Digital Markets, Competition and Consumers Bill

Lord Bassam of Brighton Excerpts

Committee stage
Wednesday 24th January 2024 Grand Committee

[Lord Clement-Jones (LD)]

My Lords, this has been a really interesting and helpful debate, with a number of noble Lords answering other noble Lords’ questions, which is always pretty useful when you are summing up at the end. One thing absolutely ties every speaker together: agreement with the letter to the Prime Minister from the noble Baroness, Lady Stowell, on behalf of her committee, about the need to retain the JR principle throughout the Bill. That is what we are striving to do.

It was extremely interesting to hear what the noble Lord, Lord Lansley, had to say. He answered the second half of the speech by the noble Lord, Lord Tyrie. I did not agree with the first half but the second was pretty good. The “whiff” that the noble Lord, Lord Tyrie, talked about was answered extremely well by the noble Lord, Lord Lansley. It was a direct hit.

The interesting aspect of all this is that the new better regulation framework that I heard the noble Lord, Lord Johnson, extolling from the heights in the Cholmondeley Room this afternoon includes a number of regulatory principles, including proportionality, but why not throw the whole kitchen sink at the Bill? Why is there proportionality in this respect? It was also really interesting to hear from the noble Lord, Lord Faulks, who unpacked very effectively the use of the proportionality principle. It looks as though there is an attempt to expand the way the principle is prayed in aid during a JR case. That seems fairly fundamental.

I hope that the Minister can give us assurance. We have a pincer movement here: there are a number of different ways of dealing with this, in amendments from the noble Lords, Lord Holmes and Lord Faulks, and the noble Baroness, Lady Stowell, but we are all aiming for the same end result. However we get there, we are all pretty determined to make sure that the word “proportionate” does not appear in the wrong place. In all the outside briefings we have had, from the Open Markets Institute, Foxglove and Which?, the language is all about unintended consequences and widening the scope of big tech firms to challenge. What the noble Lord, Lord Vaizey, had to say about stray words was pretty instructive. We do not want language in here which opens up these doors to further litigation. The debate on penalties is coming, but let us hold fast on this part of the Bill as much as we possibly can.

[Lord Bassam of Brighton (Lab)]

My Lords, I thank the noble Lord, Lord Faulks, for his neat and precise analysis of the position in which we find ourselves in the discussion on this group of amendments. This debate is a prequel to that which will follow on penalties, and we should see it in that light; the two things are very much connected, as the noble Lord, Lord Clement-Jones, made clear. Like him, I completely agreed with the noble Lord, Lord Vaizey, when he warned about using stray words. Proportionality is probably one of the most contested terms in law, and in all the 25 years or so that I have been in this House, I must have heard it in all the legal debates we have come across.

These are the first amendments seeking to restore some of the Bill’s original wording, which, as we have heard, was changed late in the day in the Commons. We are yet to receive a full explanation from the Minister of the reasons for that. The noble Lord, Lord Faulks, asked why, and we on these Benches pose the same question. Were Ministers lobbied into this and, if so, why? We support Amendments 16 and 53 in the name of the noble Lord, Lord Faulks, which, as he outlined, seek to restore the original wording of the Bill, taking out the word “proportionate”, removing proportionality as the determining factor behind a CMA pro-competition intervention and reinserting the word “appropriate”.

We have two, possibly three, sets of solutions to the problem that the Government have set. However, we also have added our names to Amendments 17 and 54, in the names of the noble Baronesses, Lady Stowell and Lady Harding, and the noble Lord, Lord Clement-Jones, with the intent of ensuring that clarifying that the condition for conduct requirements imposed by the CMA to be proportionate does not create that novel legal standard for appeals of decisions and the confusion that will flow from that. In our view, as the noble Baroness, Lady Harding, says, the original wording strikes the right balance, roughly speaking, whereas the Government’s version would weaken the intent of this part of the Bill.

The formulation of the noble Baroness, Lady Stowell, relies on prevailing public law standards—in other words, standards that are commonly understood. We take the view that we all need to know what rules we are working to, and if the Bill introduces or creates a new standard then that certainty is removed. Of course, when it comes to the issue of pre-emption, we will need to resolve the best way forward on this issue at the next stage of the Bill. For my part, I think that reversion might be the best route, but no doubt by negotiating round the Committee we can come up with a workable solution.

The amendments of the noble Lord, Lord Holmes, particularly Amendments 220 and 222, offer another way through it. However, on the face of it, for us they are useful in the context of reminding our Committee that guidance will need to be produced on the operation of this regime as it covers financial penalties and the countervailing benefits exemptions.

We have heard a lot about the new regime being flexible and participatory as a framework for regulation, and we agree with that principle. However, we think that, with this particular change, the Government strike at the heart of that and bring in a measure of uncertainty that is unwise, frankly, in this particular process. The intervention of the noble Lord, Lord Lansley, was very telling. What he told the Committee was extremely important and we should listen very carefully to what was said in that exchange of correspondence. He rather shot the Government’s fox.

In conclusion, the Minister has a bit of a difficult job on his hands here. He may feel the weight of the Committee against him. I rather hope that he can offer us a measure of reassurance and perhaps help us come to a point where the whole Committee can agree a sensible reversion or an amendment that makes the Bill as workable as it seemed when it was first drafted.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)]

I thank the noble Lord, Lord Faulks, for raising the topic of proportionality in the digital markets regime and for doing so with such a clear and compelling analysis, which I think all of us, myself included, found deeply helpful. This is of course the requirement for the CMA to impose conduct requirements and pro-competition interventions on firms only where it is proportionate to do so.

First, I reassure my noble friend Lady Harding that this change is not about introducing a new standard or meaning of proportionality but about clarifying the scope of decisions that it applies to.

Amendments 16 and 53 from the noble Lord, Lord Faulks, seek to remove the explicit statutory requirement for PCIs and conduct requirements to be proportionate. Under these amendments, SMS firms would still be able to argue that their rights to peaceful enjoyment of property under Article 1 of the first protocol of the ECHR, or A1P1, were engaged in most cases, allowing them to appeal on the basis of proportionality. I refer noble Lords to the ECHR memorandum published by the department, which explains how the regime intersects with human rights and how this relates to property rights. A1P1 protects possessions, which can include enforceable rights such as contracts, and so regulating SMS firms under the regime would commonly affect possessions, and therefore engage A1P1.

The Government have always been clear that the CMA will need to act proportionately and comply with ECHR requirements, and that imposing obligations on SMS firms will very often engage the firm’s rights under A1P1. However, having a statutory requirement for proportionality in the Bill reinforces the Government’s expectations for how the CMA should design conduct requirements and PCIs, to place as little burden as possible on firms while still effectively addressing competition issues. This should be the case even when A1P1 property rights are not engaged, which this requirement provides for.

In particular, it is worth highlighting that A1P1 rights on their own would not amount to grounds to challenge interventions that impact a firm’s future contracts. It is right that these interventions should be proportionate. I understand the concern from many noble Lords about any extension to the grounds for appeal in the regime, but we are giving extensive new powers to the CMA to regulate digital markets.

--- Later in debate ---

[Lord Black of Brentwood (Con)]

My Lords, this is not just to prevent the Minister getting up again; it is relevant to both points that have just been made. A number of noble Lords asked whether this huge volte-face by the Government between the publication of the Bill and the amendments made very late in the other place came about as a result of pressure from the platforms. Could he tell us whether the platforms lobbied for this change and whether he discussed it with them?

[Lord Bassam of Brighton (Lab)]

My Lords, if I might help the Minister, this legislation has been knocking around for some time now, so what was it that provided that blinding flash of official or ministerial inspiration to bring this amendment about “proportionate” so late in the day in the other place that it was tabled right at the end of the Commons process? What was it that was so compelling as to make that dramatic change?

