(3 weeks, 5 days ago)
Lords ChamberI thank the noble Lord for that question and for all the work he has done on the AI issue, including his new book, which I am sure is essential reading over the summer for everybody. I should say that several noble Lords in this Chamber have written books on AI, so noble Lords might want to consider that for their holiday reading.
The noble Lord will know that the use and regulation of live facial recognition is for each country to decide. We already have some regulations about it, but it is already governed by data protection, equality and human rights legislation, supplemented by specific police guidance. It is absolutely vital that its use is only when it is necessary, proportionate and fair. We will continue to look at the legislation and at whether privacy is being sufficiently protected. That is an issue that will come forward when the future legislation is being prepared.
My Lords, would the Minister agree that the way to regulate AI is principles-based, outcomes-focused and input-understood, and always, where appropriate, remunerated? To that end, what is the Government’s plan to support our creative industries—the musicians, writers and artists who make such a contribution to our economy, society and well-being, and whose IP and copyright are currently being swallowed up by gen AI, with no respect, no consent and no remuneration? Surely it is time to legislate.
The noble Lord raises a really important point here and again I acknowledge his expertise on this issue. It is a complex and challenging area and we understand the importance of it. I can assure the noble Lord that it remains a priority for this Government and that we are determined to make meaningful progress in this area. We believe in both human-centred creativity and the potential of AI to open new creative frontiers. Finding the right balance between innovation and protection for those creators and for the ongoing viability of the creative industries will require thoughtful engagement and consultation. That is one of the things we will do when we consult on the new legislation.
(3 months, 2 weeks ago)
Lords ChamberMy Lords, this has been a sober and serious Second Reading—understandably so. How does one even begin to find the words to describe such an unspeakable set of circumstances? Perhaps one pulls on the words of those who have been faced with many miscarriages of justice: the CCRC itself described this as
“the most widespread miscarriage of justice”
it had seen. It is for that reason at least that I support this legislation.
I am well aware, and completely supportive, of the separation of powers, and the fine and delicate balance of our unwritten constitution, but in passing this legislation, it is as clear as it can be that Parliament will be carrying out the will of the people. It is also clear that this will set a precedent. I am delicately untroubled by that, because it sets a precedent for a set of circumstances where, were they to occur again, it may well be the case that the will of the people and Parliament need to step in. It is that set of circumstances which—I say delicately and with respect—argue against the claims that this tends towards autocracy and totalitarianism.
This is not something that any of us are undertaking lightly, but it is a means of securing justice for those who have waited far too long, many serving prison sentences and all carrying the sentence of having been convicted, often for decades. This is why I believe Parliament is right to take this Bill through, to enable justice around in the most timely manner. It is difficult to even call it “timely”, bearing in mind how long this has already taken.
To ensure justice and equity for all those who have suffered for so long, I need to ask my noble friend the Minister: how can the Government act to ensure that justice for all happens on a similar, if not identical, timeline? How can the Government, while understanding the reserved nature of the Post Office and the devolved nature of justice, work even more with the Scottish Parliament to ensure that all postmistresses and postmasters in Scotland can achieve justice at the same time or in a similar timeframe to those in England, Wales and Northern Ireland?
Similarly, as other noble Lords have rightly stated, it seems inequitable for those who have already been to the Court of Appeal to be excluded from this legislation. They are effectively being punished for having been able to pursue their claims quickly and effectively, only to find themselves receiving no remedy and the outcome that the court, at that stage and on the evidence provided, delivered for them. We know that justice delayed is justice denied. We have the opportunity to at least bring justice through the legislative process—yes, it is novel and unprecedented—through this Bill.
I turn to the means by which the private prosecutions were brought about in the first place: Section 6(1) of the Prosecution of Offences Act 1985. Many members of the public were shocked to discover that the Post Office could pursue such prosecutions in this manner. They were even more shocked when they realised that this was a power in no sense available just to the Post Office but available across the piece. The Post Office was effectively acting as investigator and prosecutor in cases where it was the alleged victim. Does my noble friend the Minister not agree that this is self-evidently prima facie problematic?
If we are to deliver justice for all those who have suffered, how many sub-postmistresses and sub-postmasters will be left with their convictions not quashed even after this legislation is passed? As much as we can be clear on the numbers, there are approaching 1,000 convictions and so far—again, as much as we can know—around 103 convictions have been quashed: 10%. This Bill, when it comes into statute, will certainly address a large number of those convictions, but how many people—to the Minister’s best knowledge, on the evidence he has available to him—will still be left unhelped after we pass this legislation?
