Oral Answers to Questions

Christian Matheson Excerpts

Wednesday 19th April 2017 Commons Chamber

[The Prime Minister]

My right hon. Friend is absolutely correct. Obviously we have committed to meet our NATO pledge of 2% of GDP being spent on defence every year of this decade. We are delivering on that. We have got a £36 billion defence budget that will rise to almost £40 billion by 2020-21—the biggest in Europe and second largest in NATO. We are meeting our UN commitment to spend 0.7% of GNI on overseas development assistance. I can assure him that we remain committed, as a Conservative party, to ensuring the defence and security of this country and to working for a stronger world.

[Christian Matheson (City of Chester) (Lab)]

Schools in Cheshire West and Chester were already underfunded by about £400 per pupil on average before the new national fair funding formula came in, and now every school in Chester is cutting staff and raising class sizes. That is how the Government have protected the education budget, so will the Prime Minister explain to the House why the national funding fair formula provides neither fairness nor funding?

[The Prime Minister]

As I have said in this Chamber before, we need to look at the funding formula. We have published proposals for fair funding, we have consulted on those proposals, and in due course the Government will respond to those proposals.

I was very interested to see the hon. Gentleman being interviewed yesterday and being asked whether he would put a photograph of the Leader of the Opposition on his election literature. Sadly, he said that the only photographs he wanted on his election literature were his own; he was not prepared to support the leader of his own party.

Article 50

Christian Matheson Excerpts

Wednesday 29th March 2017 Commons Chamber

[The Prime Minister]

We will work with the devolved Administrations, but we will also listen to businesses and others from across the United Kingdom as they make clear to us their interests as the negotiations go forward.

[Christian Matheson (City of Chester) (Lab)]

Like the Prime Minister, I supported the remain campaign in the referendum. Unlike the Prime Minister, I have been consistent in my view about how damaging Brexit will be, while she careers towards the hardest of Brexits, presumably a prisoner of the right-wing ideological Brexiteers on her own Benches. May I ask her about the executive agencies that will need to be established to replace, for example, the European Aviation Safety Agency, Euratom, or Medicines Control? Has she identified how many of those agencies we will need to have up and running in the next 18 months, how much they will cost and whether we have the capacity to staff them?

[The Prime Minister]

The hon. Gentleman is wrong in the premise of his question. He says that the Government are going for the hardest of hard Brexits; we are not. I have been very clear in my letter to President Tusk, in my statement today and in everything else that I have said in this Chamber that we are looking for a comprehensive free trade agreement with the European Union. We can achieve that and that is what we will be working for.

Advisory Committee on Business Appointments/Ministerial Code

Christian Matheson Excerpts

Monday 20th March 2017 Commons Chamber

[Ben Gummer]

The Committee on Standards in Public Life is considering that, and it is entirely right that the House should also do so. One reason why colleagues on both sides of the House have identified this issue of politicians being held in low esteem is to do with the culture that has grown up over the past 13, 14 or 15 years of Governments giving immediate answers to stories in the press just to show that they are ahead of some media game. That is not the way to get faith in politics or trust in politicians. We need to be considerate and deliberative, and to think carefully about the problems in front of us. Members of the House should discuss this matter dispassionately, calmly and with dignity in the weeks and months ahead, and come to a conclusion, to which the Government will listen.

[Christian Matheson (City of Chester) (Lab)]

I have only one job: representing the people of City of Chester. Will the Minister confirm or comment on the notion that perhaps jobs for former Ministers should not be accepted formally or announced before ACOBA has announced the conditions on which that job depends?

[Ben Gummer]

I think ACOBA will look at this case and make its judgment on it and the process that has taken place. I hope that the hon. Gentleman does not mind if I do not comment at this stage, because that would prejudice what ACOBA says. Let us see what ACOBA says; then, no doubt, we will return to the matter, because the House will continue to be interested in it.

European Council

Christian Matheson Excerpts

Tuesday 14th March 2017 Commons Chamber

[Christian Matheson (City of Chester) (Lab)]

Does the Prime Minister accept that if we crash out of the European Union with a bad deal or no deal at all, it will be entirely the failing and responsibility of our chief negotiator and her team—the Prime Minister and her Ministers?

[The Prime Minister]

I have already said that I am optimistic that we will be able to negotiate a good deal for the United Kingdom.

Informal European Council

Christian Matheson Excerpts

Monday 6th February 2017 Commons Chamber

[The Prime Minister]

The First Minister said that they would lose the right to stay here if the EU did not allow an independent Scotland to rejoin, and of course the EU made it very clear that Scotland could not consider that it was going to get automatic membership of the European Union.

[Christian Matheson (City of Chester) (Lab)]

Were there any discussions at the Council about reports of the likely appointment by President Trump of Mr Ted Malloch as his ambassador to the European Union? Would such an appointment cause concern to the Prime Minister, since Mr Malloch has reportedly likened the European Union to the Soviet Union?

