Digital Markets, Competition and Consumers Bill

Lord Lansley Excerpts

3rd reading
Tuesday 26th March 2024 Lords Chamber

[Lord Faulks (Non-Afl)]

My Lords, I also pay tribute to the Government, Ministers, officials and lawyers for their speedy response to the amendment put down on Report by the noble Baroness, Lady Stowell, and others. I declare an interest as the chair of the Independent Press Standards Organisation, which regulates 95% of the printed press and its online manifestations.

I shared with many other noble Lords concern about the prospective acquisition of the Daily Telegraph and the Spectator by the United Arab Emirates—or at least the acquisition of a substantial part of those important titles. It seems to me that this amendment will make this sort of acquisition much more difficult, if not impossible, as soon as the Bill becomes law.

I agree with other noble Lords that it is most important in framing the necessary secondary legislation that the driving principle behind the amendment, which is to prevent foreign state ownership of newspapers, is reflected appropriately. There is a risk that too tightly drawn definitions might catch wholly benign investors who might have a very modest and non-active interest in newspaper organisations. Sovereign wealth funds have already been mentioned, and the noble Lord has given assurances in this area. I do not entirely agree with the noble Lord, Lord Forsyth, in his citation of Pepper v Hart and its importance, but none the less we will be much reassured by anything the Minister might say. I also ask him to consider the position of banks which may provide a newspaper organisation’s finance. Banks are often part of a consortium, and one part of a consortium may well be a bank with a connection to a foreign state. It is important that that is not captured.

There has been a deliberate choice by those drafting these amendments to change the language of the Enterprise Act 2002, which speaks of “material influence” to provide in the amendment that a relevant merger situation arises where one party acquires “influence” over another. That is plainly a much lower bar. I imagine that the change is designed to protect against somewhat unconvincing assertions by prospective acquirers of an interest in newspapers that editorial independence is protected by some form of editorial board or other Chinese wall. I welcome the Minister’s clarification on this.

The definition of a newspaper in the amendment is,

“a news publication circulating wholly or mainly in the United Kingdom or in a part of the United Kingdom on any periodic basis”.

That seems to exclude news websites or broadcasters. News websites are increasingly a source of news for consumers, many whom have deserted conventional newspaper models. It may be that more power and influence can in fact be obtained there than in the traditional format. I hope that the Minister can continue to reassure the House that these websites are in the Government’s sights, simply on the basis of consistency. I venture to suggest that the Media Bill might provide an appropriate parent for relevant provisions to bring websites into the same category as newspapers. I welcome clarification on that.

The provisions make it clear that the Secretary of State must—I emphasise the word “must”—

“make an order … reversing or preventing … the foreign state newspaper merger situation”.

There is no discretion here. That makes it all the more important that any exemptions should provide that remote or benign interest in newspapers by various emanations of foreign states will not necessarily fall foul of these provisions.

I would like to make it clear that I am entirely in favour of the thinking which animates this amendment, but it is inevitable that when an amendment is drafted, at considerable pace, at a late stage in the progress of a Bill, there may be gaps or ambiguities. Freedom from state interference is of fundamental importance. Our newspaper industry is not in anything like the healthy state it once was, and its vulnerability is what makes newspapers potentially prey to outside investment from foreign states which seek influence. However, important though it is to keep our newspapers free of such influence, we want them to survive and, indeed, to prosper. I hope that the amendment entirely comprehends that aim.

Finally, I simply ask for clarity—the drafting is impressive, but sometimes the meaning is a little hard to tease out—on how the Minister envisages parliamentary involvement in the case of a contentious merger situation.

[Lord Lansley (Con)]

My Lords, I intervene just briefly. I am very pleased to take the opportunity to follow what the noble Lord, Lord Faulks, was just saying because it touches directly on the points I was going to make.

First, I am very grateful for the conversations I have had with the noble Lord and Minister Lopez in his department. I look forward to further debate about the extension to online news services. It will certainly be my intention to table amendments to the Media Bill to enable us to consider how the media public interest test is to be applied in relation to this wider definition of news providers, since the definitions are clearly now out of date—I can say that, having been part of the Puttnam committee on the 2003 legislation.

My noble friend has done an amazing piece of legislative work. I just have to ask, as I did on Report, why it would not have sufficed to have added a new specified consideration to Section 58 of the Enterprise Act 2002, in effect on the need to prevent the acquisition, control of, or influence over newspapers or newspaper periodicals by any defined foreign power. As my noble friend says, we have 16 pages; frankly, we could have done it in about three lines, but clearly there are differences in terms of the bar that has to be crossed and the requirement on the Secretary of State. As the noble Lord, Lord Faulks, said, the Secretary of State must do these things, as opposed to the discretion under the current merger regime, but it seems to me that, with a new specified consideration, the current merger regime would provide the necessary powers. For example, it was sufficient for the purpose of meeting the capability to deal with a public health emergency in Section 58 as a specified consideration, or to maintain the stability of our financial system, as specified after the financial crisis, in Section 58. I am not at all clear why we have departed from the same approach in this case. There is a risk that we end up with overlapping and very complex provisions relating to one type of merger situation as opposed to other merger situations, but we will come on to discuss that.

On Report, I raised with my noble friend the question of broadcasting. We can return to that in the Media Bill, but, of course, where broadcasters are concerned, we have the benefit of the relationship to the Ofcom standards code, which does not apply in relation to newspapers. I hope we can revisit that when we come to the Media Bill.

[Lord Clement-Jones (LD)]

My Lords, I want to revert very briefly, and thank the noble Lord, Lord Offord, for his statement about the status of the Bill in Northern Ireland, before commenting on Amendment 1. I very much hope that those discussions go as quickly as possible in the circumstances. I also welcome the noble Lord, Lord Leong, back to the Opposition Front Benches, and hope that he is in much better form.

I start by congratulating the noble Baroness, Lady Stowell, and the noble Lords, Lord Forsyth, Lord Robertson, and Lord Anderson, on what is really a triumph. I thank the Minister, in particular, the noble Lord, Lord Parkinson, for producing something so comprehensive, and perhaps complicated. As someone who is rather used to replies such as “in due course” or “we’re going to produce guidance”, it just shows what government can do swiftly and decisively when it really gets the bit between its teeth. It means that we are not going to take many more excuses in future.

I very much hope that, as the noble Lords, Lord Faulks and Lord Lansley, said, we will not lose sight of the digital news media agenda as well, because it just demonstrates what is possible through this change to the Enterprise Act. There is a broader agenda, and that needs addressing. I very much hope that, as other noble Lords have said, the secondary legislation really is consistent with the intent demonstrated today, both in what the Minister had to say and in the intent of the proposers of the original amendment. It is very good that the Minister has, in a sense, confirmed that it will impact on the RedBird proposal, if that proposal is still current on the effective date, given the circumstances. I entirely agree with the noble Baroness, Lady Stowell, that this is a matter of principle; it is not about the particular country. However, I do feel strongly about the particular country, so in these circumstances, we are entitled to be pleased that this is going to be the case in terms of this particular transaction.

The noble Baroness raised questions about the threshold, and I very much hope that the Minister can answer them. I thank him, and I think there is general satisfaction across the House. This demonstrates what the Government can do when they get the bit between their teeth.

Comprehensive and Progressive Trans-Pacific Partnership (IAC Report)

Lord Lansley Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Lansley (Con)]

My Lords, I am glad to have the opportunity to express our thanks to the committee, its chair and its former chair for the work in preparing this report. I am glad we have the opportunity to debate it now, in good time in relation to the CRaG process. Noble Lords will recall that, in previous discussions on trade Bills, we secured what we regarded as agreement from the Government that, where any committee makes a report for debate in either Chamber, it should be facilitated before the conclusion of the CRaG process and moving to ratification.

That said, I do not want to understate the degree of scrutiny that has been given to our accession to the CPTPP. When I was a member of the committee some time ago, we looked in detail at the mandate for the negotiations, and we looked at the issues arising from the treaty, because of course we were looking at an existing treaty and could consider what the implications of the provisions of the CPTPP might be, were we to accede to them. The Government responded very positively to some of the points we made at that time, not least on behalf of the witnesses we received. In addition, we have had the opportunity to debate the Bill, in so far as legislation was required. I do not want to understate the scrutiny of this House, which has been nothing other than thorough, demonstrating the importance that should be attached to the continuing work of the International Agreements Committee and the scrutiny we give treaties in this place.

It is really important to recognise that this is an accession, not a negotiation. Occasionally, some of the witnesses’ evidence submissions to the committee and some of the wider CPTPP debate suggested that it was open to us to negotiate an agreement as we are doing with other countries on a bilateral basis to conclude an FTA. This is an accession, and I will come back to that in a moment.

Investor-state dispute settlement is a very good example of this. I remind the House of my registered interest as the UK co-chair of the UK-Japan 21st Century Group. Japan was a very early supporter of our accession to the CPTPP, and we should not underestimate the significance of that in our being able to be the first to join this regional plurilateral grouping. Some expressed the view that we could join the CPTPP but that we do not like investor-state dispute settlement. I am not quite sure why we do not like it; some do not because they think we will be challenged, although we never have been. As outward investment and our reliance on foreign direct investment is unusually important to this country, we should be in favour of giving investors confidence. I am therefore in favour of our agreeing to appropriate ISDS provisions. Had we tried to join the CPTPP while having side letters with everybody, and tried to exempt ourselves from all the effects of ISDS, including with Japan, we would not have been able to accede. Let us not get into arguments that pretend that we could have had a negotiation that we could not have had.

I want to talk about one main element from the latter part of the general themes that the noble Baroness, Lady Hayter, talked about: the strategic context—not the Indo-Pacific tilt but the question of whether the Government should have a trade policy White Paper and a trade strategy document. When we as a committee asked for one over a year ago, we were right to do so, but it is now late in the Parliament to do that. However, anyone who wants to—not least from these Benches—can look at the Government’s activity in trade policy and deduce what we are trying to achieve. I think one would make a very positive deduction, not least from the fact that we wanted to join the CPTPP in the first place. It was very easy for people to say, “What has that to do with us? We’re not a Pacific country and we weren’t involved in the negotiations that led to the CPTPP, so why would we want to join it?” The short answer is because our trade policy is to support a rules-based system that obtains at high standards and is a broad-ranging and flexible, but also progressive, system of agreement for trade.

