Written Statements

Monday 16th December 2024 Written Statements

Monday 16 December 2024

Royal Mail Takeover Bid: EP Group

Monday 16th December 2024 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)]

Royal Mail is an iconic national institution, and this Government will ensure that it continues to be one. Since taking office in July, the Secretary of State and I have been clear that the Government would robustly scrutinise the proposed takeover of Royal Mail, and ensure there are safeguards for its future.

While the takeover bid is still ongoing and subject to the relevant ongoing regulatory processes, this statement is to update the House on the legally binding undertakings that have now been given to Government by the bidder— EP Group. This does not mark the conclusion of the takeover, and these undertakings will only become effective if the takeover goes through.

Should the takeover complete, I am pleased to confirm that the Department for Business and Trade has secured significant commitments to promote the long-term and financially sustainable future of Royal Mail in the United Kingdom.

It may be helpful to set out where Royal Mail was at the time the takeover bid was announced. In its financial year 2023-24, Royal Mail recorded an operating loss of £348 million. At the same time, Royal Mail had not met its quality of service targets as set by the independent regulator, Ofcom. Royal Mail’s performance for the 2022-23 financial year resulted in a £5.6 million fine.

While the previous Government were happy to accept decline, this Government have worked closely with EP Group to secure significant commitments to delivering transformation of Royal Mail into a sustainable service, and hardwired in stronger protections for Royal Mail’s identity.

My Department’s objectives when these discussions with EP Group began were to first strengthen the financial sustainability of this iconic and important British institution. Secondly, we wanted to protect the customers, workers and brand of Royal Mail.

The Department for Business and Trade has agreed unprecedented commitments from the potential buyer of Royal Mail to protect its long-term future and to recognise its position in the UK’s national life.

Significantly, EP have committed to issue the Department for Business and Trade with a “golden share” in Royal Mail for certain matters. This means that—except in very limited circumstances—the Department for Business and Trade can now prevent Royal Mail from moving its headquarters abroad or moving its tax residency without the Government’s permission. This is an entirely new measure which was not in place at the time of Royal Mail’s privatisation, and it will remain in place in perpetuity, including where there is a subsequent change in ownership of Royal Mail in the future.

I want to be clear that this will not change any of the Government’s role in the day-to-day running of the business; Royal Mail remains a private entity.

In addition to this golden share, there are several other commitments made by EP Group to the Department for Business and Trade. These include:

A number of financial commitments to guard against value extraction and introduce a set of requirements to strengthen Royal Mail’s finances, including the implementation of a balance sheet restructuring, which will remove a significant intra-group debt that is currently due to the remainder of the IDS group.

There is a commitment from EP Group to ensure that Royal Mail has the financial means to fund the transformation of its business in the three-year period following completion of the acquisition.

Royal Mail has consistently not met its targets set by Ofcom. Recognising this, there will be a commitment such that EP Group cannot extract value from Royal Mail Group until it both can afford to do so, and has achieved specific performance targets.

I am placing copies of the deed in the Libraries of both Houses.

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Office for Budget Responsibility: Economic and Fiscal Forecast

Monday 16th December 2024 Written Statements

[The Chancellor of the Exchequer (Rachel Reeves)]

Today I can inform the House that I have asked the Office for Budget Responsibility (OBR) to prepare an economic and fiscal forecast for publication on 26 March 2025.

This forecast, in addition to the forecast that was published in October 2024, will fulfil the obligation required by the Budget Responsibility and National Audit Act 2011 for the OBR to produce at least two forecasts in a financial year.

I intend to respond to the March forecast with a parliamentary statement. This is in line with my commitment to deliver one major fiscal event a year, to give families and businesses the stability and certainty they need and, in turn, to support the Government’s growth mission.