[The Prime Minister]

I have been very clear that it is in the interests of the UK to have a continuing strong European Union, and that is a point that I have made to the American Administration.

Digital Economy Bill (Eleventh sitting)

Christian Matheson Excerpts

Committee Debate: 11th sitting: House of Commons
Tuesday 1st November 2016 Public Bill Committees

The Secretary of State is keen to see action, and she has told me herself that the existing Computer Misuse Act 1990 does not work. The new clause is supported by every secondary and primary ticketing site that I have spoken to, artists and, most importantly, genuine music fans, many of whom will be watching our sitting today and listening to what the Minister has to say. I agree wholeheartedly with the Prime Minister, who has promised to govern for the many and not for the privileged few. My amendment will allow that to happen.

[Christian Matheson (City of Chester) (Lab)]

I rise briefly to support the new clause and to pay tribute to my good friend and fellow Select Committee member, the hon. Member for Selby and Ainsty, who has form on campaigning in this area. He is known as a music fan, and the new clause is the culmination of a long campaign on behalf of music fans everywhere.

Moreover, I do not believe that the hon. Gentleman will damage the credibility of Green Day, because he has a track record of supporting live music—this is certainly nothing like David Cameron suggesting that he was a Smiths fan and having Johnny Marr tweeting him to back off. While I am on the subject, I remind the Committee that I was at the last concert of The Smiths, which was in Brixton Academy, probably in December 1986 or ’87.

In those days, ticket touts were blokes in long macs shouting, “Any spare tickets?”, which was a problem, but manageable. The hon. Member for Selby and Ainsty has been outlining industrial-scale, mechanical touting, which is way beyond my experience of those days 20, 30 or even 40 years ago. The problem absolutely needs to be addressed and the new clause does so. I am pleased to support it and, if the Minister is planning to accept it in principle, I suggest that he could do worse than recognise the work of the hon. Gentleman, give him the credit for the new clause, along with my hon. Friends on the Front Bench, and the chance he so richly deserves to make a mark.

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I could not possibly be as glowing about the hon. Member for Selby and Ainsty as the hon. Member for City of Chester has been. There is a love-in across the Benches this morning.

I, too, rise briefly to support the new clause. To paraphrase a well-known quote by Eric Hoffer, the American moral philosopher, every good idea begins as a movement, becomes a business and eventually degenerates into a racket. That is what we have here. Online sales and fan-to-fan ticket sites are fantastic at enabling people to get access to the music events they want to go to, but because of the evolution of technology, software and bots, we now have a distorted market, about which we absolutely need to do something.

I want the hon. Member for Selby and Ainsty to be able to go to see his favourite band, Green Day—as he was mentioning them, it occurred to me that one of their songs, and the name of their 2004 album, seemed appropriate for a gentleman who might yet end up in the White House. I must also add that my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) suggests that MP4 tickets are very easy to get hold of—he is determined that they are stopped from selling below ticket value.

I commend the hon. Member for Selby and Ainsty on his new clause and I am happy to support it.

--- Later in debate ---

As the hon. Lady will have seen in recent announcements, we have decided to take an overall approach to looking at this challenging area. She mentioned the review we are having, which is led by the former head of the No. 10 policy unit under the Labour Government: Matthew Taylor, now chief executive of the Royal Society for the encouragement of Arts. We have taken a cross-party, broad approach and he is incredibly well placed to undertake the review.

[Christian Matheson]

Will the Minister tell us which trade unions are actively involved in the review?

[Matt Hancock]

I have no doubt that Matthew Taylor will get in contact with lots of trade unions. It is a good idea to take a cross-party approach. The review will last for about six months and among other things it will consider security, pay and rights, skills and progression, and specifically the appropriate balance of rights and responsibilities of new business models and whether the definitions of employment status need to be updated to reflect new forms of working such as on-demand platforms. It will tackle some of those issues. With that explanation, I hope that the hon. Lady will see that we are taking a sensible, reasonable approach and will withdraw her new clause.

Digital Economy Bill (Ninth sitting)

Christian Matheson Excerpts

Committee Debate: 9th sitting: House of Commons
Thursday 27th October 2016 Public Bill Committees

[Louise Haigh]

The Opposition drafted the amendments and I accept that they may not be perfect, but the principle behind the idea of a data register is impossible to argue with. If the Minister claims that these audits will be done thoroughly and that they will be subject to the Freedom of Information Act anyway, I see no reason why they should not be proactively published, so that the public and Opposition Members can have full confidence that everything in the codes of practice, which are not statutory, is being properly adhered to.

[Christian Matheson (City of Chester) (Lab)]

Does my hon. Friend concur that a proactive publication might be a lot more cost-effective than chasing after hundreds or, indeed, thousands of FOI requests?

[Louise Haigh]

Absolutely. This is where the Government often miss a trick: the interrelationship between FOI and open data could drive significant efficiencies across the Government and provide citizens and the data community with valuable data, including data that are valuable to the digital economy. I appreciate that our amendment might not be perfectly drafted, but I hope that the Minister will give serious consideration to the proactive publication of these audits and of all data-sharing arrangements across the Government.

