Data (Use and Access) Bill [HL]

Lord Lucas Excerpts

Committee stage
Wednesday 18th December 2024 Grand Committee

[Lord Kirkhope of Harrogate (Con)]

My Lords, I make a brief intervention. I am not against these amendments —they are very useful in the context of the Bill. However, I am reflecting on the fact that, when we drafted GDPR, we took a six-year process and failed in the course of doing so to really accommodate AI, which keeps popping up every so often in this Bill. Every part of every amendment seems to have a new subsection referring to automative decisions or to AI generally.

Obviously, we are moving on to have legislation in due course on AI and I am sure that a number of pieces of legislation, including no doubt this one, will be able to be used as part of our overall package when we deal with the regulation of AI. However, although it is true that the UK GDPR gives, in theory, a higher standard of protection for children, it is important to consider that, in the context of AI, the protections that we need to have are going to have to be much greater—we know that. But if there is going to be a code of practice for children and educational areas, we need also to consider vulnerable and disabled people and other categories of people who are equally entitled to have, and particularly with regard to the AI elements need to have, some help. That is going to be very difficult. Most adults whom I know know less about AI than do children approaching the age of 18, who are much more knowledgeable. They are also more knowledgeable of the restrictions that will have to be put in place than are adults, who appear to be completely at sea and not even understanding what AI is about.

I make a precautionary point. We should be very careful, while we have AI dotted all the way through this, that when we specify a particular element—in this case, for children—we must be aware of the need to have protection in place for other groups, particularly in the context of this Bill and, indeed, future legislation.

[Lord Lucas (Con)]

My Lords, I very much support the thrust of these amendments and what the noble Lord, Lord Knight, said in support of and in addition to them. I declare an interest as a current user of the national pupil database.

The proper codification of safeguards would be a huge help. As the noble Baroness, Lady Kidron, said, it would give us a foundation on which to build. I hope that, if they are going to go in this direction, the Government will take an immediate opportunity to do so because what we have here, albeit much more disorganised, is a data resource equivalent to what we have for the National Health Service. If we used all the data on children that these systems generate, we would find it much easier to know what works and in what circumstances, as well as how to keep improving our education system.

The fact that this data is tucked away in little silos—it is not shared and is not something that can be used on a national basis—is a great pity. If we have a national code as to how this data is handled, we enable something like the use of educational data in the way that the NHS proposes to use health data. Safeguards are needed on that level but the Government have a huge opportunity; I very much hope that it is one they will take.

[Viscount Camrose (Con)]

I start by thanking all noble Lords who spoke; I enjoyed the vivid examples that were shared by so many of them. I particularly enjoyed the comment from the noble Lord, Lord Russell, about the huge gulf in difference between guidance, of which there is far too much, and a code that actually drives matters forward.

I will speak much more briefly because this ground has been well covered already. Both the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Kidron, seek to introduce codes of practice to protect the data of children in education services. Amendment 138 in the name of the noble Lord seeks to introduce a code on processing personal data in education. This includes consultation for the creation of such a code—a highly important element because the safety of this data, as well as its eventual usage, is of course paramount. Amendment 141 in the name of the noble Baroness, Lady Kidron, also seeks to set out a code of practice to provide heightened protections for children in education.

Those amendments are absolutely right to include consultation. It is a particularly important area of legislation. It is important that it does not restrict what schools can do with their data in order to improve the quality and productivity of their work. I was very appreciative of the words of the noble Lord, Lord Knight, when he sketched out some of the possibilities of what becomes educationally possible when these techs are wisely and safely used. With individual schools often responsible for the selection of technologies and their procurement, the landscape is—at the risk of understatement —often more complex than we would wish.

Alongside that, the importance of the AI Safety Institute’s role in consultation cannot be overstated. The way in which tech and AI have developed in recent years means that its expertise on how safely to provide AI to this particularly vulnerable group is invaluable.

I very much welcome the emphasis that these amendments place on protecting children’s data, particularly in the realm of education services. Schools are a safe place. That safety being jeopardised by the rapid evolution of technology that the law cannot keep pace with would, I think we can all agree, be unthinkable. As such, I hope that the Government will give careful consideration to the points raised as we move on to Report.

--- Later in debate ---

[Lord Hampton (CB)]

My Lords, I support Amendments 204, 205 and 206 in the names of my noble friends Lady Kidron and Lord Freyberg, and of the noble Lords, Lord Stevenson and Lord Clement-Jones, in what rapidly seems to be becoming the Cross-Bench creative club.

I spent 25 years as a professional photographer in London from the late 1980s. When I started, retouchers would retouch negatives and slides by hand, charging £500 an hour. Photoshop stopped that. Professional film labs such as Joe’s Basement and Metro would work 24 hours a day. Snappy Snaps and similar catered for the amateur market. Digital cameras stopped that. Many companies provided art prints, laminating and sundry items for professional portfolios. PDFs and websites stopped that. Many different forms of photography, particularly travel photography, were taken away when picture libraries cornered the market and drove down commissions to unsustainable levels. There were hundreds if not thousands of professional photographers in the country. The smartphone has virtually stopped that.

All these changes were evolution and the result of a world becoming more digitised, but AI web crawlers are different, illegally scraping images without consent or payment then potentially killing the trade of the victim by setting up in competition. This is a parasite, but not in the true sense, because a parasite is careful to keep its victims alive.

[Lord Lucas (Con)]

My Lords, I very much support these amendments. I declare an interest as an owner of written copyright in the Good Schools Guide and as a father of an illustrator. In both contexts, it is very important that we get intellectual property right, as I think the Government recognised in what they put out yesterday. However, I share the scepticism of those who have spoken as to whether the Government’s ideas can be made to work.

It is really important that we get this straight. For those of us operating at the small end of the scale, IP is under continual threat from established media. I write maybe 10 or a dozen letters a year to large media outfits reminding them of the borders, the latest to the Catholic Herald—it appears not even the 10 commandments have force on them. But what AI can do is a huge measure more difficult to deal with. I can absolutely see, by talking to Copilot, that it has gone through my paywall and absorbed the contents of the Good Schools Guide, but who am I supposed to go at for this? Who has actually done the trespassing? Who is responsible for it? Where is the ownership? It is difficult to enforce copyright, even by writing a polite letter to someone saying, “Please don’t do this”. The Government appear to propose a system of polite letters saying, “Oh dear, it looks as if you might have borrowed my copyright. Please, can you give it back?”

This is not practically enforceable, and it will not result in people who care about IP locating their businesses here. Quite clearly, we do not have ownership of the big AI systems, and it is unlikely that we will have ownership of them—all that will be overseas. What we can do is create IP. If we produce a system where we do not defend the IP that we produce, then fairly rapidly, those IP creators who are capable of being mobile will go elsewhere to places that will defend their IP. It is something that a Government who are interested in growth really ought to be interested in defending. I hope that we will see some real progress in the course of the Bill going through the House.

[Lord Clement-Jones (LD)]

My Lords, I declare my AI interests as set out in the register. I will speak in support of Amendments 204, 205 and 206, which have been spoken to so inspiringly by the noble Baroness, Lady Kidron, and so well by the noble Lords, Lord Freyberg, Lord Lucas and Lord Hampton, the noble Earl, Lord Clancarty, and the noble Viscount, Lord Colville. Each demonstrated different facets of the issue.

I co-chair the All-Party Group on AI and chaired the AI Select Committee a few years ago. I wrote a book earlier this year on AI regulation, which had a namecheck from the noble Baroness, Lady Jones, at Question Time, which I was very grateful for. Before that, I had a career as an IP lawyer, defending copyright and creativity, and in this House, I have been my party’s creative industries spokesperson. The question of IP and the training of generative AI models is a key issue for me.

This is the case not just in the UK but around the world. Getty and the New York Times are suing in the United States, as are many writers, artists and musicians. It was at the root of the Hollywood actors’ and writers’ strikes last year. It is one thing to use the tech—many of us are AI enthusiasts—but it is another to be at the mercy of it.

Close to home, the FT has pointed out, using the index published by the creator of an unlicensed dataset called Books3, published online, that it is possible to identify that over 85 books written by 33 Members of the House of Lords have been pirated to train AI models from household names, such as Meta, Microsoft and Bloomberg. Although it is absolutely clear that we know that the use of copyrighted works to train AI models is contrary to UK copyright law, the laws around the transparency of these activities have not caught up. As we have heard, as well as using pirated e-books in their training data, AI developers scrape the internet for valuable professional journalism and other media, in breach of both the terms of service of websites and copyright law, to train commercial AI models. At present, developers can do this without declaring their identity, or they may use IP scraped to appear in a search index for the completely different commercial purpose of training AI models.

How can rights owners opt out of something that they do not know about? AI developers will often scrape websites or access other pirated material before they launch an LLM in public. This means that there is no way for IP owners to opt out of their material being taken before its inclusion in these models. Once used to train these models, the commercial value, as we have heard, has already been extracted from IP scraped without permission, with no way to delete data from these models.

The next wave of AI models responds to user queries by browsing the web to extract valuable news and information from professional news websites. This is known as retrieval-augmented generation—RAG. Without payment for extracting this commercial value, AI agents built by companies such as Perplexity, Google and Meta will, in effect, free-ride on the professional hard work of journalists, authors and creators. At present, such crawlers are hard to block. There is no market failure; there are well-established licensing solutions. There is no uncertainty around the existing law; the UK is absolutely clear that commercial organisations, including gen AI developers, must license the data that they use to train their large language models.

Here, as the Government’s intentions become clearer, the political, business and creative temperature is rising. Just this week, we have seen the creation of a new campaign, the Creative Rights in AI Coalition—CRAIC —across the creative and news industries and, recently, Ed Newton-Rex reached more than 30,000 signatories from among creators and creative organisations.

--- Later in debate ---

[Lord Lucas (Con)]

My Lords, having a system such as this would really focus the public sector on how we can generate more datasets. As I said earlier, education is an obvious one, but so is mobile phone data. All these companies have their licences. If a condition of the licence was that the data on how people move around the UK became a public asset, that would be hugely beneficial to policy formation. If we really understood how, why and when people move, we would make much better decisions. We could save ourselves huge amounts of money. We really ought to have this as a deep focus of government policy.

[Lord Clement-Jones (LD)]

My Lords, I have far too little time to do justice to this subject. We on these Benches welcome this amendment. It is entirely consistent with the sovereign health fund proposed by Future Care Capital and, indeed, with the proposals from the Tony Blair Institute for Global Change on a similar concept called the national data trust. Indeed, this concept formed part of our Liberal Democrat manifesto at the last general election, so of course I support the amendment.

It would be very useful to hear more about the national data library, including on its purpose and operation, as the noble Baroness, Lady Kidron, said. I entirely agree with her that there is a great need for a sovereign cloud service or services. Indeed, the inability to guarantee that data on the cloud is held in this country is a real issue that has not yet been properly addressed.

--- Later in debate ---

Moved by

[Lord Lucas (Con)]

211F: After Clause 132, insert the following new Clause—
“Local Environmental Records Centres (“LERCs”)(1) Any planning application involving biodiversity net gain must include a data search report from the relevant Local Environmental Records Centre (LERC), and all data from biodiversity surveys conducted in connection with the application must be contributed free of charge to the LERC in record-centre-ready format.(2) All government departments and governmental organisations, local and national, that collect biodiversity data for whatever reason, must contribute it free of charge to the relevant LERCs in record-centre-ready format, and must include relevant LERC data in formulating policy and operational plans.”Member’s explanatory statement
This amendment ensures that all the biodiversity data collected by or in connection with government is collected in Local Environmental Records Centres, so records are as good as possible, and that that data is then used by or in connection with government so that data is put to the best possible use.

[Lord Lucas (Con)]

My Lords, environmental data, specifically such things as biodiversity data, is a key component to getting policy in this area right. To do so, we need to make sure that all the good data we are generating around the UK gets into our storage system, and that the best possible and most complete data is used whenever we make decisions.

We currently run that through a system of local environmental records centres that are independent and not for profit. Since that is the system we have, it ought to be run right. At the moment, we are failing to capture a lot of quality data because the data is not coming in from the planning system, or from other similar functions, in the way that it should. We are not consistently using that data in planning as we should. Natural England, which ought to be intimately linked into this system, has stepped away from it for budgetary reasons. The environment is important to us. If the Government are serious about that, we have to get our data collection and use system right. I beg to move.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the noble Lord, Lord Lucas, for his Amendment 211F. I absolutely agree that local environmental records centres provide an important service. I reassure noble Lords that the Government’s digital planning programme is developing data standards and tools to increase the availability, accessibility and usability of planning data. This will transform people’s experience of planning and housing, including through local environmental records centres. On that basis, I must ask the noble Lord whether he is prepared to withdraw his amendment.

[Lord Lucas (Con)]

My Lords, I am grateful for that extensive answer from the Minister. If I have anything that I hope that she might add, I will write to her afterwards.

My heart is always in the cause of making sure that the Government get their business done on time every time, and that we finish Committee stages when they ask, as doubtless they will discover with some of the other Bills they have in this Session. For now, I beg leave to withdraw my amendment.

Amendment 211F withdrawn.

Data (Use and Access) Bill [HL]

Lord Lucas Excerpts

Committee stage
Monday 16th December 2024 Grand Committee

[Baroness Harding of Winscombe (Con)]

My Lords, I was in such a hurry to apologise just now for missing Second Reading that I forgot to declare my interests and remind the Committee of my technology and, with regard to this group, charitable interests as set out in the register.

