Online Safety Bill

Baroness Stowell of Beeston Excerpts

2nd reading
Wednesday 1st February 2023 Lords Chamber

[Baroness Stowell of Beeston (Con)]

My Lords, I am humbled to speak in this debate among many noble Lords who have spent years involved in or campaigning for this landmark legislation. I salute all of them and their work.

Like many, I support some parts of this Bill and am sceptical about others. The tension between free speech, privacy and online safety is not an easy one to resolve. We all accept, however reluctantly, that one Bill cannot cure all social ills—indeed, neither should it try. In fact, when it comes to online regulation, this is not the only legislation that is urgent and necessary: the digital markets, competition and consumer Bill is a critical, yet still missing, piece of the jigsaw to us achieving a strong regulatory framework. I hope the Government will bring it forward swiftly.

As my noble friend Lord Vaizey has already said, I see this Bill as the beginning of online regulation and not the end. I see it as our opportunity to make a strong start. For me, the top priority is to get the regulatory fundamentals right and to ensure we can keep updating the regime as needed in the years ahead. With my chair of the Communications and Digital Committee hat on, I will focus on key changes we believe are needed to achieve that. As I cannot do that justice in the time available, I direct any keen readers to our committee’s website, where my letter to the Secretary of State is available.

First, the regulator’s independence is of fundamental importance, as the noble Baroness, Lady Merron, and others have already mentioned. The separation of powers between the Executive and the regulator is the cornerstone of media regulation in western Europe. Any government powers to direct or give guidance should be clearly defined, justified and limited in scope. The Online Safety Bill, as it stands, gives us the opposite. Future Governments will have sweeping powers to direct and interfere with Ofcom’s implementation of the regulations.

I will come, in a moment, to my noble friend the Minister’s proposed remedy, which he mentioned in his opening remarks, but I stress that this is not a general complaint from me or the committee about executive overreach. Many of the Bill’s executive powers are key to ensuring the regime is responsive to changing needs, but there are some powers that are excessive and troubling. Clause 39 allows the Secretary of State to direct Ofcom to change its codes of practice on regulating social media firms. That is not about setting priorities; it is direct and unnecessary interference. In our view, the Government’s proposed amendment to clarify this clause, as my noble friend described, remains inadequate and does not respect the regulator’s independence. Clause 39 also empowers the Secretary of State to direct Ofcom in a private form of ping-pong as it develops codes of practice. This process could in theory go on for ever before any parliamentary oversight comes into play. Other powers are equally unnecessary. Clause 157 contains unconstrained powers to give “guidance” to Ofcom about any part of its work, to which it must have regard. Again, I fail to see the need, especially since the Government can already set strategic priorities and write to Ofcom.

Moving on, my committee is also calling for risk assessments for adult users to be reinstated, and this has already been mentioned by other noble Lords. That would have value for both supporters and critics of “legal but harmful”, by requiring platforms to be transparent about striking the balance between allowing adult users to filter out harmful content and protecting freedom of speech and privacy.

Finally, given the novel nature of the Bill, I hope the Government will reconsider their unwillingness to support the setting up of a Joint Committee of Parliament to scrutinise digital regulation across the board. This would address many general and specific concerns about implementation and keeping pace with digital developments that have been raised recently. Parliament needs to properly discharge its responsibilities, and fragmented oversight via a range of committees will not be good enough in this new, modern world.

Overall, and with all that said, I commend my noble friend and his colleagues for getting us to this point. I look forward to, and will support him in, completing the passage of this legislation in good order.

Channel 4

Baroness Stowell of Beeston Excerpts

Wednesday 11th January 2023 Lords Chamber

[Lord Parkinson of Whitley Bay (Con)]

I look forward to more questions on other aspects of the media Bill’s work than perhaps we have had in recent months. Yes, it is our intention to bring forward the media Bill when parliamentary time allows, so that we can carry forward important reforms that will benefit the whole of our public service broadcasting system.

[Baroness Stowell of Beeston (Con)]

My Lords, I declare an interest as the chairman of your Lordships’ Communications and Digital Select Committee. I welcome the Government’s decision on the future of Channel 4, not least because it reflects so much of what the committee recommended in the report that we published just over a year ago on the future of Channel 4—although it is worth reminding your Lordships that, as a committee which represents all sides of this House, we did not object in principle to the sale of Channel 4.

I was also pleased that the Government recognised, none the less, that the status quo was not an option for the future of Channel 4. Bearing in mind what my noble friend has just said about the media Bill, which will be necessary to introduce the legislative changes and address some other needs of public service broadcasters to ensure their sustainability, perhaps I may push him further. If he will not give us a precise timetable for when the media Bill will come, can he tell us in which order the Bills that the DCMS has on the slate are going to come? The Online Safety Bill is about to come but we are also waiting for the digital competition Bill.

[Lord Parkinson of Whitley Bay (Con)]

My noble friend will know, as a former leader of your Lordships’ House, that that decision is above my pay grade, but it is our intention to bring the media Bill forward when parliamentary time allows. I am grateful to her and the other members of your Lordships’ committee for their thoughts, which have been part of the evidence that my right honourable friend and colleagues at the department have weighed up.

BBC: Future Funding (Communications and Digital Committee Report)

Baroness Stowell of Beeston Excerpts

Friday 16th December 2022 Lords Chamber

Moved by

[Baroness Stowell of Beeston]

That this House takes note of the Report from the Communications and Digital Committee Licence to Change: BBC future funding (1st Report, HL Paper 44).

[Baroness Stowell of Beeston (Con)]

My Lords, it is both a privilege and a pleasure to chair the Communications and Digital Select Committee, and I am delighted that so many fellow members will contribute to this debate on our report published in July, Licence to Change: BBC Future Funding. My colleagues bring a breadth of knowledge and expertise from across the media, digital and creative sectors and are a joy to work with, as is the outstanding team who advise and support us: Daniel Schlappa, our clerk, Emily Bailey Page our policy analyst, administrator Rita Cohen and, for this particular inquiry, communications officer Lucy Dargahi. However, the committee does not exhaust the House of Lords’ expertise and interest in this area, so it is very welcome to see so many other noble Lords signed up to speak in this debate. I look forward to everyone’s contribution.

The questions of the BBC’s purpose and how it should be funded are becoming more and more urgent. Media consumption is increasingly digital, audience habits are changing and people have unprecedented amounts of choice about where, when and how they consume entertainment and news. Political debates about the BBC’s future and the way it is funded can become a distraction from the real threats to its future, but talking about the licence fee should not be a taboo subject, and neither should we avoid highlighting the BBC’s flaws and that there are certain audience groups who do not feel well served. Safeguarding the BBC’s future and the public value it generates requires us all to have an open conversation about what we want of our national broadcaster and how we should fund it. There are opportunities to be seized, but they will be lost if we make our goal protecting the status quo or defending the institution for its own sake.

We therefore launched this inquiry to provide a cross- party, non-partisan, objective view on these big questions. Unusually, our conclusions and recommendations are aimed at the BBC as well as at the Government, because we were clear in our conclusions that the corporation itself must lead the debate about the way forward. Facing up to the real threats to its future requires the BBC to define a clear purpose for itself that makes it relevant to today’s world, not the world it entered 100 years ago.

Let me say more about the committee’s findings before I say more about our expectations of the BBC. We found that the BBC has an important role to play in our national life in bringing people together in an increasingly atomised society and reflecting the nation in times of celebration and hardship, as we have been proud to see it do well during Covid, in Ukraine and when we celebrated and mourned our late, great Queen. We, the members of the committee, believe in a public service broadcaster to help us avoid the fate of polarisation that we see in the USA. However, to remain relevant and valuable in future, the BBC needs to grapple with major challenges around serving audiences in a fast-changing world.

There is more competition than ever. The traditional broadcasters’ share of UK viewing fell from 97% in 2010 to 70% in 2021. This downward trend is continuing, with sector analysts predicting it will fall to 50% in five years’ time, and it is lower still among younger people. The cost of TV drama production is rising, and international streaming businesses have transformed the market. In 2021, the BBC’s content budget was £2.5 billion, Netflix’s was $14 billion and Disney’s $18.6 billion. By contrast, the licence fee fell by 30% in real terms between 2010 and 2020.

A flat licence fee, which does not take account of people’s ability to pay, cannot rise to meet the costs of production without being unacceptably expensive for the less well off in society. However, cost is not the only thing which leads people to question the licence fee, and straightforward value-for-money arguments do not convince all those who can afford to pay. The BBC also needs to do much better in reflecting all sectors of UK society. Ofcom data shows that audiences with disabilities, those in Scotland and those who are less well off are the least satisfied with the BBC. If people are not properly represented, they will be even less inclined to pay the licence fee when alternatives are available. We were clear that the legitimacy of public funding, and the BBC itself, can be maintained only by doing a better job of representing the full range of perspectives and communities that make up the UK.

Since our report was published, evidence of the urgency of these issues has continued to mount. Ofcom’s most recent report on UK media consumption showed that UK broadcasters continue to lose viewing share to streamers such as Netflix, despite the improved performance of on-demand services such as BBC iPlayer.

