Post Office (Horizon System) Offences Bill

Lord Etherton Excerpts

2nd reading
Monday 13th May 2024 Lords Chamber

[Lord Etherton (CB)]

My Lords, the Horizon scandal was described in the Explanatory Notes as a

“miscarriage of justice of unparalleled scale and impact”.

I do not know of anyone who would challenge that description. I certainly would not. It has had a devastating impact on huge numbers of sub-postmasters over a long period, leading to shattered lives, including huge trauma and mental distress, suicides, financial and reputational ruin, and the loss of a normal happy retirement.

The sub-postmasters, who have waited for far too long for recognition of their suffering and of the injustice that has overwhelmed their lives, deserve a speedy and simple route to bring that suffering and injustice to an end. The question for this House is whether this Bill is, in all respects, appropriate to achieve that goal.

The difficulty, which we must confront head on, is that the Bill infringes one of the most fundamental and critical tenets of our constitution: the independence of the judiciary. The judiciary is one of the three pillars of our constitution—the Executive, Parliament and judiciary. Each of those has its allotted function, providing the checks and balances essential for a democratic state.

Increasingly, in our own state, there has been a blurring of lines between the Executive and Parliament. The Minister, in his opening address, said that it is really Parliament and not the Executive that should be regarded as the body responsible for the legislative acquittals en masse provided for in the Bill. The reality, however, is that the Executive, especially one with a significant majority in the other place, almost always secure the implementation of their policies—an elective dictatorship, it has been called.

Reducing the Bill to its essence, the Executive are using Parliament to strip the judiciary of one of its central functions—determining who is guilty and who is not guilty of a criminal offence. That intrusion into the judicial pillar of the state is made as plain as could be from the wording of Clause 7(1), which states that

“a person whose conviction is quashed by section 1(1) is to be treated as if, on the coming into force of this Act, the conviction had been quashed by a court on an appeal”.

It is a characteristic of every autocracy and dictatorship that the Executive directly or indirectly nullify one or more aspects of judicial independence. History has demonstrated that there can be no liberty without judicial independence. This may seem a long way from the benign Bill that we are now debating, but it is not. We must guard our basic constitutional norms ferociously. Perhaps the most important duty of this House, performing its essential role as a check and balance in the lawmaking process, is to do precisely that when it is faced with draft legislation that is the result more of political expediency than of constitutional compliance.

Paragraph 24 of the Explanatory Notes states, as did the Minister, that

“the Bill does not set any constitutional precedent”.

That, however, is a quite meaningless statement. Of course, the Bill does not set any constitutional precedent since no Parliament can bind a future Parliament—each one is sovereign. By contrast, the Bill, if enacted, will provide an historical example of an overreach by the Executive, through Parliament, into the judicial pillar of the state. In that sense it is indeed a precedent for any Government with a sufficient parliamentary majority, even where the object of the Government is not a benign one.

The noble and learned Lord, Lord Falconer of Thoroton, suggested that the precedent was a very narrow one, in effect, confining it to the precise facts and circumstances of the present scandal. I see no reason at all why a non-benign Executive should not take the wider view that I have just described.

The precedent is all the more egregious because, contrary to the impression created by the Explanatory Notes, it is not at all clear that the Bill is necessary to achieve the desired objective. The noble and learned Lord, Lord Burnett of Maldon, has described several practical arguments as to why our constitutional norms can be preserved while delivering the justice that the sub-postmasters so urgently require. I wish to make one or two points in relation to this.

The noble and learned Baroness, Lady Carr of Walton-on-the-Hill, the Lady Chief Justice of England and Wales, addressed the Justice Committee of the other place on 16 January this year on the Prime Minister’s announcement the previous week that there would be emergency legislation to quash en masse the convictions of people prosecuted by the Post Office on the basis of Horizon data. The Lady Chief Justice refuted any suggestion that the judiciary had given the proposed legislation the green light. She said that she had had two short conversations with the Justice Secretary at his urgent request, and that was the extent of the consultation that had taken place. She also refuted any suggestion that the courts had been unable to cope with the cases or would be unable to cope with future volumes.