At the time that it was negotiated, the CPTPP was cutting edge in terms of digital trade and was quite forward in terms of services trade. A number of years have gone by, and there is now scope in the 2024 general review to remedy that. When they started this process, the Government were demonstrating their commitment to trade liberalisation, open trade, a rules-based trading system and not simply to bilateral agreements but to plurilateral agreements that would bring others into a broader world trading system. In the years to come, CPTPP may well demonstrate itself in that way as by no means confined to the Pacific Rim. We are leading the way, and I hope there will be others that follow. Let us not discount completely —happily, sometimes things change, and they do not always change in the wrong direction—that there might be the day when the United States once again thinks about joining a plurilateral, open trading system in ways that it has not done in the recent past. When it does so, the fact that two of its leading strategic allies, the United Kingdom and Japan, are in the CPTPP and were involved in the early stages of negotiating the agreement may give it greater confidence that this would be the proper step for the United States to take, if it really wants to rejoin a rules-based trading system, and greater confidence on how to go about it.

The only other point that I want to make is that I agree with the noble Baroness and the committee report—I think it is in paragraphs 74 to 76—that the CPTPP is not an alternative to the WTO, but in the recent WTO ministerial conference we have seen that plurilateral agreements in that context have made some progress, on things like the regulation of services, investment facilitation and so on. However, the WTO was not able to get agreement on things like food security and fisheries, or, sadly, on dispute settlement. I do not think that we can rely upon the WTO to make the progress that we need. If we are not careful, in the absence of WTO agreements, everything will be done by way of bilateral agreements, which lead one into a more mercantilist system, whereas what we want is an open, plurilateral trading system.

From my point of view, that means that things like the CPTPP and other plurilateral agreements—which are not just regional but may, as we can see, develop in relation to services, investment facilitation or, very importantly, trade in environmental goods—are all ways in which we can promote a wider, positive, open trading system. If we do not do that, protectionism will increase, and in so far as people are not simply protectionist, they will be mercantilist, expecting—as President Trump was wont to do and China is wont to do—that they can negotiate the outcome of trade, rather than create a system which enables the outcome of trade to be the result of markets and competition. That is what we are looking for, and that is why we are looking for an open trading system.

In that context, our accession to the CPTPP is a wholly positive step. I do not think that we should in the slightest diminish it by reference to some of the current statistics about what the prospective economic impact might look like. By the time we have made changes in terms of digital and services trade, and by the time one takes into account the confidence that is given to investors, the beneficial impacts resulting from our membership of the CPTPP will be considerably in excess of what has presently been predicted. I very much support it, but I am also very grateful to and support the committee in the report that it has given us.

UK Tradeshow Programme Closure

Lord Lansley Excerpts

Monday 18th March 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I would say two things to the noble Lord. First, exports are up over the past year by 13%—and tomorrow we have a debate on the CPTPP, which will allow this country to join an £11 trillion trading network, which will result in significant benefits to our businesses immediately and into the future.

[Lord Lansley (Con)]

My Lords, I remind my noble friend that, many years ago, I secured the outsourcing of the export marketing research scheme to the British Chambers of Commerce from the then department; that was very successful for over 20 years, and continues as a scheme under the department. That plus the grant support for introduction into markets provides a significant benefit to small businesses. Can my noble friend say whether he and the department are working very closely with trade associations and chambers of commerce to ensure that they are also delivery vehicles and multipliers for the work that the department is doing?

[Lord Johnson of Lainston (Con)]

I am very grateful to my noble friend for all the work that he has done to help exports and trade in this nation over his many years of service in this House and the other place. I draw attention to the fact that the British Business Bank also provides funding for small businesses to give them the training and skills to export, and UKEF provides billions of pounds to ensure that they have the capital to enable them to export. But my noble friend is absolutely right: we can do more with the chambers of commerce, and we have a specific group structured to enable us to have strong relationships with those organisations. On the ground, particularly in harder-to-reach markets such as China, they play an invaluable role, and I personally do everything I can to co-operate with and encourage them.

Digital Markets, Competition and Consumers Bill

Lord Lansley Excerpts

Report stage
Wednesday 13th March 2024 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, with only one amendment in this group, I have the mixed blessing of having the Minister’s undivided attention. I will be very brief as I want to give way to heavier oncoming traffic, in the form of Amendments 67 and 158. My intention in retabling this amendment on Report is to probe further the Government’s intentions as regards amending the Enterprise Act 2002, in respect of mergers of digital media.

In Committee, I pointed out that the Online Safety Bill—now Act—sets great store by the importance of freedom of expression on digital media and, in the context of competition in the media, we believe that the protection of the public interest needs bringing up to date, alongside the collective consumer interest. This was on the basis that digital media now play a significant role in the national discourse, and public interest considerations could emerge from permutations of takeovers or mergers.

In Committee, I described how Section 58 of the Enterprise Act is limited in scope, and that we should add the need for free expression of opinion and plurality of ownership of media enterprises in user-to-user and search services to the existing public interest considerations that the Secretary of State can take into account. The reply of the Minister—the noble Lord, Lord Offord—was sufficiently encouraging for me to bring the amendment back for further and better particulars. He said:

“The Government are currently reviewing the recommendations on changes to the media public interest test in Ofcom’s 2021 statement on media plurality. Ofcom did not recommend that online intermediaries or video and audio on-demand services should fall within the scope of the media mergers regime, which this amendment would provide for”.


There is always hope. The Minister went on:

“We are considering Ofcom’s recommendations carefully and, as we do that, we will look closely at the wider implications on the industry. The Government have not proposed pursuing substantive changes to the grounds for public interest interventions in mergers in this Bill. The changes recommended in Ofcom’s review can be addressed directly via secondary legislation under the made affirmative procedure, if appropriate”.—[Official Report, 29/1/24; col. GC 291.]


The Minister did not offer any detailed timetable, so this is a brazen attempt to push the Minister further in telling us what the Government really have in mind, even if it is going to be included in secondary legislation. It is quite clear, in general, that changes to the Enterprise Act are needed and should be in contemplation. I very much hope the Minister can go rather further than he did in Committee. Indeed, it may be that there is a vehicle available, in the form of the Media Bill, which could take the position further. I beg to move.

[Lord Lansley (Con)]

My Lords, I intervene very briefly to support the noble Lord, Lord Clement-Jones, in the intentions of his amendment. A number of noble Lords will recall that, about eight years ago, we sought that the Government would use secondary legislation to extend the definition of media enterprises under the Enterprise Act.

The point that the noble Lord, Lord Clement-Jones, is making is in this territory. Clearly, if media enterprises for these purposes were defined more widely, it would capture some of the providers that the noble Lord, Lord Clement-Jones, was talking about. At the moment, media enterprises basically consist of print newspapers or broadcasters—and broadcasters are only those that are licensed under the Broadcasting Acts.

I hope it will be evident to noble Lords that there are now many more news creators and aggregators, and sources of news, that make up the news landscape and are not comprised within the definition of print newspapers or of broadcasters under the Broadcasting Act. So we need to make sure that the specified considerations under Section 58, about free expression, accurate presentation and plurality, are applied in relation to this wider definition of media enterprises.

This was something that Ofcom said to Ministers in pursuance of the consultation about the media public interest test, I think as far back as 2021, or maybe at the end of 2022. So I suppose what I am asking is to share in the urging of the noble Lord, Lord Clement-Jones, that Ministers might take this on, and to give advance notice that—from my point of view—we should address this in the Media Bill quite soon, in order to give them further encouragement for this purpose.

[Lord Bassam of Brighton (Lab)]

My Lords, we are very grateful—we are always very grateful, actually—to the noble Lord, Lord Clement-Jones, for tabling this amendment, which raises a valid concern around the suitability of the current provisions in Section 58 of the Enterprise Act.

We take the view that the world has changed significantly since that legislation was put on the statute book. It was changed as a result of the passage of the National Security and Investment Act, but not in a way that addressed the points that have been properly raised by the noble Lord. Some aspects of this debate featured during the passage of the Online Safety Bill, and I strongly suspect we will revisit this on other occasions in the future, as the noble Lord, Lord Lansley, has invited us to with the Media Bill.

The noble Lord, Lord Clement-Jones, described this as a “brazen attempt” on his part. Well, I hope the Government will be open-minded about looking at whether and how the public interest notice regime could be revised in the future, to take account of different types of media provider. However, because I know that noble Lords would like to progress on to another interesting group on a similar topic, I will hand the Floor to the Minister.

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

The noble Lords have intervened at a helpful point, because I was about to outline that we want to ensure that the new measures do not have undesired effects on wider foreign business investment in the UK media, or on purely passive investments made by established investment funds.

In the amendment we will bring forward at Third Reading, it will be necessary to take a power to make secondary legislation to set out two points clearly: first, what limited types of established investment funds we mean, which could be split out of the general prohibition on foreign state ownership provided for by this regime; secondly, the very low threshold up to which they may be permitted to invest, which we intend to be considerably lower than the current thresholds for material influence in the Enterprise Act.

As we bring this forward ahead of Third Reading, we would be very happy to discuss the drafting with noble Lords before it is tabled so that we can discuss the detail. We will set that out in the provisions at Third Reading.

[Lord Lansley (Con)]

I am sorry to interrupt my noble friend but, as he knows, I am interested in the question of media enterprises more generally. Is he intending that the amendment to be brought forward will relate only to newspapers, and therefore will not touch upon broadcasters, as they will be excluded? I am not sure I understand why the presentation of news by broadcasters is to be treated differently from the presentation of news by newspapers.

Digital Markets, Competition and Consumers Bill

Lord Lansley Excerpts

Report stage
Monday 11th March 2024 Lords Chamber

Both Secretaries of State who are currently involved in this legislation, for DSIT and the Department for Business and Trade, are very strong individuals. I am not concerned about them being anything other than resolute in the face of great pressure. However, unfortunately we are legislating for a situation that goes way beyond the current personalities in these different posts. It is important, regardless of who is in the post, that there is a deadline. Therefore, if my noble friend Lord Lansley pushes his Amendment 56 to a Division, I will support him.

[Lord Lansley (Con)]

My Lords, with that lead-in I will say a few words about Amendment 56 and Amendments 13 and 35 in the name of my noble friend Lord Faulks, which were discussed very intensively in Committee. We are all very grateful to my noble friend Lord Offord for the extent of his response to that debate as Minister, but I fear that it gave us information on which to work but not sufficient reassurance to hold back, as my noble friend Lord Faulks has continued to press the argument.

