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Oral Answers to Questions
(1 year, 1 month ago)
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Kim Johnson (Liverpool, Riverside) (Lab)
The Secretary of State for Defence (Grant Shapps)
All export licence applications are assessed on a case-by-case basis against the strategic export licence criteria. This Government will not use any export licences to any destination where applications are not consistent with the criteria.
Kim Johnson
I thank the Secretary of State for that answer, but since the horrendous Hamas attacks on 7 October, 12,000 innocent Palestinian civilians have been killed; and two thirds were women and children. The UN Secretary-General has described Gaza as a “graveyard of children”. Today an Israeli airstrike on a United Nations Relief and Works Agency school has killed 12 people. The Indonesian hospital in Gaza is currently surrounded by Israeli Defence Forces tanks. Can the Minister confirm whether arms sold by the UK have been used in violations of international humanitarian law, and will he explain why arms sales to Israel have not yet been suspended?
Grant Shapps
The hon. Lady is right to describe as terrorism the horrendous and heinous attacks by Hamas, without which this would not have started. We call on all parties—the Israelis included—to ensure that they act within international humanitarian law. It will interest her to know that our defence exports to Israel are relatively small—just £42 million last year—and, as I mentioned in my initial answer, they go through a very strict criteria before anything is exported.
Neil O’Brien (Harborough) (Con)
The Secretary of State for Defence (Grant Shapps)
We are working with partners across the wider region, urging all sides to de-escalate tension, facilitate the supply of humanitarian aid, and tackle all forms of extremism.
Neil O’Brien
We are all absolutely heartbroken—[Interruption.]
Mr Speaker
Order. Members must sit down again once another Member is speaking. We cannot have two Members on their feet at the same time.
Neil O’Brien
We are all heartbroken by what is happening in the middle east. As Israel works to root out Hamas terrorists, will my right hon. Friend work to ensure that aid gets to civilians and that Israel works in a way that is compatible with international law? As the Government work to get hostages freed, will they also work for increasingly long humanitarian pauses that can build towards a just and lasting peace?
Grant Shapps
My hon. Friend is right about trying to do everything we can in the region. That is why I sent a Royal Navy task group to try to de-escalate tensions, including RFA Lyme Bay and RFA Argus. Those facilities, along with others, are doing everything they can to help lower the tensions and certainly act as deterrents, and to ensure that we can get aid into the region. He will be interested to hear that we have had 51 tonnes of aid delivered so far, and there will be another flight later this month.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
There are thousands of orphans and displaced families amid an ongoing humanitarian catastrophe. What are the Government doing to ensure that unrestricted aid is reaching all the people who desperately need it, and, importantly, to ensure that Israel lifts the siege conditions?
Grant Shapps
As the hon. Lady will know, we are in favour of seeing pauses in the action. Some people, I know, call for a ceasefire, but I would point out that there was a ceasefire on 6 October; the problem is that it was broken by Hamas, who wrought this carnage on the middle east. We are doing everything possible to help get that aid in. With the Royal Navy taskforce, infantry, and other personnel in the region, we now have an uplift of about 600 personnel in the wider region, who are all helping to ensure that we get the aid in and across the border once we have got it to the region itself.
Mr Tobias Ellwood (Bournemouth East) (Con)
I welcome the Defence Secretary to his place. Behind Hamas, sits Iran; behind Iran, sits Russia; and, increasingly, behind Russia sits China. That is the geopolitical backdrop that will define the next decade, with growing authoritarianism impacting on our security and our economy. Is it now time to increase the defence budget to 3%?
Grant Shapps
My right hon. Friend will know that we have indeed pledged to increase defence spending to 2.5%, as economic conditions allow. This year, it will probably be around 2.4%, so we are making good progress. Prior to getting this role, I talked about my own desire to see higher defence spending, because we are living in a much less certain world, with many more variables. He is right to point out Iran’s action, with Hezbollah in Lebanon, Syrian militias in Iraq, and Houthis in Yemen very much driving the situation.
Andrew Gwynne (Denton and Reddish) (Lab)
The reality is that neither the long-term security of Israel nor justice for the Palestinians will be found through bombs and bullets. As an international community, we need to be doing all we can to move to an enduring cessation of the violence, but while we are doing that, can the Secretary of State say how the UK armed forces will be utilising their capacity to help those getting aid into Gaza to get much bigger quantities in than is happening at the moment?
Grant Shapps
The hon. Gentleman is absolutely right about the UK’s desire to do that, and I have talked about how we have deployed a large increase in personnel in the region to work with various Governments. I have personally spoken to most of the middle eastern Governments, and on those calls the first thing they have done is welcome our deterrent and the fact that we have brought such a large amount of aid—now £30 million—to help the Palestinians. It is not just the hostages themselves who are being held hostage; the population of Gaza are being held hostage by Hamas, and therefore the solution is to deal with Hamas themselves.
John Healey (Wentworth and Dearne) (Lab)
After nearly three months, it is very good to finally welcome the Defence Secretary to the Dispatch Box for the first time. He reflects the deep concern about the humanitarian catastrophe in Gaza and the risks of wider escalation. Labour totally condemns Hamas terrorism. We back Israel’s right to defend itself, but require it to meet its duties under international law and lift the siege conditions, and we want to see the breaks in fighting extended to get much more aid in and the hostages out. We back the military deployments to the region to support wider security, but with attacks against US personnel rising, what action is the Defence Secretary taking to increase protection for UK personnel in the middle east?
Grant Shapps
First, Mr Speaker, it is good to be at the Dispatch Box opposite the right hon. Gentleman. I thank him, as well as yourself and others, for their condolences when I was not able to attend the first Defence questions.
In terms of protecting our own personnel, I have asked the Chief of the Defence Staff to review their position. I made reference to the additional personnel who have moved to the region, but did not mention that several have been moved to Tel Aviv, Beirut and Jordan, all with the aim of protecting both British military personnel and British citizens in the region. We keep that matter under constant review.
John Healey
Would the Defence Secretary agree that over the past decade, there has been an international failure to pursue a Palestinian peace settlement and tackle the Hamas threat? Middle east escalation risks were not mentioned in the Government’s defence Command Paper update, nor were Hamas or Palestine. With threats increasing, is the Defence Secretary pursuing that defence plan in full, including further deep cuts to the British Army?
Grant Shapps
The right hon. Gentleman is right to say that nobody, including the Israelis, saw what Hamas were about to do coming. That points to the need for much greater surveillance, but also—much wider than that—the need to pursue the two-state solution, which is official British policy and is something that the world must do as this conflict, we hope, comes to an end.
The answer to the right hon. Gentleman’s question about being able to deploy British troops and, indeed, assets is that when I asked the question, the answer came back immediately: “Yes, we can do it, and there is more that we could do should we need to.” I am satisfied that we cut our cloth in order to react to events around the world, which of course came on top of what we are doing in Kosovo and elsewhere. We will certainly make sure that we maintain the resources to carry out those important missions.
Chris Elmore (Ogmore) (Lab)
Helen Morgan (North Shropshire) (LD)
The Minister for Defence Procurement (James Cartlidge)
Currently, 96.5% of the service family accommodation meets or exceeds the Government’s decent homes standard; only those properties should be allocated to service families. The Government continue to invest significant sums to improve the quality of UK service family accommodation. The Defence Infrastructure Organisation received an investment of £400 million over this financial year and the next as part of the defence Command Paper refresh, meaning that the forecast £380.2 million for this year is more than double last year’s investment in maintenance and improvements.
Chris Elmore
The Minister will be aware that this time last year, almost 5,000 homes of armed forces personnel were affected by black mould and damp, which obviously included many properties that had children in them. A year on, too many of our service personnel and their families still have this problem. No matter whether it is one house or 5,000 houses, can the Minister set out how he is going to tackle this problem quickly? Our armed forces personnel and their families deserve better than what they have been getting to date.
James Cartlidge
The hon. Gentleman asks an excellent question. We are aware that what happened last winter was not good enough. Too many homes were affected, particularly by damp and mould. That is why we have prioritised getting the investment in, and it has more than doubled in the current financial year. I am pleased to confirm to him that last week I set out our winter plan. It shows that 4,000 homes in the defence estate would benefit from significant work on damp and mould, which is about 60% of the total number that require that work.
Helen Morgan
A constituent of mine who lives in Clive barracks at Tern Hill in Shropshire has reported that he lives in rat-infested accommodation, sometimes with two to six soldiers living in the same room. As a result, shipping containers have been placed in the grounds—about 40 at the end of August—and kitted out like budget hotel accommodation for those soldiers to live in. Can the Minister provide any reassurance that these servicemen will be provided with somewhere appropriate to live in the near future?
James Cartlidge
I am obviously sorry to hear about that case. I would ask the hon. Member to write to me with the details, and I will look into it with the DIO. The key thing is that, wherever we are talking about—whichever specific barracks or base—if we are going to get on with the works, we need the money there, and we have got that. We have put in place the extra £400 million, and as I set out in the winter plan, thousands of forces personnel will now benefit from that work.
Mr Mark Francois (Rayleigh and Wickford) (Con)
The DIO is not fit for purpose, and the Future Defence Infrastructure Services accommodation contract has been a disaster, including completely unacceptable delays in issuing and checking gas and electricity safety certificates. No private landlord would get away with this without being sued. The Secretary of State had a good run out at the Defence Committee last week, and said he was potentially looking at radical reforms in this area. Can I urge the Minister and his boss to do precisely that to honour our service personnel and their families in a way they are not being honoured at present?
James Cartlidge
I am very grateful to my right hon. Friend. He knows that I share his passion for seeing genuine step change improvements in our accommodation. That is why we have announced the spending that we have. On the performance of the contractors, which the DIO ultimately oversees, one of the important aspects of the winter plan is a significant increase in staff manning the telephone service, so that we see better service to personnel. We expect the average waiting time for one of those calls to go from seven minutes to 29 seconds. It will be very important to service personnel that, when they make those calls, they get answered in good time.
Dame Caroline Dinenage (Gosport) (Con)
The Minister may be aware that earlier this year one of the accommodation blocks in HMS Collingwood in my Gosport constituency was shut down all together because it just simply was not fit for human habitation. There are also some issues with the accommodation blocks in HMS Sultan. Could I invite the Minister to come to Gosport to have a look at some of the accommodation on offer for our service personnel? It is simply not good enough, and they deserve better.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
There is a new Defence Secretary, but it is the same old story in service accommodation, with reports of broken boilers, black mould, leaky roofs and painfully long waits for repairs. Last Christmas, one service family told me that they went without a working boiler for three weeks and were forced to live in a hotel over Christmas and new year. Can the Minister assure me that no one who serves our country in uniform will go without heating, or be forced out of their home this winter because of the dire state of their military accommodation?
James Cartlidge
I am grateful to the hon. Member, and I repeat the point: we recognise that performance was not good enough last winter, which is why the Secretary of State made it an absolute priority to get the extra investment in. Having done that, I am pleased to say that the winter plan does include boiler and heating upgrades for about 1,500 homes.
John Mc Nally (Falkirk) (SNP)
The Minister for Armed Forces (James Heappey)
Defence Ministers have close relationships with our US colleagues and discuss such issues on a case-by-case basis.
John Mc Nally
I thank the Minister for his answer. It is fast approaching the sixth anniversary of Captain Dean Sprouting being killed, in a road traffic accident in 2018 while on operational duties, by US servicemen. The US guardsmen did not adhere to any standard operation procedures or health and safety regulations, driving unsuitable and poorly maintained vehicles on an unnecessary journey. Captain Sprouting’s death was both avoidable and preventable, and it would not have occurred had the US servicemen involved adhered to the regulations. Despite the continuous efforts of his widow, Linda, for the Ministry of Defence to highlight the complicated jurisdictional procedures involved in blue-on-blue incidents, Linda and her boys continue to suffer the consequences on a daily basis. What I would like to ask the Minister is: given that the Defence Minister in the Lords—
Mr Speaker
Order. I think the Minister must have got the gist by now and be able to answer with something. [Interruption.] Just to help the hon. Member for Falkirk (John Mc Nally), I have to try to get through a list of what are meant to be questions. I gave him a long time to ask a question, and it was not forthcoming. If I do not do this, I will not get through the other people who wish to ask questions.
James Heappey
The hon. Gentleman raises a very complicated case and the widow, to whom I send my condolences, is obviously keen to see the matter resolved. I suggest that the hon. Gentleman and I meet to discuss the issue in appropriate detail.
Mr Speaker
I am happy to look at an Adjournment debate, if that helps, but we have to have short questions to get other people in.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Selaine Saxby (North Devon) (Con)
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
The Ministry of Defence delivers a range of services to veterans and their families, including the administration and payment of armed forces pensions and compensation, and tailored advice and assistance through the Veterans Welfare Service, Defence Transition Services and integrated personal commissioning for veterans.
Patricia Gibson
When veterans and their families are compensated for the detrimental impact their service has had on their lives, that is unjustly classed as income when applying for means-tested benefits, rendering veterans and their families ineligible for welfare support under UK Government control, the most significant of which is pension credit. As a result, thousands of veterans miss out on almost £6,000 every year. Will the Minister pledge his support for the Royal British Legion’s Credit their Service campaign? And will he work with the Department for Work and Pensions and his other Cabinet colleagues to ensure that compensation awarded to veterans is disregarded when applying for means-tested benefits?
Dr Murrison
Of course the MOD works with the DWP on a range of issues. Compensation is set in the full knowledge of how it will be dealt with under the benefits system in the UK. By most measures, the armed forces compensation scheme and the war pension scheme are felt to be sound and appropriate for awarding significant amounts of money to those who have served our country and who, unfortunately, have been disadvantaged as a result.
Selaine Saxby
Will my right hon. Friend join me in thanking The Veterans Charity in North Devon for their Poppies to Paddington operation, which saw 231 wreaths from the Great Western Railway region reach Paddington for Remembrance Day, and for their incredible work to help support our wonderful veterans across the UK?
Dr Murrison
I absolutely will, and I add my congratulations to my hon. Friend’s in thanking The Veterans Charity in North Devon. I also congratulate her on the extraordinary support she gives to our veterans in her constituency and elsewhere, particularly as we come out of the season of remembrance, which I know you were heavily involved with too, Mr Speaker. It is important to reflect on those who give so much in the service of our country.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Over the past year, the number of veterans claiming universal credit has increased by 31.6%, which is nearly a third. Does the Minister recognise that the King’s Speech failed to help veterans in receipt of universal credit to cope with the increased cost of living caused by his Government’s economic failure? And does he further recognise that some of the long-term sick who his party has been attacking in the media over the last few days are veterans with physical and mental health challenges? What advice has he given his colleagues about the Conservative party rhetoric, and about lending their full support to our veterans and all those who have served?
Dr Murrison
The hon. Gentleman will know that universal credit is an in-work benefit. Within the system, there are allowances that we offer to our veterans that can be improved. As he knows, that is why we have instituted the quinquennial review and the independent review of veterans’ welfare services, which we will be responding to shortly.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
The Minister for Defence Procurement (James Cartlidge)
The Ministry of Defence co-ordinates a range of interdependent programmes to support, maintain and renew the nuclear deterrent. The expected cost of the combined defence nuclear enterprise will be set out at supplementary estimates in February.
Neale Hanvey
The estimated costs of Trident’s renewal stand at the moment at £31 billion, with a further £10 billion earmarked for contingency. We know that containment of nuclear material is a problem for the Ministry of Defence, and we also know from recent reports that a Vanguard-class submarine nearly had a collision over the weekend. Our party put in a freedom of information request asking about transportation of nuclear material through Scotland, and that was rebuffed. The UK Government may be content to play second fiddle to the US on weapons of mass destruction, but can the Secretary of State explain the lack of transparency on WMD movement in Scotland, and justify Scotland’s being kept in the dark? Is it not time to abandon this costly and dangerous bomb and get it out of Scotland for good?
Mr Speaker
Order. Let us help each other to get through the list, please.
James Cartlidge
I profoundly disagree about this being the time to abandon the deterrent. I could not think of a worse time. The policy of the hon. Gentleman’s party is not just to abandon the deterrent but to withdraw from NATO. I could not think of a more reckless policy to undertake in the face of Russian aggression. We support the deterrent and we will continue to invest in it.
Sir Julian Lewis (New Forest East) (Con)
Does the Minister share my relief that both main parties in the House of Commons support the retention and renewal of the nuclear deterrent? Did he also share my relief that, in July 2016 when the vote was held on whether to renew the nuclear deterrent, there was a massive majority of 355 in favour of doing that? That sends a message to the Scottish nationalists about how unrepresentative their views are.
James Cartlidge
I am extremely grateful to my right hon. Friend for that remark. I was delighted that those on the Labour Front Bench showed their agreement by nodding when I gave my previous answer. I am delighted that there is consensus. I think we all agree that, particularly at this time, the country needs the security of a deterrent to deter what would be the most aggressive threats to our nation’s freedom.
Maria Eagle (Garston and Halewood) (Lab)
May I confirm again that Labour’s support for our nuclear deterrent, which we maintain on behalf of our NATO allies, is total? However, following reports in newspapers about a malfunctioning depth gauge on a Vanguard submarine at sea, can the Minister explain what steps he has taken to ensure that such an incident never happens again?
James Cartlidge
First, I am delighted to hear confirmation of Labour’s total support for the deterrent. That sends a very powerful message to our adversaries about our national endeavour to support the deterrent and its renewal. On the specific story that the hon. Lady mentions, she will not be surprised to hear that we do not comment on operational matters in respect of our submarines.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
This one will break the convention.
Let me also welcome the Secretary of State to their position. The nuclear enterprise has an uncapped budget, and, after the demise of HS2, is the largest single public procurement project on these islands. For those of us on the SNP Benches at least, that is money spent on a weapons system that is designed never to be used, which not only bleeds money from the conventional MOD budget but sucks it from hospitals, schools and social care. On a day when the preview of the autumn statement in the Financial Times reads,
“Stagnation nation: governing the UK when ‘there is no money’”,
can the Minister advise the House what steps his Department is taking to ensure that there are no further cuts to conventional forces or elsewhere because of the uncapped, runaway Trident budget?
James Cartlidge
The hon. Gentleman talks about budget and cost. I can be open about the figure that matters: 80 million. That is the combined death toll in the first and second world wars. We have not had a third world war and we are profoundly lucky, and I put it to the House that it is not a coincidence.
Martin Docherty-Hughes
We know from the official history of the submarine service by Peter Hennessy and James Jinks that, during the transition to Vanguard, contingencies were made in Whitehall for the possible alteration of the continuous at-sea deterrent to take account of the complete breakdown of one or more hulls. This involved diving a Polaris submarine into Loch Long to remain there on a quick reaction alert. Can the Minister advise the House on what discussions his Department is having on the contingencies that we now see arising from an almost 40-year-old Vanguard fleet?
James Cartlidge
The hon. Gentleman, too, will not be surprised to hear that we will not comment on that, other than to say that we have had a continuous at-sea deterrent since 1969. We should all be proud of that, and I am delighted to see that Members on both sides of the House who support our Union also support the nuclear deterrent.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Janet Daby (Lewisham East) (Lab)
The Secretary of State for Defence (Grant Shapps)
Defence assets continue to be ready to supply humanitarian support to the region. As the hon. Gentleman knows, the delivery of aid is impeded by the many challenges around Gaza, but so far we have airlifted 51 tonnes of aid to the country.
Mr Dhesi
As I have said previously, I want to see an end to the violence in the middle east, although I acknowledge that neither Israel nor Hamas agreed to an immediate ceasefire. While negotiations to deliver an enduring peace are ongoing, we must urgently accelerate the delivery of aid via the RAF to alleviate human suffering on the ground. Can the Secretary of State explain why, within two weeks of the earthquake in Turkey and Syria, nearly 100 tonnes of aid was delivered there, yet since the Israel-Hamas war broke out more than a month ago, only 50 tonnes has been delivered by the RAF?
Grant Shapps
I can. The difference is a war zone. When I said that we had delivered “to the country”, I meant, of course, to Egypt. From there we have to get the aid across the Rafah crossing, which, for all the reasons of complexity, is not always open or available. There are many restrictions to getting that aid in, but I am working very hard on that. The problem is not a lack of resource; we have put in £30 million, more than doubling the existing £27 million, and I can assure the hon. Gentleman that there are further flights leaving later this month.
Janet Daby
For more than a month we have witnessed a distressing humanitarian disaster unfolding in Gaza. It is welcome that the RAF is flying UK humanitarian aid to the region, but so far we have seen only three RAF flights. When will the Government increase the number of flights and the amount of aid given to Palestinians, who have suffered so much and who deserve, at the very least, the basic essentials to try to survive?
Grant Shapps
The issue is not getting the aid to the region; we could fly more aircraft. The issue is getting the aid into Gaza itself, and in that regard we have the problem of Hamas, a terrorist organisation not in the least bit interested in looking after the citizens of Gaza, and, of course, the problem of the Rafah crossing, which is opened and closed on a fairly arbitrary basis. However, I can assure the hon. Lady that we are working very hard with all the different bodies and Governments in the region to get more of that aid in as quickly as possible. The capacity constraint is not flying it to the region.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The Minister for Armed Forces (James Heappey)
Some 13,000 eligible persons and their families are now in the UK under the ARAP scheme. We are determined to deliver on our commitments, with many hundreds more arrivals in the UK planned before the end of the year.
Dr Huq
In the light of Pakistan’s brutal crackdown on undocumented and temporary visa-bearing Afghan refugees and its forcible deportation of those people back to Afghanistan, can the Minister confirm the security of those eligible for the Afghan citizens resettlement and ARAP schemes in Pakistan, including many whose claims have been unprocessed for two years? Can he expedite those claims to stop people being thrown back into the clutches of the Taliban?
James Heappey
May I gently encourage Members on both sides of the House to change their tone when describing the Government of Pakistan in relation to these matters? We would not have brought out thousands of people had it not been for the support of the Government of Pakistan, and we continue to enjoy their support and co-operation in our efforts to bring out many thousands more. As the hon. Lady well knows, because it has been well covered in the media, the Government of Pakistan have sought to accelerate the deportation of those whom they consider to be there illegally, but our excellent team in the high commission in Islamabad are working day and night with the Government of Pakistan to ensure that that does not happen to those who are in Pakistan under ARAP and ACRS. We are moving at our best pace to bring people back, with the full co-operation of the Government of Pakistan.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
The Secretary of State for Defence (Grant Shapps)
We continue to support Ukraine—we provided £2.3 billion of military support in the last year—and will go on doing so, because Putin must not win in Ukraine.
Sir Bernard Jenkin
I thank my right hon. Friend for that answer and for the consistency of support the British Government have shown and the way they have led our NATO allies in support of the Ukrainians right from the start. How are we going to maintain that lead in the face of another war in the middle east, a certain amount of disarray in the Congress and indeed some visible wavering among our European allies?
Grant Shapps
My right hon. Friend is right that the UK has led, and we must continue to do so. I have visited Ukraine twice this year, I hosted a Ukrainian family for a year in my own home, and the Government have set up the British-led international fund for Ukraine, which is on its way to delivering, I think, nearly £800 million of support. We have also been first with tanks, with ammunition, with long-range missiles and with permissions, and we intend to be first with this war going forward.
Derek Twigg (Halton) (Lab)
It is vital that we continue to give military aid to Ukraine and to show our steadfast support and leadership in Europe. Has the Secretary of State had a chance, since he came into office, to meet with representatives of the defence industry to talk about how we maintain that level of military aid to Ukraine and, if he has had such a meeting, what was the outcome?
Grant Shapps
Yes, on several occasions, including in Kyiv and, more recently, last Thursday at the MOD, where I met with large, medium and small defence companies to discuss exactly that issue. There are a whole range of measures in place to increase the amount of arms, particularly arms replenishment, that can come through via UK companies. Having supported Ukraine from the beginning, we must support them all the way through to the end, and we intend to do so.
Andrew Jones (Harrogate and Knaresborough) (Con)
David Duguid (Banff and Buchan) (Con)
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
In June 2023, the Ministry of Defence published the Haythornthwaite review of armed forces incentivisation. Multiple teams are being stood up across Defence to implement all 67 recommendations, working to establish a reward and incentivisation architecture that will attract and retain skills. Meanwhile, I am delighted to say that the Army has just been named the UK’s No. 1 employer of apprentices for the third consecutive year.
Andrew Jones
I am aware that the MOD is the biggest single employer of apprentices, with more than 15,000 soldiers currently on the programme, and I have seen the excellent training and development that takes place at the Army Foundation College, which, as my right hon. Friend knows, is located in Harrogate. Does he agree that the apprenticeship scheme is not only bringing in future talent, but ensuring that those individuals have the skills for the remainder of their lives?
Dr Murrison
My hon. Friend is absolutely right, and I enjoyed my relatively recent visit to Harrogate. More than 95% of all non-commissioned recruits across the armed forces are offered apprenticeships mapped to their training. As he rightly says, that benefits not only Defence but the individual and the wider economy.
David Duguid
Given that the defence of our United Kingdom is reserved and education and skills are devolved, what discussions is my right hon. Friend having with the devolved Administrations to ensure that the skills needed by our British armed forces are being developed across our whole United Kingdom?
Dr Murrison
The Ministry of Defence actively engages with the devolved Administrations to align education, skills and development, and will continue to do so, using the UK-wide pan-Defence skills framework, which ensures that the armed forces skills requirements are met across the country and contribute to the wider economy that we share.
Jim Shannon (Strangford) (DUP)
I thank the Minister for that response. Beyond the Battlefield, an independent charity in my constituency, does incredible work with veterans who are homeless, giving them accommodation and some skills. I have extended an invitation to the Minister to come to Northern Ireland to visit Beyond the Battlefield, so I will extend that again. I think he will be impressed—I know I am—and he will see that what we do in Northern Ireland can be done elsewhere in the United Kingdom.
Dr Murrison
It is always a joy to visit Strangford—one of the most beautiful places in these islands, if I may say so. I am grateful for the hon. Gentleman’s invitation; I have it at the front of my mind and when I am in Northern Ireland I will ensure that I visit.
Rob Butler (Aylesbury) (Con)
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
We remain committed to maintaining the overall size of the armed forces and recognise the importance of recruitment to achieve that. We are responding to immediate challenges with a programme aimed at increasing the breath of potential candidates and driving efficiencies in recruitment. Meanwhile, the services continue to meet all their operational commitments, keeping the country and its interests safe.
Rob Butler
Since my election, I have met many new recruits during visits with the armed forces parliamentary scheme, and I have always been incredibly impressed by their sense of duty, their commitment to serve their country and their recognition of the great careers that lie before them, but we know that there are still shortages in recruitment. How can my right hon. Friend ensure that all parts of the armed forces recruit the right number of people, with the right mix of skills and experience to keep our nation safe in these increasingly dangerous times?
Dr Murrison
My hon. Friend is absolutely right that recruitment to the armed forces is mixed—some of it is good, some of it less good—across the western world. We are struggling to recruit people into our armed forces, and we must redouble our efforts. That is why we have had the Haythornthwaite review and the tri-service recruitment model, which I am convinced will plug the gaps that we have in skills and overall numbers.
Sarah Dyke (Somerton and Frome) (LD)
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
There is no evidence—[Interruption.]
Mr Speaker
Order. Look, I do not need Members making signals to me on taking questions—it is quite obvious that I go from the Government side to the Opposition side.
Dr Murrison
There is no evidence that the operational MOD Guard Service employment contract has had a material bearing on workflow, recruitment and retention. However, it is not possible to conduct an accurate assessment of the impact that OMEC has had on applications from staff seeking promotion, because of the way applications are filed. That said, the MOD Guard Service is encouraged by the volume of applications received for vacancies through fair and open competition, no doubt encouraged by the fact that OMEC terms and conditions of service remain highly favourable when compared with private sector security companies.
Sarah Dyke
I thank the Minister for his response but, respectfully, I do not find it sufficient. My constituent has provided more than a decade’s service within the Ministry of Defence Guard Service. He reports that he and his contemporaries are disincentivised to apply for promotion, because it would mean switching to the new OMEC contracts from their legacy contracts and an extra six hours’ work a week. Many are leaving. Will the Minister promise to investigate this issue thoroughly?
Dr Murrison
I am grateful to the hon. Lady. The new way of working was passed through the trade union consultation process, of course, and in terms of pay, pension, leave and sickness benefits and working hours, the MOD Guard Service performs well, as I have said, against private security companies. That is why we appear to be recruiting and retaining well.
Richard Graham (Gloucester) (Con)
The Minister for Armed Forces (James Heappey)
The tempo of our engagements and operations in the Indo-Pacific grows all the time on land, sea and air. We are also strengthening regional resilience among our partners to uphold freedom of navigation, deter security threats and build support for international law throughout the Indo-Pacific.
Richard Graham
I agree that relationships with several south-east Asian states have reached new highs as a result of partnerships in areas such as space and cyber as well as air and maritime capabilities. Does my right hon. Friend agree that we should do more to ensure that the United Nations convention on the law of the sea is maintained in the South China sea, working closely with our partners in the region?
James Heappey
My hon. Friend hides his light under a bushel, because as a trade envoy in the region he will have had much to do with the improved relationships we enjoy there. Furthermore, HMS Spey transited the Straits of Malacca only this weekend, demonstrating the UK’s and the Royal Navy’s commitment to upholding freedom of navigation in the South China sea and around.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Does the Minister believe the appointment of Lord Cameron as Foreign Secretary strengthens or weakens the Prime Minister’s stance that China poses an “epoch-defining challenge” to global security?
James Heappey
It greatly strengthens the Prime Minister’s position.
Chris Loder (West Dorset) (Con)
The Minister for Defence Procurement (James Cartlidge)
Helicopters form an important part of our integrated operating concept. Through past and current investment in rotary capability, the UK industrial base remains well placed to support existing and future helicopter platforms. Positive progress is being made towards the next stage of the competition with the three downselected suppliers: Airbus Helicopters UK, Leonardo Helicopters UK and Lockheed Martin UK.
Chris Loder
Can my hon. Friend confirm that the invitation to negotiate for the medium-sized helicopter will indeed be issued by the end of December?
James Cartlidge
I am grateful to my hon. Friend. We are keen to get on with this, and that is certainly our intention. At the moment, we are in the process of securing final cross-Government approval. As I said, that is our aim, but I cannot absolutely guarantee it.
Mr Rob Roberts (Delyn) (Ind)
The Minister for Defence Procurement (James Cartlidge)
The most recent estimate shows that MOD investment supports more than 200,000 jobs in industries across the UK, and continued investment in defence along with the changes we continue to make as part of our defence and security industrial strategy are contributing to further economic growth and prosperity across the Union.
Mr Roberts
I thank the Minister for his answer. As a Member from north-east Wales, I am interested in how we promote defence spending in all regions of the United Kingdom, meaning that there is some balance, with defence jobs and investment not concentrated in the same part of England every time. What can the Minister do to assure my constituents in Delyn that they will have as much opportunity as those in places such as the south-west of England?
James Cartlidge
My hon. Friend makes an excellent point. Obviously, we strongly want to see defence expenditure benefiting every part of the Union. I can confirm expenditure with industry in Wales amounting to about £744 million. Just to reassure him and show him how importantly we regard Wales, the week before last I heard I held my small and medium-sized enterprise forum in Cardiff at Space Forge, a brilliant Welsh SME that we are supporting with half a million pounds of funding to develop in-space manufacturing of semiconductors. That is a strong example of how we are supporting Welsh SMEs in the defence sector.
Richard Foord (Tiverton and Honiton) (LD)
The Minister for Armed Forces (James Heappey)
I thank the hon. Gentleman for raising the work of the slightly less glamorous part of the Royal Air Force that does long-distance surveillance missions. They are an important part of the UK’s defence strategy and our ability to monitor and observe what our adversaries are doing. Their work over the past year above the north Atlantic and the high north, the Baltic, the Black sea, the eastern Mediterranean and across the middle east has been central to defence operations. The team at RAF Waddington and at Lossiemouth should be congratulated.
Richard Foord
We understand that UK surveillance assets such as Rivet Joint are providing surveillance support to Israel. I appreciate that, for reasons of operational security, the Minister cannot comment on the operational specifics of this activity, but will he rule out the possibility that these platforms are being used to support target acquisition?
James Heappey
While I was grateful to the hon. Gentleman for his initial question, he also gives me an opportunity to make an important clarification. Rivet Joint is not flying in support of Israel; it is flying to observe the risk of escalation in the region, to inform decision making in the UK MOD, and for nothing else.
James Gray (North Wiltshire) (Con)
Is my right hon. Friend concerned about the volcanic activity in Iceland at the moment? The P-8 regularly uses Keflavik airport near Reykjavik. Could that be interrupted by the threatened volcanic activity?
James Heappey
To the relief of people everywhere hoping for a Christmas getaway, I am told that this particular volcanic ash is not the same as that of last time and thus does not pose such a threat to aviation. However, we are, of course, monitoring it carefully and have contingencies.
Jonathan Gullis (Stoke-on-Trent North) (Con)
The Secretary of State for Defence (Grant Shapps)
My first months as Defence Secretary have strengthened my long-held belief that we need to strengthen our national defence as the world grows ever-more dangerous. With the challenges in Ukraine, the middle east and the Indo-Pacific, these are more contested times than any since the cold war. The servicemen and women of our armed forces are our greatest asset. As has been mentioned, as we ask them to do extraordinarily difficult things around the world and they do deserve comfort back home. That is why I have put service accommodation at the forefront of my mission.
Jonathan Gullis
I thank the Secretary of State for his answer. Will he add his thanks to volunteers such as Trevor Simcock, Mal Mullet and Chris Smith, who work with the Commonwealth War Graves Commission locally in Stoke-on-Trent North, Kidsgrove and Talke? Ahead of the Armistice Weekend, I was proud to join them at Burslem cemetery with my daughter Amelia to clean the headstones of 130 of our brave and fallen heroes. Will he add his thanks and come to visit those great volunteers?
