Digital Markets, Competition and Consumers Bill

Lord Holmes of Richmond Excerpts

Committee stage
Wednesday 24th January 2024 Grand Committee

[Lord Vaizey of Didcot (Con)]

I wonder if I can just slip in before Members on the Front Bench speak, particularly those who have signed the amendment. I refer again to my register of interests.

I support the principle that lies behind these amendments and want to reinforce the point that I made at Second Reading and that I sort of made on the first day in Committee. Any stray word in the Bill when enacted will be used by those with the deepest pockets—that is, the platforms—to hold up action against them by the regulator. I read this morning that the CMA has resumed its inquiry into the UK cloud market after an eight-month hiatus based on a legal argument put by Apple about the nature of the investigation.

It seems to me that Clause 19(5) is there to show the parameters on which the CMA can impose an obligation to do with fair dealing and open choices, and so on. It therefore seems that “proportionate”—or indeed perhaps even “appropriate”—is unnecessary because the CMA will be subject to judicial review on common-law principles if it makes an irrational or excessive decision and it may be subject to a legal appeal if people can argue that it has not applied the remedy within the parameters set by paragraphs (a), (b) and (c) of Clause 19(5). I am particularly concerned about whether there is anything in the Bill once enacted that allows either some uncertainty, which can be latched on to, or appeals—people refer to “judicial review plus” or appeals on the full merits, which are far more time-consuming and expensive and which will tie the regulator up in knots.

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part in day two of Committee on the DMCC Bill. Again, I declare my interest as an adviser to Boston Limited.

It is a pleasure to follow the introduction from my noble friend Lord Faulks. I think is highly appropriate that we discuss proportionality. I have a number of amendments in my name in this group: Amendments 33, 52 and 220, and then the rather beautifully double Nelsonian, Amendment 222. Essentially, a considerable amount of work needs to be done before we can have proportionality going through the Bill in its current form. My amendments suggest not only addressing that but looking at counter- vailing benefits exemptions and financial penalties.

Agreeing with pretty much everything that has been said, and with the tone and spirit of all the amendments that have been introduced thus far, I will limit my remarks to Amendment 222. It suggests that regulations bringing into force Clauses 19, 21, 46 and 86

“may not be made until the Secretary of State has published guidance”

going into the detail of how all this will operate in reality.

Proportionality is obviously a key element, as has already been discussed, this is just as important, as we will come on to in the next group. My Amendment 222 straddles the groups a bit, under the vagaries of grouping amendments, but it is nevertheless all the better for it.

I look forward to hearing my noble friend the Minister’s response on proportionality, countervailing benefits exemptions and financial penalties, and on the need for clear, detailed guidance to come from the Secretary of State before any moves are made in any and all of these areas.

[Lord Black of Brentwood (Con)]

My Lords, I am afraid I am going to play the role of Little Sir Echo here. I hope that the unanimity expressed so far will send a strong message to my noble friend the Minister. I support Amendment 16 in the name of the noble Lord, Lord Faulks, to which I have added my name, and Amendments 17, 53 and 54. I note my interests as declared at the start of Committee.

As I made clear in my remarks on Second Reading, we must, throughout the consideration of the Bill, steadfastly avoid importing anything into the CMA and DMU procedures that would allow the platforms to deploy delaying tactics and tie up the regulators in endless legal knots. Long legal wrangling will destroy the very essence of the Bill, and it is not mere speculation to suggest that this might happen. As we have seen elsewhere in the world, and indeed in publishers’ own existing dealings with the platforms, we do not need to gaze into a crystal ball; we can, as the noble Lord, Lord Tyrie, put it the other day, read the book.

In that light, as we have heard consistently this afternoon, I fear that the government amendments made in the other place, requiring the conduct requirements and PCIs to be proportionate rather than appropriate, do just that. They impose significant restrictions on the work of the CMA and, as an extremely helpful briefing—which I think all Members have had—from Which? put it, produce “a legal quagmire” that would allow the unaccountable platforms

“with their vast legal budgets … to push back against each and every decision the regulator takes”.

It is simply counterintuitive to the design of the flexible and participatory framework the legislation portends. As my noble friend Lady Stowell said, it certainly makes me very nervous.

The key point is that introducing the concept of proportionality is, frankly, totally otiose, as the noble Lord, Lord Faulks, put it so well, as proportionality is already tested by judicial review—something the CMA itself has already reiterated. The courts, in this novel area of legislation, will rely on Parliament clearly to state its intentions. Introducing the concept of proportionality not only is unnecessary but in fact muddies the waters and creates confusion that will be mercilessly used by the platforms. It certainly does not produce clarity. The Government really must think again.

--- Later in debate ---

[Lord Vaizey of Didcot (Con)]

I want to get all the heckles out of the way; they have to be recorded in Hansard. I listened to the Minister’s explanation very carefully. He said that there is no single accepted definition of “proportionate”—that there are different definitions depending on case law and the common law. Is that not exactly what the problem is? The minute you put that word in the clause, you have, effectively, said that there are eight, seven or six definitions of proportionate. Guess what the platforms will do with that.

