Construction Sector: Cash Retentions

Baroness Jones of Whitchurch Excerpts

Tuesday 10th September 2024 Lords Chamber

[Lord Aberdare]

To ask His Majesty’s Government what plans they have to end the practice of cash retentions in the construction sector.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I pay tribute to the work of the noble Lord in championing this issue so successfully over the years. The Government are committed to amending the Reporting on Payment Practices and Performance Regulations 2017 to require firms to report on their policies and provide key metrics in relation to retentions. We intend to introduce legislation for this in 2024. We will consider whether further action on retentions is needed to deliver our manifesto commitment to tackle late payment.

[Lord Aberdare (CB)]

My Lords, I am grateful to the Minister for that response. Cash retentions—withholding payments due to subcontractors for work done, often for an unreasonable period of time, or indeed for ever—have a highly damaging impact on the ability of small construction firms to invest, expand or even survive, and create pressure to cut corners on quality and safety. The Grenfell report is a shocking reminder of where that can lead.

There is a long-standing goal of ending retentions by 2025—I welcome what the Minister has said about the implementation of the reporting requirement—and widespread industry recognition that legislation is needed to achieve this. What plans do the Government have to introduce such legislation, thereby freeing thousands of construction SMEs to play their full part in delivering the Government’s housebuilding goals?

[Baroness Jones of Whitchurch (Lab)]

My Lords, we are prioritising bringing forward the statutory instrument to amend the Reporting on Payment Practices and Performance Regulations this year, with the aim of it coming into force in 2025. This will require large firms to report twice per financial year on their policies in relation to retentions, including standard terms for holding retentions and metrics in relation to payment performance for retentions. We believe that this information will be most useful to small firms in the supply chain, and this legislation was developed in conjunction with firms in the industry and their representative organisations.

[Baroness Thornhill (LD)]

My Lords, this pernicious issue, interestingly, is not covered in the Government’s construction playbook, which sets out exactly how public works projects are to be assessed, procured and delivered. Indeed, a number of government departments and arm’s-length bodies continue to use retentions themselves. So would it be a good first step for this new Government to put their own house in order as soon as possible?

[Baroness Jones of Whitchurch (Lab)]

The noble Baroness makes an important point about public procurement. There are steps that we can take to progress on this issue; it is a manifesto commitment that we will do so. Obviously, we will consult before we introduce any further legislation, but we are committed to reviewing our policies on this issue, to enable more smaller firms to be able to access public contracts.

[Lord Johnson of Lainston (Con)]

My Lords, late payments in the construction sector hold developments back significantly, which hinders progress on the delivery of new homes. The previous Government took strong action on this and published a payment and cash flow review in November 2023. What assessment have the Government made of the impact of cash retention on housing delivery, and will the Minister commit to continuing the excellent work of the previous Government to tackle this issue?

[Baroness Jones of Whitchurch (Lab)]

As the noble Lord has said, there have already been some changes made to this and we are following that up to introduce further changes. We will be addressing the value of payments and the level of invoices not paid because of disputes, but there is more work to be done on this and enforcement is obviously part of that. DBT has already written to 416 large companies not complying with the payment performance reporting requirements and 45% of firms written to have come into compliance. We have further follow-up action to make sure that those further transgressions are being addressed.

[Baroness Donaghy (Lab)]

My Lords, I often think of Lord O’Neill of Clackmannan, who was a great champion of this issue, and I pay tribute to the noble Lord, Lord Aberdare, for following in his footsteps. Does the Minister agree with me that the present proposals do not get rid of the plain abuse of power that happens in subcontracting and contracting in construction? Late payment leads to bankruptcies in small and middle-sized firms and is part of the difficulty across the whole of the construction industry that leads to cutting corners in safety—and we have seen the results of that over many years. Does she agree that Lord O’Neill and the noble Lord, Lord Aberdare, who have been fighting for this for years, have been looking for something a bit more concrete?

[Baroness Jones of Whitchurch (Lab)]

My Lords, as I have said, it is important that we seek the views of industry on any reforms. We will take further action and obviously we will welcome the views of Members of this House, as well as the construction industry, as part of that process. The noble Baroness and other noble Lords have talked about safety and we are acutely aware of the situation with the Grenfell Tower final report, which highlights the systemic failure of institutions and individuals to ensure building safety and the safety of construction products and materials. My honourable friend the Parliamentary Under-Secretary of State for Building Safety and Homelessness tabled a Written Statement on 2 September that commits the Government to a system-wide reform of the construction products regulatory regime. Those reforms will take account of the recommendations of the Grenfell Tower inquiry.

[Baroness Lawlor (Con)]

My Lords, I thank the Minister for her replies so far. On her last answer, what proportion of businesses and organisations will be small or will represent small contractors and businesses in this trade? It is they who suffer most, which, as noble Lords have said, can lead to bankruptcies. If you are stuck with payments to make yourself for materials and supplies and you have not been paid by the overall contractor, you may go out of business. It is very important to bear in mind that we should give higher emphasis to the smaller contractors and businesses.

[Baroness Jones of Whitchurch (Lab)]

The noble Baroness is right that the smaller businesses are getting squeezed at the end of the supply chain, but we are already making progress with the steps that have been taken, which will continue with the new regulations that we will introduce. There have already been improvements in payment performance since 2018: for example, the average time to pay invoices has come down from 45 to 32 days. We are doing this on a step-by-step basis and we are working with industry—the construction sector—to make sure that this is what people want and truly effective.

[Lord Aberdare (CB)]

My Lords, the Minister mentioned taking the views of industry. The Government have been taking the views of industry since the completion of their consultation in 2020. The reason that they have not come to a conclusion is that there is no consensus with the industry. I greatly miss the contributions of Lord Stunell, who described seeking a consensus on this issue as being like asking lions and lambs to sit down together and agree on a menu for tea. There is no consensus between the larger and smaller firms, which is why the only solution seems to many in the industry to be legislation. Reporting is all very well, but it will not solve the problem on its own.

[Baroness Jones of Whitchurch (Lab)]

My Lords, we have been working to resolve the problems associated with cash retentions through the Construction Leadership Council. As the noble Lord said, there are a wide range of views across the sector about the use and problems associated with retentions and how they might be addressed. Many in the industry are in favour of reform and are now calling for a legislative ban, in the way that the noble Lord described, but any policy solution must be sustainable and work for the whole of industry and its clients, addressing both the surety and fair payment issues that are thrown up.

[Lord Pannick (CB)]

Does the Minister acknowledge that the vice of late payments is not confined to the building industry? Do the Government have any plans to address this mischief more broadly?

[Baroness Jones of Whitchurch (Lab)]

Yes, my understanding is that the changes that will be introduced are not to affect only the construction industry. Certainly the late payments legislation that we are working on will be across the board and not specific to the construction sector.

Watchdogs (Industry and Regulators Committee Report)

Baroness Jones of Whitchurch Excerpts

Monday 9th September 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I am very pleased to respond on behalf of the Government. I thank my noble friend Lord Hollick for tabling today’s Motion and congratulate him on the report of the Industry and Regulators Committee. As others have said, the report is a fine swansong for his very able period as chair of the committee. I am also grateful to other members of the committee and other speakers for their insights and remarks on this important topic. I am grateful to the noble Lord, Lord Skidelsky, for giving us a very short but important history lesson. It is important that we remember the context which started this whole process, through the natural monopolies that were created and the forced need for external oversight. What a journey we have been on from those days to where we have got to today, with all the complications of regulation that we are now confronting.

This Government welcome views on how we best improve the performance and accountability of UK regulators and the frameworks to which they operate. This will support our ambition to build a pro-innovation, pro-worker, pro-wealth creation economy. I am therefore grateful to the committee for conducting its inquiry and producing this report, which focused on concerns about the functioning of the relationship between regulators, government and Parliament and made recommendations spanning issues across the regulatory landscape. I have heard messages from noble Lords today which echo many of the issues in the report: for example, the need for a review of regulator duties, with a view to streamlining duties and objectives and providing clear priorities; the need for strategic steers in how regulators handle any political and distributional trade-offs in implementing their duties; more attention to the skills and resource needs of regulators in the context of what they are being asked to achieve; the need for measures to support accountability, including a definitive list of UK regulators; and a greater emphasis on performance reporting from regulators, with metrics linked to outcomes.