Grant Shapps
I am delighted to add my thanks to my hon. Friend’s brilliant volunteers. It is an opportunity to mention from the Dispatch Box the many thousands of people who turned out across the country on Remembrance Weekend to commemorate and remember those who bravely gave of themselves so that we can be here in freedom today.
John Healey (Wentworth and Dearne) (Lab)
The Defence Secretary said recently that, despite middle east tensions, we must not forget about Ukraine. I welcome that statement, but the UK’s leadership on support for Ukraine is flagging, so will Wednesday’s autumn statement, as a minimum, confirm the commitment to match this year’s £2.3 billion in military aid funding for next year?
Grant Shapps
I do not know when the right hon. Gentleman was last able to visit Kyiv himself, but when he does go, he will discover that the attitude there is that no country in the world has been more forward-leaning and progressive in its support, and that remains the same today as it was before this conflict began. We have trained 52,000 Ukrainian troops since 2014. Our support is not for today or tomorrow or the short term; it is forever.
Henry Smith (Crawley) (Con)
Grant Shapps
It is essential that we maintain our position, to be able to assist ourselves and the United States, in Diego Garcia.
Alistair Strathern (Mid Bedfordshire) (Lab)
The Minister for Defence Procurement (James Cartlidge)
I commend the hon. Gentleman for raising this important matter for his constituency, and I am pleased to work with him on what we offer his service personnel. I have said that last winter was not good enough, but this year we are ramping up massively. We have at times withheld profit from contractors where they have not performed, but what I want to see from them above all is delivery. We have put in place the £400 million and I now want to see that delivered as improvements to houses, including work being done on boilers and on damp and mould. Thousands of homes will be supported this winter and hopefully we will be in a far better position.
Andrew Jones (Harrogate and Knaresborough) (Con)
Grant Shapps
My hon. Friend is absolutely right about that. The way that we can start along that path is that Hamas could release the 242 innocent civilians that they are holding hostage, which includes some Brits. That would open the door to starting to be able to get a resolution. That is what they should do, but sadly, I doubt that they are about to.
Andrew Gwynne (Denton and Reddish) (Lab)
James Cartlidge
On all the key metrics there has been a significant improvement since the hon. Gentleman’s party was in office. If you were to ask, Mr Speaker, what the key test was for a procurement system, I would say it is wartime. Of course we are not ourselves directly at war, but in supporting Ukraine, we have seen excellence in procurement, particularly at Defence Equipment and Support, getting equipment—
Robert Courts (Witney) (Con)
May I take this opportunity to formally welcome the Secretary of State to his position? I am grateful for his comments on military accommodation being a priority for him. The Select Committee is undertaking an inquiry into that as well. One of the issues that has come up is the absence of a military uniformed accommodation officer who is responsible for continually inspecting accommodation and then liaising with the contractors to ensure that the repairs take place. Is that something my hon. Friend the Minister will consider?
James Cartlidge
I strongly congratulate my hon. Friend on becoming Chair of the Defence Committee and I look forward to working with him. I know that, predating his appointment, he had a strong interest in accommodation, and I enjoyed visiting his constituency to look at the accommodation for Brize Norton. I will consider his point and write to him.
Kirsten Oswald (East Renfrewshire) (SNP)
Grant Shapps
I want to make it absolutely clear that I think everyone working within the civil service as part of the Ministry of Defence and, indeed, working in the UK armed forces should feel able to be represented and be a part of it. I want to challenge the hon. Lady’s figures: the numbers I have for female representation between last year and this year are 10.4%, rising to 11.5%—it has actually gone up, not down—and civilian representation at SCS level stands at 45%. None the less, I accept the overall point that we need to see a far more balanced armed forces in the future.
Sarah Atherton (Wrexham) (Con)
Two years ago, the Defence Select Committee undertook an inquiry into the experiences of women in the armed forces. While progress has been made, the culture within defence remains unacceptable. We now understand that 60 female senior civil servants at the MOD have made allegations of sexual assault, harassment and abuse. Would my right hon. Friend like to comment?
The Minister for Defence People, Veterans and Service Families (Dr Andrew Murrison)
I am very grateful to my hon. Friend for her question, and I reiterate once again my thanks for all the hard work she has done on behalf of women in defence. She is quite right: it is unacceptable. Today, the permanent secretary has written to the Department with an action plan on how to deal with the specific issue my hon. Friend has raised, in particular asking our non-executive directors to conduct a review, so that we can ensure that what we are doing stands up to muster against the norms in other large organisations.
John Spellar (Warley) (Lab)
James Cartlidge
The right hon. Gentleman talks about the fleet solid support ships being built in foreign yards. I can assure him that recently, I had the great pleasure of visiting Harland & Wolff at its Appledore yard in north Devon. That is in the UK, and it is where a significant part of the FSS contract will be made.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Rock Barracks in my constituency is home to the excellent 23 Parachute Regiment. I know the Government have invested a lot of money in new accommodation, but people are being let down. We know that Pinnacle is the problem, but it also worries me that people feel they cannot approach their MP directly because of retaliation if they make a complaint. I encourage the Minister to come and visit so that we can fix this problem properly.
James Cartlidge
I am alarmed to hear that. It is a pleasure to take a question from my right hon. Friend, who is my constituency neighbour; it is not far for me to travel, and I would be delighted to do so.
Helen Morgan (North Shropshire) (LD)
James Cartlidge
The hon. Lady asks a very good question. To be clear, the figure of 4,000 homes with damp and mould is for this winter: we have put in place £400 million of additional spending. Of course, as we move into next year, we will look at what further work can be undertaken so that we can deal with all the other properties.
Sir Edward Leigh (Gainsborough) (Con)
Will the Minister confirm that the Ministry would never put serving personnel at risk by putting an open camp for illegal migrants in a serving base, and therefore any undertaking about that is worthless—that the most we will get at RAF Catterick is a closed detention centre?
The Minister for Armed Forces (James Heappey)
I am well aware of my right hon. Friend’s concerns. I am happy to meet him and discuss them further.
Mr Kevan Jones (North Durham) (Lab)
James Cartlidge
The right hon. Gentleman is very knowledgeable on these matters, and I am more than happy for him to write to me about them. The Ajax contract is a firm price contract, and I am very pleased to say that we are getting very positive feedback from the Household Cavalry about that platform’s capability, its sensors and its cannon. I do not know the answer to the right hon. Gentleman’s specific question about payments to subcontractors, so he is more than welcome to write to me.
Jack Lopresti (Filton and Bradley Stoke) (Con)
Will my hon. Friend meet me to discuss a British company, Christy Aerospace and Technology, which has the capability to dramatically reduce the time it takes to train Ukrainian pilots on F-16s, and does he agree that we need to do everything we can to accelerate the rate at which we can get those pilots trained?
James Cartlidge
It is always a pleasure to meet my hon. Friend.
James Cartlidge
It is always a pleasure to meet my hon. Friend. He has been an absolute champion on the Ukraine issue, and I would be delighted to meet him to see what more we can do.
Ronnie Cowan (Inverclyde) (SNP)
Dr Murrison
I am disturbed to hear that the hon. Gentleman’s constituent has not received his medal, because they have been minted and distributed. If he would like to write to me with the details, I will chase it up.
Mark Logan (Bolton North East) (Con)
Local mosques in Bolton are collecting donations, yet there seem to be major problems in getting those donations and aid into Gaza. What discussions is the Department having with the Foreign, Commonwealth and Development Office and the Israeli Government about ensuring that those donations get to those most in need? Not doing so will only escalate the conflict.
Grant Shapps
As I have described, it is a complex position on the ground to get the aid all the way through, but I am happy to either meet or take details from my hon. Friend to ensure that those donations get where they are intended.
Tony Lloyd (Rochdale) (Lab)
Defence Ministers will be aware that the situation in Kosovo is deteriorating dramatically. Can the Secretary of State give us an assurance that the current international military presence there is sufficient to counter any threat from Belgrade?
Grant Shapps
When the Supreme Allied Commander Europe asked us for additional support for the Kosovo-Serbian border, the answer was immediately yes, that weekend, and we have a battalion there now, which is doing a great job. That has contributed to a lessening of tensions, and we are keeping a close eye on it in our conversations, to ensure that we do not see the situation erupt.
Dr Matthew Offord (Hendon) (Con)
This weekend we witnessed the third attack in a year on a commercial vessel in international waters. The cargo ship Galaxy Leader has been described by the Israeli Government as British owned and Japanese operated. What actions will the Minister take to prevent such acts of terrorism on British vessels?
James Heappey
We are very aware of the incident that my hon. Friend describes. The US navy has a presence in the Red sea, and the Royal Navy always keeps under review options to deploy there too.
Matt Rodda (Reading East) (Lab)
Gurkha soldiers who retired before 1997 receive a lower pension than other British soldiers. Will the Minister update the House on the current negotiations between the UK and the Government of Nepal to solve that difficult issue?
Dr Murrison
I am grateful to the hon. Gentleman, and I am seeing a bilateral committee with veterans and the Nepalese ambassador on Wednesday. This is an ongoing process. The hon. Gentleman will be aware that pension schemes are extremely complicated, and in many cases the Gurkha pension scheme and offer to transfer subsequently represents good value for many of our brave Gurkha veterans. I am certainly in discussion with the interested parties. I am afraid that I cannot offer any promises at all, but nevertheless discussions are ongoing.
Simon Jupp (East Devon) (Con)
The great south-west region is home to cutting-edge defence companies such as Supacat, which makes military vehicles for our armed forces. The Jackal 3 is an incredible vehicle that is being put to good use in Ukraine. What steps is my hon. Friend taking to ensure that more defence jobs come to the south-west?
James Cartlidge
It is brilliant to see south-west colleagues standing up for the defence sector in their constituencies, and my hon. Friend is right about Supacat—it is a brilliant platform. In February 2023 Supacat was awarded a £90 million contract by the MOD for 70 high-mobility truck vehicles, to be delivered by the end of the financial year, securing 100 jobs in the UK. Supacat already has two other direct contracts with the MOD for the Jackal military enhancement programme, which is valued at a total of £4.5 million.
Sir Chris Bryant (Rhondda) (Lab)
We must ensure that Putin does not win. We must co-operate and help with the reconstruction of Ukraine. Is it not time that we started seizing Russian state assets to help pay for the reconstruction of Ukraine?
Grant Shapps
A long time ago, when the war started, I was Transport Secretary. We seized quite a lot of yachts and aircraft, which have still not been released, to ensure that they did not benefit from their closeness to Putin. The hon. Gentleman is right that over time we must keep cranking up the different ways by which we ensure that money is not flowing to that regime, and we will continue to keep that under review.
Holly Mumby-Croft (Scunthorpe) (Con)
I believe that the ability to make virgin steel is crucial to the UK’s defence capabilities. Does my right hon. Friend the Secretary of State agree?
James Cartlidge
My hon. Friend makes an excellent point. She has been a long-running champion of the steel sector and its importance to her constituents. Of course, we want a smooth transition between blast furnace and electronic arc steel making technology. Steel remains incredibly important to the defence sector. Take the Type 26: almost 50% of that is British steel. That is 1,400 tonnes per ship. That underlines why it is so important that, in constituencies such as my hon. Friend’s, we continue to support the steel sector.
Dave Doogan (Angus) (SNP)
The Secretary of State and his predecessors rightly called out the wanton and unlawful destruction of civilian infrastructure in Ukraine—homes, hospitals and schools. Why can they not show equal uproar at what is happening to civilians in Gaza?
Grant Shapps
There is a principle in international law that a country can defend itself. Ukraine was attacked for absolutely no reason whatsoever. While we call on Israel, both privately and publicly, to protect civilians in whatever way it can, Hamas are using civilians as human shields, and deliberately using the infrastructure on top of them to hide behind. I would have thought that the hon. Gentleman could see the difference.
Sir Julian Lewis (New Forest East) (Con)
Does the Secretary of State agree that it is vital that his counterparts in the US Administration realise that if Putin does not lose in Ukraine, the peace and security of the whole of Europe is called into question, so it is in their short and medium-term interests to make sure that Putin is seen to fail?
Grant Shapps
My right hon. Friend is characteristically correct about this, but I would widen that point: we are talking about the security of not just Europe, but the Indo-Pacific, and indeed the entire world. Putin must not win.
Levelling Up
(1 year, 1 month ago)
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The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Jacob Young)
With permission, Mr Speaker, I would like to make a statement on levelling up. This Government are committed to levelling up and creating opportunities across all regions and nations of the UK. Last year, we set out our 12 levelling-up missions in the levelling-up White Paper, all principally aimed at tackling regional inequality, because we believe that people’s opportunities should be the same wherever they live, be it in a city or town, on an island, or in a rural or coastal community. I am proud to say that since 2019 this Conservative Government have committed over £13 billion of local growth funding to levelling up. Through the levelling-up fund, the town deal, the UK shared prosperity fund, the future high streets fund and much more, we are regenerating town centres and high streets, improving local transport, funding heritage assets and boosting productivity, jobs and living standards.
Our recently announced long-term plan for towns is providing long-term investment for 55 towns, and the money is to be spent on local people’s priorities. We have launched our investment zone programme: 12 investment zones across the UK will grow key industries of the future and increase jobs. That includes west Yorkshire’s investment zone, announced earlier today, which will focus on life sciences.
We have also made excellent progress on freeports. All freeports in England are now open for business, and we have announced a further four in Wales and Scotland. As levelling-up Minister, I have been lucky enough to see at first hand how we are using this transformative funding to unlock the potential of local economies and improve the everyday life of people across the UK. We recognise the good that this funding can do, so we have embarked on an ambitious plan to simplify the funding landscape for local authorities, led by my right hon. Friend the Secretary of State.
Our simplification plan describes how this Government will deliver our levelling-up White Paper’s commitment to streamlining funds in three phases of reform. First, there will be an immediate simplification of existing funds. Secondly, we will establish a funding simplification doctrine, by which central Government will abide. Finally, we will implement further reforms at the next spending review. We have already delivered much of the first phase. For instance, we have given local authorities greater freedom to adjust their town deal, future high street and levelling-up fund projects. We have also invited 10 local authorities to become part of the fund simplification pathfinder pilot, which will give them greater flexibility to move money between different funds. By increasing local flexibility, we will reduce bureaucracy and inefficiency within the delivery process.
The second phase of our funding simplification plan will see the Government launch a new funding simplification doctrine, which will change how central Government give funding to local authorities. It is clear that funding competitions can drive value for money and help identify the best projects for certain programmes, so we will continue to deploy competitions where they make sense, but we also recognise that bidding into multiple competitions, especially in parallel, can place a dispro- portionate burden on local authorities. The new Government doctrine will therefore ensure that we consider fully the impact on local authorities when designing new funds. Finally, we have committed to further reforms at the next spending review, including giving our trailblazer mayoral combined authorities in Greater Manchester and the west midlands single Department-style, multi-year settlements.
Of course, our work to give local authorities the right levers to spend funding efficiently is only one part of the picture; of equal importance is the funding itself. As I mentioned earlier, since 2019 we have made more than £13 billion available to local places. As part of that, across rounds 1 and 2 of the levelling-up fund we committed £3.8 billion to 216 projects across the country. We have listened to feedback from the first two rounds of the fund, and my right hon. Friend the Secretary of State announced in July that we would take a new approach to round 3. As a result, we decided not to run another competition for this round. Instead, we have drawn on the impressive pool of bids that we were not initially able to fund through round 2.
Today, I am delighted to confirm the allocations of the levelling-up fund’s third and final round. We are investing £1 billion in 55 projects across England, Scotland and Wales. Copies of the successful allocations have been made available in the Vote Office. The sheer number of high-quality bids is testament to the enthusiasm for levelling up across our country and the hard work of so many hon. Members in supporting their local areas to develop strong plans for renewal. From Chorley, Mr Speaker, to Elgin, and from Doncaster to Rhyl, these local infrastructure projects will restore pride in place and improve everyday life for local people.
We have targeted funding at the places most in need, as identified through our levelling-up needs metrics. We have also ensured a fair geographic spread across Great Britain, including £122 million across six projects in Scotland and £111 million across seven projects in Wales. That means that across all three rounds we have invested more than £1 billion in Scotland, Wales and Northern Ireland, exceeding our original funding commitments. It also means that across all three rounds of the fund, the north-east and the north-west will have received more per capita than any other region in England. They are followed closely by the east midlands and by Yorkshire and the Humber.
Our round 3 investments double down on two of our key levelling-up missions—pride in place and improving transport—but we also recognise the key role that culture plays in levelling up. We invested £1 billion on projects with a cultural component in rounds 1 and 2, and as part of this round we are setting aside a further £100 million for culture projects to be announced in due course.
We want to get delivery happening quickly. We will work closely with local authorities to confirm that their projects remain viable, and we will provide ongoing support to ensure that local places are able to deliver. We are committed to giving local areas the funding and power they need to deliver transformative change within their communities. We have committed more than £13 billion of local growth funding for communities the length and breadth of our country. We have invested in pride in place and reversed decades of decline. We are taking long-term decisions for a brighter future for our country. I commend this statement to the House.
Justin Madders (Ellesmere Port and Neston) (Lab)
I thank the Minister for advance sight of his statement. I start by congratulating all those areas that have been successful in their bids—including Chorley, Mr Speaker. Commiserations to all those areas that have missed out once again, although the truth is that even the areas that have won will find that this money is a drop in the ocean, compared with the £15 billion cut from local government funding since 2010. Only six weeks ago there were reports that councils face a £3.5 billion shortfall in their budgets for this year alone. How does today’s announcement help them face that existential threat?
At least the Government appear to have finally accepted that local authorities were forced to spend disproportionate sums in previous rounds to get bids prepared, although we appear to have lurched from one extreme to the other: this time, councils have not been involved in any dialogue on the bids and were possibly not even aware that their bids were being considered. Will the Minister tell us what discussions have taken place with local authorities before decisions were made? Given that the proposals are approaching being a couple of years old, what assurances will he give us that they still reflect local priorities?
The Government’s methodology notes say the Department capped bids for regeneration projects outside priority areas by local authority and region. Did any projects that met the Department’s threshold not get funded for that reason, and which ones were they?
Please do tell us what on earth is meant by a “funding simplification doctrine”—is it an elaborate way of saying sorry? Does it apply to all Government spending decisions, or just to this Department because it has so patently failed to get a grip on spending that it has to have its own doctrine? Is it being done to address the concerns of the National Audit Office and the Public Accounts Committee that billions of pounds are being wasted because the Department has engaged in a programme without any understanding of its impact? As the IPPR North said, levelling up has been a
“litany of missed deadlines, moving goalposts and dysfunction”
although, to be fair, it could have been talking about any Government project when it said that.
Does the Minister accept that the new approach announced today means that the concerns levelled against the Department are, in fact, valid? With this latest iteration, how does the Minister expect anyone to keep up with what this Government want when they flit around so much? The Prime Minister announced five new priorities this morning. Were the projects selected in line with those priorities, or will they all be changed again to reflect this week’s prime ministerial thinkin
Of course, where does this leave the hundreds of projects that still have not been successful? There was no mention of any future rounds in the statement; in fact, I think the Minister said that this was the final round of bidding, so where does that leave all the places that have been unsuccessful so far? What is the plan to address those communities that are crumbling and those high streets that are emptying? Is this the end of any hope of levelling up for them?
Even in those areas that have attracted funding, we know that these crumbs from the table are not enough to reverse 13 years of neglect. Streets that were once bursting with pride are shutting down, rents are rising, mortgages are soaring, and insecurity is still baked into the workplace. Tackling those things would be genuine levelling up, and Labour believes in giving those communities the power, resources and flexibility to tackle such issues in the way they think best. That is a true way of allowing people to take back control.
The statement offers no path ahead to deal with those issues; it just rearranges the deckchairs of what has gone before. We have been left with a failed experiment—an illusion that lasted as long as the press release. It has not gone unnoticed that the number of Conservative MPs standing down at the next election has gone past 50. They know that after 14 years of stagnation, they do not have a record to defend. They are not levelling up; they are giving up.
Jacob Young
The hon. Gentleman misjudged the mood of the House. He talks about local government finances. Last year, we gave local authorities an uplift of more than £5 billion. He asks whether any projects were axed by the methodology that we used—no, they were not. As I say, we set out the methodology online, and I will ensure that there is a copy in the House of Commons Library.
The hon. Gentleman asked what conversations there were with local authorities ahead of any announcement. We have area teams on the ground in all local authority areas, which confirmed with councils that projects were still a priority. They also confirmed with councils whether projects could still be delivered by the deadline. No projects were identified through those conversations that did not qualify this time around.
Further to that, the hon. Gentleman asked about funding simplification and why we are embarking on that. He mentioned the NAO’s concerns. Some of its concerns are legitimate, but we looked at its report and many of the figures dated from March. We have spent £1.5 billion on local places since March. We announced the funding simplification plan in July, in response to the commitment we made in the levelling-up White Paper to simplify the funding landscape.
Finally, the hon. Gentleman described £13 billion of levelling-up funding as “crumbs”. That says it all about the Labour party. It does not recognise the value of anything. We are investing £13 billion in local priorities, and Labour describes that as crumbs. I leave it to the House to determine what it thinks of that.
Anthony Mangnall (Totnes) (Con)
I am well accustomed in this place to rejection, and after rounds 1 and 2 of the levelling-up fund, it was disappointing not to see Brixham and Paignton recognised. However, I am delighted today to see that Brixham harbour and the EPIC centre in Torbay business park have been recognised with £20 million of support, which will make a huge difference. Can the Minister reassure me that that money will come in good time and good order, so that we have the ability to deliver as quickly as possible in our coastal communities?
Jacob Young
Absolutely. We are delighted to be funding high-tech fish and chips in Brixham. This announcement comes on top of additional funding pots that we have been able to give Torbay, including the levelling-up partnership, on which I am working well with my hon. Friends the Members for Totnes (Anthony Mangnall) and for Torbay (Kevin Foster). The funding will come in due course and we will work with local authorities to ensure that they can still deliver the projects on time and to plan.
Peter Grant (Glenrothes) (SNP)
Some Members may have an advantage on me in that they have seen the details of the allocation, which I have been handed just this second, so I will give a completely constituency-neutral response to the Minister’s statement.
However hard the Tories try to hide the truth, the fact is that these days, the word most people will apply before Britain is “broken”. Most people support genuine levelling up—who could argue with it?—but when the Prime Minister’s constituency got more than the whole of Glasgow last time around, and when most people think their high streets are getting worse rather than better, we have to ask what the real agenda is.
Will the Minister confirm how much of the money he boasts has been committed since 2019 has actually been spent? How does it compare to the overspend on HS2, for example?
The Scottish Government have decades of experience—Scottish Governments of various political persuasions, by the way—in successfully allocating EU funding, for example, in true partnership with local authorities. What discussions did the UK Government have with the Scottish Government, given their statutory role in culture and transport, and their role in pride in place, before he made today’s announcement? What discussions did they have with the Convention of Scottish Local Authorities to get a consensus view on what Scottish local authorities need? Or is this decision just being made by somebody in a ministerial office in Whitehall who is as out of touch with Scotland today as they will be out of office next year?
Jacob Young
The hon. Gentleman describes being out of touch with Scotland; he also mentions Glasgow. I should tell him that Glasgow has received £15 million in this round, so I suggest that it is he who is out of touch with Scotland. The Government have a responsibility to all people, businesses and communities across the whole United Kingdom across all three rounds of the funds. As I mentioned in my statement, we have invested £1 billion of levelling-up funding in local authorities in Scotland, Wales and Northern Ireland. The hon. Gentleman should consider his argument: it seems somewhat bizarre that he is frustrated at the funding that we are spending in Scotland. He should focus on what the cash is delivering, rather than on who is delivering it.
Jane Stevenson (Wolverhampton North East) (Con)
I am thrilled that the Department for Levelling Up, Housing and Communities has funded the green innovation corridor in my constituency. The Government have invested tens on tens of millions of pounds in Wolverhampton, which was desperately needed. However, speed of delivery is an issue. Will the Minister meet me to discuss how the council can be encouraged to deliver the projects quickly?
Jacob Young
I commit to meeting my hon. Friend to discuss that matter. She is a fantastic champion for her constituents in Wolverhampton, which is a key place where we are seeing levelling up in action, including the relocation of DLUHC’s offices to Wolverhampton. I am pleased that we have been able to fund my hon. Friend’s project in this round, and I am delighted to be working with her on it.
Mr Clive Betts (Sheffield South East) (Lab)
The Minister has said a lot about inputs, but what is important, in the end, is outputs and the changes that are made. Will the Minister say which indicators have shown a reduction in inequality between the south-east and the north since this funding began, and in particular whether the productivity gap has reduced at all?
Finally, I am surprised there is no mention of the trailblazer projects in Manchester and Birmingham and their roll-out to the other mayoral combined authorities. I understand that they will be rolled out but with reduced powers for the rest of the combined authorities. Will the Minister tell us exactly what the situation is? Please do not ask us to wait for Wednesday’s statement. I read about it in the Financial Times on Saturday, and if the Financial Times can be told on Saturday, I am sure this House can be told today.
Jacob Young
I am very grateful to the Chair of the Select Committee. As I said in my statement, across all three rounds of the fund, the north-east and the north-west have received more per capita than any other region in England. He asked about the specifics on productivity improvements and so on, and I will write to him and his Committee about that. Regarding the trailblazer deals, I have not read the piece in the Financial Times, but I will do so as soon as the statement is finished. I would encourage him to wait until Wednesday.
Steve Double (St Austell and Newquay) (Con)
The Mid Cornwall Metro is a levelling-up infrastructure project to upgrade railway connectivity across Cornwall. It will bring huge benefits both economically and socially. I was pleased to hear the Minister say that the Government are keen to get on with delivering the project. I ask him to use his offices to work with the Department for Transport, the Treasury and Cornwall Council to get the final business case over the line and the funding released, so that we can get on with the project.
Jacob Young
Absolutely. There are few greater champions for Cornwall in this House than my hon. Friend, and I shall work with him to ensure that the business case is signed off as soon as possible and that we are able to see levelling up in Cornwall. I am delighted that I will be visiting Cornwall in the very near future to sign a devolution deal.
Mr Kevan Jones (North Durham) (Lab)
I am not sure whether the Minister lives in some parallel universe, but he came to the Dispatch Box today to talk about the simplification of the process—a process that both he and the Secretary of State have been implementing—as though it is nothing to do with them.
County Durham had one successful bid in the first round, which happened to be in Bishop Auckland—surprise, surprise—the constituency of the former levelling-up Minister. In round 2, Durham County Council was asked to put in bids and spent hundreds of thousands of pounds of taxpayers’ money doing so. Once the bids were in, it was told that they would not be considered because it had had a successful one in round 1. Will the Minister compensate Durham County Council for the money it has wasted, not through its own inefficiency but because he seems to chip, chop and change the rules when he likes?
Jacob Young
The right hon. Member talks about the processes that are owned by my Department. As I said, we are embarking on this ambitious funding simplification agenda purely on the basis of some of the points that he has raised. Local authorities, Members of this House and the Select Committee were concerned about the number of competitions that were involved in various Government funds. We are addressing that through our funding simplification doctrine.
The right hon. Gentleman talks about Durham. I simply say to him that the international territorial level region for the Tees Valley in Durham has received eight projects across the rounds of the levelling-up fund. That equates to £128 per capita in the region, which is one of the highest amounts. I would ask him to welcome that.
Chris Green (Bolton West) (Con)
Bolton is opening its new £40 million Institute of Medical Sciences, which followed an earlier £50 million levelling-up fund investment. Will my hon. Friend confirm that the latest £20 million of funding for Bolton town centre, for which I am very grateful, is not the end of his commitment to the people of Bolton?
Jacob Young
It could not be the end of the levelling-up commitment in Bolton, because of the efforts of my hon. Friend, who works so hard for his constituents. I am delighted that Bolton is receiving money in this round, and I will work with him to ensure that levelling up continues in his part of the world.
Richard Foord (Tiverton and Honiton) (LD)
In his statement, the Minister referred to Scotland, Wales, Northern Ireland, the north-east, the north-west, the east midlands, and Yorkshire and the Humber. There was no mention of the south-west. How can this Conservative Government claim that they want to level up communities when Conservative-run Devon County Council cannot even level up the potholes?
Jacob Young
I am delighted to confirm for the hon. Member that the south-west region has received 20 projects across the rounds of the levelling-up fund to a total value of £409 million. That works out at about £71 per capita. I thank the hon. Member.
Dame Caroline Dinenage (Gosport) (Con)
May I warmly welcome the announcement of over £18 million to regenerate Gosport’s historic waterfront? It will drive jobs, attract visitors and drum up a huge amount of economic prosperity for the area, which has such a rich cultural heritage but has been overlooked for so long. This excellent bid was, of course, submitted under the previous Conservative-led administration. The council has since changed hands and it will be for the Liberal Democrat leadership to deliver on it. This is a Lib Dem leadership that has already paid back £1.3 million of brownfield land release funding to the Government because it was unable to spend it. What message does the Minister have for the council to ensure that the money is spent in a timely way to level up Gosport and drive prosperity for the region?
Jacob Young
I am delighted that Gosport was able to receive funding in this round. The funding in Gosport must be spent on the project priorities. The council is unable to reallocate that funding to some other random Lib Dem project that it has in mind; it has to deliver on the priorities that my hon. Friend mentioned. There is an adjustment process that local authorities can work on with my Department to ensure that challenges around inflation, for example, can be met. However, the project aims must still be met, and I shall work with my hon. Friend and her local authority to ensure that they are.
Tony Lloyd (Rochdale) (Lab)
Can the Minister confirm that Rochdale received no funding in this round, in either path? Can he also explain to my constituents why, even if we had a successful bid, which we would have welcomed, it would have been dwarfed by the cuts made to health, education and, of course, our local authority? Those are the things, ultimately, that are destroying the quality of life in my constituency.
Jacob Young
I would not accept the hon. Member’s synopsis. As I said earlier, we gave councils an uplift of £5 billion last year to meet priorities in their area. I cannot answer the hon. Member’s question today on Rochdale, but I shall write to him as soon as this statement is over.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I particularly welcome the £4.1 million for the Chambers Institute in Peebles, the £6.8 million for walks and cycleways in Clydesdale and the £13.8 million for transport in Dumfries and Galloway, but I pay particular tribute to the trustees of the Annan Harbour Action Group for its compelling bid, which secured £11.9 million to regenerate Annan Harbour. These are all essentially rural projects. Does my hon. Friend agree that rural areas across the United Kingdom must be at the core of levelling up?
Jacob Young
There is no greater champion for levelling up in rural areas than my right hon. Friend. I am delighted that we have been able to give Dumfries and Galloway a chunk of money in this round, and I am sure that he will work to ensure that his local authorities put it to good use. I am delighted to be working with him on doing just that.
Sir Chris Bryant (Rhondda) (Lab)
I confess that I am very disappointed by today’s announcement, because we have been trying to get some money for the Rhondda tunnel, which would be an enormous enhancement to the top end of the Rhondda Fawr. Successive Government Ministers have told me personally that we should apply under round 2, and then told the local authority that it could not apply under round two. I was then told personally that we should apply under round 3, and now it turns out that there is no such thing as a round 3, so we never had an opportunity to make a bid at all—of any kind whatsoever. I am hopeful that the Minister will now say that the Government are not closing the door on the Rhondda tunnel, and that there will be another chance for us to make an application to the Government for the £20 million that we need for one of the poorest areas in the country.
Jacob Young
I understand the hon. Member’s concerns. To be absolutely clear, I have not made any such commitments to him. Levelling up is an agenda that the Government are focused on; this is not the end of the road for levelling up, and I would be delighted to come to Rhondda, not least because Rhondda received money through round 1 of the levelling-up fund—a total of £3.6 million.
Philip Davies (Shipley) (Con)
The Minister knows full well how much Bingley has been neglected and let down by Labour-run Bradford Council, largely because I keep telling him about it. Bingley needs regeneration, and it particularly needs a new swimming pool, so can he tell me what the Government will do to help Bingley receive the swimming pool and the regeneration that it desperately needs? I am afraid that the people of Bingley cannot trust Bradford Council to deliver those for them.
Jacob Young
I understand the plight of the people of Bingley because, as my hon. Friend says, he raises it with me at every possible opportunity. I will work with him to see what funding streams are available to tackle the mess left behind by Labour-run Bradford Council, and to fund Bingley swimming pool.
Sammy Wilson (East Antrim) (DUP)
People in Northern Ireland will be angry tonight that not one penny of a fund that the Minister describes as creating opportunities across all regions and nations of the UK, and aimed at tackling regional inequality, is allocated to Northern Ireland. He gives the flimsy excuse that it is because the Northern Ireland Executive are not up and running. The Northern Ireland Executive did not have any input into the previous rounds, and would not have had any into this round. Of course, they would not even have needed to seek new allocations, because no new applications were needed. Is this not a case of blatant, pathetic, transparent economic blackmail to try to get the Assembly up and running again, without addressing the reasons why it fell, and of pouring the money into key Conservative marginal constituencies to bolster party support?
Jacob Young
I share the right hon. Gentleman’s frustration that we have been unable to fund projects in Northern Ireland this time around. As I indicated to him, that is because of a lack of an Executive in Northern Ireland. I assure him that we have set aside what Northern Ireland’s allocation would have been in this round, and I commit to working with him and his colleagues to ensure that Northern Ireland receives the full benefit of levelling up.
Mrs Heather Wheeler (South Derbyshire) (Con)
I thank my hon. Friend for his statement. I have lost my voice cheering for the £1.1 million for Swadlincote town. This is the first time in 50 years that Government money has been put into regenerating that area, which is the heart of South Derbyshire, and I thank him very much indeed. I have had a word with the chief executive of the new Labour council, and I will sit on the board that ensures we have spades in the ground. I thank the Minister very much.
Jacob Young
I am delighted to be able to give my hon. Friend’s constituency the funding this time around. She is an extremely efficient champion for the people of Derbyshire, and I am delighted that we have been able to fund the project.