Where do we find anywhere, in the Explanatory Notes or elsewhere, any analysis by the Government of why the courts would be unable to make special arrangements for expedited appeals in relation to all convictions, or as to how quickly that could be done? The noble and learned Lord, Lord Falconer, gave a range of speculative difficulties that would arise in relation to a wide variety of matters. As I understand it, he acknowledged that it might be possible to provide alternative arrangements that would satisfy the giving of justice in a speedy and effective way but said that this would result in bending our justice system out of balance. But all of this is a balance. I suggest it is better to bend the justice system out of its ordinary shape—if this can be done, as I think it can—if that would give proper, fair and speedy restitution and acquittals to the sub-postmasters, rather than drive a coach and horses through one of our most important and fundamental constitutional norms.

The second point I wish to emphasise in relation to the various examples given by the noble and learned Lord, Lord Falconer of Thoroton, is that, as I have mentioned, his examples of difficulties and his expansion of the problems are all speculative. As far as I am aware, there has been no proper discussion between the Executive and the senior judiciary as to what it might be possible to achieve. The truth of the matter is that every problem said to make the Bill a necessity is capable of resolution without legislative en masse acquittals, including speed of appeals, reluctance of those convicted to become further involved in our court proceedings, lack of evidence, and the test for a successful appeal against conviction. I do not accept that these matters are impossible of achievement outside the context of the present Bill.

What we need is evidence of actual discussions as to what is viable, rather than to deal with speculation as to what may or may not occur. For my part, in the absence of any clear and public explanation by the Government, following discussions with the senior judiciary, and for the reasons I have given, I do not consider that it would be right to support the approach of acquitting through this legislation all those who have been convicted.

Digital Markets, Competition and Consumers Bill

Lord Etherton Excerpts

Report stage
Monday 11th March 2024 Lords Chamber

The Minister, like others, has been very generous with his time and that of officials in discussing these matters. I hope that he none the less recognises that this Amendment 56 is a necessary safeguard that does absolutely no harm to the purposes of the Bill. When the time comes, I hope that he will accept it, but, if he does not, I fear that we will have to press it.

[Lord Etherton (CB)]

My Lords, I speak to my Amendment 49. I am grateful to those across the House who have supported it. This amendment is about the fundamental right of access to justice for consumers who have suffered from breaches of requirements and directions by the CMA, as the regulator, or commitments given to the CMA. The persons against whom the requirements and directions are imposed—those who have given the commitments—may be broadly described as the “big players” in digital markets. Their definition is a complicated one, but it indicates that these are the big players. We are talking here about those such as Amazon, Apple, Meta, Google, Samsung, Nokia and more.

In addition to remedies available to the CMA for breach of such requirements, directions and commitments, as has already been mentioned, such as imposing financial penalties, or the bringing of criminal proceedings and disqualification of directors, Clause 101 of the Bill grants those, whether businesses or individuals, who have suffered loss or damage, the right to bring their own civil proceedings for damages, or an injunction, or any other appropriate relief or remedy.

In the real world, one has to ask who has the financial ability or time to take on the large players in digital markets. The answer is, only billionaires and other wealthy businesses. This is true, critically, for the purposes of my amendment, which is directed to where large numbers of individuals or businesses have been harmed by the same improper or unlawful conduct. That situation of multiple complainants is the situation to which my amendment is directed. Under the current procedural rules of the courts in England and Wales, there are very limited circumstances where more than one person can join in the same proceedings, even though they may have suffered harm or loss from the same wrongful conduct of a big player. Multiple claimants could not, for example, bring one set of proceedings where the harm or loss has been suffered on different occasions, and in different circumstances.