In its annual report on the BBC published at the end of November, Ofcom found that the BBC needs to do more to reach and resonate with audiences on lower incomes, although—as was noted in a different debate yesterday—the BBC’s promise in response to provide more lighter drama and other genres, together with factual entertainment competitions, perhaps illustrates a lack of understanding of why some audiences have turned away.

To address all these challenges, the BBC needs a new, bold and ambitious strategic vision that sets out its role and answers the question of why it exists, as well as how it will deliver distinctive value in a rapidly changing world. Pleasingly, the BBC has signalled a desire to be more open and front-footed. The chairman, Richard Sharp, told us that the BBC board is currently overseeing a detailed strategy review of the corporation, and Tim Davie’s substantial speech to the Royal Television Society earlier this month was a welcome step forward in addressing some of the points raised in our report. He acknowledged that the BBC needs to articulate a clear, market-leading role for itself in the digital age, and that tough choices are needed to secure its future.

This is a good start, but it remains unclear what the BBC wants to be, beyond being a significant player in this global media world; it needs to offer greater clarity and avoid attempting to be all things to all people. Mr Davie said that the BBC needs to differentiate itself. That recognition too is welcome, but we need to see more detail on what this means in practice—what the BBC will do more of, what it will continue to do and what it will stop doing. For that to be meaningful and give us confidence, we need clarity on the strategic purpose driving the plan.

Previous attempts to map out distinctive territory have not always been convincing. Talking about high-quality, unique content is confusing because some of what makes the BBC unique is not necessarily high quality, and what it does that is high quality is not always unique. That is a problem because, if the uniqueness is the way the BBC is funded, what is left of its distinctiveness once the licence fee diminishes in importance or disappears altogether?

That is not an argument to keep defending the licence fee as the BBC’s primary source of income, or defining the BBC’s output as a way to justify the licence fee. What it demonstrates is the danger of that approach in a world where more people question the licence fee because they can get what they want elsewhere.

Like it or not, the BBC must be more open to discussion about alternative options than it has been in the past. Our report explored a variety of models, ranging from full commercialisation through to full state dependency. We did not set out to recommend any individual funding model, although our evidence was clear that some would not work. Advertising, for example, is highly unlikely to be viable, leading to a multi-billion pound reduction in the BBC’s income and damaging other public service broadcasters; a pure subscription model would generate insufficient income while facing major technical challenges and creating barriers to access; and funding the BBC by government grant would risk eroding the BBC’s editorial independence.

We were clear, however, that a BBC designed to benefit the nation would require some form of public funding, and there are viable alternatives that deserve serious consideration. For example: a hybrid subscription model—either domestic or international—which you might describe as a “top-up” approach, where some features are available for an additional fee; a hypothecated tax; progressive reform of the licence fee itself; or a progressively applied household levy.

For the BBC to be serious about safeguarding its future, it needs to be a lot more open about ambitious new proposals for its funding model. I was pleased to see that the Government welcomed our analysis, and the new Secretary of State’s recent commitment to launching the independent review of the licence fee is most welcome. We were clear that an independent, evidence-based process to take this work further is what is required.

I am concerned, however, that the review has not yet been launched. It was originally due last summer but, only last week, the Secretary of State seemed no closer to announcing further details on its timing or terms of reference. It would be very good news if my noble friend the Minister were able to say today when this independent review will start.

This matters because any possible changes will take time. Decisions about the BBC’s future funding cannot be left to the last minute in charter discussions. Parliament and the public must be given adequate time to engage and must be provided with information about the implications of change. If delays continue, we risk losing the opportunity for the BBC and the Government to consider a broad range of models.

I acknowledge the Government’s position that there will be public and parliamentary consultation as part of the BBC charter review, but the committee remains concerned that more extensive engagement is required for an issue of such importance. We heard from members of the public during our inquiry that their voices were not being represented in this debate. Decisions on the BBC’s role and future must be taken more transparently than has previously been the case.

Securing the BBC’s future will also involve action on the regulatory front. It is vital in a fast-changing media world that the BBC has the flexibility to adapt, and that is why we called for a more nimble regulatory framework; but, at the same time, this must also be balanced with transparency and engagement with stakeholders from the commercial media sector.

I have written to Ofcom to emphasise the importance of ensuring that more flexibility does not lead to the BBC crowding out domestic competitors from the market. It will also be interesting to see what changes to the BBC’s internal governance are recommended as a result of the current mid-charter review.

The Communications and Digital Committee has been glad to see both the BBC and the Government signal in response to our report that they are committed to a proactive, constructive discussion on future funding. This will only get more important in the years ahead. We want to see in the decades to come a strong BBC that thrives and delivers value for all audiences across the UK and the world, but achieving that vision will involve tough decisions and bold action.

Now is the time for the BBC to step up and lead this debate, rather than wait for others to decide its fate. It is also time for all of us as parliamentarians to encourage the BBC and demand that it be bold in responding to the challenges that we have set out in our report. There is so much to gain if it does so. I beg to move.

--- Later in debate ---

[Baroness Stowell of Beeston (Con)]

My Lords, I am very grateful to everybody who has spoken in the debate. I am also grateful for the constructive welcome that our committee’s report has received. I echo the noble Baroness, Lady Merron, and thank my noble friend the Minister and his department for the swift response to our report. Perhaps through my colleague the Government Whip on the Front Bench I can also offer my thanks to the Government Chief Whip, who is not in her place, for scheduling this debate so swiftly. It is unusual for us to be able to have this time so soon after publication, and I am very grateful.

As I said at the start, examining how the BBC is funded is not, and should not be seen or received as, an attack on the BBC. I was pleased that most, if not all, recognised that some change is needed to the way the BBC is funded, even if that extends only to modification of the licence fee. As the noble Lord, Lord Hall, and my noble friend Lady Harding made clear in their powerful speeches, the issue is not whether the BBC should exist but what its role needs to be in the decades to come. We need clarity on that to inform decisions on how best to fund it.

I will make just a couple of other points. I was pleased that the noble Baronesses, Lady Bull and Lady Rebuck, emphasised the report’s finding that the BBC should be a market shaper, not a market failure model. As our report said, and some of my colleagues have reinforced,

“the status quo is not an option.”

We need to see change from the BBC, but this presents challenges for the BBC.

The noble Baroness, Lady Merron, my noble friend Lord Vaizey, the noble Lords, Lord Hall and Lord Liddle, and some others raised concerns, which I certainly share, at recent announcements from the BBC about local radio. To me, the announcements reinforce the need for that clear, strategic purpose, and how that is driving some of these big decisions, to be known and understood. Until or unless we get that, it is very hard for anybody to evaluate the decisions the BBC makes on its operations without being confident that it is doing so for the right reasons and towards a goal we all recognise and share. Overall, we recognise the value of the BBC today and in the past, but it will have to change to remain relevant in the future.

It was disappointing not to hear from my noble friend the Minister a date for the independent review of the licence fee. I am grateful to him for outlining the process that the Government intend to follow, but we really need to get on with this. As many noble Lords have said today, leaving final decisions until the charter review is leaving things quite late. There needs to be some real progress on this much sooner than that, and I get nervous if that is the time at which these things will happen.

This was a group of cross-party and non-party Peers working together to examine an issue that previously has always been considered to be something political, or anathema to raise without provoking some kind of perception of attack. I am pleased that we have been able to demonstrate the importance of doing so and that our report has received a constructive welcome in your Lordships’ House today.

Motion agreed.

Online Safety Bill

Baroness Stowell of Beeston Excerpts

Monday 7th November 2022 Lords Chamber

[Lord Parkinson of Whitley Bay (Con)]

Your Lordships’ House gives voice to those voiceless victims through the right reverend Prelate and, not least, the noble Baroness, Lady Kidron, who has rightly asked this Question today. I am keen for all those voices to be joined in the debate on the Bill as soon as possible.

[Baroness Stowell of Beeston (Con)]

To go back to one of the earlier questions about financial harms, does my noble friend agree that one of the problems facing the Bill is the way in which things keep getting added to it? Once the Bill arrives in your Lordships’ House—the sooner we can get on with scrutinising it, the better—it is important that we all remain self-disciplined, try not to add things to it and just focus on child safety.

[Lord Parkinson of Whitley Bay (Con)]

My noble friend makes the sort of wise point that one would expect from a former Leader of your Lordships’ House. I think that is the case with any Bill that comes before Parliament. With this one, which has benefited from pre-legislative scrutiny, Members of both Houses have been able to look at it and wider issues. I look forward to thorough but targeted debates when the Bill comes forward.

Public Service Broadcasting: BBC Centenary

Baroness Stowell of Beeston Excerpts

Thursday 3rd November 2022 Lords Chamber

[Baroness Stowell of Beeston (Con)]

My Lords, I too congratulate my noble friend Lord Parkinson on his return to the Front Bench, and I also congratulate the noble Lord, Lord Foster of Bath, on an excellent opening and scene-setting speech to this debate.