Without moving away from the serious matter of today, I would like to ask the Minister about what thoughts the Government have put to reflecting on Section 6(1) of the Prosecution of Offences Act 1985. What are the safeguards? How did they work in these instances? Are the Government satisfied to continue with this legislation in its current form? Is the Law Commission looking into this?
Similarly, looking to a potential future beyond this unprecedented set of circumstances, what are the Government’s thoughts in terms of the future of the Post Office? It is a unique entity. It has been in our communities, on most of our high streets, for over half a millennium—but 500 years-plus of history does not give any organisation any right necessarily to continue in any form. Does the Minister agree that urgent thought on the structure of the Post Office, potentially looking at mutualisation or other such models, could, at least once we are through this, enable a brighter, better Post Office?
With sub-postmistresses and sub-postmasters, the pillars of our community, knowing our communities and the business better than anybody else, would it not make sense to have their voices, past and present, involved in shaping that future? In equalities discussions, there is a useful mantra, “Nothing about us without us”. I gently suggest that that mantra should apply to considerations about the Post Office going forward, where all the sub-postmasters and sub-postmistresses right across the country are able to have a voice in shaping what needs to be a very different future for the Post Office.
(6 months, 2 weeks ago)
Grand CommitteeMy Lords, I am delighted to speak to this group of amendments, and I thank my noble friend Lord Holmes, the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones, for their amendments. I will first briefly address the government amendments, and the other amendments in my closing remarks.
Amendment 195 is a minor and technical amendment which aims to clarify independence requirements for trustees overseeing funds in a consumer savings scheme, strengthening safeguards against potential conflicts of interest. Trustees must have no association with the trader or interests in the trader’s assets, ensuring that funds are controlled for the benefit of savers and independently of the trader.
This measure is essential to safeguard consumer funds against insolvency and ensure that they are used for their intended purpose. I hope that noble Lords will accept this amendment. I look forward to addressing in closing any questions or points that they may have about the amendments in this group. I beg to move.
My Lords, it is a pleasure to follow my noble friend, if not for the fact that it seems we are going backwards and forwards at the same time, which is always a good state be in. As this is the first time I have spoken on day six in Committee, I restate my technology interests, as set out in the register, as adviser to Boston Ltd.
My two amendments in this group are concerned with artificial intelligence. It is a truism, self-evident and barely in need of stating, that artificial intelligence is already impacting many aspects of our lives—as citizens, as consumers, as businesses and as a country—so it would seem timely to review all the relevant legislation to assess its competence to deal with the challenges, opportunities and risks that AI presents for us in all those roles and capacities. I shall say more on that next month.
Today, within the scope of this Bill, Amendment 199 suggests that all legislation concerned with consumer protection be reviewed to assess its competence to deal with the challenges, opportunities and risks inherent in artificial intelligence. It is clear that a number of the concepts and provisions within consumer protection legislation and regulation will be applicable and competent to deal with AI, but there is a huge gulf between what is currently set out in statute and what we require when it comes to making the best of what we could call this future now. I shall give just one example: if we consider how algorithms are set up simultaneously to push voraciously certain content while holding back other content, it is very difficult to see how consumer protection legislation is set up to deal with that challenge. That is but one specific example.
Amendment 200 goes to the question of consumer protection and the need to label all products and services where AI has been used or is built into that product or service so that the customer can know that and determine whether she or he wishes to avail herself or himself of that product or service. In no sense would this amendment require great burdens to be placed on business in bureaucracy, administration or cost. In many ways, this is yet another example of “set AI to solve an AI problem”, with human in the loop and human oversight always present.
I suggest that these two amendments, taken together, would enable the Bill to speak positively and in a timely manner on the opportunities, risks and threats to all of us, and to try to get the optimal deployment of AI in this context when it comes to consumer protection. I look forward to the Minister’s response.
My Lords, we move from a very new problem to a very old problem. My Amendment 215B asks that the Government restore to us the protection we used to have from double-glazing salesmen. There used to be a cooling-off period. That got swept away by EU regulations. Now that we have Brexit, we have the opportunity to give consumers back the protection that they once had. At the moment, double-glazing can claim to be made to the consumer’s specification but, actually, it is not. It is a standard product, and you just tweak it a bit. There is plenty of room when you are providing double glazing, fitted kitchens or anything like that to allow consumers proper time to step back and ask themselves whether they want to go in for such an expense and whether it is something they really want to do. We ought to restore that to consumers, there being no good reason not to.
(6 months, 3 weeks ago)
Grand CommitteeMy Lords, I rise briefly to speak to Amendment 140 in my name to add some more fuel to this already well-stoked fire and to set out exactly what we mean in the Bill when we talk about good faith and indeed the lack thereof where a trader does not take into account the interests of the consumer in terms of product design or information about the product or seeks to exploit the consumer because of their biases or particular views to induce a purchase or a desire for a particular product. Amendment 140 merely adds to the excellent amendment, as already set out. I look forward to the Minister’s response.