--- Later in debate ---

[Chris Skidmore]

Yes, I can confirm that. Moving forward, I reassure the Committee that we will continue to work closely with Citizens Advice and StepChange to look at fairness in Government debt management processes. Only HMRC and DWP have full reciprocal debt data-sharing gateways in place, under the Welfare Reform Act 2012. This power will help level the playing field for specified public authorities by providing a straightforward power to share data for clearly outlined purposes. Current data-sharing arrangements are time-consuming and complex to set up, and significantly limit the ability of public authorities to share debt data. This power will help facilitate better cross-Government collaboration that will help drive innovation to improve debt management. The clause will provide a clear power for specified public authorities to share data for those purposes, and will remove the existing complications and ambiguities over what can and cannot be shared and by whom.

[Christian Matheson]

The Minister may have just clarified the point I was seeking to tease out of him. The problems that my hon. Friend the Member for Sheffield, Heeley described show that, far from helping people with debt, the agencies acting on behalf of the Government have created debt that did not exist previously by misusing Government data. The Minister may have just assured us that that will not be the case. If the Minister is really concerned about reducing Government debt, perhaps the Government should have not chopped in half the number of HMRC tax inspectors and instead gone after the people who owe the Government tax.

Question put and agreed to.

Clause 40 accordingly ordered to stand part of the Bill.

Clause 41

Further provisions about power in section 40

Amendments made: 120, in clause 41, page 40, line 5, at end insert—

“(ba) for the prevention or detection of crime or the prevention of anti-social behaviour,”

This amendment and amendment 123 create a further exception to the bar on using information disclosed under Chapter 3 of Part 5 of the Bill for a purpose other than that for which it was disclosed. The amendments allow use for the prevention or detection of crime or the prevention of anti-social behaviour.

Amendment 121, in clause 41, page 40, line 6, leave out

“(whether or not in the United Kingdom)”.

This amendment removes the provision stating that a criminal investigation for the purposes of clause 41(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.

Amendment 122, in clause 41, page 40, line 8, leave out

“and whether or not in the United Kingdom”.

This amendment removes the provision stating that legal proceedings for the purposes of clause 41 may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.

Amendment 123, in clause 41, page 40, line 11, at end insert—

‘( ) In subsection (2)(ba) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”—(Chris Skidmore.)

See the explanatory statement for amendment 120.

Clause 41, as amended, ordered to stand part of the Bill.

Clause 42

Confidentiality of personal information

Amendments made: 124, in clause 42, page 41, line 4, at end insert—

“(da) for the prevention or detection of crime or the prevention of anti-social behaviour,”

This amendment and amendment 127 create a further exception to the bar on the further disclosure of information disclosed under Chapter 3 of Part 5 of the Bill, allowing disclosure for the prevention or detection of crime or the prevention of anti-social behaviour.

Amendment 125, in clause 42, page 41, line 5, leave out

“(whether or not in the United Kingdom)”.

This amendment removes the provision stating that a criminal investigation for the purposes of clause 42(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.

Amendment 126, in clause 42, page 41, line 8, leave out

“and whether or not in the United Kingdom”.

This amendment removes the provision stating that legal proceedings for the purposes of clause 42(2) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.

Amendment 127, in clause 42, page 41, line 12, at end insert—

‘( ) In subsection (2)(da) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”

See the explanatory statement for amendment 124.

Amendment 128, in clause 42, page 41, line 13, leave out subsections (3) and (4) insert—

‘( ) A person commits an offence if—

(a) the person discloses personal information in contravention of subsection (1), and

(b) at the time that the person makes the disclosure, the person knows that the disclosure contravenes that subsection or is reckless as to whether the disclosure does so.” —(Chris Skidmore.)

This amendment applies to the disclosure of personal information in contravention of subsection (1) of clause 42. It has the effect that it is an offence to do so only if the person knows that the disclosure contravenes that subsection or is reckless as to whether it does so.

Clause 42, as amended, ordered to stand part of the Bill.

Clause 43 ordered to stand part of the Bill.

Clause 44

Code of practice

Amendment made: 129, in clause 44, page 42, line 7, at end insert—

‘( ) The code of practice must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).”—(Chris Skidmore.)

This amendment requires a code of practice issued under clause 44 by the relevant Minister and relating to the disclosure of information under clause 40 to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.

Question proposed, That the clause stand part of the Bill.

[Louise Haigh]

In evidence, Citizens Advice told us that an estimated £1 in every £5 of debt in this country is debt to the Government. It found that its clients can suffer detriment when public bodies have overly aggressive, unco-ordinated and inconsistent approaches to debt collection. There is also fairly substantial evidence that central Government debt collection lags behind the high standards expected of other creditors, including water companies, council tax collection departments, banks and private debt collectors.