I shall speak to Amendments 95, 96, 98, 101, 102 and 104 in my name and those of the noble Lords, Lord Clement-Jones and Lord Stevenson of Balmacara, and my noble friend Lord Black of Brentwood, and Amendments 103 and 106 in my name and those of the noble Lords, Lord Clement-Jones and Lord Stevenson. I also support Amendment 162 in the name of the noble Lord, Lord Clement-Jones. I will speak only on the marketing amendments in my name and leave the noble Lord, Lord Clement-Jones, to do, I am sure, great justice to the charitable soft opt-in.

These amendments are nothing like as philosophical and emotive as the last amendment on children and AI. They aim to address a practical issue that we debated in the late spring on the Data Protection and Digital Information Bill. I will not rehearse the arguments that we made, not least because the Minister was the co-signatory of those amendments, so I know she is well versed in them.

Instead, I shall update the Committee on what has happened since then and draw noble Lords’ attention to a couple of the issues that are very real and present now. It is strange that all Governments seem reluctant to restrict the new technology companies’ use of our data but extremely keen to get into the micro detail of restricting older forms of our using data that we have all got quite used to.

That is very much the case for the open electoral register. Some 63% of people opt out of being marketed at, because they have put their name as such on the electoral register. This is a well known and well understood use of personal data. Yet, because of the tribunal ruling, it is increasingly the case that companies cannot use the open electoral register and target the 37% of people who have said that they are quite happy to receive marketing unless the company lets every single one of those users know that they are about to market to them. The danger is that we create a new cookie problem—a physical cookie problem—where, if you want to use a data source that has been commonplace for 40 years, you have to send some marketing to tell people that you are about to use it. That of course means that you will not do so, which means that you reduce the data available to a lot of small and medium-sized businesses to market their products and hand them straight to the very big tech companies, which are really happy to scrape our data all over the place.

This is a strange one, where I find myself arguing that we should just allow something that is not broken not to need to be fixed. I appreciate that the Minister will probably tell us that the wording in these amendments is not appropriate. As I said earlier in the year—in April, in the previous incarnation—I very much hope that if the wording is incorrect we could, between Committee and Report, have a discussion and agree on some wording that achieves what seems just practical common sense.

The tribunal ruling that created this problem recognised that it was causing a problem. It stated that it accepted that the loophole it created would allow one company, Experian, a sizeable competitive advantage. It is a slightly perverse one: it means that it has to let only 5 million people know that it might be about to use the open electoral register, while its competitors have to let 22 million people know. That just does not pass the common-sense test of practical use of data. Given the prior support that the Minister has shown for this issue, I very much hope that we can resolve it between Committee and Report. I beg to move.

[Lord Lucas (Con)]

My Lords, I have a couple of amendments in this group, Amendments 158 and 161. Amendment 158 is largely self-evident; it tries to make sure that, where there is a legal requirement to communicate, that communication is not obstructed by the Bill. I would say much the same of Amendment 161; that, again, it is obvious that there ought to be easy communication where a person’s pension is concerned and the Bill should not obstruct it. I am not saying that these are the only ways to achieve these things, but they should be achieved.

I declare an interest on Amendment 160, in that I control the website of the Good Schools Guide, which has advertising on it. The function of advertising on the web is to enable people to see things for free. It is why it does not close down to a subscription-only service. If people put advertisements on the web, they want to know that they are effective and have been seen, and some information about who they have been seen by. I moved a similar amendment to the previous Government’s Bill and encountered some difficulty. If the Government are of the same mind—that this requires us to be careful—I would very much welcome the opportunity of a meeting between now and Report, and I imagine others would too, to try to understand how best to make sure that advertising can flourish on the internet.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

I am very happy to talk to the noble Baroness about this issue. She asked what the Government’s view is; we are listening very carefully to the Information Commissioner and the advice that he is putting together on this issue.

[Lord Lucas (Con)]

My Lords, I am very grateful for the answers the noble Baroness gave to my amendments. I will study carefully what she said in Hansard, and if I have anything further to ask, I will write to her.

[Baroness Harding of Winscombe (Con)]

My Lords, in response—and very briefly, given the technical nature of all these amendments—I think that we should just note that there are a number of different issues in this group, all of which I think noble Lords in this debate will want to follow up. I thank the many noble Lords who have contributed both this time round and in the previous iterations, and ask that we follow up on each of the different issues, probably separately rather than in one group, as we will get ourselves quite tangled in the web of data if we are not careful. With that, I beg leave to withdraw the amendment.

--- Later in debate ---

As useful as ADM is for promoting efficient government, people are afraid of it. They do not necessarily trust the Government, and many are worried by the Government using algorithms to make important decisions that affect their lives. If the Government intend to roll out ADM across the public sector, as they promise, then it is essential to do everything possible along the way to nurture trust with the public. These amendments would go some way to doing that.

[Lord Lucas (Con)]

My Lords, my Amendment 115 would similarly act in that way by making automated decision-making processes explain themselves to the people affected by them. This would be a much better way of controlling the quality of what is going on with automated decision-making than restricting that sort of information to professionals—to people who are anyway overworked and have a lot of other things to do. There is no one more interested in the decision of an automated process than the person about whom it is being made. If we are to trust these systems then their ability, which is way beyond the human ability, to have the time to explain why they took the decision they did—which, if the machine is any good, it knows and can easily set out—is surely the way to generate trust: you can absolutely see what decision has been made and why, and you can respond to it.

This would, beyond anything else, produce a much better system for our young people when they apply for their first job. My daughter’s friends in that position are getting into the hundreds of unexplained rejections. This is not a good way to treat young people. It does not help them to improve and understand what is going on. I completely understand why firms do not explain; they have so many applications that they just do not have the time or the personnel to sit down and write a response—but that does not apply to an automated decision-making machine. It could produce a much better situation when it comes to hiring.

As I said, my principal concern, to echo that of the noble Viscount, is that it would give us sight of the decisions that have been taken and why. If it becomes evident that they are taken well and for good reasons, we shall learn to trust them. If it becomes evident that they really are not fair or understandable, we shall be in a position to demand changes.

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part in the debate on this group. I support the spirit of all the amendments debated thus far.

Speaking of spirits, and it being the season, I have more than a degree of sympathy for the Minister. With so many references to her previous work, this Christmas is turning into a bit of the Ghost of Amendments Past for her. That is good, because all the amendments she put down in the past were of an excellent quality, well thought through, equally considered and even-handed.

As has been mentioned many times, we have had three versions of a data Bill so far over just over three years. One wonders whether all the elements of this current draft have kept up with what has happened in the outside world over those three years, not least when it comes to artificial intelligence. This goes to the heart of the amendments in this group on automated decision-making.

When the first of these data Bills emerged, ADM was present—but relatively discreetly present—in our society and our economy. Now it would be fair to say that it proliferates across many areas of our economy and our society, often in situations where people find themselves at the sharpest end of the economy and the sharpest end of these automated decisions, often without even knowing that ADM was present. More than that, even on the discovery that ADM was in the mix, depending on which sector of the economy or society they find that decision being made in, they may find themselves with no or precious little redress—employment and recruitment, to name but one sector.

It being the season, it is high time when it comes to ADM that we start to talk turkey. In all the comments thus far, we are talking not just about ADM but about the principles that should underpin all elements of artificial intelligence—that is, they should be human led. These technologies should be in our human hands, with our human values feeding into human oversight: human in the loop and indeed, where appropriate, human over the loop.

That goes to elements in my two amendments in this group, Amendments 123A and 123B. Amendment 123A simply posits, through a number of paragraphs, the point that if someone is subject to an automated decision then they have the right to a personalised explanation of that decision. That explanation should be accessible in its being in plain language of their choice, not having a cost attached to it and not being in any sense technically or technologically convoluted or opaque. That would be relatively straightforward to achieve, but the positive impact for all those citizens would certainly be more than material.

Amendment 123B goes to the heart of those humans charged with the delivery of these personalised explanations. It is not enough to simply say that there are individuals within an organisation responsible for the provision of personalised explanations for automated decisions; it is critical that those individuals have the training, the capabilities and, perhaps most importantly, the authority within that organisation to make a meaningful impact regarding those personalised explanations. If not, this measure may have a small voice but would have absolutely no teeth when it comes to the citizen.

In short, ADM is proliferating so we need to ensure that we have a symmetrical situation for citizens, for consumers, and for anyone who finds themselves in any domain or sector of our economy and society. We must assert the principles: human-led, human in the loop, “Our decisions, our data”, and “We determine, we decide, we choose”. That is how I believe we can have an effective, positive, enabling and empowering AI future. I look forward to the Minister’s comments.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My understanding is that it would be. Every individual who was affected would receive their own notification rather than it just being on a website, for example.

Let me just make sure I have not missed anyone out. On Amendment 123B on addressing bias in automated decision-making, compliance with the data protection principles, including accuracy, transparency and fairness, will ensure that organisations take the necessary measures to address the risk of bias.

On Amendment 123C from the noble Lord, Lord Clement-Jones, I reassure him that the Government strongly agree that employment rights should be fit for a modern economy. The plan to make work pay will achieve this by addressing the challenges introduced by new trends and technologies. I agree very much with my noble friend Lord Knight that although we have to get this right, there are opportunities for a different form of work, and we should not just see this as being potentially a negative impact on people’s lives. However, we want to get the balance right with regard to the impact on individuals to make sure that we get the best rather than the possible negative effects out of it.

Employment rights law is more suitable for regulating the specific use of data and technology in the workplace rather than data protection law in isolation, as data protection law sets out general rules and principles for processing that apply in all contexts. Noble Lords can rest assured that we take the impact on employment and work very seriously, and as part of our plan to make work pay and the Employment Rights Bill, we will return to these issues.

On Amendments 119, 120, 121 and 122, tabled by the noble Lord, Lord Clement-Jones, the noble Viscount, Lord Colville, and my noble friend Lord Knight, the Government share the noble Lords’ belief in the importance of public sector algorithmic transparency, and, as the noble Lord, Lord Clement-Jones, reminded us, we had a very good debate on this last week. The algorithmic transparency recording standard is already mandatory for government departments and arm’s-length bodies. This is a cross-government policy mandate underpinned by digital spend controls, which means that when budget is requested for a relevant tool, the team in question must commit to publishing an ATRS record before receiving the funds.

As I said on Friday, we are implementing this policy accordingly, and I hope to publish further records imminently. I very much hope that when noble Lords see what I hope will be a significant number of new records on this, they will be reassured that the nature of the mandation and the obligation on public sector departments is working.

Policy routes also enable us to provide detailed guidance to the public sector on how to carry out its responsibilities and monitor compliance. Examples include the data ethics framework, the generative AI framework, and the guidelines for AI procurement. Additionally, the data protection framework already achieves some of the intended outcomes of these amendments. It requires organisations, including public authorities, to demonstrate how they have identified and mitigated risks when processing personal data. The ICO provides guidance on how organisations can audit their privacy management and ensure a high level of data protection compliance.

I know I have given a great deal of detail there. If I have not covered all the points that the noble Lords have raised, I will write. In the meantime, given the above assurances, I hope that the noble Lord will withdraw his amendment.

[Lord Lucas (Con)]

My Lords, I would be very grateful if the Minister wrote to me about Amendment 115. I have done my best before and after to study Clause 80 to understand how it provides the safeguards she describes, and have failed. If she or her officials could take the example of a job application and the responses expected from it, and take me through the clauses to understand what sort of response would be expected and how that is set out in the legislation, I would be most grateful.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am happy to write.

--- Later in debate ---

This change would speed up the criminal justice process. It would reduce considerably the financial burden on the taxpayer and the massive number of police hours committed. Everything we hear from the current Government, with which I have huge amounts of sympathy, says that there is a need to reduce pressure on the public purse and to speed up police time in being able to get on to the streets and do what I think all of us hope they will do: spending time on the streets, supporting victims, catching criminals, not spending hours redacting lots of images from body-worn cameras just in case the CPS happens to use that in a charging decision. I look forward to hearing from the Minister in due course.

[Lord Lucas (Con)]

My Lords, I have Amendment 201 in this group. At the moment, Action Fraud does not record attempted fraud; it has to have been successful for the website to agree to record it. I think that results in the Government taking decisions based on distorted and incomplete data. Collecting full data must be the right thing to do.

[Baroness Kidron (CB)]

My Lords, I had expected the noble Baroness, Lady Owen of Alderley Edge, to be in the Room at this point. She is not, so I wish to draw the Committee’s attention to her Amendment 210. On Friday, many of us were in the Chamber when she made a fantastic case for her Private Member’s Bill. It obviously dealt with a much broader set of issues but, as we have just heard, the overwhelming feeling of the House was to support her. I think we would all like to see the Government wrap it up, put a bow on it and give it to us all for Christmas. But, given that that was not the indication we got, I believe that the noble Baroness’s intention here is to deal with the fact that the police are giving phones and devices back to perpetrators with the images remaining on them. That is an extraordinary revictimisation of people who have been through enough. So, whether or not this is the exact wording or way to do it, I urge the Government to look on this carefully and positively to find a way of allowing the police the legal right to delete data in those circumstances.

--- Later in debate ---

The other amendments in this group are designed to remove the involvement of the Secretary of State and transfer the responsibility to appoint the commissioner from the Government to Parliament. Amendment 167A would ensure that non-executive members of the commission have a sufficient balance of expertise to inform the commission outside purely data protection issues. There is concern that the ICO will simply draw its NEDs from the same narrow profile of data protection lawyers as has previously been the case. We know from the European Union that it is important that regulators understand the broader horizon and appropriately balance GDPR enforcement with other fundamental rights, such as civil liberties and the economic impact that rulings can have. Will the Minister agree that the ICO should be looking for a broad range of expertise that can aid its decision-making in the reformed structure? I beg to move.

