Consumer Rights Bill

Baroness Jolly Excerpts

Wednesday 26th November 2014 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I thank all noble Lords for speaking in the debate, and give special thanks to the right reverend Prelate the Bishop of Birmingham for taking on the amendment tabled by the right reverend Prelate the Bishop of Truro. He spoke extremely well—in borrowed shoes, perhaps, but he obviously felt the same as the right reverend Prelate did in his introductory remarks earlier. I declare my interest as the retiring chair of StepChange, the debt charity, which has a lot of experience in this area.

As we found in Committee, there is clearly an all-party consensus for action. It all boils down to the question of why, if it is right to have advertising restrictions on certain items viewed as harmful or inappropriate for children such as violence, junk food, gambling and alcohol, it is not right to do the same to prevent the harm caused by payday loans. We have clear evidence that there is significant pressure from parents and many campaign groups to place payday loans in the same category as the items that are already restricted, and we need to listen to that.

It is up to the Government to defend their position and explain why on earth they feel that they can resist this amendment. When it was debated in Grand Committee the noble Baroness, Lady Jolly, said:

“The Government share the concerns of noble Lords that this market has caused serious problems for consumers, with unscrupulous lenders taking advantage of vulnerable consumers”.

I could not have put it better myself. She added that the Government were,

“committed to tackling abuse in the payday market wherever it occurs, including in the marketing of these loans. The Government strongly agree with noble Lords that it is unacceptable for payday lenders deliberately to target vulnerable consumers with their advertising material”.

Game over, it seems to me. So far, so good—but it went downhill from there. The Minister’s argument boiled down to the tired old saw that regulation, not legislation was the right answer, and that,

“a robust set of measures are now in place to protect the vulnerable from such practices”.—[Official Report, 3/11/14, col. GC 618.]

But they do not.

What do we want? We want legislation now. What are we being offered? Wishy-washy regulations that do not stop children seeing payday lenders’ advertisements, causing irreparable harm. The Government accept that these products, like alcohol and gambling, which I have already mentioned, are unsuitable for children. They agree that advertisements for those should not be targeted at children, but they are happy to let this go forward for payday lenders. This is not good policy-making.

The Government have a chance today to give the noble Lord, Lord Mitchell, an early Christmas present and allow him to say that the job on payday lenders has been well done. This is a good thing to do. The time for reviews and evidence gathering is surely over, and I hope that the right reverend Prelate will not be dissuaded from testing the opinion of the House at the end of this debate. The noble Lord, Lord Higgins, may be right that that wording of the amendment is not exact enough, but that, of course, can be tidied up at Third Reading. We should not desist from testing the principle here simply because of difficulties with the wording. Sometimes you just have to do the right thing—and I hope we will.

[Baroness Jolly (LD)]

My Lords, I am grateful to noble Lords for raising the important issue of the payday lending industry again. I repeat what I said in Committee—that the strong feeling in the House on this matter is clear, and the Government share the concern that payday lenders’ advertising can encourage irresponsible borrowing and cause consumers real harm.

The Government have worked hard on this issue to listen to as many views as possible, both within this House and beyond. As was noted earlier, I have met and spoken to the right reverend Prelate the Bishop of Truro several times, and just this morning the Minister and I met the right reverend Prelate the Bishop of Birmingham—who is an excellent understudy in this matter—and other noble Lords, to discuss their concerns.

It is worth reiterating all the action the Government have taken to protect consumers in this industry, because in Committee we were a very select bunch whereas on Report there is a wider audience. First, the Government have fundamentally reformed the regulation of the payday market. The Financial Conduct Authority’s new, more robust regulatory system is already having a significant impact: the FCA has found that the volume of payday loans has fallen by 35% since it took over regulation in April; that has happened in just seven months.

The Government have also legislated to require the FCA to introduce a cap on the cost of payday loans, to protect consumers from unfair costs. This cap, which will be in place from the turn of the year, will ensure that no customer ever has to pay back more than double the amount they have borrowed. The FCA has estimated that as a result of the cap, perhaps as few as three or four firms will be able to continue in the market. The Government remain committed to tackling abuse in the payday loan market wherever it occurs, including in the marketing of these loans.

