Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Report: 1st sitting: House of Lords
Wednesday 22nd February 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I thank all noble Lords who have taken part in this debate on Amendment 24, tabled by the noble Lords, Lord Clement-Jones and Lord Foster. This amendment, which was first tabled in Committee, partly reflects proposals currently under discussion at European level as part of the draft copyright directive, as noble Lords have said this evening. It would require organisations using copyright works via licences to provide creators with regular information on how their work has been used, and the revenue generated by their use. This obligation could be met by complying with a code of practice determined at sector level. The amendment also provides creators with recourse to the intellectual property enterprise court in cases where such a code was not implemented or adhered to.

As we said in Committee, the Government agree that transparent markets can benefit all parties. I particularly understand the potential benefits of transparency in areas such as the creative industries, where individual artists—writers, musicians and performers, as noble Lords have said so eloquently this evening—often deal with large corporations. As noble Lords are aware, the Government are currently in the process of negotiations on the draft copyright directive, and I continue to hold the view that we should allow this process to reach a conclusion before considering the case for domestic intervention. I appreciate that the noble Lords, Lord Clement-Jones and Lord Foster, the noble Earl, Lord Clancarty, and the noble Baroness, Lady Jones, would welcome a firm statement of support for the Commission’s proposals in this area. Unfortunately, however, I am not in a position to give such a statement this evening. However, I can assure noble Lords that the information received in the recent call for views on the directive has been carefully considered, and that the Government will continue to engage constructively in this debate, including in relation to the role of collective bargaining mechanisms and industry-led codes in improving reporting to creators.

I also wish to raise another issue regarding the amendment. The proposals from the European Commission include an ability for member states to adjust or restrict the transparency obligation in certain cases, taking into account, for example, the contribution of an individual creator to an overall work, or the proportionality of the administrative burden. Views on the benefits of these powers are mixed, and are likely to require careful consideration with the creative industries at sector level if the directive comes into force in the UK. However, I believe that it would be imprudent to accept an amendment at this stage that does not appear to provide the Government with similar flexibility. Doing so could risk imposing burdens on publishers, producers and broadcasters that restrict their ability, in effect, to develop new talent. With this explanation and the renewed assurance that the Government really do take the concerns of creators in this area seriously, I hope that the noble Lord will withdraw his amendment.

[Lord Clement-Jones]

My Lords, I congratulate the noble Baroness, Lady Buscombe, on finding a new argument at the end; I thought that was magnificent. Imprudence is something that I would never want to be accused of in these circumstances. I thought that this amendment did not reflect fully what Article 14 contained. The Minister was absolutely right: it was entirely the intention that it would not contain that, because of the difficulty of interpretation. It is possible to do that more easily in continental law, rather than when you transpose it into UK law. I shall be very interested to see what our parliamentary draftsmen make of it, if ever they are faced with the task of transposing Article 14 into UK law.

I like the sound of “engage constructively”. I know that the Minister’s heart is in the right place and I think she said something like, “We really do mean this”, so the sincerity was utterly apparent. In the face of that, how can I do anything but withdraw the amendment? I beg leave to withdraw.

Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Lords Chamber

[Baroness Buscombe]

My Lords, Amendment 228 introduces a new clause with a regulation-making power that will enable the police and the National Crime Agency to apply to the courts for an order compelling communication providers to take whatever action the order specifies to prevent communication devices being used in connection with drug-dealing offences. Such action may include blocking mobile phone handsets and SIM cards and preventing particular phone numbers from porting between networks, as well as preventing access to wi-fi networks. This is an enabling provision that provides for the Secretary of State to set out in regulations details of how applications are to be made and dealt with in the courts. The amendment broadly mirrors Section 80 of the Serious Crime Act 2015, which provides for a similar power to prevent the use of mobile phones in prison.

The amendment responds to an operational requirement of the police, who require support in tackling the issue of county lines—the police term used to describe gangs in large urban areas who supply drugs, especially class A drugs, to suburban areas and market and coastal towns. To support their market expansion, gangs recruit and exploit children and vulnerable adults through deception, intimidation, violence, debt bondage and/or grooming. They are used to carry drugs and money.