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Clean Power 2030 Action Plan

Monday 16th December 2024 Written Statements

[The Secretary of State for Energy Security and Net Zero (Ed Miliband)]

On Friday 13 December the Government published our clean power 2030 action plan. This is an important step towards delivering the Prime Minister’s mission to make Britain a clean energy superpower, by achieving clean power by 2030 and accelerating to net zero across the economy, and follows on from his “plan for change” speech this December.

We are undergoing a significant transformation of our energy system, and this transition needs to accelerate to meet the Government’s 2030 clean power goal, secure the economic opportunities it presents, and respond to the wider challenges presented by our ageing energy infrastructure. Our plan will play a critical role in delivering this acceleration, unlocking billions of pounds of private investment. It outlines the most ambitious reforms to Britain’s energy system in a generation to make our country’s energy secure, protect households from volatile international fossil fuel markets, reindustrialise the country with thousands of skilled jobs, and tackle the climate crisis. This plan will provide the foundation for the UK to build an energy system that can bring down bills for households and businesses for good.

Earlier this year, the National Energy System Operator published its independent, expert advice on delivering clean power by 2030. The Government’s plan builds on that advice, outlining our view of the pathway to the 2030 clean power goal and the steps needed to get there. The plan covers both individual technologies and the cross-cutting enablers of deploying them, such as planning, grid, supply chains and skills.

Key measures in the plan include cleaning up the grid connections queue by prioritising the most important projects and ending the “first come, first served” system; speeding up decisions on planning permission by empowering planners to prioritise critical energy infrastructure; and expanding the renewable auction process to stop delays and get more projects connected.

The plan has been developed in partnership with interested Departments, the devolved Administrations and other parts of the public sector, such as Ofgem and NESO. A dedicated clean power commission, made up of experts from across industry, has also informed the plan, alongside broader industry engagement.

This ambitious plan marks a significant step forward for the Government’s clean energy mission. We are committed to continuing to work in close partnership with stakeholders to deliver it.

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Capacity Market: December Publications

Monday 16th December 2024 Written Statements

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

I am tabling this statement to inform members of three publications relating to the capacity market. The publications consist of a consultation on improvements to capacity market rules and treatment of consumer-led flexibility in the capacity market; a call for evidence inviting further views on improvements to consumer-led flexibility in the capacity market; and a statutory report summarising the capacity market’s performance over the last five years.

This Government have committed to delivering clean power by 2030 and accelerating progress towards net zero, while ensuring the security of supply. Making Britain a clean energy superpower by 2030 is one of the Prime Minister’s five missions. To deliver this mission, we will increasingly rely on renewable power. The Government have set targets to double onshore wind, treble solar and quadruple offshore wind by 2030.

Introduced in 2014, the capacity market provides Great Britain with its ultimate safeguard to ensure security of supply. It serves to ensure enough capacity is available to provide a reliable electricity supply during peak demand periods and system stress events. The funding provided through the capacity market incentivises investment in new and existing generation, interconnectors, batteries, and demand side response mechanisms that enable consumer-led flexibility to ensure sufficient available capacity when required. This capacity is acquired through annual auctions held at intervals four years ahead and one year ahead of its delivery years. The Government regularly amend the capacity market prior to auction cycles to ensure it is cost-effective and meets broader strategic objectives such as clean power by 2030.

The transition to clean power will see changes in the patterns of energy production and consumption, with flexibility playing an increasingly important role. In October, we published a consultation and call for evidence exploring proposals to maintain security of supply and to enable flexible generation capacity to decarbonise. Today, we build upon this work by publishing a consultation and call for evidence on proposals to modernise the capacity market rules and improve consumer-led flexibility within the capacity market.

Consumer-led flexibility involves voluntary actions taken freely and directly by energy consumers to shift their electricity use. This includes residential customers using smart technologies, such as smart-charging EVs and heat pumps, as well as industrial and commercial units adjusting demand and utilising behind-the-meter generation or storage. This enables consumers to be rewarded with cheaper electricity by flexibly adjusting their usage to times of lower demand on the grid.