Andrew Gwynne (Denton and Reddish) (Lab)
I can be one of this Government’s sharpest critics, often justifiably, but today I thank the Minister and his predecessor, the hon. Member for Bishop Auckland (Dehenna Davison), whom I harassed relentlessly since the round two bid for Denton was rejected. I am so pleased that today “Destination Denton”, the project that we put forward, will receive nearly £17 million. Given that I am the constituency Member of Parliament, and was involved in putting the bid together, what assurances can the Minister give me that I will be involved in ensuring that the project comes to fruition?
Jacob Young
I am grateful to the hon. Gentleman for his kind words. We expect local authorities to work with their Members of Parliament, who are key community stakeholders, in delivering the bids. A project adjustment request process is available to local authorities if projects need to be adjusted because of changes in inflation and so on; a key thing that I asked for is that Members of Parliament be consulted in that process, and I will ensure that the hon. Gentleman is consulted at all turns.
Richard Graham (Gloucester) (Con)
I congratulate the new Minister on the energy and purpose that he has brought to the vital task of levelling up the country, and particularly small cities and large towns, which were largely overlooked by the Labour Government during 13 years of focus on metropolitan cities. The £11 million award to the Greyfriars and Eastgate project in Gloucester will deliver a new shopping centre, indoor market and much more besides, as well as put a roof for the first time in 60 years on the beautiful 13th-century Greyfriars friary. That will make a huge difference, alongside the King’s Quarter projects that have already been funded by the local council and the Government. Does the Minister agree that if the shadow levelling-up Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), wants to see an example of giving up in this country, he is welcome to visit the car park bought by a previous Labour administration for £11 million and later sold for £1? That is why Gloucester, like the rest of the country, needs to keep regeneration in the right hands.
Jacob Young
Gloucester could not have a better champion than my hon. Friend; he is a fantastic champion for it. When I took on this job, one of my first conversations was with him about the urgent need for levelling-up funding in Gloucester. I am delighted that we have been able to fund his project this time around. As he said, it is important that we keep Gloucester in Conservative hands.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
My goodness, what a con this is. Earlier this year, we heard from the National Audit Office that of the £9.5 billion allocated in the first round, only £1 billion had been spent. Perhaps the Minister can say how much has been spent now. Is this not much like any other Tory slogan—meaningless in reality? Once again, there is nothing for Ross, Skye and Lochaber. We heard from the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) about the importance of rural areas, but there is nothing for the Portree harbour bid, which would have made such a difference.
I invite the Secretary of State and his ministerial team to my constituency. We will drive around and look at all the sites of the projects that were funded by the European Union—roads, bridges, harbours, sports facilities. That money would have come if we had stayed in the European Union, as Scotland voted to do. We are missing out on €750 billion that the EU was investing in regeneration, and once again we are getting nothing—zip—from this Tory Government.
Jacob Young
The right hon. Gentleman is wrong. I shall write to him following the statement on exactly how much UK shared prosperity funding his area has received, and I hope that when I do, he will come back to the Chamber to update the House on the facts of the matter. He asked how much money has been spent since the National Audit Office released the figures in March: £1.5 billion has been spent since then, but I would be delighted to come up and visit the humble crofter’s constituency.
Sir Edward Leigh (Gainsborough) (Con)
Pardon me for having an unfashionable Thatcherite point of view, but much better than Government, taxpayer-funded levelling up is private sector levelling up. Although I thank the Secretary of State for having released some money for Gainsborough, £300 million of private sector levelling up, namely for RAF Scampton, is at risk in my constituency. Will the Minister meet me after the court case to ensure that, whatever its result, we get on with levelling up? For instance, the roof of the officers’ mess alone will cost half a million pounds. The roofs of the hangars are decaying. The site will not be viable unless private sector investment is unleashed and the Home Office gets on with it.
Jacob Young
I would be delighted to meet my right hon. Friend, but one of the key ways to unlock private investment in the Greater Lincolnshire area is to progress with the devolution deal. I shall be delighted to meet him to discuss that further.
Grahame Morris (Easington) (Lab)
What consideration has the Minister given to the formation of development corporations to deliver specific projects? As he may be aware, I represent a Durham constituency that includes one of the poorest communities in the country. There has been a failure to leverage investment into the county, most notably in round 2 but also in round 3, and to resolve some very serious structural problems. I can identify lots of problems in the ABC streets in Easington, and the numbered streets in Horden and Peterlee town centre. We had two very successful development corporations. May I remind the Minister that Durham is run by a coalition of Conservatives, Lib Dems and independents that is failing to deliver?
Jacob Young
I hear the hon. Gentleman’s plea for more development corporations. We are obviously on an ambitious journey with the north-east to devolve further through the new mayoral North East Combined Authority. That will be a key way to help ensure levelling up in his part of the world.
Kevin Foster (Torbay) (Con)
It was welcome to hear the news about Torbay today—taking the total regeneration funding available up to £100 million, which will hopefully be matched by a similar amount coming in from the private sector. We are of course in the process of negotiating the levelling-up partnership, and some of the schemes in that are now being dealt with via the levelling-up fund. What implications are there for the levelling-up partnership and will there be an opportunity to re-look at other schemes that can now form part of it?
Jacob Young
I am grateful to my hon. Friend for highlighting just how much levelling-up investment Torbay is getting under this Conservative Government. We are working with the local authority, as he knows, on the levelling-up partnership, and with local Members of Parliament and key stakeholders. Projects have been addressed by this funding today, but we will look at other projects to fund through the levelling-up partnership.
Chris Elmore (Ogmore) (Lab)
It is deeply frustrating to hear the Minister say that round 3 was done by reviewing round 2 projects, which meant the Pencoed level crossing in my constituency was rejected again. That means my constituency has received zero levelling-up funding. There is a wider concern in local authorities across the UK that level 2 rounds, which may not start until the next financial year, will not have continuation of funding into 2026, because the Minister has said that this will potentially all end in 2025. Will he confirm that any project that starts next year from round 2 funding will be funded fully for completion of projects, even if it goes beyond the Minister’s confirmed funding for 2025?
Jacob Young
I will write to the hon. Gentleman on the specifics of his question. Without reading my notes, my understanding is that round 2 has to be spent by the end of March 2025, but I shall write to him to confirm after this session.
James Morris (Halesowen and Rowley Regis) (Con)
I welcome the Minister’s statement, and in particular the £20 million that is announced for Halesowen town centre. Halesowen has recovered well from the pandemic, not least because of the work of the local business improvement district. This further investment will be a secure investment in the future of Halesowen, and I very much welcome it today.
Jacob Young
I am delighted that Halesowen is receiving funding in this round of the levelling-up fund. My hon. Friend is a fantastic champion for his constituents in Halesowen and I look forward to working with him to ensure that the project is delivered as quickly as possible.
Stephen Farry (North Down) (Alliance)
Northern Ireland is missing out on this. It would be nice if we had a devolved Executive working with the Department, but that has not been the case in the past anyway, even whenever the Executive was sitting, so the Minister’s rationale simply does not stack up. Can he confirm that the money for Northern Ireland, which has been denied today, will be ringfenced, and what sort of timescale he envisages—including without a restored Executive—for spending that? Will there be a fresh round 3 in Northern Ireland, or will it too be a continuation of round 2?
Jacob Young
I do not believe it is accurate to say that Northern Ireland is not benefiting. As I have already outlined, we have spent £120 million across the levelling-up fund in Northern Ireland, and we will continue to work with Northern Ireland communities on the delivery of those projects. With regards to the hon. Gentleman’s other questions, I will be happy to write to him after this session but, as I say, the £30 million that would have been spent in this round has been set aside for levelling up in Northern Ireland.
Nick Fletcher (Don Valley) (Con)
I welcome the £18 million for Mexborough and Moorends in my home city of Doncaster, but it does mean that Edlington in my constituency has missed out again. My constituents are missing a leisure centre, a decent shopping high street and decent quality housing. This needs to be addressed, because unfortunately we have had decades and decades of neglect from the socialist Labour council, which I know is playing party politics. Will the Minister and the Secretary of State, who on his visit promised he would help fund this, meet me to find out what we can do for my constituents in Edlington? It is not fair that they have not at least got a leisure centre.
Jacob Young
I think both you, Madam Deputy Speaker, and my hon. Friend know how amazing a community Doncaster is. We want to do what we can to help level up in Doncaster, which is why we have been delighted to fund bids there in this round. I appreciate my hon. Friend’s concern that Edlington is not getting its swimming pool, and I shall meet him at the earliest possible opportunity to look at different ways that we could fund a pool in Edlington. I know that he is a fantastic champion for constituents in that community, and I will continue to work with him to do what we can to level up there.
Alex Sobel (Leeds North West) (Lab/Co-op)
I was here 10 months ago after the conclusion of round 2; none of Leeds—a city of 800,000 people in eight constituencies—was successful. Today, one bid was successful. What about the six constituencies in Leeds that have not received levelling-up money? We have five bids from round 2 that are on the table, and councillors and council officers have worked hard on them. What is their status? Is there going to be another round? Where can we go to deliver that project, including transport and employment land in my constituency, which would deliver thousands of jobs?
Jacob Young
As the hon. Member mentioned, we are funding Leeds in this round for the “Heart of Holbeck” scheme, with almost £16 million of funding. As I said in my statement, Leeds is also the beneficiary of a new investment zone announced earlier today. This Government have continued to focus on levelling up, and I will work with him to ensure that the benefits of that can be felt in Leeds and across West Yorkshire.
Bob Seely (Isle of Wight) (Con)
I am delighted that the Isle of Wight’s bid has been accepted, and I am grateful to the Minister for pushing it through. Our cycle group—CYCLEWight—has raised with me the condition of current cycle routes on the Island. As well as this funding delivering new routes—especially the west Wight cycle route, which is incredibly important—when we are reconfirming the bid, will we be able to tweak elements of it so that we can spend some of that money on improving and repairing the existing cycle routes, namely Sandown to Newport?
Jacob Young
I apologise to my hon. Friend that I am not able to give him that assurance today. We have an adjustment process where we work with local authorities to ensure that the projects that they have received funding for can still be delivered. If that is not the case, we will work with them to see what can be delivered through the bid. I am happy to work with my hon. Friend to do just that.
Jason McCartney (Colne Valley) (Con)
It is a really positive day for my beautiful part of West Yorkshire: £16.6 million for Huddersfield open market regeneration; and £48 million for the Penistone line rail upgrade, with stations in Honley and Brockholes in my constituency—and it continues through the patches of my hon. Friends the Members for Dewsbury (Mark Eastwood) and Penistone and Stocksbridge (Miriam Cates). Also today we have had the announcement of the West Yorkshire investment zone, which is anchored around the national health innovation campus at the University of Huddersfield. Will the Minister ensure that his excellent officials continue to work with the really hard-working officers at Kirklees Council, led by David Shepherd, to ensure that those transformative projects are delivered on time to the benefit of my communities?
Jacob Young
I am really pleased to hear a positive voice for West Yorkshire in this House and to see some of the investment that we are making in my hon. Friend’s community. I know how important the Penistone to Stocksbridge line upgrade was to him and to my hon. Friend the Member for Dewsbury (Mark Eastwood), and I am delighted that we have been able to fund it through this round. I will of course work with him to ensure that its benefits are felt right across West Yorkshire and that it is implemented as soon as possible.
Sarah Dyke (Somerton and Frome) (LD)
I thank the Minister for his statement. I am disappointed that that levelling-up fund bid submitted by Somerset Council for the much-needed regeneration works in the rural market towns of Frome and Wincanton has not been successful. In the Somerton and Langport area, we have been without a train station since the 1960s. The Langport Transport Group’s joint proposal with Somerset Council has not received an update to their bid to the restoring your railway fund since July 2022. Will the Minister provide an update and support me to bring much-needed rail connections to the area?
Jacob Young
I am responsible for many things, but not the restoring your railway fund; I ask the hon. Lady to contact the Department for Transport for assurances on that. However, I assure her that across the Dorset and Somerset region, we have been able to fund five projects to the tune of £87 million.
Douglas Ross (Moray) (Con)
I warmly welcome the UK Government confirming Moray’s levelling-up bid of over £18 million today. When the Minister wrote to me, he said project adjustments may need to take place. One reason that there may need to be an adjustment in Moray is because the announcement follows hot on the heels of Moray receiving £20 million in the towns fund just last month. Will he work with me and the excellent local council leader, Councillor Kathleen Robertson, to look at the proposals for Moray leisure centre? There is an opportunity to also unlock private sector investment, which would mean more resources coming to Moray for people across the region. Does he also agree that local SNP politicians who were very negative when we were not successful in round 2 will surely be extremely positive in welcoming this investment from the UK Government?
Jacob Young
I hope every politician is as positive about Moray and its future as my hon. Friend. It is fantastic that we are funding Moray’s bid today. As he said, it builds on its success with the long-term plan for towns. I am happy to work with him to ensure that the priorities of the local people in Moray are met through both funds. I will work with him and his excellent Conservative council leader to ensure that that happens.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
The communities of Devonport and Stonehouse are some of the poorest in the country, so it felt like a punch in the gut when our round 2 bid was rejected. I thank the Minister for agreeing to the project in round 3. However, the bid we put together was delivered 10 months ago. Since then, Plymouth’s ambition has not stopped. We have part-funded elements and changed other parts. Will the Minister set out what the adjustments mean? For a community like Plymouth, which is trying to create more jobs and bring in private sector investment, how can the adjustment mechanism ensure that we get all the £19.9 million we bid for, and not just part of it, because our bid has changed, quite reasonably, because of inflation and other economic challenges and opportunities over the last year?
Jacob Young
I am delighted about the work we are doing in Plymouth to level up, whether that is the Plymouth freeport or the further investment we are giving Plymouth today. The hon. Gentleman asks specifically about the project adjustment request process. A local authority can amend its bid by up to 30%. The bid is £19.9 million, so it will have flexibility on about £6 million. If any adjustments need to be made to a project, his local authority should contact my officials as soon as possible. We will work with them to reprofile the funds and ensure that his constituents and people across Plymouth are able to benefit properly from the funding.
Holly Mumby-Croft (Scunthorpe) (Con)
I thank my hon. Friend for his work. As soon as I heard the good news, I was straight on the phone to our excellent council leader, Rob Waltham, duly confirming that we are absolutely positioned to bring these projects forward. I hope the Minister can find time to visit Scunthorpe and see some of the projects. I would be very happy to show him around and I know that the good people of Scunthorpe would give him a very warm welcome.
Jacob Young
I am very grateful to my hon. Friend. I have had many conversations with her council leader about devolution in Greater Lincolnshire. I look forward to visiting Scunthorpe very soon, hopefully with further good news on that front. I would be delighted to be shown around by my hon. Friend.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Here’s a first: I would like to thank the Minister. At last, after over two years of waiting and at significant cost to our council, the Government have eventually granted South Shields a piecemeal sum of money. He also knows that, thanks to Tory economic failure, the cost of delivering our bid is now much higher. I have just heard his response to my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), but can he confirm whether it means that in South Shields we are getting more or less money now?
Jacob Young
I am delighted to be able to give the hon. Lady the good news for South Shields today, building on the future high streets fund, which I know she is aware of, in her constituency. The money we announced today for South Shields—£20 million—will be given to South Shields to spend on the bids it outlined. There will not be additional funding coming in on top of that, but the project adjustment request allows the council in her constituency to move money around within the bid to account for inflation and other things. I am delighted that we are able to be levelling up in South Shields, with £20 million today on top of the future high streets fund that we have already given to her constituency.
Mark Logan (Bolton North East) (Con)
Today is a very happy day for Bolton, with £20 million going to the Bolton town centre north regeneration project. That means that Bolton, across all its three constituencies held by both Tory and Labour MPs, has had almost £100 million since 2019. May I extend an invitation to the Minister to visit Bolton when he goes next door to Chorley, as part of his visit to the north? Today is a very happy day for levelling up. The shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), of whom I am very fond, spoke about giving up, but I say that today is a day for us all to cheer up.
Jacob Young
I quite agree with my hon. Friend. He is a fantastic champion for his constituents in Bolton, and I am delighted that he has been able to get this funding for them today. I would be delighted to visit Bolton at the earliest opportunity to see him in action in his community.
Mike Kane (Wythenshawe and Sale East) (Lab)
The £20 million announced for Wythenshawe town centre today is testament to the hard-working leadership team at Manchester City Council. However, my personal thanks goes to Gavin Taylor from the Far East Consortium, who helped me kickstart this project just over two years ago. My thanks also go to the Minister. The money unlocks, with all the other things, the potential for 2,000 much-needed homes. Without sounding like Oliver Twist, may I ask the Minister to talk to his colleagues at the Department of Health and Social Care and request that they look again at the exciting plans at Wythenshawe Hospital just up the road, which could deliver an extra 1,000 homes on top?
Jacob Young
I am pleased that the hon. Gentleman has been successful. He is quite right to praise his council officials, because his bid was one of the highest scoring bids that we have been able to afford money to in this round. I am pleased to be able to grant it, and I am happy to work with him on how we can level up further in Wythenshawe and elsewhere across Manchester.
Peter Gibson (Darlington) (Con)
I welcome my hon. Friend’s statement, with the investment for Billingham in the Tees Valley and the extension to our freeports. However, Darlington narrowly missed out in rounds one, two and three of the levelling-up fund. The Minister, who is from the north-east himself, will be familiar with the phrase “shy bairns”. What advice can he give me in respect of the Darlington projects that still need funding?
Jacob Young
My hon. Friend is an amazing champion for Darlington. Without him, the great work that we are doing in levelling up in Darlington would not be happening. That includes: the investment that we are making into Darlington rail station; the investment that the Treasury has made, bringing new civil service jobs to Darlington; the buying back of Teesside airport by Tees Valley Mayor Ben Houchen; and the Darlington town deal. All those things are dependent on my hon. Friend, who is a fantastic champion for Darlington, and his former council leader, Councillor Jonathan Dulston, who has done an amazing job. I will continue to work with him and others to level up across the Tees Valley.
Michael Shanks (Rutherglen and Hamilton West) (Lab)
My first correspondence to the Government since being elected was to ask the Secretary of State to look again at the levelling-up bid for Shawfield in my constituency. I am delighted that, after only a month in this place, he has awarded £14 million to that project. It will be a challenge to keep that up, I suspect. This is a really important project, which not only unlocks huge investment in my constituency but clears up a toxic legacy where, in the 19th century, the world’s largest chemical factory once was. It will make a huge difference to my constituency.
The Minister has been asked a number of times to reflect on the costs for local authorities in coming up with these bids, and I do not think that we have had an answer yet. As part of his review, will he look at those significant costs? I know that organisations in my constituency such as Clyde Gateway and South Lanarkshire Council spent huge amounts of time, expertise and money pulling together bids, which they then thought were dead; now they realise that the project has a second chance. Will he think about the total costs involved and reimburse local authorities for them?
Jacob Young
I am grateful to the hon. Member for welcoming this funding. I am sure his letter to the Secretary of State had a key decision-making role in that. We are making capacity funding available within the Department to help local authorities where they come up against further challenges in the delivery of these projects. As he has rightly identified, these projects were submitted some time ago, so adjustments will need to be made. I cannot give refunds, unfortunately, but our funding simplification programme is all about ensuring that we step forward to a simpler version of funding that meets councils’ needs, rather than asking councils to meet the needs of various funding streams.
Matt Vickers (Stockton South) (Con)
I am delighted to see Billingham awarded £20 million of levelling-up money, which comes on the back of £16.5 million for Stockton, £20 million for Yarm and Eaglescliffe and £23.9 million for Thornaby. For years, Stockton’s Labour council said that it did not have the money to sort out the eyesore that is the Golden Eagle Hotel in Thornaby, but for three years it has had the Government money to sort it out and it has made no progress whatsoever. Does the Minister agree that it needs to pull its finger out, and will he meet me to see if there is any way we can make that happen?
Jacob Young
What an amazing champion for the people of Stockton my hon. Friend is. In Stockton, we are delivering towns funding in Thornaby, future high streets funding in Stockton High Street and levelling-up funding in Yarm and Eaglescliffe, and today we have confirmed levelling-up funding in Billingham. There is no place in this country that is receiving such love and attention from this Government, and it is thanks to the hard work of my hon. Friend, as well as people such as the Tees Valley Mayor, Ben Houchen, and local councillors in Stockton such as Councillor Niall Innes, who I know was particularly keen on seeing this bid delivered. I shall be happy to work with my hon. Friend to ensure that the Golden Eagle Hotel is sorted out as soon as possible and to deliver on his priorities through the town deal.
Hywel Williams (Arfon) (PC)
It would help the House to come to a judgment on the funding simplification plan and the funding simplification doctrine if we understood the complexity of the current system of assessments of need. Try as I might, and I have looked at the White Paper and various other documents, I cannot find a single concise explanation. Could the Minister write to me, and perhaps place a copy of his reply in the Library, to explain how the current system has got us to this position?
Jacob Young
I would be happy to do that, but we currently operate more than 70 different local growth funds across 17 different Departments. I think that demonstrates the complexity that local authorities and other stakeholders, community groups and so on must navigate to try to get cash for their area. That is why we are embarking on this funding simplification plan, and I am happy to work with him to ensure that it meets the needs of his constituents.
Dr James Davies (Vale of Clwyd) (Con)
Today’s announcement of nearly £20 million for the Vale of Clwyd through the levelling-up fund is fantastic news for redevelopment projects in Rhyl, Prestatyn, Denbigh and elsewhere, and I look forward to working with the local authority on that. By my calculation, Denbighshire is set to receive £63.7 million through local growth funds. Will my hon. Friend visit the area, as I think he hopes to do, and will he provide an update on levelling-up partnerships in Wales?
Jacob Young
On levelling-up partnerships in Wales, I would ask my hon. Friend to watch this space, but he is a fantastic champion for his constituents in Denbighshire. I visited Rhyl earlier this year for the wedding of another Member, but I would be delighted to visit again to see the work that my hon. Friend is doing and to see how we can ensure his constituents feel levelled up.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his enthusiasm in his answers to questions. Ards and North Down Borough Council has a project about mining in Conlig, which goes back to the early 19th century; it also has the Somme centre, which commemorates and runs a programme about the first world war; and part of another project was to do something on the second world war. The Minister has kindly indicated that moneys that would have been going to Northern Ireland will be ringfenced or kept aside. Can he give me and other Members from Northern Ireland a direction for what we should do to ensure that the chief executive of Ards and North Down Borough Council, Stephen Reid, can pursue, and get the moneys for, this tourism project?
Jacob Young
I would be delighted to meet the hon. Gentleman to discuss the project further. I would say to him and his colleagues in Northern Ireland that the key thing is that the UK Government and, I think, everyone in this House want to see the Northern Ireland Executive restored. When they are restored, we can discuss how best to implement levelling up in his constituency and across Northern Ireland.
Scott Benton (Blackpool South) (Ind)
I thank the Minister for the further funding award for Blackpool, meaning that we have now received well over £400 million of additional Government investment since 2019. The Minister will be aware of the partnership work between Blackpool Council and his Department to deliver a levelling-up project in Revoe and Bond Street in my constituency. Is he able to meet me to see how we can get this project over the line and delivered for those communities?
Jacob Young
I am delighted to confirm that more than £15 million of investment is coming into Blackpool from round 3 of the levelling-up fund, announced today. That builds on the other investments we are making in Blackpool, which my hon. Friend mentioned. I will work with him on the projects he has outlined, to see what can be done to ensure they are delivered in a timely manner.
Mark Eastwood (Dewsbury) (Con)
I echo my hon. Friend the Member for Colne Valley (Jason McCartney), who said that today is a positive day. Like him, I thank David Shepherd of Kirklees Council.
After campaigning for an upgrade since 2018, the £48 million for the Penistone line is fantastic news for me and my constituents. This is on top of the £44.8 million secured for Dewsbury town centre and the £318,000 for Shelley football club. Will my hon. Friend agree to come to visit the Penistone line user groups, the Dewsbury town board and the team at Shelley FC to celebrate these amazing levelling-up successes?
Jacob Young
What an amazing champion for the people of Dewsbury— I am not sure that any Member of Parliament for Dewsbury has ever delivered as much investment as my hon. Friend. I would be delighted to visit his constituency to see some of those projects, and I will do so as soon as I am available.
Mr Rob Roberts (Delyn) (Ind)
Greenfield, around which the Delyn constituency bid was structured, is in the top 10% of areas of deprivation in Wales. As the constituency bid has again been unsuccessful, making a total of seven unsuccessful bids across both Delyn and Alyn and Deeside, which together make up my county council area of Flintshire, can the Minister explain to the people of Greenfield and Flintshire why, just like the Welsh Government, the UK Government do not seem to care about their future prosperity? If they do, will he at least take this opportunity to approve the joint Flintshire and Wrexham investment zone bid?
Jacob Young
As I said in my statement, we have delivered more than £1 billion of funding in Wales, Scotland and Northern Ireland across all three rounds of the levelling-up fund. I am disappointed to hear my hon. Friend’s question, as he knows all too well that this Conservative Government care about the people of Wales. Proceedings Time for conclusion of proceedings New Clauses and new Schedules relating to, and amendments to, Part 1 Three hours before the moment of interruption Remaining proceedings on Consideration One hour before the moment of interruption
Digital Markets, Competition and Consumers Bill: Programme (No. 2)
Motion made, and Question put forthwith (Standing Order No. 83A(9)),
That the Order of 17 May 2023 in the last session of Parliament (Digital Markets, Competition and Consumers Bill: Programme) be varied as follows:
(1) Paragraphs (4) and (5) of the Order shall be omitted.
(2) Proceedings on Consideration and Third Reading shall be taken in one day in accordance with the following provisions of this Order.
(3) Proceedings on Consideration—
(a) shall be taken in the order shown in the first column of the following Table, and
(b) shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption.—(Mr Gagan Mohindra.)
Digital Markets, Competition and Consumers Bill
Monday 20th November 2023
(1 year, 1 month ago)
Commons ChamberRead Full debate Digital Markets, Competition and Consumers Act 2024 View all Digital Markets, Competition and Consumers Act 2024 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 20 November 2023 - (20 Nov 2023)
18:35 - The House divided: - Ayes: 196 / Noes: 275 - Question accordingly negatived.
18:49 - The House divided: - Ayes: 197 / Noes: 278 - Question accordingly negatived.
20:56 - The House divided: - Ayes: 210 / Noes: 280 - Question accordingly negatived.
21:11 - The House divided: - Ayes: 209 / Noes: 281 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Saqib Bhatti)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss:
Government new clause 6.
New clause 23—Digital Markets Unit and CMA: annual statement to House of Commons—
“(1) The Secretary of State must, once a year, make a written statement to the House of Commons giving the Secretary of State’s assessment of the conduct and operation of—
(a) the Digital Markets Unit, and
(b) the CMA as a whole.
(2) The first statement must be made by 1 February 2024.
(3) A further statement must be made by 1 February each subsequent year.”
This new clause would require the Secretary of State to make a written statement about the conduct and operation of the DMU and CMA.
New clause 27—Appointment of senior director of the DMU—
“The senior director of the Digital Markets Unit must be appointed by the Secretary of State.”
This new clause provides that the senior director of the DMU must be appointed by the Secretary of State.
New clause 28—Duty of the CMA: Citizens interest provisions—
“(1) The Enterprise and Regulatory Reform Act 2013 is amended as follows.
(2) After section 25(3) insert—
“(3A) When carrying out its functions in relation to the regulation of competition in digital markets under Part 1 of the Digital Markets, Competition and Consumers Act 2024, the CMA must seek to promote competition, both within and outside the United Kingdom, for the benefit of consumers and citizens.””
This new clause would give the CMA a duty to further the interests of citizens – as well as consumers – when carrying out its digital markets functions under Part 1 of the Bill.
Amendment 176, in clause 2, page 2, leave out lines 20 and 21 and insert—
“(b) distinctive digital characteristics giving rise to competition law concerns such that the undertaking has a position of strategic significance (see section 6).”
This amendment is linked to Amendment 182.
Amendment 206, page 2, line 25, after “Chapter” insert “, taking account of analysis undertaken by the CMA on similar issues that have been the subject of public consultation.”
This amendment aims to ensure that the CMA are able to draw on previous analysis on issues relevant to the regulatory regime.
Amendment 177, page 2, line 25, at end insert—
“(5) The CMA must publish terms of reference setting out a summary of the evidence base for making a finding of substantial and entrenched market power or of a position of strategic significance.
(6) The terms of reference must include a detailed statement of the competition law concerns arising from these characteristics and the relationship between the designated digital activity and other activities.
(7) Activities with no reasonable prospect of adverse competitive effects linked to digital activity must be referred to as unrelated activities and the terms of reference must expressly state that unrelated activities are not covered by the designation.”
This amendment would require the CMA to publish terms of reference summarising the evidence base for a finding of substantial and entrenched market power or a finding of strategic significance.
Amendment 178, in clause 3, page 2, line 28, after “service” insert “predominantly”
This amendment clarifies that the provision of a service predominantly by means of the internet would be a digital activity.
Amendment 179, page 2, line 34, leave out subsection (2)
This amendment is linked to Amendment 178.
Amendment 180, in clause 5, page 3, line 28, at end insert—
“(c) are not assuaged by evidence of competition arising beyond the activities of the undertaking, and
(d) demonstrate that the perceived market power will be improved compared with the scenario in which the designation does not occur.”
This amendment makes additions to the definition of substantial and entrenched market power.
Amendment 181, in clause 6, page 3, line 31, leave out “one or more of” and insert “both”
This amendment is linked to Amendment 182.
Amendment 182, page 3, line 33, leave out paragraphs (a) to (d) and insert—
“(a) significant network effects are present;
(b) the undertaking’s position in respect of the digital activity would allow it to extend its market power.”
This amendment changes the definition of the term “position of strategic significance”.
Amendment 183, in clause 7, page 4, line 17 at end insert “arising from the designated activities”
This amendment limits the turnover condition in relation to UK turnover to turnover arising from designated activities.
Amendment 184, page 4, line 19, at end insert “to account for inflation on the CPI measure”
This amendment ensures that the sums used to determine whether the turnover condition has been met can only be amended to account for inflation on the CPI measure.
Amendment 194, in clause 11, page 6, line 36, at end insert—
“(c) give a copy of the statement to those undertakings that have not been designated as having SMS that are most directly affected.”
This amendment ensures that challenger firms are able to access information about the regulatory framework on an equal basis to designated firms.
Amendment 195, in clause 12, page 7, line 9, at end insert—
“(5) As soon as reasonably practicable after giving a notice under subsection (2), the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 196, in clause 14, page 7, line 36, at end insert—
“(5A) As soon as reasonably practicable after giving an SMS decision notice, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 2 and 3.
Amendment 197, in clause 15, page 8, line 41, at end insert—
“(6) As soon as reasonably practicable after giving a revised SMS decision notice, the CMA must give a copy of the revised notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 4 to 7.
Amendment 193, in clause 19, page 11, line 15, at end insert—
“(9A) A conduct requirement must be imposed within 3 months of an undertaking being designated as having SMS under section 2.”
This amendment ensures that a time frame of three months is imposed for the CMA to enforce conduct requirements on designated SMS firms.
Government amendment 8.
Amendment 190, in clause 20, page 12, line 9, after “to”, insert “harm competition in the relevant digital activity or the other activity,”
This amendment would ensure that the CMA can tackle anti-competitive conduct in a non-designated activity, provided that the anti-competitive conduct is related to a designated activity.
Amendment 191, page 12, line 11, after “activity”, insert “, provided that the conduct is related to the relevant digital activity”
See the explanatory statement to Amendment 190.
Government amendments 9 and 10.
Amendment 192, in clause 25, page 14, line 7, at end insert—
“(e) whether to take action in accordance with Chapter 4 (Pro-competitive interventions) in respect of the extent to which it is complying with each conduct requirement to which it is subject and the effectiveness of each conduct requirement to which it is subject.”
This amendment would ensure that the CMA considers the efficacy of existing Conduct Requirements when considering whether to make Pro-Competitive Interventions.
Government amendments 11 and 12.
Amendment 198, in clause 26, page 15, line 3, at end insert—
“(7) As soon as reasonably practicable after giving a conduct investigation notice, the CMA must give a copy of the conduct investigation notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 187, in clause 27, page 15, line 8, at end insert—
“(2) The CMA may have regard to any significant benefits to users or potential users that the CMA considers have resulted, or may be expected to result, from a factor or combination of factors resulting from a breach of a conduct requirement.”
This amendment would ensure that the CMA considers any significant benefits to users resulting from the breach of a Conduct Requirement when it is considering representations from designated undertakings as part of a Conduct Investigation.
Amendment 199, in clause 28, page 15, line 20, at end insert—
“(5) As soon as reasonably practicable after giving a notice under subsection (2), the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 188, page 15, line 21, leave out Clause 29.
This Amendment is consequential to Amendment 187.
Government amendment 13.
Amendment 186, in clause 29, page 15, line 31, leave out subsection (c) and insert—
“(c) the conduct is necessary for the realisation of those benefits based on the best available evidence reasonably obtainable, and”
This amendment would change the circumstances in which the countervailing benefits exemption would apply.
Government amendment 14.
Amendment 209, page 15, line 37, at end insert—
“(4) The CMA may only consider that the countervailing benefits exemption applies if it has reached such a consideration within six months of the day on which the conduct investigation notice is given to the undertaking.
(5) In subsection (2), a “benefit” means any benefit of a type set out in regulations made by the Secretary of State in accordance with the procedure under subsections (6) to (9).
(6) The Secretary of State must, within six months of this section coming into force, lay before Parliament draft regulations setting out the types of benefit that apply for purposes of subsection (2).
(7) A Minister of the Crown must make a motion in each House of Parliament to approve the draft regulations within 14 days of the date on which they were laid.