County lines gangs’ criminality relies on the unrelenting recruitment, coercion and systematic exploitation of the most vulnerable including looked-after children, young people reported as missing and children from broken homes. Vulnerable adults are also exploited and can lose control of their home to gangs who use it as a base to distribute drugs, in a practice known as cuckooing.

The phone line is central to this model and to the gangs’ ability to deal drugs out of area in this way. When establishing a new county lines market, gangs will promote a number locally as the number to call to buy drugs. That “deal line” is therefore at the very core of this criminal model. Dealing drugs is a serious criminal offence and the police are committed to securing prosecutions wherever possible. However, as the deal line is held well away from local street-level drug-dealing activity and it will be an anonymous pay-as-you-go line, both those factors make it hard for the police to achieve prosecutions against an individual for the activity on that line.

Each deal line has the potential to interact with hundreds of customers and facilitate thousands of deals 24 hours a day. Disrupting these lines will have a significant impact in disrupting the gang-related drug supply and associated exploitation. There is currently no legal power in place to compel communication providers to disconnect phones used in county lines drug-dealing activity. We must ensure that the police have the powers they need to tackle this issue.

This legislation is part of a wider ongoing multiagency response, including safeguarding partners, to tackle county lines gangs, but this new order is a critical tool that will render this operating model ineffective and unattractive through the disruption of it. Amendments 236 and 241 are consequential. I beg to move.

[Lord Clement-Jones]

My Lords, we are broadly supportive of the amendment. We want to put on record that we have our doubts about the efficacy of the provisions, but obviously if they work then we will be thoroughly delighted. We are slightly doubtful about whether these measures will ultimately be effective, though, and I am sorry that my noble friend Lord Paddick is not here to add his experience to the debate.

Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Committee: 3rd sitting (Hansard): House of Lords
Monday 6th February 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I thank the noble Lord, Lord Clement-Jones, for raising this issue. Our creative industries ultimately depend on the efforts of authors, musicians and other creators, and I agree with the principle that they should be fairly remunerated when their works are used. We want to create an environment where the UK’s creative industries can continue to thrive and retain their world-leading edge. The creative content tax reliefs are one of the Government’s flagship policies, and the film tax relief alone supported over £1 billion of expenditure in the UK in 2015-16. The Government are also investing in skills to create a pipeline of future talent. Since 2013, we have made available up to £20 million match funding to the skills investment fund to help employers address priority skills needs in the screen sector. Over the last 18 months, this has supported more than 500 graduate placements.

The amendment would require those organisations exploiting copyright works via licences to provide the relevant creators with regular information on their use and the revenue they generate, and states that this obligation could be met by complying with a code of practice determined at sector level. It would also provide creators with recourse to court if these requirements are not adhered to. The principle of transparency is an important element of well-functioning markets. I am aware that some creators and their representatives find it difficult to access information on the use of their works owing, for example, to difficulties in negotiating suitable contractual terms. I am, however, happy to confirm to your Lordships’ House that the Government are already engaged in discussions to address this issue. The European Commission has made proposals in this area as part of its current draft directive on copyright, and the UK will actively engage in these debates while we remain a member of the European Union. As such, I hope the noble Lord, Lord Clement-Jones, will understand the Government’s wish to allow this process to develop before considering the case for domestic intervention.

I welcome the noble Lord’s recognition in his amendment of the important role that collectively agreed industry standards can play in this space. Creators and publishers alike have highlighted the role that such standards can play in improving transparency and fairness. Examples in the UK include the Publishers Association’s Code of Practice on Author Contracts, and the fair digital deals declaration operated by the Worldwide Independent Network. I believe that it is worth giving careful consideration to the part that these industry-led initiatives can play, and I hope the debate at EU level will be a chance to explore that. With this explanation, and the assurance that these issues are under active consideration, I hope the noble Lord will withdraw his amendment.