Noble Lords raised specific concerns about the potential for payday loan advertising to target children. Members of the Consumer Finance Association, the main payday loan trade body, and Wonga, which is represented separately, all have explicit policies not to advertise on children’s TV. Ofcom has found that payday loan adverts comprise a relatively small 0.6% of TV adverts seen by children aged between four and 15, which is just over one a week. This is across all channels and time slots. Ofcom has also found that over a quarter of TV watched by four to 15 year-olds is after 9 pm, after the watershed. Therefore the key to protecting children must be to ensure that all adverts seen at any time of day—and this is the point that the noble Lord was making earlier—have appropriate content and are not targeted at children in any way.

Let me be clear. There are already robust content rules in place to protect children from payday loan advertisements. The Advertising Standards Authority enforces the rules set out in the UK Code of Broadcast Advertising, or the BCAP code. The BCAP code requires that all adverts are socially responsible and ensure that young people are protected from harm.

[Baroness Crawley]

I am grateful to the noble Baroness and I apologise for interrupting. If Wonga and other payday loan companies are saying that they do not directly target children, why do they use the creative powers of advertising that are particularly attractive to children, such as the granny and grandpa puppets in one of the ads?

[Baroness Jolly]

I am not sure that those ads are attractive solely to children. The point is that they perhaps attract us all. I am not sure. I have not seen a Wonga advert for a very long time but I understood that the old grannies disappeared some considerable time ago. I will come back to the noble Baroness on that issue.

I want to proceed because I have a few things I would like to say. The rules specifically prohibit payday loan adverts from encouraging under-18s to either take out a loan or pester others to do so for them. The noble Baroness, Lady Drake, brought up the point about pester power. Existing ASA rules prohibit the payday loan adverts from encouraging under-18s to take out loans. BCAP is undertaking a review to ensure that these rules are effective, and I will come back to that in a moment.

The social responsibility requirement prohibits lenders from deliberately targeting vulnerable people more generally. That was referred to earlier as well. The ASA has powers to ban adverts which do not meet its rules and has a strong track record of so doing. Since May 2014 it has banned 12 payday loan adverts as being inappropriate. In addition to the ASA’s role, the FCA has introduced tough new rules for payday loan adverts, including mandatory risk warnings and a requirement to signpost to free debt advice. To ensure that protections remain effective, the Broadcast Committee of Advertising Practice is currently reviewing how its content rules relating to the protection of children are applied to payday loan advertising on TV.

The Government recognise the strong feeling on the issue in the House, as well as the important research that has been published since the inception of the BCAP review, including that produced by the Children’s Society. Here I pay credit to the society for its tireless work and for bringing this issue very much into our inboxes and to our attention. As a result, I can today announce that Treasury Ministers have asked BCAP to broaden the remit of its review, to ensure that it also considers the appropriateness of its scheduling rules, as well as those around content. Treasury Ministers are writing to BCAP formally to set out this request and this letter will be placed in the Library of the House. BCAP has agreed to this and will expand its review with a view to publication of its findings, in full, in the new year.

During the review, BCAP will of course be very keen to engage with noble Lords on their concerns. When meeting noble Lords at lunchtime today we talked about what might happen within the House. A debate on BCAP’s findings would be more that welcome in the House. I am happy to take the request for a debate back to the business managers. I hope noble Lords will understand that I cannot commit to a timetable for a debate before discussing it with colleagues and with the usual channels.

[Lord Alton of Liverpool]

My Lords, I am grateful to the noble Baroness, not least because of the discussion that some of us were able to take part in earlier about this very issue. However, a debate and a review, of course, are no substitute for legislation, as she will agree. Will she at least commit, not about debates or reviews but about what the Government can commit to themselves, which is legislation if the review does not bring forward the necessary mechanisms to control this disease which has been described by so many noble Lords today as affecting so many people?

[Baroness Jolly]

My Lords, I do not dispute for one minute that we would all like to see this problem go away. Regrettably, these decisions are made by Treasury Ministers and this is well above my pay grade.

[A noble Lord]

But you are a Minister.

[Baroness Jolly]

I am, indeed, a Minister. However, there are things to which this lowly Minister will not commit. I want to press on. I have a few paragraphs to go.

This rule-making process is consistent with the way that BCAP makes its rules around adverts for gambling and alcohol. The noble Baroness, Lady Drake, made the point that this must be the same as for adverts for gambling and alcohol; and this is the same way that BCAP copes with such adverts.

