Ministers: Legal Costs

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Tuesday 12th March 2024 Lords Chamber

[Lord Clement-Jones]

To ask His Majesty’s Government what assessment they have made of taxpayer-funded legal costs incurred by Government Ministers, following the recent libel settlement funded by the Department for Science, Innovation and Technology.

[The Minister of State, Cabinet Office (Baroness Neville- Rolfe) (Con)]

My Lords, in line with established practice under multiple Administrations of all political colours, Ministers are provided with legal support and representation where matters relate to their conduct and responsibilities as a Minister. As set out in Chapter 6 of the Cabinet Manual, Ministers are

“indemnified by the Crown for any actions taken against them for things done or decisions made in the course of their ministerial duties. The indemnity will cover the cost of defending the proceedings, as well as any costs or damages awarded against the minister”.

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[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for that reply. The Prime Minister put it rather differently. He said

“it is a long-standing convention stretching back many years … that the government will fund those legal disputes when it relates to government ministers doing their work”.

How can making party-political libel posts on X on Friday at midnight constitute “Ministers doing their work”? Why should this settlement come out of the public purse? Is this not a breach of the Ministerial Code, after all?

[Baroness Neville-Rolfe (Con)]

As I said, it is long-standing practice. Indeed, the Secretary of State concerned made a statement this morning at the Lords Science and Technology Committee and explained the circumstances in full, including how she was engaged in official work and got support from officials on the disputed letter.

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[Baroness Neville-Rolfe (Con)]

I do not see it that way. The Secretary of State gave evidence this morning to the Lords Science and Technology Committee. There was a brief discussion of this matter. They then moved on to discuss important points about science, which she and this Government are extremely supportive of and have done so much to make sure that the UK is one of the leaders in the world in science and technology matters.

[Lord Clement-Jones (LD)]

My Lords, is this not another case of the Government marking their own homework? What is the Government’s ethics adviser saying about this? Have the Government taken a proper view from the ethics adviser?

Digital Government (Disclosure of Information) (Identity Verification Services) Regulations 2023

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Monday 20th November 2023 Grand Committee

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, I am glad to see the noble Lord, Lord Stevenson of Balmacara, and others, and I echo what he said about our constructive discussions in 2014-16. I am also pleased to see my noble friend Lord Camrose championing intellectual property, as we try to do, and to see him accompanied by my noble friend Lord Evans of Rainow in his new position as Cabinet Office Whip.

The Digital Government (Disclosure of Information) (Identity Verification Services) Regulations 2023 are an important part of this Government’s commitment to strengthen the use of data and information across the public sector. We are bringing these forward so we can deliver better and more joined-up services and, in turn, improve outcomes for our citizens.

The regulations aim to allow information sharing between named bodies for the specific purpose of supporting cross-government identity checking when it is needed. Verifying a user’s identity—ensuring that a person is who they say they are—is a key part of delivering many government services. The draft regulations enable this by establishing a new data-sharing objective under Section 35 of the Digital Economy Act 2017 and by setting out which public bodies may use the new objective. This will create a legislative gateway, enabling us to use existing data sets, which public bodies already hold, to help as many people as possible to access the government services that they need online. It is therefore central to the development of more inclusive and accessible systems.

Specifically, the proposed objective would unlock the full benefits of the new cross-government digital system known as GOV.UK One Login. This is now live; users are able to set up an account, log in and prove their identity in order to access an initial set of 24 government services, with more being added all the time. However, at the moment, users must have photographic documentation, such as a passport or driving licence. This will change following the introduction of the new objective, as it will unlock new ways for people without photo ID to prove who they are, opening up the system to more users.

The delivery of One Login is a step change in simple joined-up access to government services online. This, in turn, delivers substantial cost and time savings for the Government and users by reducing duplication and providing enhanced capability to identify and stop fraudsters. In summary, the proposed objective will, first, enable checks against existing government-held information, such as PAYE and benefits data, to build confidence in the user’s identity, which will be particularly key where service users do not have a passport or driving licence. Secondly, it will provide a specific legal framework for checks against documents currently used in identity verification, such as driving licences. Thirdly, it will enable the sharing of the results of identity checks performed by one named body with another, so that users need to prove their identity only once.

The draft regulations set out which of the bodies already listed in Schedule 4 to the Digital Economy Act can use the new identity-verification data-sharing power, such as HM Revenue & Customs and the Department for Work and Pensions. They also add four new public bodies to the schedule that will be able to use the power: the Cabinet Office, the Department for Transport, the Department for Environment, Food and Rural Affairs and the Disclosure and Barring Service.

The public bodies listed in the regulations are either bodies that hold information that could be used in support of proving that someone is whom they say they are or those that own and manage services that people need to access, which they therefore need to receive the results of identity checks. Of course, some public bodies do both.

The territorial extent of the draft regulations is England, Wales and Scotland. The Information Commissioner’s Office and the devolved Administrations support the draft regulations, and indeed the Scottish and Welsh Administrations have requested that certain Scottish and Welsh bodies be included in the draft regulations to enable them to use the new data-sharing power—so it is devolved friendly.

I am sure noble Lords will be pleased to know that these draft regulations have been subject to the standard rigorous processes of internal and external review. In the first instance, the objective has been subject to scrutiny by the Public Service Delivery Review Board, as set out in the underpinning code of practice on public service delivery, debt and fraud of the Digital Economy Act 2017. The board recommended that Ministers take forward these draft regulations since they meet the required criteria of supporting the improvement, or targeting, of public services to individuals in order to enhance their well-being.

Furthermore, the objective has been subject to a public consultation, which received more than 66,000 responses. Some respondents recognised the benefits to individuals of improved and more inclusive services. Some mistakenly expressed concern that this was a back-door route to identity cards. Therefore, in response to the consultation, the Government confirmed that they have no plans to introduce mandatory digital ID or identity cards. We also published additional information on how GOV.UK One Login will operate within these regulations and within the overall data protection framework. We extended the time between the regulations being approved and coming into force, and we amended some of the wording to reflect that of the Act. Of course, the Government understand that people want to protect their personal information and this is central to our approach. The draft regulations relate to using data only for the purpose of identity verification.

Part 5 of the 2017 Act gives the Government powers to share personal information across organisational boundaries to improve public services. It lays down what data can be shared and for which purposes. Data sharing must also have regard to the accompanying statutory code of practice on public service delivery, debt and fraud, which sets out how the power must be operated, including how any data shared must be processed lawfully, securely and proportionately in compliance with data protection legislation and UK GDPR.

The Digital Economy Act statutory code of practice on public service delivery, debt and fraud also requires information-sharing agreements to be listed on a public register of information-sharing activity under the powers. The framework for data sharing under the DEA provides a supportive background to help organisations to share data in ways that benefit the public, as confirmed by the Information Commissioner’s Office in its recent review. It includes robust safeguards that ensure that organisations share data responsibly and in alignment with data protection principles, while also safeguarding people’s rights.

I think these regulations are relatively straightforward and important, and I hope that colleagues will join me in supporting them.

[Lord Clement-Jones (LD)]

My Lords, it is good to see the Minister move seamlessly from intellectual property to digital and data, but both can sometimes create their own questions. Since this is the first time we have debated One Login in the Lords, I hope that the Minister will not mind if she gets a large number of questions about the scheme. As I understand it, the goal of the One Login programme is to create a log-in database owned by the Government and containing the verified names, addresses, dates of birth, phone numbers and email addresses of everyone who uses—eventually—all Government-owned digital services, which is likely to be everyone in the country.

Perhaps unfairly, I have always thought of One Login with some scepticism, as the son or daughter of Verify, and not in a good way. The cost of the failed Verify scheme was over £200 million. It would be very useful as part of this debate to hear the cost of OneLogin so far and how much more is budgeted to be spent on its rollout. It does seem strange that the Government are having another crack at a single verification system, given the many other trustworthy existing systems that could be adopted.

First, I think it worth mentioning what the Secondary Legislation Scrutiny Committee said in its 55th report in October. I think it was rather baffled and scathing at the same time:

“This is a classic example of an Explanatory Memorandum … with too narrow a focus”.


I think it felt it was being bounced to some extent, without the context in which One Login was going to be designed to work. It said:

“We therefore request that the Cabinet Office revises its”


Explanatory Memorandum

“to include sufficient background information to enable any reader to understand the legislation’s practical effects”.

I suppose I am lucky in that I followed the gory progress of Verify through to One Login and the current date. I have some idea of the purpose behind One Login. As I understand it, the principal effect of these regulations is to allow the Government to share data for the purposes of identification. The SI does not restrict those flows of data; data can flow into the Cabinet Office as envisaged but identity data can also flow from the Cabinet Office to any other listed department. I hope that the Minister will be able to confirm that.

Will the Government allow population databases to be copied, whether openly or not? The revised Explanatory Memorandum is silent on this, and it is unclear if this assurance from the Government’s consultation response will be delivered. The response said:

“In particular, information will set out which departmental services are using identity verification services to support delivery and which will provide data to help departments establish who a person is”.


Will that actually happen? Will there be that level of transparency? There are apparently no safeguards on sharing bulk data if the Government want to share for this purpose across government. What transparency will there be if and when this takes place?

There is then the question of for whose benefit One Login really is. Is this a “better login to government” project, which many people might applaud, or is it a “one identity to government” project? The answer at the moment appears to be the latter. I say this because medConfidential, which I thank for its briefing, reports that a

“meeting held during the consultation was told that the Government’s intent is to actively prevent individuals from having multiple login accounts. A person may be able to have multiple email addresses— indeed, they may already do—but Government would attach them to a single ‘identity’. This regulation allows that database to be shared in bulk”.

Not to put too fine a point on it, that turns One Login into a tool of a centralising state—with implications for the privacy of the citizen—which the Government have previously assured us many times they were not building. I would therefore be extremely grateful if the Minister described the reality of One Login, as well as its purpose and operation.

At a roundtable on the consultation, the Government Digital Service apparently said that the regulation’s “first use is One Login”, which suggests there will be a second use. It is unclear to us to what extent the DWP will embrace One Login for government, for universal credit, for HMRC’s services, or indeed for the MoJ’s digital courts. What commitment from government departments and agencies is there? I can see that they are all listed, but Verify fell down precisely because of the lack of commitment from many government departments. What about the identities, too, of public servants? Will they be able to have multiple identities as both citizen and employee? What is the reality of that?

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[Baroness Neville-Rolfe (Con)]

It is data sharing for the purposes of digital identity. Ultimately, by April 2025, we hope to have approximately 145 central government services that can be accessed via One Login. It is a mistake to think that this is somehow going to be used in the bulk way that the noble Lord describes. It is about identity checking, not collecting huge amounts of data for use in a Big Brother sort of way; the noble Lord may have misunderstood this. Users can delete their account at any time. I think that the noble Lord’s concern is perhaps misplaced.

[Lord Clement-Jones (LD)]

That is exactly the assurance that I am seeking.

[Baroness Neville-Rolfe (Con)]

While I am on the subject of benefits to the individual, there is an example that I would like to share with the committee; it reflects a question that I asked. Sometimes, married women have two different names. I am in that lucky, or unfortunate, position. We understand that some users will need or want to use multiple accounts, so users can already set up multiple accounts on One Login using different email addresses that can relate to different names. From next year, we plan to allow users to link accounts under the same verified identity. The noble Baroness, Lady Chapman, asked us to look through the eyes of the individual. This is one of the things we have been trying to do in this programme, learning from the past.

[Baroness Neville-Rolfe (Con)]

The difference is that, at the moment, you tend to have to provide a passport. It is difficult to log in to some of these services without a passport or a driving licence. In future, as I made clear in my introductory remarks, it will be possible to use different sorts of identity data and to have a system within government that allows us to do that. That will have the effect of making it easier for more people who are finding establishing their identity difficult without encouraging a lot of identity fraud, which is obviously another concern that one has to take account of in putting these systems together.

[Lord Clement-Jones (LD)]

I entirely appreciate the Minister taking the trouble to talk us through this. The question is: for whose benefit is this? Is this so that government departments can identify somebody right across the board, so that you can have only one identity in government and so that the Home Office will share data with universal credit and every other department that interfaces with an individual? Is that the idea of this One Login? Or is it possible to have more than one digital identity?

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[Baroness Neville-Rolfe (Con)]

One obvious benefit is that more and more government departments are using digital. The technology is transforming our lives, after all. Once you have this single digital identity, you will then be able to use it to access services and opportunities from other government departments as well. That is the point: the digital identity will be used across the board. That is helpful to individuals. I should add that a document is published on GOV.UK outlining what data is being used by One Login. I think it is worth noble Lords looking at that.

The noble Lord, Lord Clement-Jones, rightly asked a question about cost—something we always used to ask about in our previous debates. The One Login programme’s total budget for 2022-23 to 2024-25 is £305.4 million. Of this, the programme forecasts expenditure of £132.7 million on the development and rollout of the system by the end of the current financial year.

The noble Lord mentioned the Explanatory Memorandum. We did indeed make some changes, as he acknowledged, to the Explanatory Memorandum, which was made available to the SLSC, to provide a clearer explanation of which part of the law the instrument is changing and why. He mentioned that the revised Explanatory Memorandum was laid on 2 November, and provided more contextual information. In particular, it explained that the SI provides the statutory basis for specified public bodies to share data in order to verify an individual’s identity in a safe and secure way so that they can access public services online, and that duplicative systems are being replaced with a single account. This is an obvious benefit.

The SI will also enable the GOV.UK One Login to draw on a broader range of government-held data sources when users need to verify their identity. That is an important point, because it is difficult for people who do not have a passport or a driving licence under the current system.

We are committed to being open and transparent by making information about data shared under the Digital Economy Act easily available for all to find and understand in the public register of data-sharing agreements. That was one of the safeguards laid down in that Act, so we have obviously taken that on board. That is an important point of transparency.

This is also underpinned by a robust code of practice—I have read it—which was created by Section 43 of the DEA. That sets out how the power must be operated, and includes setting out how any data shared under this power must be processed lawfully, securely and proportionately, in line with data protection legislation. We therefore have the DEA and data protection legislation coming together to allow us to implement this, hopefully life-changing, bit of technology in a way that protects the citizen. Obviously, the Cabinet Office is responsible for maintaining that register, and the Public Service Delivery Review Board is overseeing strategic consistency.

We have not seen that many regulations made under this Act—I think there was one on social care before—but we can see the value of the Act and the safeguards that Parliament added to it coming through.

On voter registration, the noble Baroness, Lady Chapman, raised a very good point, to my mind. I will have to follow up in writing. Fundamentally, as she said, these regulations will enhance the user experience. Despite many improvements over the last few years, today’s experience of interacting with government is too fragmented. We have multiple logins, and we are repeatedly asked the same information, which sometimes one has recorded on the phone—and sometimes recorded wrongly, as I know from my own experience. This is the same for everyone trying to access government. One Login will replace this with one system; we are used to this on our phones and so on, and there is a lot to be said for this new arrangement. We will have better data sharing to help those people without traditional forms of ID to access the services online that they need.

I hope noble Lords, having heard the benefits of the regulation—

[Lord Clement-Jones (LD)]

My Lords, I am sorry to interrupt the Minister as she comes to the final furlong, but the question of oversight raised by the noble Baroness, Lady Chapman, and by me, and the standards that will apply to this system, are extremely important.

[Baroness Neville-Rolfe (Con)]

Given the time, I will take that away, along with the voting point, if I may. I drew attention to the code of practice and the parent Act; we have every intention of following the principles, but the point about review and oversight is well made by the noble Lord, as always. I will come back to him on that point.

I am sorry that I have not been able to answer every question on the login area. I can introduce noble Lords to my honourable friend in the other place, Alex Burghart, who has spent a great deal of time developing these regulations. The point is that these narrow regulations before us today are a necessary enabler for this major change for the citizen. I hope that noble Lords, having heard the benefits, will join me in supporting the draft regulations. I commend them to the Committee.

