukraine, and why it is so important for us all?
On the future, can the Minister assure us that an incoming Defence Secretary will not initiate a defence refresh 2 or indeed 3? It is crucial that the current Defence Command Paper is seen as a longer-term plan. To that end, with a general election approaching, what discussions are the Government planning to have with my right honourable friend in the other place, John Healey MP? It is important for our defence that this is an ongoing plan, with consensus built across Whitehall.
The defence plan contains a lot of strategic vision, including the demand to be a campaigning department and to tackle skills shortages, but it fails in some respects to outline in detail what changes to various other plans should be made. That is very important, since the Command Paper says, in a crucial phrase, that we have shifted
“from a competitive age to a contested and volatile world”—
mentioning Russia and China, of course, but other threats too, including those posed by terrorism and fragile regions. What does that mean for the current shape of our Armed Forces as envisaged two years ago, with the change being made in the Defence Command Paper?
The Defence Secretary says that we must
“match our ambitions with our resources”.
To do that, what ambitions have been left out? The defence paper also says we must match our equipment plans to our budget. Does that leave a shortfall? If so, in what?
Many questions are left unanswered in the Command Paper. Why does the paper not halt the cut in troop numbers—which, as we have seen, has led to the smallest number of troops since Napoleon—following the second-in-command at NATO, a British officer, saying that the British Army was now too small? I remind noble Lords that the Army has been cut by 25,000 since 2010 to 76,000 and, despite the threat from Putin, will fall again to 73,000 by 2025.
The defence paper confirms cuts in tank numbers. Despite equipment promises elsewhere, how can we be sure that the MoD can deliver them, given that just on Sunday the Defence Committee published a report into military procurement that said the system was broken? Thousands of skilled Armed Forces jobs remain unfilled, and supply is now a real problem. Again, little is said about how to address these problems now, although plenty is said about the future.
We fully support NATO and defence across the world with our allies, but troop numbers are being cut, as are tank numbers; one of our aircraft carriers remains in dock; Ajax is still a promise rather than a reality; there are problems in the engines of many of our new destroyers; Hercules transport planes have been scrapped while we will wait for the A400M; we have inadequate stockpiles; and defence spending at 2.5% of GDP is still an aspiration rather than a full commitment.
Many real questions come out of the Defence Command Paper. Of course we support the Government, but these are challenges that they need to address. The Government must reassure us that, in our support for NATO, we have the Armed Forces that we need.
Baroness Smith of Newnham (LD)
My Lords, as so often from these Benches, I echo the words of the noble Lord, Lord Coaker. There is nothing in his comments or questions with which these Benches would disagree, so I will augment them.
First, I want to express disappointment that the Secretary of State is stepping down. His time as Secretary of State for Defence has been important, and his leadership on the Ukrainian situation has been particularly significant. We can only hope that when the next reshuffle comes, the Prime Minister is able to find someone to serve as Secretary of State who can lead our defence capabilities and take this defence refresh forward effectively, because we are at a difficult time. The fact that we have a refresh after only two years is significant. It is clear that what was said in 2021 was not sufficiently forward-looking; we were looking at the threats of today and not those of tomorrow.
While much is to be welcomed in this defence refresh, so much of it seems to rely on the lessons we have learned from Ukraine. Great: we need to learn the lessons of the last 15 months, but are we thinking forward sufficiently strategically? What is being put forward, and what was outlined in the Secretary of State’s Statement yesterday, seems to be modest in its ambitions in many ways. Saying that we will not be looking at new platforms is probably just as well, because, as the noble Lord, Lord Coaker, has touched upon, defence procurement is an area where we have been remarkably weak. The defence platforms that have been procured—Ajax, the “Queen Elizabeth” class and various destroyers—have all come with problems.
What is being proposed in the defence refresh seems to be more limited in terms of procurement, talking about working closely with industry. Like the noble Lord, Lord Coaker, I press the Minister on whether His Majesty’s Government have given any thought to their procurement procedures. It is fine to talk about working more closely with industry, but have they got their procedures right? What lessons have been learned in that regard?