As the noble Lord, Lord Johnson, quite rightly identified, a formal government response was published in May 2024 as a supplementary document to the White Paper, Smarter Regulation: Delivering a Regulatory Environment for Innovation, Investment and Growth. This response proposed a number of non-statutory reforms to the regulatory landscape and worked towards addressing some of the recommendations in the committee’s report. However, I have to say that the response was written some time ago, and since then a new Government have been formed, so I think it is important to say that we will need to consider afresh our approach to all these issues.

I should also say that I know that noble Lords will want to press me on the specifics of our reform agenda, but I hope they will understand that, at this stage, I am able only to outline a direction of travel; we are still working on a lot of the detail. However, what I can say is that the Government are determined to kick-start economic growth, working with industry and businesses to deliver economic opportunity. This of course needs to be supported by the right regulatory frameworks that foster competition, innovation and investment. Central to this will be a focus on ensuring high-quality regulation, both in terms of improving existing regulations and, where the bar is met, delivery of any new regulations necessary to support the Government’s missions.

In addition to the interest from the committee and the comments we have heard today, noble Lords will know that there have also been numerous well-researched publications on regulatory reform led by a number of think tanks, including Progressive Britain. They too have set out concerns and recommendations on the performance and accountability of independent regulators. All of this is invaluable work in shaping the Government’s next steps. It goes without saying that regulators play a crucial role across almost all sectors of the economy, including the oversight of essential services and infrastructure; medicines and healthcare products; workplace safety; and the environment and financial services. Their work is seen and felt by consumers, businesses and the environment—by everyone. It is only right that we continue to evaluate how our regulators are functioning and drive improvement where needed to support our economic growth mission.

In response to the noble Baroness, Lady Finn, and the noble Lord, Lord Clement-Jones, the Government of course have a critical role to play in setting that strategic direction and the outcomes that they want to see regulators deliver, so issuing strategic guidance in a consistent way is key to that delivery.

The noble Lord, Lord Clement-Jones, and others asked about publishing a list of the UK regulators, with their responsibilities and their oversight. The White Paper proposed that a register be published, and we are considering how to take that proposal forward.

The noble Lord, Lord Clement-Jones, the noble Baroness, Lady Finn, and others asked about getting the best possible people on boards. Many of these are regulated by the Commissioner for Public Appointments, but we are determined to reduce delays and improve those processes. I think we could all identify with the experience of the noble Lord, Lord Teverson, when he illustrated the problems that he encountered.

The noble Lords, Lord Hunt of Wirral and Lord Johnson of Lainston, asked about and emphasised the growth agenda. The Government recognise the importance of well-performing and accountable regulators in our mission to kick-start economic growth. This is reflected in our plans to launch a new industrial strategy to build a more resilient economy, while ensuring that we have the right regulatory environment to go for growth at every opportunity. Regulators reporting on their performance will continue to play an important part, and the Government will set out their overall plans on performance to help deliver that growth agenda in due course.

A number of noble Lords, including my noble friend Lord Hollick, stressed the importance of independence. The Government recognise the important role of regulatory independence, particularly in technical areas where outcomes depend on long-term decisions that sit outside of traditional political cycles. We know this is valued by businesses, investors and wider stakeholders. At the same time, we know that regulators differ in their degree of operational and policy independence, and that there is a role for government in providing that strategic direction and ensuring that regulators operate to the right duties. As noble Lords have argued, we must be alive to mission creep, and ensure that regulators’ duties are focused on what matters to business and to citizens.

We are alive to the importance of these issues for all stakeholders. Indeed, the Department for Business and Trade’s call for evidence, which has been referred to, and which ran from October 2023 to January 2024, has informed our understanding of these regulatory issues and the specific concerns of industry. The call for evidence received over 200 responses from a diverse range of voices, including businesses, consumers and industry groups, academia and regulators themselves. Respondents recognised the many positives in the UK regulatory system, that it is broadly well-structured and that it is well-regarded internationally.

However, they also set out some specific concerns that are helpful to the committee’s understanding of these issues. These points have been reiterated today—for example, the difficulty that businesses and others face in understanding the different roles and remits of the different regulatory bodies and how they interact with government; the accumulation of regulatory duties over time, which can dilute regulatory purpose and give rise to trade-offs which are implied rather than explicitly addressed; and the need for effective strategic steers from government to regulators on how to handle those trade-offs in their duties, particularly for decisions that verge on the political, such as normative and distributional issues.

This Government are determined to further understand and tackle these issues head-on. This includes pro-actively engaging with regulators to understand the issues they face and identify where the greater scope for improvement lies. This will also include identifying areas where the costs of regulation, particularly when viewed in the round, may be too high and burdensome for businesses. This includes both how regulations are designed, as well as how they are implemented.

In response to my noble friend Lady Taylor, we absolutely understand the need for regulators to have those clear duties and objectives, particularly in the light of the piecemeal accumulation of duties which has occurred to date.

We will take a mission-driven approach to improving the UK regulatory regime. This means improving existing regulations and working actively with regulators to support their performance and accountability, the frameworks that they operate to, and, crucially, the candour with which they explain their decisions. It means ensuring there is a shared understanding of objectives, and working with regulators to ensure that they have a skilled and capable workforce, alongside an efficient appointments process for independent boards.

The noble Baroness, Lady Kidron, quite rightly raised the issue of raising skills, particularly in technology and AI. I absolutely understand and concur with her concerns. As part of this work, we want world-leading regulatory structures in driving technology and innovation, with, for example, a clear understanding of the potential role that artificial intelligence can play.

In that regard, I agree with my noble friend Lord Chandos and the noble Lord, Lord Holmes, that AI has a huge role to play, but we have to get the regulation right. So, as per our manifesto, we will introduce binding regulation on the handful of companies developing the most powerful AI models.

More broadly, we are acutely aware of the need to support innovative businesses working in a fast-growing, fast-changing field such as AI and quantum computing, so that they can navigate the regulatory landscape effectively. This will be the principal focus of the regulatory innovation office, led by the Department for Science, Innovation and Technology. This was a key manifesto commitment, and we are pressing ahead to deliver on it over the coming weeks and months.

A number of noble Lords, including my noble friends Lord Hollick and Lord Berkeley and the noble Lord, Lord Holmes, questioned the role of the regulatory innovation office. It is important to clarify its future role. It is part of the overall solution but will not be the independent statutory oversight body recommended by the committee. As part of the Government’s mission-driven vision for regulatory reform, the activities of the regulatory innovation office will sit alongside wider cross-cutting work on improving regulatory performance and accountability led by the Department for Business and Trade, and it will work closely to deliver on the Government’s priorities with the Department for Science, Innovation and Technology.

A number of noble Lords, including the noble Lord, Lord Cromwell, raised the interests of stakeholders. We are acutely aware of the importance that stakeholders place on understanding roles and responsibilities across government, with clear points of contact to address their regulatory concerns. I reassure the House that the Government will take a joined-up approach to regulatory reform across departments and will clearly communicate this to stakeholders.

More broadly, we are in the process of developing a clear regulatory reform agenda that addresses all the issues I have outlined in my speech and which noble Lords have highlighted today. This agenda will be set out in more detail in due course. However, we are clear that these reforms must have a real, lasting and positive impact on business and everyone who interacts with the regulatory system and UK regulators. It is important that we get this right and deliver the high-quality reforms that are needed. This will be the best way to support the growth mission and deliver the right outcomes for individuals, households, businesses and the environment.

A number of noble Lords illustrated the failures of regulation in a number of different sectors, and Ofwat, as has been well discussed, is a good case in point. My noble friend Lord Hollick described it as arising from a catastrophic underinvestment, and the noble Baroness, Lady Jones, well illustrated how the regulator lost its way in maintaining water quality standards. She also rightly mentioned the need to listen to wider voices when we are putting forward the direction for regulators. The Water (Special Measures) Bill will deliver our manifesto commitment by putting water companies under tough special measures by strengthening regulation. Similarly, as my noble friend Lady Taylor illustrated, the Office for Students was given too many conflicting spheres which prevented it fulfilling its effectiveness. We would not want to repeat that issue in the future.

Before I turn to other points made in this debate, I acknowledge the Grenfell report that was published this week and take this moment to honour those who lost their lives and the many who were injured and extend my deepest sympathy to the bereaved and to the broader Grenfell community affected by this tragic event. I echo the sentiments expressed by the Prime Minister, who apologised on behalf of the state in a Statement to the House of Commons on 4 September. There is no doubt that it represents, in part, a failure of regulations at that time. This Government are committed to carefully considering the inquiry’s findings and recommendations to ensure that a tragedy like this can never happen again. There will of course be opportunities for more in-depth debate on the inquiry’s report in due course.