Emergency Alert System: Fujitsu

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Wednesday 19th April 2023 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My noble friend and I agree that the impact of the Horizon scandal on postmasters and their families is utterly horrendous; we used to work together on this when I was on the Back Benches. That is why the Government have set up an inquiry, much encouraged by my noble friend, to get to the bottom of what went wrong and ensure that it can never happen again, as well as providing compensation for those affected.

All government contracts are awarded in line with procurement regulations and transparency guidelines, and that goes for the contract on the alerts. As noble Lords would expect, robust security measures are in place as part of the procurement process.

[Lord Clement-Jones (LD)]

My Lords, I pay tribute to the noble Lord, Lord Arbuthnot, for his relentless campaigning over a period of 13 years. Otherwise, the sub-postmasters would not have received any form of justice. Fujitsu’s track record is quite appalling; the noble Lord mentioned that it has never apologised. It was described as giving unsatisfactory and inaccurate evidence in the case brought by the sub-postmasters. The NHS terminated two contracts with it back in 2008-09, then Fujitsu sued the NHS for £700 million and did not settle for 10 years. On exactly what basis do the Government judge Fujitsu to be fit and proper to hold this contract?

[Baroness Neville-Rolfe (Con)]

I will make one preliminary point: Fujitsu has been fully co-operating with the postmasters inquiry. I also emphasise that there is no link between the small amount of work that Fujitsu has done for DCMS and the Cabinet Office and the work done for the Post Office.

Security of Government Devices

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Tuesday 21st March 2023 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, as a long-standing deputy chair of the all-party China group, I welcomed the proportionate approach taken in the Government’s statements in the integrated review refresh about relations with China. In the face of the current human rights position in Xinjiang and the situation in Hong Kong, however, this should not change any time soon.

On these Benches, we are in strong agreement with those who consider that the Government could and should have been a great deal more strategic about relationships with sensitive Chinese suppliers—whether internet or data based, hardware or software related—in the run-up to this Statement. This is a one-off Statement about TikTok, a social media company. It would be good to see the assessment and the evidence of potential cybersecurity issues which the Government have not yet—as far as I know—produced.

However, when it comes to makers of surveillance cameras, as the noble Lord, Lord Collins, said, the Government appear far more reluctant to act. The Surveillance Camera Commissioner, Professor Fraser Sampson, has been very clear in his warnings, in particular about Hikvision and Dahua cameras, which, as far as we know, are used extensively in Xinjiang for surveillance purposes and pose security risks here, even when live facial recognition is not enabled.

Just last week, we saw Tesco lead the way in the private sector and order the removal of these cameras from its stores. The Government have simply ceased to install them. Why are they not directing their removal, particularly in police forces? Have they mapped exactly where on the government estate and in other spaces these cameras remain?

Regarding TikTok, why act so late when the EU and US, as the noble Lord, Lord Collins, mentioned, acted earlier? Presumably they have the same security information. When did the evidence emerge that has led to this ban? Will the Government publish the review by cybersecurity experts which assesses the risks posed by these third-party apps on government devices?

As the noble Lord, Lord Collins, also mentioned, why are private devices used by government Ministers not covered? I note that Oliver Dowden repeated that position last week. After all, we know there has been extensive use of private devices by Ministers, particularly —dare I say—among former Health Ministers. What assessment of this aspect has been made? Which government departments and public bodies are actually covered? What is the process for drawing up the promised approved list of apps? What criteria will be used?

As many said in the Commons, this looks like whack-a-mole; the Statement is no substitute for a coherent cross-government strategy. Why do the Government not now move, for instance, to include the capture of biometric data in the definition of “critical national infrastructure”? Questions have been raised recently about Chinese cellular internet of things modules—CIMs—which are imbedded in many devices. What is the Government’s approach to this? Are they even aware of what CIMs are?

Finally, if the Government are concerned about information being harvested by social media and other apps, why is the Data Protection and Digital Information Bill, now before the Commons, widening the circumstances in which research data can be used for commercial purposes? Is this not a typical example of this Government’s incoherence and lack of co-ordination on issues such as this?

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, I welcome the welcome for the Statement made by my right honourable friend the Chancellor of the Duchy of Lancaster last week. By way of background, I should explain that the Government commissioned a review by our cybersecurity experts of the risks posed by third-party applications, including TikTok. As a result, the review concluded that we needed further security measures to protect the data.

There is obviously a limit to what I can say due to the sensitive nature of the Government’s work, but we are taking what we believe is proportionate, considered action to strengthen the security of government devices, and we are doing that in two ways. First, as is already the case in many departments—and that includes my own, the Cabinet Office—all government departments will now move to a system where only the third-party mobile apps available on their devices are those which have been pre-approved for inclusion on a departmental “allow list”.

Secondly, as a precautionary measure, all government departments are now required to take action to prohibit TikTok on their devices with immediate effect. It is a prudent, proportionate step, and more broadly, we are absolutely committed to bolstering national security, of which this is an example. As I explained to the House about 10 days ago, new guidance on the use of non-corporate communications will be issued very shortly and will bear on some of the questions that have been raised.

I was asked about TikTok on Ministers’ personal devices. The Secretary for State for Energy Security and Net Zero, who has been quoted, supports our policy and has been very clear that he has never used TikTok on his government devices. On personal devices, it is more of a personal choice. As I have explained before, all Ministers are carefully trained in security when they are appointed, and they have a briefing from time to time to keep that up to date.

To answer the question about exemptions, the business justification for having TikTok on government phones is to my mind very limited, but there are a small number of cases where it is necessary. Examples would include security and law enforcement. I know that some of my colleagues who are involved in security may need to use TikTok to make observations. Marketing would be another area—I think that the Secretary of State for Energy Security and Net Zero, Grant Shapps, comes into that category. We need to have common sense and proportionality. Departments will be able to make exemptions on a case-by-case basis through a departmental approval process, but with ministerial clearance as appropriate and risk mitigation in place.

Regarding Chinese security cameras, we have acted— we have discussed this in this House many times. We are also strengthening the powers in our Procurement Bill, and suppliers will be considered for addition to the debarment list on the basis of a rigorous and fair policy. This policy is under development, so it is too early to say, but regarding the action we have taken, we are now working with departments to make sure that Hikvision cameras are phased out.

The noble Lord, Lord Clement-Jones, talked on a more strategic level about China, about which we need to be sober and realistic. Obviously, we do not dispute the importance of China, but it has become more authoritarian at home and more assertive overseas, which is of concern to the UK—our policies need to reflect that. In the integrated review refresh, which was published last week and is well worth a read—the noble Lord referenced it—the Prime Minister set out clearly the overall direction across government for a consistent, coherent and robust approach to China, rooted in the UK’s national interest and aligned with our allies. A proper, and properly resourced, approach to security is an important part of that.

I repeat that the Prime Minister set up a new department, and the Budget included a substantial pledge—£3.5 billion by 2030—to support the Government’s ambitions to make the UK a scientific and technology superpower. This is one of the Prime Minister’s five priorities. So we should take the steps we need to take for security, but we also need to be careful to encourage the positives of new technology, whether that is AI, quantum technologies or engineering biology. We seek an important balance here.

Retained EU Law (Revocation and Reform) Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Committee stage
Monday 6th March 2023 Lords Chamber

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, this has been a good debate, probing our powers to revoke or replace, which are important cross-cutting enablers of the REUL reform in the Bill. They will allow the Government to overhaul retained EU laws in secondary legislation across many sectors of the economy, as we have heard, and replace them with domestic laws that are tailored to and beneficial for the UK.

It would make sense to begin with the debate on the clause stand part notice, which was introduced by the noble Lord, Lord Clement-Jones, and supported by the noble Lord, Lord Hannay, and explain why we believe that Clause 15 must stand part of the Bill. Retained EU law no longer aligns with EU law, nor does it keep pace with the evolving needs of the UK’s citizens or businesses. That is why reform is needed. Although the Government recognise the importance of ensuring that delegated powers are appropriately limited and have the necessary safeguards in place, we judge the powers under Clause 15 to be necessary in order to deliver this reform. I am afraid we do not agree with the DPRRC recommendation to remove Clause 15 from the Bill.

At present, the problem is that there is a distinct lack of subordinate legislation-making powers to remove retained EU law from the statute book. This is an oddity. It results from our EU membership and it is appropriate to take a power which covers the gap. Removing Clause 15 would significantly damage the UK’s legislative dynamism and potentially hinder the UK’s ability to regulate adequately. There must be scope for reform over the next two to three years if we are to deliver post-Brexit benefits.

I note that the noble Baroness, Lady Chapman, raised concerns in particular around Clause 15(3). We recognise that the power under Clause 15(3) is a broad one, but we want to ensure that departments have the necessary tools to create a regulatory environment which is the right fit for the UK. In addition, Clause 15(3) may still provide only “alternative provision” to the retained EU law or assimilated law being replaced. Any replacement legislation must therefore cover similar ground to the retained EU law or the assimilated law it replaces. Therefore, the power cannot be used to create new regulations in wholly unrelated policy areas, for example. Moreover, I add that nothing in this legislation prevents the Government introducing sector-specific primary legislation where that is considered necessary and appropriate for that subject area, as exemplified by the Procurement Bill, the Agriculture Bill and the Environment Bill in recent times.

I turn to Amendment 112, introduced by the noble Baroness, Lady Chapman, and tabled by the noble Baroness, Lady Mcintosh of Pickering. Although the latter has gone home, I listened to this with care. The amendment would hinder the removal of regulations that have been identified as outdated and unsuitable for UK citizens and businesses, which we do not think would be efficient lawmaking. As I touched on before, we do not consider adding to the Bill a requirement to consult to be appropriate or necessary. Equally, I understand the concerns that have been raised.

I turn to Amendment 113, tabled by the noble Baroness, Lady Chapman. Honourable Members—sorry, noble Lords: exempting regulations and judgments on customer protections, which range from aviation to pensions and, indeed, to toy safety, which the noble Lord, Lord Clement-Jones, spoke to, from this power would obviously reduce the scope for reform that the Bill sets out to deliver in an orderly manner. There is simply no need for any carve-outs for individual departments or specific policy areas or sectors. Doing that would prevent the UK Government carrying out the necessary work to overhaul secondary retained EU law, which sits across so many different sectors of the economy.

I think my noble and learned friend Lord Bellamy talked about tides and how EU law had become entrenched in UK law. Where protections are necessary, these will be kept, but there is an opportunity to improve and in some places simplify laws passed over many years in Brussels.

Turning to Amendment 114, introduced by the noble Lord, Lord Clement-Jones, Clause 15(2) has already been restricted such that any replacement legislation must be appropriate and must

“achieve the same or similar objectives”

as the legislation it is replacing. This amendment seeks to further restrict that subsection. The use of the word “effects” instead of “objectives” would further restrict the functionality of this limb of the power and prevent departments undertaking reforms that would adjust the existing policy to better fit the UK context. It is important that we ensure departments are able to amend their legislation to better fit that UK context, so this is an important clause.

Amendments 120 and 121, tabled by my noble friend Lord Lindsay, both seek to amend the limitation on Clause 15 that states that the replacement legislation must not add to the overall regulatory burden—so allowing extra burdens. In seeking to remove Clause 15(5) and (6), both amendments would increase the scope of the powers and enable them to be used to introduce additional regulation. Consequently, they would create a wider power than the Government have proposed or intended. As such, these subsections are a necessary check on our powers. Comments have been made that Clause 15(5) and (6) mean that regulation made under these powers could be challenged by the courts. That is of course correct, and like any delegated legislation, an entirely appropriate check.

We recognise that it will not always be a scientific test precisely to establish what the value of regulatory burdens are, or to balance one burden against another. That is why we have sought to ensure an appropriate level of discretion for Ministers in the interpretation of Clause 15(5) and (6). When doing so, the Minister is required to act reasonably and to take into account relevant factors. This strikes the right balance between limiting the scope of the powers and providing Ministers with a pragmatic degree of discretion in deciding whether the regulatory burden test has been met. The restriction to the powers to revoke or replace set out in Clause 15(5) and (6) will help the UK to establish a more UK-specific regulatory approach in order to go further and seize the opportunities of Brexit.

We have sought to ensure that the powers to revoke or replace cannot be used to add to the overall regulatory burden for a particular subject area. However, it will be for the relevant authority to decide. I thought I would share with noble Lords a hypothetical example from my own experience. There may be instances where there are multiple reporting requirements for businesses across a number of regulations in a similar area. Through consolidating these reporting requirements in a single regulation—aligning dates, for example—it can be administratively easier for businesses to comply with the regulations, and it may be possible thus to lower the regulatory burden while maintaining exactly the same standards and, indeed, possibly providing better enforcement. I hope that example reassures my noble friend Lord Lindsay, who I know does so much to try to tackle overburdensome regulation.

In responding to the interesting point made by the noble Lord, Lord, Hacking, about the ability of the powers under Clause 15 to create a criminal offence and provide for monetary penalties, I hope I can be reassuring. Any offences or penalties must correspond to, or be similar to, those which the revoked provisions provided. In that sense, the power does not provide licence to create wholly new offences or penalties, but rather allows like-for-like replacements for what already exists: for example, similar conditions for the commission of an offence and similar penalties. Furthermore, any instruments made under Clause 15(3) will be subject to the affirmative procedure, as well as any instruments made under Clause 15(2) which recreate a delegated power or create a criminal offence present in retained EU law.

To conclude, it is right—

[Lord Clement-Jones (LD)]

My Lords, I wanted to interrupt the Minister before she got much further because I was much struck by her phrase “damaging legislative dynamism”. What would be more dynamic than changing retained EU law in product safety so that it covered online marketplaces? If that is legislative dynamism—very desirable legislative dynamism—what would prevent it? Well, Clause 15(5) would prevent it. How could it be possibly balanced against any other form of deregulation, however much discretion the Minister had? That would be around the edges. Can the Minister answer the hypothetical that I put in my speech?

[Baroness Neville-Rolfe (Con)]

There is a balance here. What we have got are powers that allow us to make changes, such as the example that I gave, which will improve the state of regulation. There may be a bit of an extra burden at the margins, but if you are bringing regulation into a new area, which I think is what we are talking about, in my opinion—and I am not an expert in this particular area—that might be a case for primary legislation. Of course, we are about to have further primary legislation in the digital area in the coming months.

Civil Service: Digital Skills

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Monday 20th February 2023 Lords Chamber

[Lord Clement-Jones]

To ask His Majesty’s Government what steps they intend to take in response to the Global Government Forum report UK civil service digital skills, published on 29 November 2022.

[The Minister of State, Cabinet Office (Baroness Neville-Rolfe) (Con)]

My Lords, the Government are already taking action to build digital skills at scale and have a clear road map, set out in the Transforming for a Digital Future strategy, which we published in June 2022. The road map has set a target to upskill at least 90% of senior civil servants in digital and data by 2025 and to strengthen the attraction and retention of digital talent by bolstering the Government’s recruitment brand and pay offer for specialist skills.

[Lord Clement-Jones (LD)]

My Lords, the Government claim that their 2022-25 digital and data road map will usher in a

“new era of digital transformation”

for public service improvement, yet Civil Service skills are clearly inadequate to deliver it. As the NAO has pointed out, there has been

“a consistent pattern of underperformance”

in public services for many years. What will be different this time? Is not the road map another example of this Government’s wishful thinking?

[Baroness Neville-Rolfe (Con)]

It is important to have an ambition and a road map if you are going to move things forward. We have a Prime Minister who regards the digital and data area as very important. We have set out our digital future strategy, which includes, on the point that the noble Lord is concerned about, that 90% of senior civil servants will be upskilled in digital and data through that programme. Digital professionals will also have top-up training every year. We are moving to recruit a lot more civil servants in the digital and data area; we have 4,000 vacancies, which is too many, but we are doing everything that we can to attract more people. This includes a capability-based pay scheme and much more focus on the regions, where we believe that we can get more digital talent out of the universities, often working away from London in centres such as Cardiff and Darlington.

Preparing for Extreme Risks (RARPC Report)

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Thursday 12th January 2023 Lords Chamber

[Baroness Neville-Rolfe (Con)]

I always like to be the bearer of good news from the Dispatch Box.