It is noticeable that the new mantra being put forward is about partnership. When I have raised issues with the Foreign, Commonwealth and Development Office over the years, I have stressed the need, post Brexit, for having closer bilateral relationships and stronger multilateral relationships. So it is good to hear that in a defence Statement, but it comes alongside this mantra of “allied by design, national by exception”. A cynic might suggest that is simply because alone the United Kingdom is too small to act in the way His Majesty’s Government have so often suggested they want it to act. The defence refresh talks about being more agile and having a role globally. Is that really feasible if we are sticking with the size of troops, whether regulars or reservists, outlined in 2021? Is it not time to think about troop numbers again? Do we have the size of forces that we need in this world of contestation rather than competition? Have His Majesty’s Government really thought this through adequately?
Finally, there is a suggestion that we need to think again about risk and how we view risk. Could the Minister explain what is really meant? Again, the Statement and the refresh document seem to be quite limited in explaining what His Majesty’s Government really mean about this.
The Minister of State, Ministry of Defence (Baroness Goldie) (Con)
My Lords, I thank the noble Lord, Lord Coaker, and the noble Baroness, Lady Smith, for their helpful remarks at the beginning of their questions. I thank them particularly for their tributes to my right honourable friend the Secretary of State for Defence, Mr Ben Wallace. I am very appreciative of the sentiments that have been articulated, and I think they are echoed across Parliament and the wider public domain. The noble Lord, Lord Coaker, referred to him as a “Defence Secretary of integrity” and I could not possibly disagree with that.
Ben Wallace and I first met in 1999, when, as absolute rookies, we stepped through the doors of the newly revived Scottish Parliament. I remember thinking at that time that this was a decent, principled, very solid young man. My opinion over these many years has not changed one jot. It has been an honour to be one of his Ministers. It has been a pleasure to work with someone with such a passion for the department and such a commitment to changing things for the better. I can tell from the comments I have heard within the department that he has been regarded as a very good steward of defence. There is widespread admiration, and genuine regret that he has decided to step down. I will make sure that I convey the thanks of the noble Lord, Lord Coaker, and the noble Baroness, Lady Smith, to him.
A number of important points were raised. The noble Lord, Lord Coaker, raised—I will include the noble Baroness, Lady Smith, in my comments because she associated herself with the points he raised—the interesting issue of public support for the war in Ukraine. That is a very important matter. Generally speaking, people have been so shocked by the prospect, and now reality, of a third war in Europe when they thought that those days were behind us. I think the public understand that, in the very difficult age of hybrid and competitive threat in which we live, the defence capability within the United Kingdom is one of their best protectors. It is one of their gilt-edged insurance policies, which is trying to keep the nation safe and to exercise our influence in global affairs. I know that my ministerial colleagues have been active in disseminating that message. I have picked up some comment from those in the media that they too understand that. It is an important point and something we certainly need to keep looking at, because the one thing we should never take for granted is the safety and security of the country.
The noble Lord, Lord Coaker, raised the status of this Defence Command Paper refresh and asked whether a new Defence Secretary would have another one. I hope noble Lords will agree, having looked at the coherence and character of this refresh—I invite noble Lords to remember that this was not drawn up on the back of an envelope; it was distilled out of extensive initial consultation way beyond the MoD to stakeholders and academia. We genuinely wanted to find out from these informed sources how we should be shaping our Defence Command Paper refresh and making sure that it remained pinned to the integrated review refresh because the two have a synergy that must not be broken.
I think everyone recognised—again, I say this to the noble Baroness, Lady Smith, who specifically raised it—that the 2021 paper was not sufficiently forward looking. What happened post 2021 is that the issues defined as the primary preoccupations of defence—the threat from Russia, the challenge posed by China, and the growing nature of threat and the hybrid form it can take and hence the unpredictability of how threat might manifest itself—did not, of course, take into account the conflict in Ukraine. Quite simply, that has galvanised thought.
The conflict in Ukraine has done two things. First, I think it has changed mindsets, not just on the part of the MoD, hence this refreshed Command Paper, but it has absolutely galvanised the defence industry, which had put a lot of its manufacturing production capability into deep freeze—thinking it was never going to be required. Secondly, it has galvanised attitudes across the world, not just within Europe and NATO. There has been a recognition that the unthinkable actually can happen. It is very foolish to imagine that you can allow yourself to remain unprepared for that.