[Viscount Camrose (Con)]

If noble Lords will forgive me; that was a large variety or questions. First, I can confirm right away that I have not received any lobbying from any big tech firms on this topic—none; zero. Secondly, as with any Bill, this was part of an ongoing pattern of constantly looking for means of improving the Bill, to maximise its clarity and effectiveness. I recognise the concern voiced by the Committee about this. I am very happy to set out in detail all the arguments I have attempted to make. I hope that will go some way further towards satisfying the Committee.

--- Later in debate ---

[Baroness Harding of Winscombe (Con)]

My Lords, I associate myself with the remarks just made by the noble Lord, Lord Tyrie, about recognising how important it is that we embolden the CMA to tackle these merger issues. I do not have anything like the expertise in detailed drafting that my noble friend Lord Lansley has just demonstrated, but I encourage the Government to listen carefully to his advice and review the drafting. We should see if we cannot come together with a solution on Report that achieves what I think we are all trying to achieve here.

I would also like to briefly correct the record. On Monday, as the noble Lord, Lord Vaux, said, I said that all the companies had appealed their designation of the DMA. Much to my amusement, Google was very swift to email me on Tuesday morning to tell me no, it was very keen to collaborate, so I would hate that to become a considered fact of this Committee—I owe Google that.

I support the amendment by the noble Lord, Lord Vaux, but I point out to the Committee that it is actually a very small amendment. The CMA told us in one of its briefings last week that it could undertake only two SMS investigations at any one time. We should recognise that it is a very minor amendment meaning that, while the CMA is investigating two entities, those two entities will be required to report. We should accept that that is a very small improvement that we should encourage the Government to accept.

[Lord Bassam of Brighton (Lab)]

My Lords, I am sure the Committee will be relieved to know that we do not have a great deal to say on this, except that we see merit in the amendments from both the noble Lords, Lord Vaux and Lord Lansley.

I thought the noble Lord, Lord Vaux, made a very good point: this is very simple. It is about providing and encouraging greater transparency in the merger process. It is straightforward in ensuring that all parties are aware of the status of the undertaking involved, and it brings clarity where the SMS is concerned.

It has to be regretted that companies might want to use mergers and acquisitions as a way of delaying SMS designation. As the noble Baroness, Lady Harding, has just said, there are delays enough in the process as it is. If the CMA is going to be able to do only two of these a year, there is hardly much reason to encourage more, greater and longer delays in the process.

The noble Lord, Lord Vaux, argued that designations could take until 2025 and delays will occur. With the sheer volume of acquisitions taking place, if companies are going to use that as a means of gaming the system then that cannot be right. It cannot be in consumers’ interests either.

I turn to the elegant amendment by the noble Lord, Lord Lansley. It seeks to ensure, where a designated undertaking is involved, that there is an assessment of the impact on consumers. The Minister has argued from the Dispatch Box that the legislation is designed by the Government to place the interests of consumers at the very front of this piece of working legislation. So, if a merger is likely to lead to a loss of benefit to consumers, it must therefore be right that market intelligence is shared, and we assume from our perspective on the Labour Benches that that must be a public good to be supported.

Digital Markets, Competition and Consumers Bill

Lord Bassam of Brighton Excerpts

Committee stage
Monday 22nd January 2024 Grand Committee

[Viscount Camrose (Con)]

My Lords—

[Lord Bassam of Brighton (Lab)]

My Lords, I am sure the noble Viscount has more important things to say than I have, but it falls to me to make a few comments from the Opposition Benches on this. While listening to my noble friend Lord Knight, I was reflecting that we might be the last profession ever to be dismissed or appointed by algorithm and wondering whether that is a good or a bad thing. I leave that for the Minister to ponder while I make my observations.

The noble Lord, Lord Clement-Jones, introduced these amendments with his customary skill and guile. No doubt, like the rest of us, he has been extremely well briefed by the Institute for the Future of Work; I pay tribute to my noble friend Lord Knight for his work in that regard. This group of amendments is extremely important. We know that, with algorithms, new digital technology and thinking, just as the history lesson from my noble friend showed, it is really important when technological revolutions happen that we grasp the moment to think about their wider social and economic impact—with this, in particular, the impact on the world of work.

On the face of it, these amendments would provide a valuable extension of the CMA’s remit and role and could lead to protection of consumers and workers from the adverse impacts brought about by the activities of digital companies that operate in a dominant position in the marketplace. As the noble Lord, Lord Clement-Jones, said, the near-monopoly position of some companies means that wage and price fixing are a real concern. The ability of the CMA to monitor, comment and have an impact on conduct could have a wider and beneficial impact on ensuring that the market works not only well but fairly and with equity. It is the case that social, environmental and well-being risks and impacts, including work conditions and the environment are under increasing scrutiny from consumer and corporate sustainability perspectives.

The noble Lord, Lord Clement-Jones, referenced the World Economic Forum’s Global Risks Report and the EU’s new corporate sustainability due diligence directive 2023, to be introduced later this year. They exemplify the importance and salience of the issue. As he said, this all suggests that consumer interests can extend to local supply chains, so, as a consequence, informed decision-making will need to have better information on work impacts in the future. Consumers are, as has been said, both consumers and workers, and they are bound to take much greater interest in digital workplaces. From these Benches, we therefore support, in general terms, better monitoring, intervention and information sharing by the CMA; if these amendments achieve that objective, they are certainly worthy of our support. The Minister will have to persuade us otherwise, or explain that the CMA will have the scope to use its powers to satisfy the objectives behind the amendments in the name of the noble Lord, Lord Clement-Jones.

I was intrigued by the reference by the noble Baroness, Lady Kidron, to sports officials being put out of a job. I am a big football fan, as many colleagues will know. It just seems to me that VAR is a great example of how you can generate even more activity and interest by the digitisation of assessments and the use of algorithms to judge whether something is or is not offside. We are happy to support these amendments; we think they potentially touch on a vital aspect of the CMA’s work and we look forward to what the Minister has to say about them.

[Viscount Camrose (Con)]

My Lords, I apologise to the noble Lord, Lord Bassam, for jumping the gun before his interesting words. I reflect that the algorithm that puts exactly this combination of people in this Room would be fairly complex—but a good one.

I thank the noble Lord, Lord Clement-Jones, for using several amendments to raise the important issue of the impact of technologies, such as artificial intelligence, on workers and the nature of work. I also thank the noble Lords, Lord Knight and Lord Bassam, and the noble Baroness, Lady Kidron, for their contributions to what is an important part of our deliberations.

The Government of course recognise that new technologies can create challenges and risks, as well as opportunities and benefits. I agree with noble Lords that the impact of technology on work and workers deserves attention, and I will respond to each amendment in turn. However, I also hope that noble Lords agree that it is of paramount importance that this regime is effective and focused on promoting competition for the benefit of consumers, which is the CMA’s area of expertise. I know that future amendments propose that the CMA’s focus should go beyond that, so perhaps the bulk of that can be left for that debate.

The CMA has been considering future issues in the space of competition, and indeed recently published its first horizon-scanning report on 10 trends in digital markets and how they may develop over the next five years and beyond. However, the Government feel that wider issues around the impact of digital technologies on work and workers—those that do not impinge directly on competition for the benefit of consumers—are better dealt with elsewhere.

Amendment 2 would allow the CMA to establish that there is a link to the UK for the purposes of designating a firm with SMS when a digital activity is likely to have a substantial impact on work or work environments in the United Kingdom. The CMA’s objective is, as I say, to promote competition for the benefit of consumers, and it is important that the digital markets regime is focused on competition.

The current criteria to establish a link to the UK ensure that the regime is targeted and proportionate, and draw on similar approaches in other legislation, including Chapter 1 of the Competition Act 1998. However, this amendment would allow the CMA to link a digital activity to the UK on the basis of impacts that are explicitly unrelated to competition. It would therefore detract from the aims of the regime, which are competition focused. It would also be inappropriate for the CMA to assess impacts unrelated to competition, which is its area of expertise and jurisdiction.