(8) Subject to subsection (9), if the draft regulations are approved by both Houses of Parliament, the Secretary of State must make them in the form of the draft which has been approved.
(9) If any amendments to the draft regulations are agreed to by both Houses of Parliament, the Secretary of State must make the regulations in the form of the draft as so amended.”
This amendment would introduce a 6 month time limit on the duration of investigations into countervailing benefits claims, and specifies that the Secretary of State shall introduce further legislation for Parliamentary debate providing an exhaustive list of the types of countervailing benefits SMS firms are able to claim.
Amendment 200, in clause 30, page 16, line 13, at end insert—
“(4A) As soon as reasonably practicable after giving the notice, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 15 and 16.
Amendment 201, in clause 31, page 17, line 3, at end insert—
“(7A) As soon as reasonably practicable after making an enforcement order (including a revised version of an order), the CMA must give a copy of the order to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 202, in clause 32, page 17, line 35, at end insert—
“(6A) As soon as reasonably practicable after giving a notice under subsection (5), the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 203, in clause 34, page 18, line 36, at end insert—
“(4A) As soon as reasonably practicable after revoking an enforcement order, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 17 and 18.
Amendment 189, in clause 38, page 21, line 7, leave out “breached an enforcement order, other than an interim enforcement order” and insert “breached a conduct requirement”
This amendment would allow the CMA to initiate the Final Offer Mechanism after a Conduct Requirement of the type permitted by clause 20(2)(a) has first been breached, provided that the other conditions in clause 38 are met.
Government amendments 19 to 30.
Amendment 204, in clause 47, page 26, line 8, at end insert—
“(4A) As soon as reasonably practicable after giving a PCI investigation notice or a revised version of the PCI investigation notice, the CMA must give a copy of the notice to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Amendment 205, in clause 50, page 27, line 28, at end insert—
“(6A) As soon as reasonably practicable after making a pro-competition order, the CMA must give a copy of the order to those undertakings that have not been designated as having SMS that are most directly affected.”
See the explanatory statement to Amendment 194.
Government amendments 31 to 56.
Amendment 185, in clause 102, page 61, line 10, leave out subsections (6) and (7) and insert—
“(6) In determining an application under this section—
(a) for any application made within a period of three years beginning on the day on which this Act is passed, the Tribunal must determine the application on the merits by reference to the grounds set out in the application;
(b) for any application made thereafter, the Tribunal must apply the same principles as would be applied—
(i) in the case of proceedings in England and Wales and Northern Ireland, by the High Court in determining proceedings on judicial review; and
(ii) in the case of proceedings in Scotland, by the Court of Session on an application to the supervisory jurisdiction of the court.
(7) The Tribunal may—
(a) for any application made within a period of three years beginning on the day on which this Act is passed, confirm or set aside the decision which is the subject of the application, or any part of it, and may—
(i) remit the matter to the CMA,
(ii) take other such steps as the CMA could itself have given or taken, or
(iii) make any other decision which the CMA could itself have made;
(b) for any application made thereafter—
(i) dismiss the application or quash the whole or part of the decision to which it relates. and
(ii) where it quashes the whole or part of that decision, refer the matter back to the CMA with a direction to reconsider and make a new decision in accordance with a ruling of the Tribunal.”
This amendment changes for a three-year period the mechanism by which the Tribunal would determine applications for review.
Government amendments 57 to 67, 83 and 84, 106, 108, 111, 148 and 149.
Saqib Bhatti
I am honoured to have been appointed as the Minister with responsibility for tech and the digital economy, and as one of the Ministers with responsibility for the Digital Markets, Competition and Consumers Bill. When I was appointed last Tuesday, many helpful colleagues came up to me to say, “You have been thrown in at the deep end,” but it is a blessing to have responsibility for taking this legislation through the House.
In that vein, I thank my hon. Friend the Member for Sutton and Cheam (Paul Scully) for his tireless work to get the Bill to this stage.
I am aware of the importance of this legislation and the sentiment across the House to deliver the Bill quickly. The benefits of the digital market measures in part 1 of the Bill are clear to see. They will bring about a more dynamic digital economy, which prioritises innovation, growth and the delivery of better outcomes for consumers and small businesses. The rise of digital technologies has been transformative, delivering huge value to consumers and businesses. However, a small number of firms exert immense control across strategically critical services online because the unique characteristics of digital markets, such as network effects and data consolidation, make them prone to tip in favour of a few firms. The new digital markets regime will remove obstacles to competition and drive growth in digital markets, by proactively driving more dynamic markets and by preventing harmful practices such as making it difficult to switch between operating systems.
I turn now to the Government amendments. When the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) first stood in the House, he stated that the legislation would unleash the full opportunities of digital markets for the UK. That intention has not changed, and our amendments fully support that. The Government’s amendments to part 1 will provide greater clarity to parties interacting with the regime, enhance the accountability of the regulator and make sure that the legislation is drafted effectively and meets its aims. I will address each of those themes in order.
This new regime is novel. To maximise certainty, it is critical that its parameters—the scopes of the regulator’s functions and the rights and obligations set out in the legislation—are clear. Therefore, the Government have tabled a series of amendments to further clarify how the digital markets regime will work in practice. The amendments relate to how legally binding commitments provided by firms within the scope of the regime will work in practice, the Digital Market Unit’s ability to amend certain decision notices, and how in certain circumstances the DMU may use its investigatory and enforcement powers after a firm is no longer designated.
Two important sets of clarifying amendments are worth covering in more detail. The first relates to conduct requirements. Consumer benefit is a central focus of the digital markets regime. The DMU must consider consumer benefit when shaping the design of its interventions. To reinforce that central focus, we are clarifying how the DMU will consider consumer benefits when imposing and enforcing conduct requirements. Amendment 7 requires the DMU to explain the consumer benefits that it expects to result from a conduct requirement, ensuring transparent, well-evidenced decisions. Amendments 13 and 14 simplify the wording of the countervailing benefits exemption, while critically maintaining the same high threshold.
Sir Jeremy Wright (Kenilworth and Southam) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. Let me take the opportunity to congratulate my hon. Friend the Member for Meriden (Saqib Bhatti) on his appointment. Does he recognise that it is important to be clear—and for the CMA and the DMU to be clear—that there could be a conflict between the interests of current consumers and those of future consumers? Therefore, it is important that the interests of both are balanced in what the CMA and the DMU eventually decide to do.
Saqib Bhatti
My right hon. Friend makes an important point. As I make progress, I hope he will be reassured that the regime will take both those things into account.
Together, amendments 13 and 14 will make sure that consumers get the best outcomes. Amendment 14 makes an important clarification on the role of third parties in the final offer mechanism process. New clause 5 and related amendments will clarify when and how third parties may make collective submissions in relation to the final offer mechanism. That is vital, as collective bargaining can help to address power imbalances during negotiations. We expect that third parties, especially smaller organisations, may seek to work together when negotiating payment terms and conditions.
My second theme is the accountability of the regulator. The discretion afforded to the CMA and its accountability to Government and Parliament have formed a large part of the debate—quite rightly—during the passage of the Bill. I will take time to address that.
The digital markets regime is flexible in its design, with the CMA requiring a level of discretion to deliver effective outcomes. While that is common for ex ante regulation, that does not negate the importance of taking steps to maximise the predictability and proportionality of the regulator’s actions. For that reason, the Government are introducing an explicit requirement for the CMA to impose conduct requirements and pro-competition interventions only where it considers that it is proportionate to do so.
That will make it clear to firms in scope of the regime that they will not be subject to undue regulatory burdens. Firms will be able to challenge disproportionate obligations, and the Competition Appeal Tribunal will, in its consideration of any appeals, apply the principle of proportionality in a reasonable way, as it always does. To complement that, and to ensure consistent senior oversight and accountability of the regime, amendments 57 to 60 require enforcement decisions, including the imposition of penalties, to be reserved to the CMA board or its committee.
Damian Collins (Folkestone and Hythe) (Con)
I welcome my hon. Friend to his position, and congratulate him on his role. The Government amendments relate to the proportionality test for conduct requirements. Why did the Government feel that there was a need for those additional tests? Was there a concern that the CMA would use the power disproportionately, and if so, what might such a use have been?
Saqib Bhatti
I thank my hon. Friend for his contribution to the House on these matters, and for that question. The aim of the amendments is to provide clarity and give certainty—clarity that we will always ensure that the consumer is at the heart of what we do, and certainty because that is what business always needs. I will happily give further clarity in my closing remarks. To ensure robust oversight of the DMU’s implementation of the regime, we are also requiring that the Secretary of State approve the publication of guidance relating to part 1 of the Bill.
Rebecca Long Bailey (Salford and Eccles) (Lab)
On the issue of clarity, the Minister knows that the final offer mechanism should be an issue of last resort, and before that there should be a mechanism by which negotiations can take place. Can he assure the House that there will be a mechanism to ensure that big tech firms do not drag out negotiations unnecessarily, because it is not clear so far?
Saqib Bhatti
The whole mechanism is designed to ensure that smaller firms have a say in this. That is why the final offer mechanism is there. I hope that that that gives the hon. Member some reassurance.
Finally, the regime has the potential for significant financial penalties to be imposed, so we have tabled amendments to allow any party subject to a penalty to appeal decisions about the penalty on the merits, rather than on judicial review principles. An appeal on the merits allows the Competition Appeal Tribunal to consider whether it was right to impose the penalty, and to consider the penalty amount. Where appropriate, it also allows the Competition Appeal Tribunal to decide a different penalty amount.
John Penrose (Weston-super-Mare) (Con)
I join the queue of people congratulating the Minister on his new role, which is well deserved. I think that I am right in saying that any appeal against a fine from another economic regulator, such as Ofwat or Ofgem, is made to the CMA on the basis of the JR standard, yet we seem to be creating a different, and arguably more complicated, special deal for large tech platforms. Can he explain the Government’s thinking behind that?
Saqib Bhatti
I do not think that there is, as my hon. Friend puts it, a special deal; it is about taking a balanced approach to ensure that firms with penalty decisions that have less direct impact on third parties have the opportunity to challenge them, and take a view on them according to the regime.
John Penrose
The Minister is being very generous. I just want to understand why the approach differs from that taken in identical appeals by other companies against other economic regulators.
Saqib Bhatti
Given the huge size of the fines, it is only right that that approach is put in place to ensure the penalties are applied appropriately, but it does not apply to decisions that are not made by the CMA.
The regime has the potential for significant financial penalties to be imposed, so we are introducing amendments to allow any party subject to a penalty to appeal decisions about that penalty “on the merits”. An appeal “on the merits” allows the Competition Appeal Tribunal to consider whether it was right to impose the penalty and to consider the penalty amount. Where appropriate, it allows the Competition Appeal Tribunal to decide a different penalty amount. The DMU’s other decisions, including the decision as to whether a breach of the regime occurred, would remain subject to an appeal on judicial review principles.
Sir Jacob Rees-Mogg (North East Somerset) (Con)
I join in congratulating my hon. Friend on his appointment and on this very wise amendment. It is fundamental to the rule of law that people who are fined large amounts of money have some proper form of appeal; we must not put too much trust in unaccountable and unelected regulators.
Saqib Bhatti
My right hon. Friend is always a thoughtful contributor to debates in this House. We believe that the amendments ensure consumer benefit is at the heart of what we are doing and any appeals will be carried out appropriately. Adopting these amendments would bring the digital markets regime into closer alignment with existing CMA mergers and markets regimes, where penalty decisions can be appealed on the merits. As in those regimes, all other decisions are appealable on judicial review principles.
Sir Jeremy Wright
I thank my hon. Friend for giving way again. He will appreciate that we are all trying to get clarity, so we understand what the proposals really mean. In relation to the appeal standard that he describes, for cases that are not specifically related to fines, he mentioned the proportionality addition earlier in his remarks. When it comes to an appeal, are we right to understand that the question of proportionality applies when the CMA originally makes its decision to require an intervention and does not apply to the JR standard that is used to determine an appeal?
It is important to be specific about that, because there are those who would argue that proportionality should be a part of the appeal process. I think the Government amendments say that proportionality applies at an earlier stage and that when it comes to considering whether the CMA has behaved in a proportionate way in making its decisions, the assessment will be made by the Competition Appeal Tribunal on JR principles. Am I right about that?
Saqib Bhatti
I agree that that is exactly what we are saying. I am happy to provide further clarity in my closing remarks.
Critical to accountability is, of course, transparency. The Government are committed to transparency and bringing forward amendments that will require the CMA to set out its reasons for imposing or varying a conduct requirement. That will improve transparency around CMA decision making and increase consistency with other powers in the Bill where similar justification is required. It also reinforces the CMA’s existing responsibility to consider likely impacts on consumers when deciding whether and how to intervene.
The third theme is to ensure the legislation is drafted effectively. Therefore, we have tabled further technical amendments to ensure that the Bill’s text meets the Government’s original intended aim. They relate to the scope of conduct requirements, specifically the application of the materiality threshold contained in clause 20(3)(c), the maximum penalty limits imposed on individuals, the mergers reporting duty and the service of notices on undertakings overseas in certain circumstances.
It is worth noting that there are a small number of cross-cutting amendments contained in parts 5 and 6 of the Bill that will also impact the digital markets regime. I want to ensure that there is plenty of time for hon. Members to debate the Bill at this important stage in its passage. I appreciate a collaborative approach from across the House. I am sure that there will be many different views on some of the amendments, but I look forward to a constructive and collaborative discussion.
Alex Davies-Jones (Pontypridd) (Lab)
It is a true privilege to be back in the Chamber once again, on behalf of the Opposition, to open the third debate in recent months on Report stage of this incredibly important Bill. I welcome the Minister to his place: he is joining this brief at a very exciting time, and I look forward to working with him in the months ahead to get the Bill finally over the line. I pay tribute to his predecessor, the hon. Member for Sutton and Cheam (Paul Scully). We may not always have agreed on the detail, but I was always grateful for his collegiate and open-minded approach to getting the Bill to a good place, where it needed to be.
Margaret Greenwood (Wirral West) (Lab)
People often find it difficult to get out of internet provider contracts. They may spend hours on the phone, or communicating via a bot, and when they do get through to someone, that person tries to talk them out of what they are trying to do. It seems to me that it would be very straightforward to require providers to have on their websites a simple and prominent “cancel my contract” button, easily visible to anyone who is logged in. That, surely, would save people acres of time and a huge amount of frustration.
Alex Davies-Jones
My hon. Friend has made an important point about an issue faced by all our constituents who are struggling to get out of contracts that do not give value for money, and subscription traps, which we will discuss later this evening. These are issues that should have been dealt with in the Bill, and could have been had it been afforded parliamentary priority. Sadly, many opportunities have been missed and will need to be returned to, and we will be urging the Government to do that in due course.
The Conservatives have needlessly delayed the introduction of the Bill. Their focus on infighting and general chaos has prevented them from presenting suitable legislation. The Bill was first promised in Parliament more than a year ago, and since then, owing to Tory delay, we have fallen behind our European neighbours in this vital policy area. Failure to act against gatekeepers to access points in the digital economy—from web browsers to search engines, and from mobile operating systems to app stores and broadband contracts—is having a huge impact on business growth and consumer prices. Let us be clear: a failure to regulate and level the playing field is having a huge impact on consumers, who ultimately pay the price.
This is a complicated Bill, which has rightly received substantial coverage in the media since it was first published. It is only appropriate for me to begin my consideration of the first group of amendments by raising particular concerns about the Government amendments relating to the countervailing benefits exemption—notably, amendments 13 and 14. As we all know, the countervailing benefits exemption allows the Competition and Markets Authority to close an investigation of a breach of a conduct requirement if a big tech firm can demonstrate that its anti-competitive conduct produces benefits that outweigh the harm. These amendments change the test for the exemption from indispensability—a recognised competition law standard that ensures that a big tech firm cannot proceed with anti-competitive conduct without good reason—to an untested, potentially ambiguous standard. There is a danger that this new, untested standard could allow big tech firms to evade compliance and continue with conduct that harms UK businesses and consumers. They might also inundate the CMA with an excessive number of claims of consumer benefit, diverting its limited resources away from other essential tasks.
The Minister must be realistic. It is highly unlikely that anti-competitive conduct on the part of regulated firms will ever have a consumer benefit. The amendment creates an unnecessary loophole that Labour colleagues and I find very concerning. I would also be grateful if the Minister could clarify whether these amendments create a new legal standard that could allow regulated companies to evade compliance. There is also the question of how the amendments will protect the CMA from being inundated with claims of countervailing benefits from regulated companies. Labour is concerned by these amendments, and I therefore urge Members across the House to support amendments 187 and 188, tabled in my name, which seek to undo the Government’s mismanagement.
I will turn now to the changes in the appeals mechanism. The Minister knows about, and will have heard, the concerns of colleagues on the Conservative side—on all sides, actually—about the changes in the appeals process, as outlined in Government amendment 51 to 56. We have all heard the passionate calls from businesses that have risked their reputations and market share by sticking their heads above the parapet to warn of the risks of watering down the appeals process. It is testament to their hard work that we are at this point today.
As colleagues will be aware, the Government amendments would change the appeals process and standard for penalty decisions to full merits only. As we know, penalties such as fines are the most significant deterrent to prevent short message service firms from breaking the conduct requirements established by the CMA. Although timing—a key concern when considering the impact of full merits on other parts of the Bill—is not of paramount importance when it comes to fines, it is foreseeable that full merits appeals could allow SMS firms to reduce significantly the size of penalties, thus reducing their incentive to comply.
The Minister will come to learn that collegiate, sensible agreement has been a common theme as the Bill has progressed, particularly in line-by-line scrutiny in Committee. Indeed, we broadly welcome the Government’s decision to maintain the judicial review standard for appeals on regulatory decisions. Labour feels that will ensure that the Competition and Markets Authority has the tools to act and is not bogged down in complex, lengthy and costly legal wrangling, which would render the new regime completely ineffective.
However, the Minister must clarify how the amendments will not impede the CMA’s ability to keep pace with rapidly moving digital markets. The regulator must retain the flexibility to construct remedies that target the harms to UK businesses and consumers stemming from big tech’s dominant position in digital markets. Looking back on the contributions of the Minister’s predecessor in Committee, we were all assured with a level of certainty that there would be no changes to weaken the appeals process, so it is a frustrating reality to see yet another U-turn from this Government—sadly, we have all become more than used to their slapdash way of governing and making law.
As we know, introducing full merits appeals for all regulatory decisions would have allowed complex, lengthy and costly legal wrangling, which would render the new regime ineffective. It must therefore be clarified that the Government’s amendment allows full merits appeals only for the level of the fine and for the decision to issue a fine. It must not permit a review of the CMA’s decision to create a conduct requirement or implement pro-competitive intervention, or of the CMA’s decision on whether a conduct requirement has been breached and how to remedy that breach. I would therefore be grateful if the Minister clarified exactly whether that will be the case.
I am conscious of time so I will push the Minister to clarify a number of important points. Government amendment 64 gives the Secretary of State the power to approve CMA guidance, which will be critical to regulated firms, particularly on how they should comply with the conduct requirements placed upon them. What is unclear is when and how, and in what timeframe, guidance must be submitted to the Secretary of State. I know that many of us would be grateful for some straightforward clarity from the Minister on that issue.
Lastly, I am keen to highlight Labour amendments 194 to 196, tabled in my name, which aim to improve the consultation rights of challenger firms. Under the current drafting, firms with strategic market status will have far greater consultation rights than those that are detrimentally affected by their anti-competitive behaviour. The amendments would give third parties the ability to provide critical information for the CMA’s consideration, and feedback on its work. That is vital, particularly for challenger companies whose growth may see them captured by the regime at a future point. I hope that the Minister will consider the merits of introducing similar amendments in the other place. He would have widespread support from colleagues across the House if he were to go ahead and do so.
We have heard the concerns of Members across the House about how the changes have been implemented, so I urge the Minister to listen carefully to the debate as it progresses and to do the right thing by working collegiately for the benefit of good legislation.
Sir Robert Buckland (South Swindon) (Con)
In rising to address the House, I draw Members’ attention to my entry in the Register of Members’ Financial Interests: I am an independent adviser in a collective action being brought in the Competition Appeal Tribunal for alleged anti-competitive behaviour relating to cryptocurrency. Although I will not address my remarks to any part of the Bill that might be perceived as relevant to the funding of litigation relating to such actions, I thought it right to be comprehensive in my declaration.
I wish to couch my remarks in this way: I am a firm supporter of the need to provide effective regulation in a market that is vulnerable—and, some would say, prone—to monopolistic abuse of market power. It is clear that regulation is not only desirable but essential when it comes to representing the interests of the consumer, and that is the place from which we all need to start.
In the sturm und drang that has accompanied some of the coverage of the Bill, it is perhaps inevitable that focus has been placed on the interests of one sector, as opposed to those of another—the large-scale enterprise against the small start-up. In all that, we risk forgetting the essential truth of why we are legislating in this way, which is first and foremost to ensure that any regulator is working in the interests of the consumer. My amendment deals precisely with that issue, by imposing an overarching and paramount duty on the regulator, and indeed the courts, to serve the interests of the consumer. Accompanied with a duty of expedition, that underlines the thrust of why I have decided to speak in this debate and to table amendments. Much needs to be done in the process of dealing with competition issues, which of course means the operation of the CMA and the Competition Appeal Tribunal. This debate—indeed, this whole process—can be a moment for us to reflect, and to take action and ensure that the way such disputes are dealt with in future will be more efficient, more speedy and in the interests of the consumer.
Ex-ante regulation is very difficult; it is all about predicting the future. Indeed, I am glad to see my hon. Friend the Member for Folkestone and Hythe (Damian Collins) in the Chamber. He followed that market very carefully and knows its ever-changing nature. It is difficult to predict what the world will look like in six months, let alone in five years. It is right to remember that the basis of the Bill, and of today’s debate, goes back four years to the Furman review, which rightly set out the parameters that have led to the development of this much-needed legislation.
In one respect, the review has been somewhat prayed in aid in a way that is potentially misleading. Recommended action 12 of the Furman review speaks about the ability of an affected company to appeal a decision—this is relevant to amendment 185 to clause 102. The review states:
“To facilitate greater and quicker use of interim measures to protect rivals against significant harm, the CMA’s processes should be streamlined.
The ability for an affected company to appeal a decision or an interim measure is a vital safeguard of their rights, and a check on the quality of CMA decision-making. Appeals processes need to strike a balance between protecting those affected by any unjustified decision and ensuring that CMA powers can be exercised effectively to protect those who would be left exposed by underenforcement or undue delay.”
It goes on:
“The competition framework would be improved for digital markets by focusing appeals on testing the reasonableness of CMA judgement, that procedure has been appropriately followed, and that decisions are not based on material errors of fact or law—a standard more closely relating to that of judicial review.”
As I read it, that is an invitation to ensure that there is not a completely unbridled merits-based approach. It is a world away from suggesting that somehow, in this world of ex-ante regulation, we should be immediately narrowing down the options of any court or applicant relating to potential claims on merit.
Ex-ante review work is not easy, but it is not unprecedented in United Kingdom regulation. We have had telecoms regulations for a long time, with the work of Ofcom in policing that. In that area, for a long time the decision making and the appeals process were allowed to be based on merit, before a reversion or a narrowing down to judicial review principles. Indeed, that was laid out for a long time—much longer than the period I envisage in my amendment—in order to reflect the importance of achieving maximum clarity as early as possible. I do not want to see anything that creates uncertainty in this market, because that will lead to a lack of investment, and perhaps a reduction of the sorts of investments that we want to see domestically and internationally in this important and vital market for the future of our British digital services industry.
Sir Robert Neill (Bromley and Chislehurst) (Con)
My right hon. and learned Friend is making an important and eloquent speech. Can I emphasise the point that he makes about certainty, and return to the intervention by my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright) about the importance of having clarity on what the test will be and at what stage it applies? We all understand proportionality tests, and we certainly all understand classic judicial review tests, but it is important in this emerging market that people know at which stage which test applies. I appreciate the Minister saying that he will clarify that later in his speech, but I am not sure that the wording proposed by the Government gives us that clarity. Will my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) consider what more needs to be done around that?
Sir Robert Buckland
What my hon. Friend outlines is precisely what we are seeking. In making these arguments, we are not in some way the friends of big tech; we are not here to represent a particular sectoral interest. My amendment was drafted by me and by senior counsel from Monckton Chambers, including Philip Moser KC, who regularly appears both for and against big tech in these matters. I thought it right to seek some independent pro bono advice on the operation of competition law to make sure that, in developing the law in this way, we do not create entirely untested mechanisms that would—guess what?—require litigation to clarify.
The point is that we should be seeking to minimise more interpretive language that will require to be tested in the courts. That is why I take slight issue with what was said by the hon. Member for Pontypridd (Alex Davies-Jones), whom I respect very much. In amendment 186, I seek to replace the word “indispensable” with “necessary”, because I think that is a much clearer term that everyone would understand and that would, in itself, be a high threshold for the affected company in demonstrating consumer benefit in the countervailing consumer benefit test.
I think that, rather than trying to use and develop new language, we should look back and learn from the experience of telecoms regulation. One of the problems in, in effect, handing considerable power to the new digital markets unit is that the legal landscape relating to this activity is unformed. Unlike the landscape that underpinned the Competition Act 1998, we do not have the advantage of years of EU and UK court interpretation that was then applied by guidelines issued by the CMA.
Grahame Morris (Easington) (Lab)
The right hon. and learned Gentleman is articulate in presenting the case and knowledgeable about the issue, but may I distil it down to an issue of fairness that everyone can understand? Before our very eyes, the landscape is changing. Long-established titles, newspapers and publications are disappearing and retrenching. Thousands of journalists are losing their jobs. Is it not a matter of basic fairness that people who create the content should be properly compensated?
Sir Robert Buckland
The hon. Gentleman is right to make that point. That is why in other jurisdictions we have seen agreement reached between big tech and newspaper titles to ensure that there is that element of fairness. I agree with him; I want to see similar fairness and equity applied across the market. What I and others who agree with me are trying to do is to ensure that, in creating this brave new world of energetic and efficient regulation, we do not as a Parliament upset the balance by giving too much power to a particular regulator. A lot of us in this place have watched with concern the failure of other types of regulation—in our water industry or our energy industry, for example. I do not think anybody would deny that, at times, we have got regulation wrong. That is why it is important that we have this debate.
There are people outside this place who have put pressure on us by saying, “The Bill is in perfect order. There is no need for you to look at it any more; great minds have thought about it.” I say to them that it is for this place to make those decisions. I do not look kindly on comments made by the chief executive of the CMA about the merits of what this place is considering while the Bill is in Parliament. I absolutely accept the independence of the CMA and the important role that it plays, but we should not confuse independence with lack of accountability. That is a point that I will warm to in a little while, when I address the relationship between regulators—in this case, the CMA—and Parliament. At the moment, that relationship is wholly inadequate.
I was making the point that, unlike the Competition Act 1998, there is a relative lack of worked-out court interpretation of this Bill’s subject matter. That has led to distinguished commentators—no less than Sir Jonathan Jones, former Treasury counsel—making the point in evidence to the Committee that, in effect, the DMU would be able to decide who was going to regulate, set the rules that apply and then enforce those rules. The phrase “legislator, investigator and executioner” was used. While that is colourful language—perhaps too colourful for a dry debate about competition law—it is important that we reflect on the view of that former Treasury solicitor and be very careful that in going down this road, we are not making false comparisons.
A lot has been said about Ofcom and its decisions, and comparisons have been made, but we must not forget that those Ofcom decisions were heavily governed by EU framework directive 2002/21. Article 4 of that directive says that on ex-ante telecom appeals,
“Member States shall ensure that the merits of the case are duly taken into account and that there is an effective appeal mechanism.”
That is a bit different from the provisions in the Bill. A simple JR-type review is precisely that, and no more.
I listened with interest to the intervention made by my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), who made a really good point that needs answering. We need to understand where proportionality comes into this. If the principle of proportionality is being used in the first instance, that is all well and good, but we need to understand how that fits with the provisions of the Bill: whether it implies that the courts deem every decision made by the DMU to be proportionate, or whether there is a way to challenge a particular decision by saying that it was not made according to the DMU’s own principles, acting in a proportionate way.
Sir Jeremy Wright
It seems to me—I would be interested in my right hon. and learned Friend’s view—that on the basis of the Government’s proposed wording, it is more likely that a firm will be able to challenge whether the CMA has applied its proportionality test appropriately, but the means by which it will do so will be under JR principles on appeal, rather than on a merits basis. It is not that proportionality is not subject to challenge, but that that challenge is limited by JR principles at the appeal stage. Does my right hon. and learned Friend agree?
Sir Robert Buckland
That is what we need to bottom out. The primary worry that a lot of us have about the JR principle is that it means that any challenge will probably be vanishingly small, which is not good for ensuring that the regulator is working in the best way. None of us wants to encourage incontinent litigation—or incontinent legislation, bearing in mind the importance that we place on it—but sometimes, challenge is essential to create greater certainty. There will be ambiguities; there will be occasions where there needs to be a test. We should not be frightened of that.
Damian Collins
I am following what my right hon. and learned Friend says carefully. Does he agree that we have to consider the nature of this business landscape? For these firms—some of the biggest companies in the world—litigation is a cost of doing business. Their track record shows that they use almost all grounds there are to challenge any decision made by any regulator. Not even a regulator is resourced sufficiently to be able to contest those challenges, and the people who seek to bring them know that they will take years and cost a huge amount of money, and that the business may even be closed by the time a resolution has been found.
Sir Robert Buckland
I fully take on board my hon. Friend’s concern. He is right to say that, which is why this should not just be about what might happen in terms of raw dispute; it has to be the culture of the new regulator to work with any potential subject—any company that might be a subject of an investigation—in a co-operative way. That raises the issue of how open the parties are with each other about the basis of their assertions and of how data is shared—that goes right into the Competition Appeal Tribunal itself. A lot of people would be surprised that the disclosure rules in the CAT are not as open as one would expect them to be if one is challenging a decision. We have to work our way through that, in order to change that attitude and reduce the amount of potential litigation by making sure that there is agreement.
I accept that the Government have moved on the JR test with regard to penalty, but a potential problem could result from the Government’s amendment on that: there will not be a change of culture, there will be a readiness by big tech to admit breach and then all resources will be thrown into contesting the penalty. There we will get the litigation, the real argument and the high-stakes money. To paraphrase my hon. Friend, we will get the actuarial calculation that it would be worth throwing a lot of money at litigation to reduce a penalty that could be a big percentage of turnover. We are potentially talking about huge penalties for these companies.
That issue does worry me and I hope that it demonstrates to the House why I am properly sensitive about the need to make sure that we do not just open the door to abuse by another means. I am a huge follower of Theodore Roosevelt and a great believer that his approach to fighting the J.P. Morgans and the Standard Oils of his day is exactly how we should operate in the monopolistic markets of today and tomorrow. My hon. Friend is right to say that this market is fast developing. When the Furman report was produced, we were looking at a different world in big tech. With the rise of artificial intelligence, we are seeing it evolve further.
Damian Collins
I am grateful to my right hon. and learned Friend for giving way, particularly as we are on the subject of Theodore Roosevelt. Does he agree that we have to be careful when considering consumer detriment in this case? The argument was not successfully made in the United States that J.P. Morgan could say that he may have a railway monopoly but the ticket prices were relatively low and so there was no consumer detriment. That was not considered to be a binding argument, so because the cost of an app in an app store might be low, that does not mean to say that the company can get away with overcharging.
Sir Robert Buckland
Again, I am grateful to my hon. Friend. He is right: there is a danger that in regulation we focus on the cost of the good or service, rather than on the overall environment and quality of the market. Some would say that that has been a particular issue in the way that regulation has operated in the water sector. That is why this is a good moment for all of us, as a House, to pause and reflect on where we have gone wrong with regulation in the past and how we can get it right from here on in.
There are some options the Government can look at when dealing with the JR standard. I have mentioned the importance of making sure that there is accountability, but we should not just be looking at the sunset option that I have set out in my amendment; we should look again at whether the clarification of the proportionality test could help everybody to understand precisely how the JR principles will work. If we miss the opportunity on this occasion to get this right, I am not sure we will be doing anybody any favours, least of all the consumer and especially not the DMU itself, which needs to develop in a way that is truly accountable.
The thrust of some of my amendments relates to the regulator’s accountability to this place, which is why they include a requirement to report regularly to Parliament and to Ministers. New clause 12 relates to the appointment of the senior director of the DMU, which I think should be done directly by the Secretary of State. That is not a challenge to the independence of the body; Ministers regularly appoint independent directors and inspectors, for example, and it does not undermine the integrity and quality of their role. However, through those amendments I am seeking to make the case that we should not confuse independence for lack of accountability. I do not use that word as a way of avoiding a greater accountability to this place.
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
Order. I have to get five more speakers in, plus the Minister. As the right hon. and learned Gentleman will shortly have been on his feet for nearly 25 minutes, this is just a quick reminder that he needs to give others time to speak.
Sir Robert Buckland
Of course. I have just cleared my throat, Madam Deputy Speaker, and by my standards this is a very short speech.
I will deal in summary with the other amendments. What I am seeking with those amendments is to ensure that, in using definitions, we do not end up creating mission creep for the DMU. I want the DMU to focus on the emerging digital economy; I do not want it to end up dealing with, for example, supermarkets such as Tesco, which will increasingly use online services to allow customers to shop. I do not think that is the intention of those proposing the Bill, but we need to make it clear in the Bill that that sort of mission creep will not be part of how the regulator develops.
I also want to make the point that, when looking at entrenched market power, focusing purely on size can sometimes be deceptive. Rather small enterprises can often have a disproportionate effect on a market. They do not necessarily need to be big. While we rightly understand that generally the bigger the entity or organisation, the bigger the impact it has, it is not always the elephant that makes a difference; it is sometimes the mouse. That is why focusing on market power rather than size is a better way of dealing with effective regulation.