Turning back to the context of this debate, I hope that I have picked up most of the points that have been made. I would be happy to meet with the noble Lord, Lord Ashcombe, to discuss the UK captive regime and perhaps could recommend HMT Ministers joining that discussion as well. If I have missed other noble Lords’ questions, I will write to them.

I noted the report’s remarks on the previous Government’s engagement, or perhaps lack of engagement, with the committee, and I reassure your Lordships that this Government look forward to engaging in a bipartisan fashion with the committee and in a very positive way with noble Lords as we take this vital work forward. I personally have a huge respect for the work of the committee and look forward to working with it in future.

In conclusion, I believe we are broadly on the same page, not only in the report but in this debate, and I hope that in due course noble Lords will see the full evidence of the seriousness with which we are taking these issues and our determination to modernise the regulatory landscape to achieve better outcomes. I therefore commend this report to noble Lords.

Lithium-ion Battery Safety Bill [HL]

Baroness Jones of Whitchurch Excerpts

2nd reading
Friday 6th September 2024 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I thank the noble Lord, Lord Redesdale, for tabling this Bill. It has enabled us to have a fascinating and wide-ranging discussion. I have certainly learned a lot about the issues as we have gone forward.

At the outset, I should say that I share the concerns of noble Lords at the number of traffic deaths that have occurred, and we share that determination to make sure that we prevent further deaths by whatever means possible. I also assure noble Lords that we have received proper briefings from the fire service. We have met and talked with it and take its concerns very seriously. I hope that, as a result of this debate and the issues that I shall come on to, we will have a common cause on the way forward.

The Government recognise the intent of the Bill and the importance of safe storage, use and disposal of lithium-ion batteries. However, for reasons that I will set out, and as I think noble Lords already know, we have reservations about this particular Bill. I hope that I can reassure noble Lords about the alternative that we propose.

First, I reassure your Lordships that the Government take product safety extremely seriously. As such, we are already taking significant steps to protect people from the types of harm that the Bill aims to address. The Office for Product Safety and Standards, which sits within my department, has been working with colleagues from across government and industry to ensure that action is taken to protect consumers and remove dangerous products from the market. For example, action has focused on assessing the compliance of manufacturers and importers to ensure products are safe when placed on the market; issuing guidance for repairers to make them aware of their responsibilities to be competent to complete safe repairs and modifications; giving consumers clear information to enable them to purchase and use products safely; and ensuring that online marketplaces play their part in keeping consumers safe.

The OPSS has been working with local authorities and has successfully targeted unsafe and non-compliant products at the border to prevent them entering the UK in the first place. We have also engaged with UK businesses to ensure that compliance with regulations is carried out, and we have worked with the fire and rescue services to identify products involved in incidents and to take action where unsafe products are identified. Our efforts have led to 18 separate product recalls and 20 other enforcement actions for unsafe or non-compliant e-bikes or e-scooters since 2022. The OPSS has issued 26 withdrawal notices on eight online marketplaces and two manufacturers and across 16 separate sellers to stop the sale of dangerous models of e-bike battery manufactured by Unit Pack Power that were identified by the fire and rescue authorities’ investigations.

While batteries and chargers may individually be compliant with the law, we know that if they are used in a combination that is not compatible there is a risk of product failure leading to serious fires. This may also be the case when an e-bike or e-scooter draws more power from a battery than it is manufactured to supply safely. The emerging evidence base also suggests that, when these products are modified inappropriately, they can pose a high safety risk. The noble Lord, Lord Redesdale, and the noble Baroness, Lady Finlay, were right to make the point about the dangers of modification and conversion; evidence shows that there is a particular danger of fire when that occurs.

Based on this evidence, earlier this year the OPSS launched the e-bike and e-scooter repairer project, working with local authorities across the UK to conduct inspections at local businesses involved in the maintenance and modification of e-bikes and e-scooters. Those inspections are focused on providing advice and guidance on businesses’ legal responsibilities to complete safe modifications and repairs. In addition, the OPSS published a safety message for consumers in the run-up to Christmas last year, with five steps to follow to reduce risks when purchasing, using or charging an e-bike or e-scooter. This followed guidance on safe charging published by Fire England. Further guidance was also published by the Department for Transport in February this year. We continue to work closely with fire and rescue services and other stakeholders to raise consumer awareness and reduce the risk of fire.

Noble Lords are right to raise concerns about how easy it can be for unsafe products to find their way on to the market through online marketplaces. That is why, in addition to the action that I have just referenced, the OPSS wrote to major online marketplaces earlier this year to express its concerns about the availability of unsafe products online. We have demanded action on the need for user instructions to be supplied with all e-bikes and e-scooters, including batteries and accessories. In addition, online marketplaces must comply with legal notices that prevent the supply of specific products.

Existing product safety law is clear: products must be safe before they are placed on the market, and those seeking to profiteer from the supply of products that are unsafe will be dealt with. However, while a significant amount has already happened to ensure that people are kept safe, we know that much more must be done. As noble Lords will be aware, the Product Regulation and Metrology Bill was introduced by the Government on Wednesday. It will have its Second Reading here on 8 October. In answer to the noble Lord, Lord Foster, I hope that many of the points he raised will be raised at that Second Reading, when there will be a proper, thorough debate.

This Bill will ensure that we have a regulatory framework that is agile and adaptable in a digital world. The potential fire risks posed by lithium-ion batteries is today’s challenge, but it is not the first and it will not be the last. As the products we buy and the way we buy them adapt in a digital world, it is essential that we have laws that can adapt and go forward when we need them to protect the public. This is what the Product Regulation and Metrology Bill will deliver. Through the powers in that Bill, we will be able to respond to emerging risks in product safety. This includes, where necessary, strengthening regulation to respond to risks from a range of products such as lithium-ion batteries and e-bikes, protecting consumers. It will also allow us to look more closely at those who are making these products available on the market, including online marketplaces, and to take the necessary steps to stop unsafe goods reaching consumers.

I agree with the noble Baroness, Lady Brinton, that product safety should start with safe design and I very much hope that our Bill will be at the heart of that. I also agree with the noble Viscount, Lord Camrose, who said that this is an opportunity for us to be trail-blazers in global safety standards. There are huge opportunities in the marketplace for us to set standards and to maximise our growth in this market if we get it right, so there is a win-win in pursuing this with vigour.

[Lord Berkeley (Lab)]

My noble friend has given the House a good list of the work that has been done recently to make the whole system safer, and I am hoping that the new Bill will do that, but have the Government got as far as being able to persuade the London Fire Brigade, for example, to withdraw its ban, or recommended ban, on scooter batteries on trains and things like that? In other words, are they happy that the new regulations will enable people to use these things safely wherever they want to go?

[Baroness Jones of Whitchurch (Lab)]

I do not know the answer to that specifically. My instinct is that there needs to be a policy of “safety first” on issues such as the London Underground, but we may well get those standards to a high enough level. I was very interested to hear what the noble Baroness, Lady Brinton, said about passports for batteries. There may be schemes like that that we could adopt. I do not know the answer, but it is a very good point that I think we can pursue outside this Chamber.

I am grateful to my noble friend Lord Winston for delivering an interesting lesson on the science and chemistry behind these products: I know that we all learned from it. I reassure him that the Product Regulation and Metrology Bill will allow for changes to labelling to ensure that proper details are updated and safety information on products is made clear.

[Lord Winston (Lab)]

I thank my noble friend for that helpful point. Does that mean that there is a possibility that the chemistry might be labelled? If we could actually teach people a bit more about the chemistry, it would do no harm. Also, of course, we are dealing with products that are going to become scarcer and scarcer and which will be thrown away, or not recycled. There is a public lesson that is rather more important than the average labelling that we see on many foodstuffs, for example.

[Baroness Jones of Whitchurch (Lab)]

In fact, I am going to come on to the point about the availability of lithium, so bear with me for a second. I reassure the noble Lord that we are taking greater education very seriously, and we will be running more consumer campaigns. The composition of the products might be included in that. I recognise, however, that more can be done.

A number of noble Lords, including my noble friend Lord Winston, made a point about the new technology implications of this. I assure them that the Product Regulation and Metrology Bill will allow us to regulate for developments of innovation and technology in UK energy going forward, because there are new issues that a number of noble Lords have raised. It will enable powers to change the regulations, to future-proof full technological advancements.