I was at an event last night—I believe that the noble Lord, Lord Foster of Bath, also attended—at which the Secretary of State, Michelle Donelan, committed to bringing forward the media Bill very soon. As my noble friend the Minister knows, and I hope agrees, I believe that there is a strong case for a pro-growth media Bill that combines the prominence measures, which the noble Lord, Lord Foster, has just described, with the digital competition measures, which are also critical not just to the PSBs but to newspapers, publishers and UK tech businesses. These measures form part of another long-promised but still-to-be-seen Bill, so I hope that my noble friend the Minister can say something meaningful about all these things when he comes to wind up.

However, as important and urgent as prominence is for public service broadcasters and radio networks on digital platforms and smart TVs, it is also important to be clear that it is nothing more than a short-term solution. Prominence alone is not the answer to the real challenges facing the future of public service broadcasting. As much as we may feel sentimental towards our broadcasting institutions or specific channels, we cannot escape that the PSBs’ share of UK video viewing has fallen from 97% in 2010 to 63% this year, and it is currently predicted to fall to 50% by 2027. The broadcasters are all responding to this challenge: digital first is the main strategic shift that each is having to adopt, which is why prominence is so important. While I would not for one moment suggest that this is easy and without its challenges, this is a commercial imperative or a survival strategy.

When it comes to the bigger challenge of safeguarding the value of public service broadcasting to society, institutional preservation for the sake of it is not the place to start. There needs to be some big thinking about what public service broadcasting means in the next quarter of the 21st century, and the best way to deliver it, taking account of not just the changing viewing habits of audiences, and the young in particular, but the dissatisfaction of some sections of society who feel that their lives and perspectives are patronised and not seriously represented.

I believe that the broadcasters themselves should take the lead in being radical in the solutions they propose. As politicians, we should be demanding that they be clearer than ever before what the point of them is in this highly competitive media world, and calling on them to set out how the structure of public service broadcasting should change for it to continue delivering value for society. That includes asking whether we still need four public service broadcasters—each independently owned—to deliver distinctively British quality programming that binds us together as a nation. It requires the BBC—as the Communications and Digital Committee has called for—to come forward with its own vision for the future, driven by a clear strategic purpose and costed options for how best to deliver benefit to the nation, as well as how to fund it. The noble Lord, Lord Foster, referred to the report on Channel 4 by the Select Committee I chair—although it was chaired at that time by my noble friend Lord Gilbert—and we were clear that we did not object in principle to its privatisation, although we did question its urgency. If Channel 4 is not to be privatised, it requires its board, if it is to respond to these challenges, to propose new ways for it to be financially sustainable and deliver value that is distinctive from commercial broadcasters. For public service broadcasting to face all these challenges, competition regulators are required to think differently and not repeat the mistakes of the past.

Finally, it requires us, as politicians, not to blindly defend the status quo or engage in a political battle about the licence fee or Channel 4 privatisation, which only encourages the BBC or Channel 4 to keep their heads down and hope that, if we keep fighting, big decisions about funding or ownership models will remain unmade. Clearly, financial pressures are forcing the BBC and others to make changes now, ahead of any long-term strategic decisions, but these seemingly piecemeal decisions serve to illustrate the danger of the BBC waiting to define its strategic purpose to inform decisions about how it needs to change. We might worry about changes to, say, local radio, because we cannot see how they relate to a bigger picture.

It is because I believe in the importance of public service broadcasting to a cohesive society and our prosperity as a nation that I am demanding radical thinking about its future. I do not want solutions to be left to us politicians; I want the broadcasters themselves to be emboldened by us to lead the way and to depoliticise the debate. We all need to recognise that this is urgent and that raising these questions is not some kind of attack; it is the only way of safeguarding something that is important to all of us. I hope that my noble friend the Minister—back in his rightful place—can give me some assurance that the Government understand this and are acting accordingly.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, this has been a very spirited and thought-provoking debate, and a very enjoyable one for my first time back at the Dispatch Box. I warmly congratulate the noble Lord, Lord Foster of Bath, on securing it. He encouraged me to sign up to speak from the Back Benches and I had done so, but it is a delight to be responding with a bit more time from this position.

The noble Lord’s Motion encourages us to look to both the future and the past, but perhaps I should start with an observation about the present. It seems to me that we in the UK today are very lucky to benefit from a vibrant and diverse broadcasting sector. We have access to hundreds of television and radio channels, each of them unique. These are in turn supplied by a wealth of creative talent and distributed in innumerable ways, some cutting-edge and others which would be familiar even to the late Lord Reith himself—although I wonder whether he might have mellowed in his opinions on jazz.

Moreover, it strikes me, taking the long view, as today’s Motion invites us to do, that that success is due in no small part to the work of the BBC, first as the pioneer of radio, and later television, broadcasting, and then, over time, providing a different role, an important foundation on which so much else of our broadcasting heritage is built.

As the noble Baroness, Lady Bakewell said, 1922 was a very special year. It marked the publication of TS Eliot’s “The Waste Land” and James Joyce’s Ulysses, one of which I have read repeatedly and the other of which I am still struggling through, but both of which I have learned a great deal about in this centenary year thanks to the BBC’s programming about them.

However, as we heard, a lot has changed since 1922. The BBC is no longer our only broadcaster; indeed, it is not our only public service broadcaster. Strictly speaking, it is one of six but, taking a more rounded measure of public service, we might also include our eight local television providers and hundreds of local and national radio stations in that list. That does not even include all the programmes created and shown by commercial broadcasters that are nevertheless public service in nature.

The need for public service broadcasting in this country is as strong as ever it was. Whether that is breaking news footage of Russia’s illegal invasion of Ukraine, or lessons for children stuck at home during the pandemic, it is vital that our broadcasters understand the positive impact that they can and do have on our life in the United Kingdom: on our culture and values, on our economy and on the very cornerstones of democracy. They play a key role in bringing the nation together at our moments of greatest celebration and our moments of deepest sadness.

In particular, I echo the tributes paid by other noble Lords to our public service broadcasters, especially the BBC, for their thoughtful and respectful coverage following the recent death of Her late Majesty Queen Elizabeth II. As the noble Lord, Lord Bassam, said, more than half the country, 32.5 million people, watched the BBC’s coverage of the state funeral, and millions more watched it on ITV: a powerful example of what public service broadcasting can and should be about.

I agree with my noble friend Lady Harding that, in Parliament, it is our job as parliamentarians to hold public service broadcasting to account but also to provide a legal and regulatory framework which encourages and supports the contribution that the BBC and others make. Part of that framework, of course, includes the media Bill, which noble Lords in great number have asked about, understandably, today. Let me highlight what my right honourable friend the Secretary of State said last night in your Lordships’ House—not in the Chamber but in a reception held here. She said she is fully committed to introducing legislation to make sure that we are regulating in a way that is fit for the modern era, and that we will be coming forward with the media Bill shortly. I am afraid I cannot be more precise than that, but I am happy to echo her words that we will do that soon.

I will start with the legal and regulatory framework for the BBC. In January, the Government announced that the licence fee will be frozen for the next two years and will rise in line with inflation for the following four years. That means that the cost of the licence fee will remain fixed at £159 until April 2024, before rising in line with inflation until April 2028.

Concerns about the cost of living have been echoed in your Lordships’ House today and were central to the Government’s decision. The settlement aims to support households at a time when they need that support most, while also giving the BBC what it needs to deliver on its important remit. Under the settlement, the BBC will continue to receive around £3.8 billion in annual public funding, allowing it to deliver its mission in public purposes and to continue doing what it does best.

We believe that this is a fair settlement which strikes the right balance between protecting households and allowing the BBC to deliver its vital public responsibilities, while encouraging it to make further savings, efficiencies and innovations. The Government’s longer-term road map for reform of the BBC sees two forthcoming milestones as we prepare for the next review of the BBC’s royal charter: the ongoing mid-term review and the planned BBC funding model review. I will address each of those in turn.

At this point, half way through the charter period, work has already begun on the mid-term review. That will function as a health check, conducted by the Government and examining how effectively the governance and regulatory arrangements introduced by the current charter, such as the move to the new unitary board, are performing, and whether further reforms are required. The Government are interested in the success of the BBC’s governance and regulatory arrangements in enabling progress against our ambitions for greater impartiality, an effective complaints system and a BBC that represents the breadth of the audience it was established to serve.

That is not just about how well the BBC is doing. We also want to look at the effectiveness of the framework by which Ofcom holds it to account. The Government are seeking to conclude the review swiftly and to report on its findings next year. At the same time, the BBC’s funding model faces major challenges, due to how people consume media, as we have heard in this debate. Technology has revolutionised how, when and where audiences can access and watch content. An increasing number of households are choosing not to hold a TV licence as fewer people choose to watch live television or other activities which require a TV licence. If this trend continues as expected, that presents clear and looming challenges to the sustainability of the licence fee.

It is not just the Government who have these concerns. They have been echoed in today’s debate. Licence to Change: BBC Future Funding, the report of your Lordships’ Communications and Digital Committee under the chairmanship of my noble friend Lady Stowell of Beeston, whom I had the pleasure of sitting alongside, albeit briefly, in the last few weeks, found that the drawbacks to the current licence fee model are becoming more salient. We must consider how best to fund the BBC over the long term so that it can continue to succeed. It is therefore right that we examine the future of the licence fee. The Government will set out further detail on their plans in due course.