I repeat that the Government are determined that children are protected from inappropriate advertising by payday lenders. The Government have introduced a wide range of reforms to clean up the payday sector and these are already having a significant impact in protecting consumers. The Government welcome the extended BCAP review to ensure that evidence informs both the content and, indeed, the scheduling rules around payday adverts and continues to deliver a forceful regulatory approach. I hope that noble Lords also welcome these developments and recognise the Government’s efforts to find agreement on this matter. I hope that the right reverend Prelate will see fit to withdraw the amendment.

[The Lord Bishop of Birmingham]

My Lords, I am grateful for the full, well informed and passionate debate that we have had on this subject. There has been considerable progress. With the noble Lord, Lord Higgins, I was here during the passage of the Financial Services (Banking Reform) Act last year and this area was given a lot of attention. We expected change and change has begun to happen. There is certainly a mood in the House today that further change should take place, change that must happen quickly. Children grow up very quickly and one or two influences at a certain age can make a dramatic difference, not only to them but to the behaviour of their parents, as has been so well illustrated today.

I am grateful to the noble Lord, Lord Alton, for reminding us that we need not only rigour but action in order to pursue proper behaviour by this area of commerce, just as we expect proper responsibility from all our citizens in managing their money, even in extremely difficult circumstances. I am very grateful to the noble Lord for asking the Minister to enable us in this House to hold this business accountable in public, so that further action can not only be monitored but be insisted upon.

I am grateful to the noble Lord, Lord Higgins, for challenging me on my use of the English language and on using back-street “slanguage”, when the language of the Treasury and the legal department—but also the advertising industry, which understands perfectly well when we say “content and timing of … communications”—is what is meant. The noble Lord, Lord Stoneham, brought some of that insight. We have regulators, of whom we expect great things: the Advertising Standards Authority, the Financial Conduct Authority and, of course, the Broadcast Committee of Advertising Practice.

Advertising of this kind, as was said by the noble Baroness, Lady Drake, is unsuitable for children and is corrosive to the family. The approach to this very difficult issue, success though there has been, is multifaceted. A degree of negotiation and persuasion, as well as authoritative legislation, is needed in these powerful institutions that are driven, really, by our consumer society.

I am grateful to all noble Lords who have taken part today and I thank the Minister for taking this issue not only seriously but further by agreeing that the Treasury will write to the Broadcast Committee of Advertising Practice, by broadening the scope of the accountability it must take and by insisting that the content and the timing of adverts must not only be improved but satisfy the points made in this House. The watershed is vital, as is the issue of content. There is a long way to go but I look forward to working with my noble colleagues in this House, with the Minister and with the Children’s Society and the other charities that have been mentioned in ensuring that what has been passionately argued today takes place. I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Drake]

My Lords, I support Amendment 50B. The evidence available on the use of payday loans heightens fears that credit is increasingly seen as the new safety net for many citizens. StepChange found, for instance, that its clients with payday loans often have other forms of debt, such as a much greater likelihood of being behind with their rent.

The FCA has taken some strong and definitive action against the payday loan companies, and is suggesting that within a year or so perhaps 95% of these payday lending companies will be withdrawing their services. However, on its own admission, even after the cap on charges is introduced, the proportion of borrowers experiencing financial distress as a result of such borrowing will remain at about 40%. But whatever the action taken by the FCA to regulate a particular market, the demand for credit among low-income households will remain, as will the problem of rising debt and the need for help and advice.

Even after addressing the business models of the payday loan companies, the systemic problem will still need to be resolved: how can people get access to affordable credit and get access to, and use of, a free debt advice service? Only the Government can drive the policy needed to secure sufficient capital liquidity for not-for-profit affordable lenders to provide an alternative source of credit. This amendment captures the need for the Secretary of State to bring forward measures to address those twin needs of free debt advice for vulnerable consumers and the provision of affordable credit.

As a comparator, for those who have assets rather than debts, the new freedom and choice agenda for pensions due in April 2015 comes with a guaranteed guidance service, captured in legislation—on the assumption, quite rightly, that the position of pension savers and consumers in the marketplace will be more vulnerable to poor decision-taking without such guaranteed guidance. How greater is the case, then, for those who have debts rather than assets?