We are going to be updating the risk register, as everybody has talked about. I cannot give an exact date, but I can say that we are working on these issues with energy. I am delighted to be working now in this area, and obviously very keen to make progress. I do not think that I can say anything today about the very important issue of powers, because I was on the Back Benches during all the Covid measures, so I very much understand the points that have been made. We have got a Covid inquiry that is taking place, and there has to be some sort of interaction between the Covid inquiry and what we do for the future.

I am very grateful to my noble friend Lord Arbuthnot for his positive comments on the resilience framework. I am pleased that he recognises elements of his committee’s recommendations within it—in fact, nearly all the recommendations were accepted in whole or in part. My noble friend rightly raised transparency and challenge. We set our commitment to both in the framework and are already working to embed the principles across my departments, and across others. As an example, the national risk register, when it is published in the coming months, will include more detailed risk information and guidance than previous iterations, and it follows the new classified version of the national security risk assessment.

Noble Lords will be pleased to know that the development of the latter involved a great deal of external challenge this time, and the NSRA is more robust as a result. My colleague the Chancellor of the Duchy of Lancaster will be chairing the next UK resilience forum in February—just one way in which we are incorporating more independent challenge and expertise from outside government. I hope that further work on resilience this year will demonstrate more progress, and we will update Parliament through our inaugural annual statement on resilience.

The noble Lord also raised the committee’s recommendation, as others did, for an office for preparedness and resilience, and the accountability issue was emphasised by the noble Lord, Lord Browne of Ladyton, who sadly had to slip away. It is a key factor of the framework and, while have not chosen to establish a new body, we are taking steps to address the spirit of the committee’s recommendations. We agree with the noble Baroness, Lady Brinton, on the need for culture change—a point that she rightly often makes—and that is already happening.

The strength and function at the centre of government build on the approach that we have got under way on things like procurement and infrastructure, and I am sure that it will lead to much better coherence and accountability in the resilience system. We are also strengthening the lead government department model of risk ownership and are establishing a sub-committee of the National Security Council to enable Ministers to focus on national resilience, because ministerial involvement is important in getting things effectively progressed. I need hardly say that the Government also agree with the report’s emphasis on training, conducting exercises and performing dummy runs as a fundamental part of our collective resilience.

We are not just going to carry on as before, as the noble Lord, Lord Berkeley, rather mischievously said, and I look forward to giving evidence to his Built Environment Committee on infrastructure next week and to discussing the improved way we now monitor the progress of hundreds of infrastructure projects.

I am sorry that it has been over a year since the committee’s report was published, but the Government, as I have already outlined, have taken a number of steps to address the points that were raised. It is worth reiterating three key themes. On finalising a new classified national security risk assessment, the changes were informed by recommendations from the committee, but also by an external review from the Royal Academy of Engineering in September 2021. The intervention of the noble Lord, Lord Mair, showed the importance of bringing in the engineers.

[Lord Clement-Jones (LD)]

My Lords, I apologise for interrupting the Minister but one of the key points is about the methodology adopted for the NSRA, and one of the key issues that appears to be emerging is that the Government do not seem to be committing to go beyond a five-year horizon. What assurance can the Minister give about the methodology that is going to be used, and whether we are going to be looking further into the future?

[Baroness Neville-Rolfe (Con)]

I think the noble Lord is right that the main focus is on the next five years, but I will perhaps come back to him to discuss that point further. It is clear from what I have been saying that we are looking at extreme risks, and they are not necessarily going to arrive tomorrow, so I understand and sympathise with the point he has made.

The second step is strengthening the crisis and resilience structures in the Cabinet Office with the creation, as I have said, of the resilience directorate and the COBRA unit. We are responsible for resilience planning and national crisis response, working closely with departments which have sectoral responsibilities. This includes identifying, planning and preparing for risks, and building capacity to respond effectively. The changes to how it is organised will help to ensure that the Government have the capacity and capability to respond to emergencies, which is obviously particularly important in the wake of Covid-19.

Thirdly, we are working to improve our resilience to chronic risks and vulnerabilities, such as climate change—which was emphasised by the noble Viscount, Lord Thurso—and artificial intelligence. We have recognised that this type of risk poses continuous challenges over time to communities, the economy and security, and requires a different type of response to more acute risks, such as flooding or terrorism.

The scale of the risks we face has required a new strategic approach to resilience. That is why we published the UK Government Resilience Framework in December, which previously had the working title of “national resilience strategy”, to respond to a point made by several noble Lords. It is a new strategy which is already being implemented across government. It reflects our ongoing commitment to resilience which we made in last year’s integrated review, and the new strategic approach will be reflected in further publications this year, with the refreshed national risk register, the updated biological security strategy, and the update to the integrated review itself, which has also been promised.

Procurement Bill [HL]

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Report stage
Wednesday 30th November 2022 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, forgive me; I thought I could move this amendment formally too. I try to find a sensible and reliable pathway through, as your Lordships know. I look forward to debating this group, which discusses the single digital platform and transparency.

Transparency has been central to the development of this Bill, and it should be noted that there is a significant extension to transparency under the regime. The publication of documents and notices that follow the award stage will allow interested parties to see how contracts are being implemented. While we have stated publicly that it was always the Government’s intention to create a central digital platform to host this data, we acknowledge the concerns raised by noble Lords during Committee around the importance of the online platform. Amendment 129 therefore creates a new duty requiring a Minister of the Crown to provide an online system for the purpose of publishing notices, documents and other information under this Act.

In addition, the duty requires that the platform has to be accessible to people with disabilities—a point we were debating on Monday—and provide access to procurement information that is published under the Act, free of charge. This means everyone will have access to public procurement data and can track contracts as they progress through the commercial lifecycle from tender to award and delivery. Citizens will be able to scrutinise contracting authority decisions; suppliers will be able to identify new opportunities to bid and collaborate; and buyers will be able to analyse the market and benchmark their performance against others, for example on their spend with SMEs.

In addition to the principal amendment, Amendment 132 is a technical amendment which removes an existing statutory power as this platform is expected to be delivered through common law powers. Since becoming the Minister responsible for this Bill, I have been keen to ensure that it strikes the right balance between transparency and not imposing undue burdens on contracting authorities. Contracting authorities will continue to be bound by the obligation to publish opportunities for all advertised procurements that are above a threshold of £12,000 for central government authorities or £30,000 for others. This will ensure that there is a high degree of transparency for SMEs, so that they can bid.

However, at the other end of the commercial process, the Bill introduces additional transparency requirements after the award of the contract. I have reflected on these, and Amendments 78, 80 and 104 all seek to raise the original threshold for the publication of contract key performance indicators, public contracts and modifications to a public contract from £2 million to £5 million. This will reduce the administrative requirements for contracting authorities while ensuring transparency of the public sector’s larger contracts. I am pleased to say that these amendments have been welcomed by the Local Government Association in the briefing note it published on 25 November.

I will turn to the other amendments tabled in this group in closing, having heard the points raised by noble Lords. Meanwhile, I beg to move Amendment 78.

[Lord Clement-Jones (LD)]

My Lords, I rise to speak to Amendment 130 to government Amendment 129. Many of us will be pleased that the Minister has decided to put the new online system for procurement information on the face of the Bill. At the same time, however, we need some assurance that it will be fit for purpose and achieve the objectives set for it, otherwise the Government seem to have carte blanche to construct whatever system they see fit to inflict on the vendor community, without any required standards or reporting duty. Let us face it: even the modest database under the Subsidy Control Act is subject to a form of reporting duty, and this system will be of far greater significance.

The amendment in my name and that of my noble friend Lord Fox is designed to provide assurance but in very simple terms. There would be the requirement for a report, first, on the performance standards expected and, secondly, on the standards achieved in the relevant period, including metrics on satisfaction and the accessibility experience of stakeholders. This is a modest proposal; how can the Minister possibly argue against it?

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

My Lords, Amendments 79, 81 and 105 have been tabled by the noble Baroness, Lady Hayman, and the noble Lord, Lord Coaker, to amend to £3 million the financial threshold above which contracting authorities would be required to publish contracts and contract modifications, and set and publish KPIs. The government amendments raise these thresholds to £5 million. The intention of this is to reduce the administrative burden on contracting authorities, while still providing increased transparency on larger contracts. Redacting contracts for publication where they contain commercially sensitive information is particularly burdensome for smaller contracting authorities, requiring detailed and costly checking by legal teams that they may not have or expensive legal advisers.

Where does the figure come from? I do not know exactly; that is the honest answer. I was offered options of £50 million, £10 million and £5 million. I chose £5 million because that is quoted in the Sourcing Playbook, which seemed a reasonable point. I believe that a threshold of £5 million balances the benefits of transparency with the costs and burdens of implementation.

The higher threshold in the government amendment has been welcomed by the Local Government Association. We want the arrangements to work, so we will monitor them carefully. We have powers to change the thresholds if we need to do so—for example, to bring in extra contracts as the system grows and matures—and if analysis of the new data gathered allows us to better understand how to ensure that the obligations are effective and proportionate; or, to go the other way, if we end up with a lot of difficulties. It seems a reasonable approach.

Amendment 130 tabled by the noble Lords, Lord Clement Jones and Lord Fox, seeks to require the Minister of the Crown to report annually on performance standards and feedback on the online system, including stakeholder satisfaction and accessibility. The data on the platform will be available in real time, and interested parties—of which there will be many—will be able to access information by using the tools available on the platform and by downloading the data for external analysis, such as statistics on the publication of notices and the progress of contracts. The platform will be accessible, as I have said, and will comply with the relevant legislation, including the Public Sector Bodies (Websites and Mobile Applications) (No. 2) Accessibility Regulations 2018, on which I am not, I fear, an expert. The Government are continuously monitoring the existing online platform that supports noticing under the current regulations and will continue to do so under the new regime and make changes as they are needed, so we are not inclined, on this occasion, to write in a review clause.

[Lord Clement-Jones (LD)]

What mechanism will there be for feedback from vendors and so on?

[Baroness Neville-Rolfe (Con)]

We have talked several times about the PRU and the role it will have in looking systematically at things. It seems to me that one of the main sources of information for it will be this online system. It has the merit of largely being an all-singing and all-dancing system. I will come on to my noble friend Lady Noakes’s amendment in a minute. I think, therefore, that this is going to work well, but if the noble Lord discovers in the fullness of time that it is not doing so, I am sure he will come back and ask the Cabinet Office what it is up to.

Amendments 166 and 168 in the names of my noble friends Lady Noakes and Lord Moylan have been tabled to remove provisions in two pieces of transport legislation, both relating to contracts for subsidised public passenger transport services. The first repeals two subsections from Section 89 of the Transport Act 1985—that is a long time ago—dealing with the obligation to invite tenders for such contracts. This change would remove the requirement to issue invitations to tender individually to anyone who has given a written notice requesting this. The second amendment revokes two regulations from the Service Subsidy Agreements (Tendering) (England) Regulations 2002, dealing with information to be published regarding accepted tenders and where no tenders are accepted. These amendments were raised in Committee and, while both rightly seek to reduce the burden on contracting authorities, there are further considerations for the Department for Transport.

Not all transport is covered by the Bill, and we have carved out certain public passenger transport services under Schedule 2. The Department for Transport is reviewing procurements that fall under this separate regime as part of its review of retained EU law and its legislation more widely. It is important that what we do in our schedules does not impinge on that review. We are therefore unable to accept my noble friend Lady Noakes’s repeals today, but I have asked my officials to work with the Department for Transport to see whether it is possible to sort this out and bring forward a government amendment in the Commons to address her concerns. In the light of those various assurances, I respectfully request that noble Lords do not press their amendments.

Procurement Bill [HL]

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Committee stage
Monday 24th October 2022 Grand Committee

[Lord Clement-Jones (LD)]

My Lords, it falls to me as the mover of the lead amendment to respond to the Minister. Clearly, there was quite a lot in what she said and we will need to brood over Hansard when the time comes because there are a large number of issues here. I recognise the Minister’s track record on SMEs but I am somewhat amazed that the Government have been commended on bringing greater clarity, as she put it, because our intention was to provide much greater clarity—and, indeed, equity—in all of this for SMEs. In terms of the addition of more time, burden and so on, I believe the Minister would normally think that we should go the extra mile for SMEs in these circumstances.

[Baroness Neville-Rolfe (Con)]

Certainly. We have discussed SMEs before; we have gone away to have a look at that issue. I recently held a round table with SMEs. Basically, they were positive about the Bill. Clearly, we have to see through and teach them about the new proposals. The basic point is that there are fewer different ways forward. I was quite surprised that that was the case but clearly there is complexity, and we have got to make sure that the Bill is in the right form.

Advanced Research and Invention Agency Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Report stage
Tuesday 14th December 2021 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, it is a great delight to hear from the noble Lord, Lord Ravensdale, who brings his business acumen and passion for both innovation and climate change to the feast. We have discussed these together often in Peers for the Planet.

We have the climate change Acts, and a huge amount of attention is paid to climate change in every part of government life and in their multi-billion-pound R&D budget. ARIA is a small, independent body and should be left to decide what is most important to our future and to the inventive opportunities that it is set up to create. That might include climate change, health, poverty or the quality of life. Technology, for example, improves our lives, but it also brings risks. ARIA should be left to decide what is most important. It should be able to think completely outside the box and make its own choices, and not be bound by precedent. I am afraid that I am therefore sceptical about these amendments.

[Lord Clement-Jones (LD)]

My Lords, the noble Lord, Lord Ravensdale, the noble Baroness, Lady Bennett, and my noble friend have made a compelling case for supporting this amendment, based on the climate and ecological emergency that we face. Tackling those challenges will require massive innovation and ingenuity and the development of practical applications from that. If ARIA has the bold, independent, innovative culture that the Minister emphasised throughout Committee, then it must be the ideal vehicle for this research, and we should spell it out. We should make ARIA an essential component of the net-zero strategy.

National Security and Investment Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Report stage
Thursday 15th April 2021 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, I shall speak to the Government’s amendment and to Amendment 8 in the name of the noble Lord, Lord Hodgson, but, as regards Amendment 2, the questions raised by the noble Lord, Lord Lansley, are valid and it is rather inexplicable that that subsection of Clause 8 is not included in Clause 6.

When we debated the thresholds for the trigger for mandatory notification, the noble Lord, Lord Leigh—I am sure he will get many tributes today for having pushed the envelope and succeeded in having the Government agree with him—raised issues about 15% versus 25%. The principal arguments were that keeping it at 15% would result in a huge number of notifications, the vast majority of which would not give rise to national security concerns, which would place a significant administrative burden on the new investment screening unit, and that that the current filing threshold of 15%, as set out in the Bill, is significantly below the threshold used in a number of other major foreign direct investment regimes such as France, which requires 25%, Australia which requires 20% and Canada which requires 33.3%. I am delighted that the mandatory notification threshold has been increased to 25%, which was the threshold set out originally in the White Paper. I think the Government’s reversion to their original intent is very much to be welcomed.

As regards Amendment 8, tabled by the noble Lord, Lord Hodgson, not having practised company law for many years now, I can only admire his forensic ability in setting out exactly why we need greater clarity under that provision. He has illustrated that the current language does not provide that level of clarity. In his words, it does not dispel uncertainty, but the language in his Amendment 8 certainly would. I believe it is only in the Government’s and the ISU’s interest to acknowledge that, and I very much hope the Government will accede to his request to provide clarity, either by accepting his amendment or by giving assurance that they will look at it further and take that forward at Third Reading.

[Baroness Neville-Rolfe (Con)]

My Lords, I rise to speak for the first time on this Bill. I declare my interests in the register as a director and former director of a number of companies, although none is obviously affected. I have not spoken until today because I support this Bill, and it has been making good progress without any help from me and with the forensic assistance of my noble friends Lord Lansley, Lord Hodgson of Astley Abbotts, Lady Noakes, Lord Leigh and others right across the House.