[Lord Lucas (Con)]

I have Amendment 135A in this group. The Bill provides a new set of duties for the Information Commissioner but no strategic framework, as the DPDI Bill did. The Information Commissioner is a whole-economy regulator. To my mind, the Government’s strategic priorities should bear on it. This amendment would provide an enabling power, such as that which the Competition and Markets Authority, which is in an equivalent economic position, already has.

[Baroness Kidron (CB)]

My Lords, I have huge sympathy for, and experience of, many of the issues raised by the noble Lord, Lord Clement-Jones, but, given the hour, I will speak only to Amendment 145 in my name and those of the noble Baroness, Lady Harding, my noble friend Lord Russell and the noble Lord, Lord Stevenson. Given that I am so critical, I want to say how pleased I am to see the ICO reporting requirements included in the Bill.

Amendment 145 is very narrow. It would require the ICO to report specifically and separately on children. It is fair to say that one of the many frustrations for those of us who spend our time advocating for children’s privacy and safety is trying to extrapolate child-specific data from generalised reporting. Often it is not reported because it is useful to hide some of the inadequacies in the level of protection afforded to children. For example, none of the community guidelines enforcement reports published for Instagram, YouTube, TikTok or Snapchat provides a breakdown of the violation rate by age group, even though that would provide valuable information for academics, Governments, legislators, NGOs and, of course, regulators. It was a point of contention between many civil society organisations and Ofcom that there was no evidence that children of different ages react in different ways, which, for anyone who has had children, is clearly not the case.

Similarly, for many years we struggled to understand Ofcom’s reporting because older children were included in a group that went up to 24, and it took over 10 years for that to change. It seems to me—I hope the Government agree—that since children are entitled to specific data privacy benefits, it follows that the application and enforcement of those benefits should be reported separately. I hope that the Government can give a quick yes on this small but important amendment.

Data (Use and Access) Bill [HL]

Lord Lucas Excerpts

Committee stage
Tuesday 10th December 2024 Grand Committee

[Lord Lucas (Con)]

My Lords, I declare an interest in that I checked yesterday and Copilot has clearly scraped data from behind the paywall on the Good Schools Guide. It very kindly does not publish the whole of the review, but it publishes a summary of it. It concerns me how we police copyright and how we get things right in this Bill.

However, I do not think that trying to draw a boundary around “scientific” is the right way to do it. Looking at all the evidence on engineering biology that we have just taken for the Science and Technology Committee, they are all doing science, but they all want to make money out of it at the end, if things go right. There is no sensible boundary between science and commerce. We should expect that, with anything that is done for science, even if it is done in the social sciences, someone at the end of the day will want to build a consultancy on it. There is no defendable boundary between the two.

As my noble friend Lord Camrose said, getting a working definition of public interest is key, as is, in the context of this amendment, recognising the importance of the concepts of intellectual property, copyright, trademark, patents and so on. They are international concepts, and we should seek to hold the line in the face of technological challenges because the concepts as they are have shown their worth. We may have to adapt them in one way or another, but this should be an international thing, and we should not support local infringement, because we would then make the UK a much less worthwhile place to hold intellectual property. My intellectual property is not mobile but a lot of it is, and it wants to be held in a place where it can be defended. If we do not offer that in our legal system, we will lose a great deal by it.

Data (Use and Access) Bill [HL]

Lord Lucas Excerpts

Committee stage
Tuesday 3rd December 2024 Grand Committee

Moved by

[Lord Lucas]

5: Clause 2, page 3, line 28, at end insert—
“(1A) The Secretary of State may by regulations make provision requiring a data holder to communicate (to the extent that they have the data required to do this) in a specified manner with all or a subset of the customers for whom they hold data.”Member’s explanatory statement
This amendment is to enable communication with customers to ascertain, for instance, whether regulations have been complied with or, for example in the case of the Student Loans Company, to enable research into the outcomes of courses that they have funded.

[Lord Lucas (Con)]

My Lords, I apologise to the Committee for having not expected things to go quite as fast as they did. In moving Amendment 5, I will also speak to Amendments 200 and 202 in this group.

Amendment 5 is very much to do, in my mind, with the Office for Students and the Student Loans Company, but it is about a problem of more generality, in that public bodies that hold a great deal of customer data find that they are unable to use that access and understanding for the greater public good. In the particular instance of the Student Loans Company, it is in active touch with most British young people who have been through university and is in an excellent position to help us understand the quality of the university courses that they have been through and looked back on a few years later so that we can get data and information that will enable universities to improve those courses for future students. That is important feedback that we ought to have in our university system. Otherwise, universities just concentrate on students who are there now; the moment those students leave, the universities are not interested any more, until they are old enough to get donations out of.

We should have a much better and more self-improving system, which could be driven through the Student Loans Company. I have in the past asked the company whether it would feel able to participate in such a thing, and it said no, it would not be permitted by data protection regulations to communicate in this way with the students it looks after. We should give ourselves the power to consider that in this Bill, so that we can look at how we could use that data to make life better for future generations of students.

There are other examples of where the public realm has gathered data and contact information on people to do with a particular set of transactions but feels unable to communicate with them again to do something slightly wider than that, so I suggest to the Government that something along the lines of Amendment 5 would open some very interesting doors to improving the performance of the public realm.

Amendment 200 is on a completely different subject: how we properly define the data we are collecting so that across the public realm a particular dataset means the same thing. The instance I choose to illustrate this is sex. One would have thought that sex means male or female and, in fact, properly construed, there are only two sexes, and I hope the Supreme Court will agree in due course. Gender can be as wide as you like, but sex has two possible values, male or female. If we are collecting data on that in the National Health Service, the police service and other aspects of life to see whether we are treating men and women equally, it is very important that that data item should mean the same thing, but the police now routinely record rapes as being committed by women because the person convicted of rape chooses to identify as a woman because they think they will then get better treatment thereafter. If you are recording gender, it can be what you want, but if you are recording sex, it should be male or female.

It is really important within the National Health Service that we always mean male or female because male and female physiology differs, and if someone is a candidate for a particular treatment, it may well depend on their sex. For instance, in blood transfusions, it is important to know whether the donation came from a man or a woman, because people may react in different ways to the blood.

Having a data dictionary within government that defines particular terms for use in government statistics so that statistics collected across different departments are comparable and mean the same thing, so that you can work with them knowing exactly what they mean, ought to be part of the way we run government. Certainly, whenever I have been involved in collecting data within a largish business, data dictionaries have been common.

Lastly, I turn to a third entirely different subject, which is schools admissions data. There is provision in legislation for schools admissions authorities to publish admissions data. This, when it started, was quite useful. Local authorities would publish booklets and you could pick up a booklet for your local authority and see what the admissions rules were for all the schools in that local authority and what the outcomes of those rules had been in previous years. With a little work, you could understand which schools your child had a chance of getting into. That would then form the basis of the investigations you would do about which school you should be using. Over time, the quality of this data has degraded, mostly because the concept of an admissions authority has moved far beyond local authorities, which is where it used to be. Many individual schools and school groups are now their own admissions authority, and they do not share data with the local authority, which means that there is now—certainly in the local authorities I have looked at recently—no consolidated source of schools admissions information, either on the rules prospective pupils are subject to or on the outcomes in previous years.

That makes it a much longer and harder business to establish which schools your child has a right to go to, and the result is that it is only the socially advantaged who can find out what their options are. Anyone short of time or data literacy finds it difficult to know anything beyond which their nearest school is and to see all the other options that might be available to them.

That is something which we should turn around, and the way to do so is to make all admissions authorities drop their data into a common database. That is not difficult—it might take someone of medium talent about a day to design—and all schools have this data in a form that is easy to drop into a database, because that data is subject to a data dictionary. Terms are defined, and you know what they mean because they have to be interpreted in a consistent way by parents. It is a really easy thing to create.

Once the data is all in one place, it would be much easier for parents to establish which schools they could send their children to. It would be an opportunity for businesses of all sorts to help parents to make that easier. We ought to be putting ourselves in a position where we are making sure that we do not disadvantage people because they are disadvantaged. We should look after people who find it difficult to deal with differently arranged and differently stated sets of admissions criteria. We should not be disadvantaging people like that; we ought to—it is really quite simple—put them in a position where they are on a level footing with everyone else. I beg to move.

--- Later in debate ---

[Lord Lucas (Con)]

My Lords, I am very grateful to the Minister for her reply and to my noble friends and others for their interventions before that. I am delighted that she considers that Clause 2(3)(a) covers my Amendment 5. If I have any further concerns about that when I have reread her reply in Hansard, I will write to her.

I am sure that we need to do something about data integrity across the piece. I will very much take into account what the Minister has said about the Sullivan review and how sex data is or might be recorded in the future. However, it is a considerable problem that there is no reliable source of it, particularly when it comes to deciding how to treat people medically but also in other circumstances, as my noble friend has said, such as prisons and sports. We have to think through how to have a reliable source of it, which is clearly not passports, while for those with a gender recognition certificate, birth certificates are not a reliable source of information. There are obviously other aspects of life, too, where one wants to know that the data being collected is accurate.

So far as schools’ admissions regulations are concerned, I am afraid the state of the matter is that local authorities are no longer publishing the data that they ought to. The previous Government, who had plenty of time to enforce it, did not and this Government have not yet picked up on that. I will read what the Minister has said and pursue her colleagues in the Department for Education to see if we can get some improvement on the current state of affairs. With thanks to the Minister, I beg leave to withdraw my amendment.

Amendment 5 withdrawn.

Data (Use and Access) Bill [HL]

Lord Lucas Excerpts

2nd reading
Tuesday 19th November 2024 Lords Chamber

[Lord Lucas (Con)]

My Lords, I declare an interest in that, through the Good Schools Guide, I am an extensive user of government schools data. With another hat on, I share my noble friend Lord Markham’s worries about how this affects little organisations with a bit of membership data.

I very much look forward to Committee, when we will get into the Bill’s substance. I supported almost everything that the noble Baroness, Lady Kidron, said and look forward to joining in on that. I also very much support what my noble friend Lord Holmes said, in particular about trust, so he will be glad to know that I have in advance consulted Copilot as to the changes they would like to see in the Bill. If I may summarise what they said—noble Lords will note that I have taken the trouble to ascertain their choice of pronouns—they would like to see enhanced privacy safeguards, better transparency and accountability, regular public consultation and reviews of the Act, impact assessments before implementation, support for smaller entities and clearer definition of key terms. I am delighted by how much I find myself in agreement with our future overlords.

To add to what the noble Earl, Lord Erroll, said about digital identity being better, there was a widespread demonstration of that during Covid, when right-to-work checks went digital. Fraud went down as a result.

On the substantial changes that I would like to see, like my noble friend Lord Arbuthnot of Edrom, I would like a clear focus on getting definitions of data right. It is really important that we have stability and precision in data. What has been going on in sex and gender in particular is ridiculous. Like many other noble Lords, I also want a focus on the use of artificial intelligence in hiring. It is so easy now to get AI support for making a job application that the number of job applications has risen hugely. In response to this, of course, AI has been used in assessing job applications, because you really cannot plough through 500 in order to make a shortlist. Like the Better Hiring Institute, which I am associated with, I would really like to see AI used to give people the reasons why they have not been successful. Give everybody a reply and engage everybody in this process, rather than just ignoring them—and I apologise to the many people who send me emails that I do not reply to, but perhaps I will do better with a bit of AI.

This is a very seasonal Christmas tree of a Bill and I shall not be shy of hanging baubles on it when we come to Committee, in the way that many other noble Lords have done. My choices include trying to make it possible for the Student Loans Company to be more adventurous in the use of its data. It ought to be a really good way of finding out how successful our university system is. It is in touch with university graduates in a way that no other organisation is, but it feels constrained in the sorts of questions it might ask. I would really like Action Fraud to record all attempts at fraud, not just the successful frauds. We need a better picture of what is going on there. I would like to see another attempt to persuade the DfE that schools admissions data should be centrally gathered. At the moment it is really hard for parents to use, which means there is a huge advantage for parents who are savvy and have the time. That is not the way it should be. Everybody should have good, intelligent access to understanding what schools are open to them. There will be plenty of opportunities in Committee, which, as I say, I look forward to.

In the context of data and House of Lords reform, when I did a snap census at 5.47 pm, the Cross-Bench Peers were in the majority in the House. That suggests that, in providing Peers who have a real interest in the core business of this House—revising legislation—the process of choosing Cross-Bench Peers does rather better than the process of choosing the rest of us. If we are to reform the House of Lords, getting that aspect into the political selection would be no bad thing. I would also like some data, in the sense of some clear research, on the value of Statement repeats. I cannot recall an occasion when a Statement repeat resulted in any change of government policy of any description. Perhaps other noble Lords can enlighten me.

Digital Markets, Competition and Consumers Bill

Lord Lucas Excerpts

Report stage
Wednesday 13th March 2024 Lords Chamber

[Lord Mendoza (Con)]

My Lords, Amendment 126 is in my name. I declare my interests as set out in the register, particularly as chairman of Historic England, which also has oversight of English Heritage. I want to talk about the very narrow point the amendment tries to cover, which is the specific treatment of contracts relating to charity membership subscriptions. I am sure that many in this House have purses and wallets bulging with membership cards for museums and wonderful organisations such as the National Trust, English Heritage, the Woodland Trust, and so on, and this issue is causing great concern across the charity sector. I am sure many noble Lords’ inboxes have been filled with briefings and pleas from charities. The point is a very narrow one: according to the Income Tax Act 2007, if a subscription is refundable, it will become no longer eligible for gift aid, which is a very large number for charities up and down the land.