My Lords, I thank all noble Lords who have spoken in this debate. I am pleased to have added my name to Amendment 137 in the name of the noble Lord, Lord Clement-Jones, which deals with the issue of submitting or creating fake reviews by adding it to the list in Schedule 19 of commercial practices which would always be considered unfair. This is the issue that we touched on in the earlier debate. I am pleased that we have the chance to raise this today because it has been an issue of concern for some time. It is good to get the chance to debate and pursue this, and it is good to hear that the Government are also keen to do that.
We argue that this is not just about the effect fake reviews have on consumers; they affect businesses as well. They damage the livelihoods of many small traders—restaurants and hotels, for example—when their business is deliberately targeted by damaging reviews, or the local competition down the road receives glowing fake reviews which take trade away from the legitimate trader, so this has a business element as well as a consumer element. At the same time, Which? reports that the proliferation of fake reviews for online product sales results in consumers being more than twice as likely to choose poor quality products. We heard a little bit about how that works in the earlier debate.
Urgent action is undoubtedly needed to bring quality standards back into online sales and marketing so that people are not duped. As we have heard, since the amendment was tabled, the Government have produced their response to the consultation on improving price transparency and product information for consumers. It proposes that the Government will add fake reviews to the list of banned practices in Schedule 19. I am grateful to the Minister for hosting a meeting last week where we had a chance to discuss this. It is good to hear that the Government have finally decided to act on it.
However, there are still some outstanding concerns. Concerns have been raised by Trustpilot and others that the fact that the proposed wording lacks clarity. The Government saying that they will work with the Office of the Parliamentary Counsel to clarify the wording is a sign that they have not yet got this quite right. Can the Minister clarify the timescale for that additional work? When will we see the outcome of it?
Concern has also been raised that the Government’s proposals do not address the role played by internet service providers and social media in promoting fake reviews. The noble Lord, Lord Clement-Jones, raised this issue. What action will we take against those who host and reproduce these fake reviews, often knowingly?
Concern has been expressed that the penalty for promoting fake reviews is subject only to civil, not criminal, enforcement. Can the Minister explain a bit more about why that decision was taken? In the meantime, we argue that our Amendment 137 addresses those concerns. We look forward to further talks along the lines that the Minister has proposed, and we hope that he will agree to work with us and the Committee to produce a government amendment that is both clear and comprehensive.
The noble Lords, Lord Lucas and Lord Holmes, helpfully sought greater clarity on consumer rights to prevent consumers being misled or manipulated. The noble Lord, Lord Clement-Jones, rightly mentioned the additional measures needed to protect us from rogue traders. I am grateful to the noble Lord, Lord Lucas, for asking a series of small but important questions around his almost probing amendments. It is important to have clarification on the record, and I hope that the Minister will be able to give it.
The noble Lord, Lord Holmes, helpfully raised the issue of good faith and asked how we can bring some standards back into trading and the exchange of information. Again, I hope that the Minister will be able to clarify that.
We have had a positive discussion on these important points. It is good to hear that there will be further discussion. In the meantime, I look forward to hearing what the Minister has to say.
(6 months, 3 weeks ago)
Grand CommitteeI have to ask the noble Baroness to bear with me for just a short while. I am being asked to speak to two amendments simultaneously, both of which are quite important, particularly the one that we are on now.
I said a moment ago that I would address some of the objections that Ministers may have heard from the department. One will have been that the CMA’s mission statement and underlying purpose implant a focus on consumers into its bloodstream. It is true that the consumer interest forms part of the CMA’s mission statement—it was found on the walls of its offices when I joined—but it is certainly not in its bloodstream. Few organisations with a responsibility to protect consumers have ever been more remote from consumers than the CMA. The intellectual framework behind the statute that it is trying to enforce is similarly abstract and technical. A consumer duty will put the consumers’ interests firmly into the CMA’s bloodstream.
A second argument against the duty that I think the Ministers will have heard will no doubt be that if the CMA takes action on competition, the consumer will always pick up the benefit. In its pure form, this is straight back to the Chicago school justification for competition policy—the approach rolled out across the world 25 years ago. A heap of academic work has now cast doubt on it. In any case, we do not need the academics, as the evidence is all around us that acting on competition alone has not been enough to stop a growth of consumer detriment and a rise in concentration ratios.