The consultation sets out policies to streamline how consumer-led flexibility, delivered by demand side response mechanisms, participates in the capacity market. As participation in the capacity market from aggregated domestic demand-side response portfolios increases to enable increased consumer-led flexibility, it is important that capacity market rules are updated to better incorporate and enable access from emerging technologies that can respond flexibly to times of high energy demand. It also seeks views on the introduction of a termination fee for new demand-side response mechanisms that fail to demonstrate agreed capacity, improving delivery assurance to enable the capacity market to fulfil its central principle of ensuring security of supply.

The consultation also outlines proposals on capacity market rule improvements. The capacity market rules govern how the capacity market operates. It is integral that the rules are clear and consistent in their operation to ensure the market remains accessible for new entrants seeking to invest in new sources of capacity. The consultation outlines proposals to improve the accessibility and clarity of the capacity market rules to ensure greater understanding and adherence to them. The proposed changes will enable capacity market units to change their opt-out status following a change in their operational circumstances, and will remove rules on transitional and coronavirus arrangements that are no longer required. These changes should ensure the capacity market rules remain fit for purpose and continue to allow new, innovative technologies to participate in the capacity market without facing unnecessary administrative hurdles. The proposed changes also extend a policy to allow existing generators to use data older than 24 months to pre-qualify for auctions held in 2026. This will further increase auction competitiveness and lower the costs of the capacity market for consumers’ energy bills.

The call for evidence seeks views on potential changes to the capacity market to improve consumer-led flexibility. It builds on proposals laid out in the capacity market phase 2 consultation, which was published in October 2023 to invite views on how the demand-side response mechanisms that enable consumer-led flexibility could be better categorised and integrated into the capacity market. It also seeks feedback on how these mechanisms can be better supported through improved portfolio management, while maintaining the high levels of delivery assurance expected within the capacity market.

Finally, we have published the second statutory five-year review, covering the years 2019 to 2024 of the capacity market’s performance—referred to as the 10-year review. This review provides a summary of how the capacity market has performed against its original objectives. It draws on evidence gathered from a Government-commissioned independent process and impact evaluation of the capacity market scheme in September 2021, and on responses to a call for evidence published in October 2023.

The review has taken place as the Government consider larger strategic questions through the review of electricity market arrangements programme, whose remit includes how a future capacity market can meet Government objectives on security of supply. The review does not seek to pre-empt the outcomes of the review of electricity market arrangements.

These publications consider actions to improve accessibility to and functionality of the capacity market, while continuing to uphold its primary objective of ensuring security of supply. As the capacity market reaches its 10-year milestone as a key pillar at the heart of the Government’s strategy for ensuring security of electricity supply in Great Britain, these proposals seek to ensure that it remains fit for purpose and continues to play a crucial role in achieving the clean power mission.

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Development and the Environment

Monday 16th December 2024 Written Statements

[The Minister for Housing and Planning (Matthew Pennycook)]

The Government are determined to rebuild Britain, delivering on our hugely ambitious “plan for change” milestones of building 1.5 million safe and decent homes and fast-tracking 150 planning decisions on major infrastructure by the end of this Parliament. At the same time, we are committed to supporting nature recovery and delivering on the Environment Act 2021.

When it comes to development and the environment, we know we can do better than the status quo, which too often sees both sustainable house-building and nature recovery stall. Instead of environmental protections being seen as a barrier to growth, we want to unlock a win-win for the economy and for nature.

In the King’s Speech, we set out our intention to use development to fund nature recovery, delivering necessary changes through legislation where we can confirm to Parliament that the steps we are taking will deliver positive environmental outcomes.

With a view to progressing policy development in advance of the publication of the Planning and Infrastructure Bill next year, the Government have published a working paper inviting views on a proposed new approach to accelerate housing and infrastructure development while going beyond offsetting harm to drive forward nature recovery.