No doubt the argument will be made that significant numbers who would benefit do not seek debt advice and that the allocation of funding to a debt advice service is proportionate to the demand. My response is to say that the Government should take the lead in creating the demand and the take-up for that debt advice service. My noble friend Lord Stevenson suggested examples based on the Scottish system. Maybe we should see the introduction of some conditionalities into the credit market on taking debt counselling in association with the giving of loans. There are lots of initiatives that the Government could take, not only to provide debt advice services but to ensure that users or takers of loans use that service.

We also need to see how structural changes in the labour market interface with the social security system to understand whether this is reinforcing the use of credit as a systemic solution to low-income families’ financial management, demonstrating the need for free debt advice services. I will take a few moments to explain what I mean. The casualisation of employment contracts, along with variable and zero-hours contracts, can result in significant volatility around hours worked and income received in any one week, let alone between weeks. In such situations, where people do not have a smooth income flow, if you have to pay your rent, buy food for your children or repair a much needed broken washing machine, you probably cannot wait until a week where you have more hours and higher wages. You need the credit to tide you over.

However, the welfare system cannot provide a real-time response. Under the current system, if you work less than 16 hours in a week, you do not qualify for the working tax credit in that week. If you are tied into an exclusive contract with an employer and provided with very few hours of work that week, and are not available for other work because of that exclusivity, then you cannot get JSA. Universal credit, when it is rolled out, may overcome the barrier of the 16 hours but it will replace it with another hurdle that will increase the need for credit. Universal credit is paid monthly in arrears, so you would struggle to catch up with your debt even under universal credit.

If you face such volatility in your hours and income and have more than 16 hours of work, you deal with the HMRC, but if you have worked under 16 hours in that week, you deal with the DWP for JSA and with the local authority for housing benefit. You also have to manage your debts. As my noble friend Lady Hollis frequently comments, being poor can be a full-time job—even more so with the changing nature of the labour market and, potentially, the greater need for credit.

The point that I am making is that for lower-income households, given what is happening in the labour market and how the welfare system operates, even under universal credit, the need for short-term credit for families—particularly vulnerable, low-income ones—to manage their finances will increase, not decline, and with it the desperate need for debt advice services. The examples that I have given illustrate the real evidence why low-income people will persist in being vulnerable to high-cost loans and in need of debt advice services.

The problems are compounded by the insufficiency of low-cost sources of credit and the absence of public policies promoting savings strategies for low-income people to provide a savings buffer. Most do not have such a thing or the means to acquire it. Tax incentives are targeted at the better off. One has to earn enough in the first instance to get the benefit of incentivised tax relief. The need for low-cost loans and debt counselling will remain very important for the foreseeable future for many on low incomes. Whatever the FCA does to the business model of payday loan companies, the systemic problem of how low-income people manage their finances, their dependency on loans and their need for assistance in managing debt will, when one looks at what is happening in the world of work, increase and not decrease.

This amendment would put a responsibility on the Secretary of State to bring forward measures to ensure,

“free debt advice for vulnerable consumers; and … provision of affordable alternative credit through credit unions”.

Much is said by politicians, including in both Houses, about protecting people in the face of the realities of today’s labour and financial markets. Helping them manage their finances, which will protect the well-being of their families though the provision of affordable credit and debt counselling, has to rank very high.

Thinking of a comment to conclude my speech, I remembered being at a discussion dinner a while ago on the duties of care of providers in the wholesale and retail asset management industry, an issue on which I engage a great deal. There was a mixed group of people there from different sides of the industry and of different political persuasions. Someone asked why the management of consumers’ assets and savings receives so much more political attention than the management of debt. There was a pause around the room. I replied that it is because unmanageable debt is concentrated among the poor.

We have to raise that issue and say that there is nothing, looking at the horizon of the labour market and at how the welfare system will operate, that provides an easy solution for families caught in this need to manage their finances. That is why this amendment is so helpful. We have to sustain the debate. Governments and the Secretary of State must take on, as a core societal issue, how they address providing or delivering debt advice and low-cost access to credit to so many people who need them.

[Baroness Jolly]

My Lords, those were really interesting contributions from noble Lords who know—not at the coal face but at the advice centre—what the issues are.

Turning to the noble Lord’s proposal for a levy on payday lenders, I commend his work in the area of debt advice as he stands down. I am sure that he will find something else to do with his time. The Government believe that the key to tackling problem payday lenders is tougher and better regulation. This is already set out. I have spoken at some length today about the way that the Government have reformed regulation of the payday market with the introduction of the FCA’s new regime.