I say to the noble Baroness, Lady Smith, that, if she looks at the current refreshed paper and back at the 2021 paper, she will find that the broad shapes and issues identified remain the same. But we have acknowledged in the MoD—and it is made clear in the refreshed paper—that we have to move at pace, with agility, flexibility and resilience that perhaps we did not anticipate three years ago.
The paper makes this very clear, both in its text and its graphics, because a picture tells a thousand stories. I was having a look through it and was very pleased to see some ladies in some of the images looking very fierce and doing all sorts of incredible things. If you look at this as a whole it is an extremely solid, well-structured and very coherent document. I would say to the noble Baroness, Lady Smith, and certainly the noble Lord, Lord Coaker, that I do not see anyone wanting to change this any time soon. It has been built to last. It is specifically not about soundbite announcements. It is very deliberately structured to explain where we have got to, where we need to get to and how we think we do that.
The noble Lord, Lord Coaker, mentioned that there was no outline detail about the other plans. What is clear in here is that the whole sense of direction and the pace of change is accelerating. It is visible within this Defence Command Paper refresh how we are approaching that, whether we are embracing science and technology, whether we are embracing a new model for our people, whether we are embracing a new campaigning attitude and whether we are embracing putting MoD Main Building on to a campaigning footing, which we are doing. That is incredibly changing to the mindset that has prevailed in Main Building. This is not so much about the detail of what other plans may involve. The equipment plan stands; it is public. The orders placed for equipment and ships stand. We will need these things. They are all part of our holistic approach as we move forward.
The noble Lord, Lord Coaker, very specifically raised troop numbers and mentioned Napoleon. I think more instinctively of Wellington—but never mind, we are even-handed in this House. I do not remember Wellington walking around benefiting from unmanned aerial drones or clutching a mobile phone and being able to control operations from five miles behind the source of conflict. The point is that we have learned from Ukraine that the capacity of technology, which also has moved at an astonishing pace, has completely changed how we look at conflict and how we cohere what we have. You will see repeatedly throughout this document a reference to the “whole force”. This is a very important recognition that we now look at how we contribute across our whole capability. We have contributions coming from five domains. This is no longer about looking at one single service and saying, “We’ll need to do more with that” or “do more with this”. What we have to look at is what the capability requires to address the threat that we think is out there and how we most intelligently cohere that capability to produce the response to that threat.
On troop numbers, as the noble Lord, Lord Coaker, is aware, we currently have 73,000 regulars and 1,000 reserves. However, something else is also clear in here, which I think is exciting. I often wondered, and have asked questions about, the silos in which our workforce existed. Those noble Lords who are familiar with the Armed Forces will know that we have three distinct single services, a civilian cohort and incredible skills across all of them. That is why it is important to remember, as we approach this new age, as outlined in the paper, that it is about looking at the whole force and then working out which parts of the capability we need. I say to the noble Lord that yes, I am satisfied that the balance of numbers that we have across our single services is appropriate. We are never complacent. We constantly look at recruitment. We think that our Armed Forces offer a very exciting career for anyone minded to join them and we are doing what we can to improve on that offer and to make sure that it is an attractive one and that people will be minded to join.
I have tried to deal with all the points that have been raised. I hope that I have, but as usual I will look at Hansard and, if there is anything that I have missed, I shall write to the noble Lord and to the noble Baroness, Lady Smith.
Lord Robertson of Port Ellen (Lab)
My Lords, I add my tribute on the impending retirement of the Defence Secretary in the House of Commons. He is the longest-serving Conservative Defence Secretary and, especially in his role in connection with Ukraine, he has been outstanding. We will miss him. I am in many ways sorry that he did not get the job that he aspired to, which I once had the honour of holding. After all, he had the primary qualification that the Minister and I both have—he is Scottish. Sadly, that was not sufficiently appreciated among the other 31 countries and therefore, the Back Benches beckoned to him as well.
The Minister held up the document, and I could see that it has been well flagged by the department for her. It is called not “Refresh” but Defence’s Response to a more Contested and Volatile World. On page 63 it states:
“As set out in the IRR, the most urgent priority in the Euro-Atlantic is to support Ukraine to reassert its sovereignty and deny Russia any strategic benefit from its invasion. Our continued and unwavering support to Ukraine has shown the UK at its best”.