I ask the Minister to consider extending the common standard financial statement to set affordable payments, as the energy, water, banking and commercial debt collection sectors do. That is demonstrated by research from StepChange, which found that in terms of debt collection, those facing severe financial difficulty were likely to rate the DWP and local authorities only just behind bailiffs as those most likely to treat them unfairly.

Digital Economy Bill (Tenth sitting)

Christian Matheson Excerpts

Committee Debate: 10th sitting: House of Commons
Thursday 27th October 2016 Public Bill Committees

[Matt Hancock]

That was an excellent assessment of the pros, cons and challenges around the proposed changes to appeals. Much of the analysis and thinking that the hon. Lady has just set out is what we went through in coming to the same conclusion that it is sensible to change the appeals process.

I will set out some of the detail of the changes and then I will answer the specific questions that were put. The clause alters the standard review applied by the Competition Appeal Tribunal when deciding appeals brought under the Competitions Act 2003 against decisions made by Ofcom. This is in order to make the appeals process more efficient. The changes will not apply to appeals against decisions made by Ofcom using powers under the Competition Act 1998 or the Enterprise Act 2002.

Currently, appeals can be brought and decided on the merits of a case, and this exceeds and effectively gold-plates article 4 of the EU framework directive that requires that the merits of a case are taken into account in any appeal. The result of this over-implementation is an unnecessarily intensive and burdensome standard of review that can result, as the hon. Lady set out, in very lengthy and costly appeals litigation, which can hinder timely and effective regulation, and risks Ofcom taking an overly risk-averse approach to regulating the sector properly.

[Christian Matheson (City of Chester) (Lab)]

Would it also not give Ofcom much more credibility in the eyes of the organisations that it regulates, because they would realise that they had much less ability to overturn its decisions?

[Matt Hancock]

That is right. We heard the evidence from Three and TalkTalk, who are in favour of this change. That is no surprise, as they are essentially the insurgents in the infrastructure market, and the incumbents were less keen on this change. We also heard from Which? and Citizens Advice, which explained that it is no surprise that large companies want to keep the status quo.

It is not my job to bask in the reflected glory of the appreciation from Three or TalkTalk, nor is it to have undue concern, rather than due concern, for the complaints of those who disagree with this change.

--- Later in debate ---

[Louise Haigh]

We do not wish to oppose Ofcom’s new role in regulating the BBC, for which clause 75 provides—as the Minister knows, we supported the BBC charter agreement last week in the House—but we have some concerns, which are shared by the BBC, about how Ofcom’s new role will work out in practice.

Distinctiveness is an absolutely vital characteristic of the BBC and its services. It is one of the things that justifies its public funding. The BBC should deliver its public purposes and mission, and it should serve all audiences, through distinctive services. Critically, distinctiveness should be judged at the level of services, rather than programmes. That does not mean that the BBC should focus on “market failure” programming or never make a programme that the commercial sector might make. Instead, the test should be that every BBC programme aspires to be the very best in its genre. Overall, the range of programmes in the BBC services should be distinguishable from its commercial competitors. There is a concern that Ofcom could be too prescriptive in the standards it expects of the BBC. For example, it might focus on quotas, such as the number of religious or news hours, rather than a substantive, qualitative assessment, and rather than a standard, such as high-quality journalism.

Evidence shows that BBC services are distinctive and have become more so in recent years. Audiences agree: more than 80% of the people responding to the Government’s charter review consultation said that the BBC serves audiences well, almost three quarters said that BBC services are distinctive and about two thirds said that they think it has a positive impact on the market.

The definition of distinctiveness in the agreement and the framework for measuring it are therefore critically important. The section of the charter agreement that relates to the new powers that will go to Ofcom requires Ofcom to set prescriptive and extensive regulatory requirements, which must be contained in an operating licence for BBC services. Ofcom must have a presumption against removing any of the current requirements on the BBC—there are about 140 quotas in the BBC’s existing service licences—and seek to increase the requirements overall by both increasing existing requirements and adding new ones.

Ofcom has been given detailed guidance about what aspects of distinctiveness it must consider for the BBC’s TV, radio and online services. That follows an old-fashioned approach to content regulation based on prescribing inputs, rather than securing audience outcomes, such as quality and impact. The BBC is concerned that it will introduce a prescriptive and inflexible regulatory framework that could restrict the BBC’s editorial independence and creativity.

Clarity about the definition of distinctiveness would be welcome. It should be applied to services, not individual programmes. The extensive content quotas in clause 2 of the charter should be a response to a failure to be distinctive, not the starting point.

[Christian Matheson]

Does my hon. Friend share my concern that, when the Government came up with the idea of distinctiveness, they themselves were not absolutely clear what it meant? Frankly, we are still at the stage at which the Government might say, “We don’t know what it is, but we might recognise it when we see it.”

[Louise Haigh]

That is a very great concern. There is a serious risk of confusion about how the new regulatory regime is going to work for both Ofcom and the BBC. To be frank, I do not think quotas are appropriate in this respect. I have got nothing against quotas—I was selected on an all-women shortlist, which aim to increase the number of women in the parliamentary Labour party.