[Lord Clement-Jones]

My Lords, I thank the Minister for an extraordinarily well-crafted response—it seemed to throw bouquets in various directions, but I am not quite sure where the petals will fall at the end of the day. It was splendidly positive at the outset, and I felt a speech on industrial policy for the creative industries might be coming on. I thank the noble Earl, Lord Clancarty, for his very supportive contribution.

The Minister talked about transparency being an important element of a well-functioning market and went on to talk about codes of practice, the Government’s active engagement in discussions of elements of the EU draft directive, and so on, but she never actually agreed that the principle of transparency should be incorporated into UK law. Clearly, if the EU directive is passed within the two-year period after notice of Brexit is given, it may well be incorporated into UK law. However, the Minister did not say, “Yes, and moreover, given the call for evidence, we have heard the evidence on transparency and we fully support that element of the directive”. It was rather a case of saying, “Let’s keep talking and actively engaging”, and so on and so forth. I suspend disbelief slightly given that the Minister supported the principle but I am not sure she went so far as to support its incorporation into law. That is a rather different matter. We may well return to this issue on Report. In the meantime, I thank the Minister and beg leave to withdraw the amendment.

Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

Committee: 2nd sitting (Hansard - continued): House of Lords
Thursday 2nd February 2017 Lords Chamber

[Baroness Buscombe (Con)]

My Lords, Amendments 71B and 79A seek to expand the existing criminal liability for making or dealing with copyright-infringing articles and the restrictions on unlawful decoders to include the supply of devices and software—such as set-top boxes or IPTV boxes and illicit software apps or extensions—intended to be used for copyright infringement.

An amendment with the same or a similar ambition was first tabled in the other place and then withdrawn. The Government are still of the view, as they were then, that illicit streaming and the infrastructure and devices that enable it pose a very serious threat to legitimate copyright owners and service providers. We share the wish of those behind these amendments to ensure that this harmful activity is properly tackled. I agree with the noble Lord, Lord Clement-Jones, that this poses a real threat to the creative industries.

That does not mean, however, that we should jump immediately to introduce new criminal provisions to copyright law. As previously discussed in debate in another place, the Government believe that this activity is already covered by existing offences. Relevant provisions include those contained in the Fraud Act 2006, the inchoate offences in the Serious Crime Act 2007, and other provisions of the Copyright, Designs and Patents Act 1988.

In December a supplier of IPTV systems that enabled viewers to watch unauthorised content was convicted for conspiracy to defraud and sentenced to four years’ imprisonment. A second supplier received a two-year suspended sentence. This conviction shows that the courts agree that this behaviour is already illegal and must be tackled appropriately. But we recognise that court cases take time and cost money, and that this is a complex area of law where enforcement agencies may not feel well equipped to take on investigations and carry them through to prosecution. That is why we are working on a range of interventions to tackle this behaviour.

Officials at the Intellectual Property Office are working with the Crown Prosecution Service and the police to develop guidance on how the existing offences may be effectively applied, and we will be running a public call for views over the coming few weeks to ask investigators, prosecutors and industry representatives whether they think the existing legislation is providing all the tools that are needed.

IPO officials have also been meeting intermediaries, especially those platforms where these devices are sold, and others whose legitimate businesses facilitate, however unknowingly or unwillingly, this criminal behaviour. We need to work together with a broad coalition to tackle illicit streaming, and everyone in the supply chain has a part to play. This is very much an area where we want to make progress. We believe that we are making progress on a number of fronts. The Minister for Digital and Culture committed in the other place to bring forward legislation if the evidence shows that it is needed—but that case has not been made yet.

With reference to what the noble Lord, Lord Gordon of Strathblane, said, I think it is right to emphasise that the ever-changing nature of how criminals operate means that they will quickly circumvent technology-specific legislation. We have to be careful when we talk about primary legislation. The changing way in which content is consumed means that specific legislation such as that proposed may be rendered obsolete, unprosecutable or both. I hope that with this explanation, the noble Lord will feel able to withdraw the amendment.

[Lord Clement-Jones]

Before the noble Lord, Lord Stevenson, expresses his view of the Minister’s response, may I ask her a few questions? She gave a bit of a “curate’s egg” response, giving with one hand and taking away with the other. At the end of the day it might be considered that a criminal offence is appropriate—but as to the call for evidence, does the Minister have a timetable that she can reveal to the House for this to take place? Will it include the role of intermediaries?