Amendments 18 and 23 would ensure that the CMA can require the SMS firm, through conduct requirements, to carry out and share an assessment on wider social impacts. I agree with noble Lords that it is of crucial importance that users are given the information necessary to make informed decisions about the services they use. The current objectives and list of permitted types of conduct requirements have been carefully drafted to ensure that the regime can protect consumers and businesses that rely on SMS firms via targeted and tailored rules. Conduct requirements can be imposed for the purposes of the trust and transparency objective, to ensure that those who use or seek to use the relevant digital activity have the information they need to understand the terms on which the activity is provided. This amendment would go beyond the scope and competition remit of the CMA, potentially creating new burdens and additional complexities, which could slow down effective enforcement.

Amendment 56 would expand the concept of an adverse effect on competition to include the displacement or alteration of work conditions or environments within the United Kingdom. Pro-competition interventions are designed specifically to address the root causes of the substantial and entrenched market power which gives rise to strategic market status. Where adverse working conditions intersect with or create a substantial negative impact on the competition within a particular market or industry, it may be relevant for the CMA to consider these. However, explicitly amending the definition of adverse effects on competition to include workplace conditions would skew the focus of the regulator away from competition and shift PCIs away from the established precedent of the markets’ regime. During a PCI investigation, the CMA may identify actions that other regulators or public bodies would be better placed to act upon. This may include the DMU referring issues such as workplace conditions to a relevant regulator, better placed to deal with these key issues.

--- Later in debate ---

[Viscount Camrose (Con)]

I refer to the digital regulators themselves—the ICO or the FCA and Ofcom—or indeed regulators with oversight of employment law.

Amendment 61 would enable the CMA to require algorithmic impact assessments, to assess the impact of algorithms on society and the environment, including working conditions, if it considered such information relevant to its digital markets functions. I agree wholeheartedly with the noble Lord about the importance of understanding the impact of algorithmic systems on society, the environment and working conditions in the UK.

[Lord Bassam of Brighton (Lab)]

Is the Minister saying that it is up to the CMA to decide whether it is a relevant consideration?

[Viscount Camrose (Con)]

Yes, I think that I am saying that. The CMA, over the course of its investigations, can come across information beyond its own competitive remit but relevant for other regulators, and then could and should choose to advise those other regulators of a possible path for action.

Data Protection and Digital Information Bill

Lord Bassam of Brighton Excerpts

2nd reading
Tuesday 19th December 2023 Lords Chamber

[Lord Bassam of Brighton (Lab)]

My Lords, first I want to thank all those noble Lords who have spoken today, and actually, one noble Baroness who has not: my colleague, the noble Baroness, Lady Jones. I am sure the whole House will want to wish her a safe and speedy recovery.

While I am name-checking, I would also like to join in the general congratulation of the noble Lord, Lord de Clifford, who, as others have observed, made a valuable case on behalf of small businesses and SMEs generally, and also called, in his words, for investment to assist this sector to deal with the challenges of data protection.

The range of concerns raised is a good indication of the complexity of this Bill and the issues which will keep us pretty busy in Committee, and I am sure well beyond. We have been well briefed; a record number of briefings have been dispatched in our direction, and they have been most welcome in making sure that we are on top of the content of this Bill.

At the outset, let me make it clear that while we support the principle of modernising data protection legislation and making it suitable for a rapidly changing technological landscape, one that is fit for purpose, we join with noble Lords like the noble Lord, Lord Kirkhope, who made the case for ensuring that the legislation is relevant. We need to properly scrutinise this, and we understand the need to simplify the rules and make them clearer for all concerned. Most speakers commented on this real need and desire.

However, as others have said, this Bill represents a missed opportunity to grasp the challenges in front of us. It tinkers rather than reforms, it fails to offer a new direction and it fails to capitalise on the positive opportunities the use of data affords, including making data work for the wider social good. I thought the noble Lord, Lord Holmes, made a good case in saying it is our data and therefore needs to be treated with respect. I do not think this Bill does that.

The Bill fails to build on the important safeguards and protections that have been hard won by others in other fields of legislation covering the digital world, in particular, about the use of personal data that we want to see upheld and strengthened. The noble Baroness, Lady Kidron, made an inspired speech, pleading with us to hold the Government’s feet to the fire on this issue and others.

The Bill also fails to provide the simplicity and certainty that businesses desire, given that it is vital that we retain our data adequacy status with the EU. Therefore, businesses will find themselves navigating two similar but, as others have said, divergent sets of rules, a point well made by the right reverend Prelate the Bishop of St Albans and the noble Lords, Lord Vaux and Lord Kirkhope. In short, it feels like a temporary holding position rather than a blueprint for reform, and I suspect that, all too soon, we will be back here with a new Bill—perhaps a data protection (No. 3) Bill—which will address the more profound issues at the frontier of data use.

Before that, I must take over the points made by my noble friend Lord Knight, who opened the debate for us. It is an affront to our parliamentary system that the Government chose to table 266 amendments on the last available day before Report in the Commons—about 150 pages of amendments to consider in a single debate. The marvellous notes that accompany the Bill had to be expanded by something like a fifth to take account of all these amendments; it has grown over time. Clearly, our Commons colleagues had no way of being able to scrutinise these amendments with any degree of effectiveness, and David Davis made the point that it is down to us now to make sure that that job is well done.

I agree that some of the amendments are technical, but others are very significant, so can the Minister explain why it was felt necessary to rush them through without debate? For example, the new Schedule 1 will grant the Secretary of State the power to require banks, or other financial institutions, to provide the personal data for anyone in receipt of benefits. These include state pensions and universal credit, but they also include other benefits—working tax credit, child tax credit, child benefit, pension credit, jobseeker’s allowance and personal independence payments. That is a long list; we think that it probably covers some 40% of the population. What is the Government’s real need here?

Yesterday, we had a consultation session with the Minister. I asked where the proposals came from, and he was very honest that they were included in a DWP paper on fraud detection some two years ago. Why is it that the amendments were put into the Bill so late in the day, when they have been around and accessible to the Government for two years? Why has there not been any effective consultation on this? Nobody was asked whether they wanted these changes made, and it seems to me that the Government have acted in an entirely high-handed way.

Most of the population will fall into one or the other of the categories, as my noble friend Lady Young and the noble Lord, Lord Vaux, made clear. Some, such as the noble Lord, think that they might be exempted—but, having listened to my list, he may think otherwise. The criteria for these data searches are not clarified in the Bill and have no legislative limit. Why is that the case?

As Mel Stride and the DWP officials made clear when giving evidence to the Work and Pensions Select Committee recently, this is not about accessing individual bank accounts directly where fraud is suspected, it is about asking for bulk data from financial organisations. How will the Government be able to guarantee data security with bulk searches? When were the Government planning to tell the citizens of this country that they were planning to take this new set of powers to look into their accounts? I warn the Minister that I do not think it will go down very well, when the Government fully explain this.

Meanwhile, the banking sector has also raised concerns about the proposals, which it describes as too broad and liable to put vulnerable customers at a disadvantage. The ICO also questions the proportionality of the measure. Let me make our position clear on this: Labour is unreservedly committed to tackling fraud. We will pursue the fraudsters, conmen and claimants who try to take money from the public purse fraudulently or illegally. This includes those involved in tax fraud or dodgy PPE contracts. As our shadow Minister Chris Bryant made clear in the Commons:

“I back 100% any attempt to tackle fraud in the system, and … will work with the Government to get the legislation right, but this is not the way to do it”.—[Official Report, Commons, 29/11/23; col. 887.]


I hope that the Minister can confirm that he will work with stakeholders, banks and ourselves to find a better way to focus on tackling fraud in all its guises.

