(6 years, 6 months ago)
Lords ChamberMy Lords, I welcome this Bill, and I am glad that it is shorter and clearer than most other comparable Bills. As this is the Second Reading debate, I will touch on three areas: EU aspects of what is planned; prospects for nuclear; and then I will ask some detailed questions about the Bill itself.
I resisted the temptation to add to the enormous numbers speaking last week on the withdrawal Bill. I should, however, state clearly that I am in the camp of those who voted remain, but unlike the noble Lord, Lord Fox, now believe that, following the democratic vote in the referendum, we should get on with Brexit. Given the attitude of the EU negotiators, I am, sadly, increasingly doubtful about the prospect of reaching a broad-based deal with the EU. The clearly expressed attitude of the EU negotiators that the UK’s preferred outcome is not possible for them needs to be reflected in a more realistic UK position in the negotiations, based on the fact that our future is outside the EU, not half inside it. But that is, in the main, for another day. However, it means that, as a contingency, we need to work very hard now to be ready for a bare-bones deal, which will keep the aeroplanes flying, the interconnectors working, and so on.
Turning to the nuclear area, as a former Energy Minister, my judgment is that we need to pass this Bill quickly and get on with the negotiations with the IAEA and other nuclear powers. Moreover, I would not yet completely rule out the possibility of extending Article 50 in the case of Euratom if unforeseen problems arise. My view is that this would have no real implications for Brexit overall. I would be amazed, indeed, if the EU would have a problem, given the potential dangers of nuclear material and the mutuality of interest in proper nuclear safeguards across Europe.
I turn to the prospects for the nuclear industry, and endorse what was said by the noble Lords, Lord Grantchester and Lord Fox, about the importance of nuclear fusion research. I speak today partly because of my support for nuclear power, which of course started in this country in the 1950s at Calder Hall, another British innovation. Nuclear is still responsible for more than one-fifth of UK electricity generation, and we know that most of this is produced in reactors whose life will probably be over by the 2030s. Renewable energy has been growing, but in some weeks we produce tiny amounts of energy from wind and solar because of the intermittency problem—blame the UK weather.
I am therefore a believer in what I like to describe as a portfolio approach to energy. Security of supply is vital, and diversification is as important for energy as it is for financial investment if we are to avoid disasters in future generations. Nuclear, which is virtually zero carbon, has to play a key part internationally and in the UK, which is why the safeguards against proliferation, which are at the heart of today’s Bill, are so important. I take this opportunity to ask the Minister to update us very soon on nuclear investments that secure a baseload capacity for the future. What is the state of play on Hinkley? Have we found a way of securing investment in the other five power stations for which we have proposals across the UK? What has happened to the plans for small modular reactors? We know they work technically, as they have been used by the Royal Navy for years. To my mind, they offer export potential in a post-Brexit world, especially given our strong record on nuclear safeguards and security—the subject of today’s Bill. The Government have rightly earmarked substantial funds for UK infrastructure. I believe that some of this should go to securing nuclear investment as part of a sustainable energy portfolio and to ensure that power cuts do not blight our old age.
I am supportive of the Bill, and glad to see the use of affirmative resolution SIs in key areas. It is helpful that we have been given sight of the regulations in draft that will be made under the Act later this year. That inspires real confidence. I commend the Minister and his colleague in the other place, Richard Harrington, for this, and indeed for the briefing meetings that have been arranged to get us all up to speed. This making available of draft regulations early could usefully be adopted more widely in the Brexit context. That could increase understanding in a complex and difficult area, and I shall come back to it as an idea on another day.
There are, however, some questions which I hope to explore in Committee, if today’s debate does not assuage my concerns. First, I would like to understand how the proposals relate to nuclear waste. This is an important UK operation, with Sellafield pioneering innovation in safe disposal to the benefit of its large Cumbrian workforce, and government plans, out for consultation, for a new geological disposal facility. The government memorandum on delegated powers says that there are about 100 UK facilities or other duty holders subject to Euratom standards and safeguards. What and where are these? I also associate myself with the questions about the movement of medical isotopes raised by the noble Lord, Lord Grantchester, and others. This issue must be addressed here, or in another Brexit Bill— and it is good to hear the Minister saying that he is focusing on the issue.
Secondly, on resourcing, according to the memorandum ONR has five areas of responsibility; it looks after safety, site health and safety, security, safeguards and transport, following its separation from the Health and Safety Executive in 2014. I would like to understand how well that change has worked and be reassured that the resourcing is adequate for the future, with enough expertise and enough money, and without over-the-top fees on nuclear operators. It is a tight timeframe, so this issue of resourcing matters a lot.
Thirdly, is the ONR geared up for a crisis? We would not want to find out that it was not after the event. Learning from Grenfell, can the ONR secure rapid back-up help from the Government, the police and security services and other agencies?
Finally, I note that there is no review clause in the Bill. Given that, what are the arrangements for reporting to Parliament on an area of such importance, both within and beyond the Brexit period? The Bill does not provide for an annual report. Is this provided for elsewhere? Perhaps the Minister can reassure us and agree that the safeguards work will be properly covered in any annual report.
(6 years, 8 months ago)
Lords ChamberTo move that this House takes note of Her Majesty’s Government’s plans to ensure that regulation is balanced, cost-effective, easy to understand, and properly enforced.
My Lords, I am sponsoring this debate because regulation plays an important part in all our lives, both for good and, unfortunately, sometimes for ill. In recent decades, successive Governments have recognised the cost of regulation and sought to minimise it while still gaining the associated benefit. Recent initiatives are very well explained in the report that the House of Lords Library has helpfully produced for this debate. I thank the Library for it most warmly; it will prove invaluable, and not only for this debate.
To be clear, I fully agree that important steps have been taken in recent years to ensure regulation is justified and proportionate. Despite this, as is often the case in human affairs, we need to run to stand still. Even so, and despite the apparent political consensus I have described in favour of reducing the burden of regulation, I sometimes detect a common view that regulation is virtuous in principle and that those of us concerned to reduce it are somehow working for an ignoble cause. I believe that to be profoundly mistaken. Regulation in general is, I agree, a necessity. But specific examples are frequently unnecessary; regulation often inhibits freedom and economic activity, making us all poorer. Therein lies the rub. There is nothing for it but to try to find the correct balance, and the way forward is rarely completely obvious.
Today, I do not want to run through the history of regulatory policy, but to raise concerns and to make some general observations that have occurred to me ever since, as a civil servant, I headed the deregulation task force under my noble friend Lord Heseltine. Identifying ongoing problems can be a first step to finding a remedy. In particular, I want to bring to the House’s attention the possible link which I believe exists between disappointing productivity and bad, or poorly enforced, regulation. Then I will turn to the issue of what steps we can take to improve matters. This will be especially important very soon, when we are faced with the tide of regulatory implementation arising from Brexit. We need to find a way of scrutinising it well in this House.
I start with the problem—indeed, puzzle—of low productivity, which has been extensively addressed in this House and in the other place during the Budget debates. The flatlining in productivity that we have seen since 2008 is something of a mystery, like TS Eliot’s cat. I have been reading closely the official papers on the matter from the ONS—not a task yielding a laugh a minute. A brief summary might be that the problem exists, but the exact cause or causes have not been proved. Likely culprits identified by informed observers include poor education and skills, inadequate infrastructure, insufficient housing and R&D, and the impact of digital on revenue and national income statistics.
I believe, however, that the wrong kind of regulation, an excess of it and a tendency to dream up new regulations in response to crises are also contributors. Rather than enforce existing regulations properly and learn from our mistakes in the kind of continuous improvement that I know from my time in retail, too often we see a failure to monitor existing rules and then very costly and intrusive regulation. My objection to the wrong sort of regulation is that it is inefficient, diverting of effort, irritating, time wasting and often expensive for those regulated.
My first example is Grenfell Tower. This was an appalling tragedy of a kind that should not occur. The facts are being carefully examined and there will be a forensic report, but I highlight three apparent regulatory failures from which we might learn. The most serious to my mind was to bring in for tower blocks building regulations that exempted the refitting of old blocks from the requirement to install sprinklers, as required in new blocks. The second was to require new cladding with a focus on energy saving to meet public sector climate change targets, and not to think enough about fire safety. The third was to have a Cinderella system of enforcement of the fire safety rules rather than well-trained professionals.