The BBC forms just one part of the UK’s vibrant public service broadcasting system. Our six public service broadcasters provide a wealth of important content—news and current affairs programmes which help us understand the world around us, original, distinctively British programming which shapes our culture and reflects our values, and programmes made in all corners of our nation and broadcast around the world.

The noble Baroness, Lady D’Souza, the noble Lord, Lord Bilimoria, and others, were right to praise the important work of the BBC World Service. The Government strongly support the BBC’s mission to bring high-quality and impartial news to global audiences in some of the most remote places in the world, particularly those parts of our globe where free speech is limited. The BBC is operationally and editorially independent from the Government, so decisions over its spending and services are a matter for the BBC, but the Foreign, Commonwealth and Development Office is providing the BBC World Service with over £94 million annually for the next three years, supporting services in 12 languages and improving key services, and that is in addition to the nearly £470 million which the Government have already provided through the BBC World2020 programme since 2016.

The noble Lord, Lord Dubs, was right to highlight the bravery of BBC journalists who report for the World Service, particularly in Iran. We regularly raise the harassment of BBC Persian staff directly with the Iranian Government as well as in multilateral fora, but I wholeheartedly agree with his tribute to them. Moreover, our public service broadcasters complement their commercial competitors by raising standards across the industry by investing in skills, boosting growth and taking creative risks. They drive growth in our booming production sector by commissioning distinctive public service content and supporting the hundreds of independent production companies that are the lifeblood of that sector.

This contribution is not limited to television. As the noble Baroness, Lady Bonham-Carter, noted, in celebrating 100 years of the BBC, we are celebrating 100 years of BBC radio. Since listeners first tuned in to daily news bulletins on its 2LO service, BBC radio has been a pioneer of public service content, from great drama to ground-breaking comedy, the newest music and the greatest of old, not least through its orchestras and choirs. Radio is also changing, as more and more people consume audio content online. With its unique position in the radio market, I hope we can have confidence that the BBC will continue to evolve to deliver high-quality and engaging audio services to the country and the globe over the years to come.

The noble Baroness, Lady Bonham-Carter, and others raised the announcements this week about changes to BBC local radio stations. Again, the BBC is rightly operationally and editorially independent of government, but the Government are disappointed that it is reportedly planning to make such extensive cuts to its local radio output. In an Answer to an Urgent Question in another place earlier this week, my honourable friend Julia Lopez set out that she is meeting the BBC next week and will be conveying to it the views raised in that Urgent Question. We wait to hear more from the BBC on how it expects these changes to affect local communities, including the provision of local news and media plurality.

As noble Lords have noted, it is not just the BBC celebrating an important birthday this year. On Tuesday, Sianel Pedwar Cymru, or S4C, the UK’s Welsh language television broadcaster, celebrated its 40th birthday. S4C is a great example of how our public service broadcasting provides for every part of the UK, not only providing an opportunity for Welsh speakers to access content in a language familiar to them but supporting the Welsh economy, culture, and society.

Channel 4 also celebrated its 40th birthday yesterday. It is an integral part of our public service broadcasting system and a great UK success story. Over the past four decades, Channel 4 has done an excellent job in delivering on its founding purposes, providing greater choice for audiences and supporting the British production sector, including in the diocese of the right reverend Prelate following its move to Leeds. The Government want Channel 4 to continue to deliver for audiences for the next 40 years and long beyond. My right honourable friend the Secretary of State is carefully examining the business case for the sale of Channel 4 and will set out further detail on our plans for the future of the channel in due course. As the right reverend Prelate and others said, there is much to be considered. The principal conclusions of the Government’s review of public service broadcasting were set out in our White Paper earlier this year and my right honourable friend will be able to draw on those conclusions when considering her decision.

I am grateful to the noble Lord, Lord Bassam, for giving me the opportunity to correct the record. He is right to pick up on an answer that I gave when last in this post, stemming from a confusion between salaries and total remuneration packages. One of the last things that I did before leaving was to write a letter to the Library of your Lordships’ House setting that out for the record; if it was not sent, I will make sure that it is. I am grateful for the opportunity to do that from the Dispatch Box.

Continuing with birthdays, as the noble Lord, Lord Inglewood, will remember particularly well as a former Broadcasting Minister, in March this year Channel 5 turned 25. It continues to make a vital contribution to the UK PSB system through its provision of news and its unique focus on children’s television.

Our two other public service broadcasters, ITV and STV, continue to play an important role both on and off the screen. Last year, STV was the most watched peak-time television channel in Scotland for the fourth year in succession, and in 2019, the most recent year for which detailed data are available, ITV spent more than £250 million outside London, directly employing more than 2,000 staff and indirectly supporting many more. That is not to mention its 3,000 hours of national and regional news, with “STV News at Six” having held Scotland’s number one news programme slot since 2019.

However, despite these ongoing successes, there are also challenges ahead for our public service broadcasters. I have referred already to some of the specific challenges facing the BBC, but in many ways, they are symptomatic of broader changes in the sector, which create both opportunities and risks. One of those is advances in technology. Just as the advent of cable and satellite services revolutionised broadcasting in previous decades so internet-delivered services are revolutionising it now, creating new distribution methods and potential business models. It is notable, for instance, that 79% of households with a television set now choose to connect it to the internet.

Changing consumer habits are also a factor. Today’s viewers now have huge choice in what they watch and how they watch it, and are taking advantage of that choice. Two-thirds of households subscribe to video-on-demand services like Netflix and Disney+, and in September 2021 YouTube reached 92% of online adults in the United Kingdom. Viewers are shifting to different platforms, types of content and modes of viewing: telephones, laptops, short-form, long-form, on-the-go and around the house. To be a successful modern broadcaster, it is important that broadcasters make their content available in a multitude of formats across a wide range of devices and platforms.

Increased competition is also changing the sector. New global players, particularly US-based streamers, as noble Lords have noted, are using their greater financial resources to compete with both our public service broadcasters and our commercial ones. That is not just a question of competition for viewers but for the programmes they show. In 2019, the public service broadcasters in the UK were collectively able to spend just under £2.8 billion on new content. At the same time, Netflix alone spent an estimated £11.5 billion on production globally.

In April this year, the Government set out their proposals for supporting our public service broadcasters, using our new legislative freedoms to deliver a regulatory framework which works in the best interests of the UK. We were able to draw upon much previous work, including the report of the Communications and Digital Committee of your Lordships’ House, at that time chaired by my noble friend Lord Gilbert of Panteg. As a result, the White Paper contained a number of proposals to support British broadcasters to prosper in this new media environment.

The first of these relates to prominence. An important part of our public service broadcasting system is ensuring that public service content is readily available to as wide an audience as possible and easy to find. But as audiences increasingly watch content online, our broadcasters, including the BBC, are finding it increasingly difficult to secure and maintain their presence on global platforms. We announced in our White Paper plans to legislate for a new online prominence regime, so that PSB content is made available and given protected prominence across designated TV platforms. Building on Ofcom’s recommendations, we believe that legislating for prominence will not only support the future sustainability of public service broadcasters; it will also mean that viewers can continue to find the content they value. We understand, and share, the concerns of our public service broadcasters that action to address this issue is needed as soon as possible. I am glad to hear that echoed in today’s debate.

I also want to touch briefly on the listed events regime, which helps to ensure the free and universal availability of key moments from some of our most loved sports. In recognition of the key role that our public service broadcasters play in distributing content which is distinctively British and of interest to audiences in the UK, the Government have announced their intention to make qualification for the listed events regime a benefit specific to our public service broadcasters. This will ensure that they have the opportunity to show national sporting events such as the Paralympic Games and the Women’s EUROs, both rightly praised by the noble Lord, Lord Addington, for years to come. We are considering whether digital rights should be brought in scope of the regime to reflect the rapidly changing viewing habits of UK audiences and the growth in on-demand streaming services.

Video-on-demand services such as Netflix and Amazon Prime provide huge value to UK audiences and in many cases significant, and growing, contributions to the UK economy. But these on-demand services, apart from BBC’s iPlayer, are not subject to Ofcom’s Broadcasting Code, which sets out appropriate standards for content, including for harmful or offensive material, accuracy, fairness and privacy. This means that the television-like content which people watch is regulated differently depending on how they choose to watch it. Some services available in the UK are not regulated in the UK at all. That is why we intend to bring larger TV-like on-demand providers, which are not regulated in the UK but which target and profit from UK audiences, under Ofcom jurisdiction. We will also give Ofcom powers to draft and enforce a new video-on-demand code, similar to the existing Broadcasting Code. These changes will mean that UK audiences will be better protected from harmful material and better able to complain to Ofcom if they see something about which they are concerned.

My noble friend Lady Harding of Winscombe was right that the people who are moving to these new methods of watching television the quickest are the young, and the noble Baroness, Lady Benjamin, was right to raise our important responsibility to children. UK-wide television tax reliefs aimed specifically at children’s television programming have since 2015 directly supported more than 500 projects and over £600 million of investment in children’s content. We are grateful to have worked closely with the noble Baroness, Lady Benjamin, on introducing powers for Ofcom to monitor the commercial public service broadcasters and enable them to set criteria for the provision of children’s television programming; and of course, we chose children’s television, alongside radio, to pilot contestable funding, as she mentioned in her contribution. An evaluation of the three-year pilot of the young audiences’ content fund is taking place to determine its impact. The potential for further investment will be assessed against that evaluation and future public service broadcasting needs.