Representative proceedings—or, as they are usually called, class actions—would overcome the procedural limitations. These class actions can be conducted, and usually are, on an opt-out basis, so that the proceedings would embrace everyone who has suffered from the same breach, whether or not they are aware of their right to damages or other relief, unless they take steps to opt out. Provision for collective proceedings, or class actions, already exists in the Competition Act 1998, as amended by the Consumer Rights Act 2015, for breaches of competition law. My Amendment 49 would extend that provision to the rights of civil action given to consumers under Clause 101 of the Bill.

In Committee, the Minister rejected that proposal. In Hansard of 24 January 2024, he is reported as saying that

“it is also important that the CMA can take a clear lead in imposing and enforcing requirements to bring effective change in digital markets ... We want the regime to be collaborative, but not litigious. This is why we have made provision for a public-led enforcement approach, which will ensure the CMA’s central role in ensuring the consistent application and enforcement of the regime, while still making explicit provision for parties to seek redress”.

He then said:

“Lengthy and complex litigation in the early years of the regime in particular would run the risk of creating uncertainty for all stakeholders and could undermine the delivery of the regime as a whole”.—[Official Report, 24/1/24; col. GC 255.]


I am afraid that that response to a perfectly reasonable procedural improvement for the benefit of consumers is illogical and unconvincing.

The position is that, in addition to a market regulator scheme, the Bill expressly confers a civil right of action. To say that, although such a civil right exists, the Government do not want many or possibly anybody to enforce it is to grant a right without an effective remedy. That is a basic breach of the right of access to the courts.

The leading case on this is the 2017 Supreme Court decision in what is known as the UNISON case. In that case, the Lord Chancellor decided to impose fees for claims to employment tribunals. The number of claims dropped by around 66%. The Supreme Court, having found that the fees were unaffordable for most of those people to whom the courts were a proper means of recourse, quashed the fees order on the basis that it impeded access to justice.

As I said, civil claims against the big digital market players will be unaffordable, save for a very few people. The right to an opt-out class action in the most serious cases of damage or loss suffered by multiple businesses and individuals from the same wrongful conduct will provide a practical remedy, enabling such claims to be enforced.

The Government have recently announced that they will introduce in this parliamentary Session legislation that will make third-party litigation funding lawful in order to promote access to justice. Accordingly, my amendment, together with third-party litigation funding, will provide all the necessary practical ingredients for collective enforcement of the civil rights confirmed by Clause 101.

Further, the Minister’s observation that lengthy and complex litigation is undesirable is contrary to the grant of the civil remedy in Clause 101, expressly given to those who have suffered loss or damage. Where multiple people have incurred loss or damage as a result of the same wrongful conduct specified in Clause 101, litigation would inevitably be lengthy and complex, even if brought by a single person who has the time and money to bring the proceedings.

The noble Baroness, Lady Stowell, in referring to Amendment 47, tabled by the noble Baroness, Lady Harding of Winscombe, says that it is undesirable that there should be any way in which the CMA undertakes investigations into breaches of undertakings, requirements or commitments at the same time as someone who has been harmed by the wrongful conduct brings civil proceedings. Amendment 47 specifies the circumstances in which, among other things, a court must stay proceedings.

The difficulty here, I am afraid, is twofold. In the first place, no example has been given as to where the overlap would occur. The regulatory provisions in Chapter 7 of Part 1 available to the CMA include

“Penalties for failure to comply with competition requirements”,

the imposition of criminal offences, and provision for director disqualification, but there is no provision for payment of damages to small businesses that, or individuals who, have suffered loss or damage.

Furthermore, some of the provisions in Amendment 47 are extremely vague. Take, for example, one of the situations in which it is said that there should be a stay of civil proceedings: where

“the CMA gives notice to the appropriate court or Tribunal that it is investigating the conduct to which the civil proceedings relate under this Part, or is intending to open a breach investigation … into such conduct within a reasonable time”.