[Lord Holmes of Richmond (Con)]

May I build on that before my noble friend the Minister responds? What precisely was inappropriate about “appropriate”?

[Lord Black of Brentwood (Con)]

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

--- Later in debate ---

[Lord Holmes of Richmond (Con)]

My Lords, I shall speak briefly to this group of amendments and particularly commend those in the name of the noble Baroness, Lady Jones.

There are key themes that inevitably run through deliberations across groups in Committee, and it seems that, this afternoon, a recurrent theme has understandably been that the Bill is certainly better as was than currently as is. A number of amendments make that point very firmly.

If the Bill does not address at every point necessary the whole question of asymmetry in the nature of the relationship between the parties in all these complex arrangements, there is precious little point in proceeding beyond this point. The whole nature of the relationship and the negotiations therein is framed by the asymmetry of power, of resources and of what can be brought to bear by each party to proceedings. Hence, in this set of amendments, while different approaches are taken, similar ends are sought.

I look forward to hearing the Minister’s response and, as the noble Lord, Lord Clement-Jones, is “not” here, I also look forward very much to him “not” intervening on the Minister.

Digital Markets, Competition and Consumers Bill

Lord Holmes of Richmond Excerpts

Committee stage
Monday 22nd January 2024 Grand Committee

Moved by

[Lord Holmes of Richmond]

15: Clause 19, page 11, line 1, leave out subsections (5) to (8)

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part in this first day of Committee on the Bill. As it is my first time speaking in Committee, I declare my technology interests as set out in the register, not least as an adviser to Boston Limited. In moving Amendment 15, I will also speak to Amendment 24, and I am very interested in the other amendments in this group.

Much of the discussions so far rest on the most important point of all when it comes to legislating. It reminds me of many of the discussions that we had in this very Room last year on the Financial Services and Markets Bill, as it was then, about accountability, the role of the Secretary of State and the role of the regulators. Much of this Bill as drafted, if not a pendulum, simultaneously swings significant powers to the regulator, and indeed to the Secretary of State. But the question that needs continually to come up in our deliberations in Committee and beyond is where Parliament is in this process. We hear every day how the physical building itself is crumbling, in need of desperate repair and in need of a decant, but, when it comes to this Bill, Parliament has already disappeared.

There is a massive need for accountability in many of the Bill’s clauses. Clause 19 is just one example, which is why my Amendment 15 seeks to take out a chunk of it to help in this process. Later in Committee, we will hear other amendments on parliamentary accountability. It is not only essential but, as has already been mentioned, goes to the heart of a trend that is happening across legislation, in different spheres, where huge powers are being given to our economic regulators without the right level of accountability.

What we saw as one of the major outputs of FSMA 2023, as it now is, was a new parliamentary committee: the financial services and markets committee. In many ways, you can see this as a process that may happen repetitively, but positively so, across a number of areas if this approach to legislation is perpetuated across those areas when it comes to competition. I look forward to my noble friend the Minister’s response to my Amendment 15 on that issue.

I move on to Amendment 24, which concerns a very different but critical area. It seeks to amend Clause 20, which makes brief mention of the accessibility of the information pertaining to these digital activities but is silent on the accessibility of the digital activities themselves. Does my noble friend the Minister agree that we need more on the face of the Bill when it comes to accessibility? With more services—critical parts of our lives—moving on to these digital platforms, it is essential that they are accessible to all users.

I use the term “user” deliberately because, as we have heard in previous debates, there is a great need for clarity around this legislation. “User” is used—indeed, peppered—throughout the legislation. This is right in that “user” is a term of art that would be understood across the country; however, it does not appear in the title of the Bill, which is at least interesting. We must ensure that all users or consumers are able to access all these digital platforms and services fully. Let us take banking as an example. It is far more difficult to get face-to-face banking services and access to cash, so much more is moved online. However, if those services are not accessible, what use are they to people who have been physically excluded and are now being financially and digitally excluded in the digital space?

When it comes to sporting events, mention has been made of sport in our debates on earlier amendments. I think everyone in the Committee would agree that VAR has not demonstrated technology at its brightest and best in the sporting context. I wonder whether, if we completely turned referees into bots, there would be questions about the visual acuity of the bot on the decisions that it similarly made when it went against our team. If we are to have so many ticketing services for sporting, musical and cultural events available largely, if not exclusively, online—and if, at the front end of that process, there is the all-too-familiar CAPTCHA, which we must go through to prove that we are not yet a bot—what will happen if that is not accessible? We will not get tickets.

I put it to my noble friend the Minister that there needs to be more in Clause 20 and other parts of the Bill around the accessibility of those digital services, activities and platforms. If we could fully embrace the concept of “inclusive by design”, this would evaporate as an issue. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, this is quite a group of amendments. Clearly, it will take a bit of time to work our way through all of them. It is a pleasure to follow the noble Lord, Lord Holmes, who is so knowledgeable about digital aspects—I thought that he would slip stuff about the digital aspects of sport into his introduction.