To noble Lords, including the noble Lords, Lord Holmes and Lord Howell, and my noble friend Lord Winston, I say that at the moment lithium-ion batteries are the most efficient way of powering vehicles; we should not lose sight of that. We will, however, continue to keep the mining of critical minerals and their use in our green technology under review. We have to do that because, as my noble friend quite rightly said, if we do not, we are in danger of scarcity on these issues. We have to keep moving forward. There is not an endless supply of these minerals, so we have to make sure that those in circulation are protected and properly recycled.

My noble friend Lord Berkeley made a point about battery safety being a wider issue and gave some very vivid examples of why that was the case. I assure him that we continue to liaise with the Department for Transport on these issues. Similarly the noble Baroness, Lady Brinton, raised an important point about wheelchair travel. She mentioned the issue of wheelchair passports, which was an interesting conversation. I assure her that we will continue to liaise with departmental Ministers across the board, including the Disability Ministers, because we need to get this issue sorted.

I have spoken a lot about product safety, but I am aware that the noble Lord’s Bill goes further in scope, so I will now turn to battery energy storage systems, which are also covered by the Bill. The flexibility offered by grid-scale lithium-ion batteries will play a vital role in the decarbonisation of the grid, enabling Britain to balance the system at lower cost while maximising the efficiency of intermittent low-carbon generators such as wind and solar—a point the noble Earl, Lord Erroll, quite rightly made.

The Government agree with the intent of having robust measures in place to manage the risks associated with facilities that involve the use of large numbers of lithium-ion batteries. In terms of the proposals in this Bill, powers already exist under the Pollution Prevention and Control Act 1999 to bring new sectors and pollution sources in scope of the Environmental Permitting Regulations (England and Wales) 2016. Similarly, the Government do not believe currently that there is a need for additional statutory consultees on planning applications for standalone battery energy storage systems. However, my officials continue to work closely with the industry-led electricity storage health and safety governance group to ensure that a robust health and safety standards framework is maintained.

A number of noble Lords talked about disposal. The Government are deeply saddened at the recent increase in the number of fires at waste treatment facilities caused by batteries. We are committed to cracking down on waste as we move towards a circular economy where we keep our resources in use for longer and reduce waste. The existing producer responsibility scheme for batteries and waste electricals makes producers responsible for the cost of end-of-life treatment.

Under the existing legislation, it is already mandatory for all batteries placed on the market in the UK to be clearly marked with the crossed-out wheeled bin symbol. This symbol indicates that batteries should not be disposed of by throwing them in the bin. This symbol is also mandatory on electrical products containing batteries. Existing legislation also requires those selling batteries to provide a means to take back waste batteries —for example, the waste battery collection bins at supermarkets, which many noble Lords will be familiar with. Similarly, sellers of disposable vapes, which were mentioned earlier, are now required to provide take-back of waste vapes. Producers of industrial batteries, including e-bike and e-scooter batteries, must take back waste batteries free of charge on request. This means that a shop selling e-bikes, such as Halfords, must take back a waste e-bike battery if asked to do so by the owner of that battery.

There are also existing public awareness campaigns such as the HypnoCat Recycle Your Electricals campaign, funded by industry to educate the public on safe battery disposal. Ministers are reviewing proposals to consult on reforms to UK battery regulations before setting out the next steps. However, I agree with noble Lords that we need to find more imaginative ways to help consumers dispose of batteries more conveniently and in greater numbers than is currently the case.

In summary, I thank the noble Lord, Lord Redesdale, for the debate that this Bill has enabled. As I have laid out, my department is already working across government to identify the key aspects of lithium-ion battery safety and has taken action where needed. The Product Regulation and Metrology Bill, which will soon be debated by your Lordships’ House, will enable us, where necessary, to make regulatory change to keep our product safety framework up to date. We are seeking to address this complex issue while ensuring that we have the evidence to help prevent further injury and loss of life. We will continue to engage with all noble Lords on these critical issues as we develop our regulatory approach.

I can of course assure the noble Lord, Lord Redesdale, that we will continue to consult with him about his Bill, which will happen at a ministerial and official level, as necessary. I hope that the noble Lord has heard my request for him to consider withdrawing this Bill and I look forward to his response.

Online Safety Legislation: Abuse on Social Media

Baroness Jones of Whitchurch Excerpts

Thursday 5th September 2024 Lords Chamber

[Baroness Ritchie of Downpatrick]

To ask His Majesty’s Government what assessment they have made of the ability of current online safety legislation to regulate abuse, including racism, Islamophobia, homophobia, and sectarianism, on social media platforms.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, as my noble friend will know, we take these issues very seriously. The Online Safety Act will tackle illegal abuse, protect children and empower users. Regulated providers, including social media companies, must implement systems to reduce the risk that their services are used for illegal activity, including illegal abuse. Under the Act, stirring up hatred is a priority offence, requiring providers to proactively combat illegal racism, Islamophobia, homophobia and sectarianism.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I thank my noble friend the Minister for her detailed Answer. What consideration have the Government given to the flourishing of hate content on smaller online platforms, which they have the power to regulate under the highest tier of regulation: category 1 under Schedule 11 to the Online Safety Act? Are the Government minded to reject Ofcom’s advice not to use the powers available to them under the Act to do so?

[Baroness Jones of Whitchurch (Lab)]

My Lords, we share my noble friend’s concern about the flourishing of hate crime on these sites and particularly on smaller online platforms. The Secretary of State for DSIT is carefully considering Ofcom’s categorisation recommendations and will make regulations as soon as reasonably practical. He can decide to proceed with Ofcom’s advice or divert from it. If the latter approach is taken, a statement must be published explaining why.

[Lord Browne of Ladyton (Lab)]

My Lords, it was reported today that the United States, the EU and the UK are all expected to sign the Council of Europe’s convention on AI, which emphasises human rights and democratic values in its approach to the regulation of public and private sector systems. The convention, which is legally enforceable, requires signatories to be accountable for any harmful or discriminatory outcomes of AI systems and for victims of AI-related rights violations to have legal recourse. In addition to the offence of sharing, is now not the time to consider criminalising the creation of sexualised deepfake images without consent? The noble Baroness, Lady Owen, called for this on 13 February in your Lordships’ House, and described deepfake abuse, which is almost wholly misogynistic and now epidemic. It is the new frontier of violence against women.

[Baroness Jones of Whitchurch (Lab)]

My Lords, my noble friend will know that, in addition to the implementation of the Online Safety Act, we already have plans to bring forward a new data Bill where some of these issues can be debated. We also have ambitions to bring forward a further piece of AI legislation, on which we will have the opportunity to talk about those issues in more detail. He is absolutely right: these are serious issues. They were debated at length during the passage of the previous data protection Bill, and we hope to return to them again.

[Lord Watts (Lab)]

My Lords, is it not the case that Ofcom is letting down the public? What we need is to review the role of Ofcom and other regulators and, if they are failing to do their duties for the public, they should be removed from office.

[Baroness Jones of Whitchurch (Lab)]

My Lords, Ofcom has a very wide-ranging and serious set of responsibilities. There is no suggestion that it is not carrying out its responsibilities in the run-up to the implementation of the Online Safety Act. We are working very closely with Ofcom and believe that it will carry out those additional functions that we have given it with proper scrutiny and to high standards. Yes, there is a case for looking at all regulators; we have a debate on this on Monday in the House, and I am looking forward to that, but that is a wider issue. For the moment, we have to give Ofcom all the support that we can in implementing a very difficult set of regulations.

[Baroness Kidron (CB)]

My Lords, the crafting of the Online Safety Act was fraught with exceptions, exclusions and loopholes, the most egregious of which is that regulated companies get safe harbour if they comply with Ofcom’s codes, but Ofcom has provided us with codes that have huge gaps in known harms. What plans do the Government have to fulfil their election promise to strengthen the OSA by ensuring that it protects all children effectively, even the very young, and that it has adequate mechanisms to act swiftly in a crisis, or with an evolving new risk, to stop abuse being whipped up algorithmically and directed at minority groups?

[Baroness Jones of Whitchurch (Lab)]

My Lords, I think that we are in danger of downplaying the significance of the Online Safety Act. It is a trail-blazing Act; the noble Baroness was very much involved in it. Our priority has to be to get that Act implemented. Under it, all user-to-user services and search providers, regardless of size, will have to take swift and effective action against illegal content, including criminal online abuse and posts of a sexual nature. We should get behind Ofcom and the Online Safety Act, and we will then obviously have to keep that Act under review, but we have the tools to do that.