What is a reasonable time? These investigations could go on for years, funded by very large, wealthy and determined players in the market. In the meantime, those who have suffered the loss will be out of pocket and will remain so. This is an opportunity to increase access to justice for those who have been given a right to recover damages or loss in a civil action against large, powerful players in the digital markets who would otherwise have no practical and efficient way of enforcing that right. We should embrace this opportunity.

--- Later in debate ---

[Viscount Camrose (Con)]

Yes, we very much understand the spirit and intent of the amendment, so I would be very happy to consider that if we could expand it to cover the bases, as my noble friend sets out.

Amendment 55, also from my noble friend, would remove the role of the Secretary of State in approving the CMA’s guidance on the regime and replace it with consultation with certain parliamentary committees. I agree with her that oversight of regulators by both government and Parliament is vital, but the Government have responsibility for the effectiveness of regulators and the policy framework that they operate in. As such, it is appropriate that the Secretary of State approves the guidance under which the CMA will deliver the regime. The CMA must already consult during the production of guidance and parliamentarians can respond to these consultations as they see fit. The Government therefore believe that this amendment is not necessary to permit parliamentary engagement with the drafting of guidance.

My noble friend Lady Stowell’s Amendment 57, also discussed in Committee, requires additional reporting from a number of regulators, including the CMA, on the impact of the digital markets regime on their activities. As each of these regulators already provides annual reporting to Parliament detailing its operations and effectiveness, we feel that additional reporting would be duplicative and create unnecessary administrative burden for regulators. The named regulators also participate in the Digital Regulation Cooperation Forum, which also produces reporting on digital regulatory issues.

Amendment 56 from my noble friend Lord Lansley would add a statutory timeframe to the approval of guidance by the Secretary of State, requiring a response within 40 days. I thank the noble Viscount, Lord Colville, the noble Baroness, Lady Kidron, and my noble friend Lord Black for their remarks and our conversations on this issue. While the Government agree that it is important that the approval of guidance takes place in a timely manner and are committed to the prompt implementation of the regime, we do not think it is necessary to amend the Bill to achieve this outcome. The Government are committed to the prompt implementation of the regime. The introduction of a deadline for the approval of guidance, while supporting this objective, could cut short productive discussion and reduce its quality.

Amendment 59, tabled by the noble Baroness, Lady Jones, introduces a duty on the CMA to further the interests of citizens as well as consumers when carrying out digital markets functions. I thank the noble Baroness, Lady Kidron, for her remarks on this. As I outlined in Committee, the Government believe that the CMA’s existing statutory duty provides the greatest clarity for the regime, people, businesses and the wider economy. The CMA already manages the interactions between competition in digital markets and wider policy on societal issues under its existing duty and through its work with the Digital Regulation Cooperation Forum.

For example, the CMA’s market study into online platforms and digital advertising considered press sustainability and media plurality among the broader social harms to consumers. The CMA and Ofcom have also published joint advice on how the new regime could govern the relationship between online platforms and news publishers.

The Bill incentivises close co-operation with key digital regulators through the explicit regulatory co-ordination provisions. The CMA will have a duty to consult Ofcom on any proposed interventions that might affect Ofcom’s competition functions for the sectors for which it has responsibility, such as broadcasting and telecoms. It would allow Ofcom to raise wider implications for media plurality.

The CMA has a clear mandate to act for the benefit of consumers in the broadest sense. The meaning of citizens in this context is unclear and risks reducing the clarity of the CMA’s core competition remit and its role in the wider regulatory landscape.

Amendment 49, in the name of the noble and learned Lord, Lord Etherton, would enable private actions relating to breaches of the digital markets regime to be brought on a collective basis. It would also require the Secretary of State to produce a report on other types of claims which might be brought on a collective basis. We commit to reviewing the provision of collective claims in a post-implementation review. It is likely they will play an important role in protecting individuals and incentivising compliance in time.