Cinderella enforcement has been an issue in many of the regulatory scandals of my lifetime, examples of which are Nestlé baby milk contamination, which closed the relevant Cumbrian factory for ever; local authority enforcement of BSE rules; and foot and mouth. For success you need a good enforcement system, and the Health and Safety Commission and, later, the Food Standards Agency have done a reasonable job, with trained staff and a system of simple, easy to understand guidance and a policy of issuing improvement notices before businesses face prosecution. Sadly, local environmental health and trading standards are not given the priority they should be.
Another good way to achieve compliance is to have industry schemes that act as an incentive to virtuous behaviour. An example—a good one, I hope; and I declare this and my other interests in the register—is the red tractor assurance scheme appearing on some £13 billion-worth of British agricultural produce. Had my noble friend Lord Lindsay been able to be here, he would, I know, have talked more broadly about other UKAS-accredited conformity schemes, because they have been used successfully for many years to support government regulatory policy and a risk-based approach in a wide range of important areas such as environmental management, food safety and quality, and healthcare services.
My second example is financial services. The UK’s establishment of the Financial Services Authority was, to my mind, a mistake. My experience at Tesco was despair at the micromanagement it imposed on the detailed wording of consumer products while apparently neglecting investment banking and sub-prime. Regulators should have economic spectacles: they should care about growth and innovation in the economy, but they should also be wary of wealth creation that seems too good to be true. After the crisis, all that changed and, arguably, there has been regulatory overreaction—all very well meant, no doubt—and a double banking of UK and EU regulation. This growth of regulation has been introduced in part to tackle money laundering, but it is sometimes done without regard to common sense. My husband has looked after the affairs of an elderly aunt confined to a nursing home for many years, yet he is often asked to provide proof of her existence and her bona fides.
Having said all that, the new financial services regime is much better than it was in the FSA era. The FCA and the PRA are now in effect part of the Bank of England and can attract better staff as a consequence. They are more strategic and did well in the weeks after the Brexit vote. The FCA has rightly been praised for its work on fintech, with the regulatory sandbox providing a light regulatory regime for start-ups, which has impressed internationally. They now face a new difficulty: the need to secure some form of bespoke deal in the Brexit context. Because of the importance of a Brexit deal for financial services, there is no appetite for lighter regulation. Indeed, I worry that the rules could end up being more onerous. The risk then must be that global operators will decide to move business to New York or Singapore. We need to be a force for good in regulation in the EU while we remain in it, and in supranational discussions and bodies thereafter. Our influence is important.
My third example is product safety. I have previously highlighted the case of Whirlpool tumble driers that burst into flames. Whirlpool, a US company, was in my opinion slow to take its safety responsibility seriously when it emerged that there were 5 million dangerous machines in British homes. I understand that about half have been fixed. We know from debates on the then Consumer Rights Bill in 2014 that the product recall system in this country is not up to scratch. There is a simple solution—central resource and central responsibility, not for all consumer safety, which rightly sits with local authorities, but where we have major national product recalls as faced by Peterborough with Whirlpool. We need a major, centralised enforcement effort in such cases. I was rather hoping that the Minister might agree.
My fourth example, very briefly, is Volkswagen, which was again an appalling example of poor enforcement, not the wrong basic standards or laws. We do not have time to go into this case in detail, but I wonder whether the problem was in allowing manufacturers to set the performance tests rather than requiring independent certification.
Finally, I am following the Data Protection Bill through our House at present and I predict that the scale of the new burden it imposes will eventually cause a backlash of complaint. New rules will apply to pretty well every business or private sector organisation in the country, regardless of size, which collects or holds data about identifiable individuals—that is most small businesses and charities; not a happy situation. We must do what we can to help them.
What do we do about all this? I speak as someone who has spent half my life fighting red tape, sometimes with success. When I ran the Deregulation Unit aeons ago, we had a mantra which I think we could revive: “Fewer, better, simpler”. As Winston Churchill said,
“If you have ten thousand regulations you destroy all respect for the law”.
The Federation of Small Businesses says that regulation is a top priority for its members. In a recent survey, two-thirds of them thought that the costs outweighed the benefits in terms of reduced profitability, productivity, innovation and so on. They are especially concerned about the flow of new regulation and a de minimis rule that might be coming in for impact assessment. I hope the Minister will be able to provide them with some reassurance.
What else can we do together to make things better? First, we should recognise that regulation, while often necessary, is a cost that hits the bottom line of businesses and diverts management effort. We should be up-front about this. We need impact assessments available to Ministers and senior officials on new rules and regulations before key decisions are taken. The assessments should be realistic and simple and should reflect dialogue and consultation with the real economy, and quote the names of companies or bodies affected and what they think. The independent Regulatory Policy Committee has done good work on economic assessments and business impact, as the NAO has acknowledged. However, it lacks political edge and is somewhat undermined by the fact that its processes do not apply to burdens coming from the EU, to tax or to the national living wage. The NAO suggests that when these are added in, the regulatory burden has actually been increasing, despite the various targets such as one in, two or three out. Perhaps proposals with increased regulatory costs might be required to be approved by a Minister, as is the case with expenditure proposals. He or she could be defined as a champion of lower regulatory costs. A good system is all the more necessary given the great tidal wave of replacement regulation coming our way with Brexit. The process needs to be refreshed, and the moment for that has come.
Secondly, and linked to that, we need to be champions of good, simple, inexpensive regulation across Europe and in international fora.
Thirdly—and this would appeal to most politicians in free countries—we should think small first. It is sometimes possible to have exemptions, such as the VAT ceiling, but we should ensure that administration for smaller firms is clear, simple and online and that charges are lower. Indeed, they often might not be worth imposing at all when you allow for the administration costs. At Tesco every invoice cost £25, so in many cases it paid to be generous. There are millions of SMEs, small charities, trusts and small public bodies such as parish councils and primary schools, who will love us if we can make the regulatory burden easier.
Fourthly, regulation must be easy to understand. The growth in complexity is good for the lawyers and consultants, but in the modern world there is no excuse for a lack of simple clear rules and information.
That brings me to my final recommendation: enforcement matters. As my tale of Grenfell Tower showed, enforcing and resourcing our regulatory systems needs to be an essential part of our deregulatory approach. Again, the Brexit changes give us an opportunity to review this aspect.
I note in closing that unfortunately, none of these ideas appears in the recently published industrial strategy. Indeed, regulation barely gets a mention, despite its importance to productivity. Robert Bork, a famous US lawyer and judge, said that:
“As government regulations grow slowly, we become used to the harness. Habit is a powerful force, and we no longer feel as intensely”,
yet what is proposed would have been “utterly intolerable” in former ages. That could be a prescient warning.
My Lords, I am delighted to have led such a constructive and interesting debate with a lot of fine examples. In response to the noble Baroness, Lady Henig, I have no regrets at all about tackling this subject.
Indeed, there has been some important common ground on this often disputed subject: for example, on simplification; on the battle against complexity; on a risk-based approach, which we probably should say should be proportionate and balanced; on enforcement of the law—to my mind, investing in enforcement is a good investment—and on thinking small first. It is not a sexy area, in the words of the noble Lord, Lord Stunell, but it is an important one, especially in the Brexit context. I was very glad to hear from my noble friend the Minister of the progress made, not least on culture, and I look forward to hearing from him in due course on the vexed issue of tumble-driers.
Many noble Lords referred to the plans to reduce the powers and reach of the Regulatory Policy Committee. This, it seems, is still a rumour, but it is a profound disappointment to me because it is not a step in the right direction. Many others have said this, including my noble friend Lady Altmann and the noble Lords, Lord Curry, Lord Haskel and Lord Mendelsohn. However, I think that we should be generous to the Government. It may be that, in the light of this debate, they will think about what can be done at this moment of Brexit to keep the flow of unnecessary regulation in check and ensure not only that necessary safety standards but also economic impacts are taken into account in the decisions we make in the interests of prosperity and productivity.
It was a pleasure to hear from the noble Lord, Lord Stoneham, and the noble Lord, Lord Whitty. I think that he is quite wrong. My fear is—and this is one of the reasons I voted to remain—that without a detailed debate in Brussels, we will actually regulate more heavily.
I have run out of time, but I would like to thank all noble Lords who have taken part in the debate. Let us hope that our efforts today will move the dial.
(6 years, 8 months ago)
Grand CommitteeI stand here as a part of history. When I was Minister for Intellectual Property, we went to the European Community to try to get it to understand that the Chinese and Americans could have patents overnight but we were still, after 40 years, having to translate over and again the members of the European Community at that time. We worked very hard during that time. I thought we had eventually got there but it sort of floundered for a while. I am delighted to see it written down that we are going to ratify the Unified Patent Court.