Let me make a point about that. In the course of that debate, as the noble Lord, Lord Faulks, said, the Government’s intention seemed to be that either Article 1, Protocol 1, of the ECHR is engaged in relation to an appeal, using the arguments for the peaceful enjoyment of possessions and therefore, as the noble Lord, Lord Faulks, said, proportionality would be engaged as a consequence of that, or the ECHR is not engaged but it is the Government’s intention, by introducing this provision in the Bill, that the same test would apply. However, I fear that we need to say, as the Minister quite reasonably said in response in Committee, that there are expectations that proportionality would form part of the decision-making process of the Competition and Markets Authority as a responsible regulator. It would be expected, as the Minister said, to apply that principle in the terms on which it was done in the Bank Mellat v Her Majesty’s Treasury (No. 2) case.

The Minister referred to the “four limbs” of Lord Reed and Lord Sumption. I spent a bit of my life which I will not get back now reading some of these judgments, though it was quite interesting. It led me to go a little beyond the cases that were cited by my noble friend to the case of Pham v Secretary of State for the Home Department, where there was a really interesting discussion demonstrating that, although there was some development of the use of proportionality alongside reasonableness in determining administrative law cases, in the decisions that were being handed down there was a clear distinction between that proportionality which is linked to the reasonableness test—that is, that this was something so disproportionate that no reasonable regulator would have made this decision—and what they described as an intense review of the merits of the decision on proportionality.

--- Later in debate ---

[Lord Lansley (Con)]

My Lords, I have four amendments in this group. Amendments 16 and 17 relate to the conduct requirements that the CMA can impose on designated undertakings, and Amendments 20 and 25 relate to countervailing benefits in relation to that conduct. I will come to that in a minute. Let me stick for a moment with Amendments 16 and 17.

Amendment 16 was helpfully introduced, to some extent, by what the noble Lord, Lord Clement-Jones, said about the activities in the run-up to the introduction of the Digital Markets Act in the European Union. There was a deadline of 7 March for that, and considerable attention has been paid to what Apple in particular has done in relation to that. The noble Lord made Apple’s position clear. It is saying, essentially, that we can either stay with our existing system, and it will charge 30% by way of fees for apps on the App Store, or we can go to this alternative which enables us to comply with the DMA, and Apple will offer an alternative but with a 17% fee for apps plus a 3% core technology fee, and, if you go beyond a million downloads, you will get a 50 cents processing charge per download. Those who fear that their app may go viral, with millions of downloads, are potentially facing enormous costs for processing them through the App Store. As far as all the potential users of the Apple App Store are concerned, this potentially restricts their opportunity for competition rather than enabling it.

My first point is to further reinforce that we have come together to design legislation in support of the Government that is more flexible than the Digital Markets Act. The DMA, in effect, puts the obligations into the originating Act. To change them will be considerably more difficult than would be the case for the Competition and Markets Authority in our regime to change the structure and the content of conduct requirements. Potentially, we have really good flexibility.

Amendment 16 is linked to whether the powers to impose conduct requirements enable the CMA to act in relation to the leveraging of market power in digital activities into other activities—the wider system of its business. Amendment 16 is absolutely about whether the conduct requirements that can be imposed under Clause 20 are sufficiently wide to enable the Competition and Markets Authority to structure them to limit activity which restricts competition in the way that these efforts are being pursued in relation to the Digital Markets Act. To that extent, Amendment 16 asks the Minister, if he would be kind enough to respond in this light, whether, if a designated undertaking were to behave in that sort of way, the CMA would have the power under the conduct requirements to respond and act, and to do so rapidly, to frustrate that kind of anti-competitive result.

Amendment 17 is slightly different, in that we discussed it in Committee. One of the European Union Digital Markets Act obligations is termed expressly to prevent others seeking to stop someone making a complaint to any public authority about non-compliance with the relevant obligations. I looked to see whether our conduct requirements, specified in Clause 20, cover a similar circumstance. In discussion in Committee, the Minister directed me to the “fair and reasonable terms” provision, which is very wide ranging but does not cover this, because these are not the terms of a contractual relationship between a designated undertaking and its users or potential users. It may not relate to that at all.

The Minister also directed me to the question of discrimination, but I do not think this is about discrimination between users; it is about preventing someone, who may be a user, a potential user or a potential competitor, from going to a public authority and saying, “This undertaking does not comply with its conduct requirements”. We know—I will not repeat the evidence that I gave in Committee—that there have, unhappily, been circumstances of intimidation of those who would complain to regulators about the conduct of organisations with significant market power. I return to this simply to say to the Minister that I am not yet convinced. Can he convince us that this kind of activity is covered by the conduct requirements? If it is not, will he undertake to ensure that the necessary changes are made to Clause 20, which the legislation would permit?

I will also speak to the amendments about counter-vailing benefits exemptions. Amendments 23 and 24 revert the Bill to its original wording, which would be better than where we are now. I have looked at Clause 29 from my point of view and I cannot find a good reason for it, so I thought it better to leave it out. If there is a conduct investigation and there are countervailing benefits, they should be presented to the CMA when it makes representations to a conduct investigation. Why would they be left to any other time or specified separately in the legislation?

I thought it better to amend Clause 27 such that, when making representations, the designated undertaking may give details of the benefits associated with its conduct to form part of that investigation. At that point, it should come forward if it is prepared to make commitments that the CMA could accept, without necessarily making a finding, to close that investigation.

All this should take place in Clause 27 on representations, because that is where the sequence lies. I do not understand why Clause 29 has been added at what appears to be a later stage in the sequence of the legislation. As it is a separate clause, it appears as though the benefits can be presented at an entirely separate point.

As I have also discussed with the Minister, there is an analogy with the exempt anti-competitive agreements under the Competition Act 1998. I was on the stand when that Bill was in Committee and this is a very different kettle of fish. The 1998 Act set out broad descriptions of agreements that would be deemed anti-competitive and therefore void, except if undertakings came to the Competition and Markets Authority; then the burden is on it to demonstrate that they have, in effect, countervailing benefits, such as to innovation, the consumer and the like, without an adverse effect on competition.

That is ex post regulation. That is agreements and obligations that are broad-ranging and apply across industry. Here, we are talking about conduct requirements that are optimised and designed in relation to that undertaking in the first place. This is ex ante regulation. You cannot compare ex post provisions in the Competition Act with ex ante regulation under this legislation. They are not the same kind of thing.

Therefore, again, I come back to the argument: let us not have exemptions. The use of “exemption” seems wholly inappropriate. We have here a very straightforward process. Conduct requirements require, in themselves, under Clause 24, for there to be a consultation. The undertaking should tell the CMA what the benefits associated with its conduct are at that stage.

There is a forward-looking process; the conduct requirement is supposed to look forward five years, but none the less, circumstances change. The CMA can review a conduct requirement, and the designated undertaking should come to the CMA if circumstances change and there are countervailing benefits and ask for the conduct requirement to be reviewed. Even if, under all these circumstances, a conduct investigation notice is issued, the undertaking should come forward and express what the benefits are at that point. Under none of these circumstances is there a requirement for the use of “exemption” or for an additional clause that offers countervailing benefits as such.

I dare say I will not press this, because there is probably more to be said for Amendment 23 and going back to the original wording, but it afforded me the opportunity, I hope, to explain why I think the whole proposition in Clause 29 seems misplaced.

[Baroness Kidron (CB)]

My Lords, I find myself in a slightly awkward position because my name is listed in support of Amendments 23 and 24, but I find the argument of the noble Lord, Lord Lansley, incontrovertible, and maybe he should press his amendment.

On the wording, I want to put on the record the view of Which?:

“This is a legal loophole for big tech to challenge conduct requirements through lengthy, tactical, legal challenges. It would tie up CMA (i.e., taxpayer) resources and frustrate the intent of the legislation. Whilst we agree with the intent of this provision, which is to encourage innovation that will benefit consumers, it is critical that these provisions do not inadvertently give designated firms a get out of jail free card from DMU decisions”


by presenting opaque consumer benefits.

I put that on the record because it is so measured in comparison with many of the emails and representations I have had, and still is absolutely categoric that this is a get out of jail card. Like the noble Lord, Lord Lansley, I do not understand why the regulator duty to be

“proportionate, accountable, consistent, transparent and targeted”,

within the context of coming to the conduct requirements and taking up any countervailing benefits at that point, is not adequate. So I will support the noble Baroness, Lady Jones, and, indeed, the noble Lord, Lord Lansley, should he change his mind in the next few minutes.

I also add my support to Amendment 60, tabled by the noble Lord, Lord Fox. I am an enthusiastic supporter of international standards. They provide for soft law and, having worked with the IEEE on a number of standards over the last few years, I see how brilliantly they work to bring disparate people together and provide practical steps for those tasked with implementation. I declare an interest in relation to the IEEE, which gives some funding to 5Rights Foundation, of which I am chair.

The point I leave with the House is that, toward the end of 2022, I had two conversations with companies that will certainly be SMS about why they were now recruiting for employees to work on standards full-time. I believe the CMA should be in the standards-writing game.

--- Later in debate ---

I turn next to Amendments 23 and 24 from the noble Baroness, Lady Jones of Whitchurch, which would revert the wording of the countervailing benefits exemption to the text as introduced in the Commons. I stress that the current wording maintains the same high threshold. However, I will not repeat the arguments, given the extensive debate we shared on this in Committee.

[Lord Lansley (Con)]

I am very grateful to my noble friend. Could he say therefore whether a designated undertaking that feels it can demonstrate countervailing benefits must have presented those to the CMA before the CMA concludes its findings under Clause 30—or can it do so afterwards?

[Viscount Camrose (Con)]

It can make a representation to the effect of countervailing benefits as part of a breach investigation, which can of course happen at any time during the life of a conduct requirement. We would expect it to make those representations at the start of or during the initial investigation. When these representations are made as part of a breach requirement, the Bill sets out the high standards required in order to accept that argument.

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[Lord Lansley (Con)]

Sorry, may I just press my noble friend? Can he therefore say that the presentation of a countervailing benefits exemption after the CMA has made findings under Clause 30 would be void?

[Viscount Camrose (Con)]

A representation to the effect that there are countervailing benefits would take place as part of a breach investigation. Of course, once the investigation is complete, there is no further opportunity to do so. Have I answered the question?

[Lord Lansley (Con)]

Yes.

[Viscount Camrose (Con)]

To address the concerns of the noble Lord, Lord Leong, that the current wording deviates from legal precedent, I note that, since this is a new regime, existing exemptions in different competition regimes would not be directly applicable. It is highly likely that the application of the exemption will be tested, no matter the wording.