In summary, I want to hear from my hon. Friends on the Front Bench a response to the challenges that I have laid out. I do not seek to press the amendments to a vote this evening, but I am sure that they will be returned to in the other place. Surely it is in the interests not only of the people we serve, but of the wider British economy that in passing such pioneering legislation, which in many ways puts Britain in a different place from other jurisdictions, we do not end up disincentivising the sort of investment that I know is part of the Prime Minister’s aspiration to make this country a world leader in artificial intelligence and machine learning safety and a place where digital businesses will want to invest. It is as simple as that. That is why it is vital that in this Bill we strike as perfect a balance as we can, because in this complex, ever-changing market it is very difficult to predict what the future will be.
Richard Thomson (Gordon) (SNP)
My party broadly welcomed the Bill at its introduction and through Committee, and broadly speaking we still do. However, for our liking there remain too many gaps in consumer protection. The Bill does not include an equivalent to the EU’s consumer rights to redress when consumers are misled, and it does not baseline the protections that we had previously, which we think is a serious omission. Many consumers found that to their cost when their travel arrangements went haywire through chaos at the channel ports over the summer.
The Bill does not do enough to tackle greenwashing. As we have heard, there is a systemic failure to tackle drip pricing and subscription traps. We are also still unclear about how the Government intend to tackle the scourge of fake reviews; although secondary legislation could be introduced, the scope of the sanctions that could be brought to bear against the perpetrators would inevitably be restricted.
Rather to my surprise, we have 175 Government amendments to the Bill. That seems rather a lot to be bringing in. It can be gently elided over that this is a Government who have been listening carefully to all the arguments put, but, to be perfectly honest, I think it shows that this has become something of a Christmas tree Bill. It would have been better to have had much more parliamentary scrutiny in Committee of some of the things we now find coming in, no matter how well-intentioned they are.
A number of amendments to the Bill do cause me concern, including the series of amendments that changes the mechanism for appealing the Competition and Markets Authority’s decisions. In our view, Government amendments 6, 7, 10 and 30 will water down the Bill’s effectiveness, allowing tech companies described under the Bill as the most powerful firms and dynamic digital markets to be able to challenge the CMA’s decisions if they do not believe that they are proportionate.
Government amendments 51 to 53, 55 and 56 also have that effect, since they will prevent certain appeals by big-tech firms of decisions made by the CMA from being held to the judicial review standard. I am unpersuaded by the arguments that we have heard so far about that. We fear that, in practice, when a decision is taken that is not, for whatever reason, to the liking of big-tech companies with rather large budgets—to take one entirely at random, we have Apple, which makes profits and turnover yields that are bigger than most countries’ GDPs—they will inevitably be able to tie those decisions up in the courts for quite some time, all the while being able to secure whatever advantage they had which the CMA had judged they got unfairly. The CMA has warned that changing the appeal mechanism could lead to such a set of drawn-out legal battles and quite an adversarial relationship with the firms that it seeks to regulate, which I would venture is far removed from the Bill’s original intention.
It is unusual that I should ever pray in aid the other place in a political argument, but last month the House of Lords Communications and Digital Committee called on the Government to maintain the JR standard for all appeals. It is therefore worrying, if not entirely surprising, that the extensive lobbying that some of the bigger tech companies have subjected us to seems to have found the ear of the Government.
If the UK Government’s amendments 6, 7, 10 and 30, which seek to allow firms with strategic market status to appeal against CMA decisions, are accepted, that will essentially undermine the CMA’s job and ability to protect consumers. Those amendments would allow big tech firms to appeal against decisions taken by the regulators on significant issues such as blocking mergers and issuing fines simply on the basis of their feeling that they may not be proportionate. As I say, they can certainly afford to spend huge amounts of money on legal representations to quibble with these decisions, particularly if the fines or deprivation of the opportunity to make lots of money mean that they feel it is worth spending that money whatever the eventual chances of success are.
This is in addition to the letter that Baroness Stowell wrote to the PM last month warning that the UK Government must not “undermine” the Competition and Markets Authority, noting that these amendments would
“favour those with an interest in delaying regulatory intervention”
and give greater power to avoid scrutiny to the tech firms
“with the greatest resources”.
The UK Government should not be ignoring these warnings, and we believe that this is a detrimental addition to the Bill. This position was also backed up by Which? in April last year. In our view, these amendments show that the Government have done the exact opposite of sticking to their guns on this.
I am mindful of the time—as are you, Madam Deputy Speaker—so I shall come to the amendments that I believe we will be voting on later. Labour amendments 187 and 188 would enable the Competition and Markets Authority to consider any significant benefits, due to a combination of factors, that might result from a breach of the conduct requirement. We think that strikes a reasonable and fair balance on where we would like the outcomes to be, and should the amendments be pressed to a vote, the SNP will be supporting them.
Damian Collins (Folkestone and Hythe) (Con)
Listening to this debate, I was reminded of remark attributed to a major United States tech investor who said that it had always amused him that people thought competition and capitalism were the same thing. While competition can be a great driver of economic growth, the acquisition of capital and the creation of new markets, there are equally plenty of capitalistic enterprises that have grown wealthy on the back of a lack of competition, through market domination. That is why this legislation is so important.
Superficially, it is tempting to look at the landscape of the digital economy and say that the fact that there are a number of very big companies is evidence of effective competition between those companies. Those companies, including Amazon, Apple, Google and Meta, may compete for the provision of some services, but they largely dominate markets where they are the central player. We have heard throughout the passage of the Bill that even major businesses seeking to sell their goods through, say, Amazon as an online retail platform cannot afford to have a public dispute with that platform, because their relationship with that company is fundamental to the success of their business. Major publishing companies have talked about the fact that contract renegotiation with companies such as Amazon can come with big costs attached, but that ultimately they have to do business through them.
Cloud storage, which is currently an area of investigation for the CMA, is going to be a vital piece of business infrastructure for anyone who operates in the digital economy, but again, it is dominated by one or two companies, principally Google and Amazon. There are only two operating systems for our mobile phone devices. One is Android, which is owned by Google; the other is Apple’s iOS system. They both have app stores, and there is a lack of interoperability between them. We therefore have app store markets that are actual monopolies. This has been investigated by the CMA and it has billions of pounds of consumer detriment in overpricing and variable pricing attached to it.
We know that these anti-competitive forces exist. In its recent ruling on the proposed Microsoft-Activision merger, the CMA was right to highlight that if a company that creates video games that people like to play is allied to a cloud system owned by a dominant company, people might only be able to access the service if they pay that cloud provider—the storage gatekeeper or guardian of that service—which could have consumer detriment down the line.
We are already seeing examples such as market domination and self-preferencing. Google has been investigated by the European Commission over self-preferencing. This is where companies are not just creating an easy-to-use service across multiple products for people, but doing so in a way that excludes others from that market. In the long run we must be concerned about the consumer detriment of market power being consolidated into the hands of a relatively small number of companies. An example that Members will probably all be familiar with is the mobile mapping app market. It used to be quite a vibrant market with a number of players in it, but it is now largely dominated by two, Google and Apple. That is not to say that the interest of companies is always against the consumer interest, but we should be mindful of the fact that in many of these markets, monopolistic conditions can easily be created, so we should be concerned about abusive market power. There is already some evidence of that.
Grahame Morris
I, too, welcome the new Minister to his place and congratulate him on his appointment. We all recognise that this is important, long-overdue legislation, so I wish him well in piloting it through the House. I also declare an interest: I am co-chair of the all-party parliamentary group for the National Union of Journalists. I receive no pecuniary advantage, directly or indirectly, and the NUJ is not affiliated to the Labour party or any other party, but it none the less makes some valid points, which I wish to raise today.
We face immense challenges and significant technological changes in the UK, and indeed globally, given the development of social media and the increasing use of artificial intelligence. In an era of fake news, there are few sources of news trusted more than our national, regional and much-loved local titles, which have stood the test of time and have deep roots in our communities. I have participated in a number of debates on the subject in Westminster Hall, and debates on the decline of our local newspapers and the need to support them are always over-subscribed.
It is important to be aware that professional journalism in the UK is in crisis. Reach PLC, the publisher of titles including The Mirror, the Daily Star and the Manchester Evening News, has announced a third round of redundancies, putting at risk as many as 800 journalist jobs. If we do not find means of fairly compensating established publishers and trusted sources of journalism, we will suffer from a less diverse media landscape, job losses, and the promotion of voices delivering fake news guided by hidden agendas.
Big tech continues to exploit its market dominance in digital advertising; it uses news content from professional journalists without giving any payment or compensation to the publishers who produce the content. This Bill is a positive step, which I welcome. It is welcomed by the NUJ, journalists and publishers. A functioning media market requires regulators to address the power imbalances that have emerged between major tech companies and the journalism industry in recent years.
Our established news titles and publishers are essential to democracy; they scrutinise Government and contribute to an informed society. Their content is being used to generate revenues for tech giants. They—the creators—must be guaranteed a fair share of revenues. Without quality news content on online platforms, the overall standard of information that we all consume will decline. It is in the collective interest of our Government, of all citizens of the country, and even of major tech companies to ensure the continued presence of quality journalism. That is relevant to the part of the Bill that allows the Competition and Markets Authority to initiate a final offer mechanism, which was referred to by my hon. Friend the Member for Pontypridd (Alex Davies-Jones)—I support Opposition amendments 187 and 188 for the reasons she gave. The final offer mechanism must be used only as a last resort, and not by big tech companies to bypass meaningful negotiations.
I also wish to reinforce the point made by my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey): meaningful and fair negotiations are vital if big tech companies are not to continue to exploit the current power dynamic, and place undue influence on smaller publishers in a way that does not recognise the true value of the original content that they produce. British journalism is valuable, and its value is quantifiable. News content used by tech giants is estimated to be worth around £1 billion a year in the UK. That revenue is essential to the health and wellbeing of professional journalism in the UK.
I welcome the stance of the House of Lords Communications and Digital Committee on the timely implementation of the Bill, and its recommendation that the Government
“resist pressure to weaken some of the Bill’s measures”.
I also echo what the NUJ and the News Media Association say about maintaining the option of judicial review for appeals against regulatory decisions.
Government amendments must be clarified—a number of Members, including my hon. Friend the Member for Pontypridd, have asked for this—to ensure that the Competition and Markets Authority can retain the flexibility to construct remedies for problems that arise, and to keep up with rapidly changing digital markets, especially when big tech has such a monopolistic position.
I urge the Minister to uphold a high threshold for exemption from penalties when tech firms breach the rules, so as to prevent misuse of exemption provisions by well-funded companies that employ expensive legal teams. The example of Everton Football Club comes to mind. It seems to me—not that I am an expert in these matters—that it is being heavily penalised. Other football clubs in the premier league that seem, on the face of it, to be guilty of far greater abuses have managed to avoid the penalties. It is crucial that we eliminate loopholes that could be exploited by big tech.
Whether we like it or not, people consume a lot of their news from the big tech giants. Research conducted by Ofcom found that Facebook is the third most popular place to consume news; a higher proportion of people go there than to the BBC or Sky News channels. Meta recently discontinued Facebook News in Europe, and that has a potential impact on news consumption. With almost half of news consumers relying on social media, it is imperative to ensure fair compensation for quality content on social media platforms.
Looking ahead, the NUJ seeks extensive engagement with the Government—I hope that the Minister will respond to this—on safeguarding the future of journalism, and on recognising the multi-faceted threats that it faces, including from emerging technologies such as artificial intelligence. It is imperative that this legislation quickly progress through Parliament, so that we can safeguard the integrity of UK news titles and publishers, and protect them from undue influence from big tech lobbyists who wish to water down much-needed reforms.
Sir Jacob Rees-Mogg
I am delighted to support the amendments in the name of my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland). It is important to get the balance right, and not to worry too much about phantasms and fears that will not arise. It is worth recalling that, in the 1970s, the Federal Trade Commission was on the cusp of opening an investigation into IBM for its monopoly in typewriters. Technology is changing so rapidly, and an over-zealous regulatory mechanism is more likely to damage and hold back innovation than advance it.
Think of the names that have come and gone over the past few years. Who now has a BlackBerry? We once again think of blackberries as a fruit, rather than a mechanism for communicating. Or a Nokia telephone? In the 1980s, Nokia made Wellington boots. It is probably now back to making them, as its telephone has come and gone and been overtaken. That is the thing about the sector that we are looking to regulate: there is competition in it. It is not necessarily a competition for market share at any one time; it is a competition of technology that is evolving faster than people are able to deal with it.
There is in the Bill a touching faith in the competence of regulators, which I do not share. The CMA, to which we are about to give significant powers, has made a fool of itself this year—and not just a little. It has been made a global laughing stock by its Microsoft Activision Blizzard ruling, in which it blundered. It got it wrong; all the other regulators in the world did something else, and the CMA had to back down. The story was—this is quite important—that the CMA was doing the work of the FTC, but the FTC had to meet a higher legal standard and therefore encouraged the CMA to make the bid more difficult, because it thought that the UK law would be easier to work around than US law. That is why the amendments on the judicial review standard are so important. I would be in favour of a full merit standard. I think it is very peculiar that the Opposition, who are always happy to go to court to obstruct the Government at any opportunity—to obstruct the Government in carrying out the will of the British people, or to obstruct the Government when decisions are made by accountable Ministers—want unaccountable, unelected bureaucrats to have arbitrary power, which I do not want them to have. I want them to be able to operate according to merits.
Sarah Olney (Richmond Park) (LD)
The Liberal Democrats welcome many aspects of this Bill. We are pleased that the Government are finally acting on the Competition and Markets Authority’s recommendations in bringing forward measures to prevent the tech giants from putting our digital sector in a stranglehold. We want to see a thriving British tech sector in which start-ups can innovate, create good jobs and launch innovative products that will benefit consumers. A strong competition framework that pushes back on the tech giants’ dominance is essential for that.
For too long a small number of big tech firms have been allowed to dominate the market, while smaller, dynamic start-up companies are too often driven out of the market or swallowed up by the tech giants. New rules designed by the CMA will ensure that these large companies will have to refrain from some of their unfair practices, and they give the regulator a power to ensure that the market is open to smaller challenger companies. The Liberal Democrats are pleased to see changes to the competition framework, which will allow the CMA to investigate the takeover of small but promising start-ups that do not meet the usual merger control thresholds. This change is particularly important for sectors such as artificial intelligence and virtual reality while they are in their infancy. The benefits of these changes will filter down to the end users, the consumers, in the form of more choice over products and services, better prices and more innovative start-ups coming to the fore.
While we are glad that most of the CMA’s recommendations are in this Bill, we have concerns about certain aspects, such as the forward-looking designation of SMS firms and the definition of countervailing benefits that SMS firms are able to claim. The countervailing benefits exemption allows the CMA to close an investigation into a conduct breach if an SMS firm can demonstrate that its anti-competitive practices produce benefits for users that outweigh the harms. There is some concern that big tech may seek to exploit this exemption to evade compliance with conduct requirements and continue with unfair, anti-competitive practices. It could also create scope for tech firms to inundate the CMA with an excessive number of claims of countervailing benefits, diverting the CMA’s limited resources away from essential tasks. Amendment 209, tabled in my name, seeks to strengthen the Bill and to curtail the power of large tech firms to evade compliance by tightening the definition in the Bill of what kind of benefits are valid.
The Liberal Democrats also have concerns about several of the Government amendments, particularly those relating to the appeals standard, as they risk watering down some of the CMA’s most powerful tools. There is now a real danger that powerful incumbents will use their vast resources to bog down and delay the process, leaving smaller competitors at a disadvantage. These amendments show that the Government are taking the side of these established firms at the expense of smaller, growing firms, and at the expense of economic growth and innovation as a whole.
The Liberal Democrats are keen to ensure that big tech is prevented from putting the British tech sector in a stranglehold. We hope that the Government will be robust on the defensive measures in the Bill. It is important that they reject any attempt to water down or weaken this Bill with loopholes, and that they ensure there is no ambiguity that could be exploited. Although competition is crucial for Britain’s tech sector, we hope the Government also move to tackle some of the fundamental issues holding it back, such as the skills gap, the shortage of skilled workers and weak investment.
Saqib Bhatti
With the leave of the House, I would like to address some of the points that have been made today.
I am grateful to Members across the House for their contributions to this debate and, of course, throughout the development of this legislation. I am similarly grateful for the cross-party support commanded by the digital markets measures. Members will find that I agree with points raised on both sides of the House, and I am confident that this Bill addresses those points.
I thank the hon. Member for Pontypridd (Alex Davies-Jones) for kindly welcoming me to the Treasury Bench, for her amendments and for her commitment to getting this legislation right. She asked about the countervailing benefits exemption, and I reassure her that the wording change maintains the same high threshold. SMS firms must still prove that there is no other reasonable, practical way to achieve the same benefits for consumers with less anti-competitive effect. This makes sure consumers get the best outcomes, whether through the benefits provided or through more competitive markets.
The hon. Lady also asked about appeals, and it is important that decisions made by the CMA can be properly and appropriately reviewed to ensure that they are fair, rigorous and evidence-based. We have considered strong and differing views about appeals from a range of stakeholders, and judicial review principles are the appropriate standard for the majority of decisions under the regime, as we have maintained with the additional clarification on the DMU’s requirement to act proportionately. We have, however, aligned the appeal of penalty decisions with appeals under the Enterprise Act 2002, so that parties can challenge these decisions on their merits to ensure that the value of a penalty is suitable. Penalty decisions have less direct impact on third parties, and the amendment will provide additional reassurance without affecting the regime’s effectiveness.
The significant changes we are making will provide more clarity and assurance to firms on the need for the DMU to act proportionately. They also bring the regime in line with the relevant CMA precedent. Parties will have greater scope to challenge whether the interventions imposed on them are proportionate or could have been achieved in a less burdensome way. When financial penalties are imposed, parties will have access to a full merits review to provide reassurance that the value of the fine is appropriate.
The hon. Lady also asked about the implementation of guidance, and I can assure her that we are working at pace to ensure the regime is operational as soon as possible after Royal Assent. Guidance must be in place for the regime to go live, and the Government will be working with the CMA to ensure timely implementation. The Secretary of State will, of course, review all guidance for all future iterations.
The hon. Lady also talked about amendments 187 and 188, which seek to replace the countervailing benefits exemption with a power for the CMA to consider benefits to users before finding a breach of a conduct requirement. The exemption will ensure that there is a rigorous process to secure the best outcomes for consumers, and removing it would jeopardise clear regulatory expectations and predictable outcomes. In turn, this would make it more likely that consumers lose out on the innovations developed by SMS firms, such as privacy or security benefits. Government amendments 13 and 14 clarify the exemption while, crucially, maintaining the same high threshold and clear process.
The hon. Lady also mentioned amendments 194 and 196, and the Government agree that it is important that the DMU’s regulatory decisions are transparent and that the right information is available to the public. We understand that these amendments would require the DMU to send decision notices to third parties that it assesses to be most affected by those decisions. However, under the current drafting, the DMU is already required to publish the summaries of key decisions. Requiring the DMU to identify appropriate third parties and send them notices would introduce a significant burden on the DMU, to limited benefit, and I argue that it would undermine the flexibility and quick pace that we expect from the DMU. We believe the current drafting strikes the right balance, providing transparency and public accountability on DMU decisions.
Sir Robert Buckland
I warmly welcome my hon. Friend to his place, as this is my first chance to do so. Are we now to understand that, with regard to the judicial review standard, proportionality will, in effect, be built in, and that we are going beyond the principles of plain, vanilla JR into the more widely understood term? Am I right?
Saqib Bhatti
I suggest that I write to my right hon. and learned Friend, and to all right hon. and hon. Members who have raised the important question of proportionality, to clarify the position. We want this legislation to have clarity for consumers and certainty for businesses because, as my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) said, this is an ever-changing market, so it is essential that we have clarity and certainty.
Sir Robert Buckland
The point about proportionality extends into clause 29, where the Government have now removed the indispensability test, leaving bare proportionality. My amendment asks for a necessity test. What assessment has my hon. Friend made of the removal of “indispensability”? Does he still think that the threshold for countervailing benefit will be sufficiently high to ensure that the CMA does not disapply or discontinue investigations inappropriately?
Saqib Bhatti
That is an important point, and I appreciate my right hon. and learned Friend giving me the opportunity to clarify it. I want to be unequivocal that, from my perspective, the threshold is still high and we have provided clarify. If he requires even further clarity, I am happy to write to him to be completely clear.
Damian Collins
I am grateful for what my hon. Friend has said so far about the application of the proportionality test, but if he is to follow up with Members in writing with some clarity, can he set out what he believes the grounds for challenge would be on the basis of proportionality? The interventions that the CMA may make and the rulings it may give are at the end of quite a lengthy process of market analysis, demonstration of abuse of market power and breach of conduct requirements. If those are challenged routinely and at a late stage, on the basis that there are grounds to say that it is disproportionate, it could have the unintended consequence of delaying systems in a way that they should not be delayed.
Saqib Bhatti
If I heard my hon. Friend correctly, he wanted a letter on that. This legislation is designed to make sure that it is not for big companies to litigate heavily to stifle the smaller challengers from coming out and becoming the big companies and employers of tomorrow. Let me write to him to clarify the point further.
My right hon. and learned Friend the Member for South Swindon has spoken about accountability in my numerous conversations with him over the past few days, and again today. I take his point. He will know that I want independent, versatile, flexible and adaptable regulators. That is only right for an ever-changing digital market that is always innovating and changing the way it operates. We do not know the unicorns of tomorrow or the benefits that we can get from consumers. The Competition and Markets Authority and the DMU have a responsibility to be accountable, to maintain that flexibility and to have adaptability to new technology and new entrants in the market. As I am sure he knows and respects, that is why independent regulators are a central part of our internationally recognised business environment. We should not forget that point.
I take the points about overreach by regulators, but they are a core part of what international partners and investors look at when it comes to the competition regime, because they know that will be innovative and will encourage further innovation in technology. The CMA is operationally independent from Government, and Government will not intervene in its regulatory decisions. The DMU will have discretion in how it designs its interventions under the regime. That discretion is matched with robust accountability, from initial decision making to appeals.
There is a range of checks and balances throughout the regime that provide assurance. I hope that reassures my right hon. Friend. There are opportunities for Government, Parliament and stakeholders to hold the CMA to account, but I welcome his challenges and interventions on this point, because it is important. I am sure that this will be looked at again in the other place. Government should always be sensitive to those challenges. The digital markets regime will be overseen by CMA’s board, which is accountable to Parliament for all key decisions. Key decisions will be taken by a committee, of which at least half its members will offer an independent perspective. I am sure that he will welcome that because, as new technologies and innovations emerge in the market, we will need new expertise.
Damian Collins
My right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) made the important point that the growth and expansion of regulation in digital markets is necessary but substantial. The ability of this place to keep track of how the regulators use their powers is increasingly important. That may be beyond the work of any departmental Select Committee, but instead requires something like the Public Accounts Committee, as he suggested—a separate committee whose job is to focus on and scrutinise such work. That was recommended by the House of Lords Communications and Digital Committee, and also by the Joint Committee on the Online Safety Bill. I do not expect the Minister to give us an answer right now, but if he could reflect on that need and give some guidance to the House, that would be welcome.
Saqib Bhatti
My hon. Friend makes an important point that is a matter for wider discussions on accountability. I am happy to have that discussion with him in future. As things currently stand, there are sufficient balances and checks in place, but I am always open to having further discussions with him.
Grahame Morris
Could the Minister give some clarification on my point about fair reimbursement to the journalists and publishing houses that produce original content? As the new Minister, is he prepared to meet the National Union of Journalists to hear its concerns directly?
Saqib Bhatti
If the hon. Member will be ever so patient, I will address that point, because it is important.
My right hon. and learned Friend the Member for South Swindon talked about the DMU’s ex-ante powers, which I want to address because it is an important measure. We proposed to give the DMU ex-ante powers to impose obligations on designated firms because of the characteristics of digital markets, which make them particularly fast-moving and likely to tip in favour of new, powerful winners. We do not think that approach is appropriate for firms in other markets that do not exhibit the same qualities. Even if a firm meets the turnover conditions and carries out a digital activity, the DMU will still need to find evidence that the firm has substantial and entrenched market power, as well as a position of strategic significance in the activity, to designate the firm. The DMU will prioritise the areas where there will be greatest benefits for markets and consumers, and will reflect the CMA’s strategic steer provided by the Government, which is designed to reflect the policy as intended.
Sir Jacob Rees-Mogg
I think that everyone wishes to achieve the same objective, so I do not quite understand why His Majesty’s Government do not accept the amendment of my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), which will make that clear beyond doubt, will safeguard it and will tidy up the legislation.
Saqib Bhatti
I will address my right hon. Friend’s point. We have listened to the concerns and discussed them in great detail, but I believe the Government’s amendments strike the right balance between prioritising the benefit to the consumer while helping the digital market to remain flexible and innovative, allowing for the future tech of tomorrow to be a big challenger.
One of the great strengths of the Bill lies in the speed and flexibility of the toolkit to better equip the regulator to tackle fast-moving and dynamic digital markets. The amendments will maintain an effective, agile and robust process, and will not undermine the Digital Markets Unit’s ability to intervene in a timely and impactful way. They will ensure that the DMU’s approach is proportionate and beneficial to consumers. I hope that we have reached a good position with the Members I have spoken about, but I want to turn to the points raised by my hon. Friend the Member for Folkestone and Hythe (Damian Collins), who was ever so eloquent about the challenge that the legislation is looking to overcome and the balance that it seeks. I was greatly appreciative of his support and the challenge he has put down.
In respect of the hon. Member for Easington (Grahame Morris), the final offer mechanism, which strengthens the hand of smaller businesses when they challenge those bigger businesses, is designed with the challenges he has put forward in mind. I hope that he appreciates that we recognise the traditional business model of news media, particularly print media, which has been substantially disrupted by the growth of digital. The regime is designed to help rebalance the relationship between major platforms and those who rely on them, including news publishers. That could include creating an obligation to offer fair and reasonable payment terms for the use or acquisition of digital, including news, content. I will absolutely take up the offer to meet the NUJ and hear its concerns. I hope that this measure goes a long way towards appeasing those concerns by rebalancing the market and ensuring that firms that have strategic market significance know that they must present a much fairer deal for regional print media.
Sir Robert Buckland
Perhaps the Minister will forgive me for juxtaposing his reluctance to make things clear in primary legislation when discussing this clause and what the Government seek to do in part 4 on subscriptions. It seems to me very odd to conduct a subscription regulation mechanism by using primary legislation. There is a conflict in the logic being applied here, and I am sorry that I have to point that out to him.
Saqib Bhatti
I am sure that the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) will appreciate the pass that I am just about to give him; I am sure that he will address that issue in his speech.
I reiterate my gratitude to the Opposition for their co-operative behaviour, which I have been informed about by my predecessor, and to right hon. and hon. Members across the House for the challenge that they have put forward today. I am grateful to Members across the House for their contributions, and I hope that they continue to work with the Government. We will continue to work with Members as the Bill progresses through Parliament to ensure that it drives innovation, grows the economy and delivers better outcomes for consumers. That is what the Government care about. We want a highly competitive market that innovates and nurtures the technology companies of tomorrow to ensure that the digital online world serves consumers. For that reason, I respectfully ask Members not to press their amendments.
Question put and agreed to.
New clause 5 accordingly read a Second time, and added to the Bill.
New Clause 6
Protected disclosures
“In the Public Interest Disclosure (Prescribed Persons) Order 2014 (S.I. 2014/2418), in the table in the Schedule, in the entry for the Competition and Markets Authority, in the right hand column, after ‘Kingdom’ insert ‘, including matters relating to Part 1 of the Digital Markets, Competition and Consumers Act 2024 (digital markets)’.”—(Saqib Bhatti.)
This new clause (which would be inserted into Chapter 8 of Part 1 of the Bill) confirms that matters relating to Part 1 of the Bill (digital markets) are covered by the entry for the Competition and Markets Authority in the Public Interest Disclosure (Prescribed Persons) Order 2014.
Brought up, read the First and Second time, and added to the Bill.
Clause 15
Notice requirements: decisions to designate
Amendments made: 2, in clause 15, page 8, line 34, leave out from “that” to the end of line 35 and insert
“the undertaking or digital activity, as the case may be, remain substantially the same”.
This amendment clarifies how the CMA may revise its view of an undertaking or digital activity by issuing a revised SMS decision notice.
Amendment 3, in clause 15, page 8, line 37, leave out from “not” to the end of line 38 and insert
“affect—
‘(a) the day on which the designation period in relation to that designation begins, or
(b) anything done under this Part in relation to that undertaking.”—(Saqib Bhatti.)
This amendment confirms that giving a revised SMS decision notice does not affect anything done under this Part in relation to a designated undertaking.
Clause 17
Existing obligations
Amendments made: 4, in clause 17, page 9, line 23, at end insert—
“(2A) In Chapters 6 (investigatory powers and compliance reports) and 7 (enforcement and appeals), references to a ‘designated undertaking’ are to be read as including an undertaking to which an existing obligation applies by virtue of provision made in reliance on subsection (1).”
This amendment provides that references in Chapters 6 and 7 to a designated undertaking include an undertaking to which an obligation applies by virtue of provision made in reliance on clause 17(1).
Amendment 5, in clause 17, page 9, line 37, at end insert—
“(ba) commitment (see sections 36 and 55);”.—(Saqib Bhatti.)
This amendment provides for the CMA to be able to apply an existing commitment, with or without modifications, in respect of certain new designations or to make transitional, transitory or saving provision in respect of a commitment when it would otherwise cease to have effect.
Clause 19
Power to impose conduct requirements
Amendments made: 6, in clause 19, page 10, line 30, leave out from “requirement” to the end of line 35 and insert
“or a combination of conduct requirements on a designated undertaking if it considers that it would be proportionate to do so for the purposes of one or more of the following objectives—
(a) the fair dealing objective,
(b) the open choices objective, and
(c) the trust and transparency objective,
having regard to what the conduct requirement or combination of conduct requirements is intended to achieve.”
This amendment provides that the CMA may only impose a conduct requirement or combination of requirements if it considers that it would be proportionate to do so, having regard to what the requirement or combination is intended to achieve.
Amendment 7, in clause 19, page 11, line 15, at end insert—
“(9A) Before imposing a conduct requirement or a combination of conduct requirements on a designated undertaking, the CMA must have regard in particular to the benefits for consumers that the CMA considers would likely result (directly or indirectly) from the conduct requirement or combination of conduct requirements.”—(Saqib Bhatti.)
This amendment provides that the CMA must consider the likely benefits for consumers when imposing a conduct requirement or combination of conduct requirements.
Clause 20
Permitted types of conduct requirement
Amendment made: 8, in clause 20, page 12, line 9, leave out from “to” to “in” on line 10 and insert
“materially increase the undertaking’s market power, or materially strengthen its position of strategic significance,”.—(Saqib Bhatti.)
This amendment clarifies that a conduct requirement is permitted if it is for the purpose of preventing an undertaking from carrying on activities other than the relevant digital activity in a way that is likely to materially strengthen its position of strategic significance in relation to the relevant digital activity.
Clause 21
Content of notice imposing a conduct requirement
Amendments made: 9, in clause 21, page 12, line 28, after “requirement” insert
“or, as the case may be, each conduct requirement as varied,”.
This amendment clarifies how the notice requirements in clause 21 apply in relation to the variation of a conduct requirement.
Amendment 10, in clause 21, page 12, line 31, leave out paragraphs (b) and (c) and insert—
“(b) the CMA’s reasons for imposing the conduct requirement, including—
(i) the objective for the purposes of which the CMA considers it is proportionate to impose the conduct requirement (see section 19),
(ii) the benefits that the CMA considers would likely result from the conduct requirement (see section 19(9A)), and
(iii) the permitted type of requirement to which the CMA considers the conduct requirement belongs (see section 20);”.—(Saqib Bhatti.)
This amendment requires the CMA to give reasons for imposing conduct requirements on a designated undertaking. Sub-paragraph (ii) is consequential on Amendment 7.
Clause 26
Power to begin a conduct investigation
Amendments made: 11, in clause 26, page 14, line 11, leave out “a designated” and insert “an”.
This amendment, together with Amendments 12, 16, 29, 37, 38, 40, 42, 43 and 65, ensures that enforcement action can be taken in respect of an undertaking that has ceased to be a designated undertaking in relation to its conduct while it was a designated undertaking.
Amendment 12, in clause 26, page 14, line 18, leave out “designated”.—(Saqib Bhatti.)
See the explanatory statement for Amendment 11.
Clause 27
Consideration of representations
Amendment proposed: 187, in clause 27, page 15, line 8, at end insert—
“(2) The CMA may have regard to any significant benefits to users or potential users that the CMA considers have resulted, or may be expected to result, from a factor or combination of factors resulting from a breach of a conduct requirement.”—(Alex Davies-Jones.)
This amendment would ensure that the CMA considers any significant benefits to users resulting from the breach of a Conduct Requirement when it is considering representations from designated undertakings as part of a Conduct Investigation.
Question put, That the amendment be made.
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
I beg to move, That the clause be read a Second time.
Mr Deputy Speaker (Sir Roger Gale)
With this it will be convenient to discuss the following:
Government new clause 8—Use of damages-based agreements in opt-out collective proceedings.
Government new clause 9—Mergers of energy network enterprises.
Government new clause 10—Power to make a reference after previously deciding not to do so.
Government new clause 11—Taking action in relation to regulated markets.
Government new clause 12—Meaning of “working day” in Parts 3 and 4 of EA 2002.
Government new clause 13—ADR fees regulations.
Government new clause 14—Power to require information about competition in connection with motor fuel.
Government new clause 15—Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel.
Government new clause 16—Procedure and appeals.
Government new clause 17—Statement of policy on penalties.
Government new clause 18—Offences etc.
Government new clause 19—Penalties under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) and offences under section (Offences etc).
Government new clause 20—Information sharing.
Government new clause 21—Expiry of this Chapter.