Intellectual property is very important for us. It is an area in which we are recognised worldwide as doing the right thing. We have allowed the French, the Germans and the rest of them to choose which bits they would like to have a go at. At the end of the day we have come up with something that works very well. Given that we are working so hard on Brexit—I work on the European Union Select Committee, which is looking at all the Brexit paperwork—it is important that we are actually seeing something coming through. It is nice and clear, we can all hear it; we are all going to do it. This is one thing that is not going to cause us any difficulty over the next few months.
I congratulate my noble friend Lady Wilcox on her contribution to intellectual property. I was honoured to succeed her in an area where Britain is very strong. Obviously, that was a delight. I was intimately involved in the Unified Patent Court discussions in both Brussels and Luxembourg last year—after, as has been said, many, many years of discussion on its establishment and its location here in London, and the other centres. I want simply to welcome it and to congratulate the Minister and the Intellectual Property Office, which is headquartered in Newport. I wish them well in finding a sensible deal for patents in the Brexit negotiations. I have one point of clarification, which I think the Minister touched on: when does the patent court in London actually open its doors?
My Lords, the Minister will be grateful to know that the shadow cast upon the previous debate does not extend this far. I will be a ray of sunlight in his life and he will emerge, if not hopping and skipping, possibly with a little spring in his step at the pleasure we express and the way in which this piece of legislation is coming forward.
In passing, it was unfortunate that the Minister caught what appeared to be a full blast from both barrels from my noble friend. He should have seen him in the earlier stages of that Bill, when the hapless victim was the noble Baroness, Lady Neville-Rolfe. The full wrath that my noble friend Lord Mendelsohn could express at the whole approach that the Government were daring to take to this important area was expressed in many amendments that we had to discuss. The Minister got off lightly; he may not feel that. We certainly look forward to his letter when it comes.
I am going to say absolutely nothing about the substance of the statutory instrument because we agree with it and are happy for it to go through. It shines a light on the way some people manage to live their lives—in tax-free environments, free of all exemptions and penalties; some people have all the luck—but nevertheless that is the way it is done. I am glad that it is coming forward.
Like the noble Baroness, Lady Neville-Rolfe, whose work on this I salute—as well as that of the noble Baroness, Lady Wilcox, who preceded her—I am interested to learn a little more about what is actually happening on the ground. There are rumours of premises having been secured and buildings having nameplates attached to them, and so on. It would be nice to know what exactly is going to happen and what the timing is, if it is possible for the Minister to tell us.
The other thing that might be interesting to find out is whether there is yet any feel for whether there will be a sufficient caseload to warrant other centres being opened. During the passage of the original Bill we talked about the possibility that the Court of Session’s responsibility for patent determinations in Scotland might be echoed by having a similar court based there, if there was sufficient casework, because there is expertise and knowledge in Edinburgh in this area, and it would be sad if those were not able to be expressed. But these are matters that the Minister may not yet have the detail on and I am happy to have that at a later stage.
As I said, I am a ray of sunlight. We support this statutory instrument.
(6 years, 8 months ago)
Grand CommitteeMy Lords, I thank the Minister for his pithy introduction. The regulations surely have to be welcomed. It must be good news to many thousands of SMEs. I refer to the register of interests: I am president of Flintshire Business Week and Deeside Business Forum, which sits across the England/Wales border and has some 9,000 jobs. It is based at Deeside Industrial Park, which has 260 companies at least, most of which are SMEs. There is considerable interest from companies such as these in the regulations. Do we yet have a commissioner’s name in mind? Who shall choose? Shall it be salaried? What salary might it be?
I refer to my entry in the register of interests, including my chairmanship of Red Tractor, which helps British branding, including some small businesses, to have their food assured and to sell it into the market.
There was a flurry in the Printed Paper Office this afternoon as some of us sought papers on the Small Business Commissioner. Eventually, we discovered papers entitled “Enterprise”. Of course, small business and enterprise go hand-in-hand. I share a passion for both, as noble Lords may know. It was fantastic to be involved in the passing of the parent legislation for these regulations. I welcome Mr Paul Uppal to his job—I believe he is the new Small Business Commissioner. Perhaps the Minister could kindly tell us a bit about him and why the Secretary of State has appointed him to this vital job for small business. I commend the role of the Federation of Small Businesses in ensuring that the Small Business Commissioner not only is now on the statute book but will be up and running once these regulations have been passed.
While regretting the length of the regulations—although obviously I support them strongly, brevity and simplicity are the most important features of law-making—I am sure that the Minister will keep the regulations and the rules and operation of this important new office under review so that we can ensure that it delivers better payment terms for small businesses in the way we all hope it will.
My Lords, I welcome these regulations because they go to show that persistence works. So many people have been asking for something like this for a long time, including myself, and now it has arrived. Considering the amounts of money that will be in dispute, are we going to be able to manage all the work on the kind of funding that will be allocated to the Small Business Commissioner?
The noble Lord throws a bit of a dampener on the proceedings, which were going quite well before that stage. I will comment on what other noble Lords had to say before I deal with some of his complaints. I am not sure that I will deal with all of them; I will probably write to him in greater detail afterwards. Since he accepted that these regulations will go through, that the Small Business Commissioner has a role and that we have to get him on the move, the sooner we can do that, the better. I will go back to those noble Lords who at least welcomed the regulations—I think he did, but he then took them to pieces and, as I said, threw something of a dampener on the proceedings.
I will start off with the noble Lord’s friend, the noble Lord, Lord Jones, who, as I said, was much politer and kinder about the regulations. I am grateful for that, and I give him an assurance that we have now appointed Mr Paul Uppal—the announcement was made a few days ago—who is a former Member of another place. The post was advertised in the usual way and will be salaried. I am afraid that if my noble friend Lady Neville-Rolfe was looking to get that job, she will have to wait a little while before it is vacant again. As I said, it was advertised in the usual way. I cannot specify exactly why he was chosen as opposed to any others, as that would be invidious and not right, but he was selected after due process and we are grateful to him.
My noble friend Lady Neville-Rolfe also regrets the length of this regulation; it is always difficult to get these matters right. On many other occasions I have moved that various orders be agreed and people have complained that there is not the detail in them. Unfortunately, the point behind regulations of this sort is that one can get into the details that one cannot get in the parent legislation. My noble friend is aware of the parent legislation; she took it through this House, and the noble Lord, Lord Mendelsohn, dealt with it from the Opposition Benches. They know full well that it is not right and proper to get that sort of detail into the original primary legislation, and the point behind these regulations is to get the detail in. I hope that we normally get it about right, but my noble friend Lord Cope teased me over the fact that the Explanatory Memorandum—which I stress is not, I think, part of the regulations, although I can never quite remember what its status is—states that the regulations will have no effect on business. We would obviously all like to make sure that it has an effect on business—and a beneficial effect.
I turn to the comments of the noble Baroness, Lady Golding. I am grateful for her welcome, but one cannot think of passing the Enterprise Act and creating a commissioner as a magic wand that will solve all problems. This is also the general remark I would make to the noble Lord, Lord Mendelsohn, in relation to his various comments, one or two of which I will deal with in greater detail. I can think of very few occasions when legislation can solve problems overnight. There was one Bill with which I had some involvement, the Scrap Metal Dealers Bill, which did quite a lot of what it was targeted to do in the area of metal theft.
In the main, legislation can only do so much. We hope that the Enterprise Act and these regulations will make a big difference. As with so many of these things, however, it is a matter of changing people’s behaviour and the culture of the bigger businesses so that they realise what damage they are doing to others. Legislation can do a certain amount and we have provided the appropriate resources for the commissioner; at least, I think they are appropriate. The figures I have—I think these are the figures that the noble Lord, Lord Mendelsohn, asked to be confirmed—are that the set-up costs are in the order of £1 million and the annual running costs will be roughly £1.4 million, most of that going on staff costs. These must be guesses but it is estimated that there may be 390,000 enquiries and 500 complaints. We think that is adequate for the commissioner at the moment but there is scope for the Secretary of State to increase the resources available to the commissioner if appropriate. He will obviously take advice from the commissioner about what he does and try to make sure he gets it right.
I make one more remark on the commissioner and the work he has already done. My noble friend Lord Cope commented on the website, suggesting that it was not clear enough and should do more, including cross-referencing with other bodies. I am sure that the commissioner will be grateful for my noble friend’s suggestion and that it will be looked at in due course. It is always difficult to get your website exactly right; some are better than others. One can take advice, and I am sure that the advice of my noble friends will be listened to by the commissioner in due course.