The noble Viscount, Lord Colville of Culross, mentioned smart speakers. Today the whole sector faces perhaps its greatest challenge yet with the emergence of online audio services and smart speakers. I share the noble Viscount’s concerns about the potential impact of these devices on the radio sector. Officials in DCMS are actively exploring potential options for bringing forward legislation to protect the position of radio on smart speakers in a way consistent with the proposals to develop a new pro-competition regime for digital markets.

The noble Lord, Lord McNally, said that it was a Conservative Government who established the BBC. As this is a Liberal Democrat debate, I should say that a Conservative and Liberal coalition presided over its birth. The BBC was founded on 18 October 1922. The following day, Tory Back-Benchers met at the Carlton Club and pulled the plug on that coalition, giving the BBC its first big story to cover. Those were the days when Tory Back-Benchers brought down Prime Ministers from other parties. It was thus a Liberal politician, the Postmaster-General FG Kellaway, who noted:

“If the best use is to be made of this new form of communication, it must touch life at many aspects”.—[Official Report, Commons, 4/8/1922; col. 1955.]


I think we would all agree that our public service broadcasters have delivered on that vision. Now is the time, as we have done today, to look ahead to the next century and provide the foundations for future success. I am very grateful to the noble Lords who have given us the opportunity to do so.

[Baroness Stowell of Beeston (Con)]

Before my noble friend sits down, may I seek a couple of points of clarification on legislation? My noble friend echoed the Secretary of State in saying that the media Bill will be with us shortly. Yet a decision on the privatisation of Channel 4 has yet to be taken. Could he confirm that, if the Government decide not to go ahead with the privatisation of Channel 4, the media Bill will still come forward shortly because it is the non-Channel 4 aspects that are deemed incredibly urgent?

The Minister also made some comment in response to the noble Viscount, Lord Colville, on digital competition. However, I am not entirely clear on what he is saying about the prospect of a digital competition Bill. He may remember that I was very keen, if possible, that we should combine the two things, particularly if Channel 4 is no longer on the agenda.

Freedom of Expression (Communications and Digital Committee Report)

Baroness Stowell of Beeston Excerpts

Thursday 27th October 2022 Lords Chamber

[Baroness Stowell of Beeston (Con)]

It is an honour to follow such a respected philosopher as the noble Baroness. Indeed, it was a privilege to join the committee under my noble friend Lord Gilbert’s excellent chairmanship, but that was not until after the inquiry was completed, so I cannot claim any input into this excellent report.

In January this year, I took on the daunting challenge of succeeding my noble friend as chair and maintaining the committee’s reputation for undertaking inquiries of relevance and impact. Clearly, I endorse the conclusions and recommendations of the committee’s report. I believe in freedom of speech—online or in the real world—and welcome the Government’s decision to look again at the most contentious element of the Online Safety Bill—which my noble friend has already referred to—which threatens to undermine that. But, like everyone else, I also care deeply about the protection of children from harm, and my concerns have only been reinforced by the recent inquest into the tragic death of Molly Russell.

Doing nothing when it comes to regulating the internet is not an option I would consider acceptable. The Communications and Digital Committee will reconsider the Online Safety Bill once the Government have announced how they plan to change it before it reaches your Lordships’ House. I am not going to comment further on the freedom of speech aspects of the committee’s report today. Instead, I want to emphasise the importance of the other half of the regulatory equation to which the Government, frustratingly, have not so far attached equal priority, even though, as my noble friend has said, it is just as important if we are to have a safe as well as economically healthy online world: legislating to tackle the dominance and overwhelming power of the big tech firms by allowing much-needed competition to them.

Chapter 4 of the committee’s report sets out most powerfully the case and urgent need for the Digital Markets Unit, which is part of the Competition and Markets Authority, to be put on a statutory footing and given ex-ante powers to intervene more effectively in these markets. My noble friend already referred to one of the key conclusions in chapter 4, which is about these platforms not being allowed to monopolise the digital public square. The report also recommends that the DMU should, where necessary,

“block mergers and acquisitions which would undermine competition.”

Earlier this year, determined to continue the good work started by my noble friend, the committee held accountability sessions with the Government and the CMA to maintain the pressure for action, including calling on the CMA to use its existing powers to their very limit while waiting for these long-promised and much-needed new powers. Since then, and to its credit, the CMA has been doing that, as evidenced by its recent ruling against Meta’s acquisition of Giphy—the GIFs that are used in tweets and different forms of social messaging. Noble Lords and others might shrug their shoulders and wonder, “So what? What’s the benefit of that?” Well, let me explain.

Had this acquisition been allowed to continue, Meta would have been able to increase its market power by denying or limiting other social media platforms’ access to these GIFs, thereby pushing people to Facebook, Instagram and WhatsApp, which already make up 73% of user time spent on social media in the UK—or it would have been able to change the terms of access to Giphy GIFs, requiring Twitter, TikTok and Snapchat to provide Meta with more data from UK users in return for their access. Disentangling Giphy from Meta will now be a slow and costly operation and a lot of the anti-competition damage will already have been done, but if the DMU had had ex-ante powers it would have been able to prevent the acquisition, or at least the integration, of the business until it had carried out its work.

The internet and the big tech firms have revolutionised our world, and they deserve huge credit for their innovation and the risks they have taken to make a success of their businesses and create opportunities for so many others. But we cannot ignore the damage they cause socially and economically because of the control and power they hold. This threat will only grow if there are no limits to their dominance and everyone else is forced to rely on them, whether as individuals, businesses or even nation states.

It cannot be right that a handful of powerful individuals or corporate entities with no democratic mandate can influence and shape our society and affect our social norms. We need to ensure that the Online Safety Bill does not inadvertently exacerbate that threat, and we need to accept that we will need to keep evolving regulation in this area. But the Government also need to recognise that, on their own, online safety legislation is not enough, and they must bring forward with equal if not more urgency the digital competition Bill. When my noble friend comes to wind up, could he explain why the Government have, so far, failed to recognise this? Could he also tell us what plans the Government have to bring forward this necessary legislation as soon as possible?

Product Security and Telecommunications Infrastructure Bill

Baroness Stowell of Beeston Excerpts

Report stage
Wednesday 12th October 2022 Lords Chamber

[Lord Blunkett (Lab)]

My Lords, I would have made a very similar speech to the noble Lord. As he has made my speech for me, I will not keep the House any longer, other than to say that when the big guy is versus the small guy it is beholden on us to support the small guy.

[Baroness Stowell of Beeston (Con)]

My Lords, just because it is my first opportunity to do so, I congratulate my noble friend on his new role and welcome the noble Lord, Lord Harlech, to his place on the Front Bench.

I do not contribute to this debate with any enthusiasm because, having made my points at all previous stages of this Bill through your Lordships’ House, it disappoints me that we are here where we are. I will repeat some of my points briefly. Like everybody else, I think it is important to emphasise that I, too, wholly endorse fast and full rollout of high-quality broadband to all parts of the UK.

As has been said already by others, my concern is really on behalf of the site owners. It is important for us to keep in mind, particularly if we have not been following this Bill closely, that when we talk about site owners this is not just about wealthy landowners but a whole range of different smallholdings and community property and that sort of thing. A whole manner of different people are involved. They were told that the reduction in rental income would be reinvested by the mobile network operators in delivering the rollout. It seems that there remains a lack of confidence on their part, because there is insufficient evidence to demonstrate how the new code is working. They are expected to engage in negotiations with commercial entities on trust while fearing their loss is at someone else’s gain. We have heard the extent of this in other groups earlier this evening.

As I have said before, the benefit of rollout relies on the willingness of site holders to participate; when we rely on people to succeed, they deserve to be heard and listened to. When their concerns are about fairness, they cannot be ignored. I am concerned about not causing any delay to rollout, but the arguments and evidence we have heard today is that ignoring the concerns of site owners is doing just that.

In Committee, I said I would support an amendment—it was Amendment 50 in Committee—that simply required the mobile network operators to report annually and transparently to Ofcom on a range of performance measures, including their overall investment into mobile networks alongside a range of other things. This amendment, ably moved by the noble Baroness, Lady Merron, goes much further and includes a review, as we have heard, and the potential for the type of reporting requirement I have just described to be an outcome of it.

In my view, the Government have to move from their current position if they are to bring all site owners on side—and we need them on side to get the rollout. In the absence of any willingness on the Government’s part while the Bill is in Parliament, the case for Parliament imposing this independent review is compelling. That said, I hope my noble friend will have given the points made in this debate full consideration, and I will listen carefully to what he has to say.

[Lord Fox (LD)]

My Lords, I congratulate the noble Baroness, Lady Merron, on her presentation of this amendment. It is an elegant composite of the discussions we had in Committee, and that is why I was very happy to put my name to it. We have heard some compelling speeches and I suggest to the Minister that they have come from 360 degrees in this Chamber, which generally indicates a klaxon for any government Minister. This really is an issue.