I agree that, in time, collective actions would also help increase access to redress, recognising the significant legal resources SMS firms will have at their disposal and the costs involved in bringing private actions. However, our view is that making further procedural provision for claims will not bring the best outcomes for consumers and businesses while the regime is bedding in. Consumers and small businesses will benefit most from a public-led enforcement approach.

Under the digital markets regime, the CMA—

[Lord Etherton (CB)]

Does the Minister accept what I said? In the Bill, currently there is no provision under the regulatory regime for the regulator to award damages for losses suffered by individual consumers.

[Viscount Camrose (Con)]

Yes, I believe that is the case and I accept that. But, as I said, I will commit to carrying out a review in the future to understand how best to implement a collective action basis.

Under the digital markets regime, the CMA will be—

Digital Markets, Competition and Consumers Bill

Lord Etherton Excerpts

Committee stage
Wednesday 7th February 2024 Grand Committee

[Lord Offord of Garvel (Con)]

My Lords, I will speak briefly to the government amendments in this group. I look forward to hearing from those who have other amendments in the group, which I will address in my closing remarks.

Amendments 203, 204 and 205 are minor and technical amendments to Clauses 295 and 296. They clarify that the Secretary of State has flexibility to impose suitable limitations and conditions on an ADR provider’s accreditation, including to reassess existing conditions, when an ADR provider applies to alter its accreditation or breaches its accreditation requirements.

Amendments 210 and 211 make consequential amendments to other legislation, including updating statutory provisions which extend limitation periods to facilitate ADR, to ensure that ADR does not result in consumers being timed out from taking court proceedings. I hope that noble Lords will accept these minor amendments, and I look forward to a debate today on ADR. I beg to move.

[Lord Etherton (CB)]

My Lords, I draw attention to my Amendment 209 in this group. It would require the Secretary of State, within 12 months of the commencement of Chapter 4 of Part 4, to complete a review of the provision of alternative dispute resolution—ADR—in relation to consumer contract disputes in each relevant sector. It would also require the Secretary of State to publish a report on the steps the Government intend to take to ensure the provision in each sector of accessible and affordable ADR for the resolution of consumer contract disputes.

Chapter 4 of Part 4 addresses the issue of ADR, subject to the government amendments currently being proposed. Essentially, these provisions are concerned with the terms of accreditation of ADR providers. What is lacking is any provision for making ADR schemes more available and accessible for the resolution of disputes, or even any provision for a review of potential ADR arrangements for inexpensive, speedy and efficient disposal of consumer disputes.

The noble Baroness, Lady Jones of Whitchurch, has two amendments in this group that would improve the position. One relates to a money award under ADR that is enforceable in the ordinary courts and the other seeks a review of ADR in the aviation sector. I support both those amendments, but my provision is much wider; it calls for a more general review, by the Government, of appropriate arrangements for ADR across the various economic sectors.

Earlier in Committee, I tabled my amendment on the introduction of class actions for consumer disputes, under Chapter 7 of Part 1. The Minister, the noble Viscount, Lord Camrose, said that the Government opposed anything that would provide complexity of litigation at this stage. ADR is at the other end: it provides a very accessible, simple and straightforward means to resolve consumer disputes that should be relatively inexpensive. Resorting to court proceedings is always expensive and time-consuming. They can also be intimidating for consumers. The current delays in the delivery of civil justice are well known.

It is significant that the Government are well aware of the desirability of ADR in other areas that may, in policy terms, be broadly described as those that concern consumers. In the Renters (Reform) Bill, currently in the other place, there are provisions for landlord redress schemes in the private rental sector. It is likely that all private landlords will be required by regulations to join such schemes, which will, in effect, provide an ombudsman service for tenants in the private rental sector. These schemes will provide a swift, inexpensive and accessible means to resolve disputes and pay compensation to tenants who have suffered from landlords’ wrongful action. Joined-up government policy strongly supports the extension of that kind of redress mechanism to consumer disputes generally.