Before my noble friend sits down, I reiterate that I very much support the regulations. I also asked, I think, what arrangements there were for review, because this is a new commissioner. I expect that the department has some standard review provision for looking at how it works, and I am interested in that.
I can give my noble friend an assurance that I was not about to sit down—unless others are desperate to get on to the other instruments—because I still had a certain amount to deal with from the noble Lord, Lord Mendelsohn, who would probably be upset if I left him at this early stage. I can, however, assure my noble friend that we will keep this under review. As I made clear, we are thinking of about £1.4 million as the budget being given to the commissioner for the annual running costs. My right honourable friend can keep that, and the size of it, under review. It is not just about money but about how they are getting on. The department will continue to keep these matters under review.
The noble Lord, Lord Mendelsohn, started off his throwing-a-dampener-on-it speech by questioning why we would use the BACS survey and saying that we should have used another survey that gave a higher figure. I will not go into details about which survey will be the best and which had the largest number of people involved in it to get the right figure. I do not know whether there is necessarily a right figure. All we can agree on is that £14.2 billion is a very high figure. The figures that the noble Lord quoted from other surveys are equally high and worrying. The important point is that something ought to be done to assist small businesses to ensure they do this properly. It is clear that the Government are taking this issue seriously from the fact that we sought parliamentary approval for the Enterprise Act and that, under that Act, we are now doing various things, of which the Small Business Commissioner and his staff are one small part. I do not think the noble Lord can accuse the Government of not taking this seriously. The important point is: we have put some resources in; we have appointed a good person to be that commissioner; and he will continue to pursue the appropriate measures available to him.
The noble Lord made the usual complaints people do about the drafting. He said it was too detailed and then that there was not enough—I was rather lost on that. The drafting went through the usual process. We consulted on it as we should. Generally, other than from the noble Lord, we have had a fairly favourable response to the drafting. I am sorry if he finds it overly legalistic. That is just the way things are drafted.
The noble Lord then asked me a rather extraordinary question: what are the unintended consequences of these regulations? If I knew what any unintended consequences were and that they would be detrimental to one or other person, or to the small business sector as a whole, I would not be moving them. I am afraid the noble Lord will have to accept that I do not have the wisdom of prophecy that he seems to think Ministers should have. I will try to improve. If I knew what the unintended consequences were, I would do something about them. We feel that the regulations will have a good effect and be one small step in helping small businesses. They will try to improve their lot and cut down the very large figure of £14.2 billion, or whatever larger figure the noble Lord would like to have.
Turning to another matter that I suppose is faintly relevant to what we are dealing with, the noble Lord asked about the evidence of the impact of the Prompt Payment Code. I can tell him that we actively monitor and enforce it. It has been successful in assisting business to recover debt, but also in highlighting best practice. That again is important as part of the necessity for the change of culture.
I appreciate that the noble Lord had other questions and that he would like further details on why we wanted BACS—
(6 years, 8 months ago)
Grand CommitteeMy Lords, what I will say follows closely on what the noble Lord, Lord Clement-Jones, has said. He and I—if I dare also bring in the noble Baroness, Lady Neville-Rolfe—are part of a declining band who followed the paths of the intellectual property legislation that this House has looked at over the past six or seven years. His intervention brought back fond memories of the time when we were happily discussing some of the issues that are clearly still in mind and will be in play as Brexit negotiations go on.
I make a slightly different point—also one that the Minister may wish to take back—which is that a lot of the effort that went into the earlier Bills was around the question of registered and unregistered designs. We are still in the situation alluded to by the noble Lord, Lord Clement-Jones: a huge proportion of the designs generated in this country—for which we should be very proud—are unregistered. That is partly to do with the nature of the industries involved: where short-term designs, such as fashion designs, are being created, there is probably no incentive to register them, because they are copied and lose economic value so quickly. That design element would not necessarily qualify as a design. However—I made this point before to the noble Baroness; I am sure that she will recognise it and I do not need a response— the Government missed a trick on this. Government ought to be thinking very hard about what package of measures could be brought together to encourage people with design skills and knowledge, of whom we have so many talented examples, to register their designs, because the protections that they can get, as exemplified by this order, are significant, though they are not recognised as such. The point was well illustrated by the fact that so few responded to the consultation document; I was a bit shocked to hear how small a number it was.
Nevertheless, we are where we are. I am sure I will make myself slightly unpopular with the noble Lord, who will find a way of coming back to me—
Will the noble Lord give way on the subject of designs? Like him, I am very keen that design rights should be properly protected. It is such a growing part of the creative industries. The Intellectual Property Office has done some very good work. I know this because my daughter-in-law was looking to register a design and I discovered, first, that it was relatively inexpensive and, secondly, that the IPO had set up a very good IT option. The Minister may well be able to tell us more about what they were doing, but I thought that this was interesting consumer research.
That is very good news indeed. If it is moving in that direction that picks up the point I am making. There is an unexplored case for more work here, which will bring benefits to UK plc in time.
As I was saying, I was going to grandstand a little on the instrument to ask a couple of questions that I am very confident the Minister will not be able to respond to directly. I am happy to have a letter on them. The first is specifically on the consultation exercise. The Minister touched on this in his opening speech. The comment is made that the UK does not need to keep its own register of registered design rights because after we accede to the Hague agreement, which is what we are doing today, it automatically confers protection on the UK because the UK signed up to the Designview database, operated by OHIM. However, what is the mechanism under which we will continue to have access to it after Brexit? If it is in any way tied to membership it will raise, as the noble Lord, Lord Clement-Jones, said, considerable difficulties in negotiating a fair price and the conditional arrangements. If there are to be cost barriers that will further diminish the pressure on people who wish to register designs. It is important and clearly a useful tool for protecting design rights, but if it is inaccessible it will obviously not be of any value. WIPO and the role it plays are very valuable. The IPO does not have much of a role in this. It again seems a slightly missed opportunity to beat the drum for registration, but if the connection is directly to WIPO and we are to be affected by Brexit, clearly that is a problem.
Secondly, the Minister may be aware of a Supreme Court decision in the Trunki case, PMS v Magmatic. It raised the interesting question of whether one could register or even protect shapes of articles. In this case, the well-known Trunki is a small ride-on suitcase that children use rather irritatingly, at speed, in airport lounges, which my ankles have felt over the years—not my children, I confess; there were third parties involved. The case raised the interesting issue that our systems do not allow anyone who has a visual representation or design representation to register it. As I understand it, the Hague agreement has some flexibility about what can or cannot be registered. It would be interesting to get a sense from the officials in due course about whether they think it would be possible to use the flexibilities in the Hague agreement to allow those talented members of our design profession who design representation to register those designs. I look forward to hearing from the Minister in due course.
(7 years, 8 months ago)
Lords ChamberMy Lords, before moving the Motion, I should like to take a moment to reflect on the Bill and to say thank you. This is a small Bill of limited scope, but we have taken steps to ensure that it will work effectively for businesses whether in physical or online environments. I want to record my thanks to the Law Commission for bringing its great expertise to this most technical of subjects. Along with the Scottish Law Commission, it played a key role in the development of the legislation.
This has been a delightful new experience for me. It gave an opportunity to see the benefit of the Law Commission special procedure, which ensured that there was both a wide-ranging debate on the key issues and a robust examination of the Bill. The evidence sessions in particular provided access to a rich seam of expertise, and the procedure, having worked as intended, has produced a Bill that is much the better for it. This is a valuable route for much-needed and uncontroversial reform, and the Law Commission has asked me to express its gratitude to the House for the time and care it has given to undertaking its work. That is perhaps code for our careful scrutiny and the amendments we made.
I should also like to take the opportunity to put on the record our thanks to the noble and learned Lord, Lord Saville of Newdigate, for his chairmanship of the Special Public Bill Committee, as well as our thanks to our excellent clerk. I am grateful to all noble Lords for their polite, considered and probing questions. In particular, I thank the noble Lord, Lord Stevenson of Balmacara, for his constructive approach, and the noble Baroness, Lady Bowles of Berkhamsted, for bringing her expertise to our deliberations. I also thank my noble friend Lady Wilcox, a former IP Minister, for her doughty championship of small businesses, along with our Whip, my noble friend Lady Mobarik.