I think that the Minister can understand some of our impatience in this area: legislative opportunities to deal with this kind of infringement are few and far between, and this is a major problem. The percentage of people using this software and these boxes is rising inexorably, and that is having a very bad impact on the business models of many in these industries. We urge urgency on the Government.

[Baroness Buscombe]

I respect what the noble Lord has just asked, but I did say—maybe I was not clear—that we would run a public call for views over the coming few weeks.

[Lord Clement-Jones]

Weeks not months?

[Baroness Buscombe]

Absolutely—weeks. We will ask investigators, prosecutors and industry representatives whether they think the existing legislation provides all the tools needed. IPO officials have also been meeting intermediaries, and I am sure that they would welcome more such meetings to see that we get this right.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank all noble Lords who have taken part in this important debate on the issue of retransmission fees. A number of noble Lords have tabled amendments urging the Government to get on with the repeal of Section 73 as quickly as possible.

The Government, through the Intellectual Property Office, consulted on the technical aspects of the repeal, including on the question of a transition period. The Government will, hopefully very shortly—and I say that with some strength—be publishing their response to this consultation, and I believe that the noble Lords will find this response enlightening and helpful. I therefore suggest that we return to this issue on Report, where I can fully set out the details of how the repeal will be conducted.

The noble Lord, Lord Stevenson, also tabled an amendment that would require any new fees which may flow to the public service broadcasters to be reinvested in original British content. I believe it is premature to legislate on this issue. We need to see how this new market develops after the repeal of Section 73. The British broadcasting landscape, with its steady flow of high-quality output, is envied around the world. The public service broadcasters are already pulling their weight here and face content requirements set by Ofcom. I do not believe that it would be necessary or desirable to legislate in this area that works so manifestly well for British audiences.

Clause 29 will repeal Section 73 of the Copyright, Designs and Patents Act 1988, which currently provides that copyright in a broadcast of public service broadcasting services—and any work in the broadcast—retransmitted by cable is not infringed where the broadcast is receivable in the area in which it is retransmitted. In effect, cable TV platforms are currently not required to provide copyright fees in relation to the core public service broadcaster channels. Last year, the Government consulted on the repeal of Section 73 and the balance of payments between public service broadcasters and TV platforms. The conclusion reached was that Section 73, as noble Lords have said tonight, is no longer relevant.

Today, a wide variety of platforms ensure that virtually everyone in the UK is able to receive public service broadcasts. Following digital switchover, completed in 2012, digital television services are now available for over 99% of consumers through a combination of digital terrestrial television, satellite and cable platforms. The cable market has now moved from a large number of local providers in the 1980s to one big provider and a few—very small—local platforms, and from 130,000 subscribers to over 4.5 million to date. The Government are satisfied that the objective of ensuring that public service broadcast services—as well as other TV services—are available throughout the UK has been met, and therefore Section 73 is no longer required to achieve that objective.

Moreover, the repeal of Section 73 will close a loophole used by providers of internet­based live streaming services of broadcast television programmes. These providers are relying on Section 73 to exploit PSB content by retransmitting channels and selling advertising around the service, without any benefit flowing to the PSBs.

I hope that, on that basis, noble Lords will feel able to withdraw their amendments.

[Lord Clement-Jones]

My Lords, I thank the noble Viscount, Lord Colville, and the noble Lord, Lord Black, for their comments and support for these amendments.

The noble Viscount, Lord Colville, talked about underlying rights and, of course, there should not be any anxiety about whether these have been obtained sufficiently for retransmission. Channel 4 tells us that it has a multiyear contractual arrangement in place with Virgin Media for which all the rights are cleared, so there is no impediment. The noble Viscount also made the point that the money involved in retransmission fees is a large amount for public service broadcasters but relatively small for cable operators. That is another factor.