--- Later in debate ---

[Calum Kerr]

Absolutely. I see we are on a bus theme, which must be because the hon. Member for Hyndburn has returned to his place.

We must consider the risks inherent in this shift. With its budget potentially squeezed in future, the BBC is the one faced with choosing a priority. The BBC will have to decide whether someone should get a free TV licence. Fundamentally, that is welfare policy. I hope the Government are listening and will reconsider. The new clause is well worded and I fully endorse it on behalf of the Scottish National party.

[Christian Matheson]

I support the new clause and congratulate my hon. Friend the Member for Sheffield, Heeley on an outstanding contribution among numerous outstanding contributions during the Committee’s considerations.

The hon. Member for Berwickshire, Roxburgh and Selkirk is absolutely right that the proposal is an outsourcing of responsibility, but there is more to it than that. The Government are not only putting a further financial squeeze on the BBC, but when, as may be inevitable, the allocation of TV licences to the over-75s has to be reviewed, they will apparently have a clean pair of hands. It will be, “Not us, guv—it was the BBC what did it”, when that may well have been the intention all along. It is, again, outsourcing of responsibility and an attempt to evade responsibility, put on the financial squeeze, take a step back and say, “It’s nothing to do with us. It’s that bad BBC. Because that bad BBC is so bad, we shall cut them even more to punish them for how they have treated pensioners.”

My hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly), who does not serve on this Committee, described the events of June and July 2015 when the so-called negotiation took place as a drive-by shooting when we were in the Culture, Media and Sport Committee. Hon. Members have today talked about negotiations with a gun to the head; a drive-by shooting is an appropriate description of what happened.

The BBC board was taken by surprise by the motives of the then Chancellor of the Exchequer, the right hon. Member for Tatton (Mr Osborne), and the then Secretary of State for Culture, Media and Sport. The Select Committee asked the chairwoman of the BBC Trust whether she and her fellow trust members had considered resigning in protest at what was happening; she declined to answer. I am sure that there were discussions.

--- Later in debate ---

[Kevin Brennan]

Is there not a further cynicism to this? The Government did that in the full knowledge that the policy had what the Treasury often calls “future reach”, as the number of over-75s is likely to go up. Even given that the Government are partially compensating the BBC for this, they know full well that the policy will become more expensive.

[Christian Matheson]

That is an extremely good point, and it reads back to the point that I made earlier: when there has to be a review of the cost of the policy, and perhaps a reduction in the availability of free TV licences, Ministers—perhaps they will be shadow Ministers by that time—[Interruption.] We fight on to win. Conservative Members will be able to point to the BBC and say, “It was the BBC what done it”, in order to evade all responsibility. But they will not evade responsibility, because this will not be forgotten, if they get away with doing it. There is a much better alternative: the excellent new clause proposed by my hon. Friend the Member for Sheffield, Heeley.

[Louise Haigh]

I am appalled by what is, as my hon. Friend is clearly laying out, a naked attempt to evade responsibility. Does he share my concern that this is the beginning of a slippery slope? Where exactly does this end? Once the principle that the Government are attempting to put in the Bill is in legislation, to whom else can they outsource responsibility for their social security policies?

[Christian Matheson]

My hon. Friend makes a good point. I am cautious about straying too far from the point under discussion, but she says that this is the beginning of a slippery slope. It is not, because the Government have form in this area. I look to you, Mr Streeter, for a little bit of latitude here.

There are, for example, massive cuts to local government funding; the Government have taken huge amounts of money away from local authorities, expect them to come up with cuts and reductions in services, and then say, “It is nothing to do with us; blame your local authority.” There is one point on which I would disagree with my hon. Friend the Member for Sheffield, Heeley: this is not the beginning of a slippery slope; it is a continuation of form. The Government have been rumbled, and they know it.

[Graham Jones (Hyndburn) (Lab)]

The amendment is important. It defines the Opposition against the Government. We value the BBC, but there is always a criticism, and the Government are reaffirming people’s view that the Government do not really trust the BBC. If they can do anything to undermine the BBC, they will, instead of supporting it. During the passage of the charter, there has been to-ing and fro-ing, and criticism of the BBC, using the stick of distinctiveness and other sticks, such as the five-year break clause.

The Government always say that they are there to stand up for the BBC and give it the freedoms that it wants, but this is not a freedom, of course; it is a shackle. As my hon. Friend the Member for Cardiff West said, the Government are trying to outsource responsibility. They will not do it on bus passes; they will not say, “We’ll make the bus companies make the decision on free bus passes”, but they will make the BBC accountable for the over-75s’ free TV licences. I do not think that the Government can escape that responsibility, or the accusation that they are continually chipping away at the BBC.

Let us talk about the issue in numbers. By 2020, when the BBC has to pay fully, the figure will be £700 million. That is a considerable amount of money for the BBC to find at a time when the Government have chipped away at BBC budgets through a bit of slicing here and another bit of slicing there, and even with a cap on the licence fee.