Because of the structure of the Bill, we enjoyed not only the usual groups of amendments but vast families of amendments—a phrase coined by the noble Baroness, Lady Bowles—across the various IP rights. Some of these families were quite large and, like any family, not always easy for outsiders to understand. Some of the families also appeared to be happier than others, but I would observe that we successfully manoeuvred our way through all the complexities.
I finish by putting on the record my thanks to the Bill team, the Intellectual Property Office and my private office officials for their support throughout the process. I believe that the Bill is being sent to the other place in great shape. I beg to move.
My Lords, I should like briefly to echo the words of the Minister. This Bill has been a good experience and a novel and, for me, different way of doing Bills—something we might learn from, in fact, as we go forward. The Minister said that there were families of amendments, which was certainly true; and we became a little family as we tried to deal with the rather odd way in which the Bill is organised. That was because, every time we looked at one area, we discovered that we would have to amend the Bill in every other clause as well. We were in some danger of extending the small coterie of your Lordships who actually like IP matters, but that is a danger which I think not many would survive.
Like the Minister, I thank all those who gave evidence both in writing and in person. It was a rich and interesting experience. The Special Public Bill Committee worked very hard, and I would particularly like to thank, in addition to our chairman, the noble and learned Lord, Lord Saville of Newdigate, the representatives from the Labour side, my noble friends Lord Plant of Highfield and Lord Hanworth, who served a noble part on the Committee. I also echo the Minister’s thanks to the Intellectual Property Office and the Law Commission. Lastly, I thank the Minister. She has been rather modest in saying that we had improved the Bill; actually, it was she who took on the burden of heavy lifting not only by daring to go back to her own department and other departments to get clearance for various things, but also by taking on, in full measure, the Law Commission itself—and winning.
(7 years, 8 months ago)
Lords Chamber
To ask Her Majesty’s Government what discussions they have held with representatives of consumer bodies about the continued protection of consumer rights following the United Kingdom’s departure from the European Union.
Ministers and officials frequently meet representatives from a range of consumer bodies to discuss issues of the day, including EU exit, and we will continue to do so. Details of ministerial meetings are published quarterly on the GOV.UK website. The Government see no reason why the UK’s departure from the EU should have significant adverse effects on consumer rights in this country.
My Lords, we read at the weekend that consumers are already worried about what this will mean for their prices—but there are other rights at risk, such as consumer redress being possible in this country for goods made abroad, victims of accidents in another member state being able to use our courts to pursue insurance claims, air passengers getting compensation for delays and cancellations, and also the many others we have because we are part of a consumer alert system for faulty or dangerous goods. So may I ask the Minister to agree to undertake an audit of EU consumer protections that are at risk after Brexit, and also to meet relevant consumer organisations to see how to reduce the risk of losing those protections?
My Lords, next week the Secretary of State for BEIS is chairing a round table with representatives from a range of consumer bodies and charities, and academics, to discuss, among other things, the impact of EU exit on consumers. These are exactly the sorts of issues that he will want to look at. Of course, the great repeal Bill, which has already been mentioned, will convert EU consumer law into UK law wherever practical, and we will want to ensure that cross-border enforcement is effective, and that our ADR landscape is preserved. These are important aspects of a consumer framework which is very strong: we should be proud of it in this country.
My Lords, if we leave the single market, will not some of the real problems for consumers be over online and mail order purchases? When consumers no longer have the right to bring actions here against EU suppliers post-Brexit, what is the Government’s cunning plan? Is it for consumers to run around with small claims in all the other EU member states?
We will want to work to ensure that enforcement is effective across borders. There is, of course, a mutuality of interest here, because online goes both ways, and there are issues online, such as cyber and counterfeits, which need to be addressed. We are continuing to develop the digital single market in our ongoing work in the Competitiveness Council, and our enforcement regimes are well respected. The noble Lord is right to highlight this area, but I am optimistic that we can find a way forward and that there will be opportunities to do things better, from the studies that we shall be doing and the work that we shall be taking forward.
My Lords, the Minister said that EU consumer law would be converted into domestic law where it is practical. Could she give the House an example of where the Government consider it will not be practical to do so?
That is a difficult question to answer—I am always straight. What I would say is that, as I mentioned earlier, we have planned a series of engagements with consumer bodies. That applies right across Whitehall, so that, for example, the Economic Secretary to the Treasury has been talking to consumer groups—because, of course, financial services are very important—and there have been talks between MoJ and the Legal Services Consumer Panel. It is clear to me that we will be able to highlight, well before March, the particular pinch points, so that in our negotiations we will know which are the important areas that we need to preserve. This is an important piece of work, and I am grateful to the noble Lord for his comments.
My Lords, we do not need to wait for Europe to part company with us—there are already problems. Ryanair has already given an indication of its intention that claims against it by passengers should be made in Irish courts. If I may say so, there is a lot to be done now with consumer rights that is not happening. My personal recent experience was that the telegraph and postal system refused to give a cash refund for faulty goods that it supplied until I suggested that we went to court. It has now said that it will pay. This is happening on a wide scale to those who are making online purchases from companies which are doing rather less than they should.
In general, consumers enjoy strong protections in this country, and we want to seek to preserve those. But where markets fail—the noble Lord has given an example—and competition is not as strong as it needs to be, they may not get a good deal, and the Government will not hesitate to take steps where we need to. We are bringing forward a Green Paper in the spring of next year that will closely examine markets that are not working fairly for consumers. It will look at both specific markets and cross-cutting items, and I look forward to hearing more on those sorts of issues so we can ensure that they are properly looked at as part of that process.
My Lords, British holiday- makers have a history of being ripped off by mobile phone companies while on holiday abroad through communication and data charges. Europe has thankfully sorted this out over the past couple of years, and the charges will be the same. Will the Government insist that British communications and mobile telephone companies keep to that agreement in future so that the rip-off stops and the service remains equitable for British consumers?
I am glad that the noble Lord mentioned roaming, because it is one of the key advances that general EU effort has achieved in recent times. When you go to Europe now, depending on your provider, you can sometimes get your calls within your contract, which I have been fortunate enough to experience. In general, consumer regulations in the area of telecoms will not be affected by EU exit—and, of course, as I have said, the market is changing. However, I assure the noble Lord that roaming, and the benefits of that, will be an important ingredient in influencing our thinking in our exit negotiations.
My Lords, given that we have agreed to participate in the Unified Patent Court, does my noble friend agree that this is an indication of how we can participate in various European organisations, even post-Brexit, to the benefit of consumers?
(7 years, 9 months ago)
Lords ChamberMy Lords, I start by saying how pleased I am to bring this Bill to the Floor of the House for the first time. The reforms contained in it support business in driving economic growth and they will help the Government deliver their manifesto commitment to make the UK the best place in Europe to innovate, patent new ideas and set up and expand a business. The Bill’s provisions will make the intellectual property system more easily navigable for rights holders and third parties alike. It will help ensure that rights holders can enforce their IP rights fairly, while preventing the misuse of threats to sue for infringement as a way to distort competition.
As noble Lords will be aware, the detailed recommendations for reform in this area were made by the Law Commission, and I thank it warmly for its thorough and detailed approach to this project, including extensive stakeholder consultation, which has brought the Bill to this House in such good shape.
The Bill has a narrow scope and follows the special Bill procedure available for uncontroversial Law Commission reforms. This procedure included a number of very informative evidence sessions during Committee. I take this opportunity to thank the chair of the Special Public Bill Committee, the noble and learned Lord, Lord Saville of Newdigate, who is unable to be in his seat today, and colleagues on the committee, several of whom are here this evening, for their time and efforts in considering the Bill thus far. Our discussions have been productive and helpful.
The first group of amendments addresses concerns raised by both stakeholders and members of the committee. I believe that they improve the clarity of the provisions, which is a key aim of the Bill as a whole. The first of the amendments would delete “solely” from new Section 70B(1)(a), and the equivalent sections for the other rights. The Law Society has long pushed for this amendment. Both CIPA and the IP Federation also agreed, at the evidence stage, that the term should be removed. I thank the noble Baroness, Lady Bowles, for raising this point during Committee and for emphasising its importance to stakeholders. The intent of the person sending a communication is not relevant in determining whether that communication is “permitted”. This has always been our position and the amendment makes it even clearer.
The second family of amendments in this group also relates to the permitted communications provisions. A common complaint is that, under the existing threats law, there is no guidance on what type of communication is allowed and what is not. It is therefore easy for rights holders inadvertently to fall foul of the threats provisions.