FCA regulation is already having a dramatic impact on the payday market. Indeed, the FCA has found that the volume of payday loans has fallen by 35% since it took over regulation in April. Further changes are expected to follow the introduction of the cap on the cost of payday loans in January. The FCA has estimated that as few as three or four lenders may remain in the market. Consumers are better protected under the FCA regime. It has introduced binding rules and a rigorous authorisation process where it assesses payday lenders’ business models and compliance, which will begin next month. Firms that do not meet the FCA’s threshold conditions will not be authorised.

The amendment specifically proposes imposing a levy on payday lenders to support free debt advice and credit unions. The Government share the view of the importance of free debt advice and acknowledge the points made by the noble Baroness, Lady Drake, that people in debt have problems around well-being. The well-being of families has to be critical and core to all of these issues. The Government have put the provision of free debt advice on a sustainable footing through the Money Advice Service, but it is clearly supplemented by organisations such as StepChange and Citizens Advice.

Free debt advice is funded by a levy on lenders: once they are fully authorised by the FCA, payday lenders will contribute to this levy. The noble Lord’s proposal would therefore duplicate existing funding arrangements for debt advice. It is important to note that the FCA is also taking steps to ensure that vulnerable consumers are aware of the free debt advice available to them. The FCA requires all payday lenders to signpost free debt advice at the point a loan is rolled over, and all payday lending adverts must include a risk warning and information about where to get advice.

The Government also place great emphasis on the role of credit unions—I note the comments from the noble Lord, Lord Stevenson. Credit unions provide an invaluable service to a growing number of members, many of whom are on lower incomes. The Government have already taken a number of steps to support them, including investing £38 million to support the credit union expansion project to ensure sustainable growth of credit unions. This is not going to be a quick fix but a slow burn.

The Government have also raised the interest rate that credit unions can charge. It used to be capped at 2%; it is now 3%. That sounds like a small difference, but it should make quite a sizeable difference to a credit union’s bottom line, month by month, to support its financial strength through their savers’ interest.

As the noble Lord, Lord Stevenson of Balmacara, will know, the Government issued a call for evidence in June to seek views from interested parties about the future of credit unions and how the Government can do more to support the development of the credit union movement in Great Britain. The Government want to see the credit union movement go from strength to strength and the call for evidence is the first step in developing an environment of co-operation and mutual self-reliance.

The noble Lord, Lord Stevenson, asked several questions. One was whether payday lenders would be authorised by the FCA in spring 2016. The FCA authorisation period for payday lenders begins next week, as I suspect the noble Lord knew. His second point was on the Farnish review. The Government commissioned an independent review into the effectiveness of the Money Advice Service. It will report to the Government by the end of this year.

The call for evidence has been successful in allowing all credit unions, regardless of size, to contribute their vision for the future of the sector to the wider debate. The Government’s response to the call for evidence will be published shortly. We believe firmly that consumers will best be served by the tough regulatory regime for payday lenders and the Government’s ongoing support for free debt advice and credit unions. Therefore I ask the noble Lord to withdraw this amendment.

--- Later in debate ---

[Baroness Jolly]

My Lords, this has been an excellent debate. I thank the noble Baroness, Lady Howe, for the opportunity to talk about this issue on Report in the Chamber—it is something that we will not forget in a hurry. I reassure noble Lords that we share a common goal to ensure that our children are safe online. Given the huge importance of the interest in children’s safety—and the complexity of the issue, because it is very multi-faceted; it is not straightforward or cut-and-dried—I ask for the indulgence of the House to speak at some length.

The 21st century has thrown many dilemmas at families, schools, and indeed government, about how to bring up and educate our children. Over the past 20 years, the landscape has changed enormously. Whereas in the 1990s children’s entertainment came from TV, comics, books and video games, with a few families having a computer in the corner, the turn of the century saw wholesale change. Homes became connected to the internet, and now four in five children have mobile phones, most of which are internet-enabled, which act as their main means of contact with the world at large.

For many parents and grandparents this is difficult new territory. The power shift of competence has changed, while our care instinct remains. How do we best protect our children both from the dangers of the known world and that of the unknown and byzantine internet? Ensuring children’s safety online is a complex—

[Lord Harris of Haringey]

I am sorry to interrupt the noble Baroness when she is in full flood and what is obviously going to be a lengthy speech. If the balance of competence has shifted to the child, could she explain why we are taking away, or not prepared to support, protections to make it more difficult—in effect, holding back the shift in the balance of competence—by requiring default protection?