Government new clause 22—Removal of limit on the tenure of a chair of the Competition Appeal Tribunal.
New clause 1—Meaning of “payment account” and related terms—
“(1) ‘Payment account’ means an account held in the name of one or more consumers through which consumers are able to—
(a) place funds;
(b) withdraw cash; and
(c) execute and receive payment transactions to and from third parties, including over any designated payment system.
(2) ‘Payment account’ also includes the following types of account—
(a) savings accounts;
(b) credit card accounts;
(c) current account mortgages; and
(d) e-money accounts.
(3) ‘Designated payment system’ has the same meaning as within the Financial Services (Banking Reform) Act 2013.
(4) ‘Relevant institution’ means—
(a) any bank which has permission under Part 4A of the Financial Services and Markets Act 2000 to carry out the regulated activity of accepting deposits (within the meaning of section 22 of that Act, taken with Schedule 2 and any order under section 22);
(b) any building society within the meaning of section 119 of the Building Societies Act 1986;
(c) any credit institution within the meaning of the Payment Services Regulations 2017;
(d) any authorised payment institution within the meaning of the Payment Service Regulations 2017; and
(e) any small payment institution within the meaning of the Payment Services Regulations 2017.
(5) ‘Discriminate’ means that a relevant institution acts in a way which, were that relevant institution a public authority, would constitute a breach of its obligations under section 6(1) of the Human Rights Act 1998, in so far as those obligations relate to—
(a) Article 8 of the European Convention on Human Rights;
(b) Article 9 of the European Convention on Human Rights;
(c) Article 10 of the European Convention on Human Rights;
(d) Article 11 of the European Convention of Human Rights; and
(e) any of the Articles listed in paragraphs (a) to (d) when read with Article 14 of the European Convention on Human Rights.”
This new clause defines relevant terms for the purposes of NC2.
New clause 2—Rights of consumers in relation to payment accounts—
“(1) A relevant institution must not discriminate against a consumer when deciding—
(a) whether to offer a consumer a payment account;
(b) whether to alter, or vary in any way, the terms of an existing payment account in use by a consumer; or
(c) whether to terminate or otherwise restrict a consumer’s access to their payment account.
(2) A relevant institution, within 30 days of deciding to alter, vary, terminate, or otherwise restrict a consumer’s access to their payment account, or deciding not to offer a consumer a payment account, must provide the consumer with a written statement of reasons explaining their decision.
(3) A written statement of reasons under subsection (2) must clearly specify—
(a) the basis upon which such a decision was taken, including reference to any terms and conditions within the consumer’s contract upon which the relevant institution relies, or reference to any legal obligations placed upon the relevant institution;
(b) all evidence taken into account by the relevant institution in reaching its decision; and
(c) any other matters that had bearing on the relevant institution’s decision.”
This new clause would place a duty on banks, building societies and similar institutions not to discriminate against consumers when offering retail banking services.
New clause 3—Rights of redress—
“Where a relevant institution has acted in breach of its obligations under section [Rights of consumers in relation to payment accounts] (1), the consumer shall have a right to damages in respect of any—
(a) financial loss;
(b) emotional distress; and
(c) physical inconvenience and discomfort.”
This new clause would give consumers a right to redress if discriminated against under NC2.
New clause 4—Enforcement of rights of redress—
“(1) A consumer with a right to damages by virtue of section [Rights of redress](1) may bring a claim in civil proceedings to enforce that right.
(2) The Limitation Act 1980 applies to a claim under this section in England and Wales as if it were an action founded on simple contract.
(3) The Limitation (Northern Ireland) Order 1989 (S.I. 1989/1339 (N.I. 11)) applies to a claim under this section in Northern Ireland as if it were an action founded on simple contract.”
This new clause makes provision for the enforcement of redress under NC3.
New clause 24—Review of Competition Appeal Tribunal—
“(1) The Secretary of State must, as soon the Secretary of State considers reasonable practicable after this Act has been passed, commission a review of all processes involving the Competition Appeal Tribunal.
(2) The Secretary of State must ensure that the review is conducted independently of the Digital Markets Unit and the CMA.
(3) The Secretary of State must lay a report of the review before Parliament.”
This new clause would require the Secretary of State to commission an independent review of the Competition Appeals Tribunal processes.
New clause 25—Duty to treat consumer interests as paramount—
“(1) In applying the provisions of this Act, the CMA and the Courts have an overriding duty to treat consumer interests as paramount.
(2) The duty set out in subsection (1) includes a duty to—
(a) address consumer detriment, including the protection of vulnerable consumers;
(b) expedite investigations that give rise to consumer detriment; and
(c) narrow points of challenge in appeals to CMA decisions that engage consumer detriment.”
This new clause would impose a duty on the CMA and the Courts to treat consumer issues as paramount.
New clause 26—Proceedings before the Tribunal: claim for damages—
“(1) The Competition Act 1998 is amended as follows.
(2) In section 47A, after subsection (2)(b) insert—
“(c) Part 4 of the Digital Markets Act 2023””
This new clause would allow claims for damages in respect of infringements of the provisions of Part 4 of this Bill.
New clause 29—Contract renewal: option to opt in—
“(1) Before a trader enters into a subscription contract with a consumer where section 247(2) applies, the trader must ask the consumer whether they wish to opt-in to an arrangement under which the contract renews automatically at one or more of the following times—
(a) after a period of six months and every six months thereafter, or
(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.
(2) If the consumer does not opt-in to such an arrangement, the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.
(3) If the consumer has not—
(a) opted into an arrangement under subsection (1), or
(b) given notification of the consumer’s intention to renew by the date specified under subsection (2),
the contract will lapse on the renewal date.”
This new clause would allow the consumer to opt-out of their subscription auto-renewing every six months, or if the period between payments is longer than six months, before every payment. If the consumer does not opt-in to auto-renewal, they would be required to notify the trader manually about renewing.
New clause 30—Contract renewal: variable rate contracts—
“(1) Before a trader enters into a subscription contract with a consumer where section 247(3) applies, the trader must ask the consumer whether they wish to opt into an arrangement under which the contract renews automatically on the date the consumer becomes liable for the first charge or the first higher charge.
(2) If the consumer does not opt into an arrangement under subsection (1), the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than five days before the renewal date.
(3) The trader must also ask the consumer whether they wish to opt into an arrangement under which the contract renews automatically—
(a) after a period of either six months from the first charge or higher charge and every six months thereafter, or
(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.
(4) If the consumer does not opt into an arrangement under subsection (3), the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.
(5) If the consumer has not—
(a) opted into an arrangement under subsection (1) or subsection (3), or
(b) given notification of the consumer’s intention to renew by the date specified under (as the case may be) subsection (2) or subsection (4),
the contract will lapse on the next renewal date.”
This new clause would introduce an option for the consumer to opt-out of their subscription auto-renewing after their free or discounted trial. Otherwise, they would have to notify the trader manually about the subscription continuing. It also introduces an option for the consumer to opt-out of their subscription auto-renewing.
New clause 31—Regulatory burdens arising from competition and consumer regulation—
“(1) The CMA must, at least once a year, publish a report setting out its assessment of the economic cost of regulatory burdens that have been created and removed over the previous year through the exercise by public bodies of—
(a) competition and consumer powers; and
(b) the following activities, as far as they relate to competition and consumer matters—
(i) the imposition of conduct requirements;
(ii) dispute resolution and public enforcement activities;
(iii) the monitoring of undertakings, and
(iv) the issuing of regulatory orders.
(2) The Secretary of State must ensure that public bodies provide the CMA with information the CMA considers is necessary for completion of the report.
(3) The Secretary of State must ensure that the net economic cost of regulatory burdens set out in the report is zero or less in every year.
(4) In this section a “regulatory burden” means a burden as defined in section 1(3) of the Legislative and Regulatory Reform Act 2006.”
This new clause places on Ministers a permanent duty to ensure that the net economic cost of burdens from competition and consumer regulation is zero or less each year.
Government amendment 69.
Amendment 207, in clause 141, page 89, line 13, at end insert—
“(c) the collective interests of consumers include avoiding any detriment that might be incurred by consumers if the United Kingdom does not reach a level of net zero carbon emissions by 2030.”
This amendment would mean that part of the test of whether a commercial practice had committed an infringement would be whether the commercial practice had failed to protect consumers from any detrimental effects arising from a failure to achieve net zero by 2030.
Government amendments 70 to 79, 81, 82 and 85.
Amendment 226, in clause 224, page 150, line 27, at end insert—
“(4A) Where a commercial practice has been found to be unfair under paragraph 32 of Schedule 18 of this Act, any body listed as a public designated enforcer in section 144(1) of this Act may require the removal of the relevant online marketing from the internet.”
This amendment allows enforcement bodies to remove the marketing of fake or counterfeit products from the internet.
Amendment 208, page 150, line 29, at end insert—
“(6) An established means used to encourage control of unfair commercial practices must include the following measures—
(a) investigation and determination on a timely basis—
(i) in accordance with a pre-determined process which has been published on the internet,
(ii) by people who are independent of any organisation undertaking commercial practices, and
(iii) with the outcome of any decision published.
(b) the appointment of a board to oversee the investigation and determination process, with the majority of the members of the board independent of any organisation undertaking commercial practices;
(c) provision for the suspension of a commercial practice during an investigation and prior to a determination being made;
(d) provision for guidance to be issued, by the CMA, the relevant weights and measures authority or, if the established means is an organisation, the established means itself, about the lawfulness of a commercial practice;
(e) publication of statistical and other information about the operation of, and compliance with, the established means to enable the CMA or weights and measures authority in question to assess on an annual basis the continuing appropriateness of using the established means.”
This amendment sets out conditions, including in relation to independence and transparency, for the means by which the control of unfair commercial practices will be encouraged.
Government amendments 86 to 93.
Amendment 210, in clause 251, page 166, line 24, leave out “six” and insert “twelve”.
This amendment would provide for traders to have to issue reminder notices to consumers about ongoing subscription contracts only every twelve months, rather than every six.
Amendment 211, page 166, line 36, leave out subsection (5) and insert—
“(5) The Secretary of State may, by regulations, make reasonable provision for the content and timing of reminder notices.”
This amendment, together with Amendments 212 and 213, would remove the detailed provision about the content and timing of reminder notices from the face of the Bill and instead give the Secretary of State the power to make such provision by regulation.
Government amendment 94.
Amendment 212, page 167, line 1, leave out Clause 252.
See explanatory statement to Amendment 211.
Government amendments 95 to 98.
Amendment 214, in clause 253, page 168, line 7, leave out “in a single communication” and insert
“in a manner that is straightforward, timely and does not impose unreasonable cost on a consumer”.
This amendment, together with Amendments 215 to 218, would remove from the Bill the existing detailed provisions for ending a subscription contract, intending that they should be covered by provision made in secondary legislation under the provisions of clause 270(1)(c), and instead set principles for how a contract may be ended.
Amendment 215, page 168, line 10, leave out subsection (2).
See explanatory statement to Amendment 214.
Amendment 216, page 168, line 15, leave out subsection (4).
See explanatory statement to Amendment 214.
Amendment 217, page 168, line 23, leave out subsection (6).
See explanatory statement to Amendment 214.
Amendment 218, in clause 254, page 168, line 37, leave out subsections (3) to (5).
See explanatory statement to Amendment 214.
Government amendments 99 and 100.
Amendment 219, page 170, line 25, leave out clause 257.
This amendment, together with Amendments 220 to 222, would remove the provision for a mandatory cooling-off period for a subscription contract.
Amendment 220, page 171, line 19, leave out clause 258.
See explanatory statement to Amendment 219.
Amendment 221, page 172, line 18, leave out clause 259.
See explanatory statement to Amendment 219.
Government amendments 101 to 103.
Amendment 222, in clause 272, page 180, line 25, leave out subsection (5).
See explanatory statement to Amendment 219.
Government amendments 104, 105, 107, 109, 110, 112 to 147 and 150 to 152.
Amendment 223, in clause 317, page 221, line 35 leave out “subsection (2)” and insert “subsections (2) and (2B)”.
This amendment and Amendment 224 would provide for an implementation period of two years before the provision in the Bill relating to subscription contracts comes into force.
Government amendments 153 and 154.
Amendment 224, page 222, line 6, at end insert—
“(2B) Chapter 2 of Part 4 comes into force two years after the day on which this Act is passed.”
See explanatory statement to Amendment 223.
Government new schedule 1—Mergers of energy network enterprises.
Government amendments 155 to 163.
Amendment 225, in schedule 18, page 343, line 42, at end insert—
“32 At any stage of a purchase process, presenting a price for a product which omits obligatory charges or fees (or an estimate thereof) which are payable by the majority of consumers, which are not revealed to the consumer until later in the purchase process.”
This amendment adds the practice of “drip-pricing”, a pricing technique in which traders advertise only part of a product’s price and reveal other obligatory charges later as the customer goes through the buying process, to the list of unfair commercial practices.
Amendment 227, page 343, line 42, at end insert—
“32 Marketing online products that are either—
(a) counterfeit; or
(b) dangerous.”
This amendment would add marketing counterfeit and dangerous online products to the list of banned practices.
Government amendments 164 to 170.
Amendment 228, in schedule 19, page 350, line 30, at end insert—
“Non-commercial society lotteries
13 (1) A contract under which a lottery ticket or tickets are purchased for one or more non-commercial society lotteries.
(2) In sub-paragraph (1), “non-commercial society” has the meaning given by section 19 of the Gambling Act 2005, and “lottery ticket” has the meaning given by section 253 of that Act.”
This amendment seeks to exclude lottery tickets purchased for non-commercial society lotteries from the scope of the provisions on subscription contracts.
Government amendment 171.
Amendment 213, in schedule 20, page 354, line 19, leave out paragraphs 28 to 38.
See explanatory statement to Amendment 211.
Government amendments 172 to 175.
Kevin Hollinrake
May I first echo the remarks about the excellent address by the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Meriden (Saqib Bhatti)? I welcome him to his place—he did a fine job on his first outing in such a complex debate.
I, too, am delighted to bring the Digital Markets, Competition and Consumers Bill to the House on Report. May I express my gratitude to colleagues across the House for their contributions to Second Reading and Committee stages, and for their continued engagement throughout its passage? I thank in particular the hon. Members for Pontypridd (Alex Davies-Jones) and for Feltham and Heston (Seema Malhotra) for their constructive engagement and commitment to seeing the Bill delivered quickly so that its benefits can be realised. I also thank my hon. Friend the Member for Weston-super-Mare (John Penrose) for his excellent engagement—over the weekend in particular—and my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) for his many important and relevant amendments.
The reforms to the competition and consumer regimes contained in parts 2 to 5 of the Bill will grow the economy and deliver better outcomes for consumers and bona fide businesses. Consumers will have more choice and protection, and pay lower prices. Businesses will operate on a fairer and more level playing field. The reforms will do that by enhancing the wider competition regime, strengthening the enforcement of consumer protection law, and putting in place new consumer rights and more transparency.
It is a simple fact that the way in which we buy products and services today very often involves a digital process. The opportunities that follow are vast—more accessibility, flexibility and choice for consumers—but there is also a greater risk of consumer harm, including, for example, consumers being trapped in a subscription contract that they no longer want or purchasing goods that may not be up to scratch because they unknowingly relied on a fake review. We must ensure that consumers and their cash are protected.
Swifter interventions to tackle bad business practices against consumers are expected to deliver a consumer benefit of £9.7 billion over 10 years, as UK consumers benefit from new rights, stronger law enforcement and more competition through merger control. Importantly, the reforms will also grow the economy by boosting competition, better placing the UK to succeed in export markets. It will allow the Competition and Markets Authority to more effectively deter, prevent, and, where necessary, enforce against monopolistic behaviours. That will ensure that the free market can operate effectively.
The Government amendments to parts 2 to 5 of the Bill will provide greater clarity, ensure coherence with related legislation, and make sure the Bill’s measures meet their intended aims. Almost all the amendments are technical in nature. I will address them across four categories: competition, consumer enforcement, consumer rights and cross-cutting provisions.
First, the competition measures in the Bill will give the CMA new powers to enable it to tackle anti-competitive activity swiftly and effectively, meaning that it can focus its work on the areas of greatest potential harm. The competition environment is complex and ever evolving. We must respond carefully but decisively to changes in the judicial and legislative landscape to provide certainty and to avoid any unintended detrimental consequences of wider developments.
New clause 8 amends the Competition Act 1998 so that the absolute bar on damages-based agreements being relied on in opt-out collective actions will not apply to third-party litigation funding agreements, which are the main source of funding for that type of action. That responds to a recent Supreme Court judgment, and effectively restores the previously held understanding of the status of litigation funding agreements under the 1998 Act. Accordingly, it will have retrospective effect.
In response to a recent Competition Appeal Tribunal judgment, we are specifying the circumstances in which a market investigation reference may be made in relation to an area that has already been the subject of a market study but was not referred for further investigation at that time. We are also bringing forward a series of amendments to ensure alignment between this Bill and the Energy Act 2023, which introduced the energy network merger regime, and to make minor corrections to provisions relating to that regime. Separately, we are repealing paragraph 8 of schedule 3 to the 1998 Act to remove a redundant reference to the treaty establishing the European Coal and Steel Community. To ensure that the implementation trials for market remedies introduced by the Bill are as effective as possible, we are introducing new powers for the Secretary of State to extend the scope of implementation trials in the markets regime to include regulatory conditions.
I will now address the new direct consumer enforcement model. That model will enable the CMA to act faster and take on more consumer cases on behalf of the public, resulting in a further estimated direct benefit to consumers of tens, or potentially hundreds, of millions of pounds. The Government have tabled a series of technical amendments to increase certainty in respect of the CMA’s operational duties. They include aligning the definition of “business” in part 3 of the Bill with that in part 4 of chapter 1 to ensure that any breaches of unfair trading prohibitions can be enforced through the regime; and making provision about information-sharing between public authorities so that enforcers can obtain the information that they need to take enforcement action under part 3 of the Bill.
On appeals, we are adding a requirement for the CMA to include information about applicable appeal rights in a final breach-of-directions enforcement notice, as well as empowering the appeal court to send issues back to the CMA for decision on certain notices. We are also empowering the Secretary of State to update through regulations the specified maximum amounts for fixed and daily penalties imposable by a court or the CMA when a business breaches a formal information request.
Moving on to consumer rights—I am sure this will interest many Members across the House—the purpose of the Bill is simple: to empower consumers to get the deal that is right for them, and to increase their confidence in the products they buy and the services they use. The new rights on subscription traps will give consumers more control over their spending. Such traps have been the subject of some debate during the passage of the Bill, and the Government are introducing amendments to remove unintended consequences.
Edward Timpson (Eddisbury) (Con)
I welcome the introduction of consumer rights on subscriptions, which have become a real minefield for many people of all ages. Why do the Government feel it necessary to have this provision in the Bill and in primary legislation, when if it was in secondary legislation it could have more flexibility with changing circumstances?
Kevin Hollinrake
We think it is a sufficiently important issue and something we consulted on previously. We have a good idea of the kind of measures we would like to put in place, and we are adding more flexibility—my hon. Friend will have seen some of the Government amendments that have been tabled in response to concerns raised by Members of the House, including my right hon. and learned Friend the Member for South Swindon. We want that flexibility, yet we want to move on quickly with this important reform. There is about £1.6 billion of potential benefit to consumers through this Bill.
Jim Shannon (Strangford) (DUP)
I commend the Minister who is putting forward ideas that I, and perhaps my party, feel we can subscribe to and support. I always ask this question, because I think it is important that the general public have an access point if they have a question on something to do with consumer rights. Do the Government intend to ensure that there is some methodology—a phone call, an email address or contact person—who the public can contact if they have a question?
Kevin Hollinrake
Our position is that we do not intervene in the practices of businesses unless there is a necessity to do so. We leave those channels open for decisions by businesses in the services that they offer to consumers, rather than dictating to them how they should communicate with their consumers. It is absolutely right that those channels are open and freely available. One important thing we are doing in the Bill is making it much easier to terminate a contract. A person should be able to end a contract as easily as they enter into it, and that is an important part of the Bill.
The Government are bringing forward a series of amendments that remove the requirement for businesses that offer subscription contracts to send a reminder notice ahead of the first renewal notice in instances where there is no free trial. For businesses that offer those contract types, the amendments will see their regulatory burden decrease as they will be required to send only two reminder notices per year instead of three. That also ensures that consumers do not receive too many notices at the start of their contract. The requirement to send a reminder notice before a free or low-cost trial rolls over to a full contract will remain in place.
In addition, we are creating a new power for the Secretary of State to disapply or modify reminder notice requirements in respect of particular entities or contracts, and amend the timeframes in which a business must send a reminder notice to a consumer. The amendments provide greater flexibility and clarity on when reminder notices should be sent, allowing for adaptability post implementation. A further amendment clarifies that, in the event of a dispute about the cancellation of a contract, the onus is on the consumer to prove that the method in which they sent a notification to cancel their subscription contract was sufficiently clear. That intends to rectify the concern that businesses will be subject to enforcement action if a consumer attempts to cancel their subscription contract through unconventional means, for example through a tweet.
I thank my right hon. Friend the Member for Calder Valley (Craig Whittaker) and the hon. Member for Gordon (Richard Thomson) for their continued engagement on Second Reading and in Committee on the issue of whether society lotteries are captured under the subscription measures. As I said in Committee, it is certainly not our intention to capture those contracts. We are therefore introducing an amendment to clarify that gambling contracts, which are already regulated under gambling laws, are excluded from the scope of the subscription contract measures. I trust that that amendment will offer them, and those in the industry, clarity on the matter.
Let me turn to a series of technical Government amendments in relation to protections for consumer savings schemes. Such schemes involve making deposits to save towards a specified event such as Christmas or back-to-school shopping, and they are a vital means for British families to budget for those big occasions. The Bill is not designed to capture routine advance payments for services. In order to avoid possible uncertainty, we are introducing amendments that will exclude contracts regulated by Ofcom, such as prepaid pay-as-you-go mobile phone contracts, as well as contracts for prepaid passenger transport services, such as prepaid Transport for London Oyster cards, from the list of what constitutes a consumer savings scheme. Finally, we are introducing two amendments to maintain the effect of the Consumer Protection: Unfair Trading Regulations 2008, which the Bill repeals and largely restates. The first relates to the application of disclosure of information provisions in part 9 of the Enterprise Act 2002, and the second relates to the information requirement placed on a trader in certain circumstances. Two technical amendments are also being introduced.
Alex Davies-Jones
First, let me say how pleased I am to see the Minister remain in post, and I thank him for his collaboration during the passage of the Bill; it has been appreciated by those on the Labour Front Bench.
I am keen to highlight a number of amendments tabled in my name that, sadly, have been significant Government omissions. New clauses 29 and 30 relate to subscription traps, which frustratingly still remain in the Bill. I have heard from the Minister and I am grateful for his approach, but Labour has pledged to end subscription traps, which see consumers get stuck in auto-renewing contracts that they did not explicitly ask for following free trials, by making companies end automatic renewal as a default option. The plans would change the current system of “opt out” to ensure that customers actively “opt in”, saving people money during this Tory Government’s cost of living crisis.
In the last year alone, people in the UK spent half a billion pounds on subscriptions that auto-renewed without them realising, and unused subscriptions are costing people more than £306 million per year. That is impacting marginalised groups and those on low incomes considerably more than others. It could mean that those least able to absorb the cost of being in a subscription trap are more likely to be in one, and the impact on those people will be more acute. Although the Government have recently made changes so that companies will be mandated to provide a reminder to consumers before renewing their subscription, sadly that change does not go far enough. I urge colleagues to support these new clauses, because this issue is impacting people in each of our constituencies the length and breadth of our islands.
In addition, amendment 225 would address the common issue of drip pricing, which impacts people across the UK. As colleagues will be aware, drip pricing is the practice of businesses advertising only part of the product’s price, and then later revealing other obligatory charges as the customer goes through the buying process. The Government promised to tackle that issue in the King’s Speech, but they have not tabled their own amendments on it. Indeed, the King’s Speech was the fourth time that this Government have promised to act since 2016, and enough is enough. Can the Minister clarify exactly why the Government have chosen to ignore the opportunity to right this wrong in the legislation?
Broadly, the Bill is welcomed by the Opposition, but it is well overdue. It is a positive step forward in creating new competition in digital markets that will enable the competition authorities to work closely and fairly with businesses to ensure fair competition and to promote growth and innovation. Labour in particular welcomes competition and consumer choice and protection as signs of a healthy, functioning market economy. It is vital, if we are to make the UK the best place in the world to start and grow a business, that digital opportunities are open for all. We are committed to ensuring that a pro-business, pro-worker, pro-society agenda is built for Britain, and we see consumer protections and competition law as playing an integral part in that. I look forward to the Minister’s response, and I look forward to seeing this Bill finally progress to becoming an Act.
John Penrose
May I start where I left off when the Bill hit Second Reading by saying that it is extremely welcome and creates an enormous amount of important and much-needed change? I continue to support it in principle.
My purpose in rising today is to speak to new clause 31, which I have tabled and 29 parliamentary colleagues have supported. Those who are familiar with the Kremlinology of the Conservative parliamentary party will understand that the new clause does something wondrous to behold, which is that it unites the breadth and every single part of the party behind one central idea: better regulation. I should pause briefly just to say that better regulation is distinct from deregulation. Better regulation is not saying that we want to trash standards; it is saying that standards of everything from environmental standards to workers’ rights all matter, but it does also matter that Governments of any type and stripe make sure they try to deliver those standards in the cheapest and most efficient and economically logical way possible. That is the difference between deregulation and better regulation. It is about delivering high standards, but in the most economically sensible way. That is what new clause 31 attempts to do.
It is worth pointing out that we had a regime that worked pretty well for about five or six years between 2010 and 2016, and it did something along those lines. It was called “one in, one out,” and then it was upgraded to “one in, two out.” It basically said that any new piece of legislation or regulation had to be costed for the extra cost it was adding on to the British economy, and before it could be introduced the Minister concerned had to find an equally large amount of cost to remove from other regulations elsewhere to begin with. Later, it was twice as much cost to remove from other regulations elsewhere. That worked reasonably well, except that it had some loopholes deliberately left, partly because it could not affect anything created in Brussels when we were members of the EU, and also because it did not cover things such as the economic regulators, Ofgem and Ofwat and so on.
That system changed to what everyone hoped would be a better one in 2016, but it turned out to be an absolute disaster. Instead of gently but steadily bearing down on the costs of regulation, we saw a huge ballooning in costs in the first year of the new system, and there was a target of reducing the costs of regulation across the economy by £8 billion or £9 billion. Instead of that, they increased by that amount. One would have thought that would have meant that the sky fell in, everyone would have been horrified by that notion and this place would have been up in arms, but not a bit of it. There was zero reaction from any party across the House, because the system was lacking some crucial points. The crucial thing it was missing was a proper accountability mechanism for when Governments of any kind fail to deliver on better regulation principles and on reducing the cost to wealth creation in this country, and inherently therefore reducing the rate of growth in the country and the improvements in productivity that we all want to see. It meant nothing happened within Parliament.
Clearly, we cannot leave things as they stand, and new clause 31 is an attempt to try to put that right. It would do something very simple, and it comes back to what I have called net zero red tape, which is effectively one in, one out, with the cost of any new pieces of legislation or regulation needing to be matched by finding countervailing savings elsewhere, but it would also do something else. The new clause says, “We need to make sure that there is not just a commitment from Ministers, but a legal duty on Governments—not just this Government, but all future Governments—to make sure that everyone who is a Minister, when they get out of bed on a Monday morning, knows they have a legal duty to deliver on this.” That would mean that if Ministers did not deliver on it, they will have broken the law. Breaking the law means they are in breach of the ministerial code, which this Parliament and all Parliaments take seriously. It would be a far more effective trigger mechanism for ensuring proper accountability and that this measure is delivered.
I would be the first to admit that this new clause is not perfect. That is because the parliamentary Clerks have rightly said, “Hang on a second; this Bill has a scope, and you cannot exceed it.” Therefore the new clause cannot, even though I devoutly wish that it could, apply the basic principles that I have just been explaining to the House across the entire economy—would that it could. As it is, it can only apply those principles to the economic regulators and anything to do with competition and consumer law. That is a huge step forward, because, as I mentioned, the previous regimes all excluded the activities of economic regulators, and we will now enfranchise them, if we agree this new clause. That is worth doing, but the new clause is far from perfect, because it cannot cover the rest of the economy.
Incidentally, the relevant bits of accountancy—the reporting on whether costs have been added or subtracted —has to devolve to the Competition and Markets Authority under the scope of the Bill, when in fact a perfectly respectable initial grouping, the Regulatory Policy Committee, already does it. It is full of clever and well-intentioned people, and I think the CMA would rather it did not have to do this work if it could avoid it; it would rather that others did it.
It is not a perfect amendment, but it none the less would take us a big step in a much-needed direction and establish an important principle. I am grateful to the Minister, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who mentioned that we have been having extensive discussions over the weekend in an attempt to lock in these fundamental underlying principles and to find ways to perhaps broaden them beyond just the scope of this Bill. I hope that in his closing remarks he will be able to come up with some comments that may allow me not to press this amendment to a vote.
Fundamentally, the crucial things we have to ensure are: proper independent measurement, reporting and accountability on the costs of new regulations, rather than anything that can be lent on by Government; proper consequences for Ministers in any Government who fail to deliver on trying to reduce those costs; and that no Government feel like they have a blank cheque on spending other people’s money. It is stark to examine the differences in how we approach taxpayer-funded spending versus regulation cost-funded spending. At the moment, a Minister or official who wants to spend taxpayers’ money has a squillion different hoops that they have to jump through, and rightly so. There are lots of controls on that spending undertaken by the Treasury and followed up by the Public Accounts Committee, and I can see one of the senior members of that Committee here today, my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown). It is highly regulated and controlled, and great attention is paid to it in this Chamber.
However, if one wants to spend five, 10 or 100 times that amount of money by increasing the cost to business through regulation, there is not a peep. Much less attention is paid to those ways of spending cash, and that cannot be right. As everybody here will understand, a pound taken in tax has the same underlying economic impact on the country’s rate of growth as a pound taken in extra cost to business. We should treat both things with equal seriousness, rather than paying huge attention to one and largely blithely ignoring the other, while writing blank cheques. Any regime has to fix that problem as well.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
My hon. Friend engaged in some self-deprecation at the beginning of his speech about the scope of the new clause, which I co-signed, but I think he is underselling it. The consumer protection and economic regulation in the new clause go a long way towards reducing the burden of red tape. The second thing that is really important is that this is not about the number of regulations, but their economic value. That is what really places a burden on business in this country. Will he explain how he is going to establish a baseline through the new clause? If this thing is to be measured properly, we have to have a proper baseline.
John Penrose
My hon. Friend is right: I may have been guilty of being too glass half empty, rather than glass half full. The new clause goes a very long way and enfranchises large chunks of the economy that perhaps have not been dealt with properly up until now; I just wanted to go even further and cover the entire economy. He is right to point out that the new clause does quite a lot, but it is half a loaf rather than the whole loaf, if I can put it that way.
My hon. Friend is also right to say that the accountancy —the measurement of the costs—is crucial. If we are trying to do one in, one out, we have to know the cost of the things coming in so that we can know what savings we have to find elsewhere. As I mentioned, the crucial thing is that we need to have an independent accounting body—an independent measurement body. That will require the Regulatory Policy Committee to be made a little more independent and to be given more arm’s length ability to set those accounting and measurement standards in a way that cannot be leant on by senior Ministers, senior mandarins or senior regulators. The committee needs to be able to look those people in the eye and say, “No, this is the way it’s got to be.” Like any good external auditor, it needs to be sufficiently at arm’s length to deal with that. If it does so properly, it will mean that any set of measurements can be relied on, both by my hon. Friend’s Committee and the rest of this Chamber. That is essential.
To bring my remarks to a close, if we do not adopt the system proposed in the new clause, we need a system that provides proper accountability for anybody who fails to hit these targets; proper measurement and independent accounting standards to make sure that Government and regulators cannot mark their own homework; and proper targets of some kind to make sure there is a standard to which Ministers must be held. I hope that my hon. Friend the Minister will be able to reassure me, and I look forward to his remarks.
Richard Thomson
It is a pleasure to follow the hon. Member for Weston-super-Mare (John Penrose), who made some very interesting arguments. In some of them, I heard echoes of the arguments that have been made by the Opposition during my few years in this place about trying to measure the effect that legislation has when it is passed. Amendments that seek to measure that effect routinely get knocked down, but there is a fundamentally useful point in what he says about the need to make sure that we are not suffering from unintended consequences and that the goals we are seeking are the ones that result, so that corrective measures can be taken if they are not.
Hansard records that on Second Reading, I was wished “Good luck!” by the hon. Member for Pontypridd (Alex Davies-Jones) when—perhaps intoxicated by an overly friendly and useful exchange across the Floor about the scourge of fake reviews—I thought we might get to a consensus that would allow something to appear in the Bill. Sadly, the hon. Member’s cynicism appears to have been well founded: there is certainly nothing about fake reviews in the Bill that I can see. I accept that the Government might amend that in future through secondary legislation—they are certainly able to do so—but as I said earlier this afternoon, that inevitably restricts the scope of the sanctions that can be levied for that behaviour.
I appear to have had a little more success in another area. In his opening remarks, the Minister said that when it came to additional gold-plating of the rules and regulations affecting charity lotteries and gambling for that purpose, there was a risk of charitable organisations being caught up as an unintended consequence of the legislation. I am absolutely delighted that the Government appear to have listened, and have tabled Government amendment 170, which
“excludes contracts for gambling (that are regulated by other legislation) from the new regime for subscription contracts”.
I very much welcome that amendment. On that basis, I will not seek to move amendment 228, which stands in my name and which I pressed to a Division in Committee.