Another aspect of the Bill that was revealed at a late date are the rules governing democratic engagement, to which a number of Peers have referred today. The Bill extends the opportunities for direct mail marketing for charitable or political purposes. It also allows the Secretary of State to change the rules for the purposes of democratic engagement. It has now become clear that this will allow the Government to switch off the direct marketing rules in the run-up to an election. Currently, parties are not allowed to send emails, texts, voicemails and so on to individuals without their specific consent. We are concerned that changing this rule could transform UK elections. These powers were opposed in the public consultation on the Bill; this is not what the public want. We have to wonder at the motives of the Government in trying to change these rules at such a late stage and with the minimum of scrutiny. This is an issue to which we will return in Committee; I hope that the Minister can come up with a better justification than his colleagues in the Commons were able to.

I turn to other important aspects of the Bill. A number of noble Lords gave examples of how personal rights to information and data protection, which were previously in the GDPR and the Data Protection Act 2018, have been watered down or compromised. For example, subject access requests have been diluted by allowing companies to refuse such requests on the grounds of being excessive or vexatious—terms that, by their very nature, are hard to define—or by allowing the Secretary of State to define who has a recognised, legitimate interest for processing personal data. Similarly, there is no definition in the Bill of what constitutes high-risk processing —risking uncertainty and instability for businesses and the potential misuse of personal data. We will want to explore these definitions in more detail.

A number of noble Lords quite rightly raised the widespread fear of machines making fundamental decisions about our lives with no recourse to a human being to moderate the decision. The impact of this can be felt more widely than an individual data subject—it can impact on a wider group of citizens as decisions are made, for example, on policing priorities, healthcare and education. This can also have a hugely significant impact in the workplace. Obviously, algorithms and data analysis can bring huge benefits to the workplace, cutting out mundane tasks and ensuring greater job satisfaction. But we also need to ensure that workers and their representatives know what data is being collected on them and have an opportunity for human contact, review and redress when an algorithmic system is used to make a decision. For example, we need to avoid a repeat of the experience of the Just Eat couriers who were unfairly sacked by a computer. We will want to explore how the rights of individuals, groups of citizens and workers can better be protected from unfair or biased automated decisions.

The noble Baroness, Lady Kidron, and others have argued the case for new powers needed to give coroners the right to access information held by tech companies on children’s data where there is a suspicion that the online world contributed to their death and demise. This is a huge and tragic issue that the Government have sadly ducked, although the promise to listen that I heard from the Minister was very welcome. We shall ensure that we keep him to that commitment.

Despite all the promises made, however, the Government have broken the trust of bereaved parents who were expecting this issue to be resolved in the Bill. Instead, the amendment addresses only cases where a child has taken their own life. We will do what we can in this Bill to make sure that the commitments made in the Online Safety Act are fully honoured.

On a separate but important point, Clause 2 allows companies to exploit children’s data for commercial purposes. We believe that without further safeguards, children’s rights will be put very much at risk as companies collect information on where they live, what they buy, how they travel and what they study. We will seek to firm up those children’s rights as the Bill goes forward.

On cookie pop-ups, it is widely accepted that the current system is not working, as everyone ignores them and they have become an irritant. But they were there for a purpose—to ensure that the public were informed of the data being kept on them, so we do not believe that simply removing them is the answer. Similarly with nuisance calls, we want to ensure that the new rules are workable by clarifying the responsibilities of telecoms companies.

As I said at the outset, we regard the Bill as a disappointment that fails to harness the huge opportunities that data affords and to build in the appropriate safeguards. My noble friend Lord Knight put his finger on it well, at the front of the debate, when he said that we need a data protection Bill, but not this Bill.

The Government’s answer to a lack of clarity in so many areas of the Bill is to build in huge, sweeping, Henry VIII powers. When reviewing the legislation recently, we managed to count more than 40 proposed statutory instruments. That is an immense amount of power in the hands of the Secretary of State. We do not believe that this is the right way to legislate on a Bill that is so fundamental to people’s lives and the future of our economy. We want to bring these powers back into play so that they have the appropriate level of parliamentary scrutiny.

With this in mind, and taking into account all the concerns raised today, we look forward to a long and fruitful exchange with the Government over the coming months. This will be a Bill that challenges the Government.

Artificial Intelligence: Regulation

Lord Bassam of Brighton Excerpts

Monday 4th December 2023 Lords Chamber

[Viscount Camrose (Con)]

I thank my noble friend for that question on the important area of AI usage in defence. As she will recall, AI in defence is principally conducted within the remit of the Ministry of Defence itself. My role has very little oversight of that, but I will take steps with government colleagues to confirm an answer for my noble friend.

[Lord Bassam of Brighton (Lab)]

My Lords, the Minister referred earlier to new risks. Sadly, the rapid development of AI has given rise to deepfake video and audio of political leaders, most recently the London Mayor, Sadiq Khan. We debated such issues during the passage of the Online Safety Act, but many were left feeling that the challenges that AI poses to our democratic processes were not sufficiently addressed. With a general election on the horizon who knows when, what steps are the Minister and his ministerial colleagues taking to protect our proud democratic traditions from bad actors and their exploitation of these new technologies? This is urgent.

[Viscount Camrose (Con)]

I thank the noble Lord for raising this; it is extremely urgent. In my view, few things could be more catastrophic than the loss of faith in our electoral process. In addition to the protections that will be in place through the Online Safety Act, the Government have set up the Defending Democracy Taskforce under the chairmanship of the Minister for Security, with a range of ministerial and official activities around it. That task force will engage closely, both nationally, with Parliament and other groups and stakeholders, and internationally, to learn from allies who are also facing elections over the same period.

Artificial Intelligence: Regulation

Lord Bassam of Brighton Excerpts

Tuesday 14th November 2023 Lords Chamber

Asked by

[Lord Bassam of Brighton]

To ask His Majesty’s Government, following the action taken by the United States in respect of regulating artificial intelligence, including the recent signing of an Executive Order, whether they have plans to introduce similar provisions in UK law.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Viscount Camrose) (Con)]

In the AI regulation White Paper we set out our first steps towards establishing a regulatory framework for AI. We are aligned with the United States in taking a proportionate, context-based and evidence-led approach to AI regulation. The White Paper did not commit to new legislation at this stage. However, we have not ruled out legislative action in future as and when there is evidence of substantial risks, where non-statutory measures would be ineffective.

[Lord Bassam of Brighton (Lab)]

My Lords, I am a little disappointed in the Minister’s response, but we welcome the discussions that took place at Bletchley Park. While the Prime Minister says he will not rush to regulate, as the Minister knows, other jurisdictions— the US and the EU—are moving ahead. Labour in government would act swiftly to implement a number of checks on firms developing this most powerful form of frontier AI. A Bill might not have been in the King’s Speech, but that does not mean that the Government cannot legislate. Will the Minister today commit to doing so?

[Viscount Camrose (Con)]

The Government are by no means anti legislation; we are simply anti legislation that is developed in advance of fully understanding the implications of the technology, its benefits and indeed its risks. This is a widely shared view. One of the results of the Bletchley summit that the noble Lord mentioned will be a state-of-the-science report convened by Professor Bengio to take forward our understanding on this, so that evidence-based legislation can then as necessary be put in place. As I say, we feel that we are very closely aligned to the US approach in this area and look forward to working closely with the US and others going forward.

Counter-Disinformation Unit: Israel and Palestine

Lord Bassam of Brighton Excerpts

Tuesday 24th October 2023 Lords Chamber

[Viscount Camrose (Con)]

That is an important part of the Government’s approach to this very difficult, nasty situation. Last week, the Secretary of State met leaders of Jewish communities, and ongoing meetings are similarly being convened by DLUHC with all communities. We are establishing bridges between these communities and the social media platforms. One advantage they have in that dialogue is that they are accorded trusted flagger status, which greatly reduces the amount of time it takes to raise content of concern.

[Lord Bassam of Brighton (Lab)]

My Lords, the House has previously debated the role and work of the Counter-Disinformation Unit. I do not think anybody was particularly convinced by the assurances which the Minister gave back in July. These issues have been brought into sharp focus by recent events. At the time of that last debate, we were promised a meeting. Unless our Front Bench was left off the invite list, I am not aware of that follow-up meeting having taken place. Given some of the Minister’s responses today, that meeting is now more urgent than ever. Can the Minister commit to meet with those of us who are deeply concerned about this issue?