I am in curate’s egg country, as far as the two amendments in the name of the noble Lord are concerned. I am not quite sure about Amendment 15, but I look forward to the Minister’s response. I think Amendment 24 is absolutely spot on and really important. I hope that the noble Lord succeeds in putting it into the Bill, eventually.

I will start by speaking to Amendments 21, 28 and 55 on interoperability, Amendment 30 on copyright and Amendment 20 in the name of the noble Lord, Lord Lansley. I will refer to Amendment 32 in the name of the noble Viscount, Lord Colville, but I will not speak on it for too long, because I do not want to steal his thunder. If possible, I will also speak to the amendments in the names of the noble Baroness, Lady Jones, and the noble Lord, Lord Vaizey, on leveraging. They are crucial if the Bill is to be truly effective.

Interoperability is the means by which websites interoperate, as part of the fundamental web architecture. Current problems arise when SMS players make browser changers and interfere with open web data, such as header bidding, which is used for interoperability among websites. Quality of service and experience can be misused for the benefit of the platforms; they can degrade the interoperability of different systems or make video or audio quality either higher or lower for the benefit of their own apps and products.

At Second Reading, my noble friend Lord Fox reminded us that Professor Furman, in evidence in Committee in the Commons, said that intervention on interoperability is a vital remedy. My noble friend went on to say that interfering with interoperability in all its forms should be policed by the CMA, which should be

“proactive with respect to promoting international standards and aiming to create that interoperability: for a start, by focusing on open access and operational transparency, working for standards that allow unrestricted participation and favouring the technologies and protocols that prevent a single person or group amending or reversing transactions executed and recorded”.—[Official Report, 5/12/23; col. 1396.]

At my noble friend’s request, the Minister, the noble Viscount, Lord Camrose, followed up with a letter on the subject on 7 December. He said:

“Standards are crucial to building the UK’s economic prosperity, safeguarding the UK’s national security, and protecting the UK’s norms and values. The Government strongly supports a multi-stakeholder approach to the development of technical standards, and it will be important that the CMA engages with this process where appropriate. The UK’s Plan for Digital Regulation, published in 2021, confirms the importance of considering standards as a complement or alternative to traditional regulation”.


It is good to see the Minister’s approach, but it is clear that there should be a stronger and more explicit reference to the promotion of interoperability in digital markets. The Bill introduces an interoperability requirement under Clause 20(3)(e) but, as it stands, this is very vague. Interoperability should be defined and the purpose of the requirement should be outlined; namely, to promote competition and innovation, so that content creators can provide their services across the world without interference and avoid platform dependency.

I move to Amendment 30. Breach of copyright online is a widespread problem. The noble Baroness, Lady Kidron, referred to the whole IP issue, which is increasing in the digital world, but the current conduct requirements are not wide enough. There should be a simple obligation on those using others’ copyright to request the use of that material. As the NMA says, the opacity of large language models is a major stumbling block when it comes to enforcing rights and ensuring consumer safety. AI developers should be compelled to make information about systems more readily available and accessible. Generative outputs should include clear and prominent attributions, which flag the original sources of the output. This is notable in the EU’s proposed AI Act.

This would allow citizens to understand whether the outputs are based on reliable information, apart from anything else.

If publishers are not fairly compensated for the use of the content by generative AI systems in particular—I look towards the noble Lord, Lord Black, at this point—and lose audiences to them, it will harm publisher sustainability and see less money invested in quality journalism. In turn, less trusted content will be available to train and update AI systems, harming innovation and increasing the chance that these systems produce unreliable results.

--- Later in debate ---

[Lord Holmes of Richmond (Con)]

I thought I would wait, just in case the noble Lord, Lord Clement-Jones, wanted to come in before the Minister sat down.

It has been an excellent debate, covering a wide range of connected issues, and I thank all noble Lords who have spoken and the Minister for his response. All the issues are connected by so many of the fundamentals that underpin not just this Bill, but the entirety of this digital project that we are all on: accessibility, interoperability, inclusion and intellectual property. I do not think we should ever stop mentioning copyright and intellectual property in these discussions; it is absolutely critical and is being decimated in so many ways right this very day.

Data, as was so eloquently set out by my noble friend Lord Lansley, is part of the critical underpinning. What is any of this without data? I certainly think that what we do not want to do with the Bill, as the Minister set out, is to come up with a definition of interoperability that is not interoperable—that would be an unfortunate slip of the pen. All these issues need to be at the forefront of all our deliberations; it unites all the amendments in this group and should unite all of our thoughts. They are the key threads that will not only make a success of this Bill but make a success of everything that we are trying to achieve with this digital project.

I know we are going to return to a number of these issues as we progress through Committee and into Report, but at this point—beating the Division Bell, still—I beg to withdraw my amendment.

Amendment 15 withdrawn.