Digital Regulation: Communications and Digital Committee Report

Baroness Stowell of Beeston Excerpts

Thursday 21st July 2022 Grand Committee

Moved by

[Baroness Stowell of Beeston]

That the Grand Committee takes note of the Report from the Communications and Digital Committee Digital regulation: joined-up and accountable.

[Baroness Stowell of Beeston (Con)]

My Lords, I am very pleased to introduce this debate on our report, Digital Regulation: Joined-up and Accountable. I will emphasise the principle behind that title quite a bit in the remarks I make today.

Before I get into the substance of my contribution, I note that this is my first debate as chairman of the Communications and Digital Select Committee. I pay tribute to my predecessor, my noble friend Lord Gilbert of Panteg. He is very well respected across the industries and sectors that the committee focuses its work on. He has become a respected figure because he has ensured that we as a committee have focused on matters of importance and that we have done so in a fair and balanced way. The work we have done has had some impact as a result. He is a tough act to follow.

I add to this tribute by paying thanks to Theo Demolder, who supported the committee for three years, initially as our policy analyst and then as our clerk. He finished that role at the beginning of this year. I also thank the policy analyst who then worked with us and remains part of our team, Emily Bailey Page. I would like to welcome our new clerk, Daniel Schlappa. They and the whole committee are greatly assisted, as always, by the wonderful Rita Cohen. I am very grateful to the team.

I am grateful to all noble Lords who sit on the committee and I am particularly grateful to my noble friend Lord Vaizey for being here to speak today. We had to decide whether to accept what I might describe as this “graveyard slot” in the Moses Room on the last day of term during a hot and sunny week, or perhaps wait months for another opportunity to have this debate. The trade-off was few people being available, but I know my colleagues are with me in spirit. I am grateful to the Labour and Lib Dem Front Benches for fielding their A-teams and to my noble friend the Minister for his never-ending zeal and commitment to his brief, whatever the weather or political events outside. I look forward to everybody’s contributions today.

This inquiry and the resulting report were the final pieces of work undertaken by the committee under my noble friend’s chairmanship, as a follow-up to a major inquiry into digital regulation carried out by the committee in 2019. Three years ago, the committee’s central finding was that the digital world requires not merely more regulation but a different approach to regulation. Digital technologies are playing an ever-greater role in our lives and the regulation of those technologies deserves increasing scrutiny.

As I say, that does not necessarily mean more regulation, but we believe that regulators would need new and different powers. Indeed, they would need to adopt a different kind of regulation. It would need to be principles-based, with regulators having to exercise greater flexibility and judgment, which in turn would require greater collaboration between regulators and much greater and co-ordinated parliamentary oversight than ever before.

We published our report Digital Regulation: Joined-up and Accountable in December 2021 as a follow-up to the earlier inquiry. So fundamental was the need for a change of approach in regulation, we thought it was important to find out what progress had been made in the two and a half years since. In December last year, regulators appeared to be on the verge of being granted broad new powers, urgently necessary to keep pace with the fast-changing digital world.

Unfortunately, since then, what was expected has not yet come to pass. The parliamentary progress of the Online Safety Bill has recently been delayed, and the proposals to place the Digital Markets Unit within the CMA on a statutory footing have not been brought forward, despite multiple reviews and consultations over nearly five years pointing to this as the way forward.

In the meantime, other jurisdictions are pulling ahead. The Digital Markets Act and Digital Services Act have been adopted this month by the European Parliament. As a result, the UK risks becoming a rule taker, rather than a rule maker, in this area of digital regulation. To state the obvious, this means that we could lose our influence in setting the agenda. It is hard to understand why the Government have been prepared to let this happen, because designing our own framework was a benefit of us leaving the European Union, and the UK’s proposed approach has been held up as much better—I will come back to this later.

Our report, published seven months ago, at a time when we were on the verge of change, focused on the need for better co-ordination and co-operation between regulators—and that requirement remains a priority. But, as a committee, we were also clear that more co-operation between regulators needed to be accompanied by updates to the legislative framework, because, however well co-ordinated they are, they will be ineffective if they do not have the powers required.

I of course understand that the call for more regulatory power can often trigger alarm. Mission creep and unnecessary red tape would not be supported by any sensible person, which is why our report recognised the legitimate concerns that many will have about regulators being given broad new powers and increased discretion to make judgments in complex areas. Furthermore, this is precisely why our report recommends that increased parliamentary accountability for regulators is an equal necessity. What we cannot escape, and what we are clear about, is that, given the pace of technological change, regulation needs to become more principles-based. But we are equally clear, as I say, that this must be coupled with greater parliamentary oversight.

I turn now to what we reported in December 2021, having reviewed progress against that earlier March 2019 report. In our first report, we asked for regulation to be strengthened and better co-ordinated, to make it capable of responding to the fast pace of change and the impact of that across the economy and society. The Digital Regulation Cooperation Forum or DRCF—even the acronym is a mouthful—was then established in July 2020. This was an early step in the right direction and includes representatives of the CMA, Ofcom, the ICO and, latterly, the FCA.

But there are persistent challenges that are not being dealt with adequately, which we raised in our December 2021 report. For instance, we found that more needed to be done to improve co-ordination and co-operation, particularly to identify new and emerging risks. The DRCF told us that it is difficult to recruit people with the right skills to scan the horizon for new regulatory challenges and that it cannot compete with the salaries that big tech companies can offer to skilled individuals. Yet, although it was struggling to do that, there is a proliferation of horizon-scanning activity in industry, academia, think tanks and advisory bodies. One of our witnesses—Andrew Murray from the LSE—told us that new reports identifying a lot of these challenges were coming out “almost daily”. In fact, as an expert working on this full time, even he could not keep up with it, although it was supposed to be his day job.

So there was no need for the DRCF to attempt to replicate this work, but it needed to do better to take advantage of the work already being done by others. As a result of that, we are pleased to see that it is doing so and joining up more now with SMEs, start-ups and academia via external engagements and symposia. However, we still feel that there is more to be done. In our report, we recommended that full membership of the DRCF be extended to all statutory regulators with an interest in the digital world, and partial membership extended to relevant non-statutory and advisory bodies.

The second challenge we identified in our report is something I have already talked about: a lack of parliamentary accountability for regulators as their work expands. Just as we believe that the work of regulation in the digital world needs to be “cross-sectoral”, if noble Lords will forgive the jargon, so too must be the process of holding regulators to account in Parliament. As I have already said, as the work of regulators expands and involves more discretion and judgment, some parts of the industry are understandably concerned that this will lead to overreach and unaccountability.

The committee believes that if the DRCF were placed on a statutory footing under a non-executive board of directors and led by an independent chair, this would enable Parliament to hold the DRCF directly accountable. We made that recommendation in our report. Unfortunately, it was not supported by the Government, but this accountability is becoming increasingly important as individual regulators increasingly take joint decisions.

As noble Lords will know, no single Select Committee has a remit to focus on digital regulation across government departments and industry sectors. Many Select Committees have remits relating to digital regulation but must balance them alongside other work. Indeed, the Communications and Digital Committee must balance scrutiny of digital regulation alongside work on the media and creative industries. Stakeholders told us that they would welcome formal public scrutiny of the work of the DRCF via a parliamentary committee, both as a counterweight to regulatory reach and to ensure that regulation is effective.

Again, one of our specific recommendations was that a Joint Committee of Parliament be established to provide sustained scrutiny of digital regulation. In fact, it is worth noting that the Joint Committee on the Online Safety Bill—the committee that did the pre-legislative scrutiny—agreed and made a similar recommendation. Unfortunately, the Government did not support that recommendation, either. Maybe my noble friend the Minister can offer us some further thoughts on that, as we are identifying it as still a key issue.

The third key concern was that the DRCF lacks robust mechanisms for resolving conflicts that may arise between regulatory agendas, increasing the risk that powerful tech companies will be able to play regulators off against each other. For example, encryption might be favoured from a privacy standpoint, but child protection advocates may seek to limit it. One of our witnesses, Dr Elena Abrusci, warned that

“the DRCF may suffer from a power imbalance between regulators. Without an independent chair or a procedure to manage trade-offs between contrasting interests, the DRCF could be limited in its actions.”

So without statutory underpinning of the DRCF, which is something we have called for and which the Government do not support, there is a limit to what the DRCF can achieve here.

We also made a recommendation to formalise DRCF co-ordination by introducing statutory measures, including duties for regulators to consult one another and the creation of statutory information-sharing mechanisms. We welcome the Government’s commitment in response to that that there will be statutory duties for the CMA and the ICO to consult other regulators, but what legislation will that appear in and when will it come forward?

Since our report, albeit that there were specific recommendations that the Government did not support, as I identified, they none the less gave overall support to the report, and we welcome that. They agreed with us about the scale of opportunities and challenges posed by digital innovation, as well as the importance of ensuring that our regulatory system keeps pace with developments in digital technologies and markets.

The DRCF itself published its workplan for 2022-23 a few months ago, including plans to build further on the joint statement between the ICO and the CMA from the year before about data protection and competition, and sharing knowledge on algorithmic auditing. We welcome the joint statement from Ofcom and the CMA earlier this month on online safety and competition in digital markets. We also welcome action from individual regulators, such as the CMA’s decision to launch market investigation references into Google and Apple’s dominance in mobile app ecosystems, while it awaits the necessary powers to place the Digital Markets Unit on a statutory footing.