A rather gruesome spectre was raised in the debate earlier—phantasms and fears that will not arise, apparently. That brings me neatly to new clauses 1, 2 and 3, which were tabled by the right hon. Member for North East Somerset (Sir Jacob Rees-Mogg)—a series of amendments that appear to be aimed squarely at a somewhat contested narrative surrounding the personal financial arrangements of somebody currently residing in a very small part of a jungle somewhere in Australia. Their appearance there is set to land them a fee that—if the scale of that bounty is as reported—would surely have every private banking manager the length and breadth of London fighting for their custom. When most of us speak in this Chamber about financial exclusion, usually we are talking about a lack of access to cash or about the ability to access one’s cash without a service charge at an ATM. We are talking about a lack of access to credit or to any kind of bank account, and very much not about those suffering the privations and indignity of having to deal with a bog-standard current account rather than being courted by Coutts.
Sir Jacob Rees-Mogg
The hon. Gentleman is absolutely right that this issue has come to people’s attention because of Nigel Farage. I will talk about that case in a moment, but what has emerged is that actually, quite a lot of people—and sometimes charities—who have views that banks do not like find that they are not able to get access to a bank account, which nowadays is a fundamentally important thing for people’s carrying on an ordinary daily life.
Richard Thomson
I thank the right hon. Gentleman for his intervention. There is already a multiplicity of legislation and entitlements—indeed, he appears to reference them in new clause 1—that can be used to tackle such circumstances when they arise, if indeed they do. I find it very encouraging that in drafting new clause 1, the right hon. Gentleman has alighted on the relevant provisions of the European convention on human rights, which provides a very useful earthing point for many of the fundamental rights that we hold dear and, indeed, are a bulwark of a civilised society. Perhaps we will see a similarly stout defence of them in future debates in this Chamber.
I very much welcome new clause 14, which will require companies to comply with requests for information from the Competition and Markets Authority when it comes to the pricing of motor fuel. On 9 November, the CMA published its first monitoring report on the road fuel market, and while 12 of the largest retailers responded to that request, I am given to understand that two did not. From my perspective and, I am sure, the perspective of many others wherever in this Chamber they sit, that is simply not acceptable. I am sure we can all point to large variations in the cost of petrol, diesel and other forms of motor fuel across our constituencies, sometimes in filling stations that are only a few miles apart or even within relatively close proximity. That is certainly a great source of contention for people right across my constituency, so the Government requiring retailers to provide the CMA with that information is an important strengthening of its powers, and one that we welcome.
New clauses 29 and 30, which stand in the name of the hon. Member for Pontypridd, seek to tackle subscription traps. I appreciate that the Government have tabled amendment 93, which seeks to tackle these traps by issuing reminders, and that is a welcome step forward. Nevertheless, I am bound to observe that SNP Members, at least, believe that a better balance could be struck by asking consumers whether they wish to opt in to automatic renewals or to variable rate contracts, rather than simply getting reminders about them, which will inevitably end up in the recycling bin or junk mail folder, even for the most attentive of consumers. Having to opt in would be far better and it would protect the consumer’s interest to a far greater extent than simply having the opt-out option emailed or mailed, or conveyed in some other way, in due course. If those new clauses are put to a vote, the SNP will support them in the Lobby.
Sir Robert Buckland
I hope to speak briefly, as the hors d’oeuvres for the pièce de résistance, which will be the speech by my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg), who has tabled excellent amendments. Although I did not sign them, for which I apologise, I very much endorse and support his efforts in these areas. These are important matters that need to be dealt with, and this is the right forum in which to do so. I wish to speak briefly in summary about provisions that I spoke to in the first group and simply reiterate that the thrust of the new clauses I have tabled, and am supported in by a number of right hon. and hon. Members, is all about accountability.
New clause 24 seeks a review of the work of the Competition Appeal Tribunal and is all about making sure that that body is functioning as effectively and expeditiously as possible to deal with these important matters. The work of the tribunal has become progressively more scrutinised. I do not wish to cast aspersions on its chairs or members, who work extremely hard. It is an impressive body, which is looked upon internationally for its work. However, there is no doubt in my mind and in the minds of many others that there is more work to be done to streamline and improve the CAT’s processes if it is increasingly to be looked upon and relied upon as an important arbiter of issues relating to digital markets, among other things.
The consumer interests duty set out in new clause 25 is at the heart of what we are trying to do here. Coupled with that, new clause 26 seeks to allow claims for damages under part 4 of the Bill and is an attempt to reframe the way in which the Government are approaching the provisions on subscriptions, to which I have tabled a number of amendments. I am grateful to my hon. Friend the Minister and the Government for having listened and moved on that issue. However, it seems to put the cart before the horse a little to not allow claims for damages, but to put through exemptions that would mean that if I were to seek to terminate my subscription via Twitter, the company concerned would not be liable. It would be far better to have a general liability in damages and not to have such prescriptive clauses in the first place that would be liable to misinterpretation. I am offering the Minister another way of looking at it that would be less prescriptive.
I have to come back to the Minister on the point that I made to the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Meriden (Saqib Bhatti): there is an odd juxtaposition between different parts of the Bill, where we are told in one breath that primary legislation is not the appropriate vehicle for prescribing procedures, yet here we are prescribing in minute detail procedures relating to subscriptions in the Bill. My hon. and learned Friend the Member for Eddisbury (Edward Timpson) has made the point for me, and it is one we well know: secondary legislation allows for greater flexibility, so that if a new potential problem or abuse is identified in this fast-growing market, the Government would be able to plug the hole and deal with the subscription issue.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
I rise to speak to amendments 226 and 227 in my name, which would introduce a take-down power to ensure that unsafe or counterfeit goods are removed from sale online. We covered this issue in some detail in the Bill Committee, where the problem of dangerous online sales was likened to the wild west, due to the risks to individual consumers and the lack of governance. I am disappointed that we still do not have clarity on how the Government want to tackle this growing concern, because this is fundamentally about safety and the Government failing in their core duty to keep people safe.
The Minister knows that unsafe products bought online have caused deaths in the UK. We have seen fires and other catastrophic damage caused by dodgy goods bought online, and since the Committee completed its considerations, a coroner has specifically cited faulty e-bike chargers in a report on a death. The coroner’s report in September suggested that at least 12 people have died and a further 190 have been injured in faulty e-bike and e-scooter blazes in the UK since 2020 alone, and that is only one area of problematic online sales. The coroner’s report goes on to call for greater action, and says:
“It is clear that there is an existing, ongoing and future risk of further deaths whilst it continues to be the case that there are no controls or standards governing the sale in the UK of lithium-ion batteries and chargers (and conversion kits) for electric-powered personal vehicles.”
There is a call for the Government to act in the face of further problematic items and dangerous goods being sold online.
My amendment helps to address the situation, where such items are identified. Not everything we discuss in this place is a life-and-death issue, but this can be. The Minister has had many representations from organisations about the growth of unsafe and dodgy goods sold online as legit: the British Toy & Hobby Association and Electrical Safety First issued briefings that supported my amendments in Committee. Trading standards also supports greater means of taking action, and briefed in support of the amendment in Committee.
At this time of year, it is even more important to act and raise awareness, because many people are buying their Christmas gifts online. Being super organised, I have my seven-year-old’s Christmas presents all safely stashed away at home. I am pretty confident she is not watching tonight and will not be looking for them, although who knows? I genuinely would not buy her gifts online because I am fearful about what happens to those who do trust some online sites.
Research by the British Toy & Hobby Association in 2021 showed that some 60% of children’s toys bought online were unsafe for a child to play with, and 86% were illegal to sell in the UK. That is very disturbing. Some of the problems it discovered were counterfeit goods, fire safety and chemical restriction failures, and packaging or parts that presented choking hazards. They were all products that online marketplaces had been told about but had not removed from sale.
In Committee, we had more time for detailed examples. We have less time here, so I will give just one, the toy crocodile story, and I will make it snappy. In July 2018, Amazon was told about a dangerous crocodile toy that was putting children’s lives at risk and was being sold widely online. Trading standards intervened several times, and in January 2020 the Office for Product Safety and Standards also intervened, but that toy range is still on sale online today, five years later. That is unacceptable, and sadly it is not a one-off. The OPSS has issued recall notices due to what it called
“serious risks of fire and electric shock”
for 90 products that are still on sale on Amazon, and 20 that are still on sale on eBay. There is a fundamental problem with the current regime and system. My amendment seeks to restore confidence.
The consumer organisation Which? has also alerted MPs to, among other issues that it has discovered, the problem of energy-saving devices that do not save energy but do present significant risks, including plugs with no fuses. There is unity in the call for greater action. The chief executive of the Government’s own Office for Product Safety and Standards said last November that
“there is too much evidence of non compliant products being sold by third party sellers”
online. The National Audit Office and the Public Accounts Committee have also called for action.
My amendments are not about new regulations or new pressures on business, which the right hon. Member for North East Somerset (Sir Jacob Rees-Mogg) talked about. They are about enforcing standards and rules for all, both online and on our high streets. The Minister, when he opened this section of the debate, said that he wanted fairness and a level playing field for all. I want that for British consumers and businesses as well. People have a misplaced faith that there is a level playing field, and that what they see in Argos and what they can buy on Amazon are regulated in the same way, but sadly they are not, and without my amendments they will not be.
Since Committee, I have tidied up the amendments slightly to ensure that they include a power to require the removal of items that are unsafe or counterfeit. That power links to the Government’s list of organisations in clause 144, to ensure that the same bodies as are listed in the Bill are involved. I am trying to help the Government and trying to help more generally, because there are wider benefits to getting this right.
UK high streets are struggling. Removing unsafe goods from online sale will mean that British high street shops that meet regulations will get a boost, as will British manufacturers who play by the rules but are undercut by imports from other countries that do not meet our safety and other standards. My amendments are designed to address all those issues and help to ensure that our standards are met. There is unity in the calls for greater regulation, and for a new sheriff or a new marshal for the wild west—not a rhinestone cowboy, singing the same old song and trying to stick up for a system that is failing British customers.
I will end on consumer rights. I do not believe in the enfeebled state, which seems to be accepted by some Ministers. We were told that the whole “take back control” narrative was supposed to lead to better rights for Brits, but we already lack rights that our European cousins have. French, Dutch, Irish and Polish customers now all have better protection, through the Digital Services Act, which has been passed by the EU since we left it—crucially, with the support of Amazon. It is beyond shocking that Amazon seemed to understand and support the need for change before most of the UK Government did.
However, there is a glimmer of hope. There is one Minister who has called for action, and has said that we should make the UK the “safest” place in the world to shop and do business online. That same Minister told this House that
“we should go further than that and require marketplaces to ensure that such products are not on their sites at all, ever”.—[Official Report, 20 January 2023; Vol. 726, c. 715.]
I agree with that Minister. These amendments help to deliver his aim, and we are lucky that that Minister is before us in this debate. I hope that when he gets back to his feet, he will reward my optimism and say that the Government will act now. I will not push the two amendments to a vote today, in the hope that my take-down power will be taken up by the Government before or during Lords consideration. I look forward to the Minister’s response.
Sir Jacob Rees-Mogg
It is a pleasure to follow the hon. Member for Bermondsey and Old Southwark (Neil Coyle). I am also grateful to the Minister for his thorough engagement on these matters. He has been extremely diligent, helpful and, as always, courteous. Let me begin by declaring a sort of semi-interest. I do not think it is technically one that the Standards Commissioner would worry about, but Mr Farage and I both appear on a television programme under the auspices of GB News at about the same time of day—I follow him. I have no financial relationship with Mr Farage; we merely appear on GB News at a similar time of day.
It was Mr Farage who brought to the attention of the public the issue of de-banking. It is a great problem; if someone’s bank suddenly says to them, “We are not providing you with any facilities”, where do they go? It is very hard to go to a new bank. New banks do not want people who have been de-banked. Nigel Farage became in a way the poster boy for this issue, highlighting something that was affecting people up and down the country, affecting charities, and affecting businesses that have been to see me as a constituency MP in the past—people running certain types of business, who found that their banking facilities were withdrawn without any proper answer or explanation. A pawnbroker who came to see me had had his banking facilities taken away. His is a perfectly honest and reputable business, but inevitably it deals with a lot of cash, which makes banks nervous and, when they are nervous, they need to give that customer a proper explanation as to why they are no longer getting that service.
The hon. Member for Gordon (Richard Thomson), in an elegant speech, teased me for standing up for Nigel Farage as if debanking was not a common problem. He mentioned that Mr Farage is off in the jungle eating offal and all sorts of other tasty morsels. Yes, that has had the benefit of bringing people’s attention to something that was affecting our constituents across the country. Therefore, I do indeed draw on definitions, but only definitions, from the European convention on human rights—this is not a sudden Damascene conversion to such a document; it is simply that those definitions are in our law and it is useful to base any amendment to a Bill before the House on existing law. That leads me, as always, to thank the Clerks for their mastery of ensuring that amendments are within scope, because getting the new clause into scope, as my hon. Friend the Member for Weston-super-Mare (John Penrose) found with his excellent new clause, which I will come to, was not particularly easy. That is why, in affecting consumers but not businesses, it does not go as far as I would have liked.
This matter is of such fundamental importance. You may think, Mr Deputy Speaker, that I am not all that much in favour of the modern world and that I think it would be nicer if we could go round with the odd groat or perhaps a sovereign to pay our way, but sadly that age of specie has gone—you might even say that the age of specie had become specious, but it is in the past. Everybody now needs modern banking facilities. Cash is not used anything like as much as it was, and every transaction that people carry out needs a piece of plastic, a bank that it comes from and a telephone or some type of technology. When somebody is debanked, it is like the Outlawries Bill on which we only ever have a First Reading: they are effectively made an outlaw in their own land. They are without the normal law of the land and the ability to do ordinary things. That is why new clauses 1 to 4 are really important, and a protection for people.
To return again to Nigel Farage, the idea that someone should be debanked because of legal political opinions is outrageous. The hon. Member for Gordon teases me for mentioning Nigel Farage, but actually a separatist who wants to break up the nation has a political opinion that in other countries would be considered treason. Those in China who say, “Free Tibet—have an independent Tibet,” do not get a lot of quarter. So once we start saying that someone can be debanked for holding Nigel Farage’s views, what about being in favour of Scottish independence? Would that be a view that one bank might not like and might say that members of the SNP—a perfectly legal party—should not be banking with it? It affects every political opinion, and a political opinion may be fashionable today, but tomorrow it may not be. We always have to consider in legislation the protection of free speech against the interests of passing fashion, because we and Opposition Members may be affected by it in a slightly different or changed environment.
Richard Thomson
Are we not talking about slightly different things? There was a highly contested narrative around the circumstances the right hon. Gentleman describes, but my understanding is that the gentleman in question was not so much debanked as offered a lesser account and has subsequently found somewhere he can bank satisfactorily.
Sir Jacob Rees-Mogg
The hon. Gentleman is misinformed. Mr Farage was only offered any new bank account with NatWest rather than Coutts when the story became public. Prior to that, he had not been offered any banking facilities, nor had he been able to find another bank that would take him on. So the facts of the matter are that Coutts/NatWest debanked him because of the extraordinary internal set of communications, which have become public and led to the resignation—effectively the firing—of the chief executive of NatWest, partly for gossiping about his banking circumstances, but also for the behaviour that had led to his banking facilities being taken away for his political opinions. That is quite clear from the information that has emerged.
Richard Fuller (North East Bedfordshire) (Con)
My right hon. Friend’s new clauses relate to debanking, prompted by a particular incident. Would he not accept that there is the broader issue that the pursuit of environmental, social and governance goals by corporations and the pursuit of values in association with diversity, equity and inclusion objectives raise the same issue on a much broader front than banking facilities? What would he recommend the Government should do on that?
Sir Jacob Rees-Mogg
I agree with my hon. Friend that it does go much further. Some time ago, the Bank of England issued a document suggesting that loans should not be given to companies investing in oil and gas when we need oil and gas for the foreseeable future. I think that this politicisation of banking is quite wrong, and ESG is not fulfilling the fiduciary duty of investors to provide the best return to their clients. We should look at that.
Neil Coyle
Can I clarify that when the right hon. Member talks about banks, outlaws and dodgy cash, he talking about high street banks and not Arron Banks?
Sir Jacob Rees-Mogg
I am talking about the banking system generally, and I am saying that it is important that people should have banking facilities regardless of their political views. It is important that Russian oligarchs may be sanctioned—that is a legitimate thing for Governments to do—but that requires the rule of law.
I want to touch briefly on some of the other amendments to which I have attached my name. I once again agree with my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) on new clauses 24 and—particularly—25. Putting the consumer first must be the essence of what we are trying to do. To my absolute horror, I have discovered that I agree with him on turning some of these measures into secondary legislation.
Skeleton Bills are a dreadful thing. We get awful legislation coming into the House on which there is no detail at all because it will all be decided by Ministers later. Such Bills should be deprecated. The House of Lords is good at pushing back on them; this House less so. Skeleton Bills are bad idea—except, there is a place for secondary legislation, and that is it. For some utterly random reason, a Government who have brought forward extraordinary skeleton Bills, some of which I could mention and have mentioned in the Chamber on occasions, have brought forward every last detail on something that, in its essence, will need revision and updating and to meet different standards as time goes by. It is a modest eccentricity to have put that in the Bill. I suggest that, in the other place, the Government look at whether that detail could be easily turned into secondary instruments, with such instruments ready to come into force at the same time as the Bill, so there would be no delay. That structurally would make for a better Bill. I am embarrassed to be speaking in favour of secondary legislation, because normally I want to see things in the Bill. If we could have a promise of fewer skeleton Bills in future, I would be delighted.
Against that, I could not disagree more with new clauses 29 and 30. Those make a real mistake—dare I say it, they are typical socialist amendments—because they do not trust people. It seems to me that people are sensible: they know what they are doing, they volunteer to do it, and they are free to undo it. Yes, of course, it is important that they should be free to undo it, but there is a cost to over-regulation. If we make companies write all the time to say, “Are you sure you want to do this?” that puts up the price. The profit margin for the business will not change, but the price that they charge consumers will. If they are constantly saying, “Do you want to leave us?” that will put the price up, because there will be an administrative and bureaucratic cost to that, and a loss of business that will put up the overall cost for everybody. It is legislating for inefficiency based on the idea that consumers are stupid. Well, in North East Somerset, consumers are very clever, highly intelligent, and know what they have agreed to and what they have not agreed to.
I congratulate my hon. Friend the Member for Weston-super-Mare. His new clause 31 is genius because it gets to the heart of an incredibly complicated and difficult matter that no other piece of legislation that we have tried has really worked with. Even the one in, one out that we had from 2010 to 2015 did not really work. I seem to remember reading that the Crown’s ownership of sturgeon was cancelled during this period because it counted as a “one out”, allowing some regulation to come in, no doubt costing millions, as we got rid of something trivial. One in, one out was not really there, but this new clause does it on a proper cost audit and looks ultimately to cover everything. That is absolutely the right way to go. My hon. Friend made the superb point that whenever any type of Government expenditure is involved, it is looked at, reviewed and referred to a Committee, yet when regulations worth billions are involved, they pass through without so much as by your leave. This is a really important new clause and I encourage the Government to do whatever they can to implement it.
A final thought before I conclude is on petrol stations. This is very good news. Why is it that the Tesco’s in Paulton is more expensive than the local service station in Ubley? I use the local service station in Ubley because it is better value for money, but Tesco’s in Paulton is more expensive than the Tesco’s on the outskirts of Bristol. That is very unfair on my constituents and I want it to bring its price down.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Thank you, Mr Deputy Speaker. We all have that image in our head now, of which particular supermarket you are talking about.
As other hon. Members have said, this Bill is much needed and will help in so many ways. Hon. Members have sought to address a number of vexed issues in this legislation. This includes an attempt, through our Opposition amendment 225, to address drip pricing, which I know as chair of the all-party parliamentary group on ticket abuse is especially prevalent in the primary and secondary ticketing markets. In these markets, customers often have to wait until the payment screen to see a complete price breakdown. In the secondary market, customers are often drawn in by Google-paid ads to professional looking sites such as Viagogo, which are selling tickets for many times their face value and engaging in illicit business practices. Initial prices, while eye-watering, are present, but there is no breakdown of the exact amounts for service charges or VAT.
The consumer is left in the dark about what they are actually paying for until it is time to pay, usually after having navigated many more time-wasting pages on the website and almost losing the will to live and the power of rational thought. Even then, the prices are often still estimates when the customer eventually hits “Buy now”, after feeling that they will lose the tickets if they do not make the decision quickly. Lots of customers still get a nasty surprise when the payment confirmation email comes in and they see the actual amount that has been taken from their bank account or credit card.
Moving on more broadly to the Competition and Markets Authority, I am aware that the CMA made its recommendations on tackling abuses in the ticketing market to the Government in August 2021, which the Department for Culture, Media and Sport then sat on for over 18 months before making an outright rejection of them. Principally, these recommendations called for stronger laws to tackle illegal ticket resale, and this Bill could and should have been—and could still be—the perfect place to introduce those powers. I am therefore very disappointed that the Government are still resisting these modest calls from the body set up to regulate our markets.
I support efforts in the Bill to ensure healthy competition online, but why not extend it to tackle online ticket touts? Sites such as Viagogo have been allowed to grow and gain a monopoly over ticket resales while being accused of benefiting from the illegal bulk buying of tickets and the wholesale speculative selling of tickets that they simply do not have. This includes Viagogo sellers attempting to sell thousands of festival tickets that they had not purchased and did not have the title to, as well as something known as the golden circle, an online rent-a-bot group illegally buying masses of tickets for the upcoming tours of Beyoncé and Taylor Swift, even when artists such as Swift actively speak out against touting and take measures to protect their tickets from ending up in the hands of touts instead of fans.
John Penrose
I do not know whether the hon. Lady heard my earlier remarks, but let me reassure her that new clause 31 would not reduce the CMA just to that; it would still have all its other powers. In fact, the total number of staff employed by the RPC to do this at the moment is relatively small. I also mentioned that if the Minister were able to come up with alternative ways of delivering a fully independent and therefore much more objective way of doing the RPC’s job—perhaps by strengthening the RPC—I would be delighted to accept that instead.
Mrs Hodgson
I agree. I am sure that would be a much better way. I definitely do not think that the CMA should have to do what the new clause is seeking to do.
I have it on good authority that professional touts now number anywhere from 3,000 and 3,500. In all the time I have been campaigning and speaking on this issue, which is getting on for 15 years, those numbers were in the tens, the fifties and the hundreds. It shocks me to know that we are now trying to deal with this level of professional touts. They are attacking everywhere, from stadium gigs to local venues and, increasingly, football games. They should not be able to tout tickets for football games, but they do. Yet according to Home Office figures, the yearly arrests of football ticket touts have been decreasing, dropping from 107 in 2011-12 to only 28 in the 2019-20 season.
In my opinion, the lone conviction of just two touts nearly four years ago, which we discussed with the Minister in the last debate on this Bill, is not a strong enough deterrent, especially as it relied on outdated legislation such as the Companies Act 2006 and the Fraud Act 2006, rather than the purpose-built Consumer Rights Act 2015, which I was substantially involved in, or the Digital Economy Act 2017.
I appreciate the efforts in the Bill to protect consumers online, and I can see that there are measures in the Bill to be welcomed, but for me, ticket touting and the widespread fraud that comes with it must be properly addressed and regulatory bodies must be fully empowered to tackle these sites. I will leave my remarks there.
Caroline Lucas (Brighton, Pavilion) (Green)
When first announcing this Bill, the Prime Minister promised that it would clamp down on greenwashing and bring misleading environmental claims under the umbrella of consumer protection laws, but the reality seems to fall far short of that—something to which we should perhaps have become accustomed when contemplating the gap between this Government’s environmental rhetoric and their lack of concrete action. While the Bill allows for consumer redress if commercial practices result in their being misled, confused or misinformed, the measures it contains certainly do not amount to the robust action on greenwashing that the Prime Minister led us to believe would be forthcoming. I have therefore tabled two amendments that would go some way towards delivering on the promises that he made.
As a multibillion pound persuasion industry, advertising has an enormous influence on which companies we trust, on our lifestyle choices and on the purchases we all make.
We are all exposed to thousands of advertisements on a more or less daily basis. To protect consumers from misinformation and harm, advertising must be properly and fairly regulated. However, we currently have an advertising regulation system that is slow, opaque and, in short, failing. The UK’s Advertising Standards Authority is not an independent regulator; it is self-funded by the advertising industry. Any complaints that the ASA handles about misleading or harmful advertising is essentially therefore marking its own homework. The ASA’s motivation to fairly regulate is wholly undermined by its close proximity to the industry it should be holding accountable.
My amendment 208 seeks to address the regulatory gap as a matter of urgency. It would create a regulator that is independent, transparent and one that can take timely action, thus better protecting consumers from misleading messaging by polluters and other harmful commercial actors. I think consumers want action. They are increasingly concerned about the role of companies in producing waste, pollution and environmental harms, and ignoring human rights. Yet in response these same companies turn to advertising to try to clean up their image and shore up their social licence to operate. New evidence reported in the Financial Times shows that Shell, one of the world’s top polluters, is estimated to have spent £220 million on advertising in 2023. Much of that advertising is aimed at younger generations, who are perhaps more vulnerable to misleading claims.
Misleading green advertising and greenwashing is on the rise. The ASA’s response has been to update its minimal environmental guidance to advertisers and to rule against just a tiny number of adverts for Shell, HSBC and other high-carbon advertisers for making misleading green claims. Those rulings are often slow and are often made well after the damage has been done. Time-consuming complaints have largely been brought by civil society organisations concerned with the impact of advertising and greenwashing on consumer wellbeing and their rights, but it should not be left to those organisations to have to try to enforce misleading adverts and to ensure that those adverts do not go unchecked. We need a robust regulatory framework and it is disappointing that the Government did not use the opportunity afforded by the Bill to deliver one.
The ASA celebrates its slim count of investigations into polluter advertising while a whole sea of greenwash escapes its notice and seeps into consumer consciousness. Only 2.4% of adverts reported to the ASA over environmental concerns saw any formal action in 2022, while thousands go unreported and therefore see no action at all. This is a drop in the ocean. We simply cannot afford this lack of effective advertising regulation to continue. My amendment 208 is a small but essential step if we are to stop the most polluting adverts from promoting our own environmental demise.
My other amendment is 207. It is another small but essential step, this time towards tackling the way in which the adverts to which we are exposed to every day are themselves fuelling the climate crisis. The UK advertising industry was responsible for 208 million tonnes of carbon dioxide-equivalent emissions in 2022. To put that another way, advertising is responsible for the equivalent of just under a third of the carbon footprint of every single person in the UK. No wonder that, from the World Health Organisation and the House of Lords Environment and Climate Change Committee, to the UN’s environment programme and the Committee on Climate Change, there is universal agreement about the need to regulate the advertising of high-carbon products.
High carbon clearly means fossil fuels, flights and SUVs. I would argue that it also probably means fast fashion, most meat and dairy, and the banks funding the likes of BP and Shell. I therefore back the many campaigns for a ban on high-carbon advertising and for interim measures, such as car advertisements with mandatory content about the benefits of active travel and public travel, as has been done in France. In the meantime, and in the absence of a Government prepared to act in line with the climate science and other evidenced demands, my amendment 207 would bring consideration of net zero emissions by 2030 into the consumer protection regime envisaged by the Government. Let me say a few words about why that is 2030, rather than 2050.
The Intergovernmental Panel on Climate Change is clear that limiting global temperatures to 1.5° requires that the whole world reaches net zero by 2050, a deadline that has been directly translated into domestic targets. But the UN Secretary-General, for example, is among many who have called for developed countries to commit to net zero much sooner, by 2040. When we look at the UK’s own historic responsibility, and indeed our financial means, that puts us into the category of richer countries that, in the interests of fairness, should be going faster and further.
Given the rate at which we are eating through our remaining carbon budget for 1.5°—according to some scientists, 1% a month—further and faster in terms of the UK translates to us achieving zero emissions by much closer to 2030 or 2035, thereby giving countries in the global south longer to cut their emissions. This idea is actually enshrined in climate law around the idea of common but differentiated responsibility, but sadly it is more respected in the avoidance rather than in the implementation.
Of course, that timeframe is undoubtedly hugely challenging. It will require a scale of social and economic transformation far surpassing what we have seen to date—hence the need for action across the board, including in relation to the advertising industry and consumer laws. Specifically, amendment 207 would signal that achieving net zero by 2030 is in the collective interests of consumers and it would help protect consumers from any detrimental effects arising from commercial practices that do not fully reflect the need to stay within that limit.
Misleading advertising is unfairly influencing consumers who want to do the right thing to protect the environment. It is delaying climate action just when we need to shift consumption patterns towards lower carbon alternatives. It is further flooding consumers with adverts that normalise and glamourise high-carbon products and ways of living, something the regulator, with its limited remit, cannot currently act upon, and which the current limited understanding of consumer collective interest does not encompass.
The scale and urgency of the climate and nature crises are such that they should be factored into every single piece of legislation. My two amendments are designed to do exactly that by delivering on the promises the Prime Minister made about greenwashing, and by delivering on what every shred of evidence tells us about the impact of that advertising on our precious environment, and therefore on consumers’ long-term collective interests.
Jim Shannon
It is a pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas). She is, if I may say so, the conscience of the Chamber in relation to net zero and environmental issues. She always gives us a helpful reminder of the importance of those issues for all of us across this United Kingdom of Great Britain and Northern Ireland.
It has been incredibly encouraging to hear the comments made thus far by all Members on all sides of the House. It is also great to see the intention of the Bill, which lies solely around the consumer, and consumer rights and protections. The Minister very helpfully set the scene in a way we can all adhere to and agree with. If the hon. Member for Weston-super-Mare (John Penrose) puts forward some of his amendments, maybe the Government will also support them. If they do, we will have no need to divide the House.
The new consumer protection measures in the Bill are intended to apply to the whole of the UK. Consumer protection policy is devolved to Northern Ireland, and reserved for Scotland and Wales. It is my understanding that, as a result, consent will be required for Northern Ireland. It would be helpful if the Minister could confirm what discussions he will have, or has had, with Northern Ireland Departments to ensure that they can be implemented as soon as possible. Reading through the Bill and the amendments and new clauses that have been tabled, I am ever mindful that the Government do have powers. In new clause 69, for instance, sectoral enactments are in place for the Water and Sewerage Services (Northern Ireland) Order 2006, the Gas (Northern Ireland) Order 1996 and the Electricity (Northern Ireland) Order 1992. There seems to be a methodology whereby decisions for Northern Ireland can be made. Again, as an Northern Ireland MP, I think it is important that we understand what the implications are and how the process will work for us.
I wish to refer to new clause 4 and also to new clause 29, which was tabled by the shadow Minister and which seems to be a perfectly amenable suggestion. I very much welcome the Minister’s commitment in his opening speech to address the issue of fuel prices. A number of right hon. and hon. Members have referred to that matter. Clearly, there is something wrong if the fuel price on one side of Newtownards in my constituency is different from that on the other side, but it is even more wrong if one of the major stores has a price at a certain level, yet further up the road that same store has a different price. It really is quite hard to comprehend how that can happen.
I wish to highlight the subscriptions issue, which many Members have referred to today. I have been made aware of two examples that I wish to put on the record in Hansard. I believe that these issues are being addressed. The Minister referred to that in his opening speech. The fact is that we are now living in an online world. I am afraid that I am not one of those who can do that—I make that admission here in this Chamber—but most people are involved in that world. It is a world where there is almost always an opportunity for subscription payments. Even newspapers now offer an online subscription service to get premium access to certain articles. These services are good if they are used correctly.
I heard a story from one of my members of staff. One of her subscriptions was with an online clothing company, which charged £50 a month for her to get access to clothes at a significantly cheaper rate. At the start of the month, for four days only, there is an opportunity to skip the month and not pay the £50 payment. The issue, quite simply, is that if people forget to skip the month, they are charged that £50. There is something wrong with that. No reminder is sent by the company, so this is a smart way for companies to make more money, as being forgetful is a human error. Again, I am keen to get the Minister’s ideas on whether this legislation address that issue.
Kevin Hollinrake
I thank right hon. and hon. Members for their contributions to the debate and for their ongoing engagement. ‘Working day Section 129(1)’.
First, let me speak to the amendments tabled by the hon. Member for Pontypridd (Alex Davies-Jones), who has thoroughly enjoyed our engagements over the weeks that we have been studying the Bill. New clause 29 would impose a requirement on traders to ask their customers whether they want their subscription to renew automatically every six months when they sign up to a subscription contract. If they do not choose this auto-renewal option, the contract would end after six months, unless the customer expressly asked for it to continue. New clause 30 would apply equivalent requirements to contracts that renew automatically after a free or low-cost trial.
The Government agree that consumers must be protected from getting trapped in unwanted subscriptions. However, we do not think the new clauses would deliver this in the right way, and such an approach could end up inconveniencing many consumers. For example, if a consumer had not initially opted into an auto-renewing contract, but later decided that they wanted to keep the subscription, they would have to repeatedly communicate that they wanted to continue their subscription or risk its unintentionally lapsing. That risk could be multiplied across each subscription they held.
The new clauses would also impose undue additional costs on businesses. As my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) rightly stated, all regulatory costs end up being borne by consumers, so we must approach regulation with extreme care. The Government’s approach strikes the balance of protecting consumers without compromising the benefits of rolling subscriptions and the convenience they provide.
On amendment 225, the Government recently consulted on tackling the practice of drip pricing, and we will shortly set out the next steps, following an assessment of the responses. It would be premature to amend the Bill in advance of that.
Turning to my hon. Friend the Member for Weston-super-Mare (John Penrose), I agree with the instincts behind his ideas to control the costs of red tape and regulatory burdens in new clause 31, and with many of the points made about this issue in his Government-commissioned report on competition policy and the subsequent 18-month update that he published. I suggest that together, we can do better than what is set out in the new clause. He too knows that, as my right hon. Friend the Member for North East Somerset said, all regulations are ultimately paid for by consumers. It is absolutely right that we look to minimise regulation and that we also recognise that the best form of regulation is competition, which is what we are here to promote.