I have been grateful over the last weeks for the assiduous attention of my noble friend the Minister and the Bill team. I am also grateful to organisations we have probably all heard from, such as the NCVO, the National Trust and English Heritage, for helping with the background on this. I was even more impressed, as my noble friend the Minister has set out, that the issue was directly referred to with its own lines in the Budget, and that the Treasury has committed to amending gift aid legislation by SI before this part of the Bill comes into force.

As the Minister has said previously, there is no intention to change the status quo on the eligibility of gift aid on these membership subscription contracts. However, I will make three points. No specific changes are being proposed for the provisions in the Bill so there will be a contradiction, before it is sorted out, between this primary legislation and the Income Tax Act 2007, which creates uncertainty. I know it creates uncertainty because we talk to charities, and they need security and confidence and the ability to plan and budget their operations. I know that the noble Lord, Lord Clement-Jones, has put a lot of work into this and I look forward to hearing him present his mechanism for the timing of how this might be helped.

In a way, despite the lines in the Budget, the Government’s amendments have conferred only a general power on the Treasury to make secondary legislation: there is no statutory commitment to get around to actually doing so before these measures come into force. This raises a risk that the provisions of the Bill could be enacted by this or a future Parliament without the issue actually being resolved. The Government’s amendments do not address the concerns raised regarding the application of consumer protections to charity memberships, which are treated as donations for tax purposes. We are certainly not asking for charities to be exempted from consumer protections, and I agree with my noble friend the Minister that many parts of a charity’s operations should not be—its shops, restaurants, cafés, and so on.

However, it cannot be right that we apply a cooling-off period to a form of charitable donation in the same way that you would to a TV subscription service. If I put £5 in the tin for the Royal British Legion, I do not expect to be able to claim it back the following week, saying “I made a mistake”. Membership subscriptions are accepted as donations under the Income Tax Act, and have been for a long time; donations are not refundable, so how can you have a cooling-off period? You have circular contradiction going on. Naturally, I prefer that these contracts might be protected by the amendment as I have set it out; it simply puts this very specific narrow bit of a charity’s operation—membership subscription contracts—into Schedule 21. I am very grateful to the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones of Whitchurch, for helping get these points across.

Charities are concerned, and perhaps while the Government are in a giving vein during the Third Reading of the Bill, they might reconsider putting in this very small amendment, which would provide huge relief for charities, and the certainty and reassurance they need, because they do such incredible work right across the country, and they are deeply concerned.

[Lord Lucas (Con)]

My Lords, I will speak briefly to Amendment 127 in this group. I do not hold, in any particular way, to my choice of wording, but I am fairly sure the Government’s choice of wording is not right. We all receive a huge quantity of emails; we do not want multiplicity—we want effectiveness—and to demand that these emails come separately is a mistake. I hope the Government will see this as an opportunity to rationalise and reduce the size of my inbox and everybody else’s inbox. If we allow more than one thing to be in the message, then the prominent message must be the statutory one. To have it in the subject line and in the first sentence, so that it comes up in the summary when you look at what the email is about, would be a better way of putting it than my amendment, but I am sure the Government can improve on that.

[Lord Black of Brentwood (Con)]

My Lords, I refer to my earlier declarations of interest.

I raised a significant number of issues relating to subscription contracts in Committee. I am very grateful to both my noble friends on the Front Bench for listening to those arguments, and for bringing forward amendments to deal with them, and I strongly support them. They help fulfil the Government’s aims without placing unacceptable burdens on business.

There is only one remaining issue that we dealt with in Committee, and that is why I am supporting the amendment in the name of my noble friend Lord Lucas. His amendment would remove the prescriptive wording that is currently in the Bill and allow for traders to provide notices

“in a clear and prominent manner:”

His wording simply recognises that the prescribed renewal information is at the heart of the notice and must not be skewed out of view, while allowing for other beneficial information to be included, if desired. I am sure all noble Lords will be very happy that it ensures notices do not become a GDPR-style irritant, but something which is actually helpful to consumers. It would certainly be counterproductive if consumers experienced information fatigue and stopped opening communications from traders or simply opted out of them all together.

Equally, it will alleviate the burdens on traders, who may feel obliged to send emails around the time of renewal notices, to provide information on alternative deals, packages and so on, which could otherwise be dealt with in one communication. As my noble friend said, there may be other ways of dealing with it, or other wording, and I look forward to hearing what the Minister has to say about this amendment, which I support.

Digital Markets, Competition and Consumers Bill

Lord Lucas Excerpts

Committee stage
Wednesday 7th February 2024 Grand Committee

Moved by

[Lord Lucas]

168: Schedule 21, page 371, line 10, at end insert—
“12 A summary of the charges that the consumer may incur if they use the service during a cooling-off period but then cancel the contract.”Member’s explanatory statement
Alongside another amendment in the name of Lord Lucas, the purpose of this amendment is to focus discussion on how use of a subscription contract during a cooling-off period is charged for if the contract is cancelled within the cooling-off period, and the information that the trader must publish in that regard.

[Lord Lucas (Con)]

My Lords, in speaking to this amendment, I will also speak to Amendment 191, and in doing so declare my interest as the proprietor of the Good Schools Guide, an organisation that derives substantial income from subscription contracts, although we do not operate any automatic renewal of them.

The problem I am looking at, which certainly applies to us, is that within the cancellation period for a subscription such as ours, the purchaser can, if they so choose, get all the value they are ever going to get from a subscription. They can just go through the online service and print out everything that might possibly interest them, and then cancel. With other subscription services, the value is received more evenly through the contract, but ours can be focused at a particular time. Under those circumstances, a fair arrangement would be that if a consumer cancels and has received substantial value, they can be charged, on a basis set out beforehand, for the value they have actually had. I beg to move.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

The Box feels that the point has been covered—but I will write to noble Lords and cover it with them.

[Lord Lucas (Con)]

My Lords, I am grateful to my noble friend for his positive reply to my first amendment, where the use of a subscription during the cooling-off period is covered by the powers in the schedule. I was not clear about that on reading it, so it is good to know. As I understand it, nothing in the Bill would prevent a trader from saying to a person, “No, you cancelled a subscription before. I am not going to let you take out a new one.” There is no right of a person continually to enter into subscriptions with the intent to cancel. They can do it once and then they have been rumbled. That is my understanding. If I am wrong, I hope that my noble friend will correct me.

I should also be grateful if he gave me some guidance in relation to Amendment 192 on the meaning of “give” in Clause 264(1), which I do not see defined in any way. When the consumer has to be given a notice, does that imply that the consumer receives it? Email addresses go in and out of use. People change them. There can be blockages of various kinds on them, because some were paid for, or some may be limited by size. One could get into a situation where the trader may think that the person has done something and has sent out the notice but it has never got through, or it can get into someone’s spam trap or, as in this place, it can be blocked by someone else’s spam arrangements of which one would not have cognisance.

My interest in Amendment 192 is whether it would be fairer to do this by making sure that the notice had been received by having some acknowledgement from the subscriber. I cannot see, as an operator of a subscription service, that this is difficult to deal with—one just does not renew until one gets the confirmation, which is a click on the screen. That is not difficult to implement. If we just have “give” as a loose term in the clause, it will allow people to continue saying, “We told you but not in a way in which you are ever likely to notice”—as in The Hitchhiker’s Guide to the Galaxy. We should try to avoid that in the Bill, so I should like to see if it is possible to get something firmer by way of making sure that the consumer knows that they are renewing the contract. That said, I look forward to subsequent conversations with my noble friend and I beg leave to withdraw the amendment.

Amendment 168 withdrawn.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords who have spoken in this debate. We are grappling with some important issues at the heart of Part 4 of the Bill. This group of amendments follows on quite neatly from our earlier debate, and it gives me a chance to put the other side of the problem. I have to say, the noble Lord, Lord Black, seemed to downgrade the scale of the problem we foresee. He also seemed to suggest that most businesses mean well and do well, but there are other things at stake here, such as the issues many consumers experience. I am not talking about the publishing world when I say that.

I have two amendments in this group, Amendments 173 and 174. Both are designed to address the concerns raised by consumer groups, including Which? and Citizens Advice: the problems with automatic contract renewals, such as whether somebody has satisfied the original minimum term of a phone contract, or completed a free trial in signing up to a streaming service. As the noble Baroness, Lady Stowell, said, all too often consumers are not given sufficient notice to bring their contracts to an end without incurring additional charges, or find that they face a time-consuming and confusing cancellation process.

The noble Lord, Lord Black, said that the Government’s proposals are predicated on an erroneous assumption that consumers do not know what subscriptions they have. I take issue with that too. In the last year alone, people in the UK spent £500 million on subscriptions that auto-renewed without them realising, while unused or unwanted subscriptions cost people more than £306 million a year. The fact is that contracts are being renewed and prices increased with minimum notice and without clear opt-outs. Of course, this has more of an impact on marginal groups and those on low incomes.

We welcome the Government’s attempts to address these issues in Chapter 2, obviously, but we do not feel that these measures go far enough. Our Amendment 173 would allow the consumer to opt out of their subscription auto-renewing every six months, while Amendment 174 would allow the consumer to opt out of their subscription after a discounted trial. As has been said, the fact is that many people do not realise that they are entering into a long-term auto-renewing contract with a business or service, and it is often not in the interests of the trader to make that clear when the consumer signs up, or to help the consumer make a conscious decision to continue with the subscription once it is active. We need to ensure that the initial rush of enthusiasm for a purchase does not become a long-term financial burden.

In addition, the consumer may discover after a short time that the subscription does not live up to the hype they were sold when the contract was first signed. Again, we need to ensure that they can extract themselves, and their money, from paying for something they no longer want. Our amendments would achieve this, and I hope that noble Lords will consider supporting them.

I now turn to the amendments in the name of the noble Lord, Lord Black. He made an impassioned speech about the future of the publishing sector, and we have every sympathy with what he had to say. What is clear to me is that we are talking about two different things. I am concerned that the noble Lord is forming some generalised conclusions, when there is no one-size-fits-all answer. Our amendments address the types of subscription that trap consumers—he says he does not agree with that—into paying for something they may no longer want or need. The subscriptions in the publishing world that he described are long-term ones freely given to a magazine or newspaper. They are akin to loyalty or membership subscriptions, which create, if you like, group awareness and consciousness. Of course, the same can be said for charity subscriptions to the National Trust, for example—consumers taking out a subscription for altruistic reasons, a topic we debated when we discussed gift aid on Monday.

We do not want to sabotage those freely given regular payments. However, although we are sympathetic to the general case made by the noble Lord, we do not necessarily agree that the way forward is to remove the provisions from the Bill and give the Secretary of State the power to regulate on this instead. That could mean putting at risk the hard-won protections from subscription traps that are already in the Bill. Similarly, while we are open to further discussion on this point, we are not convinced that a default 12-month period would benefit consumers.

However, I agree with the noble Lord, Lord Black, in his Amendment 185, that the reference to notifying a business that a subscription should cease

“in a single communication”

is oblique and could cause genuine confusion as to whether and how the communication is received. Therefore, we urge the Minister to address this issue and find a new form of words. There are a number of different models to choose from, but the key consideration will be whether and how we design businesses following good digital design processes to make it clear that people can communicate in a clear way.

As we know, too many traders make cancelling a contract more difficult than it should be, whether by forbidding online cancellations, putting customers on hold for extended periods or having multi-step cancellation processes, where a user is steered towards retaining the services. Whether we end up with a prominent button on a website, a dedicated email address or some other system, we must ensure an appropriate balance to make it easier for consumers to cancel a contract. Traders should have an opportunity to retain customers, perhaps through price reductions, but customers should not be placed under undue pressure or have to go through half a dozen steps to extract themselves from a contract. If the Bill were to say more about some basic design principles, some of these issues might be overcome. We would certainly welcome further discussions on this issue.

Finally, I have added my name to Amendment 190, tabled by the noble Viscount, Lord Colville. I will speak on this only briefly. He makes an important point. We will return to this question of who owns our non-personal data and our right to have it returned once businesses no longer need it in much more detail on the data protection Bill. I hope to have a longer debate with him on that basis, but I hope that the Minister can provide some reassurance that the Government are prepared to act on this issue.

In our earlier discussions, we had a huge amount of consensus, but we have gone in opposite directions on this issue. I think that we all want the same thing but are finding different words to deliver it. If we were locked in a room for half a day, we could probably come up with a solution. It might be quicker than writing lots of letters, which the Minister might otherwise have to do. I hope that we can find a way through this. We are not being deliberately awkward, but it is important that we get this right. I look forward to the Minister’s response.

[Lord Lucas (Con)]

My Lords, I wanted to wait until the noble Baroness, Lady Jones, had spoken, because I wanted the chance to agree with her amendment, which raises the same question that I was raising in Amendment 192. Why do you have to be locked into these subs? Why can you not be asked to resubscribe, if that is what you want to do? Why can we not give consumers a right to approach things that way and get to know a product before they know that they want it every year?

I echo what my noble friend Lady Stowell of Beeston said on newspapers. I would want to get to know the Daily Telegraph well enough to know that I want to pay for it every day. To be able to buy it once a week would be nice, but that is not an offer at the moment. Allowing consumers to get used to a product benefits business. As the noble Baroness demonstrates in her amendment, it also benefits the consumer. It should not just be a year’s subscription or nothing. We should encourage businesses to provide something in between. We certainly should not make renewal the only option that businesses look for. We should make them earn that renewal by providing a good product for a year so that customers do not want to have to be bothered with renewing it every year. That is a situation that one happily gets into with a number of charities. You know that you want to support them. They provide a good service and you just let it tick over. I do not think that anyone should be entitled to that position. They have to earn it; they have to prove it. To have a system where you do not have to tie yourself in at the beginning is estimable.