The noble Lord, Lord Black, stressed the point about time being of the essence. I am delighted that the Minister responded to that, because we are in a context where the creation of world-class content to be competitive on the world stage could never be more important. He described further delay of two years as being a lifetime in this industry. That is absolutely true.

In the circumstances, and compared with many ministerial responses, I thought the Minister’s response extremely positive. I do not think I have ever had such a tantalising response about revealing all on Report. That is quite something.

I may be getting this wrong and the Minister can correct me, but I assume there will be some sort of revelation on Report about the timetable. I am perfectly happy to table a probing amendment to get the full benefit of her response on timing, but if she is going to table an amendment that would move things towards the kind of timing we are looking for in this amendment, as a result of the technical consultation finally being determined by the IPO, I will not quarrel with that. I am very happy to suspend judgment, but a nod is as good as a wink in Committee. If the Minister would like to say anything further about what precisely she meant by what she might do on Report, I would be open to suggestion.

[Baroness Buscombe]

My Lords, I will not be tempted at this stage, but I repeat that, when we get to Report, I think noble Lords will find my response enlightening and helpful.

[Lord Clement-Jones]

My Lords, that is even more positive than the first time around. In those circumstances, we will suspend judgment. I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank all noble Lords for this important debate and for this proposed new clause. It seeks to extend the public lending right to include remote lending of e-books and e-audiobooks by public libraries. This would allow authors of these to receive payments from the public lending right fund, as they do for public lending of printed and audiobooks. It would also amend the definitions of e-books and e-audiobooks so that these works could be lent by public libraries only if they have been licensed by publishers on agreed terms for library lending.

The Government support recognising authors for e-lending by libraries. We committed in our manifesto to work with libraries to ensure the public can access e-lending, and to appropriate compensation for authors that enhances the public lending right scheme. As the Minister in another place confirmed, we intend to legislate to extend the public lending right to include remote e-lending. In response to the noble Lord, Lord Maxton, I say that our intention is to include all e-books regardless of technology.

This proposal is supported across the sector, including by libraries, authors, publishers and booksellers. I am therefore pleased our commitment is also supported by noble Lords in this House. Public libraries increasingly provide e-lending to support reading and literacy in response to the needs of their communities. Most library loans remain of printed books, with over 200 million such loans in Great Britain in 2015-16—so not everyone has given up the printed word, as has the noble Lord, Lord Maxton. However, e-lending is growing, with 4 million e-book and 1 million e-audiobook loans in Great Britain in the same period.

In considering how to legislate to extend the public lending right to include e-lending, we are engaging with representatives of authors, libraries, publishers and booksellers to understand their views. A number of these have raised points that need careful thought before the Government table their own clause.

One point made by representatives of authors and publishers is that an amendment to the legislation should include protections for the commercial market. The proposed new clause seeks to do this by specifying that e-books and audiobooks could be lent out from public libraries only if they had been licensed by publishers on agreed terms for library lending. However, others had raised concerns about whether such a provision might impact on public libraries’ ability to acquire and lend e-books.

This is an important issue. Officials have therefore met sector representatives to allow us to consider carefully the views and decide on the appropriate way to proceed with our commitment. I understand that the discussions in recent days have been promising and that the respective parties have been considering whether they can agree a settled view on the issues. We want to continue to work together to support a strong book sector that helps promote opportunities for reading and learning by the public, so we intend to table our own proposals for the necessary legislative changes as soon as possible. We will carefully consider these views in deciding how to proceed. I hope therefore that noble Lords will not press this proposed new clause.

Amendment 79B requests that e-books be exempt from VAT. Issues affecting taxation are a matter for the Chancellor of the Exchequer. It would therefore be inappropriate to include this amendment in this Bill. There are other difficulties, however, in accepting such an amendment. VAT is an EU-wide tax and is applied by member states within agreed structures. While we remain in the EU we are bound by our international obligations. This amendment would cut across those obligations in respect of VAT. EU VAT law, agreed unanimously by member states, currently specifically requires the standard rate to be applied to all electronically supplied services. This includes e-books, which are services, not goods. Because of this, if we accepted the amendment we would be in breach of our obligations. To make the change proposed in this amendment a change of EU law will be necessary, supported by all 28 member states. While a proposal is currently on the table there have been a variety of different reactions from member states and no unanimous agreement. I hope that the noble Lord will therefore not move his amendment.