In developing this working paper, the Government have engaged constructively with representatives of the development industry, nature conservation organisations, nature service providers, and local government. The approach proposed has benefited considerably from the valuable feedback received, and we intend to continue to work closely with key stakeholders as we continue to refine our thinking in this area.

That the status quo is producing sub-optimal outcomes is not in dispute. There is widespread consensus that it is deterring planning applications and hindering the pace at which development can be delivered, while at the same time failing to maximise benefits for nature.

The challenges relating to nutrient neutrality are a case in point. An estimated 8% of new housing supply —equating to approximately 16,500 dwellings per year, based on recent housing output levels—has historically been delivered in sensitive river catchments subject to nutrient neutrality requirements flowing from the Conservation of Habitats and Species Regulations 2017. There is widespread evidence that such requirements are unnecessarily deterring planning applications and hindering the pace at which homes and infrastructure in these catchment areas can be delivered. The current arrangement requires costly site-by-site mitigation for each new development, and even where mitigation measures are available, obligations currently have to be assessed and secured on a project-by-project basis that often fails to secure optimal environmental outcomes.

Alongside taking robust regulatory and policy action to address pollution and environmental harm at source, the Government therefore want to take a more strategic approach to enable development to proceed where it is needed, while delivering more effectively for nature.

Such an approach would entail moving responsibility for identifying actions to address the environmental impacts of development away from multiple, project-specific assessments in an area and toward a single strategic assessment and delivery plan implemented at the right spatial scale. Without reducing the level of environmental protection provided for in existing law, we believe this approach, if taken forward, would provide a more efficient and effective way to deliver on the outcomes that the habitats regulations and other environmental obligations aspire to achieve.

In adopting this more strategic approach, which will enable the delivery of tens of thousands of new homes alongside new infrastructure, we are seeking to:

take a holistic view of nature recovery to secure better environmental outcomes, in line with our Environment Act targets;

go beyond offsetting environmental impacts and instead use development to drive nature recovery;

drive efficiency and reduce duplication of effort to ensure every pound spent is helping to deliver our environmental goals;

make it far easier for developers to discharge a range of environmental obligations, with the legal certainty necessary to underpin substantial capital investment;

give delivery partners the tools they need to generate positive outcomes for nature, empowering them to make the right choices to deliver nature recovery;

establish a robust and transparent framework to monitor delivery of environmental outcomes; and

create a lasting legacy of environmental improvement that will promote better public health through increased access to high quality green spaces.

We want to meet these objectives by taking three steps, for which the Planning and Infrastructure Bill would provide the necessary legislative underpinning:

Moving responsibility for identifying actions to address environmental impacts away from multiple project-specific assessments in an area to a single strategic assessment and delivery plan. This will allow action to address environmental impacts from development to be taken strategically, at an appropriate geographic scale, rather than at the level of an individual project—while recognising the importance of protecting local communities’ access to nature and green space.

Moving more responsibility for planning and implementing these strategic actions on to the state, delivered through organisations with the right expertise and with the necessary flexibility to take actions that most effectively deliver positive outcomes for nature.

In turn, allowing impacts to be dealt with strategically in exchange for a financial payment that helps fund strategic actions, so development can proceed more quickly. Project-level environmental assessments are then limited only to those harms not dealt with strategically.

In due course, our proposed approach would be supported by the new framework of environmental outcomes reports that will replace the current systems of environmental assessment with a more effective and outcome-focused tool for managing the effects of development on the natural environment.

As we seek to refine our new approach, we recognise the importance of continuing to deliver nutrient mitigation schemes, including via the local nutrient mitigation fund and Natural England’s nutrient mitigation scheme. In this vein, we also intend to continue to support the delivery of strategic measures such as district-level licensing and suitable alternative natural green spaces, as well providing ongoing support for local authorities through the Planning Advisory Service.