In his “Power To The People” report, my hon. Friend the Member for Weston-super-Mare recommends a one in, two out solution. It will be interesting to see where we can go with that. Everybody, certainly on the Government Benches, is concerned about regulation and the increasing burden on businesses. However, if we look at some of the regulations that we imposed on business in 2021-22—this is from “Better Regulation: Government’s Annual Report”—significant regulations were put in place covering things such as making our telecommunications more secure against foreign actors, climate-related financial disclosures and making homes more efficient, which I think most people would acknowledge we should do, as well as sanctions against Russian oligarchs and the rest. Those regulations are not necessarily the burdens that many Members might consider them to be.
When we look at regulation, we have to decide what is the right thing to do—the right things to leave, the right things to take out and the right things to amend. We have made a start by updating the better regulation framework, with earlier scrutiny of regulatory proposals by the Regulatory Policy Committee so that its advice can be applied before a legislative solution has been settled on. The updated framework focuses on designing the least burdensome policies, avoiding regulation completely where possible, and minimising costs and administrative burdens where regulation is required. In parallel to our call for evidence and forthcoming consultations, we are seeking to change the culture of regulation in the UK to be more pro-growth and business friendly.
New clause 31 proposes some important further measures. It would create much stronger accountability for any future Government who failed to control red tape costs properly. It would plug an important historical loophole by including economic regulators in the better regulation framework, and it would provide extra independence for the accountancy sector in reporting on changes in regulatory burdens, so that Governments cannot be accused of marking their own homework, as my hon. Friend puts it. However, the new clause is constrained by the scope of the Bill, so it cannot plug all the historical gaps in the better regulation framework, and it makes the CMA a successor to the RPC, when there may be better ways to ensure enhanced independence.
As a result, I would suggest a better alternative approach. Any regime should recognise the economic benefits as well as costs of any changes to regulation. Accounting for them is complex: some are indirect, some are externalities and some take years to manifest or come to fruition. Individual regulators should take responsibility for reporting on their activities, including what they have done to support the growth of the businesses they regulate, as well as what additional burdens they have created or removed, and why. In each case, I agree that we will need to establish targets and metrics to monitor the success of our regulators and of Government Departments in promoting growth.
There are a few legitimate exceptions from the RPC’s scrutiny process, such as urgent or civil emergency measures, but that should not mean whole areas of the economy are exempt from its scrutiny, otherwise we would leave loopholes that mean costs are still not scrutinised and potential benefits are ignored.
Although the RPC is already an independent scrutiny body, I agree that we should find ways to ensure even stronger and more independent measurement and reporting of changes in regulatory benefits and burdens, without assuming that the best or only answer is for the CMA to take over this function, as the new clause proposes. Finally, there must be stronger accountability than at present for any Government who fail to control regulatory burdens properly.
Although we do not think it is right to accept the new clause as it stands, I accept and agree with many of the things it tries to achieve. I therefore invite my hon. Friend to work with officials and me to develop a better, stronger way of achieving his four aims through a mixture of potential Government amendments to the Bill and other measures or statements of Government policy to be released publicly before Royal Assent, where the changes fall outside the Bill’s scope. I hope these proposals are acceptable and that he will not press the new clause.
Amendment 228, which was tabled by the hon. Member for Gordon (Richard Thomson), seeks to exclude lottery tickets purchased from non-commercial society lotteries from the scope of the provisions on subscription contracts. We agree with him on this, which is why we tabled a Government amendment to that effect. I thank him for his contribution.
New clause 24, which was tabled by my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), would require the Secretary of State to commission a review of the Competition Appeal Tribunal’s processes, independent of the CMA and the DMU. I am grateful for his focus on this important matter and for the legal knowledge he brings to bear.
The Competition Appeal Tribunal Rules 2015, which set out the tribunal’s procedures, require the Secretary of State to carry out a regular review of the rules and to publish their conclusions, which last happened in April 2022. New clause 24 would unnecessarily duplicate this work.
Turning to new clause 25, the CMA’s overarching objective is to promote competition for the benefit of consumers, and this must shape the design of its interventions and how it prioritises its work. A consumer duty would overlap with that objective and is, in our view, unnecessary.
New clause 26 would extend the right to seek damages at the Competition Appeal Tribunal to all infringements of part 4. The Bill already provides for consumer redress in respect of some provisions of part 4. Additionally, the private redress provisions in part 3 include the power for public enforcers to seek enhanced consumer measures, including financial redress for consumers.
Amendment 210 would reduce the frequency with which a trader must send reminder notices. We share the intention of my right hon. and learned Friend the Member for South Swindon to ensure that businesses and consumers are not overburdened by reminder notices. However, we believe that this amendment would negatively impact consumers by increasing the risk that they end up paying longer for unwanted subscriptions. We think that requiring traders to send reminders every six months strikes the right balance.
Amendment 211 would create a new power for the Secretary of State to make reasonable provision relating to the content and timing of reminder notices. Amendments 212 and 213 would then remove existing provisions relating to such matters from clause 252 and schedule 20. As my right hon. and learned Friend recognises, we have tabled an amendment that provides a power to amend these details through regulations, enabling the Government to respond should evidence of consumer behaviour or operational practice indicate that adjustments are necessary.
Amendments 214 to 217 would remove requirements that are designed to ensure traders provide easy and accessible means for consumers to end their subscription contracts. Instead, principles would be set out to guide the arrangements put in place by traders, and relevant provisions would be made in secondary legislation. The Government are committed to ensuring that consumers are not hindered when trying to leave a subscription contract or when trying to stop a subscription renewing—the hon. Member for Strangford (Jim Shannon) also raised that point. That is the objective behind these provisions, and it is vital that they remain in the Bill. It is also critical that consumers have flexibility when ending their contract, rather than businesses dictating the communication channel, such as a phone cancellation only. We appreciate that any communication to end a contract must be sufficiently clear to a business, as is underlined by Government amendment 102. That amendment makes it clear that the onus is on the consumer to prove that their communication was sufficiently clear.
Amendments 219 to 222 would remove the mandatory cooling-off period for subscription contracts. It is important to retain those provisions as they provide essential protections for consumers. The renewal cooling-off period protects consumers who have signed up to trials or longer term contracts. That is particularly important since our consultation showed that many people forget to cancel those subscriptions before they automatically renew. We understand, however, that some businesses are concerned about how the cooling-off period will work in practice, particularly for digital streaming services. This is an important issue to get right, so the Government will publicly consult on the return and refund rules to ensure that they are fair and practical for businesses and consumers. That will include consulting on a waiver of cooling-off rights for some products.
Amendments 223 and 224 would apply a two-year implementation period to the subscription contract provisions in the Bill. The Government fully understand that clarity is important so that businesses know when the new rules will come into effect and can make the appropriate preparations. That is why we will continue to engage with stakeholders to understand the impact of implementing these new rules.
Let me move on to the hon. Member for Bermondsey and Old Southwark (Neil Coyle)—he and I have been walking these streets for so long. Amendment 227 would ban in all circumstances the marketing of counterfeit and dangerous products online, which are already offences under current consumer protection and product safety law. The Government are committed to strengthening enforcement of these laws through the reforms in part 3 of the Bill, and recently consulted on a number of proposals in the product safety review.
Amendment 226 would confer on public enforcers the power to require removal of such material from the internet. The Government have consulted on this issue, with proposals to extend the power to apply for online interface orders to all public enforcers. The Government will publish their response shortly. Finally, the public safety review includes proposals specifically aimed at tackling the sale of unsafe goods online. We will publish a response in due course.
The amendment tabled by my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) seeks to add further anti-discrimination laws related to payment account provisions. The Government have been clear about the importance of protecting lawful free speech. It is unacceptable for banks and payment service providers to discriminate on the basis of lawfully held political views, and others such as pawnbrokers, as he mentioned. Consequently, the Government support the spirit of the amendment, but do not believe that it is necessary, principally because the Government have taken significant action to build on existing protections to resolve this issue since the amendment was tabled.
On 2 October, the Chancellor committed to amend the threshold conditions that financial services firms must meet in order to be authorised and to consult on how to deliver that. It will ensure that banks uphold their current legal duties, including requirements not to discriminate on the basis of political opinion, therefore ensuring freedom of speech. Safeguards will also be put in place to protect consumers. Banks will be required to put in place safeguards to protect consumer rights, including free speech, and regulators will be required to act when they are not complied with. In addition, the Government announced that the legal notice period for payment service contract terminations will increase to 90 days, and payment service providers will be legally required to give consumers clear, tailored explanations detailing why they closed their accounts.
I thank the hon. Member for Washington and Sunderland West (Mrs Hodgson) for all her work on the all-party parliamentary group on ticket abuse. She raised the point about the secondary ticket market. We have taken action in this area; I know she is not content with where we are today, but the CMA has new powers in the Bill to fine businesses up to 10% of turnover, which will include ticket touts. Indeed, it has already taken action against two touts, with confiscation orders of £6.1 million in 2022.
On amendment 207, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas), enforcers can already take action under the Bill to protect consumers during the transition to net zero. For example, they have powers to tackle misleading green claims. We are already making strong progress towards net zero by 2050. The UK has reduced its emissions further and faster than any other major economy.
On amendment 208, established means have long played an important, cost-effective and proportionate role in tackling and stopping unfair commercial practices. Particularly in the field of misleading advertising, bodies such as the ASA have played a key role in expanding the reach of consumer protection law compliance.
In closing—[Hon. Members: “Hurray!”] I have gone on longer than I would have liked to, but an awful lot of amendments were tabled. In closing, I hope that right hon. and hon. Members will see from the Government’s amendments that we have listened to the concerns raised during the passage of the Bill, and that we are determined that it will deliver better outcomes for consumers and small businesses.
Question put and agreed to.
New clause 7 accordingly read a Second time, and added to the Bill.
New Clause 8
Use of damages-based agreements in opt-out collective proceedings
“(1) In section 47C(9) of CA 1998 (collective proceedings: damages and costs), for paragraph (c) substitute—
‘(c) “damages-based agreement” has the same meaning as in section 58AA of the Courts of Legal Services Act 1990 but as if in subsection (3)(a) of that section, in the words before sub-paragraph (i), for “, litigation services or claims management services” there were substituted “or litigation services”.’
(2) The amendment made by subsection (1) is treated as always having had effect.”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 1 of Part 2 of the Bill) responds to the Supreme Court judgment in R (PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28. It provides that a damages-based agreement is only unenforceable in opt-out collective proceedings before the Competition Appeal Tribunal if the agreement is with a provider of advocacy or litigation services.
Brought up, read the First and Second time, and added to the Bill.
New Clause 9
Mergers of energy network enterprises
“Schedule (Mergers of energy network enterprises) makes provision amending Part 3 of EA 2002 and Schedule 16 to the Energy Act 2023 in relation to mergers involving energy network enterprises.”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 2 of Part 2 of the Bill) introduces the Schedule inserted by NS1 which amends Part 3 of the Enterprise Act 2002 to facilitate the investigation of mergers involving energy networks enterprises under sections 68B or 68C of that Act and under section 22 or 33 of that Act by the same CMA Group, and to make other minor amendments to provisions relating to mergers involving energy network enterprises.
Brought up, read the First and Second time, and added to the Bill.
New Clause 10
Power to make a reference after previously deciding not to do so
“(1) Section 131B of EA 2002 (market studies and the making of decisions to refer: time limits) is amended as follows.
(2) In the heading, after ‘time-limits’ insert ‘etc’.
(3) In subsection (7), for ‘This section is’ substitute ‘Subsections (4) to (6) are’.
(4) After subsection (7) insert—
‘(8) Where the CMA—
(a) has published a market study notice, and
(b) has decided not to make a reference under section 131 in relation to the matter specified in the notice,
the CMA may subsequently make a reference under section 131 in relation to the matter (without first publishing a market study notice in relation to the matter) only where subsection (9) applies.
(9) This subsection applies where—
(a) the reference under section 131 is made two years or more after the publication of the market study report in relation to the market study notice, or
(b) there has been a material change in circumstances since the preparation of the report.’”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 3 of Part 2 of the Bill) responds to the decision of the Competition Appeal Tribunal in Apple v CMA [2023] CAT 2. It allows the CMA to make a reference under section 131 of the Enterprise Act 2002, if it has previously made a decision not to do so, in the two cases mentioned in what will be new subsection (9) of section 131B of that Act.
Brought up, read the First and Second time, and added to the Bill.
New Clause 11
Taking action in relation to regulated markets
“(1) In Chapter 4 of Part 4 of EA 2002 (market studies and market investigations: supplementary), section 168 (regulated markets) is amended as follows.
(2) In subsection (3) omit paragraph (j).
(3) In subsection (4)—
(a) in paragraph (g), for ‘the duty of the Director General of Electricity Supply for Northern Ireland under article 6 of that Order’ substitute ‘the objective and duties of the Northern Ireland Authority for Utility Regulation under Article 12 of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6))’;
(b) omit paragraph (l);
(c) in paragraph (m), for ‘the duties of the Director General of Gas for Northern Ireland under article 5 of that Order’ substitute ‘the objective and duties of the Northern Ireland Authority for Utility Regulation under Article 14 of the Energy (Northern Ireland) Order 2003’;
(d) in paragraph (r), for ‘Monitor’ substitute ‘NHS England’.
(4) In subsection (5), in paragraph (ia), for ‘Monitor’ substitute ‘NHS England’.”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 3 of Part 2 of the Bill) tidies up section 168 of the Enterprise Act 2002 to remove spent references and to correct references that have become out of date.
Brought up, read the First and Second time, and added to the Bill.
New Clause 12
Meaning of “working day” in Parts 3 and 4 of EA 2002
“(1) Part 3 of EA 2002 (mergers) is amended as follows.
(2) In Chapter 1 (duty to make references)—
(a) in section 25 (extension of time limits)—
(i) in subsection (1), after ‘20’ insert ‘working’;
(ii) in subsection (5), in paragraph (b), after ‘10’ insert ‘working’;
(b) omit section 32 (supplementary provision for the purposes of section 25);
(c) in section 34ZA(3) (time limits for decisions about references) omit the definition of ‘working day’;
(d) in section 34ZB (extension of time limits) omit subsection (9);
(e) in section 34ZC (sections 34ZA and 34ZB: supplementary) omit subsection (9).
(3) In Chapter 2 (public interest cases)—
(a) in section 54 (decision of Secretary of State in public interest cases)—
(i) in subsection (5), after ‘30’ insert ‘working’;
(ii) omit subsection (8);
(b) in section 56 (competition cases where intervention on public interest grounds ceases)—
(i) in subsection (4), in paragraph (b), after ‘20’ insert ‘working’;
(ii) omit subsection (5).
(4) In Chapter 4 (enforcement), in section 73A (time limits for consideration of undertakings) omit subsection (12).
(5) In Chapter 5 (supplementary)—
(a) in section 129(1) (other interpretative provisions), at the appropriate place insert—
‘“working day” means any day other than—
(a) a Saturday or Sunday, or
(b) a day that is a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971.’;
(b) in section 130 (index of defined expressions), at the appropriate place insert—
(6) In Part 4 of EA 2002 (market studies and market investigations), in section 151 (public interest intervention cases: interaction with general procedure)—
(a) in subsection (3), after ‘20’ insert ‘working’;
(b) in subsection (5), after ‘20’ insert ‘working’;
(c) omit subsection (6);
(d) at the end insert—
‘(7) In this section, “working day” means any day other than—
(a) a Saturday or Sunday, or
(b) a day that is a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971.’
(7) In regulation 2(1) of the Enterprise Act 2002 (Merger Prenotification) Regulations 2003 (S.I. 2003/1369), for the definition of ‘working day’ substitute—
‘“working day” means any day other than—
(a) a Saturday or Sunday, or
(b) a day that is a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971.’”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 5 of Part 2 of the Bill) amends Parts 3 and 4 of the Enterprise Act 2002, and the Enterprise Act 2002 (Merger Prenotification) Regulations 2003, so that they are consistent in providing that a bank holiday in any part of the United Kingdom is not a working day.
Brought up, read the First and Second time, and added to the Bill.
New Clause 13
ADR fees regulations
“(1) The Secretary of State may by regulations make provision about the following descriptions of fees, namely—
(a) fees to be paid by applicants for accreditation under section 289(1);
(b) fees to be paid by applicants for the variation of their accreditation under section 289(3B);
(c) fees to be paid by accredited ADR providers under section 292(1).
(2) The power to make provision about a description of fees includes power to provide—
(a) for fees of different specified amounts to be payable in different cases or circumstances;
(b) for cases or circumstances in which no fees are to be payable;
(c) in the case of fees to be paid under section 292, the times at which the fees are to be paid.
(3) In making regulations under this section the Secretary of State must have regard to the need to secure that, taking one year with another—
(a) the total amount of fees paid does not exceed the costs to the Secretary of State of carrying out functions under this Chapter;
(b) the total amount of fees paid under section 289(1) does not exceed the costs to the Secretary of State of processing and determining applications for accreditation;
(c) the total amount of fees paid under section 289(3B) does not exceed the costs to the Secretary of State of processing and determining applications for the variation of an accreditation.
(4) Regulations under this section are subject to the negative procedure.”—(Kevin Hollinrake.)
This new clause (which would be inserted into Chapter 4 of Part 4 of the Bill) confers power to make regulations about the fees payable under clauses 289 and 292. The power includes power to prescribe cases or circumstances in which no fee is required to be paid.
Brought up, read the First and Second time, and added to the Bill.
New Clause 14
Power to require information about competition in connection with motor fuel
“(1) The CMA may require an undertaking involved in, or connected with, the distribution, supply or retail of motor fuel (‘U’) to give specified information to it where it considers that the information would assist the CMA in—
(a) assessing competition in the United Kingdom in connection with the retail of motor fuel;
(b) publishing information about competition in the United Kingdom in connection with the retail of motor fuel;
(c) making proposals, or giving information or advice, to the Secretary of State about the need for, or the potential for, action to be taken (whether by the Secretary of State or another person) and what that action should be for the purposes of—
(i) increasing competition in the United Kingdom in connection with the retail of motor fuel;
(ii) benefiting consumers of motor fuel;
(d) assessing the effectiveness of any action taken as a result of proposals made, or information or advice given, under paragraph (c).
(2) The power conferred by subsection (1) is to be exercised by giving U a notice (an ‘information notice’).
(3) The CMA must include in an information notice—
(a) the time at which, or the frequency with which, the information must be given to the CMA;
(b) the manner and form in which the information must be given to the CMA;
(c) information about the possible consequences of not complying with the notice.
(4) The power under this section to require U to give information to the CMA includes the power to—
(a) require U to take copies of or extracts from information;
(b) require U to obtain or generate information;
(c) require U to collect or retain information that they would not otherwise collect or retain;
(d) if any specified information is not given to the CMA, require U to state, to the best of their knowledge and belief, both where that information is and why it has not been given to the CMA.
(5) An undertaking may not be required under this section to give the CMA a privileged communication.
(6) A ‘privileged communication’ is a communication—
(a) between a professional legal adviser and their client, or
(b) made in connection with, or in contemplation of, legal proceedings,
which in proceedings in the High Court would be protected from disclosure on grounds of legal professional privilege.
(7) In the application of this section to Scotland—
(a) the reference to the High Court is to be read as a reference to the Court of Session, and
(b) the reference to legal professional privilege is to be read as a reference to the confidentiality of communications.
(8) In this section—
‘consumer’ has the same meaning as in Part 4 of EA 2002 (see section 183(1) of that Act);
‘motor fuel’ has the same meaning as in the Motor Fuel (Composition and Content) Regulations 1999 (see regulation 2 of those Regulations), but as if paragraphs (c) and (d) of the definition of that term were omitted;
‘specified’ means—
(a) specified, or described, in the information notice, or
(b) falling within a category which is specified, or described, in the information notice;
‘United Kingdom’ includes a part of the United Kingdom.
(9) The Secretary of State may by regulations amend the definition of ‘motor fuel’ in subsection (8).
(10) Regulations under subsection (9) are subject to the negative procedure.
(11) In this Chapter, ‘undertaking’ has the same meaning it has for the purposes of Part 1 of CA 1998 (competition: agreements, abuse of dominant position etc).”—(Kevin Hollinrake.)
This new clause (which, along with the new clauses inserted by NC15 to NC21, would form a new first Chapter in Part 5 of the Bill) allows the CMA to give an information notice to undertakings involved in the distribution, supply or retail of petrol or diesel requiring them to provide the CMA with information for the purposes mentioned in subsection (1) of the clause.
Brought up, read the First and Second time, and added to the Bill.
New Clause 15
Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)
“(1) The CMA may impose a penalty on an undertaking where it considers that the undertaking has, without reasonable excuse—
(a) failed to comply with an information notice under section (Power to require information about competition in connection with motor fuel);
(b) destroyed, otherwise disposed of, falsified or concealed, or caused or permitted the destruction, disposal, falsification or concealment of, any document which the undertaking has been required to produce by an information notice under that section;
(c) given the CMA information which is false or misleading in a material particular in connection with an information notice under that section;
(d) given information which is false or misleading in a material particular to another undertaking knowing that the information was to be used for the purpose of giving information to the CMA in connection with an information notice under that section.
(2) The amount of a penalty imposed on an undertaking under this section may be such amount as the CMA considers appropriate, provided it does not exceed the amounts set out in subsection (4).
(3) The amount of a penalty under this section must be—
(a) a fixed amount,
(b) an amount calculated by reference to a daily rate, or
(c) a combination of a fixed amount and an amount calculated by reference to a daily rate.
(4) The maximum amounts of a penalty that may be imposed on an undertaking are—
(a) in the case of a fixed amount, an amount equal to 1% of the total value of the undertaking’s turnover (both inside and outside the United Kingdom);
(b) in the case of an amount calculated by reference to a daily rate, for each day an amount equal to 5% of the total value of the undertaking’s daily turnover (both inside and outside the United Kingdom);
(c) in the case of a combination of a fixed amount and an amount calculated by reference to a daily rate, the amounts mentioned in paragraph (a), in relation to the fixed amount, and paragraph (b), in relation to the amount calculated by reference to a daily rate.
(5) In imposing a penalty under this section by reference to a daily rate—
(a) no account is to be taken of any days before the service on the undertaking concerned of the provisional penalty notice under section 112(A1) of EA 2002 (as applied by section (Procedure and appeals)), and
(b) unless the CMA determines an earlier day (whether before or after the penalty is imposed), the amount payable ceases to accumulate at the beginning of the day on which the undertaking first complies with the requirement in question.
(6) The Secretary of State may by regulations make provision for determining the turnover (both inside and outside the United Kingdom) of an undertaking for the purposes of this section.
(7) The regulations may, among other things—
(a) make provision about amounts which are, or are not, to be included in an undertaking’s turnover;
(b) make provision about the date or dates by reference to which an undertaking’s turnover is to be determined;
(c) confer on the CMA the power to determine and make provision about matters specified in the regulations (including the matters mentioned in paragraphs (a) and (b)).
(8) Regulations under subsection (6) are subject to the negative procedure.”—(Kevin Hollinrake.)
This new clause would allow the CMA to impose financial penalties on undertakings who fail to comply with an information notice given under the new clause inserted by NC14.
Brought up, read the First and Second time, and added to the Bill.
New Clause 16
Procedure and appeals
“(1) Sections 112 (penalties: main procedural requirements), 113 (payments and interest by instalments), section 114 (appeals) and 115 (recovery of penalties) of EA 2002 apply in relation to a penalty imposed under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) as they apply in relation to a penalty imposed under section 110(1) of that Act.
(2) For the purposes of this section—
(a) sections 112 to 115 of EA 2002 are to be read as if references to ‘the appropriate authority’ were references to the CMA only;
(b) section 114(5A) of EA 2002 is to be read as if the words ‘In the case of a penalty imposed on a by the CMA or OFCOM,’ were omitted;
(c) section 114(12) of EA 2002 is to be read as if, for paragraph (b), there were substituted—
‘(b) “the relevant guidance” means the statement of policy which was most recently published under section (Statement of policy on penalties) of the Digital Markets, Competition and Consumers Act 2024 at the time of the act or omission giving rise to the penalty.’”—(Kevin Hollinrake.)
This new clause applies provision in sections 112 to 115 of the Enterprise Act 2002, with modifications, for the purposes of the new clause inserted by NC15.
Brought up, read the First and Second time, and added to the Bill.
New Clause 17
Statement of policy on penalties
“(1) The CMA must prepare and publish a statement of policy in relation to the exercise of powers to impose a penalty under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)).
(2) The statement must include a statement about the considerations relevant to the determination of—
(a) whether to impose a penalty under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)), and
(b) the nature and amount of any such penalty.
(3) The CMA may revise its statement of policy and, where it does so, must publish the revised statement.
(4) In preparing or revising its statement of policy the CMA must consult—
(a) the Secretary of State, and
(b) such other persons as the CMA considers appropriate.
(5) A statement of policy, or revised statement, may not be published under this section without the approval of the Secretary of State.
(6) Subsection (7) applies where the CMA proposes to impose a penalty under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) on an undertaking.
(7) The CMA must have regard to the statement of policy most recently published under this section at the time of the act or omission giving rise to the penalty when deciding—
(a) whether to impose the penalty, and
(b) if so, the amount of the penalty.”—(Kevin Hollinrake.)
This new clause requires the CMA to publish a statement of policy about the imposition of penalties under the new clause inserted by NC15.
Brought up, read the First and Second time, and added to the Bill.
New Clause 18
Offences etc
“Destroying or falsifying information
(1) A person (“P”) commits an offence if, having been required to give information to the CMA under section (Power to require information about competition in connection with motor fuel), P—
(a) intentionally or recklessly destroys or otherwise disposes of it, falsifies or conceals it, or
(b) causes or permits its destruction, disposal, falsification or concealment.
False or misleading information
(2) A person (“P”) commits an offence if—
(a) P gives information to the CMA in connection with an information notice under section (Power to require information about competition in connection with motor fuel),
(b) the information is false or misleading in a material particular, and
(c) P knows that it is or is reckless as to whether it is.
(3) A person (“P”) commits an offence if P gives information to another person which is false or misleading in a material particular and P—
(a) either—
(i) knows the information to be false or misleading in a material particular, or
(ii) is reckless as to whether the information is false or misleading in a material particular, and
(b) knows that the information will be given to the CMA in connection with an information notice under that section.
Sentences
(4) A person guilty of an offence under this section is liable—
(a) on summary conviction in England and Wales, to a fine;
(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum;
(c) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.
Offences by officers of a body corporate etc
(5) If an offence under this section committed by a body corporate is proved—
(a) to have been committed with the consent or connivance of an officer of the body corporate, or
(b) to be attributable to neglect on the part of an officer of the body corporate,
the officer as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.
(6) If the affairs of a body corporate are managed by its members, subsection (5) applies in relation to the acts and defaults of a member in connection with the member’s functions of management as if the member were an officer of the body corporate.
(7) If an offence under this section committed by a partnership in Scotland is proved—
(a) to have been committed with the consent or connivance of a partner, or
(b) to be attributable to neglect on the partner’s part,
the partner as well as the partnership is guilty of the offence and liable to be proceeded against and punished accordingly.
(8) In subsection (7), “partner” includes a person purporting to act as a partner.”—(Kevin Hollinrake.)
This new clause makes it an offence for a person to destroy or falsify information the person is required to give to the CMA by virtue of an information notice given to the person under the new clause inserted by NC14 or to provide the CMA with false or misleading information in connection with such an information notice.
Brought up, read the First and Second time, and added to the Bill.
New Clause 19
Penalties under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) and offences under section (Offences etc)
“(1) The CMA may not impose a penalty on a person under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) in relation to an act or omission which constitutes an offence under section (Offences etc) if the person has, in relation to that act or omission, been found guilty of that offence.
(2) A person may not be found guilty of an offence under section (Offences etc) by virtue of an act or omission if the person has paid a penalty imposed under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) in relation to that act or omission.”—(Kevin Hollinrake.)
This new clause prevents a person from being charged a penalty under the new clause inserted by NC15, and being found guilty of an offence under the new clause inserted by NC18, in respect of the same acts or omissions.
Brought up, read the First and Second time, and added to the Bill.
New Clause 20
Information sharing
“In Schedule 14 to EA 2002 (provisions about disclosure of information) at the appropriate place insert—
“Chapter A1 of Part 5 of the Digital Markets, Competition and Consumer Act 2024.””—(Kevin Hollinrake.)
This new clause provides that the restrictions on the disclosure of information contained in Part 9 of the Enterprise Act 2002 apply to information that comes to the CMA in connection with the exercise of its functions under the new first Chapter of Part 5 of the Bill to be formed by the new clauses inserted by NC14 to NC21.
Brought up, read the First and Second time, and added to the Bill.
New Clause 21
Expiry of this Chapter
“(1) This Chapter, apart from subsection (5) of this section and section (Information sharing), expires at the end of the relevant period.
(2) The “relevant period” means the period of five years beginning with the day on which this Act is passed.
(3) The Secretary of State may by regulations amend this section to change the definition of the “relevant period”.
(4) Regulations under subsection (3) are subject to the affirmative procedure.
(5) The expiry of this Chapter does not affect its continued operation in relation to any information notice given under section (Power to require information about competition in connection with motor fuel) before its expiry.”—(Kevin Hollinrake.)
This new clause provides that the new first Chapter of Part 5 of the Bill to be formed by the new clauses inserted by this Amendment, and NC14 to NC19, expires five years after it comes into force, unless the Secretary of State makes regulations extending the period for which the Chapter has effect
Brought up, read the First and Second time, and added to the Bill.
New Clause 22
Removal of limit on the tenure of a chair of the Competition Appeal Tribunal
“In Schedule 2 to EA 2002 (the Competition Appeal Tribunal), in paragraph 2 (tenure etc) omit sub-paragraph (2).”—(Kevin Hollinrake.)
This new clause (which would be inserted into Part 5 of the Bill) removes the prohibition on a person being a chair of the Competition Appeal Tribunal for more than 8 years.
Brought up, read the First and Second time, and added to the Bill.
New Clause 29
Contract renewal: option to opt in
“(1) Before a trader enters into a subscription contract with a consumer where section 247(2) applies, the trader must ask the consumer whether they wish to opt-in to an arrangement under which the contract renews automatically at one or more of the following times—
(a) after a period of six months and every six months thereafter, or
(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.
(2) If the consumer does not opt-in to such an arrangement, the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.
(3) If the consumer has not—
(a) opted into an arrangement under subsection (1), or
(b) given notification of the consumer’s intention to renew by the date specified under subsection (2),
the contract will lapse on the renewal date.”—(Alex Davies-Jones.)
This new clause would allow the consumer to opt-out of their subscription auto-renewing every six months, or if the period between payments is longer than six months, before every payment. If the consumer does not opt-in to auto-renewal, they would be required to notify the trader manually about renewing.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Kevin Hollinrake
I beg to move, That the Bill be now read the Third time.
The UK’s continued tech success depends on markets that are fiercely competitive, and where the best companies can flourish and create the innovations that spur growth. With this Bill, we will establish new, more effective tools to address the unique barriers to competition in digital markets, allowing the CMA to proactively drive more dynamic markets and prevent harmful practices, such as making it difficult to switch between operating systems. With this Bill, we will help the UK technology industry to grow, creating room for small businesses with great ideas to flourish. This Bill will deliver tangible benefits to British consumers and British businesses alike.
The Bill was welcomed on both sides of the House on Second Reading. The Select Committee Chairs from this House and the other place, as well as hon. Members from a number of parties, including the hon. Member for Pontypridd (Alex Davies-Jones) and my hon. Friend the Member for Weston-super-Mare (John Penrose), have repeatedly spoken of the Bill’s importance. I thank them for their work and for working with us so constructively. On Report, the Government made a number of amendments to the Bill, reflecting the important discussions between stakeholders and Members of this House. I thank Members from across the House for their contributions during the passage of the Bill.
I will conclude by thanking all my predecessors who have taken the Bill from consultation to this House, my officials, the Clerks, and the Chairs and members of the Public Bill Committee for their line-by-line scrutiny, and for their collaborative and constructive approach.
Alex Davies-Jones
May I briefly join the Minister in thanking all the members of the Public Bill Committee and the Clerks of the House? I give personal thanks to my hon. Friend the Member for Feltham and Heston (Seema Malhotra) for working with me so collaboratively on getting the Bill to a good place. Let me also place on the record my thanks to Freddie Cook, in my team, for all her work on the Bill.
Labour welcomes this Bill, having led the way in calling for large tech companies to be properly regulated to ensure competition in digital markets. We are pleased to see the Bill in a good place as it goes to the other place for further consideration. We have long called for measures to protect consumers, enhance innovation and promote competition in digital markets to unlock growth and level the playing field for smaller businesses. That could not be more important in the midst of a cost of living crisis. We have supported the passage of this Bill and it is now important that these new powers that are given to the CMA to ensure competition in digital markets are not watered down as the Bill progresses. We will be following closely, as will colleagues from across the House, and we look forward to the Bill finally coming into action.
Richard Thomson
May I, too, add my thanks to the Bill Committee members and to all the Members who have contributed throughout the passage of the Bill? I also thank the Clerks for their wise guidance and assistance, and Sarah Callaghan, in the SNP’s research office, for the diligent work she has done on this.
I have said throughout that the amendments we sought to put forward were merely to fill the potholes that we saw in the Bill. It did not need a special fund from the Prime Minister to fill them; all it needed was for some action to be taken on greenwashing and drip pricing, and I am sure the Minister can understand the rest from what I have said. We think those issues still need addressing, but my concern is now about the impact that the Bill will or will not have on big tech and the freedom of the markets our consumers operate in. The success of the Bill will be measured not in the size of the majority that the Government could have had tonight, but in the impact it has on consumers and small businesses in the weeks, months and years ahead.
Question put and agreed to.
Bill accordingly read the Third time and passed.