So all of this is welcome, but without the DMU being put on a statutory footing and the new pro-competition regime we will not have a UK equivalent of the news media bargaining code, which has provided enormous benefit to the news industry in Australia. I know that the Government care about the future of journalism. They committed to a news media bargaining code in their response to the consultation on the pro-competition regime for the digital market, but the policy solutions that the media industry is crying out for are sat on the table.

We welcome the initial progress, but there remains a long way to go. We as a committee are concerned that the UK is falling behind in this vital area of digital regulation, particularly in the area of competition. We urge the Government to bring forward legislation to put the DMU on a statutory footing and give it the ex-ante powers it needs to address fundamental imbalances in the market.

As I have commented before in debates, my noble friend has had busy slate of legislation to steward through your Lordships’ House, but, as much as I am concerned for his well-being in undertaking all that work, I am now also concerned about the potential delay to some of this. Will my noble friend give us an update on what is happening to the Online Safety Bill, the latest on the media Bill and, in response to something in the newspaper today, the Government’s latest position on the independent review of the BBC’s future funding? I look forward to all noble Lords’ contributions to this debate, particularly the Minister’s, and I beg to move.

--- Later in debate ---

[Baroness Stowell of Beeston (Con)]

My Lords, I am very grateful to everyone for their powerful contributions. This may have been a small Committee, but it has been perfectly formed.

To repeat something that I said at the beginning, I welcome the important work of the statutory regulators, which are responsible for a lot of important aspects of our national life. It is incumbent on me in particular—as chair of the Communications and Digital Committee, which engages with all of them—to put on record just how much we acknowledge and recognise the important work they do.

I also again welcome the creation of the DRCF. As I said, this is an important step in the right direction and, as noble Lords touched on, its work is already making a difference, which is to be acknowledged. I was taken by my noble friend the Minister’s remarks on the benefits, sometimes, of something not being statutory but agile and flexible. I take that point, but I emphasise that the nature of what we are talking about requires us to keep this under constant review. I remain of the view that there needs to be some statutory underpinning for a body that is able to pull together the work of these various regulatory bodies and deal with the occasional conflicts and issues that might require trade-offs. If it were to be on a statutory footing, that would make its accountability and the parliamentary oversight of it that much more effective.

I also endorse noble Lords’ references to the non-statutory bodies that do important work in this area. I will name a few: the Internet Watch Foundation, the Advertising Standards Authority and the British Board of Film Classification—that is not an exhaustive list. It is important that we recognise their work, the importance of the statutory regulators working hand in hand with them and the requirement for that to continue.

I was encouraged that my noble friend said that the Government remain committed to bringing forward the draft Bill on digital competition. What he said about the potential for a new Joint Committee to scrutinise the implementation of the Online Safety Bill once it is passed by Parliament was interesting. As he alluded to, when that Bill comes to your Lordships’ House, we might want to return to some of the issues we have talked about. If a Joint Committee is to be set up specifically for that, it may make sense to look at its remit.

In closing, I want to repeat something that the noble Lord, Lord Clement-Jones, said: regulation is not the enemy of innovation; it can encourage public trust and therefore the take-up of new technologies. It is important for us to understand that properly. As I said in my opening speech, I acknowledge and appreciate that there is fear about regulation being stifling. What we are calling for and recommending in our report—I am very pleased with my noble friend’s constructive response—is the need for a new approach to regulation in the digital sphere and making sure that our regulators are equipped to serve the public interest as a whole. Just believing that what exists currently will be adequate for a very different kind of world is not right. Things are changing, and we need to make sure that regulation changes too.

To illustrate that point, I turn to of putting the Digital Markets Unit on a statutory footing. One of the real-life impacts of it not having ex-ante powers—at least, not yet—and therefore not having the ability to assign strategic status to the likes of Google or Facebook is that it is very limited in how it can intervene in these markets at the moment. As I say, and wish to stress, intervention by regulators is a very sensitive area for anything to be done. In 2018, the CMA did a study of online advertising which showed that both Google and Facebook were consistently earning profits well above what is required to reward investors with a fair return to the tune of £2 billion. That was in 2018. The real risk of not being able to revisit this sort of thing—which would need to be very sensitively done; it is not something you would want to do without proper oversight—means that customers are potentially being overcharged for products and services that make heavy use of digital advertising, such as consumer electronics, hotels and insurance. In a world where we are talking about a cost of living crisis, that brings into focus that there is sometimes a need for regulators to intervene in the public interest which, at the moment, they would be not well equipped to do. Should it be decided that that is the right thing for them to do, the oversight of that does not exist in the way we might want it to in the future.

This has been a very helpful and rewarding debate. I say again that I am very grateful to all noble Lords for their contributions. I am grateful to the Minister for his update on the legislation and where we are with the Government considering the committee’s recommendations on the future funding of the BBC and their decision to launch an independent inquiry. I look forward to reconvening with him after the summer break when we are all refreshed to crack on with the important work we are responsible for.

Motion agreed.

Product Security and Telecommunications Infrastructure Bill

Baroness Stowell of Beeston Excerpts

Lords Hansard - Part 2 & Committee stage
Wednesday 29th June 2022 Lords Chamber

It is the final group in Committee, so where in all this—as my noble friend Lord Fox and I have been asking each time we debate these issues—are the interests of the consumer, especially the rural consumer? How are they being promoted, especially now that market review is only once every five years? That is why we need these reviews in these amendments. We tried in the last Bill to make the Government justify their strategy. Now it is clear that changes to the ECC are not fit for purpose and we will try again to make the Government come clean on their strategy.

[Baroness Stowell of Beeston (Con)]

My Lords, before I comment on this group, I have it on good authority that tomorrow is my noble friend the Minister’s birthday, so allow me to be the first to wish him a very happy day. I hope that his evening tomorrow is more enjoyable than this evening.

I want to focus my comments on Amendments 45 and 50. Amendment 45 would, as we have already heard, require the economic impact assessment to be carried out. I understand that it was promised by Ministers in 2017, although I know that my noble friend disputes this, or, rather, has a slight variation on what was promised. Amendment 50 would require reporting by the mobile network operators to achieve much-needed transparency.

By the time I went to add my name to Amendment 50, in the name of the noble Lord, Lord Clement-Jones, it was already fully subscribed, but I will happily add my name to it if he brings it back on Report. As my noble friend the Minister may recall from Second Reading, my concern on behalf of site owners is that they were told that a reduction in rental income would be reinvested by the mobile network operators in delivering the rollout. It seems that there remains a lack of confidence on the part of the site owners—we have heard of this already tonight—because they have insufficient evidence to demonstrate how the new code is working. They are expected to engage in negotiations with commercial entities on trust, while fearing that their loss is someone else’s financial gain. Amendment 50 seems the least the Government could agree to when faced with that situation.

I was torn regarding Amendment 45, in the name of the noble Baroness, Lady Merron, on the economic impact assessment, because I am concerned that carrying out a full economic impact assessment could delay rollout. However, I also know that not doing so is fuelling that distrust and sense of unfairness on the part of the site owners. As we have already heard today, the benefit of rollout relies on the willingness of site owners to participate. When we rely on people to succeed, they deserve to be heard and listened to.

My noble friend the Minister said on Second Reading that it is too soon to carry out a full economic impact assessment. I was going to ask whether the Government have any plans to do one at all and, if so, whether he could tell us when, but I was very interested to hear what the noble Baroness, Lady Merron, said about the conversation she had with him before the Bill was introduced. Unfortunately, it was a briefing I was not at. In light of that, if the Government have already done sufficient work to allow them to produce in public an economic impact assessment without delaying anything, that sounds like a sensible way forward. I will be very interested to hear how my noble friend responds to what the noble Baroness, Lady Merron, said.

I clarify that, specifically, I do not support Amendment 48, which the noble Baroness introduced. As I understand it from the Member’s explanatory statement, it seems to enshrine what I might call the Openreach monopoly in multi-dwelling units. It would therefore limit competition in the way that we discussed earlier, even though we were not able to get into a full debate because my noble friend Lord Vaizey was not in the Chamber to move his amendments—noble Lords will know what I am talking about. I look forward to the Minister’s reply.

Product Security and Telecommunications Infrastructure Bill

Baroness Stowell of Beeston Excerpts

Lords Hansard - Part 1 & Committee stage
Wednesday 29th June 2022 Lords Chamber

Moved by

[Baroness Stowell of Beeston]

18: Clause 60, page 45, line 22, at end insert—
“(5) In paragraph 74 (power to fly lines), after sub-paragraph (4) insert—“(5) References in this paragraph to installing lines include carrying out works to install, maintain and keep such lines and other reasonably associated apparatus.””

[Baroness Stowell of Beeston (Con)]

My Lords, if my noble friend Lady Harding is not in the Chamber—I was not expecting to do this—I will move the amendment on her behalf. I look to other noble Lords whose names are on this amendment to introduce it more comprehensively than I can. I just want to get this debate going, because I know that there is broad support across the Chamber for Amendment 18. Noble Lords may remember that I expressed my support on this matter when it was referred to at Second Reading, because it is of benefit to all telecoms operators. With that, I beg to move.