Finally, Amendment 34, tabled by my noble friend Lord Black of Brentwood, would allow the final offer mechanism to be used after the breach of a conduct requirement, rather than after a breach of an enforcement order. This novel tool has been designed as a backstop to normal enforcement processes. It is a last resort to incentivise sincere negotiations concerning fair and reasonable payment terms between the SMS firm and third parties. I wholeheartedly agree with my noble friend that these incentives must be both compelling and credible. It is clearly preferable for parties to reach a privately agreed settlement rather than one chosen by the regulator. That is why we must ensure due consideration of less interventionist options before turning to the final offer mechanism.

However, if SMS firms try to frustrate the process or drag it out to the detriment of third parties, I agree that the DMU should be able to accelerate stages before the final offer mechanism is invoked. That is why we have ensured that the DMU will be able to set urgent deadlines for compliance with enforcement orders, supported by significant penalties where appropriate, in cases of non-compliance.

I can robustly reassure my noble friend that the CMA can, via conduct requirements and enforcement orders as well as the final offer mechanism, gather and share key information with third parties.

Finally, to his comment on the forced withdrawal of content, the Bill is able where appropriate to tackle this issue. A conduct requirement could, for example, prevent an SMS firm withdrawing a service in a discriminatory way or treating users more favourably if they purchase the SMS firm’s other products.

The Government have worked hard to strike a balanced approach to intervention. This includes ensuring that firms cannot undermine regulation, and prioritising benefits to consumers at the heart of the regime. I believe the tools, as drafted, achieve these goals, so I hope that noble Lords will not press their amendments.

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Moved by

[Lord Lansley]

56: Clause 114, page 71, line 17, at end insert—
“(5) When the CMA seek the approval of the Secretary of State for guidance, the Secretary of State must within 40 days either—(a) approve the guidance; or(b) refer the proposed guidance back to the CMA with a statement of reasons why the guidance should not be published in that form.”

[Lord Lansley (Con)]

My Lords, in the debate on the first group, on Amendment 56 there was a strong view that when the Competition and Markets Authority presents guidance to the Secretary of State, the Secretary of State should either approve it or refer it back with a statement of reasons within a reasonable time, specified as 40 days, and not, as the Bill presently says, that the Secretary of State can choose not to approve it without any time limit. I am afraid, and I say it with regret to my noble friend, that we did not hear persuasive reasons to the contrary. I seek the opinion of the House on Amendment 56.

Post Office Horizon: Compensation and Legislation

Lord Lansley Excerpts

Tuesday 27th February 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord for allowing me to carry on in my position, at least until the end of this Statement. I am glad he has such halcyon memories of the railways when he was a younger man; I am not quite sure when that was.

We need to be aware of something which has struck me in the discussions around this. There is naturally a sense of reflection over the salaries paid to senior executives in an organisation such as the Post Office which is going through such a traumatic time, and the view that we want to punish the current executive leadership. While that is a very natural instinct, we want the best people possible running the Post Office today. It is an intensely complex situation, not just in terms of compensation and the issues around the Horizon scandal but running 11,000-odd Post Offices around the country and all the issues around that. What is important is that we get value for money; if the Post Office was making a great profit, everyone was happy, all the staff were delighted and we were not in this situation, we would be extremely pleased, probably, to pay the chief executive more than he is currently paid.

It is not necessarily about the quantum; the point is the governance around how salaries and bonuses are fixed. There was a question earlier in this House about long-term incentive plans compared with short-term ones. In the financial services sector, where I come from, you are paid your bonuses over three, five and often more years, which is considered to be quite onerous but I think it has resulted in changes in behaviour. It is absolutely right that we should look at these sorts of plans for these highly paid executives in these public corporations.

[Lord Lansley (Con)]

My Lords, I draw the House’s attention to my registered interest as UK chair of the UK-Japan 21st Century Group. Can my noble friend update the House on the prospects of securing a significant contribution to the financial redress from Fujitsu? Of course, Fujitsu is a Japanese company but in this context this is consequential upon its acquisition of ICL during the 1990s.

[Lord Johnson of Lainston (Con)]

I thank my noble friend for raising that point. I think it has been widely publicised that Fujitsu has apologised for its role in this —as one would expect and hope—but has also accepted a moral responsibility. It has also suggested that it will look to see how it will participate in this process and my colleague Mr Hollinrake has been very clear that this overall envelope of compensation to postmasters is not to be borne solely by the Government. Clearly, there is an ongoing inquiry. This is an extremely complicated process to comment on at this stage but the tone of what my noble friend is suggesting chimes completely with the Government’s view.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Lansley Excerpts

Report stage
Tuesday 16th January 2024 Lords Chamber

Moved by

[Lord Lansley]

1: Clause 3, page 2, line 8, leave out “and (b)” and insert “or
(b) funded by an international organisation of which the United Kingdom is a member to a lesser extent, and”

--- Later in debate ---

[Lord Lansley (Con)]

My Lords, this group and the next group of amendments follow debates that took place in Committee, and I am very grateful for the Minister’s response then and for his subsequent letters that have further amplified the discussion about this. I apologise for delaying the House—not for very long, I hope—simply, in the case of both amendments, not to make any point of principle contradicting what is in the Bill, but to try to ensure that the meaning of the Bill and its intentions are as clear as we can possibly make them.

The first two amendments, Amendments 1 and 2, work together to rewrite that bit of the Bill to state that the exempt contracts would be, in this instance, where they are “wholly or mainly funded” by an international organisation, or

“funded by an international organisation of which the United Kingdom is a member to a lesser extent”—

so that funding is to a lesser extent—and is “required to be” under a procedure adopted by that international organisation. Article 15 of the CPTPP has a requirement that we want to transpose into our legislation. It states that a procurement that is not covered by individual countries’ own procurement rules would be one that is

“funded by an international organisation or foreign or international grants, loans or other assistance to which procurement procedures or conditions of the international organisation or donor apply”.

What we are looking to do in this instance is to reproduce that, so that the exemption for contracts under our Procurement Act matches what is in the CPTPP.

The government view was that the CPTPP just says “funded”, while our general approach is to try to clarify, to a greater extent, that it should say “wholly or mainly funded”—namely, more than 50%—which is consistent with what we do in relation to the rule on the general procurement agreement. However, the point that I have now reached, which I put to my noble friend via these amendments, is that it is not necessarily the case that an organisation such as the World Bank has to be a majority funder in order for its funding—and that of others with which its funding is associated, which might be other providers of grants or loans, or the recipient country in one form or another—to be required to be conducted under its procedures. That being the case, should we reflect the CPTPP rules by saying that either a procurement is “wholly or mainly funded” by the international organisation, or, if it is funded to a lesser extent, that it is required to be subject to its procedures, and that that would give rise to an exemption under our procurement rules?

That is the point of the amendment. I am sure my noble friend will appreciate the rather fine distinctions, but I wonder whether he might agree that, at the very least, we want to be absolutely clear that, if a procurement has to be conducted under the rules of an international organisation, such as the World Bank, it should be exempt from our Procurement Act requirements. I beg to move Amendment 1.

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

My Lords, I begin by declaring my interests, which are very clearly listed on the Lords’ register. I have interests in limited companies and companies that are active in CPTPP countries, but I do not believe there is any conflict.

--- Later in debate ---

I am very comfortable having further conversations outside of this debate and am extremely supportive of the ambitions of my noble friend. However, genuinely, we have worked through this in some detail. I believe that the wording we have will ensure that, as far as possible, procurement contracts will be captured by a procurement regime in the way that we would want them to be, and as noble Lords and this House expect. I therefore ask my noble friend to withdraw Amendment 1 and not move Amendment 2.

[Lord Lansley (Con)]

I am most grateful to my noble friend. He explained very well why the Government want to clarify this in this way. I hope he is right, and it is wholly consistent with CPTPP, although it is not precisely the same wording—it adds additional clarification. My noble friend made typically generous remarks about those of us who have been, as he says, painstakingly working our way through the technicalities of this Bill, and I am grateful for that. Some of our noble friends and colleagues on the International Agreements Committee are elsewhere with their committee this afternoon, but I know that they will read his remarks and want to thank him very much for that.

I take my noble friend’s point that, to the extent that procurements are brought within the scope of our procurement rules, they are in line with the general procurement agreement and best practice. In so far as we can, we want to bring as many of the recipient countries of international organisations’ funding within general procurement agreement rules, so that they are following best practice. We should aim to have more countries following those rules and to operate in ways consistent with how we do things than to leave them outside.

On that basis, I understand and accept my noble friend’s points and beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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Moved by

[Lord Lansley]

3: Clause 4, page 3, line 13, leave out “established by use” and insert “in use prior to that date”

--- Later in debate ---

[Lord Lansley (Con)]

I hope that I will be equally quick on this amendment, as there are points of more substance and principle to be debated later.

We discussed Amendment 3 in Committee. Essentially, it relates to a set of circumstances in which trademarks and GIs—geographical indications—may come into conflict and the circumstances in which the Secretary of State can make a decision that there would be confusion between the two. The point is that the GIs should be compared to existing trademarks and registered trademarks; to circumstances where, on the date which the GI is submitted, there are applications for the registration of trademarks; and, as the legislation refers to, where trademarks are “established by use”.

My problem is that nowhere in trademark legislation do the words “established by use” appear. My noble friend’s letter to me of 10 January said that “established by use” refers to unregistered trademarks. We appear to be putting into statute the concept that where a trademark has been used, it can be established but not registered, and I am not sure that that is helpful. What is more helpful would be to indicate that the Secretary of State should have a discretion to look at a GI that may come into conflict with an unregistered trademark—there are such things—and where confusion would result. My noble friend says that they may just use a trademark once, and the fact that it had been used once at some point in the past may lead to this confusion. As the legislation is drafted, the Secretary of State would actually have the discretion to judge these matters and to say whether confusion would arise. If a trademark has not been used prior to that date in any substantial way, I think the Secretary of State could ignore it and say that the GI has a meaning that people will readily understand.

I have a problem with the term “established by use” and think that “in use prior to that date” is more straight- forward and has the meaning we are looking for; “established by use” runs a risk of establishing that, in law, trademarks can be established by use. That is not something that the trademarks legislation currently admits of. I am not an expert in intellectual property matters, but I have talked to one or two who are, as we do in this place. I think there may be a problem with this, but I stand to be corrected by my noble friend. For the moment, I beg to move Amendment 3.

