Digital Economy Bill

Debate between Baroness Jones of Whitchurch and Lord Paddick

Report: 2nd sitting (Hansard): House of Lords
Monday 20th March 2017 Lords Chamber

[Baroness Jones of Whitchurch]

My Lords, in moving Amendment 25J I shall speak also to Amendments 25K and 25P. They tackle three key aspects of the regulation regime as set out in Part 3. First, as we have said, we believe that a great deal more work needs to be done on the detail of the Bill, specifically on the functions of the regulators. It is important to get this right.

For example, potentially huge new powers will be available in Part 3, underpinned by large fines and considerable and as yet untested obligations laid on internet service providers, banks and advertisers. The core expectation is that these large institutions are going to help us to police pornography sites, but for this to work there has to be confidence in the competence of the regulators and that their judgments will be proportionate and legally watertight.

From our discussions so far with these groups, I do not think that we have quite reached that point. Like most people, they have sympathy with the aim of protecting children, but they remain somewhat confused about how this is going to work in practice and what their role will be. This is why we suggest in proposed new subsection (14) set out in Amendment 25P that there should be further widespread consultation about the designated functions and powers of the regulators before they are laid down in statute.

Secondly, there is the issue of who the regulator or regulators might be. As noble Lords will recall, the lack of detail about the roles that they are to perform was discussed at length by both the Delegated Powers and Regulatory Reform Committee and the Constitution Committee, which fed their comments through during the Committee stage. I will not rehearse all the arguments again because they have been spelled out, but as an example, the DPRCC concluded:

“We think it inappropriate to delegate to the Secretary of State, with only a modest level of Parliamentary scrutiny, the decision on whom to designate as the regulator”.


The truth is that the Government have not been clear on this issue, and indeed they seem to have changed their position as the Bill has progressed without a legitimate explanation for doing so. The original letter of intent, which was sent by DCMS to the BBFC last year, made it clear that it would carry out the front end of the regulatory framework with a different, unnamed regulator of equal status carrying out the enforcement functions set out in Clauses 20 and 21. This position was maintained by the Government throughout the Commons debates on the Bill. Thereafter, in the Lords Committee stage debate, the Minister said:

“We propose that the BBFC should carry out the initial monitoring, assessing and notification work, and we are carefully considering alongside this the option for an enforcement regulator”.—[Official Report, 2/2/17; col. 1297.]


Our amendment is consistent with that position.

However, the Government’s view has changed again. In a more recent letter to the DPRRC, they say that it is intended that the BBFC should carry out all the functions apart from issuing financial penalties. Finally, at a recent meeting the Minister, Matt Hancock, began to speculate that the BBFC could in fact carry out all the functions in the Bill and that a second regulator was not really necessary. This is confirmed in the draft guidance that was produced last week. It is clear that a degree of mission creep is taking place here without an adequate explanation. That underlines our concerns that the Government have not really thought this through. It is not clear why there has been a change of heart. It might be purely pragmatic because, as we understand it, Ofcom has shown a reluctance to take on the enforcement role, but that is not a good enough reason to load all of the powers on to one body with little experience of the scale of enforcement that is spelled out in the Bill.

We continue to be clear that there are two separate regulatory functions, both with considerable responsibilities and heavy resource commitments. They are, first, identifying persons who contravene the requirement to provide age verification filters or who display extreme pornography—it may well be that the BBFC is qualified to do that—and, secondly, taking the widespread range of enforcement actions, including imposing fines, cutting off payments and advertising revenue, and blocking sites as specified in Clauses 20 to 23. This is how the Government originally intended the system to work, and it is a mark of good governance that the two roles should be kept separate.

Our amendment would remove the option of having just one regulator and specifies that there should be two or more. The relationship between the two bodies is set out so that appropriate checks and balances are in place.

The amendment also specifies that the appeals mechanism for decisions by the regulator should be fully independent and not appointed, overseen and funded by the regulator. Again, this is an issue that we have debated previously. We do not believe that the measures set out in the draft guidance address our concerns about appeals, and I hope that even now the Minister will concede that the Government need to revisit the level of independence of the appeals mechanism and to reassure us on that matter.

Finally, our amendment specifies the need for the regulators to have the status of a body corporate, independent of the Government and with all appointments made openly and transparently. Compelling arguments on this matter were put forward in Committee by my noble friend Lord Stevenson, and we continue to believe that they should be addressed before any regulator is appointed. Unlike most regulators, the BBFC is a private company with private arrangements for board appointments. It lacks the transparency and accountability of most organisations operating in this public sphere. It is to be appointed to a role where it will take on considerable extra functions that will be funded by the Government and with complex moral responsibilities at their heart, as we have heard in the earlier debates. We need a reassurance that its governance is of the highest standard, in keeping with the Nolan principles and open to scrutiny.

We believe that our amendments cover the essential factors which underpin a solid and credible regulatory structure. The Government should take time to make the appointments of regulators and they should think again about the drift towards one regulator, which was never originally envisaged. It is important to ensure that all the parties that will play a role in this new regime have confidence in the competence and authority of the regulators, and we believe that this can be achieved only if we consult further and widely about the functions as set out in our amendments. On that basis, I beg to move.

[Lord Paddick]

My Lords, I shared some of the concerns that the noble Baroness has just articulated about the role of the BBFC as both the group that will reach these decisions and the one to enforce them. However, having met with representatives of the BBFC, I have to say that I do not agree with the noble Baroness about heavy resource commitments. The BBFC is content that it should be able to carry out these roles with a minimal increase in resources. Also, bearing in mind the confidence that the industry currently has in the BBFC around classification and the awarding of certificates for films and DVDs, we are confident that were the BBFC to become the regulator, it could carry out both roles.

At the end of the day, the BBFC is not at all confident about how effective the financial penalty elements of the Bill will be, bearing in mind that the overwhelming majority of pornographic websites are hosted in other countries. In its view, the enforcement of financial penalties will be almost impossible, but it is confident that it could quickly and easily ask internet service providers to block websites that fail to provide adequate age verification. In these circumstances, we do not believe that we can support the amendments.