Data Protection and Digital Information Bill

Lord Holmes of Richmond Excerpts

2nd reading
Tuesday 19th December 2023 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part on Second Reading; I declare my interests in financial services and technology, in Ecospend Ltd and Boston Ltd. There is a fundamental truth at the heart of our deliberations, both on Second Reading and as we progress to Committee: that is it is our data. There are no great large language models; perhaps it would be more appropriate to call them large data models —maybe then they would be more easily and quickly understood by more people. Ultimately, our data is going into AI for potentially positive and transformational purposes but only if there is consent, understanding, trustworthiness and a real connection between the purpose to which the AI is being put and those of us whose data is being put into the AI.

I am going to focus on four areas: one is data adequacy, which has already, understandably, been heavily mentioned; then AI, smart data and digital ID. I can probably compress everything I was going to say on the first subject by simply asking my noble friend the Minister: how will the Bill assure adequacy between the UK and the EU? It is quite a large Bill— as other noble Lords have commented—yet it still has a number of gaps that I am sure we will all be keen to fully fill in when we return in 2024. As already mentioned, AI is nothing without data, so what checks are being put in place for many of the suggestions throughout the Bill where AI is used to interrogate individuals’ data? Would it not be absolutely appropriate for there to be effective, clear, transparent labelling across all AI uses, not least in the public sector but across all public and private sector uses? Saying this almost feels like going off track from the Bill into AI considerations, but it seems impossible to consider the Bill without seeing how it is inextricably linked to AI and the pro-innovation AI White Paper published earlier this year. Does the Minister not agree? How much line-by-line analysis has been done of the Bill to ensure that there is coherence across the Government’s ambitions for AI and what is currently set out in this Bill?

On smart data, there are clearly extraordinary opportunities but they are not inevitabilities. To consider just one sector, the energy sector, to be able potentially to deploy customers’ data in real time—through their smart meters, for example—with potential to auto-shift in real time to the cheapest tariff, could be extraordinarily positive. But again, that is only if there is an understanding of how the consent mechanisms will work and how each citizen is enabled to understand that it is their data. There are potentially huge opportunities, not least to do something significant about the poverty premium, where all too often those who find themselves with the least are forced to pay the most, often for essential services such as energy. What are the Government doing in terms of looking at additional sectors for smart data deployment? What areas are the state activities? What areas of previous state activity are being considered for the deployment of smart data? What stage is that analysis at?

On digital ID, about which I have spoken a lot over previous years, again there are huge opportunities and possibilities. I welcome what is in the Bill around the potential use of digital ID in property transactions. This could be an extraordinarily positive development. What other areas are being looked at for potential digital ID usage? What stage is that analysis at? Also, is what is set out in the Bill coherent with other government work in other departments on digital ID? It seems that a lot has been done and there have been a number of efforts from various Administrations on digital ID, but we are yet to realise the prize it could bring.

I will ask my noble friend some questions in conclusion. First, how will the introduction of the SRI improve things compared with the data protection officer? Again, how will that impact on issues such as, but not limited to, adequacy? Similarly, linking back to artificial intelligence, a key principle—though not foolproof by any measure and certainly not a silver bullet, but important none the less—is the human in the loop. The Bill is currently some way short of a clear, effective definition and exposition of how meaningful human intervention, human involvement and human oversight will work where autonomous systems are at play. What are the Government’s plans to address that significant gap in the Bill as currently drafted?

I end where I began, with the simple truth that it is our data. Data has been described in various terms, not least as the new oil, but that definition gets us nowhere. It is so much more profound than that. Ultimately it is part of us and, when it is put together in combination, it gets so close to giving such a detailed, personal and almost complete picture of us—ultimately the digital twin, if you will. Are the Government content that the Bill does everything to respect and fully understand the need for everything to be seen as trustworthy, to be understood in terms of it being our data and our decision, and that we decide what data to deploy, for what purpose, to whom and for what time period? It is our data.

King’s Speech

Lord Holmes of Richmond Excerpts

Tuesday 14th November 2023 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Rees. He always sees the world through the right end of the telescope. It is a pleasure to take part in day 5 of this debate. I declare my technology interests as adviser to Boston Ltd and Ecospend Ltd. I congratulate all three maiden speakers on their excellent and extremely interesting contributions. Like other noble Lords, I look forward to hearing much more from them in the coming months.

I shall concentrate on the technology elements in the gracious Speech, although relatively shortly into my contribution noble Lords may notice that I am having to concentrate more on the technology elements that were not in the Speech than those that were. In reality, as has been mentioned by many already, it is not overstating the case to say that this is really all about data. It is our data. We should be able to determine and decide; we say why, who and to what. My first question for the Minister is: what is the Government’s plan to ensure that people are enabled to have control over their data, to say when, who, why and for what, and to be rightly recompensed if their data, ID or copyright is infringed by the training of these AIs?