[Lord Hope of Craighead (CB)]

My Lords, I cannot claim any expertise in trademarks or their registration, but I think there is force in the point made by the noble Lord, Lord Lansley. The expression “established by use” is slightly vague, whereas the words that the noble Lord would substitute—of it being actively “in use prior to that date”—make the point rather better. I support the amendment, for what it is worth, in the interests of clarity.

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[Lord Lansley (Con)]

I am grateful to all who took part in this very short debate, and in particular to the noble and learned Lord, Lord Hope, and the noble and learned Baroness, Lady Butler-Sloss, for their contributions on the legal aspects.

Unfortunately, I have not had an opportunity to look at the reference my noble friend refers to elsewhere in the GI regulations. That was not an aspect of this to which he referred in his letter of 10 January. He referred to the concept of the tort of passing off as a justification for it. My problem was that putting something in a statute that is justified by reference to a common-law definition seems problematic, since one might be assumed to be trying to create a statutory definition. I did not think the definition existed; I may be proved wrong about that.

I am just hopeful that it is not the case that one use of an unregistered trademark before the date of a GI means that it is established by use. It must be defined somewhere else and I hope that that is what my noble friend is suggesting—that “established by use” in relation to a GI is somewhere codified and defined. That would establish a degree of protection, and I hope we do not subsequently encounter circumstances in which the inclusion of this language causes a problem in relation to those who are responsible for distinguishing between registered and unregistered trademarks.

I remember, and my noble friend will recall from the debate we had in Committee, that we set out to secure GI recognition in the UK-Japan economic partnership agreement. We need to get on with it. Equally, in the UK-Australia deal we set out to secure protection for our GI indications. But it was made clear in the Australia deal that we would do so only in so far as, and to the extent that, the European Union secured protection for its GIs, and I am not sure that we have made the progress there that we should have.

These are very important aspects of our potential trade advantage and, if we are going to maximise our trade benefits, we need our geographical indications to be protected and we need to be using them in export markets. I should declare my registered interest as co-chair of the UK-Japan 21^st Century Group. I will be in Japan at the beginning of next month and I will make it my business to ask about what progress we, and they, are making in protecting our GIs in Japan. For the moment, we thank my noble friend—

[Lord Purvis of Tweed (LD)]

Before the noble Lord sits down, I am unaccustomed to supporting the Minister in these areas, as he and the House are aware, but, having glanced at legislation.gov.uk, regulation 2019/787, regarding the relationship between trademarks and geographical indicators, does indeed have the definition of “established by use”. I am not a lawyer, as I very willingly admit, but if the Government have had the good sense to transpose what we had in the EU legislation into domestic legislation, then that might satisfy the noble Lord.

[Lord Lansley (Con)]

I am grateful to the noble Lord, and it may indeed satisfy me as long as we do not abolish it any time soon. With all those helpful comments from noble Lords, I beg leave to withdraw Amendment 3.

Amendment 3 withdrawn.

Amendment 4

Moved by

--- Later in debate ---

[Lord Hamilton of Epsom (Con)]

My Lords, I received the email from the noble Lord, Lord Alton, trying to persuade me to support the amendment, and I must say that I am very reluctant to do so. The fact is that all trade agreements are a compromise. That is one reason why there is no veto in Parliament over a trade agreement—you would start to unpick the whole thing if Parliament objected to some aspect of a trade agreement —and there is no reason why we should want to change that now.

The other point is that the real prize for the CPTPP would be not the membership of China but the membership of the United States. It is clear that neither country wants to join at the moment, for particular reasons, but the agreement is going to last a very long time, and there may well come a moment when things change in China and the threat of China joining might well force the United States to join in order to keep China out. So we do not want to tie any Government’s hands on this in any way. We have to bear in mind that if the United States was to join the CPTPP, it really would become a massive trading bloc, and that prize would be well worth achieving.

[Lord Lansley (Con)]

My Lords, while I have enormous sympathy with the purpose of the amendment moved by the noble Lord, Lord Alton, he has explained perfectly clearly that the CPTPP members would all have to agree not just that China would join the CPTPP but that a negotiation with China would be entered into. The benchmarks against which that would be measured are laid out in an annexe to the CPTPP, and there is a great distance between where China is today and the benchmarks that would have to be met, so I see no immediate process for that.

The terms of the amendment, in creating a different legal process for the accession of one potential applicant economy as compared with any other applicant economy, represent an unwelcome position for us to have taken. It might be construed as unwelcome in other countries as well; it seems to me that it would set a bad precedent. The question that would be put to the Government is what position we should take as to whether a commission should be established to look at an aspirant economy, and the United Kingdom Government could take a position on that. While I join my noble friend in resisting the amendment, it would be helpful if he could say that there was nothing to stop the Government from potentially laying a Statement under CRaG for that purpose and asking the relevant committees to comment on it.

That would not enable Parliament to veto it—indeed, a veto would be unwelcome at that stage because it would be a decision whether or not to enter into a negotiation—but, as in other cases, the Government would be well advised to take full account of what Parliament might say in relation to any such notification and any such report by the International Agreements Committee here and the Business and Trade Committee in the other place. I wonder whether my noble friend might suggest that, if there were such a potential decision to be made by the UK Government, they could go through that process and it would be perfectly reasonable for them to do so.

[Baroness Lawlor (Con)]

My Lords, I am sympathetic to the amendment moved by the noble Lord, Lord Alton. I approach it from a somewhat different angle, on which he himself touched, which is the use of economic tools to gain hegemony geographically. We are talking about the wide area of influence that China already commands, not just in the Indo-Pacific. Already 20% of Chinese goods are destined for CPTPP countries; 50% of them are intermediate products. Of those countries, Malaysia, Vietnam and Mexico have the highest level of imports from China. When we join, that figure will go up because 13% of our imports come from China.

Whatever the outcome of the decision on this amendment, I urge the Government to consider very carefully some arrangement so that there can be collaboration between Parliament and government on the very important business aim of the UK, which is to prevent economic tools being used against UK interests, including those to which the noble Lord, Lord Alton, referred.

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[Lord Johnson of Lainston (Con)]

I am grateful to the noble Baroness for her point. There is no explicit up/down vote built into the CRaG process; we are aware of that. I am talking to a House that has far more experience of the CRaG process than I do, so we know how the process works. There are multiple ways in which a debate can be brought to the Floor of the House. For reassurance, I will go through this point again. The CRaG process requires that a treaty text and an Explanatory Memorandum be laid before Parliament for 21 sitting days before ratification can take place. Under CRaG, either House can resolve against ratification of a relevant treaty within the 21 sitting days of it being laid before Parliament. The House of Commons can continue indefinitely to resolve against ratification, in effect giving the Commons the power to block ratification.

To some extent, this is important, but it may be academic. As I said, the question is whether a new party to CPTPP can be snuck under the wire. We are very clear that this is not possible. The process is automatically triggered. Aside from that, there are also the reports written by the Trade and Agriculture Commission, and there has to be an impact assessment, and there has to be a significant amount of scrutiny and debate, as there is about the CPTPP Bill today. I am very reassured on the principles and mechanics around whether we have in this House the right level of control and security to ensure that we have control over our own destiny in relation to new parties joining a plurilateral treaty, which is of course completely different from the country-to-country FTAs.

[Lord Lansley (Con)]

I am grateful to my noble friend. As a former Leader of the House in the other place and as a member of the International Agreements Committee, I am pretty clear that, under CRaG, the International Agreements Committee here, and potentially the Business and Trade Committee in another place, might make a report to Parliament that could lead to a debate. That debate could be subject to a take-note Motion, but that would be amendable. If it were sought to be amended in the other place to say that a treaty should not be ratified, the Government could not continue to ratify the treaty if such a vote had taken place in the other House to say that it should not. I think that gives the comfort that the noble Baroness, Lady Hayman, is looking for.

[Lord Johnson of Lainston (Con)]

I am very grateful to my noble friend for that comment. He is absolutely right that the Business and Trade Committee and the IAC are able to request a debate, which, as I said, according to the Grimstone principle, we would always seek to facilitate, given parliamentary time.

I should like to come to a conclusion. I ask the noble Lord to withdraw his amendment. I have made extremely clear, I hope, the rigorous standards that CPTPP applies. This is a plurilateral trading group that wants to have the highest standards of trade among them. That is my first key point. The second is that we have a number of safeguards built into our own processes to ensure that, were another country to join CPTPP—it could be any of the countries applying or future countries over the coming years—there will be a proper process, as has been defined in the CRaG process. I would ask the noble Lord, given the complexities and sensitivities that I believe this amendment would present to our ratification process, to withdraw his amendment.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Lansley Excerpts

Committee stage
Thursday 7th December 2023 Grand Committee

[Lord Lansley (Con)]

My Lords, I will briefly join this debate because I am interested in the question of the mutual recognition of conformity assessment. Earlier this year, the Department for Business and Trade said that it would accept CE markings on a range of products for the foreseeable future—or something like that. That led to a certain amount of confusion, with the medical devices industry wondering whether it extended to medical devices. Of course, it did not extend to that industry; the Department of Health and Social Care has that responsibility. If my memory serves me right, the CE marking is certain to be recognised until 2027.

If my noble friend the Minister were to ask me for something we should aim to achieve in the trade and co-operation agreement review, it would certainly be to extend mutual recognition agreements between us and the European Union so that it recognises the UK conformity assessment and we continue to recognise the CE marking. That would afford enormous benefit to the industry.

This is not a mutual recognition agreement; this is giving the opportunity to conformity assessment bodies in CPTPP countries to apply to UK authorities so that, in effect, they provide themselves with UK conformity assessment on their products for trade, presumably within CPTPP countries and with the United Kingdom. Of course, if you are producing products for which you want a UK conformity assessment, being able to do your work according to the UK standards in your own country may well be a useful advantage. That is why it is in Article 8.6 of the CPTPP agreement.

Therefore, I am not sure that we need to worry about the question of “to what standards”. The answer is in the design of this provision. It is to the standard required for a UK conformity assessment. The bodies in any other country that are accredited for this purpose have to work to the same standards as if they were doing so in the UK, so it is pretty straightforward. However, happily, it affords the opportunity to say that there is a step beyond this, which is mutual recognition. For example, among the CPTPP countries one might anticipate, for example in our relationship with Japan at some point, a move on to mutual recognition of conformity assessment, since in many respects the Government naturally are thinking, “That is the territory that we need to go on”. As we develop trade relations and as we develop free trade agreements, eliminating technical barriers to trade should be one of our principal objectives—and this is one important aspect of that.