[Viscount Camrose (Con)]

I remember the July debate very well. I made a commitment then to meet with concerned Members, which I am happy to repeat. Again, I ask that concerned Members write to me to indicate that they would like to meet. Those who have written to me, have met with me.

Product Security and Telecommunications Infrastructure (Security Requirements for Relevant Connectable Products) Regulations 2023

Lord Bassam of Brighton Excerpts

Thursday 7th September 2023 Grand Committee

These are tiny footsteps towards gaining trust for IoT devices. I pay tribute to all the work that UCL did in this area of research about what is needed for IoT devices, but we still have quite a long way to go.

[Lord Bassam of Brighton (Lab)]

My Lords, I am grateful to the Minister, as ever, and to the noble Lord, Lord Clement-Jones, for his contribution. He had lots of questions, as ever, many the same as those we asked during the passage of the Bill.

The Product Security and Telecommunications Infrastructure Act creates a regime that has three purposes, which the Minister set out. They are to minimise default or easy-to-guess passwords, to maintain an awareness of security threats and publish contact information for use by consumers and owners, and to encourage greater transparency about how long the products covered by this legislation will receive security updates and support. I agree with the noble Lord, Lord Clement-Jones, that these are low-hanging fruit for regulation. We should look at this instrument as a small step in the right direction.

With that in our minds, we supported the PSTI Bill during its passage and, in common with other Members of the House, tabled and supported a number of amendments to go further than the Government wished.

The requirements being imposed on manufacturers are widely supported by consumer groups, although they are rightly very nervous and watchful of the direction in which the legislation takes us in terms of data. Questions are being asked about whether the standards are sufficient and what role, if any, distributors will have in improving consumer knowledge of security issues.

As discussed in a debate earlier this week, people’s habits with regard to data and the digital world have changed enormously over the past few years. This includes the rapid take-up of smart and connectable devices, such as smart speakers, CCTV doorbells and so on. These products are highly desirable, and yet research has demonstrated that many contain significant security vulnerabilities and that consumers are generally not aware of the risks that they face.

A policy commitment was made back in January 2020 and the Bill was passed in December 2022, so why will the new regime come into force only by April next year? We understand the need for technical details to be worked through and for manufacturers to adjust their own systems, but could the Government not have moved more quickly than this? This is a fast-moving market, after all.

We supported the passage of the Bill and, as I said, worked with colleagues across the House to push the Government to be more ambitious about the regime’s scope and the security standards that should be met by manufacturers, but it seems that Ministers refused to raise the bar and continue to do so.

As the noble Lord, Lord Clement-Jones, said, Which? and others have noted that, while the Act allows the Government to place requirements on manufacturers, importers and distributors, these regulations cover only manufacturers. Is the hope that distributors and retailers will pass security information on to consumers voluntarily or is the department looking at other tailored requirements for them? If the latter, how long might this take? Perhaps the Minister could elucidate that.

It seems that every day we hear of another major hack or data breach. Some are used to defraud victims, while others harness networks of smart devices to launch attacks on major websites. Sadly, these dangers are likely only to grow, as we discovered in recent weeks, so it is vital that the Government keep their foot on the gas on these issues, rather than passing these regulations and considering them job done. There is much more to do.

Like the noble Lord, Lord Clement-Jones, I draw attention to the Which? briefing paper, reflected in a Guardian article today, which suggests that manufacturers may be using these devices to collect more data than the legislation seemingly enables, which is shocking. Asking for postcodes and date-of-birth data seems outwith the manufacturers’ immediate needs. Can the Minister throw some light on this issue? What are the Government’s intentions regarding it and how do they intend to address it? These issues of data retention and use are serious. They affect consumer behaviour, confidence and trust, and trust is a terribly important commodity in today’s world. I hope the Minister can answer those questions.

I am rather with the noble Lord, Lord Clement-Jones, on smart meters. We have one; it is a scary device, and it has become scarier in the last year as the bills have gone up. I am not sure of its value but my wife tells me it is an invaluable tool. I hope that is the case, that we can get better and more confident about the data that these things produce, and that they are in the service of the consumer rather than of the manufacturer, because that is really where we should be coming from.

[Viscount Camrose (Con)]

I thank the crowds of noble Lords for their valuable contributions to the debate. I will make some general comments to start and then come to specific points that noble Lords have made.

Consumers assume that if a product is for sale it is secure, but too often—I think we are in agreement on this—that is not the case. Many consumers are at risk of cyberattacks, theft, fraud and even physical danger. These regulations will change that, ensuring that protections are implemented for our commonly used items such as smartphones, smartwatches and smart baby monitors, as well as the UK citizens and businesses that use them.

Cybercrime is thought to cost the UK billions of pounds every year, with one report by Detica and the Cabinet Office estimating the total cost at £27 billion a year. In 2020-21 the National Fraud Intelligence Bureau reported receiving over 30,000 reports of cybercrime, resulting in estimated losses of £9.6 million for the victims. Cybercrime is on the rise, and vulnerable internet-of-things products are a key attack vector for criminals. This instrument is an essential step in fighting the dangers of cyber risks.

While the product security regime will come into effect only next April, with the support of this House, I want to take this opportunity to reflect on how far we have come on this agenda. The development of the regime has been supported by a huge range of officials but I extend particular thanks to Peter Stephens, Jasper Pandza, Veena Dholiwar, Maria Bormaliyska, Jonathan Angwin, Warda Hassan, Howard Cheng and Eilidh Tickle for their dedicated and diligent advice.

I thank all experts who have contributed to delivering this regime since 2016. Among them stands Professor David Rogers, to whom I pay particular thanks for his leading role in developing the Code of Practice for Consumer IoT Security on which the security requirements of this instrument are based. Lastly, I too thank Which? for being a champion of consumer security, and for holding the Government to account throughout the process of delivering these important measures and on this agenda more broadly.

I shall now respond to the questions that have been asked. On the topic of why the security baseline does not go further, a matter raised by both noble Lords, we do not believe at this stage that there is sufficient evidence to suggest that mandating security requirements beyond the initial baseline would be appropriate. Specifically, we do not currently consider it appropriate to mandate minimum security-update periods for relevant connectable products before the impact of the initial security requirements is known. Governments mandating necessarily broad regulation across a sector as inherently complex as technology security will always run the risk of imposing obligations on businesses that are disproportionate to the associated security benefits or of leaving citizens exposed to cyber threats.

However, the Government agree that, for a number of consumer connectable product verticals, implementation of the three security requirements alone would not be sufficient. Legislation, however, is not the only incentive driving the security practices adopted by tech manufacturers. Evidence suggests that consumers value and consider the security of a product when making purchasing decisions, but assume that products available for them to purchase will not expose them to avoidable security risks.

In ensuring that manufacturers are transparent with UK consumers about how a product’s security will be maintained, we expect the product security regime to incentivise improved standards of cybersecurity beyond the initial three requirements. The Government will closely monitor the impact of the initial security requirements on standards of cybersecurity across the sector, and will not hesitate to mandate further requirements using the powers provided by the parent Act if necessary.

--- Later in debate ---

[Viscount Camrose (Con)]

No, the consultation took place with a wide range of civil society and other stakeholders. Mechanisms are in place to update, should it not prove to be as proportionate as we believe it is. The Government are also engaging directly with online marketplaces to explore how they can complement the product security regime and further protect consumers.

On the question of how the regime accounts for the possibility of changing international standards, the instrument references specific versions of ETSI EN 303 645 and ISO/IEC 29147. Were the standards to be updated, the version cited would still be the applicable conditions in Regulation 2. Noble Lords should rest assured that any action by the Government to update the standards referenced in the regime would require further parliamentary scrutiny.