[Lord Clement-Jones]

My Lords, I thank those who have taken part in the debate. The noble Earl, Lord Clancarty, has throughout been a doughty campaigner for the arts and for authors. I also thank the noble Lord, Lord Arbuthnot, for his contribution, and the noble Lord, Lord Stevenson, in particular for an amendment that we would all support if only it were practical. Who knows? There may be some silver lining to Brexit at the end of the day. I do not think that that is quite substantial enough for many of us but it is certainly a little glimmer. I thank the noble Duke, the Duke of Somerset, as well. Of course we always bow to the superior technological knowledge in these matters of the noble Lord, Lord Maxton. I agree with the Minister: I am still an aficionado of the printed book, and am one of the digital book. There is a place for both in one’s library.

I welcome what the Minister said. In a way she performed a political ju-jitsu on us by thanking us for supporting her government line on this, which I thought was magnificent. I accept that it is in the Conservative manifesto. The Minister in the Commons pledged to come up with a solution to this. All that we have done really is to give the Government a bit of a push today. This wording is not the agreed wording. Agreement was reached, at the final hour—not in time to include in Committee today—between the various parties involved, particularly CILIP. As the noble Earl, Lord Clancarty, said, I am delighted that there has been agreement reached between the parties and the wording about which I have been told will perhaps be the wording to which the Minister will return, having performed her ju-jitsu at Report. Perhaps I have her in an armlock now to come back at Report with a suitable amendment. In the meantime, I beg leave to withdraw the amendment.

Digital Economy Bill

Debate between Lord Clement-Jones and Baroness Buscombe

1st reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I will need to check this to be absolutely sure, but it will not form part of the legislation. I am talking about the report that is being considered with care at the moment. There will be a public consultation after that report, so we cannot commit to this without fully exploring our thoughts and proposals in response to the report of 16 December. I hope that that is helpful—but it will be subject to regulations as opposed to primary legislation.

[Lord Clement-Jones (LD)]

My Lords, I do not want to prolong this but if it is to be subject to regulation, there must be primary legislation permitting that regulation to be made. Perhaps the Minister could write to us on that subject.

[Baroness Buscombe]

Yes, that is a good idea. We will absolutely make sure that we write to noble Lords on this point.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank all those who have spoken in this debate. I begin with Amendment 14 in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Foster of Bath. The amendment seeks to place a mandatory obligation upon mobile phone service providers to agree with the customer a financial cap on their monthly bills at the time of entering into a contract.

Providers offer consumers a range of innovative ways to manage their usage, such as apps that allow consumers to turn financial caps on and off, warning text messages when customers are approaching their existing allowance limits, and dedicated telephone numbers that advise the customer about their usage. The noble Lord, Lord Foster, has already referred to some of these opportunities.

We expect providers to continue to take steps to minimise bill shock and to ensure that their customers are sufficiently equipped to manage their usage. Having said that, if the Government consider that more needs to be done, the forthcoming consumer Green Paper will be an opportunity for us to consider the issue of bill capping in more detail. It is also important to note—and perhaps it has been said before in another place—that Ofcom has guidance on its website to help consumers avoid so-called bill shock. Tips include making sure you have the right deal to suit your usage, switching provider or increasing your usage allowance, monitoring your usage, and how to protect your phone from unauthorised use.

Amendment 15, in the names of the noble Lords, Lord Stevenson and Lord Mendelsohn, seeks to amend the Communications Act 2003 and Ofcom’s power to set conditions to ensure that the interests of the consumer are protected when purchasing a contract relating to a mobile phone, and when switching mobile provider. Changing provider should, of course, be quick and easy for everyone. This is why Clause 2 makes explicit that Ofcom has powers to facilitate easier switching across all the communications sectors, including mobile services. Ofcom has an existing statutory duty to protect consumers of communications services, including consumers of mobile services, under Section 51 of the Communications Act 2003. The combination of this power and duty thus already creates the effect this amendment seeks.