There has been a succession of regrettable takeovers of UK jewels in recent years without proper scrutiny by the authorities. The SoftBank raid was the most egregious, yet it was welcomed by the then Chancellor. ARM—my favourite firm when I was Intellectual Property Minister, if I may now say so—was the world’s leading chip maker, headquartered relatively modestly in Cambridge and run by the talented Warren East, who must look back with pleasure to that time. Allowing its subsequent takeover was a serious mistake for UK interests.

This Bill is concerned primarily with security, so I suspect it would not have caught another controversial deal, that of Kraft/Cadbury, though it would have been useful had that too been caught. That example highlighted the fact that it is not only jobs but both R&D spend and cultural support that tend to go with the head office of a company or group.

Decades of such highly leveraged deals have contributed to damage in this respect. Think of aerospace pioneer Cobham and satellite service provider Inmarsat. As an aside, how lucky those of us who have benefited from its vaccine are that AstraZeneca held out against Pfizer a few years ago. We ought to have powers to prevent such a proposal if it arose again and was not in the UK interest. The powers in this overdue Bill should, among other things, slow the sale to overseas interests of companies engaged in tech and biotech, as well as emerging forms of AI and intellectual property.

My concern today is not with the Bill but with government Amendment 3 and its associated provisions, which, as we have heard, raise the threshold, from 15% to 25%, at which investors are required to notify the Government of their deals. I know this is done for apparently good reasons, summarised by the noble Lord, Lord Clement-Jones—notably to avoid needless blockages and queues of deals awaiting approval in the new unit at the Department for Business, Energy and Industrial Strategy, my old department—but I believe it is the wrong call. No doubt the ARM deal would have been caught by the new rules anyway, but less radical deals might not. I believe that it would be better to invest more in administration at the business department, to keep the threshold as it is and to improve the incentives to discipline and speed in processing of applications.

This is such an important matter for our future that we should not skimp on the new unit, which should be staffed by top people with the ability to work at speed. My noble friend Lady Noakes and others have rightly expressed concerns on this score, which I will support later. It would be a tragedy if this new Act were undermined by administrative inadequacy.

If we are to flourish in this more competitive and dangerous world, we need to prevent British science, technology and intellectual property leaving these shores without anyone noticing or reviewing it. We need thorough scrutiny of the deals identified in this Bill, so, for me, Amendment 3 goes too far and I would find it difficult to support the Government if the House chose to divide.

Trade Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st October 2020 Grand Committee

[Lord Clement-Jones (LD)]

My Lords, in the digital era in particular, intellectual property is the lifeblood of our creative and tech industries. As the Alliance for Intellectual Property points out, the UK’s IP framework has a number of features that protect UK consumers and reward UK creators and inventors. It is quite possible that our trading partners may wish to reduce or water down these protections. To ensure that the UK’s IP framework will continue to deliver significant economic benefits, it is paramount that the UK does not concede or dilute its current IP standards as part of trade negotiations; indeed, they should be enhanced.

Ensuring that we will retain or enhance these core protections involves asking ourselves the following questions for each trade agreement. For instance, on international treaties generally, will the UK encourage all our trade partners to promote both the ratification of, and adherence to, terms of international treaties for the recognition and enforcement of copyright, trademark design and other intellectual property rights? With regard to trademarks, will we resist the introduction of proof of use?

With regard to maintaining the UK’s injunctive relief powers, in the UK rights holders can apply to the civil courts for no-fault injunctive relief. Will the UK Government ensure the preservation of their no-fault injunctive relief regime? With regard to design rights, will our negotiators ensure that the current level of protection is not weakened and that such protection is available to all UK designers, particularly regarding unregistered designs? With regard to copyright, will we make sure that the copyright term of 70 years after death is preserved? New Zealand, by contrast, has only a 50-year term.

With regard to copyright exceptions, will future free trade agreements negotiated by the UK include balanced copyright exceptions and limitations, and uphold standards such as the Berne three-step test? Will we resist any adoption of US-style fair use?

With regard to the liability of online platforms, will the UK oppose any obligations under any trade agreement, particularly with the US, that would broaden liability shields for online intermediaries or digital platforms? Will the UK ensure that its negotiators work together with the US to simplify the DMCA notice and takedown provisions and embrace a sharing of best practice within the US and UK systems? The amendment in the name of the noble Baroness, Lady Kidron, which I strongly support, would give this wider and greater force regarding children.

With regard to site blocking, will the Government make sure that our site-blocking provisions for pirate sites are protected and included in free trade agreements? It seems they have not been in the Japan free trade agreement. With regard to sovereignty over exhaustion rights, will we ensure that exhaustion continues to be a sovereign issue for the UK, that it is not prescribed in any trade agreement and that there is no shift to an international exhaustion regime?

With regard to the artist resale right, the ARR ensures that UK visual artists receive a modest royalty when their work is resold on the secondary art market. Will we be maintaining the ARR and pressing for it to be included in all future trade agreements? With regard to reciprocal public performance rights, will the Government press the countries that we are negotiating with to provide for full payment for all music rights holders from the use of their works or from recordings, public performance and broadcast?

With regard to source codes, will we be preventing the mandatory transfer of source codes, algorithms or encryption keys as a condition of market access? With regard to data, will we be supporting the development of AI through aligning open government data and text and data mining rules with our own? Lastly, with regard to robust enforcement measures, the effective enforcement of intellectual property rights and infringement is crucial for ensuring the integrity of future trade agreements. Will we be ensuring that effective mechanisms for enforcement are in place so that rights holders have the ability to enforce IP laws within these jurisdictions?

These are all significant aspects of IP rights that have hitherto been relied on by our exporters and service providers. The Minister assured me at Second Reading:

“As he will know, our intellectual property regime is consistently rated as one of the best in the world. One of our priorities will be to ensure that future trade agreements do not negatively impact on standards in this area and that our regime will promote trade in intellectual property.”—[Official Report, 8/9/20; col. 747-78.]


But how will we know for sure in advance? Here is a classic example. The Chartered Institute of Patent Attorneys points out that in the UK’s negotiating objectives under “Intellectual property” on page 11, the Government commit to:

“Secure patents, trademarks, and designs provisions that: are consistent with the UK’s existing international obligations, including the European Patent Convention (EPC), to which the UK is party”.


In the corresponding US negotiating objectives, the US Government state that they will seek provisions governing intellectual property rights

“that reflect a standard of protection similar to that found in US law.”

As CIPA says:

“These UK and US objectives are not fully aligned, and a similar non-alignment may well arise in negotiations with other countries. This carries the serious risk of creating damaging uncertainty about the UK’s continuing membership of the EPC”.


Let us take two more examples. The July letter of the noble Lord, Lord Grimstone, about the New Zealand negotiations on intellectual property gave very little away. In his slightly fuller letter on the Japan agreement in September, he said:

“New protections for UK creative industries—British businesses can now be confident that their brands and innovations will be protected. We have gone beyond the EU on provisions that tackle online infringement of IP rights, such as film and music piracy.”


That is all well and good, but it is precious little information on such an important subject. We should know in advance through a specific report what the IP situation on each trade agreement will be so that we can be assured that the relevant protection and provisions are in place. That is what this amendment does.

I turn briefly to Amendment 16 on data flows to which the noble Baroness, Lady Neville-Rolfe, will be speaking and which I have signed. However, I do not want to steal any of her thunder. It is sufficient to say that this was not dealt with by the Minister at Second Reading. It supports the free flow of data and regulated access to data sets; ensuring that data can flow across borders is essential for digital trade, in particular for e-commerce consumption and supply chains and the use of data collection and data analytics through the cloud and otherwise.

In his September letter on the Japan agreement, the Minister said that cutting-edge digital and data provisions had been agreed. Again, how are we to judge? How are we to judge, too, the impact of any safe harbour or privacy shield provisions on our wider digital economy, especially in the light of Schrems II? Already, the Government’s consultation on a national data strategy with its promise to remove legal barriers to data use are problematic. We have heard from the noble Lord, Lord Agnew, that the Government Digital Service is carrying out a risk assessment. What impact will that have on our trade agreement negotiations?

All of this argues for a specific impact report prior to a trade agreement being signed in respect of data flows. I shall leave the Minister to the mercies of the noble Baroness, Lady Neville-Rolfe. I beg to move.

[Baroness Neville-Rolfe (Con)]

My Lords, I shall speak to Amendment 16 in my name, which requests a similar report on data. I thank the noble Lords, Lord Clement-Jones and Lord Stevenson of Balmacara, for their support. I in turn support Amendment 15 in their names on intellectual property. This is an issue on which we have worked together over many years, and of course the Minister, my noble friend Lord Younger, is something of an expert on IP, so I am hopeful of making progress and look forward to his response.

Our amendment on data is possibly even more important than that on IP, if that is possible. Data is like the electricity on which it depends: it allows everything to work and permits communication and analysis across the world. Data flow now underlies almost every aspect of our lives from financial services to the food supply chain, from defence to the music industry. The cloud is everywhere; it has made some people very rich, and has radically changed the market valuations of the world’s companies—here I refer to my own registered interests.

However, unlike IP where there are well-established international frameworks and bodies, in data there is inadequate international alignment of standards, and that has led to disputes between the EU and the US, as I know only too well as a former Minister with responsibility for data. The combination of the GDPR and the European Court ruling on Schrems caused huge problems that we solved with the EU-US Privacy Shield Framework. Led by my right honourable friend Matt Hancock and my noble friend Lord Ashton of Hyde, who is now of course our esteemed Chief Whip, we put the GDPR and associated changes on to the UK statute book so that the UK would be declared equivalent to the EU and data could continue to flow after EU exit. We still await clarity on that equivalence decision, which is important to many sectors and is a matter of much concern to the EU Scrutiny Committee on which I have the pleasure of sitting.

Business and Planning Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Monday 20th July 2020 Lords Chamber

[Baroness Neville-Rolfe [V]]

My Lords, I shall speak to Amendment 52 on digital ID and I thank the noble Lords, Lord Clement-Jones and Lord Stevenson of Balmacara, as well as my noble friends Lord Bourne of Aberystwyth and Lord Arbuthnot of Edrom—who was squeezed out by the limit of four proposers. I also thank the British Retail Consortium for its advice. The members are old friends because for many years during my Tesco days, I was the consortium’s deputy chair. It turns out that digital ID is a subject that garners great interest right across the House and indeed, despite her rather discouraging comments in Committee, I discover that it is also of considerable interest to my noble friend the Minister, and her response today will be critical.

There are two key issues. The first is the urgent need for digital ID to complement the system of physical ID on which we currently rely for sales of alcohol, whether in shops or in pubs. This, as the Minister explained in Committee, is because there is no industry standard for digital ID. Ironically, the work on developing it has been delayed by the pandemic until next year, as we heard from the Minister. That seems to be very slow given the security technology that exists and our proficiency in such matters here in the UK.

The situation with alcohol contrasts with that on verifying sales of knives—which is surely more dangerous—tobacco, lottery tickets and fireworks. Digital ID is in regular use in all these areas, despite the lack of this standard. Operators are ready and willing to use this for alcohol too, and it would bring benefits through productivity, fraud control and—this is the second key issue for today—infection control under coronavirus. Its use would remove the need for customers or staff to wash hands or resanitise. There would be no requirement to show paper ID or carry a passport, as some youngsters do when they go out, sometimes leading to loss in my experience. That is a serious matter, given current Passport Office delays. It is especially helpful at automatic check-outs and could speed up queues at pubs and elsewhere.

Our Amendment 52 permits the use of digital verification, provided the licence or certificate holder reasonably believes, with all reasonable precautions and due diligence, that the individual purchasing alcohol is under 18 years old. The amendment is drafted, in effect, to allow the Government a trial for digital ID. It would end after six months, in January, and could be extended once only, by which time we expect the industry standard to be in operation and Covid to be behind us.

We need both a firm commitment from the Government to make this standard happen in the first half of next year and a temporary arrangement to permit the use of digital ID during Covid. For some other requirements, for example at the CMA and ICO, regulators are operating an easement programme during Covid. Another approach that occurs to me is for the Government to give guidance to trading standards that the requirement for paper checks for age ID for alcohol will not be enforced, where there is a reliable digital verification method in operation, until the new standard is adopted. We all want proper enforcement. We must make progress on this, and I look forward to hearing what the Minister says before pressing my amendment.

[Lord Clement-Jones]

My Lords, Amendment 52, which I have signed and strongly support, is similar but different, in a crucial respect, to the one which the noble Baroness and I tabled in Committee. I am delighted that we are joined by even heavier artillery on Report. In Committee, the noble Baroness, Lady Williams, said:

“At present it is not possible to use a digital ID as proof of age for the purchase of alcohol in the UK because there is no industry standard for digital ID… Until such a standard is agreed, the current restrictions should be upheld. I hope that my noble friend will not press her amendment. I shall finish there.”—[Official Report, 13/7/20, col. 1435.]


I am not going to repeat what I said in Committee—for which I am sure the Minister is grateful—but I know she is always open to sound argument. I want to show why her brief in Committee was not entirely accurate.

It is rather misleading to say baldly that there is no industry standard for digital ID. Back in 2016, the age verification group of the Digital Policy Alliance—which has some distinguished and knowledgeable present and former parliamentarians among its members—sponsored a publicly available specification, PAS, code of practice standard number 1296 on online age checking. This was adopted by the British Standards Institution and the independent regulator, the Age Check Certification Scheme. It is now PAS 1296:2018.

A publicly available specification is a voluntary standard intended to assist providers of age-restricted products and services online with a means to adopt and demonstrate best practice and compliance. There are easily available audit processes and services to check conformity with the PAS, involving policy, quality and technical evaluation, and an enormous number of reputable companies provide age-verification services through digital ID systems. As the noble Baroness said, in many ways the UK is leading the way in digital ID. It is active across the range of age-restricted products and services, such as DVDs, gambling, lottery tickets and scratchcards, knives, air weapons, fireworks, petrol, solvents and cigarettes, but not—perversely and uniquely—alcohol.

This is the digital ID marketplace that the Government said they wanted to build, in their call for evidence last year. Most of these companies are UK-based and many are global. Nearly all work to the standard set by PAS 1296:2018. Many of them have other forms of certification and security standards in place, such as ISO 27001. There is an active trade body, the Age Verification Providers Association, whose members—as the Minister probably knows—have just had good news from the High Court in an important judicial review case involving non-implementation of the age-verification provisions of the Digital Economy Act.

Another government department, BEIS, through its Office for Product Safety and Standards, together with the Chartered Trading Standards Institute, provides training that

“will enable participants to confidently apply the PAS 1296:2018”.

Not only is there a form of auditable standard in place, but reputable training in compliance with PAS 1296.

As we pointed out in Committee, this is a strongly deregulatory measure. Retailers have noted that almost 24% of supermarket baskets contain an age-restricted item. As a result of current rules, many customers are waiting longer than necessary. This would ease any congestion, mitigate the risks of queuing, reduce the need for continual sanitisation by staff—as the noble Baroness said—and be for the benefit of all in infection control. Rather than being the last ship in the convoy, can the Home Office not steam ahead on this? The noble Baroness, Lady Neville-Rolfe, explained that it is essentially a pilot period only. I urge the Government to accept our amendment.

Business and Planning Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 13th July 2020 Lords Chamber

[Baroness Neville-Rolfe [V]]

My Lords, I rise to express my doubts about this amendment, because the Bill contains temporary measures. We should put liberalisation to the fore, as argued by my noble friend Lady Noakes on an earlier amendment, and should not be using this Bill to make major policy changes.

My grandmother was a smoker and died of lung cancer shortly before I was born—a great sadness, as she was a founder of the CPRE and a great cook. However, this has made me very aware of the right way to encourage the reduction in smoking. I do not believe in total bans, which drive smoking underground. The truth is that smokers are still able to smoke in the open outside some pubs and bars, so they come, sit outside well away from others and support the hospitality sector—as I saw on Saturday outside the coffee shops in Salisbury marketplace. A proper study and assessment of what this measure would mean cannot be done for a temporary Bill. It would certainly affect pubs and other outlets, but we do not know what the possible impact would be, given that we are talking about people gathering together in the open air.