If that is the case and we are now involved in helping Ukraine in the existential battle it is undertaking with the Russian Federation, why is this Parliament debating and discussing this at the fag-end of the day, just before the Summer Recess? Will the Minister reflect on the fact that the last time we had a full-scale debate on the subject of a war in which we are participating was a year ago? Will she take the message back to her department and through it to the Prime Minister that Winston Churchill came to Parliament almost every week during the Second World War in order that the Parliament of the country was as involved in the conflict as Ministers of the Crown? I have made this point to her before, but it needs to go beyond her because I am sure she actually agrees with me. We really have to have proper debates about this matter; otherwise, documents such as this will lie on a shelf and will not help with the campaign or the fight any more than is happening at the moment.
Baroness Goldie (Con)
I thank the noble Lord for his kind remarks about my colleague and friend Ben Wallace. I will convey them to him and direct him to Hansard. I know he will be much comforted by the comments of the noble Lord, Lord Robertson, and I know he will not bear any resentment that the noble Lord, Lord Robertson, enjoyed what has eluded him. He is looking remarkably free and easy. He is looking positively liberated, so I think he is clearly anticipating with great pleasure whatever lies ahead.
I omitted to respond to the point that the noble Lord, Lord Coaker, raised at the beginning of his remarks about an opportunity to debate this in the autumn. The noble Lord, Lord Robertson, has just articulated a very similar sentiment, which reminded me. When the noble Lord previously passionately expressed his disquiet and dissatisfaction with the amount of time devoted in this Chamber to debate on the Ukraine war, I did convey that, and I fully understand that this paper is a very significant component of our defence plans. Again, I will take this back direct to the Leader and the Chief Whip and say that there is clearly an appetite for more time to be set aside. Your Lordships will understand that in this House we do that through the usual channels. I would appreciate it if your Lordships would convey the same message through your avenues on your party Benches, because I think the Leader and the Chief Whip would find that helpful.
I am very clear about the significance of where we are now, with another war in Europe, as the noble Lord, Lord Robertson, indicated—an illegal conflict in Ukraine. The pivotal decisions that now lie in front of defence, our change of direction and how we will take forward this new model, genuinely require debate and discussion. I am very sympathetic to that, so I reassure both noble Lords that I hear what they are saying and I will repeat that as cogently as I can.
Lord Craig of Radley (CB)
My Lords, the refresh paper makes ambitious and encouraging claims for improving many defence issues. I am told, indeed, that the paper says “We will” nearly 300 times. Let us hope that the many advances in defence outlined will remain fully funded, and that it does not suffer the underfunded fates of so many of its predecessors. Can the Minister confirm whether the improvements trailed rely on firm delivery of the aspirational future 2.5% defence budget? Bearing in mind the increases due to inflation, are these also factored into the envisaged future programme?
Of particular interest are the many steps intended to improve on procurement—surely a vital issue following the recent Defence Committee’s scathing report on procurement entitled It is Broke—and It’s Time to Fix It. Many of the steps outlined make good sense: speeding up the processes; bringing industry in sooner; ensuring that there is production continuity, for example by maintaining a continuous shipbuilding pipeline, or avoiding skills fade by maintaining production lines for longer. Occasionally, it seems to be attempting to ride two horses at once, procurement being
“Allied by Design and national by exception”—
except for the use of homegrown technologies to reduce the risks of vulnerabilities to global supply chains. Does the Minister have any additional figure for the greater support of industry envisaged in this developing programme?
Reference is also made to increasing efforts to deliver an air and missile defence approach. Ukraine’s experience has rightly focused minds on this major gap in UK defence. What timescale is envisaged to bring this into operation?
Baroness Goldie (Con)
My Lords, I thank the noble and gallant Lord for his observations and questions. I think they go to the heart of all of this, which is money, which the noble and gallant Lord specifically inquired about. The Defence Secretary has been very clear that we will live within our means and our means at the moment is 2% of GDP. But I remind your Lordships that we will have a budget of over £50 billion this year. By any comparison with what is available to other departments, that is a very hefty allocation of funding. The Defence Secretary was clear in the other place that he would like to see 2.5%; the Prime Minister has committed to that when fiscal and economic circumstances allow. That would be a very useful target to bear in mind. So this is costed within the resource we know we have.