The noble Lord, Lord Clement-Jones, is concerned about whether there is more to be said on this matter. The clause extends Ofcom’s power to set conditions for switching, so it will be for Ofcom to decide what should be required and whether switching is an appropriate requirement to impose on providers.

[Lord Clement-Jones]

My Lords, I am sorry to interrupt the Minister but I find that a somewhat extraordinary statement. The Government are responsible for policy—indeed, they have published a paper on switching principles. The question is: what has Ofcom been asked to implement? Surely the type of switching that will be implemented is not purely up to Ofcom. The Government—the business department, as was—published a paper setting out very clearly the principles on which switching was to be based. We cannot have a situation where a Minister simply says that it is all down to Ofcom and that is the kind of scheme that it will suggest. I find that extraordinary.

[Baroness Buscombe]

My Lords, I am sorry if the noble Lord finds it extraordinary. However, I think that he has made a reasonable request and I will make sure that we write to him in detail, giving a full reply.

Amendments 16 and 18 seek to make additions to Clause 3 to ensure that compensation is paid within a reasonable timescale and that, for mobile phone services, compensation is payable where the provider fails to meet a specified standard or obligation. Also, one of those standards must be satisfactory mobile coverage.

The drafting of the clause already allows for Ofcom to consider timescales for compensation, as well as what service standards are within scope. In the spring of this year Ofcom plans to publish a full consultation setting out how automatic compensation could work. Thus, we do not see the need for these amendments.

Amendment 22 seeks to establish a code of practice on business broadband speeds. In January 2016, Ofcom published a voluntary code of practice on business broadband speeds, and it came into force in September 2016. The code gives businesses clearer, more accurate and transparent information on broadband speeds before they sign up to a contract. Signatories to the code also commit to manage any problems that businesses have with broadband speed effectivity and to allow customers to exit the contract at any point if speeds fall below a minimum guaranteed level. Ofcom will continue to work with the industry to ensure full transparency. With such a code already in existence, we see no need for there to be a power for the Secretary of State to prepare one.

Amendment 233 would amend the Consumer Rights Act 2015. I am grateful for the response of the noble Lord, Lord Clement-Jones, to this amendment, as I have to hand the transcript of the debate on that legislation—it makes quite enjoyable reading—when he referenced the consequences of an amendment which is the same as the one before us tonight. He said that,

“the consequences of this amendment could be quite unforeseen and extremely contrary to the interests of the strong and vibrant software industry that we have in this country”.—[Official Report, 19/11/14; col. 507.]

We entirely agree with the noble Lord that things have not changed that much, and they certainly have not changed in that regard. The rights set out in the Consumer Rights Act were designed to achieve a workable balance to reflect consumers’ reasonable expectations while not imposing unnecessary and potentially damaging requirements on our vibrant, growing and technically innovative digital content suppliers. We believe that this amendment would undermine those rights.

When formulating the Consumer Rights Act, we concluded that providing for a short-term right to reject was not necessary in the context of digital content. Unlike physical goods, digital content can on the whole be fixed rapidly and with little effort on the part of the consumer. Consumers accept that it is the nature of digital content that it may be released with minor errors and incompatibilities which come to light in use and which will be fixed to ensure that the product is satisfactory. A short-term right to reject digital content and impose strict limits on the number of repairs and replacements would not be practical in this context. In the digital environment, a fault in one copy of digital content may be replicated in all copies, or the fault may not be the result of an action by the trader at all. That is why a repair is a more equitable solution in the first instance than a full refund.

Many digital content producers are micro-businesses and start-ups, and we need to maintain an environment in which they can flourish and provide innovative products, while ensuring appropriate protections. Enabling rejection as an immediate remedy could cause the industry to be more conservative in its product offerings, reducing our competitiveness and chilling innovation, to the detriment of both business and consumers.

As we know, the Act has been in force since October 2015 and the Government have received no evidence or representations to the effect that it is not working as intended. With that further explanation, I hope that the noble Lord will agree to withdraw his amendment.