A third argument that no doubt will have been put to Ministers is that a consumer duty will get in the way of the Government’s growth objective, but that is based on the mistaken assumption that there is a trade-off between consumer protection and growth—between a healthy, functioning market with caveat emptor and a nanny state. One might characterise this as the free marketeer case against the consumer duty. I am a free marketeer. Many of our markets are not free at the moment; that is the problem. We have a massive and growing asymmetric power in many markets. Nudge, sludge, drip pricing, loyalty penalties and other rip-offs are on the rise everywhere. It is true that we can reduce these abuses by bringing more competition to these markets and that action is overdue, but it has not been strong enough so far to quell the detriment. On the contrary, abuses of market power, both digital and otherwise, have been growing.
The arguments for some form of consumer duty have been set out over the years by those at the sharp end of dealing with detriment for a very long time, not least the consumer groups. I recognise—this will be a relief to the noble Baroness—that the case I have put has touched on only a very small proportion of the arguments that they have developed in great detail over the years. I am strongly tempted, now I have been provoked, to supply her orally with a few of these, but I will resist the temptation. In any case, I have set out a summary of those arguments in numerous forms in writing in 2019-20, and then again just over two years ago. Not much has changed since then, so I will not rehearse those arguments, but I will end by summarising them.
First, a duty will greatly bolster and increase the effectiveness of the duty of expedition and the scope for interim measures that other parts of the Bill will give the CMA. The effect of all three acting together will be much greater than the sum of the parts. Secondly, it will facilitate a change of mindset that is essential for many of our competition regulators, including the CMA. The mindset of the last quarter of a century—that the CMA should restrict itself to acting directly only on competition—was a lot better than nothing, but it has also caused a lot of problems and been partly responsible for the rise in detriment that we can now see around us. Thirdly, a consumer duty will force the courts, particularly the CAT, to give the CMA more scope to act quickly and directly in the consumer interest. Fourthly, unlike most of what we are doing here, it would give us a better prospect of enabling the Government, of whatever political complexion, to have an opportunity to send a clear message to the public that they can expect powerful, independent bodies such as the CMA to act on their behalf.
My Lord, it is a pleasure to follow the noble Lord, Lord Tyrie. The Committee certainly benefits from his expertise and experience and he is certainly never hypertrophic.
I shall speak briefly to my Amendment 106, which proposes a new clause entitled: “CMA permission for private enforcement claims”. It is a fairly simple and straightforward amendment and does exactly what the title says. Claimants have to seek permission from the CMA to bring private enforcement claims to the CAT or the High Court. The reason is clear. It is so that when we get to the end of our deliberations the operation of which forum, at what time and by whom is clear and does exactly what Parliament intended. Without this amendment there is potential to bring actions in various fora with different approaches at the same time, potentially muddying the waters and steaming up the windows and not bringing the clarity of procedure which we are seeking to achieve with the Bill.
It is a very clear amendment to have clarity and certainty about which forum at which time and to give the CMA the right to ensure that there is not muddying within the procedure, which is completely avoidable at this stage. I look forward to the Minister’s response.
I shall speak to Amendment 106 in the name of my noble friend Lord Holmes. Before I do, I should just reinforce my sincerity in saying that I think the noble Lord, Lord Tyrie, is making some really important points in his amendments. My concern was only to make sure that he did not lose us in his exposition, which was brilliant. I felt that some noble Lords were starting to drift away, and I did not think that was doing him any service. I want him to know that I am very interested and was tuned in the whole way through.
The reason I want to speak on Amendment 106 is that last week I raised the issue of private litigation and asked why the so-called Ofcom model had not been adopted for the Bill. Just to recap, I point out that the Ofcom model is a measure in the Communications Act which requires private litigants to seek Ofcom’s permission before making a claim to the courts or a tribunal. Its purpose is to avoid the regulator and the courts considering the same issues simultaneously and reaching conflicting findings, as my noble friend Lord Holmes has just colourfully described.
Since I raised this last week, I am very grateful for the Minister’s letter, which has been circulated to all Peers and is now in the Library, which outlined the Government’s reasoning for not adopting the measure in this digital markets regime for the CMA. As noble Lords will have seen from that letter, the Government argue that it would risk politicising the CMA because decisions about whether to approve someone taking a case to the tribunal or the courts would be appealable through judicial review, in the Government’s mind reducing certainty and clarity for stakeholders. They also argue that these issues are less prevalent for breaches of requirements imposed by Ofcom, as the primary route for redress is through the Communications Ombudsman and there is no equivalent function in the digital regime.
The Minister may make the same arguments in response to my noble friend Lord Holmes’s Amendment 106. The reason why I want to raise this again and am taking the opportunity today of doing so is because, even after getting his letter and having further conversations, I remain concerned that leaving the Bill as it stands threatens the participatory approach of the firms designated SMS, because it would disincentivise them to co-operate with the CMA. That participatory approach is critical to the success of the new regime and one of the ways in which it is considered better than the European model. It is also worth knowing that the Digital Markets Act—in other words, the European Commission’s version of this regime—includes a provision to avoid conflict between national courts and Commission rulings.