The subsections in issue provide guidance on what types of information are necessary for a permitted communication by providing a list of examples. However, it has become apparent that these subsections are not as clear as they should be. The amendments make it clear that the examples will always be considered necessary for a permitted purpose. A rights holder who wishes to make a permitted communication may confidently provide the types of information listed. The list is also clearly non-exclusive, so appropriate flexibility is provided.
The next amendment addresses an issue raised by the noble Viscount, Lord Hanworth, in Committee. The issue relates to what he termed a “piece of illogic” in new Section 70C(4) and equivalents regarding the reference to “T”, curiously used to refer to the person who made the threat. To solve this problem, we have simply opted to remove the reference altogether and substitute it with a reference to the person, which, given its context, clearly means the person who made the threat.
Finally, I come to the fourth set of amendments in this group. These seek to amend new Section 70E and equivalents to clarify the position in relation to pending rights, particularly with reference to the justification defence available to the rights holder. As the noble Baroness, Lady Bowles, highlighted in Committee, expert stakeholders have concerns with the current drafting on this point. This family of amendments—a term that the noble Baroness kindly invented in Committee—addresses these concerns by stating explicitly that the question of whether there has been an infringement will be determined on the basis of the IP right once it has been registered or granted. I hope that this deals neatly with the comments from the noble Baroness, Lady Bowles, on this issue.
My Lords, perhaps I may take this opportunity to say on behalf of my noble and learned friend Lord Saville of Newdigate, who chaired the Special Public Bill Committee, how much he regrets that he is not able to be present at this stage of the Bill. He has authorised me to say that he, having read all the amendments, fully supports them. The fact that they have been brought before the House in this way indicates the hard work that the committee did, and the Bill will no doubt be greatly improved by their being moved.
My Lords, I thank the noble and learned Lord, Lord Hope of Craighead, my noble friend Lord Lucas, the noble Baroness, Lady Bowles, and the noble Lord, Lord Stevenson of Balmacara, for their kind and constructive comments. As the noble Lord, Lord Stevenson, said, we all learned a lot. These provisions are indeed an improvement.
My Lords, this group of amendments seeks to address concerns raised in Committee about the practical application of the new threats provisions. These changes amend the discretion afforded to judges in applying the new permitted communication provisions and improve the ability to access the defences available. Both these changes particularly help to address concerns expressed about the challenges of working in an online trading environment.
I turn first to Amendment 3 and its family. The provisions as drafted allow that the courts may treat another, additional purpose as a permitted purpose if that is necessary in the interests of justice. I have now had the opportunity to consider the arguments put forward by the noble Baroness, Lady Bowles, and to reflect further on the evidence given by Mr Justice Birss, Professor Sir Robin Jacob and others to the Special Public Bill Committee regarding the extent of the judges’ discretion in this area. By removing the word “necessary”, these amendments provide additional flexibility to the courts when considering whether a particular communication was made for a permitted purpose. The provisions still give clarity and certainty for those using the system, which is a key requirement for all stakeholders.
The wider discretion afforded to the courts under this amendment allows them to add to the list of permitted communications when appropriate. This would include treating the use of an online form as permitted, if that is suitable in the particular circumstances. This amendment, therefore, helps to address concerns raised about the use of particular online forms.
The next family of amendments relates to the defence available to rights holders, whereby they are allowed to send a threat to a trader, or other secondary actor, who is not the source of the alleged infringement, if a search for the primary actor has been unsuccessful. The amendments deal with two issues discussed in Committee. There were concerns that, first, the bar was set too high to access the defence, and, secondly, this was particularly problematic for rights holders dealing with potential infringements in an online trading environment. Under the current patents law, the test is that the rights holder must have used “best endeavours” to find the source but failed. During the Law Commission’s work, the “best endeavours” requirement was the subject of much criticism. As a result, the phrase “all reasonable steps” was used in the Bill. However, in evidence taken by the Special Public Bill Committee, this phrasing was also described as being too onerous.
As the BBC explained in its evidence, in the face of high-volume, low-value online infringements, the requirement to use “all reasonable steps” would be disproportionate and burdensome. It was therefore suggested that the word “all” should be left out. Compelling arguments were also put forward by the committee’s distinguished chairman, the noble and learned Lord, Lord Saville, the noble Viscount, Lord Hanworth, and the noble Baroness, Lady Bowles. On reflection, I agree that “all reasonable steps” does place the bar too high. The amendment would instead require the rights holder to simply take “reasonable steps” to find the source of the infringement. What is reasonable will depend on the circumstances. The assessment can take account of what it is reasonable for the rights holder to do in an online environment, and what is reasonable in the economic circumstances of the case.
There is a balance here. We need to ensure that we restrict potentially damaging unjustified threats but also that rights holders can take action to tackle infringement online when they need to. I beg to move.
My Lords, after being on the committee entrusted by the House with scrutiny of this Bill, I am only too fully aware of what a complex area of law intellectual property is—it is crucial that we get it right. We must ensure that we create a climate as positive as any in the world for businesses to innovate and grow, especially after we leave the European Union.
I thank the Minister for her clear thinking and her ability to make me understand exactly what was going on. I thought when I started that I would never get to the end of it all. However, it was quite amazing: with her experience as a fine civil servant who then transferred over to work in the wild business world, she came back with all kinds of straightforward thinking that I could understand and comply with.
I am confident that the Bill will make a valuable contribution to achieving this goal. It will make it easier for businesses to make legitimate threats to protect their intellectual property and for those businesses subject to unjustified threats to protect themselves. I am particularly glad that the Bill will harmonise the law across different types of intellectual property and make it simpler and cheaper for businesses, especially small businesses, which can often be the most intimidated by threats, to seek legal advice and negotiate before there is a need to involve the courts. The greater clarity created by the new category of permitted communications is most welcome in this regard. The Bill is therefore a significant improvement on the current law and has the potential to make a real difference for businesses in practice.
As a former small business owner who has been subject to threats to sue for intellectual property infringement, a consumer protection representative and a Minister for Intellectual Property, I also understand, however, quite how impenetrable intellectual property law can be for businesses. This is especially the case for small and medium-sized enterprises, which often struggle to understand complex legal points and are least able to afford expert legal advice when they encounter difficulties.
When I was running my small business, I was once contacted by a well-known company in the same industry alleging that I had fringed its intellectual property rights. It turned out that it did not have a leg to stand on from a legal point of view. Nevertheless, the whole episode still caused me and my business a great deal of disruption. While I recognise that I would have been a primary actor for the purposes of this Bill, and therefore not protected by the threats provision, I empathise wholeheartedly with those businesses for which these are crucial protections but for which intellectual property law is incredibly hard to understand.
For this reason, getting the legislation right is only half of the battle. Just as important—perhaps even more so—is how we seek to ensure that businesses understand what is in the Bill and how it helps them in practical terms. If we do not do this properly, we might as well not pass the Bill at all.
While I know from my time as a Minister that the Intellectual Property Office works hard to help businesses understand intellectual property, it needs to ensure that it keeps improving its efforts in this area. It would be unacceptable and a tragedy if even one start-up or SME capitulated to an unjustified threat to sue for intellectual property infringement out of a lack of awareness of the provisions of the Bill once enacted.
I was grateful to the Minister for her comments in Committee on how the Government intend to proceed to make sure that the provisions of the Bill are communicated to business, especially SMEs, so that it has the positive impact in practice that it ought to. However, this is one of the things about which we cannot ever have too much information or too many reassurances. I therefore continue to press the Minister to assist the House and businesses with further reassurances, wherever she can, on this matter.
My Lords, I am grateful to the noble and learned Lord, Lord Hope of Craighead, and to the noble Baroness, Lady Bowles, for the welcome they have given to the extension of sensible judicial discretion through these amendments. I also warmly thank my noble friend Lady Wilcox for her very kind words and for her strong support for the Bill, particularly from the perspective of someone who has experienced threats as a small business person. She rightly highlighted the importance of providing appropriate guidance and she may be aware that we have already published some guidance to business. The IPO has got up early in terms of what the reforms could mean in practice. I have copies of the guidance if any noble Lord would like one.
In our debate in Committee I happily committed to communicating to businesses the changes and benefits being brought by the introduction of this Bill. They will form an important part of the IPO’s work and its outreach programme. I know that my noble friend is keen to learn what this would mean in reality, so I can say that the IPO will go the extra mile for SMEs. It will update its popular online tools, publish guidance, add information on the new threats provisions to the range of IP educational materials as appropriate and include presentations about these changes at its outreach events, many of which are of course aimed at SMEs. It will also update businesses via social media channels and signpost users to the relevant guidance. It is crucial that the material produced is clear and accessible, and the IPO will road-test the guidance in draft with small business representatives to ensure that it is understandable. These changes will be communicated direct to SMEs by the IPO as well as by others who provide advice and support to small businesses, which is equally important. The IPO will work with representative bodies to ensure that their members are aware of the reforms. Emails will be sent to those stakeholders who have signed up to receive updates, which will ensure that sources of IP advice such as the patent library network, growth hubs and professional IP advisers are best able to help our SMEs.