Shifting to a strategic and more outcomes-focused approach to impact assessment and nature recovery has the potential to support the environment, as well as helping us deliver the housing and infrastructure we need, unlocking a win-win for the economy and nature. We look forward to receiving views on the options set out in the working paper.

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English Devolution

Monday 16th December 2024 Written Statements

[The Minister for Local Government and English Devolution (Jim McMahon)]

Today, I am pleased to announce that the Government have laid the English Devolution White Paper.

The No. 1 mission of this Government is to relight the fire of our economy and ignite growth in every region. But we have an economy that hoards potential and a politics that hoards power—England is one of the most centralised developed countries, with too many decisions affecting too many people made by too few.

To truly get growth in every corner of the country and raise living standards, as set out in the Government’s ambitious plan for change, we must rewire England and end the hoarding in Whitehall by devolving power and money from central Government to those with skin in the game.

That means empowering mayors to drive growth and ending the patchwork approach to devolution. But it also means rebuilding and reforming local government as the foundation for devolution, a reset in the relationship between central and local government, and giving communities stronger tools to shape the future of their local areas.

To do this, we will bring forward a landmark English devolution Bill when parliamentary time allows. In advance of the Bill, we have today laid the English Devolution White Paper.

Deepening and widening devolution in England

At its core, the White Paper sets out how the Government will strengthen and widen the mayoral model of devolution across England. Mayors are uniquely placed to drive growth. They can use their mandate for change to take the difficult decisions needed to drive growth; their standing and soft power to convene local partners to tackle shared problems; and their platform to tackle the obstacles to growth that need a regional approach.

To equip mayors with the tools they need to deliver, we will:

Provide unprecedented powers and budgets for mayors, via our enhanced devolution framework. This will include:

A clear and transparent route for mayors to access integrated funding settlements over time. Starting with Greater Manchester, the West Midlands, South Yorkshire, West Yorkshire, Liverpool City Region, and the North East, this is a consolidated budget across housing, regeneration, local growth, local transport, skills, retrofit, and employment support.

New powers over strategic planning and control of grant funding for regeneration and housing delivery, putting our regions at the centre of the drive to build 1.5 million homes in this Parliament.

Devolution of non-apprenticeship adult skills functions and supported employment funding to mayors, as well as a substantive role in future employment support that is additional to core Jobcentre Plus provision. Mayors will take on joint ownership of the local skills improvement plan model and will have a crucial role in ensuring there are clear pathways of progression from education into both further and higher education and local employment opportunities.

A statutory role for mayors in governing, managing, planning, and developing the rail network, with an additional right for the most established mayors to request devolution of services, stations and infrastructure.

A strengthened role for mayors in relation to business support, boosting exports and attracting international investment.

Moving mayoral strategic authorities to simple majority voting, including the mayor’s vote, wherever possible, because unanimity is not in the best interests of getting houses built or growing the local economy.

Reform and join up public services, to help services deliver for citizens and reduce the number of politicians. One of the simplest and most effective means to do this is bottom up, through place. So the Government will: transfer police and crime commissioner (PCC) and fire and rescue authority (FRA) responsibilities to mayors where boundaries align; explore the possibility of a single mayor taking on PCC and FRA responsibilities across two or more authorities where this would result in coterminous boundaries; establish an expectation that mayors are appointed to integrated care partnerships and are considered for the role of chair or co-chair; and announce a long-term ambition to align public service boundaries, including jobcentres, police, probation, fire, health services, and strategic authorities. Through these measures, strategic authorities will be positioned as convenors on public service reform, working in partnership with local authorities.

Hardwire devolution into Government, because, for too long, the priorities of places have been ignored. New forums, like the Prime Minister’s Council of the Nations and Regions, and statutory local growth plans, which dovetail with the Government’s national industrial strategy, will hardwire local areas into the way the UK Government operate, enabling every corner of the country to play its part in delivering the Government’s plan for change.