My Lords, it is a real pleasure to follow the noble Baroness and agree with every word that she said. I particularly applaud the specificity around software and hardware becoming obsolete by software not being maintained by the manufacturers who, in effect, make obsolete well before its time the hardware that sits alongside that.
I rise to speak to my Amendment 201. In many ways, the only build I would put on what the noble Baroness has said is around expanding to broader sectors the whole concept of right to repair. Perhaps before my time, or perhaps not, there used to be a symbol, a mark of quality, on many products: “Made in Britain; built to last”. That can go well beyond these shores, but it is not a bad line to consider when we think about right to repair.
All that my Amendment 201 seeks is for products to have their proper, natural and appropriate life cycle. We are in the middle of an environmental emergency, with difficult macroeconomic headwinds and a cost of living crisis. Right to repair speaks to all these issues. In no sense is it the silver bullet, but it is an important part of what we can practically and effectively and should do. It is not increased, burdensome regulation; it is taking a very British approach to a particular problem and with very little difficulty solving it within this Bill.
Amendment 201 proposes changing the Consumer Rights Act 2015 by inserting a right to repair so that, before a purchase is made, information must be provided on the repairability of a good, including whether it has been produced with repairability in mind, whether there are spare parts and how to access them, and the likely cost involved. Similarly, in situations where repairs can be performed safely by the purchaser, the information required includes whether information exists on how to do so, and, if so, how the purchaser can get their hands on it. It is straightforward and it makes economic, environmental and social sense.
To echo what the noble Baroness said, it is—this is positive—a particularly British way of going about things. We can cut those piles of unnecessary electric waste, change how technology operates and have a positive impact across so many sectors of our economy, positively benefiting our society. I look forward to the Minister’s response; this would be a good amendment to accept.
My Lords, it is a pleasure to follow the noble Lord, Lord Holmes; I agree with the intent if not exactly the detail of his amendment—I will come back to that. It is also a great pleasure to take part in the debate on this group of amendments, so ably introduced by the noble Baroness, Lady Jones, and following the powerful arguments presented by the noble Baroness, Lady Hayman. As at Second Reading, much of what she said about right to repair is exactly what I would have said, so I will not say it again; I will just cross-reference her speech, as I did at Second Reading on the same subject.
I have attached my name to Amendment 109 in the name of the noble Baroness, Lady Jones, as well as her Amendment 134 on greenwashing. Had there been space, I would also have attached my name to the amendments on right to repair. The noble Baroness, Lady Hayman, and I have been having a little race in various groups.
I start with Amendment 109. It is worth reflecting for a moment on the fact that, as a country, we have legally binding climate and emissions targets. The Committee on Climate Change has been awaiting a new chair for 18 months—reports suggest that at least two Members of your Lordships’ House are in line for that and waiting to find out their fate—and its chief executive has just stood down. Despite all that, it put out a statement yesterday—handily, given the timing of today’s Committee—stressing strongly that, following COP 28,
“the obligation on every country is now to push even harder”
on climate action. It said that the UK needs
“even greater domestic climate ambition to reinforce the UK’s international standing”—
something that the Government are often concerned about. Crucially, it noted
“a significant delivery gap to the UK’s Nationally Determined Contribution (NDC) of reducing emissions by 68% by 2030”.
The independent Committee on Climate Change is saying that we are not doing enough, what we have now is not sufficient and we are not meeting the international obligations that we have signed up to. It is in that context that we need to look at Amendment 109, which could be hugely powerful. We are talking about commercial practices failing to protect consumers in the promotion and supply of goods and services by digital means. This relates to the detailed discussion we had on the previous group of amendments about flights and package holidays and the ways in which they are promoted and people are given information about their environmental impacts.
Since our conference in Brighton last autumn, the Green Party has been calling for a ban on high-carbon advertising. The noble Baroness, Lady Jones, may not entirely thank me for this, but I suggest that this amendment, in essence, implies a ban on high-carbon advertising. For the avoidance of doubt, this is a suggestion not that we should stop anyone flying or taking any action that they need to, but about whether we should allow expensive, continual bombardment—on the internet, from digital screens everywhere we go, on public transport and from every quarter—to purchase things that we might not otherwise have purchased.
(6 months, 4 weeks ago)
Grand CommitteeMy Lords, it is a pleasure to follow my noble friend Lady Stowell in speaking to my Amendment 69. As has already been mentioned, a common theme runs through all the amendments in this group: limiting full merits appeals and ensuring that in practice they apply only to the imposition of financial penalties and the quantum of those penalties, as set out in Clauses 85 to 92.