Digital Economy Bill (Eighth sitting)

Christian Matheson Excerpts

Committee Debate: 8th sitting: House of Commons
Tuesday 25th October 2016 Public Bill Committees

[Calum Kerr]

I thought so. At least when we eventually get there, we will not expect to win it, unlike others.

[Christian Matheson (City of Chester) (Lab)]

Like in 1978?

Digital Economy Bill (First sitting)

Christian Matheson Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 11th October 2016 Public Bill Committees

[Claire Perry]

Q I am conscious of what Baroness Harding said about perhaps not setting a quantum, but do you think there should be a separate quantum for SMEs? One of the challenges we have is that there is not enough. We do not have separate legislation or, indeed, powers for cabling to new business parks. If I may ask a supplementary question, in my experience the issue with the USO is often with the broadband speeds in the household; it is not just a question of getting the cable to the front door or the bricks. What could the process be for dealing with those claims and helping householders realise that that might be a problem?

One final question: we would like the USO to be an average speed, rather than being achieved 15% of the time, or whatever the current average regulations are. What are your views on that? Are you prepared to commit to our offering an average USO of 10 megabits per second?

Baroness Harding: At the risk of being dangerously technical, I think we all try to summarise in the form of speed, but actually consumers and businesses would say that reliability and consistency are every bit as important as speed. The small businesses that are customers of TalkTalk would say, “It’s not the headline speed I need. I need it to work every single second when my customers are using the chip and pin machine in my small corner shop”, for example. So while speed is a useful proxy, it is not perfect.

The Minister gets to the nub of the issue: when you have a proper fibre network that goes all the way to the premises, you have upgrade potential. You just change the card in the rack of computers back at the exchange and you can go from 1G to 100G. You also have a much, much more reliable network. When it rains, water does not get into the copper and it does not stop working.

The small businesses that we talk to are very cross that the fibre-to-the-premises roll-out has missed out a lot of business parks—not necessarily because they want speed, but because they want a reliable service where they can upload as much as they can download and customers can always buy things from them.

I would therefore support being clearer in the detailed regulations that I presume Ofcom would set in specifying the service requirements for small businesses as opposed to consumers.

[Christian Matheson (City of Chester) (Lab)]

Q What flexibility would you like to see within the legislation for either the Government or perhaps Ofcom to be able to deem the level of the USO in the manner that Baroness Harding described as technology increases?

David Dyson: I have a couple of points. Covering some of the previous questions, it is impossible to predict what will be the right speed in five years’ time. There are two elements to delivering that. One is effective competition. On the second, I agree with Baroness Harding that in those harder-to-reach less economic areas, the separation of Openreach is the only way that you will get assurance that those customers will get the right speed.

Fundamentally, Ofcom needs to have more powers to make the right decisions that effectively create the right competitive environment in the UK—an environment where it is not constantly worried about being litigated. At that point, you have a stronger regulator that will make the right decisions for the right reasons and a lot of these discussions will take care of themselves.

Baroness Harding: You can see from my nodding head that I agree with David. A lot of the provisions in the Bill are very good, pro-consumer, and I would encourage the Committee to look very favourably towards them. David has just alluded to one of them, which is to make sure that you have a stronger regulator that can get decisions taken faster without using up nearly 50% of the Competition Appeal Tribunal’s time.

Sean Williams: On the specific question about flexibility, as long as it is stable enough for network investors to deploy a certain investment in order to get to the target and then recover some of their investment money, it can be flexible after that. If it is too flexible, you never quite know what you are supposed to be investing in, so I think it needs to be definitive for a period and then it can move on progressively as society and the economy moves on.

I agree with Baroness Harding on the subject of reliability. Reliability is a very important metric, but SMEs are not typically the most demanding broadband customers. A big household streaming lots of HD videos is a very demanding broadband supplier. SMEs and large households have different kinds of requirements and we need to work with Ofcom to establish exactly what those standards should be.

It is true that some of the problems happen within the home or within the business premises. It is important to make sure that all the retailers—TalkTalk and all the others—are able to support their customers in the business or home. Making sure those networks and wi-fi work well is also very important, to answer Mr Perry’s earlier remarks.

[Kevin Brennan (Cardiff West) (Lab)]

Q Sean, do you recognise the figure that improving wayleave rights under the ECC will reduce costs for providers by 40%? Would you like to tell us whether any surplus from that will be used to invest in local communities or will it be going to your profit margins?

Sean Williams: I do not recognise the particular figure, to be honest, but I would not necessarily dispute it.

--- Later in debate ---

[Kevin Brennan]

Q Will certain areas be limited, do you think, in reaching the 10 megabits?