The noble and gallant Lord made an important point about procurement. We have brought in important improvements, and of course the paper itself outlines what our new alliance with industry will be and what acquisition reform will constitute. I will not rehearse all that, but I was very struck by something that the Secretary of State said in the other place yesterday. He said:
“In 2009-10, the average time delay on a project was 28%; it is now 15%. The average cost overrun was 15% on a project in 2009-10; it is now 4%”.—[Official Report, Commons, 18/7/23; col. 792.]
We have been striving to bring in significant reforms. We have the defence equipment and supply directorate; it is staffed with people who have both commercial and MoD experience. Noble Lords will see the proposal in the paper that we move on to five-year contract periods; I think that is a useful discipline. Obviously, some of the big contracts will be extraordinary and beyond that, but I think that is a useful working template.
The other important point that the Secretary of State made in the other place was that we have found out, particularly from the conflict in Ukraine, that whereas we used to want to look at, examine and procure the perfect, even if it took 10 years to get it, it makes far more sense now to look around and see whether there is something you can get off the shelf. You can buy it more cheaply, get it now and then adapt it. An interesting illustration of that is our ocean surveillance ship, RFA “Proteus”, which we bought off the shelf and have adapted ourselves. It will shortly be ready for operational activity. So I think some important lessons have been learned.
I also picked up something that I am going to commit to memory, which the Secretary of State said. He said, in defence procurement,
“never defer—either delete or deliver”.—[Official Report, Commons, 18/7/23; col. 792]
I absolutely sympathise with that.
I think that what the noble and gallant Lord has been familiar with, and indeed was referring to, is some of these, frankly, disastrous procurement experiences where we have placed an order and changed our minds, and the industry partner has changed its mind. We have changed the spec and altered the price, and the whole thing has become like a fast-moving vehicle with no steering wheel and nobody trying to direct it. The reforms we have brought in, and particularly what is outlined in the paper, are going to be a very robust regulator of how we approach procurement in the future.
Lord Campbell of Pittenweem (LD)
My Lords, I want to return to the issue of expenditure in due course, but before I do, I associate myself with the remarks made about the Secretary of State. He has performed his responsibilities in an outstanding fashion, with great commitment. Of course, it is perhaps helpful that in his particular case he was a serving officer in Her Majesty’s Army.
On expenditure, does the Minister agree that what the Government are seeking to do when it comes to expenditure is to create a virtue out of necessity? In putting that question to her, I have regard to the contents of page 3 of the document and, in particular, the paragraph on the left-hand side which begins:
“After three decades of drawing the post-Cold War ‘peace’”.
The Minister herself referred to part of the language thereafter. I want to unpack that language, if I may. It is clear that the 2.5% which is set out there depends on GDP. The estimated GDP for the United Kingdom economy this year is 0.3%. It does not seem to me to be a figure which would allow any movement towards 2.5%.
The other point that I want to make, and the Minister has already referred to it, relates to
“as the fiscal and economic circumstances allow”.
That is an entirely subjective test to be made at the whim, one might say, of the Government of the time. It is a test which, for example, could be blown away if the Government of the time were more enthused about expenditure on health or education, or something of that kind. Since we are talking about the Secretary of State, it is right to remember that there was a very public attempt by him to persuade the Prime Minister that more money in real terms should be made available for the defence budget. I am rather surprised by the expression—and the Minister may be able to help me with what exactly is meant by it—
“this ambitious trajectory also enables our modernisation for the challenges of the future”.
The trajectory is not only ambitious; it is entirely without foundation or substance.
We get some illustration of where this approach leads us if we look across the page at the paragraph that says:
“That does not just mean more ships, tanks and jets—indeed in this document there are deliberately no new commitments on platforms at all”.
The Minister has heard me—on a number of occasions—ask about the number of F35s that the United Kingdom is going to pursue, in order to ensure that those pilots who have been assigned to fly with that aircraft actually get the opportunity of flying one. I have heard it suggested that they should spend their time on simulators. Is that a serious suggestion? Respectfully, it seems to me that the Government’s ambitions are set out, but the substance by which they could be achieved seems to be a long way from the contents of at least page 3 of this document.
Baroness Goldie (Con)
First, I thank the noble Lord for his kind comments about the Secretary of State. When we talk about budget, we deal with two things: reality, and what this Government believe is a reasonable and attainable objective. Let me deal with the reality. Defence has received an increase to its budget in the face of very difficult economic circumstances. That is recognition of the seriousness with which this Government take the current security environment and their responsibility to protect the nation and help it prosper.