To return to the question I raised at Oral Questions earlier today, would it not make sense to regulate at this stage, to enable, by regulation, all those that use others’ data, IP, images and copyrights to train AIs? All of that should be published in a transparent record to protect those individuals’ rights and to enable at least some decent degree of explainability as to how these AIs were trained. With regard to the excellent speech of my friend, the noble Lord, Lord Knight, what is the Minister’s position on what the Government are going to do about digital inclusion? Without that, citizens are not going to be enabled and will not have the benefit of what these new technologies can bring.

We are certainly at the top of the AI hype cycle at the moment. In many ways, the greatest achievement of ChatGPT is that it has got more people chatting about AI. That has to be a positive thing, but to what purpose and for whose benefit? The Minister said earlier this afternoon that it is too early to regulate; we have not got the evidence; we do not know. Well, one of the great joys and equal frustrations of being born human is that we never fully know, but we know what we need to know to make a success of these new technologies, because we understand critical theory, politics, economics and social theory. We have understood philosophy for thousands of years. So I ask the Minister, when he comes to wind up, to say whether it would not make sense to at least put on some kind of regulatory footing a role where concepts such as fairness, dignity, respect, accessibility, inclusive by design and inter- operability are wired in; golden threads through all of this development, all of this deployment.

Seven years ago, I wrote a report on another emerging technology when it was at the top of its hype cycle: the technology blockchain. My report was Distributed Ledger Technologies for Public Good: Leadership, Collaboration, Innovation. Why did I write that report? Because at that stage, then as now, I feared that many of the public good use cases there could be from these technologies could be lost because of fear, because of misdeployment, because of a connection, a belief that blockchain and bitcoin were the same thing, which they are patently not.

One example in the public space is that 25,000 doctor days are currently spent on assuring credentials. It is extraordinarily important: you want to know that the person operating on you, or consulting you, has the qualifications, the expertise, the experience, the skills that they are holding out that they have. With a very simple technological solution, those 25,000 doctor days could be collapsed into a matter of minutes. Those 25,000 days thus become converted into care. So will the Minister, when he comes to wind up, say what is being done across Whitehall, across the whole public sector, to ensure that all these potential benefits—yes, from AI, but from all these emerging technologies—are being considered, to give us the public sector, the public services, the National Health Service that we could have if we rightly lead on these technologies, with talent leading the possibilities that these technologies can bring to us?

As I said earlier, these technologies are nothing without data, but they will become nothing whatever without proving themselves trustworthy. Has the Minister considered such approaches as the alignment assemblies in Taiwan and other approaches to public engagement? Without that, how can we have fully informed and engaged citizens? How will we get the optimum benefits for all from these technologies? If everyone is not enabled to benefit, the benefits will fall far short of their potential.

Finally, I welcome the Bletchley summit, largely for this point alone. Two generations ago, a diverse and talented team gathered at Bletchley Park in one of the darkest hours of our human history. Through their diverse talents leading the technologies, they more than helped defeat the Nazis. When the Minister comes to wind up, will he agree that, if we have the enabled talent leading these new technologies, we can not only fully address some of the darkest issues of our times but really turn up the light and drive economic, social and psychological benefit for centuries to come?

Artificial Intelligence: Regulation

Lord Holmes of Richmond Excerpts

Tuesday 14th November 2023 Lords Chamber

[Viscount Camrose (Con)]

I thank the noble Baroness for her question and recognise her concern. In order to be sure that I answer the question properly, I undertake to write to her with a full description of where we are and to meet her to discuss further.

[Lord Holmes of Richmond (Con)]

My Lords, I declare my technology interests as in the register. Does my noble friend agree that it is at least worth regulating at this stage to require all those developing and training AI to publish all the data and all the IP they use to train that AI on, not least for the point around ensuring that all IP obligations are complied with? If this approach were taken, it would enable quite a distance to be travelled in terms of people being able to understand and gain explainability of how the AI is working.

[Viscount Camrose (Con)]

I am pleased to tell my noble friend that, following a request from the Secretary of State, the safety policies of Amazon, Anthropic, Google DeepMind, Inflection, Meta, Microsoft, OpenAI and others have been published and will go into what we might call a race to the top—a competitive approach to boosting AI safety. As for enshrining those practices in regulation, that is something we continue to look at.

Artificial Intelligence: Regulation

Lord Holmes of Richmond Excerpts

Tuesday 24th October 2023 Lords Chamber

[Viscount Camrose (Con)]

The Independent Review of the Future of Compute, which we accepted in its entirety, guided us to commit £900 million initially to buying compute. We have confirmed the purchase of an exascale system in Edinburgh as well as the UK’s soon-to-be most powerful supercomputer, in Bristol. There will be further announcements on this as part of the summit next week. The use of NHS data is subject to not only stringent contractual requirements but, already, stringent regulations about data privacy.

[Lord Holmes of Richmond (Con)]

My Lords, does my noble friend agree that we need far greater public engagement and public discourse around AI? Is he aware of the alignment assemblies used in Taiwan to such good effect? Will he consider taking a similar approach to such benefits in the UK?