For those reasons, I suggest that the Bill should provide for a government review of ADR for consumer disputes to make it more readily available as a means of accessible, inclusive, swift and appropriate resolution of consumer disputes that is appropriate for the needs of all consumers, regardless of age, income, educational level and vulnerabilities.

[Baroness Jones of Whitchurch (Lab)]

My Lords, it gives me great pleasure to speak to this group, partly because, for many years, I was on the board of a very good ombudsman scheme. I suppose I should own up to it being very ably chaired, at the time, by the noble Lord, Lord Clement-Jones. But that was some time ago, so I should not have to declare it as a current conflict of interest.

As a result, I have seen how the best models of ADR can work and provide quick, free, independent consumer redress without having to go anywhere near a court, which was exactly the point made by the noble and learned Lord, Lord Etherton. But, sadly, not all ADR schemes are so responsive, which is why we have tabled Amendments 208A, 209A and 209B, and why I was pleased to add my name to Amendment 209, in the name of the noble and learned Lord, Lord Etherton. He provided a very good introduction and analysis of why a review of ADR provision in the UK needs urgently to be carried out. As he rightly pointed out, this is business-friendly; it actually reduces the cost for consumers and businesses, in many ways, so what is not to like about it?

First, I should say that we welcome the measures in the Bill as far as they go. We need an improved verification system for ADR schemes. I hope that this measure will help root out misleading company schemes that masquerade as ombudsmen but, in truth, are a different branch of the same business; they lack independence and have no real incentive either to resolve consumers’ complaints or to provide appropriate redress. They have been giving ombudsman schemes a bad name. We hope that a review will tackle the more fundamental faults in the current landscape. In some sectors, there are multiple ombudsman schemes; in others, the majority of traders refuse to participate in such schemes.

Even knowledgeable consumers find it difficult to navigate the variety of schemes on offer. The information and signposting are often notoriously poor. Why would a trader notify a consumer that they have the right to go to an ombudsman when that trader may incur the cost or inconvenience of a judgment that goes against them? The bad actors—there are many of them—do not have any incentive to provide this important information. Yet the best ombudsman schemes help to improve overall service standards and breed customer loyalty for the longer term by dealing with complaints efficiently and, as I say, free of cost.

Our Amendment 209B is a case in point. The aviation sector has been plagued by stories of poor service and a lack of refunds. There is no compulsion for airlines to be part of an ombudsman scheme. The aviation ADR scheme, which exists, is not recognised by the Ombudsman Association because it did not meet its criteria for independence, fairness and transparency. It provides consumer redress for easyJet and Ryanair, among others. It once took me about 18 months of doggedness and perseverance to get a refund for a cancelled flight from Ryanair; this is not how ombudsman schemes are meant to work.

Our amendment calls for a detailed, time-limited review of ADR in the aviation sector, consulting consumers and passenger organisations in the sector as well as looking at what further regulatory measures are necessary to bring the aviation sector in line with the standards expected in the best ombudsman schemes elsewhere. I hope that noble Lords and the Minister will feel able to support our amendment, which will help bring well-overdue reform to consumer rights in this sector.

Our Amendment 208A addresses another concern around ADR schemes: how do consumers find out about them in the first place? It is crucial that details of an ADR provider are prominently displayed to consumers who have a complaint. It is not clear why the requirement to display a name and website has been taken out of the regulations; I look forward to the Minister’s explanation for this.

Our Amendment 209A addresses the issue of traders refusing to pay money awards made against them by an ADR provider. It is hugely frustrating for consumers who fight and win a case then to find that they have limited powers to enforce the compensation. This amendment would give them greater powers to have a payment enforced by a court, as would have been the case had the judgment been made in a court in the first place. Again, I hope that noble Lords see the sense of this amendment.