The Prime Minister said—this is a Conservative Prime Minister speaking; I cannot speak for any other party—that we are committed to increased spending over the longer term to 2.5% of GDP as fiscal and economic circumstances allow. I accept, up to a point, the noble Lord’s proposition that that is subjective. It is subjective in the sense that the Government will have to interpret how the economy is performing and what the fiscal regime looks like. As the noble Lord is aware, we are trying to reduce the debt and bring inflation down, and I am confident that we can reach a position of economic stability in due course, but that reflects a Conservative Government’s pledge, and we want to hold good to it. That is partly because we believe in defence, and secondly because we think it is an attainable aspiration.
As I said in response to an earlier question, the equipment plan has been published. The noble Lord raised the training of F35 pilots. We have contracted out some training in order to seek help from Italy. That is happening but we maintain our operational obligations and we would never compromise the safety of our pilots or the professionalism of their status by doing anything that underperformed or threatened their training integrity. I am satisfied that the training regime is perfectly satisfactory; it is robust and is delivering the skills we need.
Lord Sterling of Plaistow (Con)
When you read this document, it is clear that it is vastly superior to the last one, published some two or three years ago. The thinking, ideas and viewpoints are extremely interesting. The sentence that captured my imagination is at the very beginning, in the ministerial foreword, and I shall read it out if I may.
“We must address increasingly complex and diverse threats, by maximising our own growing but ultimately finite resources, which necessitates ruthless”—
I repeat: “ruthless”—
“prioritisation and improved productivity”.
I spent many decades in defence and I have to say that I totally agree with the comments, particularly from the noble Baroness, Lady Smith, on how we deal in practice with productivity but particularly procurement. The noble Baroness was very polite. Our procurement in this country—in many departments, not just the Ministry of Defence—is shocking. It is a terrible thing to have to say that in practice, in everything I have been involved in—in the ministry and in other ministries —the way we do procurement and the quality of the people doing it is really letting us down in a major way.
The real problem is this. If we had a message tonight from No. 10 that at 4 pm tomorrow we will be at war, the speed of change would be extraordinary and everybody, from all parties, would pull together. The speed of change, in procurement and everything else, would go through the roof. I know the Minister is saying that the Government are doing this and that, but in two years’ time, if we have not demonstrated that we really can deliver, I am afraid that the rest of the world will ignore us on the basis that we are no longer a country to contend with.
Baroness Goldie (Con)
I appreciate the significant experience in these commercial matters that my noble friend brings to these discussions. Interestingly, I had highlighted the passage he read because it attracted my attention when I was flagging the folder myself—I say to the noble Lord, Lord Robertson—not relying on one of my officials to do it, because I like to read as I go.
As I have admitted before in this Chamber, the history of procurement for the MoD has, at times, been a very unhappy one. The Secretary of State in the other place yesterday did not disguise that. He pointed out that procurement has been confronted and beset by difficulties, not over three years or 10 years but probably over 15 or 20 years or maybe even more. What we have seen in the MoD—and he referred to this—is that, on the basis of Public Accounts Committees, Defence Select Committees and observations from the National Audit Office, we have already taken significant steps to improve procurement. I referred to some of them earlier. I think this document—and my noble friend was very complimentary about it—spells out where we think we have to go in terms of efficiency of procurement, improved effectiveness of procurement and certainly increased productivity from defence. That is the course on which we are bound.
We are valued as one of the most important partners in NATO. I would say in relation to my noble friend’s last point that I think the United Kingdom is seen as a very serious, significant defence contributor. I know on my travels abroad the warmth and the interest that accompanies any visits we make to other countries. They want to know about us. They want to know what we are doing and how we are doing it, and they certainly want to be associated with us. They feel that we exercise influence, but underpinning that is a credible defence capability, not least our nuclear deterrent.
It has been a very interesting opportunity to hear views on this Defence Command Paper refresh. I am very grateful to everyone who has contributed questions and I end by saying that it has been a pleasure to support my right honourable friend Ben Wallace as Secretary of State and it remains an honour for me—at least for the moment—to be a Minister in the MoD.