[Baroness Jolly]

I ask noble Lords to be patient; I am just painting a scene and intend to explain about the 90% and the 10% and the issues that have been raised by the noble Baroness opposite.

The safety of our children is our collective responsibility. The Government are not being laissez-faire about this. Recognition of our collective responsibility lies at the core of the UK’s world-renowned collaborative self-regulatory approach. According to the Family Online Safety Institute, the UK is a global net exporter of internet safety. It states:

“Since the emergence of the Internet in the mid-1990s the United Kingdom has been at the forefront of online safety and best practice”.

Under the auspices of the UK Council for Child Internet Safety, every three months, key players from industry, the third sector—including parents—and government bodies meet and work in partnership to help keep children and young people safe. This model serves us extremely well, and has driven recent progress.

Technical tools that we have discussed, such as filters, play an important part in enabling parents to protect children from inappropriate content. I outlined in Committee the tremendous progress made on this by Government and industry, which I will summarise now.

The vast majority of mobile phones sold are done so with filters automatically set to default on—including pay-as-you-go handsets. For contract customers, three of the UK’s four major mobile network operators also have their filters on by default, with the remaining provider, Three, committed to doing so by July 2015. I am quite happy to take away Tesco and have a look at Tesco online.

Responding to the Prime Minister’s request, the four major providers of home broadband—BT, Sky, Virgin and TalkTalk—now provide customers with family-friendly filtering solutions. Parents can easily block a range of content categories, such as adult content, gambling and violence. Nine in 10 UK broadband connections are provided by these four companies. In Committee, noble Lords expressed concerns about families not covered by filters. It is correct that smaller, more niche companies, many focused on the SME market, provide one in 10 UK broadband connections. They also have acted. The largest of these, including EE, covering 3% of the market, and Kcom, already offer family-friendly filters to customers free of charge, and Plusnet, the sixth-largest ISP, is trialling its filtering tool next month with a launch plan for March 2015. I think it is worth mentioning that in Committee, I asked the noble Baroness, Lady Howe, to let me know which one was flouting the Prime Minister’s request openly, and I do not think I heard from her, so if she would like to get back to me with that one, I am quite happy to take action on that as well.

We should note that seven in 10 households do not have children, so we can surmise that few family homes are served by the smallest providers, who might not provide filters, and every family in the UK has the ability easily to choose a provider with strong child-safety credentials. Children also access the internet outside the home, often through public wi-fi, and we have therefore taken action here too. The six major providers, covering more than 90% of the market, provide family-friendly public wi-fi wherever children are likely to be. Taking into account progress on mobiles, on home broadband internet access and public wi-fi, we can be confident that families now have the technical tools available to enable them to filter inappropriate content.

Filters are an incredibly important part of the solution, but they cannot protect children from the aspect of online life which evidence shows us causes most distress—cyberbullying. Nor can they give parents a cast-iron guarantee that children will be protected from inappropriate content, and at some point, at a certain age, filters may be turned off.

It is an unwelcome truth that there is no silver bullet to child safety online. Alongside technical solutions and through education, which I will come to, we must therefore support parents to adopt other forms of mediation, such as having conversations with children and monitoring internet use. Parents do not always feel aware of the risks their children face when online. Indeed, many feel overwhelmed by technology and certainly less savvy. This leads to reluctance among some parents to engage in issues surrounding their children’s online activity. The need for us to guard against parental complacency is an incredibly strong reason for preserving the unavoidable parent choice on filters. The systems that providers have put in place act as a useful catalyst, forcing parents to take decisions, and prompting them to enter into discussions with their children. Default-on filters would eliminate that route to engagement.

As we do in relation to road safety, unsafe sex, alcohol consumption and other risks children face, we must raise awareness. Earlier this year, the internet service providers made a significant addition to the online resources already available to parents in the UK from education, charity, industry and law enforcement sectors. Internet Matters was launched in May and provides parents with advice on how to keep their children safe online. I commend it to noble Lords.

As well as government, parents and industry, schools have a critical role to play here. Through schools we are teaching our children the skills they need to navigate the online world safely. As part of our reforms to the national curriculum, we have adapted computing programmes of study to incorporate internet safety. Since the start of the school year in September, the curriculum has included internet safety for five to 16 year-olds, key stages 1 to 5.