More generally, I feel that noble Lords have not grasped the gravity and immediacy of the economic disaster enveloping this country as a result of Covid. The various measures and amendments before us could make things worse—for example, by hitting pub numbers and, indeed, driving smokers away from the open air that is better for their health. I believe that this should be a matter for local authorities and that we should not be embarking on a major change in this temporary Bill.

[Lord Clement-Jones [V]]

My Lords, I am speaking very strongly in favour of Amendment 18, so cogently introduced by my noble friend Lady Northover. This debate takes me back almost 20 years to the passage of my Private Member’s Bill, which became the Tobacco Advertising and Promotion Act 2002. It had cross-party support and the very effective backing of Action on Smoking and Health, as does today’s amendment.

My noble friend Lady Northover was extremely helpful then, as were the noble Baroness, Lady Finlay of Llandaff, the noble Lord, Lord Faulkner, and the late Lord Peston, who we all remember so fondly. The noble Lord, Lord Naseby, was a lot less constructive. The noble Baroness, Lady Noakes, was on patrol. The noble Earl, Lord Howe, kicked the tyres on the Bill very hard but was persuaded of its merits—as I hope he and his ministerial colleagues will be by this amendment today.

Our culture and, in particular, the balance between smokers and non-smokers, has changed dramatically since those days. I remember visiting Ireland with the noble Baroness, Lady O’Cathain, shortly after the passage of the Bill. The scales fell from our eyes about the possibility of smoke-free pubs and restaurants—and now, as a result, our health benefits hugely.

Clause 5 already sets out that conditions can be put on pavement licences by local authorities or the Secretary of State. As the LGA says, this amendment

“sets a level playing field for hospitality venues across the country”.

It wants national action. This is crucial, as my noble friend Lady Northover explained, to ensure consistency and clarity of regulation across the country for the hospitality trade. It also has the public health benefit of protecting people from unwanted second-hand smoke.

As ASH says, Covid-19 has changed the context completely. Access to indoor smoke-free areas in hospitality venues is limited and riskier as a result. Prohibition of smoking in enclosed areas has displaced it outdoors, particularly to areas around the entrances and exits to public buildings. If smoking is not prohibited, pavement areas will not be family-friendly spaces. They will exclude non-smokers from enjoying the benefit of eating and drinking outside. Neighbouring premises, particularly in cramped, inner city areas, will also be exposed to second-hand smoke.

This is a chance to ensure that the health gains of the 2002 Act and the Health Act 2006—which has had great public support, as my noble friend said, with smoking declining significantly among young people in particular—are not squandered and that the Government can realise their stated ambition for England to be smoke-free by 2030.

Data Protection Bill [HL]

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Report: 3rd sitting Hansard: House of Lords
Wednesday 10th January 2018 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, we have had something of a break, so perhaps I should remind the House what lies behind my Amendments 106, 125 and 127. It is the wish to reduce, as far as possible, the burden that the GDPR and the Bill will place especially on small entities—notably, small businesses, small charities and parish councils. I might add that it behoves us to stand back from time to time and recognise the burdens we all too often impose on people and businesses. This is very often for good reasons, but it can seem overwhelming for those at the receiving end, and it is important to minimise the burden where we can legitimately do so.

I also place on record my thanks to the Minister for a helpful meeting about my concerns. Against this background, Amendment 106 would place a duty on the Information Commissioner to support such small entities in meeting their obligations under the GDPR and the Bill. It gives examples of how this should be done, including compliance advice and zero or discounted fees. This is important both practically and as a manifestation of how the state expects the commissioner to approach her duties. We should always remember that data protection will sound forbidding to some small organisations.

Furthermore, parish councils are fearful that they could face new costs of up to £20 million in total on one reasonable interpretation of the present text. They have been advised that an existing officer of a council could not act as a DPO because they are not independent. My noble friend Lord Marlesford mentioned this issue at Questions in December but, happily, I believe the Government take a different view, and it would be helpful to hear that on the record from my noble friend.

On the same lines, Amendment 125 would require the Secretary of State to consider fixing charges levied on small entities by the commissioner at a discounted or zero level. We need to find a way to avoid the imposition of significant costs for small entities into the future as cost recovery escalates in the administration of data protection.

Amendment 127 goes a little further. It would require the commissioner to have regard to economic factors in conducting her business. This is a fundamental point. The commissioner’s remit contains elements which are similar to those of a judge and focuses predominantly on individual rights and protections. But the analogy is imperfect. Judges must go where justice takes them. The commissioner’s role is different in important respects, and economic factors ought to hold a high place in her consideration. This is important for UK competitiveness and for continued growth and innovation, which is also of benefit to business, citizens and data science—and, indeed, UK plc.

The amendment seeks to ensure that the commissioner concentrates on this economic angle by reference to the commissioner’s annual report. The noble Lord, Lord Stevenson, may remember that we introduced a special reporting requirement into intellectual property legislation which helped to ensure the right culture in that increasingly important area.

I should add that I am grateful to my noble friend Lord Arbuthnot and to the noble Lord, Lord Stevenson, for their involvement, and I am hopeful that the Minister will be able to meet the concerns I have outlined in my three amendments in a sympathetic and practical way.

[Lord Clement-Jones (LD)]

My Lords, I rise briefly to support the noble Baroness, Lady Neville-Rolfe, in her amendment. She made a very good case. Current fee proposals really are very flawed. Clause 132, “Charges payable to the Commissioner by controllers”, states:

“The Secretary of State may by regulations require controllers to pay charges of an amount specified in the regulations to the Commissioner”.


That, compared to the existing regime of registration, seems far more arbitrary and far less certain in the way it will provide the resources that the Minister, in a very welcome fashion, pledged to the noble Lord, Lord Puttnam. It is far from clear on what basis those fees will be payable. Registration is a much sounder basis on which to levy fees by the Information Commissioner, as it was from the 1998 Act onwards.

I wish to be very brief; this has already been brought up. The Minister prayed in aid the fact that there are already some 400,000 data controllers and it was already getting out of hand. If the department—indeed, if the ICO—is going to be in contact with all those it believes to hold data as data controllers, it will have to have some kind of records. If that is not registration, I do not know what is. The department has not really thought through what the future will be, or how the Information Commissioner will secure the resources she needs. I hope that there is still time for the Minister to rethink the approach to the levying of future tariffs.

Data Protection Bill [HL]

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Committee: 6th sitting (Hansard): House of Lords
Wednesday 22nd November 2017 Lords Chamber

[Lord Clement-Jones (LD)]

We are in the thickets here at the interface between technology, techno-speak and legality. Picking our way through Clause 162 is going to be rather important.

There are two schools of thought. The first is that we can amend this clause in fairly radical ways—and I support many of the amendments proposed by the noble Lord, Lord Stevenson. Of course, I am speaking to Amendment 170E as well, which tries to simplify the language and make it much more straightforward in terms of retroactive approval for actions taken in this respect, and I very much hope that parliamentary draftsmen will approve of our efforts to simplify the language. However, another more drastic school of thought is represented by many researchers—and the noble Lord, Lord Stevenson, has put the case very well that they have put to us, that the cause of security research will be considerably hampered. But it is not just the research community that is concerned, although it is extremely concerned by the lack of definition, the sanctions and the restrictions that the provisions appear to place on their activities. Business is also concerned, as numerous industry practices might be considered illegal and a criminal offence, including browser fingerprinting, data linkage in medicine, what they call device reconciliation or offline purchases tracking. So there is a lot of uncertainty for business as well as for the academic research community.

This is where we get into the techno-language. We are advised that modern, privacy-enhancing technologies such as differential privacy, homomorphic encryption—I am sure that the Minister is highly familiar with that—and question and answer systems are being used and further developed. There is nothing worse than putting a chill on the kind of research that we want to see by not acknowledging that there is the technology to make sure that we can do what we need to do and can keep our consumers safe in the circumstances. The fact is that quite often anonymisation, as we are advised, can never be complete. It is only by using this new technology that we can do that. I very much hope that the Minister is taking the very best legal and technology advice in the drafting and purposes of this clause. I am sure that he is fully aware that there is a great deal of concern about it.

[Baroness Neville-Rolfe]

I rise to support the noble Lords, Lord Stevenson and Lord Clement-Jones, and some of the amendments in this group on this, the final day in Committee. I congratulate my noble friends Lord Ashton and Lady Chisholm of Owlpen as well as the indefatigable Bill team for taking this gargantuan Bill through so rapidly.

The problem caused by criminalising re-identification was brought to my attention by one of our most distinguished universities and research bodies, Imperial College London. I thought that this was a research issue, which troubled me but which I thought might be easy to deal with. However, talking to the professor in the computational privacy group today, I found, as the noble Lord, Lord Clement-Jones, said, that it goes wider and could cause problems for companies as well. That leads me to think that I should probably draw attention to my relevant interests in the House of Lords register of interests.

The computational privacy group explained that the curious addition of Clause 162—which is different in character and language from other parts of the Bill, as the noble Lord, Lord Stevenson, said—draws on Australian experience, but risks halving the work of the privacy group, which is an academic body, and possibly creating costs and problems for other organisations and companies. I am not yet convinced that we should proceed with this clause at all, for two reasons. First, it will not address the real risk of unethical practice by people outside the UK. As the provision is not in the GDPR or equivalent frameworks in most other countries, only UK and Australian bodies or companies will be affected, which could lead to the migration of research teams and data entrepreneurs to Harvard, Paris and other sunny and sultry climes. Secondly, because it will become criminal in the UK to re-identify de-identified data—it is like saying “seashells on the seashore”—the clause could perversely increase the risk of data being re-identified and misused. It will limit the ability of researchers to show up the vulnerability of published datasets, which will make life easier for hackers and fraudsters—another perversity. For that reason, it may be wise to recognise the scope and value of modern privacy-enhancing technologies in ensuring the anonymous use of data somewhere in the Bill, which could perhaps be looked at.

I acknowledge that there are defences in Clause 162 —so, if a person faces prosecution, they have a defence. However, in my experience, responsible organisations do not much like to rely on defences when they are criminal prohibitions, as they can be open to dispute. I am also grateful to the noble Lord, Lord Stevenson— I am so sorry about his voice, although it seems to be getting a bit better—for proposing an exemption in cases where re-identification relates to demonstrating how personal data can be re-identified or is vulnerable to attack. However, I am not sure that the clause and its wider ramifications have been thought through. I am a strong supporter of regulation to deal with proven harm, especially in the data and digital area, where we are still learning about the externalities. But it needs to be reasonable, balanced, costed, careful and thought through—and time needs to be taken for that purpose.

I very much hope that my noble friend the Minister can find a way through these problems but, if that is not possible, I believe that the Government should consider withdrawing the clause.

Brexit: Consumer Rights Policy

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Monday 12th December 2016 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, next week the Secretary of State for BEIS is chairing a round table with representatives from a range of consumer bodies and charities, and academics, to discuss, among other things, the impact of EU exit on consumers. These are exactly the sorts of issues that he will want to look at. Of course, the great repeal Bill, which has already been mentioned, will convert EU consumer law into UK law wherever practical, and we will want to ensure that cross-border enforcement is effective, and that our ADR landscape is preserved. These are important aspects of a consumer framework which is very strong: we should be proud of it in this country.

[Lord Clement-Jones (LD)]

My Lords, if we leave the single market, will not some of the real problems for consumers be over online and mail order purchases? When consumers no longer have the right to bring actions here against EU suppliers post-Brexit, what is the Government’s cunning plan? Is it for consumers to run around with small claims in all the other EU member states?

[Baroness Neville-Rolfe]

We will want to work to ensure that enforcement is effective across borders. There is, of course, a mutuality of interest here, because online goes both ways, and there are issues online, such as cyber and counterfeits, which need to be addressed. We are continuing to develop the digital single market in our ongoing work in the Competitiveness Council, and our enforcement regimes are well respected. The noble Lord is right to highlight this area, but I am optimistic that we can find a way forward and that there will be opportunities to do things better, from the studies that we shall be doing and the work that we shall be taking forward.

Waterson Review

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Wednesday 23rd November 2016 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, the Minister has clearly made herself extremely conversant with digital ticketing purchasing software, but the clue is in the name, is it not? Will she confirm that she is favourably disposed towards dealing with bots well in advance of the final government report on and response to Waterson, which, ominously, she describes as coming “in due course”?

[Baroness Neville-Rolfe]

We are certainly keen to get to the bottom of the issue of bots and to find the right way forward. There was consensus in committee in the other place that it was right to try to sort out the bots issue before our formal response. But as I said, the Waterson report is with us and work is in hand on this important issue. I am told that there is a proposed federal law on bots—“better online ticketing service”—although I understand the situation is a little different in the United States.

BBC

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Thursday 12th May 2016 Lords Chamber

[Baroness Neville-Rolfe]

I would like to discuss this with the noble Lord. As I have explained, there is a combination of the director-general, who has editorial independence but has to take account of the public interest, the new executive board, which will on a day-to-day basis and strategically try to ensure that that is achieved, and a new regulator. The precise detail of how that will work is set out in some detail in the White Paper that we have just published. We should all have a look at it and return to that point in the debate we will have.

[Lord Clement-Jones (LD)]

My Lords, I must come back to distinctiveness. With great respect, I am afraid the Minister did not answer the question asked by the noble Lord, Lord Alli, on distinctiveness. Many of us are very concerned that this is the thin edge of the wedge that will prevent the BBC competing with commercial broadcasters in prime time and that it is deliberately designed to do so. What assurance can the Minister give to this House that that is not the intention and that that will not be the case?

[Baroness Neville-Rolfe]

I think I can assure my noble friend that that is not the intention. It is something that the BBC has fully recognised and embraced. The BBC’s director-general has been the driving force here. He has highlighted that he wants to see a system that,

“firmly holds our feet to the fire on distinctiveness”.

To my mind, that is what the White Paper’s proposals will deliver.

Intellectual Property

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Tuesday 26th April 2016 Lords Chamber

[Lord Clement-Jones]

To ask Her Majesty’s Government what measures they are undertaking to ensure that small businesses can protect their intellectual property and reduce the legal costs of enforcing it, in the light of World Intellectual Property Day.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, this Government are committed to ensuring that all intellectual property rights are respected and appropriately enforced. This requires the right legal framework at home and abroad, effective enforcement action when needed and education for all as to the importance of respecting IP rights. We are undertaking a range of measures under all three of these headings, with mediation, IP insurance and fee reductions all targeted at reducing costs for SMEs.

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for that very supportive Answer. However, in particular, SMEs are concerned about the recent Trunki judgment, which means that registered design rights have even less protection than was previously thought. Also, they are very concerned about the small claims track, which limits them to £10,000 of damages when, in fact, many small businesses suffer much more than that and wish to have an effective cost of enforcement. What kind of assurance can the Minister give small businesses today, on World Intellectual Property Day?

[Baroness Neville-Rolfe]

On World Intellectual Property Day, I can say how important we consider design rights and other rights for small businesses. On Trunki, officials are reviewing the guidance available and we are reducing the fees. Instead of paying £1,620 for 40 designs, you will have to pay only £130 for electronic filing. This will help those who have been hit by the Trunki judgment. On the issue of the court, I am discussing with the Chancellor of the High Court whether we can give it extra resource because it is so valuable and so admired internationally.

Press Regulation

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Tuesday 26th January 2016 Lords Chamber

[Lord Clement-Jones]

To ask Her Majesty’s Government, in the light of the launch of the new press regulator IMPRESS, what steps they are taking to promote independent and effective press regulation.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, this Government support the framework for independent press self-regulation delivered in the previous Parliament. This system protects the freedom of the press while offering real redress when mistakes are made. We want to see the press voluntarily comply with the reforms recommended by Lord Justice Leveson and enshrined in the royal charter.

[Lord Clement-Jones (LD)]

My Lords, I am glad to hear that the Government support the framework agreed in the last Parliament. However, is not the key question whether the Prime Minister will honour his pledge to the victims of press abuse by commencing the court costs incentive set out in Section 40 of the Crime and Courts Act, as Parliament intended?