Turning to computers, we do not have evidence that including such products in the scope of the regime would significantly reduce security risk. There is a mature anti-virus software market that empowers customers to secure their own devices. Alongside this, mainstream operating system vendors already include security features in their services. The result is that they are not subject to the same level of risk as other consumer devices.

On smart meters and data, the smart metering product market is already regulated through the Gas Act 1986, the Electricity Act 1989 and the Smart Energy Code. Smart metering products are subject to tailored cyber requirements that reflect their specific risk profile. This exception ensures that smart meter products are not subject to double regulation without compromising their security.

[Lord Bassam of Brighton (Lab)]

The Minister has referenced two pieces of legislation which almost—this is perhaps going a bit far—predate the digital age. Is he saying that those are fit for purpose, given that much has changed since 1986, to cite one of the dates he gave, and subsequent pieces of legislation? Are they right for what we are doing now?

[Viscount Camrose (Con)]

I have to confess that my familiarity with some of that legislation is a bit limited, but I was attempting to convey that the full extent of the regulation covering those devices is collectively included in those three instruments. I recognise that that is not a wholly satisfactory answer, so I am very happy to write to the noble Lord. That legislation mandates compliance with the code collectively, which is kept up to date and includes robust modern cyber requirements. The UK already has a robust framework for data protection. While I absolutely agree that it is important, it is not the subject of these regulations.

I would like to return to a matter that I addressed earlier and point out that the cyber resilience Act that the noble Lord mentioned will in fact not, as per the current agreed version of the Windsor Framework, come into effect in Northern Ireland. The point remains that we will monitor its impact on the continent. I beg his pardon for not being clear about that.

Turning to the matters raised by the noble Lord, Lord Bassam, we agree that the challenges posed by inadequate consumer connectable product security require urgent action. However, regulating a sector as heterogeneous as connectable technology in its diversity of devices, user cases, threat profiles and extant regulation also requires careful consideration. We feel that we have acted as quickly as was appropriate, and in doing so we acted before any other nation.

On the role of distributors in communicating the defined support period to customers, products made available to consumers in the UK, or those made available to businesses but identical to those made available to consumers, are required to be accompanied by a statement of compliance, which will contain information about the minimum security update period for the product. Retailers are in fact required to ensure that the statement of compliance accompanies their product.

In addition, the SI requires manufacturers to publish information about the minimum security update periods, alongside invitations to purchase the product where certain conditions are met. The Government have no immediate plans to make it mandatory for the distributors of these products to publicise the defined support period. However, we encourage distributors to take this action voluntarily. If the manufacturer fails to publish the defined support period, the enforcement authority can issue notices demanding that the manufacturer make the necessary corrections, or demand that importers or distributors stop selling the product. It can also seize products and recall them from end users.

We will of course be monitoring the effectiveness of the product security regime when it comes into effect. If evidence emerges suggesting that further action to ensure the availability of the defined support period at points of purchase would be appropriate to enhance and protect the security of products and their users, the PSTI product security regime empowers Ministers to take such action.

In conclusion, I hope noble Lords will recognise the benefits that this regime will bring to the UK public and its ground-breaking influence on the world stage.

EU Programmes

Lord Bassam of Brighton Excerpts

Thursday 7th September 2023 Lords Chamber

[Lord Bassam of Brighton (Lab)]

My Lords, what a climbdown; what a humiliation. When it comes to Horizon Europe, the response is straightforward: “At last, what a relief”. The UK’s absence from Horizon has been enormously damaging to our national interest. It has cost our research, business and academic communities dear, with the loss of billions in funding as well as jobs and expertise—the very things that the Minister was praising as coming along now.

The Government’s failure to negotiate a continuation of the UK’s Horizon membership ahead of Brexit saw British researchers frozen out of projects even before we had formally left the EU. A number of EU national researchers have since opted to leave the UK and its institutions for good, changing the nature and skillset of our research ecosystem—a brain drain. By rejoining, some of this damage may be undone, but that process is likely to take many years. Would the Minister like to estimate how long it may take?

Of course, we welcome the announcement, but the Government do not deserve congratulations or credit. The main reason that UK researchers and businesses have missed out on three years of funding and collaboration is successive Conservative Administrations’ simple intransigence around the Northern Ireland protocol, and we all know that. Until a deal was done, nothing could happen with Horizon or anything else where we wanted to make progress with our friends and neighbours in the EU. Our rejoining Horizon was pitched as a quick and obvious follow-up to the Windsor Framework, yet it has taken more than half a year for the deal to be done and an announcement to be made. Colleagues across your Lordships’ House have asked for updates time and time again, but Ministers, including the current one, have been unable to provide anything meaningful, holding the line that talks were “ongoing”. With such clear potential benefits for our economy, why has this not been more of a priority?

I have several questions for the Minister. I appreciate that he may not be able to answer them all today, but I think that noble Lords will want full answers before the House rises for the Conference Recess. Ministers say that they have secured improved financial terms, but this has not been backed up. No figures have been published and no evidence has been provided. Can the Minister confirm what the UK will pay over the remainder of the Horizon period? It is not much of a claim to say that we have made significant progress and savings simply by not being part of the programme. Does the amount that the UK pays truly represent an improved settlement vis-à-vis the terms offered earlier in the Brexit process, or will it merely be a case of the Government having saved during the period in which we were not members?

Has the department undertaken any analysis of the cost to the economy of not being in Horizon over the past few years? What was the lost-opportunity cost to our country? If so, will the Minister commit to publishing those figures? From a practical perspective, can the Minister tell us about the agreement’s likely impact on SMEs? Will UK SMEs be able to participate in industrial schemes under the Horizon banner? Will companies be able to hold intellectual property arising from programme projects or access other funds that may supplement those offered through participation in Horizon? These kinds of considerations are key to growing our economy—something that this Government has singularly failed to do for a prolonged period.

Once again, we welcome the good news, but today must be about more than headlines. It must act as a turning point. The sad story of the past few years has been a succession of Tory Administrations who have put political infighting ahead of the national interest. Time and money have been wasted on alternative schemes and our national reputation has taken another unnecessary hit. What will happen to the Government’s Pioneer programme now that we are part of Horizon? How much did it cost to work that programme up and what will we have learned from the experience?

On a cheerful note, we must all gather together to welcome the announcement, wish UK funding applicants luck and hope that they will be able to gain from their collaboration with others. As we move towards the next election, we look forward to working to enhance our world-leading research base and to delivering the industrial strategy that so many important parts of our economy need and deserve. Horizon is a very important first step in that direction.

[Lord Wallace of Saltaire (LD)]

My Lords, I declare a strong interest. My son came back to the United Kingdom after 10 years working at American universities as a systems biologist—which is one of the Government’s strategic priorities in science, as the Minister will know—on a Marie Curie European Union scheme. Had we not left the EU, he would have been applying for a European science council grant.

We on these Benches wholeheartedly welcome this agreement. We all need to be grateful to all those in the scientific community and the Government who did their best to maintain links and keep the negotiations going in spite of all the difficulties. I regret the overhyping of this agreement. Among the comments that have emerged from the scientific community, I note that from Professor Sir John Hardy from University College London, who says:

“Going back in is good. But irreversible damage has been done”


in the interval. Our colleague, the noble Lord, Lord Rees, said that there was an

“unconscionable delay in reaching agreement”.

Now that we have an agreement, the hard work has to begin. If we are to become anything like a scientific superpower within the next seven years, a great deal needs to be done. One of the things that the Government have to recognise now is that there is a contradiction between their approach to how foreign scientists working in this country are treated when they are here—and, even more so, their families—and the idea that we will continue to attract the most talented in the world.