[Lord McNicol of West Kilbride (Lab)]

My Lords, the noble Lord, Lord Purvis of Tweed, explained that this is a probing amendment, so I do not have a great deal to add to what he and the noble Lord, Lord Lansley, have said.

I pick up on one point: how do we ensure the conformity of that oversight when the products are coming into the UK? In the sixth group, which I do not think we will get to today, we will look at bringing in a good number of impact assessments and reports. The strongest part of the amendment tabled by the noble Lord, Lord Purvis, is the call for the publishing of a report on the impact of provisions on the treatment of conformity assessment bodies. That will give your Lordships’ House and Parliament the opportunity and oversight to ensure that there is no undercutting of quality and services. However, I am happy to support this probing amendment and look forward to more clarity from the Minister.

--- Later in debate ---

Moved by

[Lord Lansley]

1: Clause 3, page 2, line 7 leave out “wholly or mainly”

[Lord Lansley (Con)]

We come now to Amendment 1, which, strangely enough, is not the first amendment, but there we are. Amendment 1 and Amendments 2, 3, 4, 5, 6 and 7 all go to the same point; it is just that Amendments 2 to 7 are concerned with the schedules that flow from Clause 3.

We have now moved to the question of the Procurement Act. The noble Lord, Lord Purvis of Tweed, is correct that the trade hacks have got together for this one, but there were procurement hacks as well, of which I was one. Some of us have returned; not many, but one or two of us—and I see that the noble Lord, Lord Alton, a procurement hack, is in his place. It is quite amusing really because it is only a matter of a few months back that we were debating the Procurement Bill. Among other things, it created a mechanism by which the Government could designate, under statutory instruments, that additional countries with which we had entered into an international agreement should be added to Schedule 9 to the Procurement Act as treaty state suppliers, and by extension therefore get the benefit of the treaty state supplier provisions under that Act.

However, the Procurement Act, notwithstanding that it passed through Parliament, has not yet been commenced. We are reliably informed that that will not happen until October 2024, whereas under the CPTPP we are looking to achieve ratification before 16 July 2024—and some time earlier than that, I hope. There is a gap between the commencement of the provisions under the CPTPP and our treaty obligations and the point at which the Procurement Act comes into force and those procurement-related obligations are in our domestic legislation.

This legislation fills that gap by doing two things: using the opportunity to amend the Procurement Act when it comes into force by adding CPTPP as an international agreement in Schedule 9, and, further—which is why the other six amendments are linked—changing the public contract regulations in various respects between now and the point at which they are all replaced by the Procurement Act being brought into force.

Just to make life even more entertaining, the Procurement Act repealed the Trade (Australia and New Zealand) Act, which we spent quite a bit time on. I am hoping that the power to bring Australia and New Zealand in was achieved by that Act, and it will be overtaken by the Procurement Act.

We come to procurement. Clause 3(3) adds CPTPP to the list of treaty state suppliers in the Procurement Act. It may be that we have a debate about whether Parliament should approve these things in future, but the fact is that, in future, when we have free trade agreements, we will see regulations brought forward under the Procurement Act to add treaty state suppliers, so this is perhaps the last time that we will do this through primary legislation rather than secondary legislation.

Schedule 2 to the Procurement Act 2023 sets out which are exempted contracts under the Act. Paragraph 24 of Schedule 2 specifies that, among those exemptions, is,

“A contract awarded under a procedure … adopted by an international organisation of which the United Kingdom is a member, and … that is inconsistent in any material respect with the procedure for the award of the contract in accordance with this Act”.


That latter sentence is pretty much the same in all these provisions, but it is helpful for noble Lords to remember the first part, as that is where this legislation will sit.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

My Lords, it is a constant pleasure to debate with such intellectual firepowers as the noble Lords, Lord McNicol and Lord Purvis, and my noble friend Lord Lansley. It is a joy to learn new things, every day, about the opportunities and benefits of free trade, particularly the CPTPP treaty itself.

However, in this instance, the Government are not keen to accept the amendment, for the simple reason that this strikes me as an absolutely eminent clarification of the procurement relationship between a UK procurer covered by the CPTPP legislation and the international procurer who would not be covered by it. It clarifies the point that, if we are in a minority funding position, we have to be in a majority funding position in order to qualify under our own procurement legislation.

Therefore, this does something very sensible: it confirms that point. I am happy to clarify this further with the noble Lord outside this room, but it would be difficult for procuring agents in the UK who were not in control of the funding process to conform to the CPTPP procurement funding processes or our own national processes. That is why this is clarified. Otherwise, if you have a minority position, you do not have control over it—if you are putting in only a small amount of capital, it makes sense for the international body to make the procurement decisions.

Maybe I have missed something, but this strikes me as quite straightforward. I felt that, of all the amendments placed today, what we were doing here seemed to make things easier and clearer, rather than more opaque.

[Lord Lansley (Con)]

I intervene just to pre-empt my subsequent remarks. We are in Committee and may not need to return to this on Report, but it would be jolly useful to run through some case studies to examine how this works. My noble friend might help here, but this relates to whether it is exempted from covered procurement under UK procurement law. That may mean that there is less of a problem, but there is none the less a risk that these are procurements that may happen in the United Kingdom—Pergau dam buying consultant engineering services, for example. We might take that and say, “Here is a big engineering project in a developing country, and the procurement includes consulting engineering services in the United Kingdom. Do we need to know whether that it is wholly or mainly funded?” Maybe we could work through some case studies.

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord for his intervention. The principle here is ensuring that our procurement laws cover our own activities, so it is right to clarify where that is the case. I am happy to write further on this matter. I do not see anything wrong here and, in fact, I suggested to my officials before this debate that we look specifically at an example that could help to illustrate this—one floated earlier, concerning World Bank funding, would be very good to follow up on. We are happy to demonstrate that. However, this seems eminently sensible, so, unless it were felt otherwise, I would be reluctant to give way on this point, which clarifies the issue very well.

[Lord Lansley (Con)]

I thank my noble friend. I sense that the Committee would be happy for us to take this away and look at it. We may or may not need to return to it on Report, but I am grateful to my noble friend for that offer. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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Moved by

[Lord Lansley]

8: Clause 4, page 3, line 13, leave out “established by use” and insert “in use prior to that date”
Member’s explanatory statement
This amendment is to probe whether the concept of “established by use” has meaning under the Trade Marks Act 1994.

[Lord Lansley (Con)]

This is another technical amendment to a technical Bill. It seeks to understand why the language of the Bill is precisely as it is. We are dealing here with geographical indications—GIs—and the circumstances in which a GI conflicts with a trademark.

What is a trademark? A trademark is something that is registered as such under the Trade Marks Act 1994, and it distinguishes the goods or services of one undertaking from those of other undertakings. Interestingly, Section 2 of that Act says:

“A registered trade mark is a property right … No proceedings lie to prevent or recover damages for the infringement of an unregistered trade mark”.


So our starting point is that there are registered trademarks, in which rights lie, and unregistered trademarks do not enjoy that protection.

We are amending what I think is retained EU law—namely, regulation 1151/2012, Article 6 of which says that, in relation to a conflict between a potential designation for a GI and a trademark, the GI should be refused only if,

“in the light of a trade mark’s reputation and renown and the length of time it has been used”,

it

“would be liable to mislead the consumer as to the true identity of the product”.

That is the context of this. If the combination of the GI and the trademark could mislead consumers, you have a problem and should therefore not allow the GI to be so designated. The bit on misleading the consumer has not been carried through, but maybe it is not necessary.

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[Lord Johnson of Lainston (Con)]

As always, I am grateful to noble Lords for their points. Clearly, it is easy to confuse trademarks and geographical indications. With geographical indications, there is a principle of established use, whereas with trademarks, something is either trademarked or it is not. That is why we are comfortable with the language as it sits.

There is no reference in the Trade Marks Act 1994 to the concept of “established by use”, because the concept refers to unregistered trademarks, whereas the Trade Marks Act is concerned principally with protections conferred on registered marks. However, “established by use” has meaning under the law relating to geographical indications.

[Lord Lansley (Con)]

I remain confused because, in Clause 4(3), “established by use” relates to the trademark and not to the GI. I see the point that my noble friend makes, but where is the concept of a trademark established by use?

[Lord Johnson of Lainston (Con)]

I apologise to my noble friend, but that is not how I read it. It is linked to designation—that is, if origin and geographical indication conflict with trademarks. It would be logical that “established by use” is in relation to geographical indications. I am afraid that that is how I have read it. I do not think that there is an inconsistency. As with all things, I am very comfortable having a further look at it, but I think it would be an issue if we took out “established by use” and inserted

“in use prior to that date”,

which could result in applications for GIs being rejected under our amended rule, which is not required under CPTPP.

It is important to note that this authority allows the Secretary of State to restrict the use of a geographical indication if it is likely to cause confusion for any GIs that come in after accession or after this Bill becomes an Act. Clearly, she must have an eye to the UK legislative framework. The provision gives her the power to clarify the geographical indications. I do not believe that I have missed anything, but I am probably about to be corrected.

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord. I hope that he does not feel that I have been tripped up by this. I am very comfortable with what we have drafted. It gives protections in the right way for GIs which are established by use, and it clarifies the difference between those and trademarks. As with all things, it is important that we have a deep discussion about this, so I am very comfortable having further debates about it. We will no doubt return to this matter, because it is important. It is not a political point to make but a technical point to ensure that we are doing it in the right way. As the noble Lord rightly pointed out, GIs are a relatively new concept. At the same time, it makes sense to ensure that our historical GIs which have been in established use are properly protected. We have the opportunity to protect them into the future against other GIs that may cause confusion with commercial intent.

I ask the noble Lord to withdraw his amendment, but, clearly, we are happy to have further discussions and I am sure that my officials will engage on that at the first possible opportunity.

[Lord Lansley (Con)]

I am grateful to my noble friend. I am very happy to proceed on the basis he proposes, but I say that the way it is structured at the moment, “established by use” relates to the trademark, not to the GI, so the concept of a trademark established by use in statute when it is not in the Trade Marks Act seems a potential problem. I leave that thought. We will talk about it more and may need to come back to it, just as we did on the preceding group. I am grateful to my noble friend for his willingness to have a good look at it. I beg leave to withdraw the amendment.

Amendment 8 withdrawn.

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[Lord Foster of Bath (LD)]

My Lords, I will speak very briefly. Like others, I will declare whether I spoke at Second Reading—the answer is that I did. I entirely agree with the Minister’s earlier remarks that we should learn something new every day. When I was a member of the International Agreements Committee, I learned a great deal from some of its members who are present today and I continue to learn from them—not least the noble Lords, Lord Lansley and Lord Kerr, and my noble friend Lord Purvis.