[Viscount Camrose (Con)]

I very much agree with my noble friend that we need maximum public acceptance of AI. However, that must be based on its trustworthiness. That is why we are pursuing, among other things, the global AI Safety Summit next week. I am not familiar with the Taiwanese approach but will look into it, and look forward to discussing it in due course.

Beyond Digital (COVID-19 Committee Report)

Lord Holmes of Richmond Excerpts

Wednesday 6th September 2023 Grand Committee

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Bilimoria, with the wealth of experience that he brings to your Lordships’ House. It is also a pleasure to take part in this debate and, in doing so, I declare my financial services and digital interests as adviser to Ecospend and Boston Ltd, respectively.

Along with other noble Lords, I congratulate fulsomely the noble Baroness, Lady Lane-Fox of Soho, on the way that she introduced this debate and indeed the way that she chaired this committee at an unprecedented time. Almost every recommendation in the report rings true and, although we have waited two years for this debate, they are as relevant, fresh and important today as when they were inked just over two years ago.

I also congratulate the noble Baroness, Lady Lane-Fox, on everything that she has done in terms of digital inclusion, not least Doteveryone. In many ways, “doteverything” is what I would like to cover in my comments this afternoon. When it comes to digital and “doteverything”, it if does not include “doteveryone”, what is the point? Why are we doing it? As other noble Lords have commented, it is about how we thread so optimally those golden threads of inclusion and innovation—the golden threads that enable talent and technology to thrive. That is what this report really brings to bear. This should be the golden thread that runs through all our post-Covid build-back. If we do not do it in an inclusive manner, it is not really worth doing at all. Perhaps the greatest and saddest learning from the pandemic was that, although we were all in it, we certainly were not all in it together. We need to ensure that what we do going forward is very much altogether—altogether different, altogether better and altogether inclusive.

To bring this to light, I will focus on the three areas of financial inclusion, digital inclusion and new technologies for public good. In terms of financial inclusion, we had issues before the pandemic, but there are two examples where the pandemic exacerbated financial exclusion. First, we suddenly saw a rollout of card payment machines that had no keypads; they were flatscreen, thus completely inaccessible to me and millions of other people. It was another example of a phenomenon that has gone on for decades where health and safety—or something presenting itself as health and safety—was used to trump and wash away inclusion. I therefore ask my noble friend the Minister: in terms of everything that we do, products that are produced and everything that the Government have responsibility for, will it all be rolled out in an inclusive manner? Indeed, companies that bring out products or services that are inaccessible and not inclusive should rightly feel the full force of equalities law upon them as a consequence.

Similarly, there is the hybrid nature of not just work and education but life. At the height of the pandemic, we saw cash withdrawals decline by more than 80% in London and yet by less than 40% in other parts of the country. This demonstrates that cash still matters, materially, to millions. Will the Government consider designating the UK cash network as critical national infrastructure in terms of both resilience and ensuring financial inclusion?

So many of the recommendations in the report thread together what are often wrongly described as the “hard” and “soft” elements of digital inclusion. I prefer to call them the “material” and “human” elements. To echo my friend, the noble Lord, Lord Bilimoria, when will every single household, business and part of the United Kingdom have effective, reliable broadband connectivity? Without it, more than ever, it is now a case of not just being unable to get online but being socially and economically excluded.

I will bring this to life with the example of a payment app. If someone holds in their hand the best payment app ever developed, they may have great connectivity but without that social connection or the digital skills—the human part of it—they will not be able to make a payment. With the selfsame app in the hands of someone with those digital skills but without connectivity, that payment will also not be made. Will my noble friend the Minister confirm that the Government are looking at the material and human elements and mapping this across the country to understand how we can enable true connectivity that combines both critical elements?

We saw examples of farmers being forced to go to McDonald’s to do their VAT returns. The Government have often said that, if there are difficulties with connectivity, you can go to your high street or library, but does my noble friend think it acceptable for farmers and other businesses to have to do something as personal as their tax declarations and returns and VAT returns in a public space such as McDonald’s or even a public library?

I move to technology for public good. It is interesting how, even in the midst of such a horrific situation as the pandemic, opportunities came through, particularly for disabled people. I was asked in 2018 to do a review for the Government on opening up public appointments for disabled people to the boards of public organisations responsible for well over £200 billion of our money. We have shameful representation of disabled people on those boards. One of the recommendations I made was that, at application, interview and onboarding, different and, at the time, novel approaches such as video interviews should be considered. This was seen as radical. Now, thankfully and positively, it has very much become the norm.

This demonstrates the opportunity we have for technology not to divide but to bring together and connect for positive good. I wrote a report in 2017 on distributed ledger technology for public good. Would it not be such a positive post-pandemic build-back for the Government fully to engage with the opportunities of distributed ledger technology? For example, currently the NHS spends 25,000 doctor days on ensuring the credentials of our medics. This is critical—you want to know that the person you are consulting or who is operating on you has the training, skills, qualifications and credentials they say they have—but with a relatively straightforward DLT solution those 25,000 doctor days could be converted into 25,000 doctor days of care. That would be a small but incredibly impactful and positive element to come out of post-pandemic planning. Are the Government looking at all the use cases for distributed ledger technology for public good?