[Baroness Hussein-Ece (LD)]

My Lords—

--- Later in debate ---

[Baroness Hussein-Ece (LD)]

Does the Minister agree that digital literacy is crucial, so that people are better able to identify often damaging misinformation and fake news? What is the Government’s strategy in that respect?

[Baroness Jones of Whitchurch (Lab)]

The noble Baroness makes an important point. Part of Ofcom’s responsibility is to heighten the role of media literacy. We are talking to the Department for Education, and obviously there is a role for schools to be involved in all this—but parents also have to take responsibility for their children, and for their access to these sites. The media literacy role that we have to play goes right throughout society; it is the responsibility of all of us to make sure that people understand, when they access these sites, what they are able to see and how all that can be moderated. Again, the social media companies have a particular responsibility to play in all that. We expect them to uphold their terms of service to make sure that children cannot access the sites that are inappropriate, and we will work with them to make sure that this happens.

[Lord Parkinson of Whitley Bay (Con)]

I hope that the Government will look with sympathy at the Private Member’s Bill being brought forward by my noble friend Lady Owen of Alderley Edge, which the noble Lord, Lord Browne of Ladyton, mentioned. It deals with very important issues.

The Minister will be aware of the arrest of Pavel Durov in France—the founder and chief executive of the messaging application Telegram. I do not expect her to be able to comment on an ongoing investigation, but can she tell your Lordships’ House whether His Majesty’s Government have had any contact with the Government of France in relation to this matter and whether British law enforcement agencies have been involved in the investigation? I appreciate that she may need to write after checking with them.

[Baroness Jones of Whitchurch (Lab)]

I pay tribute to the noble Lord for all the work that he did in getting the Online Safety Act on to the statute book. With regard to Telegram, obviously we cannot comment on issues in another country’s jurisdiction. We have regular contact with all friendly nations dealing with those issues. I cannot comment on whether there has been specific dialogue on the issue of Telegram, but we would normally expect that to be something for the French Government to deal with.

[The Lord Bishop of Leicester]

My Lords, I recognise absolutely the urgency and importance of legislation in this area, but does the Minister agree that equally important is the work of tackling the prejudice that lies behind online abuse, and the important role therefore of intermediate institutions such as community groups and faith groups in tackling prejudice? What are the Government doing to support those groups in that work?

[Baroness Jones of Whitchurch (Lab)]

The right reverend Prelate makes a very important point. I think that we were all pleased with the community reaction to the riots. It was very heartening to see that people were not prepared to have those abhorrent views coming to the fore in their communities. We need to do more to encourage that community response, and we need to work with all of civil society, including the Church, to make sure that happens. We also need to make sure that the police, as they play a community role, make clear what is illegal and take action when actions in a locality are illegal. This is a much broader issue about civil society, and I agree with him.

AI Technology Regulations

Baroness Jones of Whitchurch Excerpts

Tuesday 30th July 2024 Lords Chamber

[Lord Knight of Weymouth]

To ask His Majesty’s Government what plans they have to regulate artificial intelligence technologies.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, as set out in the King’s Speech, we will establish legislation to ensure the safe development of AI models by introducing targeted requirements on a handful of companies developing the most powerful AI systems. The legislation will also place the AI Safety Institute on a statutory footing, providing it with a permanent remit to enhance the safety of AI. We will consult publicly on the details of the proposals before bringing forward legislation.

[Lord Knight of Weymouth (Lab)]

I thank my noble friend the Minister for her reply and congratulate her on her appointment. There is no doubt that AI will be an important part of the economic growth that is this Government’s priority, but there are also growing concerns about the potential harms being caused by this technology, in particular around the creation of deepfake content to pervert the outcome of elections. What is the Government’s view on that potential harm to democracy, and are there any plans to extend the regulation to political advertising, as recommended in the 2020 report to this House from the Democracy and Digital Technologies Select Committee?

[Baroness Jones of Whitchurch (Lab)]

I thank my noble friend for those good wishes. Of course, he is raising a really important issue of great concern to all of us. During the last election, we felt that the Government were well prepared to ensure the democratic integrity of our UK elections. We did have robust systems in place to protect against interference, through the Defending Democracy Taskforce and the Joint Election and Security Preparedness unit. We continue to work with the Home Office and the security services to assess the impact of that work. Going forward, the Online Safety Act goes further by putting new requirements on social media platforms to swiftly remove illegal misinformation and disinformation, including where it is AI-generated, as soon as it becomes available. We are still assessing the need for further legislation in the light of the latest intelligence, but I assure my noble friend that we take this issue extremely seriously. It affects the future of our democratic process, which I know is vital to all of us.

[Lord Clement-Jones (LD)]

My Lords, I welcome the creation of an AI opportunities plan, announced by the Government, but, as the noble Lord, Lord Knight, says, we must also tackle the risks. In other jurisdictions across the world, including the EU, AI-driven live facial recognition technology is considered to seriously infringe the right to privacy and have issues with accuracy and bias, and is being banned or restricted for both law enforcement and business use. Will the Government, in their planned AI legislation, provide equivalent safeguards for UK citizens and ensure their trust in new technology?

[Baroness Jones of Whitchurch (Lab)]

I thank the noble Lord for that question and for all the work he has done on the AI issue, including his new book, which I am sure is essential reading over the summer for everybody. I should say that several noble Lords in this Chamber have written books on AI, so noble Lords might want to consider that for their holiday reading.

The noble Lord will know that the use and regulation of live facial recognition is for each country to decide. We already have some regulations about it, but it is already governed by data protection, equality and human rights legislation, supplemented by specific police guidance. It is absolutely vital that its use is only when it is necessary, proportionate and fair. We will continue to look at the legislation and at whether privacy is being sufficiently protected. That is an issue that will come forward when the future legislation is being prepared.

[Lord Holmes of Richmond (Con)]

My Lords, would the Minister agree that the way to regulate AI is principles-based, outcomes-focused and input-understood, and always, where appropriate, remunerated? To that end, what is the Government’s plan to support our creative industries—the musicians, writers and artists who make such a contribution to our economy, society and well-being, and whose IP and copyright are currently being swallowed up by gen AI, with no respect, no consent and no remuneration? Surely it is time to legislate.

[Baroness Jones of Whitchurch (Lab)]

The noble Lord raises a really important point here and again I acknowledge his expertise on this issue. It is a complex and challenging area and we understand the importance of it. I can assure the noble Lord that it remains a priority for this Government and that we are determined to make meaningful progress in this area. We believe in both human-centred creativity and the potential of AI to open new creative frontiers. Finding the right balance between innovation and protection for those creators and for the ongoing viability of the creative industries will require thoughtful engagement and consultation. That is one of the things we will do when we consult on the new legislation.

[Lord Evans of Weardale (CB)]

My Lords, artificial intelligence poses a risk not only to high-profile issues such as existential threats and safety, but also potentially to public standards—a matter on which the new Government have made many statements. Areas such as objectivity and accountability are potentially undermined through the use of AI for official decision-making. Can the Minister confirm that those aspects of the risk posed by AI will also be properly considered as steps are taken to move towards regulation?

[Baroness Jones of Whitchurch (Lab)]

The noble Lord is right that there are issues around the risks in the way he has spelled out. There are still problems around the risks to accuracy of some AI systems. We are determined to push forward to protect people from those risks, while recognising the enormous benefits that there are from introducing AI. The noble Lord will know I am sure that it has a number of positive benefits in areas such as the health service, diagnosing patients more quickly—for example, AI can detect up to 13% more breast cancers than humans can. So there are huge advantages, but we must make sure that whatever systems are in place are properly regulated and that the risks are factored into that. Again, that will be an issue we will debate in more detail when the draft legislation comes before us.

[Viscount Camrose (Con)]

My Lords, let me start by warmly welcoming the Minister to her new, richly deserved Front-Bench post. I know that she will find the job fascinating. I suspect she will find it rather demanding as well, but I look forward to working with her.

I have noted with great interest the Government’s argument that more AI-specific regulation will encourage more investment in AI in the country. That would be most welcome, but what do the Government make of the enormous difference between AI investment to date in the UK versus in the countries of the European Union subject to the AI Act? In the same vein, what do the Government make of Meta’s announcement last week that it is pausing some of its AI training activities because of the cumbersome and not always very clear regulation that is part of the AI Act?