[Baroness Harding of Winscombe (Con)]

My Lords, I apologise. I rise to speak to Amendment 18 in my name, and I thank my noble friend Lord Vaizey, the noble Baroness, Lady Merron, and the noble Lord, Lord Fox, for putting their names to it. I apologise—I am slightly breathless, as the noble Lord, Lord Fox, gave us a little bit of disinformation about today’s Order Paper.

--- Later in debate ---

[Lord Vaizey of Didcot (Con)]

The whole Committee stage debate has already become surreal, and we are only about 20 minutes into it.

If I can take noble Lords back to the tea room, where I was this morning, we were discussing the lack of intervention in debates in the House of Lords, which is apparently seen as a Commons trait and discouraged in your Lordship’s House. In fact, I was told by a very senior chair of a committee—who is in the Chamber—that on no account was one to take an intervention at Committee stage. But I felt that as the noble Lord, Lord Fox, had already transgressed so badly in detaining two eminent Conservative Peers in the tea room, I would simply allow him to continue to flout convention and break the rules. I also felt that my speech was going so badly that, just as I used to do in the other place, giving way at an opportune moment to gather one’s thoughts was sensible.

[Baroness Stowell of Beeston (Con)]

I am very grateful to my noble friend for giving way. I shall make just two points to him and the rest of the Committee. Of course it is permissible—indeed, it is encouraged—for us to engage in interventions during debate, but they should be brief and to the point. I take this opportunity to also remind my noble friend that his amendments have not been moved and we are in danger of debating his amendments, instead of the amendment which another noble friend moved—or indeed, which I moved on her behalf, and she then expanded on my introduction.

[Lord Vaizey of Didcot (Con)]

I take the comments from the chair of my own committee in good heart. Clearly, I am on a learning curve in a very public way.

I simply reiterate that this Bill is about making planning as simple as possible, balancing the interests of landowners and infrastructure providers. The mood of this House is that we support Amendment 18, to allow the upgrade of telegraph poles. We understand that the Government will also support such an amendment if it is appropriately drafted. We look forward to the Minister’s comments on why this is a sensible way forward.

I merely add as an aside that the purpose of the Government’s funding and broadband rollout is to bring broadband to as many premises as possible. We all know from our own experience where the altnets are going. Quite understandably, they want a return on their investment, so they are going to cities and laying fibres in areas where Openreach is already present, where they know that they can get a return. There will be many other areas of the country where, understandably, they will not be able to afford to put in infrastructure. For the Government simply to turn their back on thinking hard about how to upgrade the many multi-dwelling units in different parts of the country simply because it is perceived to be an Openreach problem and not a problem for all telecoms providers is a missed opportunity.

--- Later in debate ---

[Viscount Stansgate (Lab)]

My Lords, I will take advantage of the flexibility of debate outlined by the former Leader of the House to say that, although we are debating the amendment moved by the noble Baroness, Lady Harding, I for one would be interested to know whether the amendments that were to be debated, but for this very unfortunate cup of tea, will be moved on Report. It would help my fuller understanding of how debate on the Bill might progress.

[Baroness Stowell of Beeston (Con)]

I can respond to that, since that question is being put to me. There is nothing procedurally to prevent my noble friend tabling an amendment on Report that would cover the same issues.

[Lord Vaizey of Didcot (Con)]

I will take advantage of the flexibility in the Chamber to say that, notwithstanding the intervention of a cup of tea, my amendment will be moved on Report.

--- Later in debate ---

Amendments 24 and 27 are predicated on a no-network valuation—

[Baroness Stowell of Beeston (Con)]

I am so sorry to interrupt the noble Earl, who is clearly giving us a sense of this important and wide-ranging matter. However, he will know that the Member introducing a group of amendments is asked to stick to 20 minutes maximum—and we are now over 22 minutes.

[The Earl of Lytton (CB)]

My Lords, I have a group of amendments here, all of them covering very technical bits and pieces and, rather than trying to deal with one at a time, disaggregate them and give an individual explanation for each, I felt it would be helpful for the Committee if I put them in context and dealt with in this way. I assure the noble Baroness that I shall be as speedy as I can, but I crave the Committee’s indulgence in that respect, and I should like to continue with what will be my principal contribution on the Bill.

I was talking about the question of fair value and had got to Amendment 24. This amendment would ensure that, where a site agreement is first renewed using part 5 of the code, the courts are unable to impose a rent reduction of more than 40% on the rents that fall under the existing consideration. This would ensure that the Government’s original expectation that rates would fall by no more than a maximum of 40% was delivered by legislation, and would prevent what I described to the Minister as the cliff edge that has occurred in the arrangements. Subsequent renewals under the code would then be made on a no-network valuation. It would also enable consideration of the effects of the policy on rollout and upgrade of sites and whether the objectives were being met.

Amendment 25 would require the Secretary of State to publish guidelines on the level of factors influencing the expected value of the imposed considerations. This would ensure some clarity about the Government’s expected policy. Amendment 26 would phase in the application of a newly fixed rental consideration imposed by the courts. The intention would be for the new consideration to become payable only, if it was a reduction, after 24 months from the date of the court order. Prior to that point, the operator would continue to pay the previous rent. Amendment 27 is similar to Amendment 26. This amendment would create a tiered phase-in period for the application of a new consideration imposed by the court.

The amendments fall under two options. The first tries, as far as possible, to remedy the effects that have occurred under the 2017 code. The second lot gives a sort of halfway house to build in what the Government say they are trying to do but, at the same time, ameliorate the effects with the same long-term result. I apologise for dealing with this at length. I beg to move.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, while we were debating the previous group, the Government seemed to be getting ready to embrace an influx of court cases by going from two judges to 100. The intention of the large number of amendments here is to avoid that eventuality. If the Government Front Bench is not happy with the words, it should be happy with the spirit of driving the alternative dispute resolution process. It would be good to have some acknowledgement from the Government, when we get to their response, that this ADR process will be central to avoiding the sort of things we were talking about in the previous group.

Amendment 39 is intended to force operators to give greater weight to Ofcom’s code of practice, which it is currently obliged to prepare under paragraph 103(1) of the ECC. Amendments 40, 41 and 42 aim to address non-compliance with Ofcom’s code of practice, and Amendment 44 deals with building safety. That could have been separated out into another group. I will speak specifically just to Amendments 42 and 44, because they are in my name.

Amendment 42 requires that Ofcom include in its code of practice guidelines on when operators must pay compensation to those affected by the operator’s failure to adhere to the code of practice. This compensation is limited to 100% of the total value of the contract to which the dispute relates. We do not expect that this would be the standard award and we have intentionally left it to Ofcom to draft guidelines on this issue. In fact, as my noble friend Lord Clement-Jones set out, Amendments 40, 41 and 42 work together with the aim of promoting consensus-based agreements, and to have a market that works effectively and is not stuffed up with disputes—which comes back to my first point.

In a gear change, Amendment 44 focuses on building safety, raised by the noble Earl opposite in the context of a previous group. The amendment would place a duty on network providers to ensure that any work done on communications infrastructure does not compromise building safety. Specifically, we are concerned about the interaction of digital infrastructure installation with the findings of the Hackitt report into building regulations and fire safety, which followed the dreadful Grenfell Tower tragedy.

As the Minister will be aware, in her report on the Grenfell disaster Dame Judith Hackitt recommends that the

“creation, maintenance and handover of relevant information”

should be

“an integral part of the legal responsibilities on Clients, Principal Designers and Principal Contractors undertaking … work on”

high-rise residential blocks. This matters because when a telecoms operator runs internal cabling in blocks, each hole is potentially a breach of a firewall. It seems to us that installation of gigabit-capable cabling is one of the most likely modifications a multi-residence high-rise block could face, and operators need to be obligated to meet safety requirements. If the Bill remains in its current form, digital contractors will have access rights that exceed those of the blue-light services, so where do they sit regarding their obligations to the Building Safety Act and in fulfilling the aims of the Hackitt report?

The purpose of Amendment 44 is to probe where telecoms and broadband contractors sit in the new environment of the Building Safety Act. I understand that, as a consequence of that Act, statutory instruments would be brought forward to compel certain actions from utilities contractors. My understanding is that the Government do not regard digital infrastructure as a pure-play utility function. Therefore, will there be a statutory instrument specifically to target digital infrastructure? In responding to this, the Minister may want to explain what statutory instruments are expected, with reference to which bits of which Act.

[Baroness Stowell of Beeston (Con)]

My Lords, my noble friend the Minister will remember from my remarks at Second Reading that my main concern is about the sense of unfairness that exists between the site owners and the mobile network operators. Because of that, I hope the Government will agree to look at making some changes to the legislation. We will come to the economic impact assessment later this evening. I have some sympathy with the suggestion of a mandatory alternative dispute resolution in the way it is described in Amendment 35. As I say, this is just a general gentle expression of warmth towards that as a way of signalling to people who at the moment feel a sense of some unwillingness on the part of the Government to recognise that there needs to be some change. I look forward to hearing what my noble friend has to say.