[Baroness Neville-Rolfe]

My Lords, the exemplary damages provisions, which now extend to all media cases, came into effect on 3 November and provide an incentive to publishers to sign up. We are not convinced that the time is right for the introduction of the costs provisions but the Secretary of State is considering the issue further and discussing it with interested parties; we have had some discussions with individual noble Lords in this House.

Copyright Hub

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Monday 2nd November 2015 Lords Chamber

[Lord Clement-Jones]

To ask Her Majesty’s Government what future financial support they intend to provide to the Copyright Hub.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

Since 2012, the Government have provided £1.3 million to the Copyright Hub in start-up funding and through the Digital Catapult which is developing the underlying technology of the Hub. We are currently assessing the hub’s need for ongoing funding and will be considering various options for the future.

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for that reply. Of course, most of that has been in kind from the catapult. The Minister is well known for her enthusiasm for the Copyright Hub but when is she going to turn that into real hard financial support? This could be a fantastic resource of huge benefit to our creative industries. It is a licensing infrastructure that could be international. Would it not be extraordinary if Singapore, the US and Australia gave more support than the UK Government?

[Baroness Neville-Rolfe]

My Lords, as we have said from day one, the Copyright Hub needs to stand on its own feet in the longer term. It is linked to the wonderful creative industries worth £77 billion. However, we want the Copyright Hub to succeed, as the noble Lord knows, and that is why we recently agreed to provide an extra £100,000 to cover the core costs for the next four months. We are also financing an independent assessment to examine options for the long-term sustainability of the hub and its development.

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, we are talking to the EU, but at the moment the EU is interested in how we are leading the way on the Copyright Hub. However, where the noble Lord, who knows so much about intellectual property, is right as usual, is that digital knows no boundaries and therefore having hub arrangements across the EU is an idea whose time will come.

[Lord Clement-Jones (LD)]

My Lords, if I may interject again, the Minister mentioned £100,000 for ongoing support for the next few months, plus £100,000 for a study of financial viability. Is this not analysis paralysis? Is it not time we just got with the job and the Government put their money where their mouth is?

[Baroness Neville-Rolfe]

It is not analysis paralysis at all. Without the catapult and the money the Government have put in, the Hub could not have been launched, despite the great work done by the creative industries. There have been teething problems—for example, in recruiting the right staff and in ensuring that picture agencies and others are equipped and linked to the Hub. We need a proper project study and that is what we are financing. I talked to Richard Hooper about it and he is supportive.

EU: Digital Single Market

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Tuesday 20th October 2015 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, we see the 16 headings as a good menu from which to choose. What we are hoping to see is some progress quarter by quarter. As I have already said, we see the priorities for the next few months to be copyright and consumer protection, but the other headings are also important because of the huge potential of digital to fuel innovation and growth across Europe and to help our competitive position.

[Lord Clement-Jones (LD)]

My Lords, would the Minister like to give the Government’s response to the recent case striking down safe harbour for data transfer, and does she believe that that will have a major impact on our ability within Europe to create a digital single market?

[Baroness Neville-Rolfe]

As the noble Lord suggests, this is a disappointing judgment. Companies need to be able to transfer data to third countries with appropriate safeguards. I discussed the judgment with businesses yesterday to better understand what they are facing. We will continue to engage. The Information Commissioner’s Office was also there and will update its guidance in the coming weeks. We will continue to press the Commission to talk to the United States—because it is an EU competence—to get clarity, but we are also making progress domestically.

BBC: Charter 2017

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Thursday 17th September 2015 Lords Chamber

[Baroness Neville-Rolfe]

As I see it, all these various pieces of work fit in and feed in to the charter review. The consultation is important and, as noble Lords know, we are making good progress with it. But we saw a need to have some new, independent advice on governance and regulation, which is why Sir David has been appointed, and his review will indeed be published.

[Lord Clement-Jones (LD)]

The Minister has not yet mentioned the advisory panel but, in answers to Written Questions, she has said that it will meet frequently and contribute significantly to the Government’s charter review—yet it has no terms of reference, it will not take its evidence in public, and its advisers are not subject to appointment by reference to the Nolan principles. Is it not totally unacceptable in the light of the influence that those advisers will have to have those circumstances prevailing, since they will have a great influence on the charter review? It is no surprise that even one of her noble friends described them as “assistant gravediggers” —and they clank with special interests.

[Baroness Neville-Rolfe]

My Lords, as I have said before, the group is not a decision-making body; it is just one part of the process. It has no legal status. As the noble Lord said, it is not set up under Cabinet Office guidelines for public appointments. It operates on a voluntary basis. We feel that it would be impossible to find a group of this kind without a significant overlap with the industry. I think that noble Lords can see that the way things are going we have several bits of work coming together. This advisory group is an important part of that work.

Authors: Rights and Income

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Tuesday 14th July 2015 Lords Chamber

[Baroness Neville-Rolfe]

I agree with much of what the noble Baroness says. She is a great role model from her work in the publishing industry, which was worth upwards of £9.9 billion of GVA in 2013. The creative industries make an enormous contribution to our economy. The digital world and the digital single market are of course changing everything; that is why we are always looking at how we should adapt our regulatory framework, both at national level and within the European Union.

[Lord Clement-Jones (LD)]

My Lords, as the Minister knows, there have been many calls to change the application of the Unfair Contract Terms Act to intellectual property contracts over the past few years. Is it not now time to have a full review of how contracts for creators can be made fairer? How can we regard ourselves as the champions of creativity in the UK when the scales are so heavily weighted against creators?

[Baroness Neville-Rolfe]

My Lords, I do not agree that the scales are too heavily weighted against creators: there is a balance between the consumers who are going to buy works and the creators and writers. We have to have a good incentive system. The noble Lord knows a huge amount about the law of contract and I will follow up the point that he makes with him. We made a lot of reforms following the Hargreaves review. We have adjusted and changed matters appropriately, and I think that was a good result.

Consumer Protection: Secondary Ticketing

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Thursday 9th July 2015 Lords Chamber

[Lord Clement-Jones]

To ask Her Majesty’s Government when they intend to commence the review of the consumer protection measures for the secondary ticketing market under section 94 of the Consumer Rights Act 2015; and who will undertake it.

[The Parliamentary Under-Secretary of State, Departments for Business, Innovation and Skills and for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, work on appointing the chair and expert group is well advanced and the review will proceed once this and the terms of reference are finalised. We are aware of our statutory obligation to publish a report on its findings by 26 May 2016.

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for that reply but ticket fraud continues to soar this summer. Circle Tickets has defrauded hundreds of music fans just this June while the RFU reports zero compliance with the Act for World Cup tickets, so the problem remains acute. This review is enshrined in statute as a result of the efforts of the noble Lord, Lord Moynihan, and others only recently. We are now two months out from the general election. When will this review start, will BIS or the DCMS oversee it and what will its scope be?

[Baroness Neville-Rolfe]

My Lords, as I have said, we will publish details of the review shortly. I share the noble Lord’s disappointment on the enforcement side and, prompted by his Question, I spoke to the City of London Police only last week. I was reassured about some of the actions it is taking, both on its own and with the cultural and sporting bodies, for the important events of this summer. As the noble Lord will know, May through to July is the peak period so there will be more cases, but Action Fraud is on to the job.

Consumer Rights Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Monday 8th December 2014 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, I understand that my honourable friend Mr Ed Vaizey is dealing with this issue. I think we have the powers that we need, and we discussed this on a previous occasion. As I say, my right honourable friend is dealing with the issue. We are not in a position to add a provision to the Bill but I assure the noble Lord that the issue is being progressed very keenly.

[Lord Clement-Jones (LD)]

My Lords, I do not know whether I am in order in speaking now but, before the Minister sits down, it may help the House to hear that I have received correspondence which I assumed had been copied to other noble Lords around the House on precisely the two matters which the noble Lord, Lord Stevenson, mentioned. One was a letter from my noble friend Lady Neville-Rolfe and the other was a letter from my honourable friend Ed Vaizey, so they have responded to the amendments tabled on Report—not wholly positively, I may say, but they have responded and set out their reasons for doing things other than agreeing to the amendments that were tabled on Report.

Consumer Rights Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Wednesday 26th November 2014 Lords Chamber

[Lord Clement-Jones]

I thank my noble friend for that reply. The one thing that I suppose I really should be grateful for is that—although one would have thought that it was natural in the course of events in Grand Committee and on Report—discussions have clearly taken place between the DCMS and Ofcom, finally, so that there seems to be at least some sort of a meeting of minds. Instead of the chief executive of Ofcom having to write as he did just after Grand Committee to clarify Ofcom’s legal situation and general position on this, discussions have taken place. We are somewhat unsighted by the fact that we do not have chapter and verse as to exactly what Ofcom said in these circumstances. However, it seems extraordinary that, whereas in the letter and in communications before the Communications Committee the CEO of Ofcom said that Ofcom did not have sufficient powers, he now seems to have agreed with the DCMS to roll over and say that it does have them.

I am sure that all sorts of arcane discussions are taking place. I think that there is a big distinction between powers formally to mandate GPL—subject to a merits test, which means that litigation therefore ensues at length about the merits of that decision—and an amendment such as this which makes a presumption that GPL is in the interests of consumers. I am not going to unpick that today; I said that this is a probing amendment. However, I still believe that further answers are required. I very much hope that the Minister will be able to write after this debate to clarify some of the points that I have raised. I hope that that will get us to a more satisfactory way of thinking about this.

[Baroness Neville-Rolfe]

My Lords, before my noble friend sits down, I am happy to say that I will write.

[Lord Clement-Jones]

I thank my noble friend for that undertaking. I hope that, at the same time, she will include a pretty firm timetable that has been agreed between the DCMS and Ofcom. On that basis, I beg leave to withdraw the amendment.

Consumer Rights Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Wednesday 19th November 2014 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, following the discussion my noble friend Lord Clement-Jones described in Grand Committee, I recently met representatives of the motor industry to discuss their concerns about the issue of one repair and we had a constructive discussion that included other amendments. I am very pleased also to hear from the noble Viscount, Lord Simon, about his discussions with the motor industry and, of course, to see my esteemed predecessor, my noble friend Lord Younger, making a very good point about the costs on traders.

I understand—although I am not a huge fan of motor cars—that motor vehicles are very complex goods and there can be a tendency for faults to reappear after repair. However, a limit of one mandatory repair or replacement sets an important and appropriate balance. The Bill provides key simplifications, as we all know, which we expect to benefit both consumers and traders, including the motor industry. The Bill sets a 30-day period for consumers to exercise the short-term right to reject, whereas in the past, claims have been made in relation to motor vehicles some months after the car was bought. The amendments we have laid on deduction for use, which my noble friend Lord Clement-Jones referred to, recognise the particular nature of motor vehicles, being complex and subject to rapid depreciation. He also noted in Grand Committee that the issue of one repair is pertinent to the final right to reject. I am grateful to my noble friend for going away and amending his amendment.

To the extent that the Bill’s provisions regarding one repair may impact on the motor industry, I think that being able to apply a deduction for use in the first six months mitigates against that and is an important and complementary protection. I am not blind to the needs of the industry, but the revised amendments go too far. They would undermine both the consumer protection and the clarity that the Bill provides. The limit of one mandatory repair or replacement before a consumer is entitled to some money back follows consultation by both the Law Commission and BIS, both of which identified that approach as being the preferred option. The Law Commission recommended that there should be greater clarity as to when a consumer can move from repair or replacement to access some money back. The Bill’s one repair or replacement provision gives that clarity and I am concerned that it should not be undermined. Importantly, the Bill does not prevent the consumer from agreeing to further repairs. I think consumers—certainly a consumer like myself—tend to act reasonably with a motor trader, especially if they are treated reasonably in return. As long as the trader keeps them well informed I think most people would be willing to accept further repairs. If, however, the relationship breaks down, the consumer should, and will under the Bill, have the right to exit the contract if the trader has tried and failed to fix the fault.

I also feel that a time limit set by the power included in the amendment would fail to provide the necessary safeguard to protect the consumer fully. There is a real risk that such a time limit would become the default, leaving consumers stuck waiting. Without the certainty of being able to ask for money back after one failed repair, consumers would have to show that a repair process had caused them significant inconvenience or taken more than a reasonable time. While these are important protections within the Bill, we do not think they are sufficient alone for goods. This was the very issue on which the Law Commission recommended that there should be further clarity. The evidence submitted to the Law Commission’s consultation showed that it is unclear when the point of significant inconvenience is reached, allowing considerable scope for dispute.

All of these concerns are compounded by the fact that these amendments are so broad in scope. We believe that as drafted they could apply to all goods, even a table that needed more than one repair. Essentially, the amendment seems to cover both complex faults in simple goods and simple faults in complex goods. It would be unclear whether or not the consumer had to make the goods available to the trader more than once. It would also be all too easy for an unscrupulous trader to argue for repeated repairs—even on simple non-complex goods if they claimed that the nature of the fault justified it.

My noble friend mentioned guidance and perhaps, without commitment, I can come back to him on that issue.

[Lord Clement-Jones]

Perhaps I can interrupt my noble friend to see what her reaction is before I respond. Does she accept that there is a conflict between what Ministers have been saying about the one repair concept and what is in the guidance? If so, clearly she could go further in undertaking that the guidance should be revised.

[Baroness Neville-Rolfe]

My advice is that there is no conflict, but as my noble friend has raised the issue, I shall certainly take a look and write to him. The amendments cut across the simple, clear provision set out in the Bill, so I ask my noble friend to withdraw his amendment.

[Lord Clement-Jones]

I detect in a mild kind of a way that that is a no—a fairly firm no. The motor industry will be very disappointed by that response, and I thank the noble Viscount, Lord Simon, for his support. I am somewhat surprised by the noble Viscount, Lord Younger, because this amendment is heavily supported by dealers and manufacturers. It is designed for their benefit; it is certainly not designed to add to their woes, which I believe Clause 23 has the capacity to do. It will bear unduly harshly on dealers, in particular, but I recognise a stone wall when I see one. I very much hope that my noble friend will undertake to review the guidance on page 39 and the conflict between what on the face of it seems to be a completely contrary statement to what is in the guidance. Perhaps we can make progress in that respect. In the mean time I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, I am not sure whether the noble Lord, Lord Stevenson, will thank me for making an even shorter speech than I made in the previous debate. I must say that my breath is somewhat taken away by the sweeping nature of the amendment, which tries to sweep all digital content into the clauses on the sale of goods. The software industry may have some difficulty with some areas of Chapter 3 on digital content, but if what the noble Lord wants happened, it would be horrified. The dialogue between the software industry and the Government may not have produced everything that the software industry wants, but it has recognised that digital content is very different. I forewarned the noble Baroness, Lady King, that I would cite her. Like me, she said:

“I will not speak at length on this amendment or the other amendments … but it seems worth reiterating the peculiar nature of digital content”. [Official Report, 20/10/14; col. GC 183.]

Although I do not have the exact reference, I entirely agree with her. The noble Lord, Lord Knight, made similar points about the peculiar nature of digital content. It would be an extremely retrograde step to sweep up the additional content in this. If the noble Lord had come with individual amendments to the clauses to bring digital content in, I might have been more sympathetic, because one then could have seen the exact consequences of the amendments, but 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.

[Baroness Neville-Rolfe]

My Lords, the Bill brings in clear quality rights for consumers of digital content for the first time. In this digital age, many of us are consumers of digital content on our smartphones, our smart televisions, our computers and, I was hearing this morning, on wearables. The sector is crucial and growing for the UK economy. The Business Population Survey estimated that there were more than 300,000 digital content firms in 2013—e-book publishers, games, software and website developers—with an annual turnover of just over £200 billion. It is vital that we have the right sort of regulation for that important, very innovative sector. That is why we have consulted widely on our approach to digital content.