[Baroness Jones of Whitchurch (Lab)]

Again, I thank the noble Viscount for his good wishes and welcome him to his new role. He is right to raise the comparison and, while the EU has introduced comprehensive legislation, we instead want to bring forward highly targeted legislation that focuses on the safety risks posed by the most powerful models. We are of course committed to working closely with the EU on AI and we believe that co-ordinating with international partners —the EU, the US and other global allies—is critical to making sure that these measures are effective.

[Lord Hannett of Everton (Lab)]

My Lords, I also express my good wishes to the Minister and say that my noble friend Lord Knight has raised an exceptionally timely Question on what is, increasingly, a major challenge for the UK: AI. I was pleased to work with my noble friend recently—or at least a few years ago now—on the Future of Work Commission. My area of concern is work. Can the Minister expand further on the use of regulation and the timeline, if possible? Does she have concerns about the potential loss of employment, despite the many opportunities?

[Baroness Jones of Whitchurch (Lab)]

I thank my noble friend for his question. He is right that there are huge opportunities from applications of AI in the workplace, but also a number of areas of cause for concern. As he knows, there have been very worrying cases where people have been sacked by a computer, sometimes incorrectly. We want to make sure that that is not possible in future and that people have more rights to be dealt with by a human being rather than by a machine.

This was an issue that came up for a great deal of debate in the last data protection Bill, which did not make it through the wash-up, but the new smart data and digital information Bill, announced in the King’s Speech, will hopefully pick up some of those issues and we will look at how we can ensure that workers are protected.

Post Office Horizon

Baroness Jones of Whitchurch Excerpts

Wednesday 24th July 2024 Lords Chamber

“Members will know that the Government made a key manifesto commitment to ensure that justice and compensation are delivered as swiftly as possible for every postmaster caught up in the Horizon scandal. The Secretary of State has already met Sir Alan Bates, Kevan Jones and the chair of the Post Office, Nigel Railton, to discuss the progress being made and what more can be done. The Government intend to make a significant announcement on the new redress scheme before the Summer Recess. This scheme will apply to postmasters whose convictions have been overturned by the Post Office (Horizon System) Offences Act 2024, passed in the last Parliament”.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I am grateful for the opportunity to make this new Government’s first Statement in your Lordships’ House on the Horizon scandal. It was one of the Government’s key manifesto commitments to ensure that full and fair compensation is delivered for every sub-postmaster caught up in the Horizon scandal.

I echo what my colleague Justin Madders MP said in the other place. This has been a huge miscarriage of justice and I am deeply grateful to those sub-postmasters who pursued justice against the odds. We owe them a debt of gratitude for their tireless campaigning. I am also deeply grateful to colleagues in this House, particularly the noble Lord, Lord Arbuthnot, and in the other place for their work in righting this wrong.

The Secretary of State for Business and Trade has already met with Alan Bates, Kevan Jones and Nigel Railton to discuss progress and what more can be done. We intend to make another announcement on the redress scheme before the Summer Recess and to help those whose convictions were overturned in the last Parliament.

[Lord Offord of Garvel (Con)]

I welcome the noble Baroness, Lady Jones, to her place on the Front Bench. I am glad that the Government are picking up with a sense of urgency the last piece of business that went through this House before the general election. At this point we might take a moment to congratulate the tireless campaigner Alan Bates on his recent knighthood. It reflects the will of the people to congratulate him on his tireless campaigning on this matter over 20 years.

The Post Office (Horizon System) Offences Act 2024 was an unprecedented piece of legislation that overturned the convictions of 800-plus postmasters and postmistresses. However, the Act quashes convictions but does not provide compensation. That is what we need to turn our attention to now. Can the Minister please clarify whether the July deadline for the letters offering the final settlement of £600,000 to go out to the 800-plus postmasters and postmistresses will be met? Has the Horizon shortfall scheme been implemented, allowing the additional £75,000 top-up? When the Minister says that this will be done before Recess, does she realise that is next Tuesday?

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the noble Lord for his kind comments and welcome him to his new role. I echo his congratulations to Alan Bates on his very well-deserved knighthood.

Obviously, we are awaiting the details of the scheme, but once they are in place the follow-up letters will go out at pace. As the noble Lord knows, in the meantime we are implementing the £75,000 fixed sum awards and we will set out further plans for that in due course. I take note that the beginning of the Recess is next week, and I hope to come back with further information in the meantime.

[Lord Fox (LD)]

My Lords, I also welcome the noble Baroness to her position, which I believe spans two departments. I am not quite sure what she has done to deserve that. I associate myself with the remarks made by the spokesperson for His Majesty’s Opposition and credit him for the energy he brought to this subject in the latter half of the last Parliament.

In those discussions, there was a group of people who are still not covered by what we are doing: the unsuccessful appellants of the case. There was a small but significant number who had the courage to take their case to appeal, lost their appeal and are now hanging outside this scheme. I spoke to the last Government in both this place and the other place about the reasons for that. I understand the reasons around the judicial nature of what has gone on, but can the Minister assure us that these people are not forgotten and that a route is being sought to make sure they get the same of level of redress received by the others as a result of the legislation?

[Baroness Jones of Whitchurch (Lab)]

My Lords, of course we are mindful of those cases and are carefully watching the numbers that remain in that camp. The usual routes of appeal remain for those cases. In particular, those individuals can apply to the Criminal Cases Review Commission to be referred back to the Court of Appeal, if it considers that

“there is a real possibility that the conviction would not be upheld were a reference to be made”.

I hope that advice will be taken by a number of those individuals.

[Lord Sikka (Lab)]

My Lords, for nearly 20 years, institutions of government and corporations claimed that there was nothing wrong with the prosecutions of sub-postmasters. Now, of course, we know different. With that in mind, I urge the Minister to appoint an independent inquiry into the 100 or so convictions of sub-postmasters that were secured by the Department for Work and Pensions. In many cases, the affected individuals have passed away and their families are traumatised.

[Baroness Jones of Whitchurch (Lab)]

The noble Lord makes a very good point. He is absolutely right about the long delays that took place, and I think we around this House have all accepted that that was unacceptable. I hope that all parts of government have learned the lesson from that. On the individuals and the question of whether there should be an independent inquiry, we believe that the best way to deal with this issue now is through the current arrangements being set up, rather than by having another third party involved. I am sure that all these matters will be taken into account in the eventual recommendations.

Digital Markets, Competition and Consumers Bill

Baroness Jones of Whitchurch Excerpts

Consideration of Commons amendments
Thursday 23rd May 2024 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, I do not propose to go over old competition ground, but like the noble Lord, Lord Moynihan, our attitude to Motion A is not to oppose it but to be somewhat disappointed at the Government’s response; on the other hand, we welcome the fact that they have added new enforcement proposals and provisions and the promised review. I think it is quite unaccountable that they have resisted the almost irresistible force of the noble Lord, Lord Moynihan; it has been a sight to behold his persistence throughout not only this Bill but previous Bills. I am quite confident that eventually his campaigning will bear fruit because, when we look at the terms of the amendments that were not agreed to by the Commons on providing evidence of proof of purchase and of title to tickets, among other things they are only common sense and very good consumer protection.

I add my thank you valedictory to the Minister, his colleague the noble Viscount, Lord Camrose, who I see is riding shotgun today, and the noble Lord, Lord Parkinson, who made a cameo appearance on the Bill and was the Minister involved very heavily in the Online Safety Bill proceedings. Both Ministers have always been willing to engage. They have not always conceded, but they have always listened, so I thank them very much indeed for all their service. It has been a pretty long ride when one looks back to the beginning of the suite of digital Bills in the past two years, starting with the Online Safety Bill, then the digital markets Bill, and now the non-lamented data protection Bill, and I look forward to further digital legislation in the autumn or the beginning of next year.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I add my thanks, first, to the Ministers. As the noble Lord, Lord Clement-Jones, said, they have worked assiduously, and we have felt as if we were constantly in their company over the past six months or so. They have always been courteous and had a listening ear, and I thank them for that. I, too, add my thanks to the members of the Bill team for all their hard work in preparing the Bill and the quite substantial amendments on occasions that have been agreed on concession. I particularly thank the stakeholders in the wider scope of the Bill, the challenger firms and the consumers who have been so active in helping us shape what is becoming a good Bill.

I am sorry that the Government did not see the sense of what I thought was an extremely reasonable amendment from the noble Lord, Lord Moynihan. We remain hugely disappointed in Motion A for the reasons that we have ready rehearsed which I do not need to repeat. I particularly thank the noble Lord, Lord Moynihan, and Sharon Hodgson who have campaigned on this issue for many years. I hope that in due course they will get their reward.