That said, I have a great deal of sympathy for what my noble friend Lord Black said. I would prefer to see a lot of this in secondary legislation. I understand that when someone cancels a subscription, the business wants a chance to correspond with them and have an argument, although I find it a huge irritant in my relationship with a business when I suddenly discover that it would do business with me on much better terms but only if I threaten to withdraw. I wish it would value me as a continuing customer and offer me good terms, rather than only benefiting discontented customers.

I think that there is a lot of good in all the amendments in this group. I echo what the noble Baroness, Lady Jones, said about the amendment tabled by the noble Viscount, Lord Colville. I look forward to seeing that in the next Bill. I just draw his attention to the likes of Ancestry.com. Its business is the accumulation of everything that everyone has added to it. You subscribe to it, but all the time you are adding information that is then available to other people. Businesses should be allowed to retain the information that you have added, if that is appropriate. I can quite see that you might want your photographs returned from Flickr, but something like Ancestry or an app about building up information about history, ecology or whatever else it might be properly retains information that individuals have contributed and it ought to be possible for an app to have that in its terms.

[Lord Clement-Jones (LD)]

My Lords, I am glad to follow the noble Lord, Lord Lucas, because having supported a number of amendments in this group I saw harmony rather than discord. The noble Baroness, Lady Stowell, had it absolutely right: the provisions here are both too vague and too detailed. Where the Bill should be detailed, it is vague; where it is vague, it should be—and so on. That is the essence of it.

Between us, we have a pretty good idea—I hope that it does not involve sitting in a locked room thrashing this out—of what good looks like. That is the important thing. The problem is that in this group we are debating the beginning of a contract, the reminder and the termination in one fell swoop, so it is easy to misunderstand exactly what we are talking about. The amendments tabled by the noble Baroness, Lady Jones, are extremely good, because this is all about having information at the beginning of the contract. What you do not want is too much elaboration. As long as you know up front what to expect and the kind of contract that you going to enter into, that seems to me to a sensible way forward. It is about getting the basics right and I do not think that the Government have got the basics right.

Many people think that the process by which the original consumer regulations were put together was perfectly sensible, so I disagree with the noble Baroness about whether secondary legislation would be appropriate after consultation. I think that that would be a perfectly proper way forward, rather than this rather clunky way of doing it with secondary legislation and schedules setting out so much detail. That seems a rather extraordinary way of going forward. It also seems to clash somewhat with the Government’s reluctance in other areas. No doubt the noble Lord, Lord Holmes, will speak in the next group about a lack of regulation in certain quarters—which way is a matter of mutual interest. That seems a bit paradoxical. We have to get the basics right.

The noble Lord, Lord Vaizey, made an interesting speech. He was almost suggesting that there needs to be friction at the end of a contract so that there is an excuse to engage. I am not entirely convinced by that. Luckly, he did not put an amendment down, so I do not have to disagree with that at the end of the day.

The amendments tabled by the noble Lord, Lord Black, are sensible. There is an issue about how many communications a consumer sees, but the important amendment is the one regarding qualification of “by any means”. Clause 258 is pretty extraordinary. What if a trader gets a Twitter message but they are not on Twitter? How are we expected to accept a notice given “by any means”? The qualification suggested by the noble Lord seems entirely sensible.

--- Later in debate ---

[Lord Lucas (Con)]

My Lords, I get the impression from my noble friend that this is not an area of the Bill that the Government want to move on, but I get the impression from the Committee that we would very much like to see some changes. I hope that, between now and Report, there may be some constructive conversations between me, my noble friends and noble Lords opposite to see whether we can make some consolidated suggestions to the Government that we need not argue about, so we can focus the argument on them.

[Lord Black of Brentwood (Con)]

I thank all noble Lords for what have proved to be good and constructive debates on both groups of amendments.

I say to the noble Baroness, Lady Jones, that I think we pretty much have a consensus. There may be some issues at the margins, but we all agree, partly because, as my noble friend Lord Vaizey said, we are not hostile to any of these intentions. We support the intentions, but we recognise that we need to support business while protecting customers. This is important because, in many ways, it goes to the heart of the creative economy and the media ecosystem. The key point that has come across from many of the excellent contributions today is that this is a rapidly evolving environment and, as my noble friend Lady Stowell said, a highly competitive one.

The whole question about digital subs is that they are a new model for the way businesses are operating. For many, that model is becoming business-critical and should therefore not be dealt with, with what the noble Lord, Lord Clement-Jones, rightly said is a blunt instrument. We should therefore not write things into the Bill that we will regret in subsequent days. I agree with a lot of what the noble Baroness, Lady Jones, said: of course there are some bad actors in this space. All we are saying is that we should not be putting into regulations things to deal just with those bad actors that would damage the much wider economy.

I hope that the Government will think again about a lot of these things. I am grateful to my noble friend the Minister for saying that we will continue discussions between now and Report. That is very important, as I think he will have the mood of the Grand Committee: that we will want to return to this area. In the meantime, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to follow my noble friend, if not for the fact that it seems we are going backwards and forwards at the same time, which is always a good state be in. As this is the first time I have spoken on day six in Committee, I restate my technology interests, as set out in the register, as adviser to Boston Ltd.

My two amendments in this group are concerned with artificial intelligence. It is a truism, self-evident and barely in need of stating, that artificial intelligence is already impacting many aspects of our lives—as citizens, as consumers, as businesses and as a country—so it would seem timely to review all the relevant legislation to assess its competence to deal with the challenges, opportunities and risks that AI presents for us in all those roles and capacities. I shall say more on that next month.

Today, within the scope of this Bill, Amendment 199 suggests that all legislation concerned with consumer protection be reviewed to assess its competence to deal with the challenges, opportunities and risks inherent in artificial intelligence. It is clear that a number of the concepts and provisions within consumer protection legislation and regulation will be applicable and competent to deal with AI, but there is a huge gulf between what is currently set out in statute and what we require when it comes to making the best of what we could call this future now. I shall give just one example: if we consider how algorithms are set up simultaneously to push voraciously certain content while holding back other content, it is very difficult to see how consumer protection legislation is set up to deal with that challenge. That is but one specific example.

Amendment 200 goes to the question of consumer protection and the need to label all products and services where AI has been used or is built into that product or service so that the customer can know that and determine whether she or he wishes to avail herself or himself of that product or service. In no sense would this amendment require great burdens to be placed on business in bureaucracy, administration or cost. In many ways, this is yet another example of “set AI to solve an AI problem”, with human in the loop and human oversight always present.

I suggest that these two amendments, taken together, would enable the Bill to speak positively and in a timely manner on the opportunities, risks and threats to all of us, and to try to get the optimal deployment of AI in this context when it comes to consumer protection. I look forward to the Minister’s response.

[Lord Lucas (Con)]

My Lords, we move from a very new problem to a very old problem. My Amendment 215B asks that the Government restore to us the protection we used to have from double-glazing salesmen. There used to be a cooling-off period. That got swept away by EU regulations. Now that we have Brexit, we have the opportunity to give consumers back the protection that they once had. At the moment, double-glazing can claim to be made to the consumer’s specification but, actually, it is not. It is a standard product, and you just tweak it a bit. There is plenty of room when you are providing double glazing, fitted kitchens or anything like that to allow consumers proper time to step back and ask themselves whether they want to go in for such an expense and whether it is something they really want to do. We ought to restore that to consumers, there being no good reason not to.

[Lord Clement-Jones (LD)]

My Lords, I will speak first to Amendment 215C and then come to Amendment 202. I am very much indebted to the Fair Standards Alliance for raising the issue of standard-essential patents. I thought I knew a fair bit about intellectual property and the digital world, but I was in a state of relative ignorance when the world of standard-essential patents came to me. I have had quite an extensive briefing from the Fair Standards Alliance, which has revealed the importance of standard-essential patents, particularly in the context of competition and licensing.

These patents are necessary to implement an industry standard, such as for wifi or 5G. As the market is locked into a standard, to prevent abuse of the market power, SEP owners are required to license their SEPs on fair terms. Unfortunately, there is widespread abuse of this monopoly power by SEP holders that often, I am told, do not abide by their voluntary commitments and instead seek to abuse their market dominance to force product manufacturers to sign up to unfair terms. SEP holders are regularly seeking and securing excessive licence fees from technological innovators by leveraging the threat of injunctions, which forces firms in the UK either to accept high licence fees or to exit the market. This is to the detriment of those businesses and to the wider UK economy.

Most prospective licensees cannot afford the cost of litigation or exclusion from the UK market. The recent High Court decisions in InterDigital v Lenovo and Optis v Apple demonstrate how SEP owners exploit SMEs and make excessive royalty demands that only large, well-resourced litigants can afford to challenge. Apparently, the costs of the recent SEP licensing trial in the InterDigital case were over £31 million. That is pretty breathtaking, even to one with my background as a commercial lawyer.

The costs can be ruinous to many businesses. This tactic not only threatens innovation by UK businesses but represents a strategic risk for UK priorities, such as 5G infrastructure, diversification and smart energy network security, by limiting the competing players. The availability of injunctions for SEPs gives foreign SEP holders the ability to prevent others in the UK entering, succeeding and innovating in those markets.

The Government have been considering SEP reform— I noticed the Minister nodding vigorously, earlier—for several years and have received evidence showing the abuse that businesses in the UK face. The Intellectual Property Office’s SME survey suggests that UK businesses face excessive licence fees for SEPs. SMEs are concerned by the threat of market exclusion by court-ordered injunctions and a lack of transparency about the cost of and need for the SEPs being offered.

British companies are predominantly SEP licensees. The majority of SEPs are held by companies from China, the EU and the US, with no major SEP licensors based in the UK. This means that, when SEP holders hold up innovative UK manufacturers during licence negotiations and extract excessive licensing fees, they are taking value that would otherwise be available to fund further innovative developments in the UK and are increasing costs to UK consumers.

The UK’s innovative SMEs are especially affected across all sectors, as they cannot afford expensive legal battles against large, international SEP holders. As I said, the costs were over £31 million in the InterDigital case. The problem is widespread and the Government themselves have already accepted that SEPs are an issue; for instance, in their 5G Supply Chain Diversification Strategy of 2020 and in DSIT’s wireless infrastructure strategy last year. Recent High Court decisions have independently confirmed that position. A court determined that licence rates have been significantly lower than those demanded by the SEP holders. Our judges have concluded that SEP holders are able to exert significant unfair pressure to get the deal they want.

--- Later in debate ---

In the context of music, labelling could simply be a requirement within the metadata to identify that music is AI-generated. Essentially, this would amend the Consumer Rights Act 2015. Using that as the parent Act underscores that there is a strong consumer protection dimension to labelling requirements for AI-generated music. Consumers should know whether music is AI or human-created before making an informed decision about whether they wish to engage with it. I commend that amendment and very much hope that the Minister will respond positively.

[Lord Lucas (Con)]

My Lords, to pick up the noble Lord, Lord Clement-Jones, on his two amendments, I can absolutely see where he is coming from on standard-essential patents. This reflects quite a long-term failure by successive Governments to support British participation in standards setting. If one looks at the history of the telecommunications industry from when I was young, when the British were dominant, to where they are now, which is nowhere, one of the great failures and one reason why things have not located or started in the UK has been that we have not committed sufficiently high-powered, consistent energy into standards setting. We have never quite been abreast of what is happening next or been the place where people want to locate a business. It is enormously important and I made a point on this in the Automated Vehicles Bill. It applies to a lot of technical areas and we must get behind standards setting.

In relation to Amendment 202 of the noble Lord, Lord Clement-Jones, how does one know how much is AI-generated? It is rather like asking how much of a Reynolds painting is by Reynolds. Did he just touch in the eyebrow and leave the rest to his servants? Does an AI grammar checker count as AI-generated content? If the AI has made suggestions of things that one might look at, is that AI-generated? I imagine that a lot of journalists now use AI to help fill out the column inches after a hard day’s doing something else. As the noble Lord knows, given his connections with academia, this is becoming common on both sides—the teachers and the taught—so what does finding a way in which to define “AI-generated” mean? Is it AI-supported or no involvement at all? Is it not using any of the tools at hand? This is a difficult concept to go at. Surely, at the end of the day, what matters with a piece of music is how good it is, not where it came from.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords who have spoken. This truly is a miscellaneous group of amendments and I will add to the miscellany of all this, because my Amendment 215A addresses the ambiguity that arises from the current laws on marketing infant formula.

Perhaps I may briefly explain the background as to why this is before us today. The Infant Formula and Follow-on Formula (England) Regulations 2007 were designed to prevent supermarkets promoting infant formula over breastfeeding. They arose because, prior to that, aggressive marketing and advertising techniques had been used by the milk formula industry to mislead parents over the best way in which to feed their babies. The current rules state that infant formula should not be advertised or promoted in a shop. They also say that no coupons, special sales offers, discounts or gifts should be offered to mothers or their families.

Meanwhile, noble Lords will be aware that the cost of infant formula has risen recently and is a huge extra burden on families, who are particularly suffering in the cost of living crisis. It is estimated that the cost increased by 22% in the past year alone. But because of the current regulations, supermarkets still cannot accept vouchers, even those provided by food banks and local authorities to purchase that infant formula. There have therefore been calls for the marketing rules to be reviewed to allow, for example, retailers to accept loyalty points, grocery vouchers and store gift cards, as well as free vouchers, for infant formula.