The noble Baroness, Lady Bowles, repeated some of the concerns that we discussed at length in Committee. I continue to believe that to include online notifications automatically as a permitted purpose would completely undermine the protection from threats which is at the heart of these provisions. It cannot be right that retailers and others lose all protection from threats simply because those threats are made via a particular medium, in this case online. As I have said, submitting an online form normally results in a listing being taken down, so making online forms permitted would not encourage parties in dispute to talk first since the rights holder could, justifiably or not, prevent at a stroke any further trade in an item. The amendments proposed address the issues in the most appropriate way. The wider discretion that we have given to the courts, which I started with, is useful because it allows the law to evolve as, for example, technology moves on so that over time it can be applied in a clear, fair and appropriate way. In addition we have made defences more readily available to rights holders who need to approach a secondary actor.
The noble Baroness and the noble Lord, Lord Stevenson, talked about online and reference was made to the Digital Economy Bill, which all being well will come before this House on 13 December. We have two amendments today to improve the online situation and I feel that we have addressed the concerns raised in Committee and by the BBC. The amended clauses should therefore be allowed to run. Further, it is only fair to say that we do not have any plans to revisit the issue in the Digital Economy Bill when it comes to this House.
We have made some significant changes to the Bill in response to the concerns that were well expressed in Committee and I hope that noble Lords will feel able to support the amendments before them.
My Lords, I am fairly new to this argument as unfortunately I was not able to be present as a member of the committee. Judges faced with the nature of this clause, in looking at the word “instructions”, would give the word a purposive meaning and would tend to look for a specific instruction as a necessary condition even if the words were not expressed in the Bill. For the avoidance of doubt, I respectfully suggest that the amendment moved by my noble kinsman has great force behind it. One would want to put the matter beyond doubt. For what it is worth, I support the amendment.
My Lords, I understand that this is an area of concern. I welcome the amendments from the noble Lord, Lord Stevenson, and the noble Baroness, Lady Bowles. I very much appreciate the noble Lord’s constructive approach to the Bill and his commitment to careful scrutiny. I think he said the amendment was probing in nature. I will start by setting out why I remain convinced that the exemption for professional advisers is so necessary, before talking about the specific amendment.
The Law Commission’s consultation demonstrated that the tactic of suing a professional adviser for making a threat has been used to hamper the legitimate client-adviser relationship. This causes problems not only for the adviser but for the client, who may as a result need to find a new adviser. I believe we heard convincingly during the evidence stages that this is a significant and common issue. It leaves rights holders in the position of having to pay indemnities before a legal adviser will write an entirely justified letter on their behalf. SMEs are more likely to be asked for such indemnities and are most affected by them.
I am aware that there were concerns regarding such an exemption, which might give rise to an increase in the use of unscrupulous threats. However, I do not agree for the following reasons. Where the professional adviser is exempt, the instructing client will remain liable. This ensures that recourse is available to those damaged by threats. A legal adviser who advises their client badly, leaving them liable for threats, risks a negligence action. The exemption does not prevent this. The exemption has been carefully and appropriately limited in its availability. The amendment would restrict the protection available for professional advisers to just those who are acting on “specific” instructions from another person.
In an increasingly global market—that was mentioned —we need to capture the many different types of foreign and domestic IP legal practitioner who may risk facing a threats action under UK law. As discussed in Committee, this should clearly include those in private practice as well as “in-house” advisers. For that reason, I do not agree that the exemption principle should apply only to the very limited category of circumstances envisaged by the amendment.
In practice, instructions come in all shapes and forms, written and oral. It is therefore unclear what would be required in order to demonstrate that an adviser was acting on a “specific” instruction. Such lack of clarity about “specific” instructions would be particularly problematic for in-house legal advisers, who are often acting on a general mandate to protect their company’s IP rights. The Law Commission agrees that the amendment risks leaving in-house advisers without protection. I apologise to the noble Lord, Lord Stevenson: I think that that is the response that he was expecting in relation to the amendment.
I thank those noble Lords who contributed to this short debate. It is right that we recognise that there are particularities in relation to in-house lawyers and I take the point made by the Minister that the exemption would be particularly useful for them. It does not get round the fact that this could easily be the thin end of the wedge. While that should not detract from the specifics of what we are discussing today, it would be odd if a very small part of a very small part of the law—while I in no sense diminish the contribution made by this Bill to the greater good—was to be adapted to allow this exemption, which then spread.
It may be clearer if I make one final point. My understanding is that the underlying law on agent liability is left undisturbed, so no precedent is being set here for other areas of law which concern agent-client relationships. I recall that being a concern expressed by the noble Lord, so perhaps my making that clear to the House will help him in agreeing to withdraw the amendment.
Yes. The Minister anticipated exactly what I was going to say. We were all looking for some words of reassurance so that those who had to interpret the provisions later would be better informed. We have not had the chance to see the Explanatory Memorandum in that regard. Perhaps we could receive that in correspondence before the final stages of the Bill, so that I might be more satisfied. On that basis, I am happy to withdraw the amendment.
(7 years, 9 months ago)
Lords Chamber
To ask Her Majesty’s Government when their response to the Waterson review of secondary ticketing will be published.
Professor Michael Waterson’s independent report on consumer protection measures applying to online secondary ticketing makes a number of recommendations which deserve to be fully considered by all those concerned with ticketing, live entertainment and law enforcement. The new Government are taking time to look very closely at the recommendations and will publish a response in due course.
I thank the Minister for that response. What would be her response to somebody who discovers that they have purchased the wrong ticket, when the Government have yet to implement the Act in question?
The Act has of course come into force and there have been prosecutions on ticketing, although they are often made through fraud law rather than consumer law. The advice I would give to consumers is to get in touch with the excellent Citizens Advice service. If they have evidence of fraud they should contact Action Fraud, and there is also the possibility of trading standards taking action. One of Professor Waterson’s recommendations is that more work should be done on that.
My Lords, does my noble friend agree that modern-day touts who use bots in the form of software that stores hundreds of credit card accounts and can instantly sweep the market of tickets the moment they go on sale, only to reappear half an hour later through their colleagues on the secondary market at highly inflated prices, corrupts the market and denies the true fans of sport and musical events the opportunity to buy tickets? These touts should be subject to legislative action by the Government through the Digital Economy Bill.
As always, my noble friend makes some powerful points. He will be glad to know that the Secretary of State for Culture, Media and Sport has asked for a round table to be held with the industry on this matter next week, on 30 November, in order to bring together all the interested parties to look at the issue of bots following very useful discussions on the Digital Economy Bill.
My Lord, the Minister told me in May this year that the response to Waterson would be coming in due course but we are still being given the same answer. Meanwhile, the law, passed in this House and elsewhere, is being flouted. Justin Bieber tickets on sale at £70 can be bought for £1,600, while a £127 rugby ticket is selling at £1,250. None of these people are keeping to the law because they are not giving the information. Given the Government’s very welcome ban on letting agents charging tenants fees, will the Minister take similar action to deal with ticket touts?
I have already explained that we are looking at the problem of bots, which has delayed the formal response to the report, but of course, we published the report straightaway and action is beginning to be taken. I do not recommend that consumers pay such prices. The report makes it clear that there is also a duty on the part of primary ticket sellers to think about how they can distribute tickets in a sensible way, perhaps by holding ballots or selling to fans. I know the disappointment this can bring—I have seen my own nieces in tears because they could not get tickets—but sometimes tickets do become available later. However, this is an important issue and that is why we spoke to Professor Waterson. The bots issue is very much on our minds and we are looking at it to see if the existing law on computer misuse is adequate.
My Lords, the Minister has clearly made herself extremely conversant with digital ticketing purchasing software, but the clue is in the name, is it not? Will she confirm that she is favourably disposed towards dealing with bots well in advance of the final government report on and response to Waterson, which, ominously, she describes as coming “in due course”?
We are certainly keen to get to the bottom of the issue of bots and to find the right way forward. There was consensus in committee in the other place that it was right to try to sort out the bots issue before our formal response. But as I said, the Waterson report is with us and work is in hand on this important issue. I am told that there is a proposed federal law on bots—“better online ticketing service”—although I understand the situation is a little different in the United States.