I have to say that, if elected, a Labour Government would strengthen consumer rights legislation to protect fans from fraudulent ticket practices, to restrict the sale of more tickets than permissible and to ensure that anyone buying a ticket on the secondary market can see clearly the original price and where it comes from. We will put the interests of the fans and the public first on this. Nevertheless, we believe overall that this is a good Bill that takes the first steps to regulating the behaviour of the big tech companies, which is long overdue, giving a bit more security to challenger firms and adding protection to consumer rights. We are grateful for the concessions made along the way that have indeed improved the Bill. At this stage in the proceedings, we think it is right that the Bill do now pass and that we do not need to debate it any further.

[Lord Offord of Garvel (Con)]

I am very grateful to noble Lords for their contributions today and throughout the passage of the Bill. I commend especially my noble friend Lord Moynihan for his dogged determination on this issue and the sentiments that he has expressed consistently throughout the passage of the Bill. I also pay tribute to my noble friend Lord Camrose, who has done more than ride shotgun; he has done the heavy lifting on the digital markets piece of this legislation, and I thank him for that contribution. I thank the Opposition Benches led by the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones, for a consistently collaborative approach on these matters. The engagement we have had has been comprehensive.

I also thank all those who have helped us get to this place, including the clerks, officials and, of course, the Bill team led by Georgie Clarke, for their hard work on this legislation. This Bill will be vital in driving growth, innovation and productivity and in protecting consumers. I am honoured to see it through its final stage today, and I look forward to it becoming an Act of Parliament. The Bill has benefited from widespread support from across both Houses as well as detailed scrutiny from many noble Lords and Members in the other place. I thank all noble Lords for supporting our position and wishing the Bill well.

Motion A agreed.

Digital Markets, Competition and Consumers Bill

Baroness Jones of Whitchurch Excerpts

3rd reading
Tuesday 26th March 2024 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, I am delighted that the Minister has come back at Third Reading as he undertook to and that he has produced this amendment. I am only sorry that the noble Lord, Lord Lucas, is not present to be able to take the credit for it.

[Baroness Jones of Whitchurch (Lab)]

My Lords, we welcome the Government’s amendment on subscription reminder notices. As has been said, the noble Lord, Lord Lucas, made a very sensible intervention when we debated this in Committee and on Report, and it provides a helpful clarification to service providers. I hope that this amendment and the other changes that we made on Report have now struck a much better balance between businesses’ needs and consumer interests.

We look forward to hearing details of the department’s further work on implementing the gift aid protections and other work on cancellation methods, but, for now, we are pleased with the progress that has been made on the Bill and we wish it a speedy onward passage.

[Lord Offord of Garvel (Con)]

I thank my noble friends Lord Black and Lord Lucas, and today the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones, for their continuing engagement on this topic and on the Bill more broadly. I am pleased they agree that the Government have achieved the right balance between business and consumers on reminder notices and that we have ensured that businesses’ communications with customers can be more streamlined.

--- Later in debate ---

[Lord Clement-Jones (LD)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Stowell. I agree with a huge amount of what she said.

I reiterate the welcome that we on these Benches gave to the Bill at Second Reading. We believe it is vital to tackle the dominance of big tech and to enhance the powers of our competition regulators to tackle it, in particular through the new flexible pro-competition powers and the ability to act ex ante and on an interim basis.

We were of the view, and still are, that the Bill needs strengthening in a number of respects. We have been particularly concerned about the countervailing benefits exemption under Clause 29. This must not be used by big tech as a major loophole to avoid regulatory action. A number of other aspects were inserted into the Bill on Report in the Commons about appeals standards and proportionality. During the passage of the Bill, we added a fourth amendment to ensure that the Secretary of State’s power to approve CMA guidance will not unduly delay the regime coming into effect.

As the noble Baroness, Lady Stowell, said, we are already seeing big tech take an aggressive approach to the EU Digital Markets Act. We therefore believe the Bill needs to be more robust in this respect. In this light, it is essential to retain the four key amendments passed on Report and that they are not reversed through ping-pong when the Bill returns to the Commons.

I thank both Ministers and the Bill team. They have shown great flexibility in a number of other areas, such as online trading standards powers, fake reviews, drip pricing, litigation, funding, cooling-off periods, subscriptions and, above all, press ownership, as we have seen today. They have been assiduous in their correspondence throughout the passage of the Bill, and I thank them very much for that, but in the crucial area of digital markets we have seen no signs of movement. This is regrettable and gives the impression that the Government are unwilling to move because of pressure from big tech. If the Government want to dispel that impression, they should agree with these amendments, which passed with such strong cross-party support on Report.

In closing, I thank a number of outside organisations that have been so helpful during the passage of the Bill—in particular, the Coalition for App Fairness, the Public Interest News Foundation, Which?, Preiskel & Co, Foxglove, the Open Markets Institute and the News Media Association. I also thank Sarah Pughe and Mohamed-Ali Souidi in our own Whips’ Office. Last, but certainly not least, I thank my noble friend Lord Fox for his support and—how shall I put it?—his interoperability.

Given the coalition of interest that has been steadily building across the House during the debates on the Online Safety Bill and now this Bill, I thank all noble Lords on other Benches who have made common cause and, consequently, had such a positive impact on the passage of this Bill. As with the Online Safety Act, this has been a real collaborative effort in a very complex area.

[Baroness Jones of Whitchurch (Lab)]

My Lords, before the Bill passes, I put on record my thanks to the Ministers—the noble Viscount, Lord Camrose, and the noble Lord, Lord Offord—as well as the noble Lord, Lord Parkinson, who made a guest appearance. I also put on record my huge appreciation for the Bill team for their timely letters and briefings, and their immense good humour when we asked for even more information.

The whole experience has been a good illustration that, when we fully engage in discussion on a Bill, we can deliver genuine improvements that have broad support. I hope that our colleagues in the Commons appreciate the careful thought and hard work that is behind these changes. I hope that we do not have to be here again on this Bill, but I reiterate that our door is always open if further discussions would help. For now, I hope that the Bill will soon be on the statute book and I look forward to its progress.

Bill passed and returned to the Commons with amendments.

Digital Markets, Competition and Consumers Bill

Baroness Jones of Whitchurch Excerpts

Report stage
Wednesday 13th March 2024 Lords Chamber

The amendments I put down are pretty self-explanatory, and I hope the Minister will respond.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I hope that I too can be brief. When we discussed the provisions on subscription contracts in Committee, there were a number of concerns raised about the original wording. There was, at the time, a recognition that some consumers were being trapped into subscription contracts from which they could not easily withdraw. There was a further issue of subscription auto-renewing without people realising, which cost individuals an estimated £500 million a year.

However, against that, there was a strong case made for the many regular subscriptions for the goods and services which were genuinely wanted and loved, and for the many other subscriptions to good causes and charities on which those organisations depended. There was a growing consensus among noble Lords that we had not got that balance right, so I am very pleased that the Minister has listened and engaged with these concerns and we are pleased with the Government’s amendments now tabled.

First, we welcome the decision to exclude micro-entities, such as milkmen and farm shops, from the provisions.

Secondly, it is helpful that the new amendments clarify the way that consumers should notify the business that they wish to end a contract. We would have welcomed a clearer provision for a simple on/off toggle button to end subscriptions; we hope that the Government will keep that option under review.

Thirdly, we welcome the new government proposals to prevent binge-watching of digital content for free during the cooling-off period. The noble Lord, Lord Clement-Jones, has further amendments on this issue which provide helpful clarification on those outstanding issues. I hope the Minister can provide some reassurance that these issues will be kept under review.

We are pleased that the Government have addressed the very real concerns from the charity sector that gift aid claims would be lost under the new regulations. The Government have explained that this requires a change to the Treasury regulations and have given an assurance that these changes will be implemented before this section of the Bill comes into force in October 2025. I pay tribute to the persistence shown by the noble Lord, Lord Mendoza, in trying to resolve this issue, which we have been pleased to support. His Amendment 126 pursues this issue, and I know that there are many in the charity sector who would like further clarity and certainty on how those assurances can be delivered in practice. I was pleased to hear from the Minister that they will be subject to further engagement with stakeholders to get this right, and I think that is the way forward.

The amendments proposed by the noble Lord, Lord Clement-Jones, helpfully set out a route that could be taken to bring about a successful resolution, and I hope the Minister can confirm that those principles will underlie any ongoing discussions.