Our amendment addresses the current ambiguity in the regulations and calls for a review to clarify the marketing rules and their impact on the pricing and affordability of infant formula. This Bill is seen as the best mechanism to get this review under way. I should stress that our aims are to clarify the law and to tackle the unfair pricing currently taking place. However, we want to ensure that parents remain protected from the aggressive advertising that has misled them in the past. I hope that noble Lords and the Minister will see the sense of this amendment.

On a completely different issue, I listened carefully to the noble Lord, Lord Lucas, about double- glazing. I agree that he made an important point. I did not know that there were still double-glazing salesmen, but he raised them so I am sure there must be. I agree with him that, if they still exist, they should be regulated.

I turn to a completely different issue again. I am grateful to the noble Lords, Lord Holmes and Lord Clement-Jones, for their amendments on AI. We look forward to debating the Private Member’s Bill of the noble Lord, Lord Holmes, on AI regulation in the coming weeks. These Benches take this issue hugely seriously. We recognise that AI has the potential to deliver life-changing benefits for working people, from early cancer diagnosis to relieving traffic congestion, but these benefits must be set firmly in new standards and new regulation to keep people safe and their data protected. The EU and the US are speeding ahead on this while the UK is dragging its heels, so we believe that new regulations on the control of AI are essential.

I listened carefully to the noble Lords. I do not disagree with what they are trying to achieve but I query whether this is the right place to pursue these amendments. The data protection Bill will come before the House shortly; that will give us a much greater opportunity to address the impact of AI on the lives of consumers and citizens. I hope that we will have a really detailed exploration of the protections needed in that Bill at that time. However, having listened to the noble Lord, Lord Clement-Jones, on music labelling just now, I realise that I cannot just pass this issue on to the data protection Bill in the way I wanted to, because he made an important point about the consumer issues arising. Again, I have some sympathy with the noble Lord, Lord Lucas, who challenged this and asked, “How can we know? What percentage of music is AI?”

[Lord Clement-Jones (LD)]

I entirely agree that it is a question to be asked. Of course, there is the general principle of transparency. If you look at the amendment, you will see that it talks about content “whether assisted or generated” by AI. It could be partly or wholly generated by AI but, in transparency terms, just the knowledge that at least some of the elements were created by AI is important. The consumer can then take it or leave it, basically. If they like the sound of AI music—believe me, some of it is pretty dreadful—that is fine, but it is an acquired taste.

[Lord Lucas (Con)]

Will we have musicians confessing on stage that the electronics under the stage are adjusting the sound of their voice?

[Lord Clement-Jones (LD)]

It all depends on how sober the audience is, I suspect.

--- Later in debate ---

[Baroness Sheehan (LD)]

My Lords, I thank the noble Baroness, Lady Wheatcroft, for tabling this amendment, to which I have added my name, as I did to a similar amendment that she tabled to the Financial Services and Markets Bill. I apologise to the Committee for not being available to speak at Second Reading.

I put my name to this amendment because votes reporting is an important issue of openness and transparency that underpins good stewardship and good governance, without which the road to net zero and our nature goals becomes that much more chaotic. At this point I should declare my interest as a director of Peers for the Planet.

As things currently stand, at AGMs investment managers vote on behalf of the pension funds they manage on issues that pension savers may have concerns about. Some, if not most, savers would prefer to know what their money is signed up to, and they cannot easily find out what their money is supporting, nor can pension schemes. This is because there is zero meaningful onus on investment managers to report their actions in a full, timely and easily digestible format, and that is important as the noble Baroness, Lady Wheatcroft, highlighted. The outcome is that pension schemes do not have the information to inform their savers, and it is for this reason that the amendment has support from the Association of Member Nominated Trustees, which has £1 trillion of assets under management.

In the US, it is mandatory. There, voting at AGMs is a key tool in ensuring good corporate governance, good long-term investor returns and good economic outcomes more broadly. What assessment have the Government made of America’s way of including people in decisions made in their name about their money? Why is it that in a relatively light-touch regime that is doable, but here it is not? Why is it that UK investment managers can comply with US rules when they operate in the US but find it too burdensome to do it here? The Government say that they see the need for action, but we see no action year after year. This amendment would enable pension schemes and ultimately pension savers more effectively to hold their investment managers to account for action on climate and nature, as well as on other matters.

I fully support the noble Baroness, Lady Wheatcroft, in what she is aiming to do, and I add the support of the noble Baroness, Lady Altmann, who has put her name to the amendment. She asked me to convey her apologies to the Committee for not being present; she is not feeling well enough to have stayed to the current late hour.

I hope that once we hear from the Labour Party we will be able to say that the amendment has cross-party support.

[Lord Lucas (Con)]

My Lords, I very much support this amendment. We are a capitalist society, and capitalism relies on a return on capital being provided to the people who provide the capital. In that sense, our capital has become very concentrated in institutional hands. Decisions are taken by a cadre of fund managers, of whom I used to be one—well-paid people who thoroughly approve of people in industries being well paid, particularly senior managers. More and more of the profits of industry are diverted to the people running them and to the people running the investments in them, and the amount getting through to the individual investor becomes limited.

What is the force in any other direction? What is the motivation for people running a company to do more than please their fund managers? They do not have to have the interest of the individual owners at the end of this. In the end, this results in bad decisions being taken on the allocation of capital and on the flow of money within a corporation. These will not be in the interests of paying the pensions of the people whose money is invested in these companies.

--- Later in debate ---

[Lord Clement-Jones (LD)]

My Lords, I will speak very briefly in support of the amendment in the name of the noble Baroness, Lady Jones.

It is unfortunate that this comes at the end of our debate rather than the beginning, as it is a really important aspect of it. We have been talking about the digital world throughout our six sessions, but it is increasingly apparent that the digital world cannot meet all the emotional needs of society. It is not the perfect substitute for everything that we do in person in the physical world—for our social, shopping and other needs. If we try to make it so, it will have considerable impact on mental health.

We must strive to keep a lively, prosperous physical world in front of us on the high street, as the noble Baroness outlined. Much of this talk about taxation is above my pay grade—you always get wrapped on the knuckles by your spokesperson if you start proposing tax reform or whatever it may be—but there is no doubt that my party certainly supports business rates reforms in a variety of different ways. It also believes that the settlement on the digital taxation side through the OECD agreements has been far too modest in its impact on the major digital players. The imbalance between physical and digital traders has been far too great and has advantaged the digital players far too much. I am in total sympathy with what the noble Baroness said.

[Lord Lucas (Con)]

My Lords, I entirely agree with the noble Lord, Lord Clement-Jones, on that last point. It is really important that we keep at the question of how we tax digital businesses. One can no longer rely on the Irish national statistics because they are so distorted by profit shifting, a lot of it from this country—profit going abroad and being taxed at a very low rate in Ireland when it should be taxed here.

I know that this is an international matter, but we absolutely must keep the pressure up. We are getting more and more digital, so we need to have an international tax system where profits are taxed where they arise and not where Governments wish to shift them to. I know that this is hard, but I am unimpressed by the progress that the world has made in this direction. I really hope that the Government will get behind the continued efforts on this. We suffer a great deal from it.

At the other end of the scale, the Government could also do a lot better. I am sure that my noble friends will remember that HMRC made a horrendous mess of VAT in the Channel Islands in the early 2000s. Whole businesses grew up in the Channel Islands on the idea that you could ship records out to them, then they would come back VAT-free to the person in the UK who bought them because the consignment was under a certain value.

HMRC eventually dealt with that, but now there is monstrous and recurring fraud through the likes of Amazon and eBay, involving “Chinese” sellers—there is no reason to think that they are of that nationality in particular, but they are certainly Far Eastern—who HMRC does not pursue. HMRC does not effectively collect the tax that is due. It says, “Oh, it’s too hard. Oh, it’s in lots of little bits. Oh, these people move around with great velocity”. Yes, they do, but by not collecting it, HMRC not only does not get the tax but damages the UK businesses that should be able to compete on a level playing field with those overseas sellers. It is delinquent; it is an issue at the root of HMCR that we have never managed to deal with effectively, but we really must.

It is so important that HMRC realises that it should focus not only on operational efficiency in terms of how much it costs to do things and whether it gets the money back that it is investing in this, or a sufficient multiplier of it, but on whether it is doing its bit for the structure of the UK economy and the ability of businesses to start and flourish here. I pay great credit to Retailers Against VAT Abuse Schemes, which has been active these last 20 years. I hope that it will eventually be successful, but golly, it could do with more help.

[Lord Offord of Garvel (Con)]

Once again, I am grateful to the noble Baroness, Lady Jones, for raising this important issue, and for the remarks of the noble Lord, Lord Clement-Jones, and my noble friend Lord Lucas.

The Government are wholeheartedly committed to protecting the country’s high streets and town centres, and supporting them as they adapt to changing consumer demands. Indeed, the Government revalued business rates in 2023, with the retail sector being the biggest beneficiary. We have also provided long-term investment in our high streets and small businesses, including £2.35 billion-worth of town deals, the £830 million future high streets fund and the £4.8 billion levelling up fund. New legislation in the Levelling-up and Regeneration Act 2023 will play an important role in reviving our high streets by introducing high street rental auctions, which will empower places to tackle decline by bringing vacant units back into use, and seek to increase co-operation between landlords and local authorities and make town centre tenancies more accessible and affordable for tenants, especially for SMEs, local businesses and community groups.

The Government also launched the new £2.5 million high street accelerators pilot programme, which will empower and incentivise local people to work in partnership to develop ambitious plans to reinvent the high streets so that they are fit for the future. Accelerators will bring residents, businesses and community organisations together with their local authorities to develop a long-term vision for revitalising high streets. The pilot will run in 10 areas across England until March 2025.

We consulted in 2022 on an online sales tax, and after careful consideration we decided not to introduce it. That decision reflected concerns raised on the risk of creating unfair outcomes and complexities in defining the boundaries between online and in-store retail, including click-and-collect orders. The Government therefore do propose to pursue further changes to business rates or sales tax at this time. I hope that the noble Baroness will feel sufficiently reassured to withdraw her amendment.

Digital Markets, Competition and Consumers Bill

Lord Lucas Excerpts

Committee stage
Monday 5th February 2024 Grand Committee

[Baroness Morgan of Cotes (Con)]

My Lords, it is a pleasure to speak here this afternoon. I apologise to the Committee for not being able to speak at Second Reading. I declare my interest as the founder and trustee of a mental health charity in Leicestershire, the Loughborough Wellbeing Centre.

It will not surprise my noble friend the Minister, I suspect, to know that this is a probing amendment. However, given that we are debating in this part of the Bill the enforcement of consumer protection, the matter that I raise relates directly to the greatest harm that a consumer can suffer: their death.

In June 2022, I asked my noble friend Lord Parkinson the following Oral Question: what plans do

“Her Majesty’s Government … have to address online retailers’ algorithmic recommendations for products that can be used for the purposes of suicide”?

At the time, the most obvious Bill to address this matter was the Online Safety Bill, which, as we know, focused on harmful content in particular. In my follow-up question, I said:

“When a particular well-known suicide manual is searched for on Amazon, the site’s algorithmic recommendations then specifically suggest material that can be used, or easily assembled, into a device intended to take one’s own life. If this is not to be regulated as harmful content under the Online Safety Bill, how can this sort of harm be regulated?”—[Official Report, 27/6/22; col. 434.]


This amendment is particularly close to my heart because, sadly, when I was a Member of Parliament, a constituent bought a manual on Amazon then completed suicide. The amendment would amend Clause 149 by expanding the specified prohibition condition definition by adding a commercial practice that

“targets consumers with marketing material for products intended to be used by that person to take their own life.”

I am grateful to the Mental Health Foundation for its support with this amendment.

Even today, Amazon continues to algorithmically recommend products that can be used to take one’s own life to users viewing suicide manuals online. To be specific, users searching for a suicide manual will be recommended specific materials that are touted as being highly effective and painless ways to take one’s own life. Amazon facilitates users purchasing the key items that they need, from instructions to materials, in a few clicks. I would like to think that this is not intentional.

In the overwhelming majority of cases, such automatic recommendation will be harmless and will help consumers to find products that might interest them. However, in this instance, a usually harmless algorithm is functioning to provide people with material that they may use to end their own lives. This risk is not just theoretical. Amazon is recommending products that there have been concerted public health efforts to address in this country and which are known to have caused deaths. So as not to make them better known, I will not name them.

It is particularly important that Amazon ceases to highlight novel suicide methods, as its recommendation algorithm currently does by recommending products to users. There is clear evidence that, when a particular suicide method becomes better known, the effect is not simply that suicidal people switch from one intended method to the novel one but that suicide occurs in people who would not otherwise have taken their own lives. This probing amendment is intended to draw the Government’s attention to this concerning issue. I have spoken about Amazon today given its position in the market and its known bad practice in this area, but the principle of course goes beyond Amazon. New retailers may well emerge in the future and a principle should be established that this type of behaviour is not acceptable.

While I suspect that my noble friend the Minister is going to tell me that the Bill is not the right place for this amendment, I hope that he will agree that a crackdown on these harmful algorithmic recommendations to protect consumers—it was the word “consumers” that meant that it was not suitable for the Online Safety Bill—is needed, in the spirit of consumer protection sought in the Bill. I hope that, at the very least, he will agree to meet me to discuss this further and to help me to raise it with the relevant department, if it is not his. I beg to move Amendment 110.

[Lord Lucas (Con)]

My Lords, I have one amendment in this group, Amendment 110A, which will be echoed in subsequent groups as part of a general concern about making sure that trading standards are an effective body in the UK and are able to do what they are supposed to do to look after consumers.