On AI, as the noble Baroness, Lady Lane-Fox, rightly identified, it is all around us right now—it is everything everywhere, all the time—and we need to ensure that that is part of the positive build-back story. I was fortunate enough to attend the Turing summit earlier this year, where the institute had all its top researchers—its post-docs—doing 90-second presentations to pitch for funding for their particular idea. All the ideas were innovative and all had a social purpose—a people purpose. The winner was looking at how to scan early for ovarian cancer. What brilliant work is happening with our researchers at our universities up and down the country. Can my noble friend the Minister comment on whether the Government are gaining all the right connections from the academic powerhouse that we have, not just in this city but right across the country?

To conclude, the Covid pandemic was a once-in-a-100-year event, but we are currently in the midst of another pernicious and avoidable epidemic that is summarised best as: we have never been more connected, and yet, in that state, we are in the midst of an epidemic of loneliness. Can my noble friend the Minister comment on what the Government are doing to use both technology and human interaction to ensure that we move from this, for our young people and all our people? Ultimately, although video conferencing was successful during the pandemic, and it has a purpose, there is nothing better than the essential quality of the human relationship. Everything must be seen as relational, not transactional, and if we can weave so optimally those golden threads of inclusion and innovation, I believe that we can drive economic, social and psychological good. We can do it, we must do it, and I believe that we owe it not least to all those who tragically did not make it through.

Advanced Artificial Intelligence

Lord Holmes of Richmond Excerpts

Monday 24th July 2023 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, I thank the noble Lord, Lord Ravensdale, for securing this debate and congratulate him on the way he introduced it. I declare my technology interests as set out in the register.

When we come to consider the regulation of AI, it is first worth considering how we define it. There are multiple definitions out there, but when it comes to regulation, it is best not to draw that definition too tightly and perhaps better to concentrate on those outcomes that are intended and the challenges that we are seeking to avoid. Ultimately, AI is just the deployment of data, and it is our data, so a central pillar must be the explainability of how the AI comes to any decision, and how we should choose to regulate to achieve that level of explainability, which should be for the citizen understanding, not just from a software engineer’s perspective. Does the Minister feel that synthetic data offers a number of potential solutions, not least to the privacy questions, and what would the Government consider in terms of how they would go about the QA-ing and indeed the regulation of such synthetic data?

As has already been discussed, in that it is our data, it is right that we, and indeed every citizen, should have a say—should have a piece in this AI play. It will come down to trustworthiness, and everything that the developers, designers and businesses have to do to make this not trusted but trustworthy.

What more do the Government intend to do to have this level of public debate and discourse around such an existential issue? Similarly, does he agree that it would make sense to consider an AI officer on the board of all businesses of a certain size? I put an amendment to this effect down to the then Financial Services and Markets Bill, as AI is obviously already pervasive across our financial services industry. Would it not make sense for the Government to consult on having AI officers on the board of all businesses?

We have already heard a lot about ChatGPT—you cannot go a day without hearing about it—but what about the energy consumption that it took to train ChatGPT and for its continued use? Has my noble friend considered what the Government might wish to conclude on energy consumption of these AIs? Perhaps it would be better if photonic calculus was used, rather than more traditional math, to massively reduce the energy consumption of these systems.

Similarly, if the public are to be enabled, it will take much more than regulation. Does my noble friend agree that we should look at a complete transformation of our education system: data literacy, data competency, digital competency and financial AI literacy through every beat point of the curriculum. Would that not be a good thing for the Government to go out to consult on over the summer and the autumn?

If we are to make a success of AI—and it is in our human hands to do so—it will be only through the engagement and enablement of every citizen in every society, and understanding how to have that innovation in everybody’s human hands. If we stuff this up and it goes wrong, that will be not a failure of the AI or the technology but a human failure: of legislators, regulators, businesses, corporates and all of us.

What are the plans for the summit this autumn? How broadly will people be engaged? What will be the role for civil society at that summit? Finally, can my noble friend set out briefly what he sees as the key differences between the approach of the UK to AI and that of other jurisdictions, not least the European Union?

We can make a success of what we have in front of us, if we are rationally optimistic, understand the risks and step over the huge hype cycle of both unrealistic potential and overly described fears. We need to consider AI as incredibly powerful—but an incredibly powerful tool in our human hands, where we can grip it and make a success economically, socially and politically for all our citizens.

Electronic Trade Documents Bill [HL]

Lord Holmes of Richmond Excerpts

Consideration of Commons amendments
Wednesday 19th July 2023 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, I add my thanks to the Minister for moving these amendments from the Commons. He has shown remarkable consistency with the words of his honourable friend Mr Scully in the Commons—I think word for word it is what he said, so that is excellent. I see other members of the committee here; I am only sorry that the noble and learned Lord, Lord Thomas of Cwmgiedd, is not here to see the final process and see this legislation go forward.