Finally, Amendment 127 from the noble Lord, Lord Lucas, raises the need for reminder notices to be prominent in any correspondence, and we very much support the intent behind his amendment. We hope the Minister will feel able to give the reassurances that the noble Lord, Lord Lucas, seeks, that these issues will be addressed.

Overall, the provision in the Bill has made good progress, but it is not the end of the matter. I hope the Minister can assure us that the operation of these changes will be kept under review and, if necessary, brought back to the House for further attention. I look forward to the Minister’s response.

Digital Markets, Competition and Consumers Bill

Baroness Jones of Whitchurch Excerpts

Report stage
Monday 11th March 2024 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, it is a pleasure to follow that piece of logic. I do not need to speak for very long in support of the many important amendments that have been spoken to in this group. The Minister, in Committee and in his welcome letters and meetings, has attempted to rebut the need for them—but I am afraid that, in all cases, their proponents have been rather more persuasive in wishing to see the CMA unambiguously able to exercise its powers.

In a different context, the Communications and Digital Committee, chaired by the noble Baroness, Lady Stowell of Beeston, in its report on large language models, said that there was a considerable “risk of regulatory capture”. Mindful of that, we need to make sure that the CMA has those powers.

I turn to the amendment proposed by the noble Lord, Lord Faulks, and his argument about the dangers of introducing proportionality, also spoken to by the noble Lord, Lord Wolfson. On these Benches, we fully support having that provision in the Bill, as in the noble Lord’s Amendment 13. Human rights for big tech is not really a slogan that I am prepared to campaign on.

The noble Baroness, Lady Jones, will no doubt introduce her Amendments 43, 46, 51 and 52 on appeal mechanisms for penalties, which differ from all the other decisions of the CMA. We very much support her in those amendments, and we have signed them. I also support the noble Baroness’s Amendment 59. The Minister took the trouble to write, explaining why the Government did not consider including a duty to citizens, but sometimes such clarification, as in this case, makes us only more enthusiastic for change. I am afraid that citing overlap and the creation and operation of the DRCF is not enough; nor is citing the risk of regulatory overreach, given its inclusion 20 years ago in the Communications Act. We agree with the conclusions of the original task force.

We also support the noble Lord, Lord Lansley, on the importance of placing time limits on the Secretary of State in approving the CMA guidance under the digital markets provisions of the Bill, in Amendment 56. Although I believe that the noble Baroness, Lady Stowell of Beeston, will not be pressing it to a vote, we very much support her in her relentless campaign for improved parliamentary scrutiny. This has been identified by so many parliamentary committees, not least by the Industry and Regulators Committee on which I sit. It seems extraordinary that we are still waiting to implement the kind of solution that she is putting forward, and I hope very much that the House will take forward her suggestion.

We also very much support in principle the amendment proposed by the noble and learned Lord, Lord Etherton, on collective proceedings. He may not press the amendment to a Division today, but this is a vital change that we should make to ensure that rights in this area can be properly exercised and enforced. If the noble Lord, Lord Faulks, seeks the opinion of the House on his Amendment 13, the noble Baroness, Lady Jones, on her Amendment 43, and the noble Lord, Lord Lansley, on his Amendment 56, we will support them.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords who have contributed this afternoon to what is a very important group of amendments. I add my thanks to the Ministers and officials for their time in the run-up to this debate in trying to resolve the many issues that we have tabled today.

I thank the Minister for tabling Amendment 1 and for listening to our concerns about the Secretary of State’s power to amend the conditions that would determine whether a tech company has a position of strategic significance. I am glad that the Minister has listened to our concerns, and we are happy to say that we accept the new proposals.

Our Amendments 43, 44, 46, 51, and 52 would reinstate judicial review principles as the means by which penalty decisions are heard, rather than being determined on the merits. I thank all noble Lords who have spoken this afternoon, and indeed those who have added their names to these amendments, for their support. As we debated in Committee and again today, these amendments are among the several we are debating in which the original balance between big tech companies and challenger firms was distorted by late government amendments on Report in the Commons. The Minister has already admitted that the changes came about as a result of lobbying by the big tech companies to No. 10. They clearly would not have done this unless they were expecting to benefit from those changes.

The debate around the appeals mechanism goes to the heart of those concerns. We know that penalties such as fines are the most significant deterrent in preventing SMS companies breaking the conduct requirements established by the CMA. There is a real concern that a merits appeals process would allow the SMS firms to deliberately delay implementation of the fines and open up the judgment of the CMA right back to square one. This is why the CMA has itself argued that it prefers the judicial review process, which is widely used elsewhere and avoids protracted litigation. We agree with the CMA and believe that appeals through judicial review will deliver swifter and more effective outcomes. We want to close down the opportunities for unnecessary litigation from huge corporate lawyers with time on their side and deep pockets to fund their activities.

As the noble Lord, Lord Black, and the noble Baroness, Lady Kidron, have said, the worrying news from Europe as to the responses so far from Apple and the other tech companies to their fines for anti-competitive behaviour underlines why it is so important to have robust and legally watertight regulation in place in the UK.

I do not think that the Minister, in Committee or in subsequent discussions, has been able to persuade us that a merits review process will not open the door to lengthy litigation designed to frustrate the whole process. If we remain unpersuaded by his arguments this afternoon, I give notice that I will wish to test the opinion of the House on Amendment 43.

These concerns also apply to Amendments 13 and 35 in the name of the noble Lord, Lord Faulks. In this case, replacing the word “appropriate” with “proportionate” has particular legal implications, which the noble Lord, Lord Faulks, has described extremely eloquently. We know that the CMA already has a duty to act proportionality, so repeating it in the Bill takes on a new legal emphasis that might lead a court to widen the scope of a judicial review challenge. In our view, “appropriate” has a much more common-sense meaning of rationality, whereas “proportionate” is a matter of judgment and is more easily disputed.

The Minister has argued that there is a need for extra clarity to reassure the tech companies on the intent of the clause. The amendment from the noble Lord, Lord Faulks, would require the CMA to act proportionately, as its current duty requires, and also appropriately. This is a win-win, which should provide the clarity that tech companies are seeking. I look forward to hearing the Minister’s further clarification on these issues, but, unless there is any new, compelling justification for the changes, we would support the noble Lord, Lord Faulks, if he chooses to test the opinion of the House.

Throughout our deliberations, the noble Baroness, Lady Stowell, has raised important questions about the need to strengthen parliamentary oversight of the CMA’s activities. Her Amendments 55 and 57 provide an excellent route to addressing these concerns. Like other noble Lords, I am sorry that they have not yet found favour with the Government and I very much hope that she will continue to pursue them.

Meanwhile, Amendment 49 from the noble and learned Lord, Lord Etherton, raises the right of consumers to bring collective proceedings where they have suffered the same harm or loss from a breach of conduct requirements. As he has argued, this is a vital lifeline for individuals or small businesses that cannot afford to finance legal proceedings alone. His amendment would create a means of effective enforcement of existing rights once a breach has occurred. We agree that we ought to find a mechanism to allow these class actions to occur in specific circumstances.

However, we also agree with the amendment of the noble Baroness, Lady Harding, that the courts need to avoid proceedings which conflict with or overlap the CMA’s ongoing investigations. We hope the Minister can provide some reassurance that the Government recognise the importance of these issues and will carry out a review. I hope this will provide sufficient reassurance to the noble Lord, Lord Etherton, that a vote on his amendment is not necessary.

--- Later in debate ---

Moved by

[Baroness Jones of Whitchurch]

24: Clause 29, page 16, line 14, after “is” insert “indispensable and”
Member’s explanatory statement
This amendment, alongside another in my name to Clause 29, would revert the Clause back to the one first introduced in the House of Commons. This would narrow the ability of bigger platforms to claim their anti-competitive behaviour presents countervailing benefits.

--- Later in debate ---

Moved by

[Baroness Jones of Whitchurch]

43: Clause 89, page 55, line 32, leave out “, 114 (appeals)”
Member’s explanatory statement
This amendment, alongside others in my name to Clauses 89 and 103, would revert the relevant Clauses back to the ones first introduced in the House of Commons. This would reinstate judicial review principles as the means by which appeals against penalty decisions are heard, rather than such decisions being determined on the merits.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I listened carefully to the Minister’s response. This amendment to the way that appeals are processed goes to the heart of our concerns about the Bill. It would revert the wording to the much more sensible wording that the Government had initially in the Commons. We feel that, without our amendment, the corporate lawyers will run rings around the CMA and postpone any delays in the implementation of CMA decisions. This is an important amendment and I therefore wish to test the opinion of the House.