Baroness Harding: I think the way that you ensure that there is sufficient competition to drive investment and create choice is by having a very strong regulator that does not believe any of us, actually, when we say “Trust us, we will be okay; we will do it for you.” If you live in any of the rural constituencies in the country, you do not have Virgin as an alternative. There is only one fixed line network provider. There are only two mast joint ventures for mobile networks, so I would argue that the telecoms market is not competitive enough at all and that the best way Government can ensure that all constituents across the country benefit is by having a much stronger regulator that forces competition. I think you should be very worried when you hear large incumbents saying, “Set up a universal service obligation but don’t let it get too far ahead of what we’ve got in our business case.” That is not what business should be doing. Businesses will invest more if they are scared their customers will go elsewhere, not because they have been given a promise by Government.

David Dyson: But also you should be very worried when you hear statements about how BT is planning to take profits from the duct access and reinvest in that, and in cross-subsidising mobile access. That is just fundamentally wrong, and is not supportive of competition.

[Christian Matheson]

rose—

[The Chair]

Is this on this point?

[Christian Matheson]

Not exactly.

[Nigel Huddleston (Mid Worcestershire) (Con)]

Q Far fewer people switch broadband and phone providers than gas or electricity, for example. Do you support the Government’s published principles of switching, which will make it easier for consumers to switch?

Baroness Harding: Yes, completely. I think it is extremely confusing for consumers, because how you switch depends on which network you are with today, and which one you are going to. It is not a level playing field among competitors, so, for example, someone leaving TalkTalk who takes mobile phone, broadband and TV—a proper quadplay customer—does not have to speak to TalkTalk at all, as they should not. They head off to whomever they want to go to, and the switching process will work its way through. On the other hand, someone leaving Virgin and going to BT, or leaving Sky TV and coming to TalkTalk, has to speak to Virgin or Sky respectively. We and, I think, Three as well have been campaigning for simpler switching for eight years. Finally we have a Bill that is very much on the consumer side, that will make switching easier and competition stronger. I think it is a great thing.

Sean Williams: And BT completely supports the position.

David Dyson: Three has campaigned for more than a decade on this issue. It is a complete joke that it has taken so long, and it fundamentally goes back to the point that Ofcom needs more powers to make decisions that are in the consumer interest. We are the bottom of the class from a global perspective, in terms of switching. I think Papua New Guinea ranks alongside us as the only country that still has donor-led porting. It is a joke. Ofcom tried to legislate on that five years ago, and Vodafone litigated on a technicality and won. Since then it has been kicked into the long grass. It is a major issue, but the more fundamental issue is that Ofcom does not have the power, right now, to make decisions that are fully in the interests of consumers and competition.

--- Later in debate ---

[Nigel Huddleston]

Q Baroness Harding, you mentioned that this is a consumer-friendly Bill in various degrees. Mr Dyson and Mr Williams, are there any other elements of the Bill that you see as consumer friendly that would benefit my constituents, for example?

David Dyson: Absolutely. The electronic communications code reform is critical in being able to roll out more coverage, more capacity and better quality from a mobile perspective. That is a really important step. We hear a lot about coverage, capacity and quality. Ofcom recognises that there is a major issue in consistency of access not just for operators across the country, but for different technologies. That will certainly help, but for me the most important element of the Bill is effectively to give Ofcom the powers to create competition in this market.

Fundamentally for us, the most important decision that Ofcom needs to take in mobile in the next five years is going to happen before the Bill comes through in that spectrum. The UK is bottom of the class not only in mobile number portability, but in spectrum distribution in this market. It is the most fundamental input in terms of a level competitive playing field and Ofcom is about to take that decision in the context that it is always worried about being litigated. The facts speak for themselves. We have a terrible position in the UK right now and I am worried that it will not get any better unless Ofcom has more powers.

[Christian Matheson]

Q I am hearing mixed messages about this industry and its ability to achieve a USO. On one hand, we hear that market forces will achieve it and, on the other hand, we hear that Ofcom does not have enough power and that there is a fear of litigation. Should this Bill be giving greater powers to Ofcom? For example, in areas such as Devizes, which Claire Perry talked about, where there are broadband not spots, should Ofcom deem a provider to provide for that area?

Baroness Harding: The key thing in the Bill is to reform the appeals regime. As David Dyson has just alluded to, between 2008 and 2013, which are the most up to date stats I could get last night, Ofcom accounted for just under 50% of all cases in the Competition Appeal Tribunal. Our industry is important, but it is not that important compared with the whole of the rest of competition issues because the standard of appeal is much lower in telecoms than in any other regulated sector. That means there is a very cautious regulator.

BT has managed to raise $45 million from private equity funds to fund its litigation pot. Ofcom spent £10 million in the last two years on litigation. That is awful use of taxpayers’ money. It means you have an industry that is used to appealing every single decision the regulator takes, so the regulator is too cautious. That is why we are saying, “Give them the powers and competition will do the job for you.”

Sean Williams: I am sorry, but I completely disagree with that point. First, it is not true to say that everything gets appealed. BT did not appeal a charge control this very year that took a billion pounds of profitability out of BT—in fact out of Openreach—over a three-year period. We did not appeal the previous charge control, which did a similar thing and we did not appeal the one before either.