As has already been stated, when he sums up, my noble friend the Minister needs to explain how this will operate in practice and why this situation is so special that a different approach is needed from that of any other regulatory environment, such as Ofcom.
There is nothing more to be said. Following on from the noble Baroness, Lady Jones, I am tempted to ask whether the amendments were government late amendments or late government amendments, but I will leave that hanging with the Committee. Ultimately, we need to ensure that we have clarity on how this approach will work when the Bill becomes law and that there is a watertight limit on the deployment, and potential misuse, of full merits appeals.
I have put a couple of amendments down which I suspect will not fully accord with the mood of the majority of the Committee on JR. I also support the removal of full merits appeals on fines, and I would like to explain why I have taken that position.
The Government took a number of important decisions on appeals in the other place. One was an amendment conceding that the scale of fines will be subject to a full merits review. Another stuck with the narrow definition of JR, or pure JR. Those two decisions are directly linked—politically, economically and legally—and there is a trade-off between them. They are best considered together.
My view on the fines issue is straightforward. There are two main reasons why the Government have got this decision wrong. First, a key point that we must bear in mind is that fines in the UK for all forms of breach of competition, anti-trust and consumer protection law are, on average, far lower than those in any comparable jurisdiction. As a result, both in the competition field and with many financial regulatory issues, fines are treated as a business cost by large firms. This has been a major weakness of our regulatory framework for decades and is still there now. If fines are to serve as a deterrent to platforms, they need to be large—perhaps very large, even unprecedentedly so for the UK. I fear that a full merits review will drag fines in only one direction, and we have the history of fines review by the CAT in other areas in support of that view.
Incidentally, I am amazed that the Treasury has not taken a closer interest in all this, because fines score against the consolidated fund, but it seems quite sleepy on this issue. It should be very wary of a full merits review of fines.
(8 months, 2 weeks ago)
Grand CommitteeMy Lords, it is a pleasure to take part in this second day of Committee on the CPTPP. In doing so, I declare my financial services interests as adviser to Ecospend Ltd and LEMI Ltd.
I will speak to Amendments 13 and 14 in my name. I also give a nod to the other amendments in this group and look forward to their introduction by noble Lords. In short, the purpose of my amendment is rooted in one simple premise: we need to increase our cross-border trade in financial services with other CPTPP nations. We have an extraordinary opportunity to do so. Chapter 11 of the CPTPP sets out the financial services requirements in the treaty and, as in any treaty, we need to play to our strengths. Financial services are obviously one such strength.
If I could have got it within the scope of the Bill, my amendment would have talked about strategies rather than impact assessments, because that is ultimately what we need here. However, for the purposes of these amendments, we are limited to impact assessments. In many ways, this is a development of many of the discussions we had on the Financial Services and Markets Bill 2023, not least what we achieved in your Lordships’ House in pushing through the international competitiveness secondary objective for the regulator. These amendments fit squarely with that intention and what we can achieve internationally with our financial services firms and ecosystem.
I will not get drawn into the debate on that, but I think that would be 1,800%, rather than 180%. However, the point is that the noble Lord is right to raise the matter of the estimated expected costs compared with the actual costs today, and the deflationary impact of global trade on some of our developing nation partners and the importance of ensuring that it can be mitigated in some way, regardless of the other trade deals that we are pursuing. I am grateful for his point.
My Lords, this has been an excellent debate. I thank all noble Lords who participated and the Minister for his response. I was pleased that financial services and environmental concerns were grouped together, because that is, in many ways, the fundamental point that is often missed. There is no purpose in talking about financial services and finance without ESG being gold-threaded through it all. I can sum up today’s debate, in many ways, as: what purpose profit if no planet to spend it on? I again thank all noble Lords who took part and, with that, I beg leave to withdraw my amendment.
(8 months, 3 weeks ago)
Lords ChamberMy Lords, it is a pleasure to take part in this Second Reading. In doing so, I declare my interests as set out in the register, as an adviser to Ecospend Ltd and Boston Ltd respectively, and as a member of the board at Channel Four Television Corporation. I would like to talk briefly about the opportunity, then the Bill at large and then make some points on specific elements within it as currently constructed.