I will pick up a very small point, which has not quite been covered, on rules of origin. As everyone is well aware, the rules of origin chapters in all our free trade agreements are incredibly complicated, as is the way in which different bodies will have to check whether they have been complied with. I notice with great interest that a report was carried out into whether the UK was suitable for membership of the CPTPP, in which CPTPP countries checked out, through a round of questions and discussions, for example, our ability to comply with its rules of origin requirements. Bearing in mind that we already have trade agreements with a number of CPTPP members—Australia, New Zealand and so on—we know that there are details in the agreement on how rules of origin will be checked out. As part of that procedure, there will be a working party on rules of origin between, for instance, New Zealand and us for its trade deal and one between Australia and us for its trade deal. I have been unable to locate details of whether there is to be a similar committee, ad hoc group or working party that will look at compliance with rules of origin. Can the Minister tell us whether that is the case?

The ultimate arbiter of whether rules of origin have been complied with will be the customs organisations in the relevant member countries. They include our customs services, which will be required to make decisions about whether to investigate particular cases in relation to compliance with rules of origin. Given the possibility that there can be goods coming from, say, Australia to the UK using the Australia free trade agreement or the CPTPP arrangements, with a slightly different rules of origin arrangement, as my noble friend pointed out, this is clearly a very complex issue for the customs authorities. Can the Minister give us an absolute assurance that appropriate support, finances, additional personnel and training are being provided to our customs services to enable them to carry out this difficult task, particularly when other member countries have had time to interrogate whether we are up to scratch but we have not yet had an opportunity to check whether the other member countries are up to scratch?

[Lord Lansley (Con)]

I take this opportunity to remind noble Lords of my registered interest as the UK co-chair of the UK-Japan 21st Century Group, in so far as Japan is a member of the CPTPP—and, as my noble friend Lord Trenchard said, not only a member but a leading advocate of UK membership, for which we are very grateful.

I am reminded by the opening speech of the noble Lord, Lord Purvis of Tweed, on his amendment, that, in the past, when we have been looking at the free trade agreements into which we have entered with Australia and Japan, in both cases we anticipated that, in time, we would enjoy the protection of our GIs in those countries. As the noble Lord, Lord Purvis, said, where Australia is concerned, that was contingent upon the Australia-EU agreement. As far as I can tell, although the Australian Government have undertaken their own study, there is no such agreement, so presumably there has been no action.

My questions are these. First, are we making any moves with our Australian friends under our free trade agreement with them to proceed, notwithstanding the absence of an EU agreement with Australia? It seems very unwise and unhelpful for us to be tied to the EU agreement. Secondly, Japan was very willing to consider it, but it was going to be considered under its procedures and that was going to take some time. Are we making progress? It would be great to know that we are. I think there is a willing and important market for UK goods with geographical indications and so on in Japan, even where Scotch whisky is concerned. I think this is the case in many other CPTPP countries, so it is quite important that we get that GI protection. I hope my noble friend can say something, if not now then at a later stage, about the progress we are making with Japan and Australia on getting our GIs recognised there.

[Viscount Trenchard (Con)]

My Lords, I entirely endorse what my noble friend Lord Lansley has just said. There is considerable room for confusion between trademarks and geographic indications, a relatively new concept, especially the application of restrictions or protections for geographic indications in countries whose language is not only not English but is far away from any language used in the European Union. Consider, for example, suits. A common word for a suit of clothes in Japanese is “sebiro”, which comes from “Savile Row”. Is that not a kind of geographic indication? I think there is scope for considerable confusion there.

The other amendment in this group, Amendment 34, was ably spoken to by the noble Lord, Lord Davies of Brixton. I worry about giving additional protection to the precautionary principle. Putting too much store by the precautionary principle has led us to be too averse to risk in many aspects of our national life and it is likely to lead to restrictions on the economic growth that we so badly need. Our accession to CPTPP is an opportunity to enhance that growth by developing more trade with the fastest-growing part of the world, including countries which place less store on the precautionary principle. I worry that, if we try to export the unduly cumbersome regulatory regime that we have had until now into countries that are growing faster and which have a more proportionate approach to the subject, it will cause, at best, restrictions on us taking up the opportunities that are available.

Lastly, I entirely agree with the good point made by the noble Lord, Lord Kerr of Kinlochard, that our accession may not take effect until a year or more after the passage of the Act, and so the question of the timing of the report being made to Parliament is a very appropriate one.

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Moved by

[Lord Lansley]

9: Clause 5, page 6, line 6, at end insert—
“(3A) In section 206, after subsection (4) insert—“(4A) Prior to His Majesty making an order in Council under subsection (4)(b) the Secretary of State must consult those whom they consider appropriate including representatives of United Kingdom rightsholders.”(3B) In section 208 (countries enjoying reciprocal protection), after subsection (1) insert—“(1A) Prior to His Majesty making an Order in Council under this section, the Secretary of State must consult those whom they consider appropriate including representatives of United Kingdom rightsholders.””Member's explanatory statement
This amendment would require consultation to take place regarding reciprocal protection for United Kingdom performers in a qualifying country before is it designated as such.

[Lord Lansley (Con)]

My Lords, we come now to the question of performers’ rights. I will not dwell at length on the purposes of Clause 5 but merely focus on the processes that it puts in place in relation to the definition of a qualifying country. There is a central issue here about the availability of the protection of rights holders and performers’ rights in the United Kingdom being part of a reciprocal process for the protection of UK performers in other countries. I am just sweeping the ground ahead of the noble Lord, Lord Foster of Bath, who may explain a bit more—or he may not, it is up to him.

--- Later in debate ---

[Lord Alton of Liverpool (CB)]

Can the noble Lord clarify that he would always want that done under the affirmative procedure so that there could be a debate in the House on secondary legislation? I agree with him on the principle that we do not want bits and pieces of primary legislation, but there needs to be some ability to discuss secondary legislation, where appropriate.

[Lord Lansley (Con)]

Some of them are under negative procedures. It is a judgment, not least in this House as our Delegated Powers Committee will advise us on what judgments to make. I would not endorse a blanket affirmative procedure; it must be based on the relative significance of the decisions to be made. Just because something is laid under the negative procedure does not mean that it cannot be prayed against or objected to, but that must rest with the committee.

There is nothing in the current legislation requiring any consultation with the representatives of rights holders in this country before the definition of a qualifying country is extended. I think it would be right for that to be the case; I suspect the representatives of rights holders would welcome it. In giving the Government this wider power, this is a good moment to add this carefully constructed consultation requirement before they bring an order forward. I beg to move.

[Lord Foster of Bath (LD)]

My Lords, the noble Lord, Lord Lansley, suggests that I should go into great detail explaining the whole issue of performers’ rights. I will disappoint him and other Members of the Committee because I am sure that those with an interest in it know that, basically, it is about performers and, in some cases, record label owners and so on receiving appropriate payment for their performances that take place in another country. It seems absolute common sense that if we do a deal with country X, we arrange it so that if our performers perform there we get payment and vice versa. Reciprocity seems pretty fundamental.

I have produced an amendment which says that in this legislation we ought simply to say that the reciprocal arrangements are with CPTPP member countries. Having raised real concerns about our failure during negotiations to make any progress on a number of intellectual property issues or to provide some of the support that our creative industries were seeking, I nevertheless welcome that this is part of the treaty. However, the question remains whether what I am seeking—a simple reciprocity agreement—is happening. The truth is that it is not.

I am enormously grateful to the Minister, who, after I raised these issues in basic terms as I have just done, wrote to me to explain the situation. I hope he will not mind but, to save him repeating it in his speech, I will read a little of what he wrote to me:

“The changes the Bill makes are necessary for the UK to accede to CPTPP and will expand the basis on which foreign performers can qualify for rights in UK law. In addition to the Bill, the Government will be making accompanying secondary legislation under existing powers”


and various other things to make sure that it all happens. That is fine, but he went on:

“The changes in the Bill will apply not only to performers from CPTPP countries but also those with a connection to other countries that are party to relevant treaties relating to performers’ rights to which the UK is also party. This is necessary to comply with the UK’s national treatment and most favoured nation obligations in those treaties”.


He is saying that if we do something with CPTPP countries, we would have to take into account our other treaty obligations and the impact it would have elsewhere. He adds:

“Beyond these changes, however, the UK has some flexibility under its international obligations around how it provides certain rights to foreign nationals, in particular the right of performers to receive equitable remuneration (i.e. a share of the royalties) when their performances are broadcast or played in public”.


In other words, what we have in the legislation at the moment, as I understand it, are changes that mean that we take account of what is going to happen in relation to reciprocal arrangements with CPTPP member countries as well as a stack of other changes that will take place, affecting our relationship with other countries, with some possible variation in how we deal with them. I absolutely understand that it would make life very easy for the Government to sweep these things up all at once, but it leaves us totally in the dark on exactly who we are dealing with and what the implications are, particularly for the music industry. The music industry is extremely concerned about this. It has told me that it has had discussions with the Minister and officials, that it got the information about all this at very short notice, and that it was unable to make any progress with getting the Minister to see things differently.

Its argument, and that which I would make—it is exactly the same as that made by the noble Lord, Lord Lansley—is as follows. If consequential changes are necessary in relation to countries beyond those that are members of the CPTPP, there is plenty of time between now and accession—we debated this earlier and all accept it is nine months away or possibly more—for the IPO to consult on the other issues referred to in the Minister’s letter and for us then to have an opportunity to debate their implications before they are brought in. The legislative arrangements to do that are very clear.

I am deeply concerned that these proposals are coming from the IPO, which in many respects does very good work but sometimes runs ahead of things, as it did with its proposals for text and data mining, for example. They came as a huge shock, were massively opposed and were eventually withdrawn and have not gone ahead—I am grateful to the Government for doing that. I do not want a repetition of that, so I hope it is possible for the Minister to accept an amendment that says, “For the time being, let’s concentrate on reciprocal arrangements with CPTPP member countries but, separately, have consultation on all the other things that the Minister wants to achieve so we can have an opportunity after the consultation to know what the impact will be, and then we can make a decision”.

I want to see that information before I decide whether those changes are right. The Minister may already have seen some information, because the one bit of his letter that I did not read out suggests that the department has already come to a conclusion. It states, at the end:

“As such, we expect the direct impacts of the measures … on UK parties to be small”.