All these amendments complement the proposal of the noble and learned Lord, Lord Etherton, that there should be a review. I hope the Minister confirms that the Government are prepared to carry out this long-overdue ADR review; I therefore look forward to his response.

Digital Markets, Competition and Consumers Bill

Lord Etherton Excerpts

2nd reading
Tuesday 5th December 2023 Lords Chamber

[Lord Etherton (CB)]

My Lords, I wish to address three short but important points. The first two concern redress or means of redress by consumers and small businesses. The third concerns the point which has been raised by a number of Members of the House about charities and subscription contracts.

The first issue concerns the absence of provision for collective proceedings by consumers and small businesses. Chapter 7 of Part 1 deals with enforcement and appeals. Provision is made for individual claims in the Competition Appeal Tribunal or to a court for breaches of requirements, such as conduct requirements and pro-competition orders following pro-competition interventions.

There is no provision in the Bill or elsewhere enabling consumers and businesses to make a collective redress claim where multiple parties have been harmed by the same breach. In many cases, individual consumers and small businesses will be unable to finance proceedings. Furthermore, the knowledge of the likelihood of such difficulty will be a disincentive for those who are subject to conduct requirements and pro-competition interventions to comply with their obligations.

Provision for collective proceedings—which, colloquially, are generally called class actions—is made in the Competition Act 1998, as amended by the Consumer Rights Act 2015. That provision, however, applies only to breaches of competition law. For these reasons, I would urge the Government to make provision in the Bill for a collective actions regime, borrowing, where appropriate, from that which applies already in the case of breaches of competition law.

The second issue I wish to raise concerns alternative dispute resolution schemes for consumer disputes under the Bill. Part 4 of the Bill deals with “Consumer Rights and Disputes”. Chapter 4 of Part 4 addresses the issue of ADR and supplementary provisions are to be found in Schedules 23 to 25. Aside from the imposition of a duty on traders to notify consumers of ADR arrangements, the provisions in this part are concerned essentially with the terms of accreditation of ADR providers.

What is lacking is any provision for making ADR schemes more accessible for the resolution of disputes, or even any provision for a review of potential ADR arrangements for the inexpensive, speedy and efficient disposal of consumer disputes. Resort to court proceedings will always be expensive and time-consuming. It is well known that current delays in the delivery of civil justice are considerable.

For these reasons, I suggest that the Bill should provide for a government review of ADR for consumer disputes so as to make it accessible, inclusive and appropriate for the needs of all consumers, regardless of age, income, education level or vulnerabilities.

Finally, I turn to a question that has been addressed by a number of your Lordships: the impact of the Bill on subscription contracts and its application to charities that provide membership benefits and also rely on Gift Aid when donations are made. Chapter 2 of Part 4 the Bill addresses the topic of subscription contracts. The important point is that it makes provision for those contracts to be subject to a right on the part of the consumer to terminate the contract and secure a refund. The effect, in the case of charities, is that the Gift Aid programme cannot apply to those donations.

This is a matter of great financial significance to charities large and small. In its briefing, the Royal British Legion points out that it has 194,000 members, 38% of whom have Gift Aid subscriptions. That Gift Aid represents approximately 10% of total RBL membership fee revenue. This could have an obviously very detrimental effect.

The description of a subscription contract in the Bill is

“a contract between a trader and a consumer … for the supply of goods, services or digital content by the trader to the consumer in exchange for payment by the consumer”,

and a trader is defined as acting for the purposes of a business. It is difficult to understand that the Government intended, without much clearer words, to embrace the concept of subscription contracts membership donations paid to a charity, because of the type of benefits conferred on donors by charities such as RBL.

So I ask the Minister to tell us, in his reply to this debate: is it the Government’s intention to include charities in these provisions? If it is their intention, were they aware and conscious in making that decision of the impact on Gift Aid? If it was not the Government’s intention to include charities in these provisions, they should be expressly excluded, in Clause 253 and in Schedule 20 to the Bill.