Establish “devolution by default”. Devolution in England has been ad hoc and inconsistent, with it being too unclear what powers places can access, when and how. The Government will legislate to set out which powers go to which type of authority. The most far-reaching and flexible powers will be for areas with mayors, because they provide the most visible and accountable form of local leadership. This is the floor of our ambition, not the ceiling, so we will enable our most mature institutions to request and pilot new functions to drive innovation.

As we widen devolution, our goal is simple: universal coverage of strategic authorities in England. These should be larger than individual councils, covering wider areas where people live and work, to utilise the benefits of economies of scale. Many places already have combined authorities that serve this role.

The Government issued an invitation to places without devolution to submit proposals in July. We have had constructive conversations with a range of areas, including Cheshire and Warrington, Norfolk and Suffolk and others, about how devolution could support their ambitions.

The Government will shortly set out their priority programme for devolution—which will be for areas that are willing to progress devolution to an accelerated timescale, and to plan for inaugural mayoral elections in May 2026. The Government will continue to develop proposals for new strategic authorities collaboratively and in partnership with local areas. However, to ensure that everyone in England can benefit from devolution and ensure the effective running of public services, the Government will legislate for a ministerial directive, allowing the creation of strategic authorities where absolutely necessary and, after due time has been allowed, local leaders have not been able to agree. This goes hand-in-glove with our partnership approach to local government reorganisation. Taken together, this will mean fewer politicians who are more able to focus on delivering for residents.

Delivering devolution at every scale

Everyone—from regional mayors leading strategic economic policy, to frontline councillors convening their communities—needs the tools and trust to deliver change. That is why the White Paper is a vision for putting power in the right places and repairing the foundations of local government.

Councils are the foundation of our state—critical to driving growth, delivering and reforming the local public services people rely on, and to our democratic system. But local government has not been empowered to live up to its potential and people have suffered as a result. We will rebuild local government after 14 years of mismanagement and decline, so that it is fit, legal and decent. This means fairer funding and multi-year financial settlements, as we committed to in the local government finance policy statement in November. The initial consultation on the principles of this funding reform will be launched later this week. The public being able to hold councils to account for decisions means ending micromanagement from central Government—so we will reform the use of wasteful competitive and ringfenced funding pots and rationalise funding for service delivery into the local government finance settlement wherever possible; streamline and rationalise reporting requirements; and review requirements for local authorities to seek Secretary of State consents for the use of their powers.

We will establish a genuine partnership between central and local government, recognising the vital role of local councillors as frontline community convenors, and executive members and leaders as partners in delivering the Government’s missions and plan for change. This includes delivering 1.5 million homes, with upper tier local authorities coming together to deliver strategic planning where there is not a strategic authority in place, underpinned through provisions in the forthcoming planning and infrastructure Bill.

And, because unitary councils can lead to better outcomes for residents, save significant money which can be reinvested in public services, and improve accountability with fewer politicians who are more able to focus on delivering for residents, we will facilitate an ambitious programme of local government reorganisation. This programme will cover two-tier areas and unitary councils where there is evidence of failure or where their size or boundaries may be hindering their ability to deliver sustainable and high-quality public services. Reorganisation should not delay devolution, and we will take a phased approach to delivery, including prioritising areas where reorganisation can unlock devolution.

Too many of our towns, villages and neighbourhoods have been left behind by economic change and have been let down by struggling public services. We will empower communities with new rights and levers to drive change and regenerate their neighbourhoods, and protect cherished community assets, introducing a new community “right to buy” for assets of community value. We have also retained the long-term plan for towns and will reform it into a new regeneration programme. We will enhance local authorities’ powers, enabling them to address the challenges facing their areas. This will include strengthening councils’ ability to take over the management of vacant residential properties and to introduce large selective licensing schemes to improve conditions in the private rented sector, without requiring Secretary of State approval.