I welcome these amendments, because it means that the legislation will cover the whole United Kingdom, and that the exception power in Clause 5 will operate across the UK. Could the Minister say whether anything is in contemplation under Clause 5 to be excepted in using that power across the UK?

I very much agree with what the noble Lord, Lord Bassam, said about a plan for implementation. This is a much more important Bill than it appears at first sight, and we should really speed it on its way in implementation terms.

[Lord Holmes of Richmond (Con)]

My Lords, I rise briefly to support the amendments as set out. In doing so, I declare my technology interests as set out in the register.

This is the most important Bill that no one has ever heard of. It demonstrates what we can do when we combine the potential of these new technologies with the great good fortune of common law that we have in this country. I particularly support the comments made by the noble Lords, Lord Bassam and Lord Clement-Jones, about the Government’s plan for implementation. Although it is obviously critical that we get Royal Assent to this Bill as soon as possible, that is really where the work begins. As my noble friend the Minister knows, the Bill is rightly permissive in nature; it cannot be that, having done all the work through both Houses of Parliament, the Bill is then just left on the shelf. There needs to be an active plan for implementation, communicating to all the sectors and all the organisations, institutions and brilliant businesses in this space to seize the opportunity that comes from electronic trade documents. Does my noble friend the Minister agree— and will he fill out some more detail on what that implementation plan is?

[Viscount Camrose (Con)]

I thank all three noble Lords who have commented. The noble Lord, Lord Bassam, and others have rightly raised the issue of how we implement the provision, and I could not agree more strongly that the prospect of such a brilliant and transformational Bill gathering dust on a shelf is rather depressing; it would be a great waste.

Industry is very keen to implement this itself, but it is on us to track how that is going and ensure that it does. On how exactly industry goes about it, I would like to write to noble Lords to explain that, because I very much recognise the importance of the question.

With respect to any actions envisaged in Clause 5, nothing is currently envisaged.

Science and Technology Superpower (Science and Technology Committee Report)

Lord Holmes of Richmond Excerpts

Wednesday 7th June 2023 Grand Committee

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part in this debate, as it was to be a member of the Science and Technology Committee when we undertook this inquiry. It is a pleasure to follow my friend, the noble Baroness, Lady Brown, who eloquently set out the extent of the report’s findings so effectively. I echo her in thanking all the staff of the committee who did such excellent work supporting our inquiry. I declare my technology interests as set out in the register.

As the noble Baroness, Lady Brown, did such an effortless job in covering the ground of the report, I would like to describe how I see our findings in five words. We need all five: clarity; long term; international; investment; and implementation. Perhaps the most powerful phrase of all came from Sir Patrick Vallance when he talked about the need for a laser focus on implementation. If we take those five words—those five pillars—what might that look like in reality?

The noble Baroness, Lady Brown, rightly highlighted the importance of regulation and the Vallance review into regulation in this area. I believe that the positive power that regulation can have to support innovation and technology in this country should not be underestimated for one second. We can look recent examples such as what we with the telecoms industry to regulate to enable mobile telephony in this country and what we did even more recently with the fintech sandbox to effectively enable in a regulatory environment so many scale-ups and start-ups to come through. What is the best measure of success for that regulatory sandbox? It has been replicated in well over 50 jurisdictions around the world. That is the positive potential that we have.

Let us put the “science and technology superpower” phrase to one side for a moment. We have, in truth, a real opportunity in the UK for science, technology and innovation. That comes from the great good fortune of the combination of common law, the financial centre in London, the English language, geography, time zone and many other factors. None of that should in any sense take us into a state of believing that we are a superpower, but we should fully appreciate the possibilities that it gives.

What might that look like with a particular sector? AI is much talked of at the moment, but if we can get safe and secure rules, it could enable positive growth in this country. We heard from the Prime Minister only days ago along the lines that if we are to grapple with and solve the problem of AI, we must do this together, not just the companies, but countries. That sounds pretty positively international to me, and that has to be the right approach.

Will the Minister say where specific sectoral strategies, such as the AI strategy, fit into an overall coherent approach across all sectors, all areas and all opportunities, not least, as we have already heard, semi-conductors but quantum and DLT, to name just three? How do we enable all this to fit together? I believe that so much comes down to having innovation right through every Whitehall department, a golden thread of innovation running through every single department. It is that cross-Whitehall working point again. I believe that the difficulty is that we have only ever had cross-Whitehall working twice, once for the Olympic and Paralympic Games and a second time for Covid. It has happened only twice, but look at the results that we had when we got that cross-Whitehall working. We had the very best of our Civil Service and the very best of our state. The possibilities are immense for the United Kingdom but, ultimately, what are science and technology superpowers? They are not nations; rather they are connection, collaboration, coming together and co-creation. That is what we need to be focused on. Tout le monde, if you will. I think we all must will it.