The digital content chapter provides that when digital content is faulty, the consumer is entitled to a repair or replacement of the digital content. If that cannot be done within a reasonable time, or without significant inconvenience to the consumer, the consumer is entitled to a price reduction, which may mean some money back or, in some cases, 100%. I set out the general picture because we are about to discuss a number of amendments in this area.

This approach takes account of the way that industry works. As my noble friend Lord Clement-Jones, who I am delighted to see here at this debate, said in Grand Committee,

“in practical terms the software industry will always find a workaround or fix to a problem”.—Official Report, 20/10/14; col. GC 211.]

I have been using that quote elsewhere. In other words, when digital content is faulty, the problem is usually remedied quickly through an update.

The proposed amendment would apply to intangible digital content the same rights as apply to goods. So when intangible digital content is faulty, the consumer would also be entitled to a short-term right to reject, a limit to a single repair or replacement, and a final right to reject. Applying the full suite of goods remedies to digital content where it does not form part of goods, as it does in a washing machine, for example, would result in provisions that were not fit for the digital world.

We want provisions that encourage an increase in uptake and allow industry to innovate and flourish. This amendment would be a retrograde step, to the detriment of consumers. As the noble Lord, Lord Knight, who has already been quoted as a real digital expert, reflected in Committee, we must remember that 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, of course, not letting them off the hook for substandard offerings.

The noble Lord, Lord Stevenson, made a number of good points, but I feel, as does my noble friend Lord Clement-Jones, that the proposals in his amendment could have unforeseen effects. A short-term right to reject intangible digital content and strict limits on the numbers of repairs and replacements would not be practical in the complex world we live in. In the digital environment, a fault in one copy of digital content may be replicated in all copies, or the fault may not be a 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.

There are also issues around the practicality of “returning” intangible digital content. I think the noble Lord, Lord Stevenson, is suggesting that there should be an obligation on the consumer to delete digital content and on the trader to provide a refund. I do not believe it would be equitable or necessary to impose such a burden on consumers, who may not be technically savvy enough to achieve this—or not without assistance from the content supplier. Of course, many forms of digital content are quickly used, so the consumer may already have taken advantage of the digital content as much as they intended—for example, having viewed the film or read some of the e-book—before they reject it. There is a high risk that a short-term right to reject would therefore push manufacturers towards more restrictive data management techniques that would not be in the best interests of the consumer. Or it could cause the industry to be more conservative in its product offerings, reducing our competitiveness. Innovation would be chilled.

Looking to the future, it is also worth considering the moves in Europe towards a digital single market, and remembering that digital content is commonly sold across borders. The short-term right to reject is a domestic law; there is no short-term right to reject in the consumer sales directive from which many of the goods remedies derive. If we went ahead with a short-term right to reject intangible digital content, we could be out of step with Europe, creating problems for our manufacturers who want to sell across borders.

I believe that, although there are attractions in providing a short-term right to reject for digital content where it does not form part of goods, this would tip the balance of the Bill too far the wrong way. Indeed, it would be to the detriment of consumers, who would suffer from, at the very least, restricted product offerings and higher prices. I therefore ask the noble Lord to withdraw his amendment.

Ticket Touting

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Wednesday 5th November 2014 Lords Chamber

[Baroness Neville-Rolfe]

My Lords, the Olympics and Paralympics were a fantastic achievement. It took an enormous enforcement effort to police the resale of tickets at that event, which we cannot do for every event. Since my appointment, I have taken a great deal of interest in this issue. I have had meetings with event organisers, including the Rugby Football Union, the England and Wales Cricket Board and UK Music, with online marketplaces and with consumer groups, to hear how the market is working. At present, we have broadly the right balance between consumer protection, with a number of regulations and allowing the market to operate, but I am considering new evidence as it becomes available.

[Lord Clement-Jones (LD)]

My Lords, my noble friend mentioned the Olympics. Will she take the opportunity of commending the report from Operation Podium of the Metropolitan Police, which so valuably made a number of recommendations about ticket fraud and abuse? Does she agree with its conclusion that self-regulation is unlikely to be successful, given the current lack of transparency, and unscrupulous practices by some? Is the Consumer Rights Bill not the ideal vehicle for reform in this area?

[Baroness Neville-Rolfe]

My Lords, Parliament has debated this issue for more than 10 hours on the Consumer Rights Bill alone, and we have legislated and produced guidance. New regulations came into force this year in June, which ensure that consumers get the information they need. We have included specific guidance on how the regulations apply to tickets. In terms of the police, consumers are protected by the Fraud Act. Action Fraud is now the single national reporting centre for fraud, and since 1 April, responsibility for that has moved to the City of London Police. They are making good progress.

Consumer Rights Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Monday 20th October 2014 Grand Committee

[Lord Clement-Jones]

My Lords, in moving Amendment 34B I will speak also to Amendment 34C.

Under the current wording of Clause 35(1), a consumer can include in a contract for digital content a term that the content is fit for the purpose for which the consumer wants to use it without providing the trader with a realistic opportunity to evaluate, reply to, agree to or reject the consumer’s request. This means that the consumer can unilaterally include terms in a contract which go against the terms and conditions or the normal use of the content or even against the use of the content stipulated by the trader. Consumers should surely not be able to include a term in the contract on their own. A term should only be included if agreed by both parties. Clarity in a shared agreement as to contract terms is essential so that both parties understand and truly agree the contract. As currently drafted, the consumer may include a term in the agreement by implication. Contract terms should be expressly agreed, not by implication.

Surely if a consumer e-mails an online content store, saying that they intend to watch “Match of the Day” for a romantic night in, then that content would be deemed fit for that purpose under the current drafting. If it did not perform the stated purpose, the consumer would have a course of action against the store. As a second example, a consumer may e-mail an online content store saying they are buying a film to watch on a plane when they will not, in fact, be able to watch it because they need to stream the film over an internet connection and cannot download it. As currently drafted, unless the trader replies before the transaction takes place, the contract will, by implication, include a term that the consumer can use the content on a plane and the trader will be in breach of contract. I am sure there are many other possible scenarios that one might dream up, but it seems very strange that the consumer can, essentially, determine the nature of the contract in these circumstances as a result of Clause 35(1). I beg to move.

[Baroness Neville-Rolfe]

My Lords, I am grateful for the comments of my noble friend Lord Clement-Jones and for his constructive and telling contributions throughout this session. I note his comment about the consumer essentially creating the contract. I will answer, and try to cast light on the circumstances that we foresee for this provision, by looking at another scenario. Where a consumer e-mails a trader about their desired use for the digital content and then downloads it immediately—as is the case in the example proposed—it is highly unlikely that the consumer would be able to claim a remedy under Clause 35 from the trader if the digital content was unsuitable for that particular purpose.

This scenario would already apply to goods bought online. A consumer could e-mail a trader saying that they wanted to use the goods for a particular purpose that was not their usual purpose, and then order the goods without waiting for a response. However, there is no evidence that consumers are playing the system in this way, nor that it is causing problems for traders. The first key point is that the consumer must make known to the trader the purpose for which they intend to use the digital content. Secondly, the clause does not bite if the consumer does not rely on, or it was unreasonable for them to have relied upon, the skill and judgment of the trader.

In my scenario, we think it would be open to traders to raise a number of arguments. First, the consumer may not have made known their purpose to the trader, particularly if the time interval was such that the trader could not have been aware of the purpose at the time the contract was made. Secondly, the trader has not responded in any way and so has not exercised any skill or judgment. Finally, the consumer did not rely on the trader’s skill and judgment in these circumstances since their decision was made before the trader responded, and possibly even before the trader could have done so. So the clause is unlikely to apply in the scenario I outlined.

Amendment 34B says that we should remove the phrase “or by implication”. It is important to reflect that the requirement that a trader makes known the particular purposes for which digital content is intended implies that the trader must be aware of the consumer’s intentions. The phrase “or by implication” is to be seen in that context and may be more relevant in face-to-face sales than online ones. For example, a consumer may tell a salesperson that they are teaching their child to read when they are buying a particular piece of software but may not expressly say that they want to buy the software for the purpose of teaching their child to read. I do not want to deny consumers a remedy in such a case.

Amendment 34C requires that traders should expressly agree the purpose. Again, there are scenarios where the consumer may rely on the skill and judgment of the trader without their express agreement. For example, a consumer may e-mail a trader several times, providing the trader with an opportunity to respond to their request. The consumer may assume that the fact that the trader has not denied that the digital content is suitable for their purpose implies their agreement. Again, I do not want to deny consumers a remedy in such a scenario. Nor would I want to introduce additional steps into the purchasing process that were not necessary.

The clause replicates the related clause for goods, Clause 10, and also, crucially, that in the Sale of Goods Act. Keeping the wording consistent wherever we can retains the link with existing case law on fitness for a particular purpose, and ensures a close alignment between goods, digital content sold on a tangible medium and intangible digital content. While on the face of it, this amendment seems like a sensible clarification of the provisions for digital content, it could, as I have explained, have a perverse effect. I therefore ask the noble Lord to withdraw his amendment.

[Lord Clement-Jones]

My Lords, I thank my noble friend the Minister for her response. It is interesting and rather tricky. This is one of the trickiest areas that we have come across to date. I can understand my noble friend’s attachment to existing case law; that is what many lawyers would say in the circumstances. However, I want to innovate. The existing case law for goods in these circumstances could be extremely dangerous.

I accept some of the Minister’s points about the consumer having seriously tried to get the trader to respond and they have not, and about circumstances in which is entirely reasonable for consumers to rely on their skill and judgment. However, the digital world is different from the product world. The ability to communicate in one direction over e-mail without having a response adds a new dimension. It will not always be the case that it being unreasonable for the consumer to rely on the skill or judgment of the trader or credit broker will get the trader out of this particular situation, where there has been a unilateral statement that the product is required for such and such and, for some reason, the e-mail has not been received or the trader has not acknowledged receipt, or whatever.

Of all the clauses we have talked about to date, I do not think that this one is really the finished article yet. There is still some room for improvement precisely because the digital world is different from the product world. If you are buying a car on the dealer’s forecourt, you are in a very different position from that of winging e-mails and pressing buttons on purchasers’ websites. This clause does not yet reflect that adequately. I shall read what the Minister has said carefully and have further discussions. In the mean time, however, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, the rationale for this amendment is that Clause 46, which deals with consumer compensation for damage to a device or other digital content, fails to appreciate totally the complexities of security software products. Failures and malfunctions in software can occur for a variety of reasons, often without any connection to the design or development of the product itself. Improper use of the product is one common cause, while defects in the consumer's own equipment are another. The incompatibility of different pieces of digital content used simultaneously by the consumer is a third. In all these instances, the liability of the software provider can extend only to what is effectively in the sole control of that provider; that is, to cases where the cause of the damage sustained by the consumer is unambiguously and exclusively the product of that provider.

In the area of internet security products, urgent critical fixes for serious threats may sometimes get released before companies have tested the process extensively as there is generally a greater benefit for a greater number of consumers compared with a small number who may experience minor compatibility issues or false positives. These updates are developed with reasonable skill and care and they are tested against numerous possible known configurations. However, by their very nature the updates are a process that needs to be automated, and that is done under extreme time pressure. As a general rule, the faster an update is released to consumers, the greater the number of people who are protected from a new threat.

However, the current clause might encourage suppliers to slow down, delay or discourage the release of new security solutions or urgent critical fixes, to the ultimate detriment of consumers. Against that backdrop one must add the fact that the Bill does not allow the trader to restrict his liability under any circumstances. It then becomes apparent that the security industry will be confronted with a very real disincentive. Moreover, in the digital environment it is sometimes necessary to sustain minor damages that are unavoidable to protect the consumer from greater or further harm. A few examples may be helpful to illustrate this point because it is so specific to the digital environment.

It is better to delete a malware-infected e-mail from the consumer’s webmail account and to lose the content of that one e-mail than to have the consumer’s entire computer corrupted. It is also preferable as a precaution to temporarily block the consumer’s access to a website that is suspected of distributing malware rather than giving access and exposing the consumer to the risk of an infection. Similarly, it might be advisable in certain cases to take a service offline in order to address a security threat before making it available again to the consumer. In all these cases, the consumer or the consumer’s property may sustain damage, such as the loss of the content of an important e-mail that was deleted because of the malware that had infected it, the failure to receive a live video transmission while access to the service platform was blocked, or the inability to perform a particular online action at a precise moment because of a service outage. But in certain circumstances it has to be understood that this minor damage is a reasonable price to pay for the avoidance of much bigger harm, and Clause 46 should acknowledge that. I beg to move.

[Baroness Neville-Rolfe]

My Lords, I listened with great interest to my noble friend’s concerns. However, it is worth going back to the driver for this clause, which is to make it clear that all consumers of contractually provided digital content, free or paid for, may have a right to damages if the circumstances warrant it. Perhaps I can expand on that a little. The consumer already has the ability to bring a negligence claim in this area. If a consumer downloads some digital content that contains a virus, the consumer could seek to make a negligence claim against the trader if the virus caused loss or damage to the device or other digital content. However, excluding free digital content from the quality rights may leave consumers unsure that they have the ability to make a claim when free digital content causes damage, so Clause 46 clarifies the position. It is designed to reflect negligence principles and not to introduce any new burdens on industry.

On the question of consumer responsibility, I agree that traders should not be liable for damage that results from something the consumer has done with the digital content that it was not reasonable for them to do. Clearly, in this case, it is the consumer’s behaviour that has caused the damage and not the digital content. However, I do not agree that it is necessary to lay this out in the Bill. It is already implicit in the way the clause works. In order to prove a breach of the clause, the consumer has to show first that the digital content itself caused the damage to their other digital content or device. Secondly, they would have to show that the trader failed to use reasonable care and skill to prevent the damage. If the damage occurred because of something the consumer had done, then the consumer would not be able to prove a breach.

The concept of reasonableness in the application of this provision was referred to. I recognise that digital content operates in a very complex environment, as has been said often, and furthermore that no digital content trader can be expected to know every possible configuration of digital content on a consumer’s device. That is why we used the concept of reasonable care and skill in this clause. Reasonable care is part of the test of whether there was a breach in the first place. Even if the digital content can be shown to have caused the damage, there is no breach if the trader acted with reasonable care and skill to prevent the damage. This effectively protects the trader from expectations that they must have acted in every way possible to prevent the damage if it was not reasonable for them to have done so. It means that the trader would not be expected to test exhaustively for every possible scenario and that the trader’s activity would be judged against the normal standards in the industry.

The concept of reasonably foreseeable is slightly different. It addresses whether it was reasonably foreseeable that breaching this clause would cause the loss that the consumer suffered. However, expressly limiting the application of the provision to damage of a kind which the trader ought reasonably to have foreseen makes the provision more complex and creates an additional hurdle for consumers, making it harder for a consumer to secure a remedy.

My noble friend raised the issue of urgent updates and the need for them to be automated under the inevitable pressure of time. It is unreasonable—

--- Later in debate ---

[Baroness Neville-Rolfe]

My Lords, I had finished explaining the background to what we were seeking to achieve, which is important for the Committee to understand and for the record because of the original nature of the discussions on online. However, my noble friend Lord Clement-Jones was particularly concerned about emergency security updates. He rightly emphasised that they need to be carried out with great speed and that some consumers could suffer minor damage.

The position as the Government see it is as follows. The consumer has to demonstrate that the trader failed to use reasonable care and skill to prevent the damage. We would expect that all reputable traders in this area would use reasonable care and skill as a matter of course, even for security updates that obviously have to be released rapidly. However, what constitutes reasonable care and skill for urgent security updates would be judged against the normal industry standards in that context, not against the standards for regular updates.

I sympathise with my noble friend’s concerns about traders facing claims concerning minor damage caused to a few consumers during the process of an emergency update. However, if the trader has used reasonable care and skill, given the context, I would not expect that Clause 46 would be engaged. I therefore ask my noble friend to withdraw the amendment.