As the Minister will know, because we were part of the same conversation, the CMA is concerned that trading standards may have been reduced to the point where they are not as effective as they ought to be. Looking at some of the local cuts—in Enfield, for instance, four officers have been cut down to one—and listening to various people involved in trading standards, there is a general concern that, as they are set up and funded at the moment, they are not able to perform the role that they should be. Given the importance that enforcers have in the structure that the Government are putting together, I am asking in this amendment that the Government review that effectiveness, take a serious look at the structures that they have created and their capability of performing as they would wish under the Bill and report within a reasonable period.

[Lord Clement-Jones (LD)]

My Lords, I entirely support what the noble Baroness, Lady Morgan, had to say in her probing amendment. It takes us back to the Online Safety Bill debate. The final question that she asked is crucial: if not here, where? We must have a means of being able to prevent the sale of these products. She has highlighted it and I hope that the Minister has a satisfactory reply, so that, in short order, we can make sure that these products are not for sale in these online marketplaces.

I also entirely support the amendment tabled by the noble Lord, Lord Lucas. It will become clearer and clearer as we move through the groups that adequate resources are required for trading standards. We impose a large number of duties on them, yet we appear not to give them the resources. In fact, their resources have dwindled over the years, as I know that the noble Earl, Lord Lindsay, and my noble friend Lady Bakewell would have outlined if they had been present. In respect of their amendments, which I will come on to later, I am the understudy’s understudy, because the noble Earl, Lord Lindsay, cannot be here today, I gather, nor can my noble friend Lady Bakewell. It falls to me to make a fist of talking to Amendments 112 all the way through to 127, which I will attempt. The noble Lord, Lord Bassam, will be making an even better attempt in the name of the noble Baroness, Lady Crawley, as I understand. Hopefully, the Minister will take on board what we have to say when the time comes.

Very briefly, I want to speak to Amendments 111 and 122, which relate to increasing the scope of the monetary penalties under the Bill. Amendment 111 applies this to Clause 157 for court enforcement orders when the public designated enforcer, such as the CMA, considers that a person is engaged or is likely to engage in a commercial practice that constitutes a relevant infringement and the court makes such an enforcement order on the public designated enforcer’s application. Amendment 222 applies this to CMA final infringement notices under Clause 181, for when the CMA imposes an infringement notice after an investigation into suspected infringements.

Current drafting limits the penalties to

“£300,000 or, if higher, 10% of the total value of the turnover (if any) of the respondent”.

However, a respondent may have made a huge profit as a result of infringements. Fines of a mere £300,000 are unlikely to incentivise good behaviour. In circumstances where 10% of the total value of the turnover is higher, our legal advice is that the UK would typically follow current EU practice, unless something in UK legislation specifically allowed it not to do so, such as we propose in these amendments. In the EU, the fine has to relate to the turnover of the activity in issue and its duration, which, in practice, makes it a much smaller number. To get to group worldwide turnover requires evidence of head office involvement. It should be made clear that to calculate the penalty amount the CMA and the court are able to take into account the profit made by the respondent.

Penalties are supposed to provide an incentive not to break the law, which raises the real question: why are fines related to turnover at all? To ensure good behaviour, they should strip the lawbreaker of the profits gained from lawbreaking. Where a platform can harm millions and only a few take it to task if it pays off the fee, breaking the law pays back handsomely. Authorities could be given the power to directly award exemplary damages of this type in these circumstances. In practice, fines are a fraction of turnover and profits. The largest fine to date was the €4.3 billion imposed on Google in respect of its Android device restriction, which is a long way ahead of other recent fines, but Google makes something of the order of $70 billion a quarter in turnover.

This amendment would also focus on the abusive practice, not the abuse only in relation to effects in one market. For example, Google changed its algorithm in 2007 to promote its own products at the top of its search results. It does so for news, maps, images, shopping and things such as flight booking. That pushes more relevant and better businesses down the rankings so that they get less business and competition is distorted. The practice is governed by an algorithm called universal search. The EU Commission had the resource only to investigate shopping; the fine was €204 billion. Google carries on discriminating in all areas but shopping. A fine could and should be calculated in relation to the abusive practice, of which shopping is an example; otherwise, breaking the law pays and behaviour does not change. Seeing the fine in relation to the profit gained from the practice would be fair. It would deprive the wrongdoer of the gains from breaking the law and is likely to change behaviour. An account of profits could easily be done.

I turn to Amendments 112 to 120 in the names of the noble Earl, Lord Lindsay, my noble friend Lady Bakewell and the noble Baroness, Lady Crawley. As I said, unfortunately none of those proposers is able to be present today, but all their amendments relate to widening the scope of how appropriate court action can take place and they all come under the banner of consumer protection and enforcement, especially for a level playing field to operate in the current marketplace.

Amendments 112, 113 and 114 are about consumer protection orders and undertakings under Clause 159 and cover applications to the appropriate court for an online interface order or an interim online interface order. Clause 159 extends the court’s online interface powers to the enactments, obligations and rules of law categorised as domestic infringements and it is to be welcomed. The Explanatory Notes to the Bill give examples of where online interface orders could be useful, especially in the area of underage sales products. This has been thrown into sharp relief by the Government’s proposals on banning the selling of vapes to underage children and young people. In relation to weights and measures, it is possible that, in order to avoid local inspection systems in the UK, an online supply of short-weight goods would need urgent follow-up with an application for an online interface order against the third-party overseas website where rogue traders are mis-selling to UK consumers.

--- Later in debate ---

Moved by

[Lord Lucas]

124A: Schedule 16, page 347, line 40, at end insert—
“4A In paragraph 28(1), after “goods” insert “or articles””Member's explanatory statement
This amendment would seek to allow evidential articles to be taken at the same time as goods under paragraph 28 of Schedule 5 to the Consumer Rights Act 2015.

[Lord Lucas (Con)]

My Lords, I beg to move Amendment 124A and to speak to Amendments 124B and 124C. These are all small amendments aimed at making trading standards a bit more effective in practice. Amendment 124A would allow trading standards to seize, as well as the suspected counterfeit goods, articles—for instance, clothing used by the trader that puts them at the scene of the crime. At the moment, trading standards do not have the right to seize such articles of evidential value and they would very much like to have it, since it would make it easier to convict rogues.

As for Amendment 124B, at the moment, trading standards are not allowed to open a vehicle if that is where the goods are being stored, because it does not fall within the definition currently used in the Bill—or at least they believe that is the case. They would like, should all the goods concerned be in a van, to be able to open the van.

As for Amendment 124C, sometimes these can be big crimes of hundreds of thousands of pounds. Level 3 just does not meet the case; it is just a bit off the profit. They would like to see the judge able to set the level of the fine to accord to the crime—Gilbert and Sullivan would have approved.

[Lord Clement-Jones (LD)]

My Lords, once again, with the indulgence of the Committee, I will speak on behalf of my noble friend Lady Bakewell to Amendments 125, 126 and 127.

Before doing so, I say that I support the amendments of the noble Lord, Lord Lucas, which strike me as extremely practical. It must be extremely frustrating when faced with some of the restrictions. This point about vehicles seems to me a particular irritant for trading standards officers—a vehicle being defined as premises. What era are we living in?

We need to bring the powers of trading standards officers up to the 21st century, which is very much the spirit in which Amendments 125, 126 and 127 have been tabled by the noble Earl, Lord Lindsay, my noble friend Lady Bakewell and the noble Baroness, Lady Crawley. Amendment 125 would delete paragraph 17 of Schedule 5 to the Consumer Rights Act, which at present requires trading standards officers to exercise physical powers of entry to premises—this is in the digital age—before accessing information and the seizing of documents that may be needed in criminal proceedings. Accepting this amendment would be an opportunity to finally update the powers of trading standards in this respect. It would have the effect of changing their information-gathering powers to enable documents requested in writing without the need for physical entry to be used in criminal proceedings. This means also relieving the undue burdens placed on businesses and trading standards officers.

For legitimate businesses there is presently the burden of having to interrupt their normal business to provide the requested documents there and then, whereas, under what is proposed in this amendment, if the request is made in writing rather than physically, they will have more time to source the required documents and even seek legal advice should they wish to. For the small band of trading standards officers, the requirement to exercise physical powers of entry across the country to seize documents they may need to use in criminal proceedings is not cost-effective for their cash-strapped local authorities. If a local authority in, say, my noble friend’s Somerset had to deal with a case in Cumbria, it would simply not be viable for this to happen. The criminal activity could go unpunished and the public and consumer would still be at risk from rogue-trader activity.

In the impact assessment for the Bill, it is accepted that:

“Consumer rights must keep pace with market innovations, so that consumers remain confident engaging with businesses offering new products and services”.


That is a good statement, but for this sort of consumer confidence to become more robust, the enforcement powers of trading standards need to be seriously updated and not inhibited by the present inflexibility.

Amendments 126 and 127 propose to substitute the words “England or Wales” and “Scotland” for the words “United Kingdom” in paragraph 44(3) and 44(2) of Schedule 5 to the Consumer Rights Act. The effect of these amendments would be to add a new paragraph to Schedule 16 to the Bill, which would give new powers to trading standards officers to operate across UK national borders where necessary. Cross-border activities should be included in the Bill; current legislation does not make it clear that trading standards officers in England and Wales can exercise their powers across the border with Scotland, or vice versa, even though consumer protection is a reserved power. In fact, the current legislation implies that this cross-border enforcement activity is not permitted, and we are told that, currently, trading standards officers err on the side of caution. Who can blame them in the circumstances? For the success of these new powers and the Bill to take root, trading standards officers should be able to pursue and enforce across the whole of the United Kingdom.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I thank the noble Lord. I share his interest in this matter, and that was exactly what I was intending to examine. The United Kingdom Internal Market Act is a fundamental new piece of architecture that, on us exiting the EU, allows us to trade as one single nation, and I will always be promoting that.

[Lord Lucas (Con)]

My Lords, I am grateful to my noble friend for his answers to my amendments, particularly for his offer of a continuing dialogue between Committee and Report. It seems clear to me that there is some different understanding out there regarding the ambit of the powers. I am content with the answers that he has given but would like to make sure that not only is that understood but that that understanding can have effect without something being added to the Bill. However, that is a conversation that we can conveniently have not now, so I beg leave to withdraw the amendment.

Amendment 124A withdrawn.

--- Later in debate ---

[Lord Clement-Jones (LD)]

My Lords, in moving Amendment 130 I will speak also to Amendment 135, which is another amendment in the names of the noble Earl, Lord Lindsay, my noble friend Lady Bakewell and the noble Baroness, Lady Crawley. This is an opportunity to remedy the long-standing, unaddressed market practice of misleadingly similar packaging of consumer products—that is, packaging which mimics that of familiar branded products. Amendment 130 would introduce a strengthened brand practice in Schedule 19.

Misleadingly similar parasitic packaging, otherwise known as copycats or lookalikes, adopts the distinctive features of familiar branded products to dupe shoppers into believing that it has the same qualities, reputation and/or origin as the brand when it does not. Shoppers buy the copy based on these mistaken assumptions and can pay more than they would were the product distinctively packaged. Such packaging is extremely prevalent in the grocery market. It inflates consumer prices and prevent shoppers making informed, accurate decisions.

The evidence I have seen is convincing that packaging mimicry misleads consumers in substantial numbers and distorts buying decisions. The similar packaging plays on shoppers, exploiting the fact that they self-select products from the shelf. Stores stock so many products that decision-making must be, and is, fast—typically around two seconds per choice. Labels are not studied closely. Colour and shape are more powerful stimuli than words and prompt shoppers to buy a product that they did not intend to buy, to pay more and to believe that products have similarities. I have a whole string of assessments here from research such as a UK IPO study, neuroscience research and a 2023 study called The Psychology of Lookalikes.

In 2008, the Competition Commission considered such packaging an issue for consumer protection. During consultations and the debate on the Consumer Protection from Unfair Trading Regulations 2008, the then Government stressed that public enforcement would be effective. This has not proved to be the case. There has been only one successful enforcement action by trading standards in the past 15 years—in 2008 itself—and no enforcement by the CMA.

IP rights are insufficient. Copiers tend to design around registered IP rights, such as trademarks, designs and copyright, to avoid infringement. A passing-off action is impractical, as proving consumer confusion to a court’s satisfaction is complex, particularly when a copier argues that the use of a different product name avoids misrepresentation. The evidence that IP rights are ineffective can be seen in the persistent prevalence of such copies on the market, with two large retailers adopting it as a business strategy largely unchallenged. Affected branded businesses are unprotected, as there is a gap in IP protection. The original copied brand is no longer distinctive; it is devalued, sales are lost and costs increase. Overall, return on investment in innovation, reputation and quality is reduced. Other products in the same category may lose sales if shoppers switch to the copy, assuming leading brand quality at a lower price, potentially leading to delisting.

For the unlawful copier, sales are boosted as shoppers buy their products by mistake or trust them unduly. They can also charge higher prices; the evidence shows that this could be by as much as 10%. The ultimate solution, of course, is not for offending products to be removed from the market, just that they be repackaged distinctively. This would preserve shopper choice, strengthen competition and reduce prices. Amendment 130, as proposed, would benefit many thousands of shoppers and branded companies of all sizes, particularly SMEs, wherever in the UK they are based.

I now turn to Amendment 135 and should say that the next group contains an amendment, Amendment 137, that is also on fake reviews, so this is a bit of a foretaste of what is coming down the track in the next group. Amendment 135 would add two more practices to the list in Schedule 19 of 31 commercial practices that are in all circumstances considered unfair and bad practice. The two additions are, first, a new paragraph 32:

“Stating or otherwise creating the impression that reviews of a product are submitted by consumers who have actually used or purchased the product without taking reasonable and proportionate steps to check that they originate from such consumers”;


and, secondly, a new paragraph 33:

“Submitting, or commissioning another legal or natural person to submit, false consumer reviews or endorsements, or misrepresenting consumer reviews or social endorsements, in order to promote products”.