My Lords, in response to the Question asked by the noble Baroness, Lady Doocey, the noble Baroness, Lady Williams, suggested that a form of redress could be sought through citizens advice bureaux. Given that very few councils can now afford to have a trading standards department, is the Minister aware that Citizens Advice has had huge cuts in its funding?
I am of course aware of the problems Citizens Advice and trading standards have with funding; we have discussed that in this House before. One of the points Professor Waterson made in his very useful report, which we are looking at very seriously, is how we make sure there is appropriate funding for the kind of investigations we all want in this area. Interestingly, secondary ticketing is not top of the complaints we get. They are often about the primary ticket sellers, rather than the secondary market we have been debating through this report.
My Lords, I again refer to my interest as listed in the register. Is not what the noble Baroness is describing a failure in the market for entertainment tickets? Might not the secondary ticketing sellers be colluding with the primary ticket sellers—a situation that suits all the parties involved rather well, because they do quite well out of it? Should we not be looking at how the market as a whole functions?
That was one of the reasons why we asked Professor Waterson, who is an economist from Warwick University, to look at this, and that is not the conclusion he came to in his report. There are benefits from the secondary platforms, which give greater protection than buying from a tout or on social media. They guarantee a replacement if you cannot get in. We have a big tourist industry in this country, and it is very important that when tourists come here—there are more and more of them since the depreciation of the pound—they are able to access our amazing sporting events, theatres and so on. There are difficulties, which I acknowledge, but in general this market works well and has its advantages. Obviously, the bots issue is a big one.
(7 years, 9 months ago)
Lords Chamber
That the draft Regulations laid before the House on 11 October be approved.
My Lords, the regulations amend a statutory instrument made under the Energy Act 2013. The instrument makes some straightforward amendments to the current regulations to strengthen the non-delivery disincentive mechanism. This mechanism is an important part of the CfD scheme. It encourages developers to stick to the delivery milestones in their contracts and sets a penalty for developers who apply for, and win, a CfD but then either fail to sign the contract or terminate it early. In the first CfD round, two small solar projects failed to sign their contracts. Both had bid at a price that was considered by the industry as not economically viable at the time. It is right that we tighten up the regulations to ensure that such speculative projects are not able to enter future rounds. Two others did not meet their milestone requirements in the view of the LCCC—the Low Carbon Contracts Company, not, of course, Leicestershire County Cricket Club.
Before I go into more detail about how the mechanism currently works and how we propose to change it, I will touch briefly on the latest developments around the CfD scheme. On 9 November we published further details on the second contracts for difference allocation round. This has put an end to the uncertainty that the industry was facing and is a key plank in our commitment to move to a low-carbon energy mix, help tackle climate change and meet our carbon budget requirements. In the announcement, we gave investors, developers and the supporting supply chain the certainty necessary to drive forward investment. Some £290 million of the annual support for new renewables projects has been allocated to the upcoming round.
The noble Lord, Lord Grantchester, will be pleased, in view of what he said in our previous debate, that we have also reaffirmed that £730 million per year will be available to support renewables through the CfD during this Parliament. In our announcement we also set out key parts of the allocation process, including strike prices and supply chain guidance. The supply chain guidance is an important part of the package. It is a compulsory requirement for projects of 300 megawatts and over, and means that projects must provide the Secretary of State with a “good degree of confidence” that the project will make a material contribution to the development of the supply chain. That is all part of the Government’s commitment to growing and strengthening the industrial base.
We have already seen a number of positive developments, particularly in the offshore wind industry, where investment is supporting long-term supply chain development, which is also of lasting value to the UK economy and helps to build a competitive supply chain that is ready to export. This has included investment in the ports of Great Yarmouth and Lowestoft to support Greater Gabbard and East Anglia ONE, as well as the development of the Siemens blade factory in Hull.
This draft instrument will help to strengthen the next CfD allocation round by making sure that developers who win a contract face an appropriate penalty if they do not deliver it. The non-delivery disincentive sets out a penalty for developers who apply for and win a CfD but then either fail to sign the contract, or terminate it early. This may prevent other potentially viable projects receiving a CfD and tie up budget that could otherwise have been used to deliver our objectives. It is right and proper that this behaviour should be discouraged and developers should pay a price. The non-delivery disincentive exclusion already prevents developers from applying to any subsequent round in respect of the same site for 13 months after a CfD is awarded. The intention is to prevent companies who fail to deliver on contracts from entering a future round with essentially the same project. This amendment will extend this exclusion to include the first of any rounds occurring in the following 11 months, so up to a maximum of 24 months. It allows us the flexibility to run rounds less frequently but maintain the same protection against developers gaming the system.
My Lords, I thank the Minister for her introduction of these regulations, which are limited in scope and technical in nature. As she says, they will deter non-delivery of contract projects by excluding participants from taking part in future periodic allocation rounds should they not fulfil certain aspects of their projects. I am happy to agree to the regulations today as they would deter applicants to the CfD scheme from making speculative bids for projects that are unlikely to be delivered, thereby tying up parts of the budget for the scheme so that it cannot be delivered. As allocation rounds are being run less frequently than originally anticipated, this would ensure greater delivery of the wider objectives of investment in power-sector decarbonisation.
The Minister has already spoken of some of the effects in the first round but perhaps she could clarify a little further why these measures are being introduced. Can she explain the overall difficulties seen in the evidence from the non-delivery of projects in the first round of contracts for difference allocation? Has there been a certain amount of “hogging” or poor fulfilment of the projects by some participants in the first round? The Explanatory Memorandum was relatively quiet on the consultation outcome and reported generally supportive responses.
I am grateful to the Minister for confirmation that the sum coming forward to support renewable investments in the second round will be the one that has been widely reported. Is she satisfied that there is an adequate appeals process should the applicant consider that he or she has been unfairly treated? Are there adequate provisions for genuine non-compliance should circumstances out of the applicant’s control result in poor fulfilment? Is she satisfied from the experience of the first allocation round that interpretations of what it means not to have delivered are adequately defined?
I would like to follow up on one further aspect of these regulations. What happens to projects that make slow progress or are even abandoned? Can that part of the budget be reallocated to a later round, or are there some residual rights of the applicant to fulfil the project? It is not clear from the memorandum whether the CfD is terminated as a consequence such that it could not be recycled in an orderly manner. The impact assessment considers the overall CfD scheme, objectives and process without considering these regulations specifically. Is there a risk that exclusions to future bidding rounds could give rise to a series of legal actions that could undermine the allocation process more generally?
I would be grateful if the Minister could clarify those aspects of how the regulations might work in practice so that the operation of CfDs will continue to bring forward schemes at least cost to the electricity consumer over the longer term.
I thank the noble Lord for his helpful remarks and his welcome for these regulations. As I said earlier, the contracts for difference scheme is designed to incentivise the significant investment we require in our electricity infrastructure to keep our energy supply secure, to keep costs affordable for consumers and to help meet our climate change targets. The instrument being debated today enables us to maximise the effectiveness of future CfD allocation rounds by increasing disincentives for non-delivery and preventing those who have failed to deliver a project in the past from gaming the system.
In my opening remarks I ran through the reasons for the failure of the two small solar projects and the other two projects that failed to meet the milestone requirements of the LCCC. I am satisfied in general that the contractual details and exemptions before us are fit for purpose, especially as amended by these regulations.
The noble Lord asked about using up proceeds of frozen CfDs. We always keep under review the total budget allocated to CfD projects. If any projects that are successful in the next auction fail to sign their contracts or have their contracts terminated we will consider—I think this is probably what the noble Lord wants to hear—the possibility of recycling budget to future auctions. This decision will, however, depend on factors including the pipeline and what will ensure the best value for bill payers. We do not expect this to be significant. In the first auction, as I have said, there were the two small solar projects that failed to sign their contracts and the two projects that had their contracts terminated out of a total of 25. I think I explained last time that there was an overspend against the levy control framework for that period so there was no scope for recycling on that occasion.
On legal action—which is always something I am rather cautious about commenting on—complaints can be made to the LCCC. Ultimately, judicial review would be the legal remedy and there is normally an appropriate and narrow window for this.
As I think we are agreed, this is another step—a small but important technical milestone—towards getting the next CfD auction going. I look forward to the work on the supply chain in the new year and to the auction commencing in April. In the meantime, I commend these regulations to the House.