[Lord Clement-Jones]

My Lords, I thank my noble friend once again for a very clear exposition. If there is ambiguity when it comes to a court looking at some of the provisions of the Bill when it is enacted, some of the explanations may be quite useful in a Pepper v Hart kind of way. That useful exposition would give some assurance to anybody looking at the clause. I will read Hansard with great interest. I thank my noble friend and I beg leave to withdraw the amendment.

Consumer Rights Bill

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Wednesday 15th October 2014 Grand Committee

[Baroness Neville-Rolfe]

My Lords, we have heard a range of detailed and informed comments during this debate and I thank all noble Lords for their contributions, to which I have listened very carefully; it was good to have a variety of points made, and I am grateful to all noble Lords who have spoken. I am also grateful to the various sports, music and ticketing businesses that have spent time briefing me and the Government on these issues. In fact I should probably declare an interest as a big sports fan and a mother of cricketers.

Given the breadth of this issue and the different angles that people are coming from, I will divide my response into the two main types of sales in this market: sales from a trader to a consumer, and sales between consumers. I will then touch on the issue in Amendment 30 concerning refunds and compensation.

Before I do that, I shall briefly address the philosophical question posed by the noble Lord, Lord Stevenson, of whether a ticket—because it is either a goods item or an intangible legal right—is even capable of being sold on or transferred. The answer is that it is possible for a ticket to be defined either way. However, I am advised that this is ultimately a matter for judicial consideration, so it is not appropriate to attempt a determination in this Bill, or indeed for the Government to state publicly how we think a court would or should determine that question.

I turn to Amendments 26, 28 and 29 on business-to-consumer sales. I reassure the Committee that when traders sell to consumers there are already rules in place to ensure that consumers are aware who they are buying from and what they are buying. My noble friend Lord Clement-Jones said that the market was not subject to the same rules on transparency as other sectors, but this is simply not the case. The ticketing market is subject to consumer laws, including information requirements, to the same extent as any other retail sector.

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, to which my noble friend Lady Heyhoe Flint referred, set out clearly in list form what information must be provided. For distance and online sales, such as ticket sales, that includes the price, the identity of the trader, contact details for the trader and the main characteristics of the ticket. In fact, there are no fewer than 24 information requirements on that list covering all the information that the consumer needs to make an informed decision.

In guidance on the regulations, we have included a specific paragraph on how the information requirements apply to tickets. I can quote directly from the guidance to reassure your Lordships that much of the information listed in the amendment is already required. The guidance states:

“Information on the main characteristics of the tickets and their total price (including delivery costs and other charges) must be given to the consumer in a clear and comprehensible way before the consumer purchases the ticket … For a ticket associated with a particular reserved seat (e.g. Seat 1, Row A) the seat number is a main characteristic”.

The regulations build on existing consumer law. The Consumer Protection from Unfair Trading Regulations 2008 protect consumers from being misled into a purchase by a trader.

The noble Lord, Lord Clement-Jones, asked about the October regulations. They are the Consumer Protection (Amendment) Regulations 2014; is that right?

[Lord Clement-Jones]

I did, but before my noble friend moves on to that, I quoted from the guidance and pointed out that, effectively, this is voluntary. The guidance states:

“Main characteristics include (if known to you)”.

I directly quoted from the regulations, as well. My noble friend has cited other parts of the guidance, but that is the crucial part.

[Baroness Neville-Rolfe]

I thank the noble Lord for that clarification. Perhaps I can continue to address the trader side. Where a consumer is sold a ticket that is claimed to be on the front row, for example, which turns out to be on the back row, that would breach the 2008 regulations. Advertising for sale a ticket that a trader is not in a position to sell because the ticket is either not available through the primary outlet yet or because the trader is awaiting the outcome of a ballot would also be a breach of the regulations, as well as a potential Fraud Act offence. Criminal penalties reinforce the legislation. A trader or a marketplace can be subject to a fine or even imprisonment if these regulations are breached. In conclusion, we believe that there is already sufficient law in place to ensure that consumers have all the information they need about what they are buying before they buy from a trader.

The noble Lord, Lord Stevenson, asked about botnets. A range of offences is available to law enforcement to tackle the fraudulent sale of tickets and the criminal harvesting of tickets from online ticket sales. The Computer Misuse Act 1990 sets out the framework of offences associated with interfering with a computer, including the criminal use of tools or articles to commit a computer misuse offence, such as a botnet. It was good to hear from my noble friend Lord Borwick that he believes that we are on the way to solving the botnet problem.

The noble Lord, Lord Stevenson, also asserted that there is evidence of large-scale criminal activity. We disagree. Europe Economics found that 90% of sales are by consumers such as you or me. There is already a strong framework to deal with criminality, such as fraud and money-laundering laws, which the noble Lord mentioned, that might take place in a market. Additional legislation for ticket marketing would not address such criminal activity. Obviously it is important to work with the police and other enforcement authorities, and we will review the data that the noble Lord asked for to see what up-to-date data we have. I will write to him on that point.

My noble friend Lady Heyhoe Flint said, “Will the Minister look at the websites?”. I will, but the enforcement of the law is for the CMA and trading standards. We have done some research. These sites already require key information to be given. All these sites have money-back guarantees. Most ticket transactions pass without problem—it is over 90%—so I think progress has been made there.

My noble friend Lord Moynihan gave us a very interesting summary of his experience with the Olympics—that wonderful summer which we all enjoyed in the brilliant sunshine, and the success of the Games. Indeed, as he described, it was very successful in terms of ticket sales, although of course there were some gaps in the audience, which was a sadness for consumers who would have liked to have been sitting in those seats. A ticket resale regime was a condition for hosting the Olympic Games. We brought that in and said at the time that such cases have to be considered on a case-by-case basis. I do not think that my noble friend was suggesting that this should be extended widely but he was asking us to consider that issue.

My noble friend Lord Moynihan also asserted that other countries had found a good way to regulate ticket sales. Our finding is that the evidence is mixed. New South Wales has a draft Fair Trading Amendment (Ticket Reselling) Bill restricting ticket resales, and we do not yet know its impact. As we understand it, these new restrictions are not the same as those in one of the amendments under discussion today. We have also seen press reports arguing that Queensland’s anti-scalping laws, as I think they call them, have had little effect. However, obviously we will keep those under review.

I have tried to talk about traders. I should now like to turn to the subject of Amendments 26, 28 and 29, which is consumer-to-consumer sales. We want consumers to be active and empowered in the market as buyers and sellers. It is a fact of life that sometimes consumers have a ticket that they cannot use. At this time of year I might buy tickets for my husband, a son and myself for a classical concert in the Royal Parks next summer. If my husband is taken ill six months later and cannot attend, I need to resell the ticket. That means that I can get my money back and it gives other consumers the chance to attend the sold-out event. We see no need to restrict this. Consumers should be able to freely and easily resell in this way tickets that they cannot use; my noble friend Lord Borwick made this point very well. The OFT has said that secondary agents can,

“provide a useful function for consumers who need tickets for events and are willing and able to pay premium prices”.

My noble friend Lady Heyhoe Flint asked about the impact of her amendment and how to build on the 2013 regulations. I shall try to answer. We know that over 70% of consumers think that they should be able to resell their tickets. Not only is it the right thing to do to allow this market to operate, but that statistic also indicates that if we restricted the legitimate resale market, consumers would find other ways to sell on the black or grey markets. We also know that consumers care about protecting their data and identity online. The Communications Consumer Panel reports that nearly two-thirds of social network users said that they had a high level of concern about the use of information from profiles by companies. In that same survey, the largest top-of-mind concern related to the safety of personal details or ID theft, with just over one-quarter of internet users spontaneously mentioning it.

Most consumers would not be comfortable having their contact details prominently displayed on a website. I am not sure I would like that—but I am sure I am not the only one who already receives too much junk mail. Consumers want to sell online and to protect their personal data. The current regulatory system allows that, while protecting consumers when they buy from traders.

Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Tuesday 29th July 2014 Lords Chamber

[Baroness Neville-Rolfe]

I thank the noble and learned Lord and will come back to him on that. I think that I addressed the issue—perhaps we could look at Hansard together and have a further word on this important point.

The noble Lord, Lord Stevenson, my noble friend Lord Clement-Jones and the noble Baroness, Lady Morris, were interested in compensation schemes and the EU law on this, which is set out in the EU copyright directive, also known as the information society directive, or infosoc. Article 5(2)(b) of the copyright directive permits member states to introduce exceptions for private copying, such as the one before us today. The article requires that any exception must include certain conditions, for example that the copy must be for ends which are neither directly nor indirectly commercial. The exact wording is on page 2 of the instrument before us. The article states that the right holder must receive fair compensation when copying takes place under the exception. It is what exactly is meant by “fair compensation” that is at the crux of this question. In interpreting this phrasing, the Government have been guided by recital 35 of the copyright directive. This states:

“In cases where rightholders have already received payment in some other form, for instance as part of a licence fee, no specific or separate payment may be due”.

Later it goes on to say:

“In certain situations where the prejudice to the rightholder would be minimal, no obligation for payment may arise”.

In other words, fair compensation can mean no compensation, as long as the exception causes no, or minimal, harm, or if an appropriate payment has been received. This is how the exception before us has been designed, and it therefore falls within the margin of discretion that the directive allows.

As I said earlier, this view is supported by many, including several eminent legal experts. The JCSI noted in its report that there are persuasive arguments in the Government’s favour. Furthermore, European case law to date, although not directly addressing the question as to what is meant by minimal harm, is consistent with the Government’s approach. I would add that there is no guarantee that the European Court ruling in the Copydan case will have any bearing on the UK’s exception for personal copying. The recently published Advocate-General’s opinion confirms once again the wide latitude that member states have in this area.

The Government do not deny that ultimately only the European Court of Justice can rule definitively on the definition of minimal harm, and it has not done so to date. However, uncertainty—for the reasons I have already articulated—is not a justification for inaction, particularly when the evidence and reasonableness of a change is clear. For all these reasons, the Government believe that the regulations are intra vires.

In response to the request from the noble Lord, Lord Stevenson of Balmacara, the Government do not routinely publish their legal advice, and I am not persuaded that an exception should be made in this case. The Government are confident in the advice they have received that the exception proposed is compatible with all the relevant EU case law and also with our international obligations, such as the Berne convention. On the question of EU law, it was right to mention that there are talks going on in Brussels in this important area. This is a new area that I will be looking at, and I have spent a lot of time in Brussels. But the fact that there may be new measures coming in at an EU level is no reason not to proceed with a package which is useful and important, both to copyright holders and to consumers. The personal copying exception before us today is narrowly drawn, and merely legitimises existing consumer behaviour. This policy is right and fair to both rights holders and consumers.

The noble Lord, Lord Clement-Jones, asked whether the changes will be evaluated, as did others. I reassure the House that the impact of these changes will be evaluated in line with evaluation best practice, and the results of this evaluation will be published within the five-year evaluation period. The Government believe that these changes will have a positive effect on the economy including the creative industries. Additionally, the strategy for carrying out the evaluation will be published. The evaluation will seek to study a range of impacts, including on the creative industries. The Government will obviously be keen to hear from experts and from noble Lords on the proposed evaluation.

The noble Lord, Lord Clement-Jones, asked whether there were really 50 exceptions to copyright law. There are around 50 exceptions in Chapter 3 of the Copyright, Designs and Patents Act 1988. They are found in Sections 28 to 76.

[Lord Clement-Jones]

I asked whether there are 50 exceptions that have been introduced by secondary legislation.

--- Later in debate ---

[Baroness Neville-Rolfe]

I thank the noble Lord for that question. I think that we will need to wait and see what the evaluation looks like—I urge him to make some input on the nature of evaluation. It is a bit of a hypothetical question. As a representative of the Government, I would be uneasy about making any promises, but I thank the noble Lord for the point made.

I should move on, as time is pressing, to say a little about fair dealing, which the noble Lord, Lord Clement-Jones, raised. Fair dealing is an established legal concept that has been part of copyright law for more than 100 years. It is a question of fact, degree and impression and will take into account a number of factors, the main ones being whether the alleged fair dealing is in commercial competition with the owner’s exploitation of the work; whether the work has already been published or otherwise exposed to the public; and the amount of work which has been undertaken and the importance of it. We did not intend to define it further in the legislation, because doing so would upset this well established case law and undermine its main benefit, its ability to adapt to the circumstances of any specific case.

The noble Lord, Lord Berkeley, asked what evidence the Government had relied on in developing their policy proposals. The Government have worked hard to ensure that the proposed changes are based on evidence. The impact assessments are based on the best evidence available and were reviewed and validated by the independent Regulatory Policy Committee.

The noble Baroness, Lady Morris, referred to cloud services. This is a difficult and very important area which was explored as part of the Government’s impact assessment. However, we were not provided with sufficient data to enable us to determine what the impact would be. The majority of evidence received related to licence services, which would not fall within the scope of the exception; for example, because they provided streamed content so were not relevant. The music industry has accepted unlawful private copying for many years, so one might reasonably assume that the ability of the consumer to make copies of CDs is already taken into account when licensing deals are negotiated. Negotiation of contracts between businesses is a matter for those businesses. If, however, this is an issue of market abuse, it would obviously be a matter for the competition authorities.

The Government have published the changes through social media and website updates and through contacting interested stakeholders, such as those who responded to the technical review. They have published plain English guidance aimed at different user groups as well as an unofficial consolidated version of the copyright Act. We would expect wider education initiatives, such as the recently announced education campaign, to include educational messages—

[Lord Clement-Jones]

I alluded briefly to inaccuracies in the guidance. If those inaccuracies are clearly shown to the IPO, will the Minister undertake that those guidance notes will be changed? They are extremely important for consumers.

[Baroness Neville-Rolfe]

My Lords, I accept that the guidance notes are important and I will take the point away, if my noble friend is kind enough to give me the detail. I also say to the noble Baroness, Lady Morris, that I will keep an eye on the cloud aspect, which she rightly raised. I feel that it is important to include the cloud, because it is part of modern life, but clearly we need to look at how it is going.

My noble friend Lord Grade of Yarmouth felt that changes would harm rights holders. I would say that the exception legitimises what millions of people already do, something that the market has accepted for many years. This is aimed at consumers who have paid for content and support the creative industries by paying for music, films and books.

Many points have been made. I will study Hansard carefully and come back if there are points that I have not addressed in my summing up. As I said in my opening speech, this is a delicate balancing act. The Government believe that the copyright system has not kept pace with the digital revolution. As a result, a great many intuitively acceptable activities are illegal or uncertain. These changes relating to private copying, parody and use of quotations form part of a package that should make copyright works more valuable to all, give users clarity about their rights and build respect for copyright in the process. They will contribute to a more modern statute book that meets the challenges of an increasingly digital and changing world.

Copyright and Rights in Performances (Extended Collective Licensing) Regulations 2014

Debate between Lord Clement-Jones and Baroness Neville-Rolfe

Monday 21st July 2014 Grand Committee

[Lord Clement-Jones]

Perhaps I may add a question so that my noble friend can answer them all in one fell swoop. Strangely enough, although I agree with the five-year initial term, it not clear, as the noble Lord, Lord Stevenson, pointed out, whether a subsequent authorisation can be longer than five years. The noble Lord, Lord Howarth, might be entirely delirious with a 20-year extension. I would not be very keen on that but he might think that it was a wonderful thing. But from my reading of the regulations, it is not clear whether or not that subsequent authorisation could be longer than the initial authorisation.

[Baroness Neville-Rolfe]

The noble Lords have raised good points in their passion to get this right. I would like to look at this and write to the noble Lords about what can be achieved. There is good sense in having clarity for five years to get things off the ground but the noble Lords have made the point about the period after five years and having a look at what makes sense.

I also commend the points that the noble Lords made about the part that officials have played in developing the IP regime and these regulations in particular. Perhaps unsurprisingly, my first meeting after today’s business is with the CEO of the IPO, and I shall be visiting it soon, so I will have the opportunity to pass on your Lordships’ kind words.

I have given due regard to the Secondary Legislation Scrutiny Committee’s decision and comments. We have had a good debate. The Government believe that these regulations are a fair and reasonable reform and I commend them to the Committee.