The promise of a software or hardware gizmo to protect our children is seductive. Yet even with filters on, in possession of excellent digital skills and with a sensible head on their shoulders, children will still have worrying experiences in this area, whether through exposure to inappropriate content via a text message, or witnessing abusive comments online or in other situations. As well as informing and supporting parents and working with industry, we must empower children and foster their confidence online so that they are resilient when the time comes.

In childhood, we learn about the world and develop the skills to make good choices. We must avoid over-cosseting our children to the extent that they do not acquire the skills required to cope with offline and online challenges when they face them. When a child encounters a problem online it is critical that they are able to find help and support. This might be through accessing online or offline information and advice, or by speaking to a friend or trusted adult, or to a teacher, carer, parent or other family member. We all share the responsibility to be there for them when needed.

It is right that the Government take steps to regulate where necessary. However, progress on filters has been remarkable. We should for a moment consider the real impact of the amendment. If it became law, while all providers would be required to provide a filtered service parents would still be able to opt for a filter-free service if they chose to do so. In doing so, they would need to verify their age, but account holders already need to be over 18. What difference would this amendment make? Arguably, the difference would be that parents would make the choice at the point of sale, rather than being able, as they can currently, to choose to customise their settings according to family circumstance and context.

In addition, this amendment would place significant burdens on and potentially sound the death knell for the very smallest ISPs, which are in any case business focused—and this at a time when government is seeking to reduce regulation. Furthermore, parents have told the Government that they want the freedom to make this choice, which is why at present they are faced with an unavoidable choice. If we take this choice away from them, we risk their disengagement and apathy. Many may reject filters completely, leaving children less protected than they are now.

The internet can be an outlet for children’s creativity and a tool for social engagement. However, we are all aware that it brings risks. We share a responsibility to ensure that children make use of digital opportunities in a safe and supported way. I believe strongly that self-regulation and partnership have got us further than regulation in this area would have done, given the pace and complexity of change. Filters are an important part of our approach to online safety. I note that the noble Baroness, Lady Howe, introduced her internet safety Private Member’s Bill in 2012, before the current parental control filters and the unavoidable choice had been introduced. I pay tribute to her and others who have engaged with this important debate. It has reaped results already, but we are not complacent and the debate is now moving on.

I have painted a broad picture of the issues concerning online safety and I thank the House for its tolerance. I have done so to highlight the range of challenges that we face and the collective approach needed to address them. Through work with industry, we are improving the tools available to families, who now have the resources that they need to keep their children safe online. Through schools, we are equipping children with digital skills and the understanding that they need. Through awareness-raising, we are supporting parents to engage in these matters.

While I know that all noble Lords here wholeheartedly agree that children should be protected from harmful digital content, which is the intention behind the amendment of the noble Baroness, Lady Howe, I hope that they are reassured that the Government’s current approach is the right one. Therefore, I ask that the noble Baroness withdraw her amendment.

[Lord Mackay of Clashfern]

Before my noble friend sits down, can she help me on one point? Can she recommend any better protection than this amendment specifies? If not, why should we allow children to be able to access this type of material until the negotiations are complete, which will not be tomorrow or the next day?

[Baroness Jolly]

I thank the noble and learned Lord for his question. I said earlier that there is not a silver bullet in this situation. This is a very elegant amendment and, as I say, it is really very seductive—but as soon as it has been enacted, we will find that people will develop workarounds and we will be back to square one. Parental and educational means are the best way forward.

[Baroness Howe of Idlicote]

My Lords, I am extremely grateful to all noble Lords who have spoken today. There was an amazing range of huge expertise and concern for our children. It was interesting to hear the comments of the noble Baroness, Lady Shields, as a new Member of the House. She is clearly going to be involved in lots of such things.

The Minister indicated exactly why I want to put this to a vote: each time one puts pressure on the Government, it improves the situation. It is important that we have age verification; there is no doubt about that, when we think of the amount of material that is streamed into this country, not able to be accessed, theoretically, via any of the routes, but nevertheless able to enter this way carrying R18 material—live streams from outside the UK. So I am very grateful for the range of comments made, I think we will all be thinking about this for a very long time, and I would like to test the opinion of the House.