Upgrading the systems

Finally, we will secure devolution for the long term, strengthening accountability and building capacity. We will deliver improvements to the accountability system for devolution, including an outcomes framework for integrated funding settlements, so it remains fit for purpose as we devolve more powers and funding, and improve external scrutiny of local public spending, such as reforms to the local audit system and local government standards and oversight. To build capacity at all levels, we will ensure the right people are available for the job, seconding out from central Government if needed, while ensuring mayors are focused on their role and can empower their team to deliver.

Next steps

I have engaged closely with England’s regional mayors, via our new Mayoral Council, and local authorities, via our new Leaders Council, and will continue to do so as we roll out this ambitious programme. When parliamentary time allows, we will bring forward the English devolution Bill, which will help us deliver on the vision set out in the White Paper and on our commitment to empower communities to take back control from Westminster, so we can work in partnership to drive growth and ensure people across the whole country benefit.

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Online Safety Act 2023: Implementation

Monday 16th December 2024 Written Statements

[The Secretary of State for Science, Innovation and Technology (Peter Kyle)]

Today, the Government have reached two significant milestones in the implementation of the Online Safety Act (“the Act”), marking an important step forward in creating a safer online environment for all UK citizens. Today, I am laying in Parliament Ofcom’s first draft codes of practice for the illegal content duties and draft regulations setting out the threshold conditions for category 1, 2A and 2B services under the Act.



Ofcom’s draft illegal content duties codes of practice:

The illegal content duties apply to all regulated user-to-user and search services under the Act, no matter their size or reach. These include new duties to have systems and processes in place to tackle illegal content and activity. Ofcom, as the independent regulator for this regime, is required to set out measures in codes of practice that providers can take to fulfil these statutory duties. Ofcom has now submitted to me the drafts of its first codes of practice for the illegal content duties to lay these in Parliament for scrutiny. If neither House objects to the draft codes, Ofcom must issue the codes and the illegal content duties will come into force 21 calendar days later. Once the codes have come into force, the statutory safety duties will begin to apply to service providers, and Ofcom will be able to enforce against non-compliance.

Ofcom has also published its guidance on how providers should carry out risk assessments for illegal content and activity. Providers now have three months to complete their illegal content risk assessment.

The completion of the risk assessments should coincide with the codes of practice coming into force if they pass the statutory laying period. Ofcom’s codes will set out steps service providers can take to address identified risks. The draft codes will drive significant improvements in online safety in several areas. They will ensure service providers put in place effective systems and processes to take down illegal content, including for content that amounts to terrorism, child sexual abuse material (CSAM), public order offences, assisting suicide, intimate image abuse content and other offences. They will make it materially harder for strangers to contact children online, to protect children from grooming. They will significantly expand the number of services that use automated tools to detect CSAM. They will make it significantly easier for the police and the Financial Conduct Authority (FCA) to report fraud and scams to online service providers. And they will make it easier for users to report potentially illegal content.

The draft codes are a vital step in implementing the new regime. Ofcom fully intends to build on these foundations and has announced plans to launch a consultation in spring 2025 on additional measures for the codes. This includes consulting on how automated tools can be used to proactively detect illegal content, including the content most harmful to children, going beyond the automated detection measures that Ofcom have already included. Bringing in the codes will be a key milestone in creating a safer online environment for UK citizens as the duties begin to apply and become enforceable.



Categorisation thresholds:

Services which are ‘categorised’ under the Act will have additional duties placed on them. This is on top of the duties which all regulated user-to-user and search services must comply with to tackle illegal content and, where relevant, to protect children from content that is legal but nonetheless harmful to them. The additional duties will vary depending on whether a service is designated category 1—large user-to-user services—category 2A— large search services—or category 2B—smaller categorised user-to-user services.

In making these regulations, I have considered factors as required by the Act. Amendments made during the passage of the Act, changed the consideration for category 1 from the “level of risk of harm to adults from priority content that is harmful to adults disseminated by means of the service” to “how easily, quickly and widely regulated user-generated content is disseminated by means of the service.” This was a significant change and, while I understand that this approach has its critics who argue that the risk of harm is the more significant factor, this is the position under the Act.