There exists a huge opportunity for the UK with the new technologies that we have available to us. If we conceive of them as tools in our human hands—yes, incredibly powerful tools but in our human hands, led by our human heads and hearts—that will give us the greatest chance of success for small, medium and potentially successful unicorn businesses, right across the United Kingdom. Some of the greatest elements of these technologies are that you do not necessarily have to be in the capital, or indeed in a city at all; you can have an international business with a laptop and a decent broadband connection from your bedroom. When we look at how we can combine those new technologies with the great good fortune of the United Kingdom’s financial services sector, and perhaps the most prized and often underrated good fortune that we have, which is English common law, the potential that we have individually and collectively as a nation—one that is looking out to connect internationally—is as good as infinite.
What we really need to see as a golden thread running through the Bill is that everything we do in this space is inclusive by design. Everything is predicated on the fundamental truth that it is our data—our decisions, our intellectual property and our copyrighted content. None of these platforms or huge businesses has very much at all without our data, our ID and our copyrighted content. We need to address, legislate and regulate for this fundamental truth.
The Bill itself is not small and it is getting bigger. Perhaps more concerning from a parliamentary perspective is that, when it entered Second Reading in the House of Commons, it had 35 Henry VIII clauses. As we start Second Reading here, that number has risen to 43. I calculate that to be a Tudorian rate of inflation of around 23%. I ask my noble friend the Minister: is this the way the Government wish to legislate? Does it make sense to have an increasing number of such clauses in our primary legislation? As we already have 43 of them, will the Minister confirm that they will all be subject to the affirmative resolution procedure?
It is a big Bill, and noble Lords have covered many of the issues eloquently and effectively at this stage. I will go relatively rapidly over a few areas I think are worthy of consideration. First, on the Competition and Markets Authority, our regulators are nothing if not independent. We have some of the most respected regulators around the world, but, if their independence is even perceived to be called into question, they and we have a problem. As we saw in our discussions during the passage of the Financial Services and Markets Bill, independence should never be confused with accountability and parliamentary scrutiny. It is absolutely essential that the regulators must be accountable to Parliament. There must be the right scrutiny mechanisms in place. As we heard earlier in the debate, we need that level of expert input so that a parliamentary Select Committee can effectively hold these regulators to account.
So that is accountability and scrutiny: good. But, on encroaching on independence, perhaps less so. Is it wise, as currently constructed in the Bill, for the Secretary of State to have sign-off powers over the guidance that will come from the regulator? That seems to go well beyond any sort of normal arrangement between government and an independent regulator. Similarly, when talking about the CMA, the Bill is peppered with references to proportionality and being proportionate, but the CMA already has to operate in a proportionate manner. So what do these additional references to proportionality add? Do they not potentially lead to confusion and less clarity for both the regulator and those who will find themselves regulated?
As many noble Lords have commented on, I am similarly concerned by the introduction of the full merits test when it comes to fines issued by the regulator. It is fairly clear, as the Bill is currently constructed, where the difference is between full merits and JR. But why are we taking a full merits approach when no other economic regulator has such an approach put upon it? We do not even need to reach back 25 years, or five years indeed, into history. Why do we not go for one of the most recent pieces of legislation, which many noble Lords present were involved with—the Online Safety Act? When it comes to fines issued by Ofcom, there is no full merits procedure there. Why are we looking at a different approach in this piece of legislation, as it is currently drafted?
Moving on to pricing and payments, the Government have spoken often, and rightly, around the present problem of drip pricing. Yet there is currently nothing in the Bill to address it. I ask my noble friend the Minister why this is. Would this Bill not offer the ideal opportunity to address the practice of drip pricing, which so many people find themselves on the wrong end of? Similarly, when looking at leveraging principles, would we not wish to strengthen the Bill in that respect? Otherwise, the potential danger is that—to take the app example so eloquently pointed out by my friend the noble Lord, Lord Knight of Weymouth—those prices, that 30%, simply gets moved and applied to a different part of the ecosystem. It could be moved, applied again, and thus nothing would be achieved from this legislation as currently constructed.
As other noble Lords have commented, I agree that we have to address the issue around charities and gift aid. I would probably be more in the camp of my noble friend Lord Kamall, in that we should consider this carefully, rather than simply saying “There’s an issue around Gift Aid” and drafting a blanket exemption. We want to consider this carefully and come up with some more elegant drafting around this point.
As I already stated, none of this is anything if it is not predicated on being inclusive by design. A key strand within that is obviously accessibility. There is a real problem with the Bill as currently constructed if we want all these markets and platforms to be accessible for all. Although Clause 20(2)(C) talks about the information describing the activity needing to be accessible, the Bill does not require the activities—the platforms themselves—to be accessible. Buildings were designed 500 years ago with no thought of accessibility or disabled people, yet, in the main, they have now been made pretty accessible. For example, take the Palace of Westminster—a grade 1 listed building. It is not perfect by any means, but it is pretty accessible, and a great job of work has been done. Why would we seek to rebuild steps and inaccessibility in cyberspace when all these markets are constructed, if you will, on completely greenfield sites?