Ofcom is an extremely powerful regulator that is accountable to nobody but the Competition Appeal Tribunal. No one in the Government can tell it what to do. It has extremely wide discretion. You will not get better decisions out of Ofcom if you reduce the standard of appeal to judicial appeal standard. Is it reasonable, is it fair, is it just that Ofcom can take £3 billion of shareholders’ equity value away from them on a judicial review standard? It is not. It is thoroughly unjust.

To keep Ofcom accountable, to keep its decisions high quality and to comply with the regulatory scheme, it is of the utmost importance to require an appeal on its merits. It is required across the communications sector across the whole of the European Union. It is not by any means unique. Ofcom makes many very impactful decisions and that is why it gets many of its decisions appealed to the Competition Appeal Tribunal, very often by the small players in the industry. The organisation that is appealing Ofcom’s most recent charge control is CityFibre Holdings, which thinks that Ofcom’s decision to drive down Openreach prices will kill off its business plan, not just Openreach’s. It is not BT that is appealing that decision. It is very important that the one piece of this that really needs to come out is the change to the appeal regime.

It is also true to say that the Supreme Court of the United Kingdom, only about two years ago, was absolutely clear that the scheme provides for an appeal on the merits.

David Dyson: There are two important points on this. First, Three is 100% supportive of the changes in the Bill in this regard. Secondly, it is really important to note that all the Bill proposes to do is raise the standard of appeal that Ofcom has to the same level as regulators in other industries, which does not feel excessive to me.

Sean Williams: Except that Ofcom has many more powers than any other regulator, including a dispute resolution power that is not available to any other sectoral regulator. That is the cause of many of the disputes and appeals that happen.

[The Chair]

Order. I am afraid that that brings us to the end of the time allotted. I thank our witnesses on behalf of the Committee.

Examination of Witnesses

Daniel Butler, Paul Morris and David Wheeldon gave evidence.

--- Later in debate ---

[Claire Perry]

Q I want to focus questions directly on Mr Legge. I represent a very rural constituency. We are very anxious about home building. We now have effective neighbourhood plans that rather than mandating giant developments plonked down wherever anybody wants them, require developers—often small developers—to work with communities. The preamble is to ask you whether you think the new law coming in next year to require automatic superfast broadband connection for sites of more than 100 homes is suitable for rural areas, or whether we ought to be going further and effectively making it a utility provision for all home builders.

James Legge: My view is very much that it should be seen as a utility provision. The whole way in which we have looked at the housing problem in rural areas has transformed over the last 10 years from the idea of plonking mini-towns on the edge of existing communities. We have realised that if you try to do that, all you do is create massive local opposition and nothing gets built. What you want is small-scale development that is sensitive and local to the community, provides local housing, and is affordable, often affordable in perpetuity.

The idea that you will only get broadband provision when you build 100 premises on the edge of a village or in a rural area is undesirable, simply on the grounds that where new properties are going in and we are putting in an infrastructure, it seems absurd not to take the opportunity. We would not say we are not going to put in electricity, water or, ideally, gas as well, although we do not have mains gas everywhere, to be fair. I think broadband is too important.

It is also important to realise that the population trend at the moment is a move from towns to rural areas. There is enormous potential. If you take a population of 10,000, there are more start-up businesses in rural areas. I think London and some of the major urban city centres exceed. The countryside is a largely missed opportunity, but all the signs are there that if it gets broadband it is ready to fire and go further; so the figure of 100 is too urban-centric in thinking.

[Christian Matheson]

Q Mr Legge, you talk about the need for a fair system of site rents for country landowners in terms of wayleaves and access.

James Legge: I do not think that I did—

[Christian Matheson]

There needs to be,

“clarity over the new system of valuation for site rents that is fair and equitable as well as a robust Code of Practice to ensure landowners, infrastructure providers and mobile phone operators are clear”.

Is there not a danger of conflict between looking after the needs of large landowners to get fair wayleave agreements on their properties and potentially preventing the roll-out of broadband and infrastructure services to other rural residents because we are keeping costs higher to benefit the landowners?

James Legge: I think we recognise that the new communications code must reduce the cost of putting in the infrastructure, both on public and private land, and must also encourage the sharing of masts and access to infrastructure. There is a difference between saying that we will do it and, say, paying a private landowner nothing, and paying them something that is reasonable and fair, taking account of the way in which we treat other utilities. I know that our view differs slightly, though, from some of the other landowning organisations that are focused on land ownership. We are very much focused on delivery to the consumer, but we think it should be fair, equitable and clear.

[Matt Hancock]

Q May I clarify that? You said that the new communication code must do those things. Did you mean by that, that it does do those things and that that is right, or that you do not think it fits what you set out? What you set out is entirely concurrent with the Bill.

James Legge: Yes, and we are supportive of that. We support the fact that we have got to start seeing broadband on the same par as a utility, as opposed to something where there is a premium cost to the provider, which limits provision—