Ofcom advice and the Secretary of State’s (Peter Kyle) decision on threshold conditions

The Act required Ofcom to carry out research within six months of Royal Assent, and to then provide the Secretary of State with advice on the threshold conditions for each of the three categories. This research included a call for evidence so that stakeholder feedback could be considered in Ofcom’s advice.

After considering Ofcom’s advice and subsequent clarificatory information in public letters, I have decided to set threshold conditions for categorisation in accordance with Ofcom’s recommendations. I am satisfied that Ofcom’s advice, which was published in March, is the culmination of an objective, evidence-based process. I have taken this decision in line with the factors set out in schedule 11 of the Act. I have been very clear to date, and want to reiterate, that my priority is the swift implementation of the Act’s duties to create a safer online environment for everyone. I am open to further research in the future and to update thresholds in force if necessary.

I appreciate that there may be some concerns that, at this time, threshold conditions have not been set to capture so-called “small but risky” services by reference to certain functionalities and characteristics or factors. My decision to proceed with the thresholds recommended by Ofcom, rather than to take the approach of discounting user number thresholds, reflects the fact that any threshold condition created by the Government should take into account the factors as set out in the Act, be evidence-based and avoid the risk of unintended consequences.

I also welcome Ofcom’s statement that it is keenly aware that the smallest online services can represent a significant risk to UK citizens, that it has established a dedicated “small but risky” supervision taskforce and that it will use the tools available under the Act to identify, manage and enforce against such services where there is a failure to comply with the duties that all regulated services will be subject to. This includes enforcement powers: to impose penalties on service providers of up to 10% of qualifying worldwide revenue or £18 million—whichever is greater; to require services to take remedial action; and in certain cases, to apply to court for business disruption measures to be taken against service providers.

As Secretary of State, my priority is timely implementation of the Act to ensure that the additional duties are enforceable as soon as possible. Ofcom’s recently updated implementation roadmap sets out the expectation that it aims to publish the register of categorised services in summer 2025 and will launch transparency reporting within a few weeks of publication of the register. This timeline is contingent on the regulations for categorisation thresholds being approved by Parliament without delay.

Proportionality

Many of the additional duties for categorised services have proportionality as a relevant consideration. For example, in determining what is proportionate for the user empowerment content duty, the findings of the most recent user empowerment assessment are relevant which includes the incidence of relevant content on the service, in addition to the size and capacity of a provider. When producing its guidance and codes of practice Ofcom will have regard to the principle of proportionality. In line with Ofcom’s recommendations, we have made it clear in the regulations that services are not captured under category 1 if they use a content recommender system which only recommends to a user their own content.

Threshold conditions

Following Ofcom’s advice and having taken into account matters as required by the Act, I have therefore today laid draft regulations which are intended to give effect to the following threshold conditions for each category of service:

The Category 1 threshold conditions are met by a regulated user-to-user service where, in respect of the user-to-user part of that service, it:

has an average number of monthly active United Kingdom users that exceeds 34 million and uses a content recommender system, OR

has an average number of monthly active United Kingdom users that exceeds 7 million, uses a content recommender system and provides a functionality for users to forward or share regulated user-generated content on the service with other users of that service.

The Category 2A threshold conditions are met by a search engine of a regulated search service or a combined service where it:

has an average number of monthly active United Kingdom users that exceeds 7 million, and

is not a vertical search engine—a search engine which only enables a user to search selected websites or databases in relation to a specific topic, theme or genre of search content.

The Category 2B threshold conditions are met by a regulated user-to-user service where, in respect of the user-to-user part of that service, it:

has an average number of monthly active United Kingdom users that exceeds 3 million and provides a functionality for users to send direct messages to other users of the same service.

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