Inaccessibility and exclusion will happen if the concept of “inclusive by design” is not written right through every element of the development and deployment of these platforms, and thus into the digital markets we describe. So would it not make sense to look at, for example, the Public Sector Bodies (Websites and Mobile Applications) Accessibility Regulations 2018, and seek to draft some amendments to that effect so that we truly have not just accessibility around the information but accessibility around the activity, service, platform and market? Those regulations are more effectively drafted and are practically implementable. They look to the international web of accessibility guidelines. Would the Government not wish all the platforms and everything in this digital markets Bill to be rooted in such firm grounding?
In some final collected thoughts, I will also comment on the right to repair. In your Lordships’ House and the other place, rightly we often talk about resource and resource matters. But we should also talk much more about resourcefulness, and how we make optimum use of the resource we have. It seems perfectly logical and timely, if not urgent, to have something in this legislation around a right to repair. Similarly, can I ask my noble friend the Minister what the budget will be for the DMU? It is being given quite a task. Although we have a full range of regulators across many sectors of our economy and society, one significant issue, which cannot be denied, is that if we do not fund them to the right level, we cannot then criticise or be disappointed if they are unable to do their job as Parliament intended. Similarly, when will the Government look to quantify many of the measures set out in the Bill—currently largely white space?
Finally, we are talking about ex ante regulation, or EAR. We need to ensure that everybody is listening when we reach Committee, and we can then approach the Bill collectively, in a participatory manner and with those golden threads of inclusive by design and those fundamental truths again—that it is our data, our decisions, our legislation, our regulation and our digital futures.
(11 months, 2 weeks ago)
Lords ChamberTo ask His Majesty’s Government what assessment they have made of the (1) economic, and (2) environmental, benefits arising from the Electronic Trade Documents Act 2023; and what plans they have to communicate those benefits to relevant stakeholders, including small and medium-sized enterprises.
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my financial services and technology interests as set out in the register.
The Electronic Trade Documents Act will provide an economic boost estimated at just over £1 billion over a decade, substantially reducing paper use. We are the first G7 country to put digital and paper trade documents on an equal footing. Given the international prominence of English law, this will kick-start digitalisation globally. We advocate similar change by trading partners. We will support businesses through international trade advisers, trade and investment hubs and initiatives promoting digitalisation, including the Centre for Digital Trade and Innovation.
My Lords, does my noble friend agree that the Electronic Trade Documents Act offers us the potential of combining our common-law tradition with our expertise in new technologies such as blockchain and our excellent financial services ecosystem? Does he agree that we must work to ensure that everybody in the business department communicates through every channel—particularly to SMEs in the UK—the opportunity that exists through this Act and, similarly, that all our missions overseas communicate to companies and politicians around the world to enable them to see the benefits of passing similar legislation? As my noble friend the Minister knows, it takes two to trade.
I thank my noble friend for those comments and questions. This is a quite remarkable Act. In fact, it is the only Act of Parliament that I have read from beginning to end. It is only four pages long and 1,500 words; I recommend it for its brevity and its conciseness. It simply does one thing, which is to take the architecture of 300-plus years of mercantile trading which has been done in paper form and translate that into digital to have the same legal impact. The onus is now on the Department for Business and Trade to communicate this to our SMEs, as my noble friend indicated. To that end, we are using international trade advisers and the International Chamber of Commerce, and we have set up the Centre for Digital Trade and Innovation at Teesside University. A lot of work will now be done to raise awareness of this, which will be for the great benefit of our trade.
(1 year, 1 month ago)
Lords ChamberTo ask His Majesty’s Government how many digital economy agreements the United Kingdom has made and with which countries; and how many are expected by 31 December.
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and declare my technology interests as set out in the register.
My Lords, under the UK’s G7 presidency we brokered the G7’s digital trade principles. Further digital agreements sit at the heart of our agreements with Japan, Australia, New Zealand, EEA/EFTA and CPTPP. Our digital agreements with Singapore and Ukraine are the most innovative trade deals signed. We continue to push our digital objectives at the WTO e-commerce joint initiative and via the digital trade commitments in our suite of upcoming free trade agreements.
My Lords, does my noble friend agree that digital economy agreements represent the very future of trade? We must ensure particularly that small and medium-sized enterprises are fully aware of this opportunity. Does he further agree that when we put DEAs together with the recently passed Electronic Trade Documents Act, we can really believe that we are on the brink of a new golden age for international trade?
I entirely agree with my noble friend. Our vision is for the UK to be a global leader in digital trade, with an entire network of international agreements that drive economic growth, create jobs and improve productivity throughout the UK.