I do not know whether that is true. I do not know what the implications are—nor, I think, do other Members of the Committee. The Minister may have a response that reassures me that we can go ahead in the way that the Government propose, but, given the lack of consultation we have had to date on those other issues, it would be helpful to proceed in the ways that either I or the noble Lord, Lord Lansley, have proposed—both achieve the same end.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord for his understanding of the complexity of this. I hope I have been able to explain to noble Lords the different principles in what we currently look to in our copyright Act and what we are signing up to in the CPTPP. It is certainly navigable. Regardless of accession to the CPTPP, it is already complicated, and there are specific agencies to make sure that these royalties are properly collected and stored.

I am reluctant to accept these amendments today and ask noble Lords who have proposed them to withdraw them, but I am very comfortable with having further discussions. It would be helpful for us to have a good discussion with the IPO so that people feel comfortable that the consultation is going in the right direction and that the right levels of input are being prescribed. The tertiary changes that we may wish to make to protect our music industry and artists would not necessarily be linked to this trade Bill, but they are important.

I am glad that I have managed to highlight and explain the new approach on who is eligible for these resale rights, because I think in the first instance it was assumed that everyone would be. That is not the case. It is important to differentiate that. We are signing up to a new approach in the CPTPP and this clearly forms part of our treaty obligations. It is very relevant that we debate that in some depth.

The noble Lord, Lord McNicol, raised a very good point in his amendment. I hope I can reassure him that this is not retrospective, but it would make sense for performances undertaken before the date to qualify. However, you would not be paid royalties for qualifying performances that were broadcast before the date. Otherwise, everyone would claim for past performances over the 70 years that IP goes back to—that would be totally impractical and inappropriate and is not what we are suggesting at all. Our legal advice is clear that the cut-off date is the day on which this comes into force. Anything following that point would qualify. Historic performances are clearly part of the IP record, but you would not receive royalties for anything from before that point. I hope that reassures noble Lords.

I hope I have covered the points raised. I am very grateful for noble Lords’ input on this important, sensitive and complex area. As is often the case in dealing with noble Lords in this Room, we are talking not about party-political or even political issues but issues of detail that have great ramifications. I see that the noble Lord, Lord Lansley, is keen to intervene as I may not have covered his points. The order of this is that the first statutory instrument gives the Secretary of State the power to make the changes, after which there is the consultation, and then the second instrument makes the changes. I hope that helps answer his initial point on the order of activity.

[Lord Lansley (Con)]

My noble friend has referred very well to all the issues relating to the definition of a qualifying performance, but my amendment relates narrowly and specifically not to subsection (2) but to subsection (3). It concerns the question of a qualifying country not simply in relation to the CPTPP and takes a power to make Orders in Council to extend the definition of “qualifying country” in future—not just to CPTPP countries but, potentially, beyond. My noble friend says that the Secretary of State can publish a draft and then consult on it. They can do that, but there is nothing in the legislation to say that they should. I would like to be sure. If my noble friend is saying that such a consultation must take place, I am not sure where it is clear that it must.

[Lord Johnson of Lainston (Con)]

We have not legislated for a consultation—there is no mention of that in the Bill—but we made such an undertaking at Second Reading. It is part of the process and we are very aware of the need to consult.

[Lord Lansley (Con)]

Is that an undertaking always to consult before making an order under Sections 206 or 208 of the Copyright, Designs and Patents Act?

[Lord Johnson of Lainston (Con)]

No, I am sorry—it is not an undertaking to consult on the artist performance rights every time changes may be made to the countries that become applicable.

[Lord Lansley (Con)]

Just to be clear, what my noble friend has said may satisfy the noble Lord, Lord Foster of Bath—is that “Bath” with a short or a long “a”?

[Lord Foster of Bath (LD)]

It is “Bath” with a short “a”.

[Lord Lansley (Con)]

Try to read that one in Hansard. However, my noble friend has not given me the assurance that I am looking for in the changes to the definition of a qualifying country.

--- Later in debate ---

[Lord Johnson of Lainston (Con)]

The noble Lord, Lord McNicol, would like me to make off-the-cuff commitments on behalf of the Government. It would be only logical to assume that there would be a degree of consultation in the same way that we are effecting one in this instance but, since I cannot give a firm commitment, I am very comfortable to come back to my noble friend between now and Report.

[Lord Lansley (Con)]

That reassurance affords me the opportunity to beg leave to withdraw my amendment.

Amendment 9 withdrawn.

Digital Markets, Competition and Consumers Bill

Lord Lansley Excerpts

2nd reading
Tuesday 5th December 2023 Lords Chamber

[Lord Lansley (Con)]

My Lords, I am very glad to follow the noble Lord, who made another of the many very valuable contributions we have listened to already in this debate. I will try not to repeat some of the important points that have already been made, which we will have an opportunity to consider in Committee in detail.

From my point of view, it is an illustration of the nature of how competition has changed in our markets. I was on the Standing Committee in another place of the Competition Act 1998, on the Standing Committee of the Enterprise Act 2002, and the Standing Committee of the Communications Act 2003, many of which are aspects of the legislation that we will be amending in this. If we had understood then the extent to which digitisation and digital markets had led to concentration of market power in relatively few hands, we would have thought that the competition regime we were establishing would have intervened to stop it.

Of course, it has not. I will come back to this in a moment, but we look at the Furman review, reporting in I think 2018 that there had previously been 400 acquisitions of nascent tech companies without any effective intervention by competition authorities anywhere. Even today, we are looking back very recently at the Competition and Markets Authority’s intervention in Microsoft’s acquisition of Activision Blizzard, which the noble Lord, Lord Fox, rightly referenced and, I think, praised its actions. But, of course, it affects only a small part of Activision Blizzard’s market penetration. It may be important in the long run—cloud computing may grow significantly—but it is not that significant yet.

It is important for us to recall that we are dealing with very large tech companies that are essentially American. The FTC tried to stop it and failed. My noble friend Lord Tyrie—he is not in his place at the moment, but will no doubt read this—was absolutely right; it is not simply the legal framework we create for our competition authorities but the manner in which the competition authorities deploy those powers that is absolutely vital. Of course, there is the consequential question of whether those competition authorities are properly accountable, and not simply whether they are doing their job well but whether we support them to do their job well—that they feel confident that the political class, as it were, will back them up.

At the time, we would have thought that the ex post interventions would have been sufficient. In the last few years, we have now realised that it will require a combination of ex ante rules and ex post interventions, and the Bill reflects that. With others, I was quite hopeful that we would make faster progress on the introduction of legislation following the Furman review. We are now over four and a half years on from the publication of that, but credit goes to our present Prime Minister for pushing things forward since he came to office. In this respect, he is a contrast to his immediate predecessor, who one might have imagined was pro competition, but who did not actually proceed apace with pro-competition legislation. Be that as it may, the Prime Minister is doing what is right to be done.

From my point of view, there are clearly many benefits that will be derived if this legislation is effective in diminishing the opportunity for self-preferencing by large digital players. I did think—this was a very good point made by, not least, the noble Lord, Lord Fox, and my noble friend Lord Vaizey—that we must ensure fair return to intellectual property. That is linked to making sure there is transparency and choice for consumers; the relationship between those two is really important.

I will be interested to see, as we proceed, the relationship between this legislation and the European Union’s. It is not a direct relationship, but we might do a bit of “compare and contrast”, not least in relation to definitions. The noble Lord, Lord Knight of Weymouth, was talking about that. The approaches are a little different, but some of the definitions, and how they are reached, will be really important. When we look at turnover, the number of consumers and users of digital technologies, the extent to which individual players or undertakings exercise power and control over those users’ access to digital markets, and indeed the extent to which they have control over business users of those markets, the definitions are already out there in the implementing regulations of the Digital Markets Act from the European Commission. So we ourselves should look very carefully at that.

I share, and will not repeat, the points that have been made very well, not least by my noble friend Lady Stowell of Beeston, about ensuring that we maintain the clarity of the appeals standard. As far as I understand it, a JR standard includes a test of proportionality. For it to be further added in the legislation in the way that is currently proposed—I think it is in Clause 46—runs the risk that the courts will say: “Well, it must have been added for a further reason, for an additional and distinct test other than we would have understood to be normal in JR”.

The same applies to the point made about indispensability. I suggest that my noble friend looks very hard at whether the countervailing benefits exemption serves any valuable purpose or opens a very dangerous door to long litigation. We know that some big companies such as Apple have $1 billion available for their legal costs in a year; we know that it is a cost of doing business; we know they have succeeded on several occasions in delaying interventions by other competition authorities for years through legal challenges. We have to be very aware that we do not create exactly that opportunity.

I will finish with a final point on killer acquisitions. The Bill includes a requirement for notification of mergers by undertakings with significant market status. However, the Furman review went on to give a recommendation that there needed to be a specific test of

“whether a merger is expected to be on balance beneficial or harmful, taking into account the scale of impacts as well as their likelihood”.

That test is not included in the merger regime in relation to these markets in the way that the Furman review recommended. I hope that, in the course of our scrutiny of the Bill, we might look at whether we should indeed come to look at that forward-looking review of mergers, taking into account that balance; giving, as a consequence of changing the legislative framework for merger control, an opportunity for competition authorities to intervene more regularly and effectively; and ensuring that there is more opportunity for entry into these competitive markets, because these markets cannot be expected to become as competitive as we wish and need them to be without real opportunities for market entry by new entrants.

Notwithstanding that, I very much support the Bill. I look forward to what I think will be a very non-partisan approach across the House to try to ensure that the Bill achieves the purposes which the Government clearly intend and Parliament intends that it should.

Electronic Trade Documents Act 2023

Lord Lansley Excerpts

Thursday 14th September 2023 Lords Chamber

[Lord Offord of Garvel (Con)]

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.

[Lord Lansley (Con)]

My Lords, in reading the Act, my noble friend will have realised that reliable systems for authenticating electric trade documents is one of the central operational issues. Will the Government therefore give their full support to the International Chamber of Commerce, which I am glad he mentioned, as it did so much good work in helping to bring this Act forward? Will they also try to put together assurance for what those reliable systems look like that will help traders to trade confidently?

[Lord Offord of Garvel (Con)]

I thank my noble friend for that. I can report that, as the Minister in this area, I have chaired a forum with the International Chamber of Commerce where we are at the forefront of this initiative. By the UK leading the way here, with G7 and others following through, this will become a standard mechanism of trade and will be followed by the new operating border and the single trade window. We will therefore be moving rapidly to 2025 and a situation where trade can be expedited across international markets to the great benefit of our economy.