Scientific research is dependent on an international network, and that has to be a two-way network. Far too much in this announcement suggests that it is wonderful for British scientists and will give us access to foreign universities. We also want foreign scientists to work in British universities, but we have just had this announcement that the visa and health charges for foreign academics in this country and their wives, husbands and families will be increased from £15,000 to £25,000 in total over a five-year term. That is a severe disincentive. I heard about this 10 years ago when my son was first coming back, and some of his colleagues over there said that they would not come back to Britain because the way their American wives and families would be treated when they got here was so unwelcoming. That is a huge disincentive to Britain becoming a science superpower. It also contradicts government policy and suggests that the Home Office, the Department of Health and DSIT need to get their act together and sort this out.

The second thing we have to work on is pay. Academic pay for scientists in Britain has sunk by 25% in the last 10 to 15 years. The pay of a university lecturer running a laboratory in a British university is now lower than that of a post-doctoral researcher starting off in the United States—I speak with expertise on this. In an international market in which scientists are highly mobile, that is not attractive and will not get us anywhere like being a scientific superpower.

We on these Benches welcome this delayed decision. We regret that it is seen so much as a matter of what we get out of the hard bargain bilaterally and not as our joining a multilateral network in which there are multiple exchanges. There need to go on being multiple exchanges. We very much hope that DSIT will begin to learn the lessons of where we have made mistakes in recent years and on which we now need to improve.

[Viscount Camrose (Con)]

I thank the noble Lords, Lord Bassam and Lord Wallace of Saltaire. Dealing first with the comments of the noble Lord, Lord Bassam, I think it is a stretch by anybody’s imagination to describe this as a climbdown and a humiliation, albeit while welcoming it. In principle, three major advances in our standing have been made with the deal: first, the creation of the clawback mechanism to mitigate the risk that we spend more than we receive; secondly, the fact that we do not spend any money on any time or activities to which we do not have access or where we are not a member; and, thirdly, the ability to withdraw from Euratom or other areas of the programme from which we did not benefit.

[Lord Bassam of Brighton (Lab)]

Can the Minister clarify in which year, during any of the time that we were part of Horizon, we ever needed to have a clawback arrangement? My understanding was that we were net beneficiaries from Horizon for the entirety of the programme.

[Viscount Camrose (Con)]

As a number of noble Lords have observed in this debate and previously, the fact that we were not members of the Horizon programme was of great concern and probably did lasting damage to the UK’s scientific community. One way to protect ourselves from further lasting damage was to create the clawback mechanism, to make sure that the money we put in would not exceed the money we took out.

It is worth reminding noble Lords that the United Kingdom did not decide to withdraw from Horizon association; the EU withdrew our association from us—making an association with the Northern Ireland protocol—which we appealed. It has always been our preference to be a member of the Horizon programme. The negotiations were hard fought and necessarily took a long time. We feel that they have given us a more than reasonable result. I do not enjoy the overhyping that the noble Lord, Lord Wallace of Saltaire, perhaps rightly points out, but on the other hand I think it a worthy cause for celebration that we are able to reassociate with the programme, which has been welcomed by the sector.

With respect to the Pioneer programme and the analysis of the opportunity cost, I argue that it would have been extremely reckless to have been negotiating with the EU and not had a programme. It would be like driving uninsured. I do not know the cost in terms of measuring the time of civil servants and other officials in creating the policy—I do not particularly know how to find out, but I am more than willing to try—but it was not a significant cost in that no actual investments were made beyond people’s time and effort to perform the preparations. The opportunity cost of the time we have missed in Horizon is a calculation that has to be performed at the end of the Horizon period in 2027, so that we can understand overall, end to end, what was paid and what was the effect of missing out.

Finally, I remind the House that the United Kingdom is putting £20 billion a year into R&D by 2024-25. This is the greatest increase ever in any public spending review period and shows how seriously we take our goals of becoming a science and technology superpower.

I will take back the comments that the noble Lord, Lord Wallace of Saltaire, made on how visa charges and health charges will be very off-putting. I take that on board, as well as the comparison of academic pay for scientists. I will absolutely have a look at that.

Beyond Digital (COVID-19 Committee Report)

Lord Bassam of Brighton Excerpts

Wednesday 6th September 2023 Grand Committee

[Lord Bassam of Brighton (Lab)]

My Lords, I join other Members of the Grand Committee in congratulating the noble Baroness, Lady Lane-Fox, on the report, which is hugely valuable. Although some time has passed since it was published, it is still fresh and useful for government and all of us to understand the changing nature of the digital world.

I feel humble to be in the noble Baroness’s presence and privileged to be able to join in this debate. I am delighted that she is here and in better health than she has been. She is a terrific advocate for the benefit of expertise in this House. We owe her a huge debt of gratitude. Her background in the digital realm is legendary and speaks for itself. The Government should have availed themselves of her expertise and insight rather earlier—and, of course, that of her fellow committee members represented here.

I have taken part in many committee report debates over the years—in fact, I have been responsible for ensuring that committee reports have been authored—and rarely have we seen a committee feel so compelled to publish a follow-up document that criticises the Government’s response. It is very much needed, and I say that not in an adversarial sense but because it adds to the quality of our thinking in debating this important subject. Of course, as the committee acknowledged, this may have been due to the cross-departmental nature of the report: it remains to be seen whether the creation of the Department for Science, Innovation and Technology will help or hinder efforts to facilitate cross-government co-operation on digital matters. I rather hope it helps.

As the report makes clear, the pandemic rapidly accelerated digital transformation—all speakers today have drawn attention to that very obvious point. People’s habits changed quickly and, while we have thankfully returned to relative normality, many of those changes in behaviour have persisted and grown. It has certainly changed my working world: the time I give to a charity has been made much easier by the widespread adoption of Teams, Zoom and so on. Travel has been reduced but content has increased and output has certainly increased—my output, too.

Whether it is the digital strategy, which we acknowledge has been updated since the report was published, or the AI strategy, Ministers have faced legitimate criticism for being behind the curve on technological change, being too slow to spot opportunities and even slower to mitigate risks. Although the Government may not have been able to anticipate the precise speed of change brought about by the pandemic, the shift to a hybrid world, as all speakers have acknowledged today, was under way well before Covid-19 struck, and policy in some areas should have been more thought through than was evidently the case.

The report discussed issues around the availability of IT devices and speedy and affordable internet connections, noting, among other things, the regrettable reality of the thousands of schoolchildren unable to participate in remote learning during the lockdown. I know from my own charity world experience about the extraordinary steps we had to take to ensure that children could get greater access to IT—shared laptops; trying to log on using generally available wifi. We had to tackle all those things to try to provide a bit more of a level playing field for kids in hard-up communities where digital access was rare or very remote.

Although some progress is being made in rolling out fibre broadband connections and upgrading mobile infrastructure, it remains the case that central government targets are routinely missed and/or downgraded. With many families still struggling with the cost of living crisis, it is surprising that the Government have not done more to promote broadband providers’ social tariffs. Instead, the department and the regulator are leaving it largely to operators, which have no incentive to proactively offer customers a cheaper product. The committee talked about the importance of improving digital literacy—again, all participants today have drawn attention to this—yet it has taken months of cross-party pressure to persuade Ministers to reinstate media literacy provisions to the Online Safety Bill after they were mysteriously dropped following the period of pre-legislative scrutiny.

Public service transformation is another important issue covered by the committee, and one where the Government’s progress has also been slow. I was at a Google presentation today, and it is so obvious when you listen to what Google says that public services could be transformed with better use of data and a more advanced digital strategy.

My own party has been clear about how new technologies could make public services more efficient and responsive to users’ needs. As we have heard this afternoon, AI tools can bring about better health outcomes, particularly for cancer patients, in terms of diagnosis; help spot mistakes or fraud in the welfare system; and provide more personalised plans for those seeking employment, changing career or training. Mind you, I am sad to say that it would not have been much use with crumbling concrete because the advice would have been ignored. The point here is that it is about making intelligent use of data and the insight that the new world of digital and the hybrid future of work bring about.

We are also clear that, as many jobs become hybrid or online only, employment rights must keep pace and workers’ well-being must be safeguarded. The Government have pledged on several occasions to introduce an employment Bill that begins to reflect the new world of work, but still we wait.

Another salient issue covered by the report is that of resilience against cyberattacks and other threats. As more public services move online and more transactions are undertaken online—or should be—systems become more vulnerable to attack and individuals become more vulnerable to costly scams. The noble Lord, Lord Alderdice, drew attention to the cyberattacks on the health service. We know that the Government and their relevant agencies, including the National Cyber Security Centre, take these threats seriously—we all must —but it is clear from recent events in Northern Ireland that more must be done to safeguard systems and data.

I think we all recognise and understand that the internet is in general a force for good. It brings people closer together, but it can also make them feel more remote from one another. We have to balance those things and find a way through that. It gives us access to information and entertainment and it can enable us to be more productive, creative, thoughtful and thinking. However, when it comes to the Government’s approach to the digital transformation accelerated by the Covid-19 pandemic, all is not well. The UK is by no means the worst but there is much more to do if we are to ensure that the benefits are spread not only evenly but fairly, and that risks are properly managed.

I have a few questions for the Minister. How will the Government keep their digital strategy fresh? That is essential. For instance, will they have a plan to ensure that we take advantage of the electronic trade documents legislation, which is urgent? I had no sense of a strategy when we were dealing with that Bill; I know that the noble Lord, Lord Holmes of Richmond, shares that view.

Can the Government assure us that they will build into the design of future public services a commitment to tackling the digital divide? I believe that to be a fundamental issue of fairness and probity and essential for us to maximise the benefits of the digital world. The noble Lord, Lord Bilimoria, made that point rather powerfully.

Finally, what assessment are the Government making to guarantee health resilience in the face of likely and future pandemics? I think somebody said—this is an advert—that nobody thought that we would have a pandemic of the sort that we did or could predict the pandemic that we had. I strongly recommend a film made in 2011 called “Contagion”. It is a good watch, but it is scary.

I hope the Minister will deal with some of the issues that we have raised this afternoon. Again, I join others in thanking the noble Baroness, Lady Lane-Fox, for a really thought-provoking and valuable committee report, which I hope will help us all shape public policy in future.

Advanced Artificial Intelligence

Lord Bassam of Brighton Excerpts

Monday 24th July 2023 Lords Chamber

[Lord Bassam of Brighton (Lab)]

My Lords, the noble Lord, Lord Ravensdale, is of course to be congratulated —we have all managed to do so—on stimulating such a thought-provoking and thoughtful debate. I observe that this is one of the occasions on which Cross-Bench contributions far outnumber contributions from those of us who have a political label attached. There is a good reason for that: not only do our Cross-Bench colleagues bring independence and expertise, but they also bring knowledge and insight, and we should be very grateful for that, to echo the noble Lord, Lord Clement-Jones.

This debate is indeed timely. Artificial intelligence has gone from theory to reality in a short time, and from marginal to mainstream. Innovation is of course in part being driven by our UK tech start-up and scale-up firms, which my party believes is essential if we are to secure the strongest sustained economic growth in the G7, which we need to secure if we are to meet our nation’s challenges and move away from our current flatlining economy.

A decade ago, most people’s experience of AI was limited to things like the tagging of photographs on social media, whereas now we can unlock our mobile phone with face ID and use AI to generate many forms of content—images, videos, essays, speeches and even data analysis—in a matter of seconds. As the noble Lord, Lord Watson, reminded us, AI can now be used to simulate Beatles hits from the past and create modern duets. The creative sector will benefit greatly from AI.

Impressive as these developments are, they can be considered fairly basic when looking at many new forms of advanced AI, the focus of today’s debate. The Lords Library briefing notes the use of AI in the financial services sector in relation to identifying suspicious transactions, but its application in that sector is even more widespread. Many banks’ mobile apps can categorise purchases to help people track how much they are spending on food or fashion and push personalised offers for supplementary products such as credit cards or insurance. If you need help, you will likely encounter an AI assistant. I can even use an AI assistant to help me choose where best to sit in my local football club’s football stadium.

There is no doubt that these tools are having a positive impact in many realms, making previously complex processes more straightforward. Firms and public services are benefiting, with AI technologies improving the identification of certain types of cancer, the safety of transport networks, the handling of spikes in demand for energy and so on.

Labour believes that AI can be used for even greater good. The noble Lord, Lord Kakkar, made a compelling argument regarding the NHS and the healthcare sector. We would wish to see new technologies cut waiting lists, better identify a broader range of illnesses and improve diagnostics. In the welfare system, it could be used to personalise jobseekers’ return-to-work plans and spot the fraud and loss that cost the Exchequer billions each year.

However, as noble Lords have observed, with opportunity comes risk. While AI can be put to positive use, we are seeing more and more examples of new technologies having unintended consequences or being deliberately deployed by the dark side in undesirable ways. Many noble Lords have spoken about the risks of AI today, whether those concerns are around bias and discrimination, privacy, security or AI’s impact on jobs and wealth distribution.

We do not need to go far to find evidence of AI being misused, and there are particularly worrying trends in the security realm. AI tools are being used to generate convincing text messages. The noble Lord, Lord Anderson, made a very good argument covering that point. AI can also simulate voice clips which purport to come from loved ones, friends, neighbours or family, leaving people increasingly vulnerable to scams. There is evidence that AI chatbots are being programmed to radicalise young people, which is why the shadow Home Secretary has announced that Labour will criminalise the deliberate training of chatbots to promote terrorism and violence.

During the passage of the Online Safety Bill, the House debated the rollout of AI-generated content and the growth in the metaverse when looking at the latter. It is said that police forces have voiced concern about the scale of misogyny and racism and the potential for child abuse. As noted in the Library briefing and by noble Lords today, the risks of AI extend further still. The rollout of ChatGPT, Bard and other large language models has sparked concerns about the integrity of the education system.

On employment, while some see AI as a means of boosting productivity, others, including the TUC, are understandably nervous about the impact on jobs. Octopus Energy claims that its AI-based customer service system does the work of around 250 people, so the threats are apparent.

These debates have become more pressing in recent months, with warnings from some of the field’s greatest minds that AI is developing at such a pace that its downsides may become unmanageable. The Government have been slow to wake up to the dangers of AI; their strategy did not, in our view, sufficiently address the risks that new technologies bring, and the Prime Minister has had to change tack in recent months. Which way will he go? Where will he end up?

As noble Lords have said, it is risk versus innovation. We need to assess and ensure that we have quality regulation. It is useful that we have health and safety processes, but they alone will not provide the breadth of protection that we need and that consumers and workers alike require. We need to adopt the precautionary principle.

What sort of regulatory framework does the Minister see for the future? The Blair/Hague report set out the parameters of the debate, but where will the Government settle? That has been one of the key questions focused on in this afternoon’s debate.

While we welcome the Prime Minister’s desire to discuss these matters on the international stage, we know that he is not so keen to lead on issues such as climate change, and the UK seems to have taken a step back on that and other issues. It is clear that very serious conversations are needed in the weeks, months and years ahead—discussions with the tech sector, the police, security forces and our key international partners.f

AI will be key to solving some of the most pressing challenges faced by society, but we must ensure that there are appropriate guardrails in place to stop it being exploited in ways that will cause more harm than good. I know the Minister is an AI enthusiast and we do not wish to change that, but we hope he can demonstrate in his response that the Government are fully informed and ready to act.

The benefits of AI are undeniable, but so are the risks. As Members of your Lordships’ House, it is incumbent on us to gain a thorough understanding of AI technology and all its implications. By doing so, we can effectively address the challenges it presents and leverage its potential to the fullest for the betterment of our society. We need to collaborate, engage in research and encourage dialogue with experts, academics and industry leaders. By harnessing knowledge and wisdom, we can navigate the complex landscape of AI development and regulation and, I hope, ensure a future where AI serves as a powerful force for good while safeguarding the interests of all citizens.