How often do we all look to see what people have said about a product or service or, indeed, a bed and breakfast before we commit to buying? I suspect that young people are particularly vulnerable to wanting to participate in something that has a good review and appears to be popular.

The Government propose adding fake reviews to the list of practices in the future, but there is no logical reason why they should not be included now. Adding fake reviews to this important list would make them both criminal and civil breaches, as we understand it. Trading standards see the widespread practice of giving fake reviews as clearly fraudulent in nature, and therefore it should be a criminal offence. Fake reviews appear to be particularly prevalent for health supplements, where a single course of some miracle ingredient will cure your arthritis for ever—that resonates with me. Large sums of money can be invested by those suffering constant pain in an effort to get some relief, only to find that they have wasted their money.

I understand that there is a proposal. The Smarter Regulation response was quite clear that there is considerable demand for this. That response contains a great deal of other material as well and is very useful. I think the latest version is dated 24 January this year, so it is hot off the press, essentially. There is this proposal to add fake reviews in the future via a separate statutory instrument, but why should they not be included in the Bill at this stage? The language has been proposed by the Government. This is a growing distortion of the online marketplace. It is unfair to legitimate businesses and completely deceives consumers who may rely on accurate information to validate their choices. I very much hope that the Minister will say that on Report it will be perfectly viable to include language on fake reviews in the Bill. I beg to move.

[Lord Lucas (Con)]

My Lords, I have Amendment 131 in this group. It is my understanding, and of course the Minister may correct me, that the investment that a student makes in their university course comes under the Bill—that the relationship is one between consumer and provider. Indeed, since this is the largest purchase that a student will make before they buy a house, it seems entirely appropriate that the sort of safeguards in this Bill should apply to university courses. If that is the case, then paragraph 29 on page 362 forbids universities marketing their courses to children, and that does not seem quite right. I would like to understand how the Government see the confluence of those two factors.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise to speak briefly on Amendment 133 in the name of the noble Baroness, Lady Jones of Whitchurch, to which the noble Baroness, Lady Kidron, and I have attached our names. I express support in passing to the attempts to restrict fake reviews, which are clearly an absolute plague online and a cause for considerable concern. I, like many other consumers, very much rely on reviews these days. I am also interested in the amendment of the noble Lord, Lord Lucas. I very much oppose the whole structure by which students are regarded as consumers. The Green Party’s position is that education is a public good, which should be provided for free, but his point raises some interesting questions, on which I would be interested in the Minister’s answers.

Amendment 133 is about so-called drip pricing. I found various government surveys producing different figures on the cost of this to consumers, ranging from £1.6 billion to £2.2 billion each year. We are all familiar with this, unsurprisingly, given that more than half of entertainment providers, transport providers and communications businesses use this as a regular practice: “Get this bargain price. Get in now. Click here: it will cost you only £10”. Mysteriously, as you go through the process, the price keeps going up and up. People fill in all the steps in the forms, fill in their names, tick to say that they have read the terms and conditions—even though they have not—and spend all that time and energy, but suddenly the price is three times what it started as. They feel as though they have spent all that time, so it is worth going hunting around again? Do they have that time?

What we are seeing is very much a change in what might have been considered service businesses; consumers are instead servicing them, with their time, energy and efforts. This is an important area, on which people need transparency. In the cost of living crisis, it is worth noting that so-called budget airlines are particular offenders. Most people think, particularly for a long-distance journey, that luggage is not an optional extra, not to mention that a family travelling should not have to pay extra for seats together. Amendment 133 is a particularly important amendment and I look forward to the Minister’s response.

--- Later in debate ---

[Lord Clement-Jones (LD)]

My Lords, the Committee may get a slight feeling of déjà vu when it comes to my Amendment 137 but we were assured that it covers a different topic and it is therefore perfectly legitimate to have it in a different group. However, there are other aspects—in particular Amendment 143, which I want to speak to in moving Amendment 137. I will be brief.

As we have heard, the Minister is positive about discussions on how we will enshrine fake reviews. As we know, the Government’s response was designed to improve consumer price transparency and product information for consumers. We very much share that intent. They have highlighted how legislation will tackle fake reviews. Any lack of criminal enforcement would be a major concern so I hope that that will be part of the subject we will discuss.

Of course, we know the impact of fake reviews. Amendment 137 is a different way of dealing with the issues. Fake reviews have been identified by the Federation of Small Businesses as one of the three primary problems experienced by smaller firms when trading on digital marketplaces, so preventing the proliferation of fake reviews will support both consumers and businesses; that is a point we should make. This should be added to the Bill.

The one question I have is this: have the Government had discussions with Trustpilot? It would like to see the Government’s proposed wording extended, particularly to the hosting issue. I do not know whether the Minister has a brief on that. I was quite impressed by the Trustpilot briefing and the evidence it gave. It has concerns about other parts of the wording but, for me, the most powerful aspect is making sure that those who host fake reviews are penalised. I hope that the Minister has an answer to that.

Amendment 143 is where I am again the sorcerer’s apprentice. This is an amendment to Clause 288. It seeks further to protect consumers from rogue traders and their unfair practices. It is something that I know the Chartered Trading Standards Institute is keen to see put into practice. It is a breach of Clause 225 of the Bill for a trader to engage in a commercial practice that is a misleading omission, meaning the practice omits material information. That is defined as

“information that the average consumer needs in order to take an informed transactional decision”.

There is much discussion in the consumer field about what information is needed by a consumer and what is merely desired. For instance, there is no specific requirement for a trader to give his or her name and address. Clause 228 adds an additional breach of omitting material information from an invitation to purchase; it states that there are a number of specific matters that are considered to be material and where it could be an offence if the information is not provided to the consumer, so surely things can only get better. However, an invitation to purchase is currently defined in the Bill as

“a commercial practice involving the provision of information to a consumer … which indicates the characteristics of a product and its price, and … which enables, or purports to enable, the consumer to decide whether to purchase the product or take another transactional decision in relation to the product”.

The point that the Chartered Trading Standards Institute and trading standards officers are making in this context is that, in their day-to-day experience, many rogue traders targeting vulnerable consumers, often in their own homes, do not give a price when offering to do work. If they do not give a price, they will not come under this new obligation in the legislation and will get away with their shoddy work or criminal activity, hence the opportunity in this amendment to remove price from the definition of an invitation to purchase. It would automatically mean that the practice is not an invitation to purchase and, therefore, that the information listed in Clause 228 is not considered material information.

To sum up, removal of price in the definition of invitation to purchase would increase consumer protection, as it would automatically make such things as price, the identity of the trader and his or her address become material information. It would therefore be a breach to provide this information to the consumer. I look forward to what the Minister has to say in respect of those two amendments.

[Lord Lucas (Con)]

My Lords, I have a clutch of amendments in this group. Amendment 138A continues the series of improvements to trading standards regulations. Before we came under EU regulation, we had considerable freedom to deal with pricing abuses. As one of the many advantages from Brexit, I do not see why we should not go back to the situation we used to have.

Amendment 138B looks at the rights that consumers have and what happens when a business ignores them. At the moment, if a business is denying or ignoring rights, trading standards has to take action under the Enterprise Act 2002 by way of a court injunction. It is slow and expensive, so I cannot see why that should not be dealt with under the scope of this Bill.

I hope that Amendment 140 will draw out from the Government an understanding of what information ought not to be omitted. If, for instance, a trader knows that a particular product has a series of adverse and well-informed reviews or has resulted in poor consumer experience, do they have to share that information? If they have it, they will probably be disinclined to be open with it, but do they have to provide it? How far should a trader go to share information of which they are aware and which they know exists but which they would not normally include in marketing their product? Some elucidation of the limits of this would be much appreciated.

Amendment 145B comes back to trading standards. At the moment, the time limit in the Bill is one year. Trading standards operates an intelligence-led approach: it lets information build up for a while before it takes action to make sure that it is acting in cases of consistent abuse rather than one-off problems. Time is then taken to investigate and it takes more time to get to court, so it is very easy to exceed that one-year time limit—particularly in relation to the earlier offences in a group of offences. Two years would be a better expression of the practical length of time that it takes trading standards to bring cases to court.

--- Later in debate ---

On the noble Baroness’s second question, the new banned practice relating to fake reviews will be subject to civil liability only. The Government consider this proportionate to achieve effective enforcement and deterrence. This judgment was also made in the light of the Bill’s proposal to give the CMA enhanced powers to tackle bad business practices. I hope I have reassured noble Lords and noble Baronesses that we are taking the right steps on consumer protections.

[Lord Lucas (Con)]

I am grateful to my noble friend for his answers, by and large, but I do not understand how Clause 245 is supposed to work. I cannot see how, in its wording, it provides protection for vulnerable persons. I look specifically at Clause 245(2), which states:

“References … to the average consumer … are to be read as references to an average member of the group mentioned in subsection (1)”,


which refers to a vulnerable consumer. So the wording of the Bill is reducing the level of comprehension required and therefore the level of information being provided for the comprehension of that vulnerable group. It therefore makes vulnerable groups open to exploitation. What am I misunderstanding here? In what way does Clause 245 provide additional protection for vulnerable groups? How does it raise the standards that traders have to meet when they are faced with a vulnerable group?

[Lord Offord of Garvel (Con)]

I thank my noble friend for that question. The intention of Clause 244, combined with Clause 245, is to afford a higher level of protection in legislation to those who are vulnerable. It sets out how the “average consumer” should be interpreted regarding vulnerable persons. Therefore, if there is some confusion about their rights having been diminished in some way when in fact the Bill is intended to enhance those rights, I think we should get clarification, so I will write to my noble friend on that matter.

[Lord Lucas (Con)]

I shall be clearer after reading my noble friend’s remarks.

[Lord Clement-Jones (LD)]

I thank the Minister for his reply to this disparate group of amendments. I thought the discussion about information raised by the noble Lord, Lord Lucas, was crucial because this is so important to the consumer, particularly the vulnerable consumer. I look forward to seeing the Minister’s letter of clarification, or whatever it is that he will come up with, in due course.

I thank the Minister for his response to Amendment 137, which was, in a sense, rehearsed in the previous group. I thank the noble Baroness, Lady Jones, for her support. She raised some important aspects about timescale and criminal offences. I am assuming that how the whole fake review aspect is dealt with predicates whether we can also have criminal liability. If it is added to Schedule 19, it gets criminal liability, but if it is dealt with in another way, it may not. Clarification of this is important because only two areas, I think, in Schedule 19 are excluded from criminal liability. All the rest get criminal liability. Therefore, it is important that the Minister can give that assurance when we have these discussions that that will be the case.

On the guidance that the noble Lord, Lord Lucas, talked about, I hope the Minister’s reply was that that will be part of what we deliver. The unfair practices guidance will be really important. Just today, the Minister clarified, for example, the brands issue, saying that it is covered by paragraph 14, or whatever it was, of Schedule 19, and that it is not necessary to add that wording. This is all part of important guidance, I suspect, in the end. Expecting people to read the Minister’s words in Committee in the House of Lords might be slightly unreasonable, so I hope that the guidance will nail down the interpretation of some of these aspects of Schedule 19, which will clearly be important legislation.

I think there will be great disappointment about the response to Amendment 143. There was a kind of circular argument that it is going too far—but going too far in what respect? The classic “unintended consequences” were raised as well. There is a set of buzz phrases that one can produce in these circumstances, and “unintended consequences” is one of them, but I did not hear a convincing reason why pricing should not be excluded from an offer to purchase. It strikes me that trading standards officers are correct that this could be a potential loophole. There was perhaps a bit of “not invented here” as well, particularly regarding the amendments tabled by the noble Lord, Lord Lucas, on “properly inform”, which I thought were rather good compared to the existing wording. However, we will, no doubt, continue these discussions. In the meantime, I beg leave to withdraw the amendment.

--- Later in debate ---

Moved by

[Lord Lucas]

148: Clause 252, page 166, line 28, leave out paragraph (c)
Member’s explanatory statement
The purpose of this amendment is to focus discussion on the effects of paragraph (c).

[Lord Lucas (Con)]

My Lords, we now move on to subscription contracts. I would very much like to understand the reason for Clause 252(2)(c). The Government seem to contemplate that, if a consumer enters into a contract providing for the recurring supply of goods, is liable to pay for each supply and has no right to bring the contract to an end, the consumer deserves no protection under this Bill. What are these contracts? I am delighted to say that I have failed to enter into such a contract in my life. I did not know that such a contract, where there is no right for the consumer to cancel under these circumstances, existed or was common. What is Clause 252(2)(c) aimed at in terms of practice out in the real world? Given these contracts, whatever they are, why does the consumer not deserve protection from them? I beg to move.

[Lord Mott (Con)]

My Lords, it is a pleasure to take part in this fifth day of Committee. I will speak to Amendments 148A and 148B, which pertain to an exclusion to the subscriptions chapter. Subscription contracts are becoming increasingly popular in our society. I support the Government’s ambition to ensure that consumers are given strengthened protections in these contracts. However, I wish to ensure that we target the right kinds of contracts and businesses with the new subscription requirements.

Schedule 20 has an exclusion for foodstuffs delivered by an unincorporated trader; to my reading, this appears to target certain micro-businesses. To qualify for this exclusion, a trader must deliver foodstuffs on its own behalf and must not be a body corporate. I support the need for a narrow, targeted exclusion for micro-businesses providing local goods and services, but I worry that the requirement not to be a body corporate will unfairly impact on incorporated micro-businesses that have similar characteristics to unincorporated ones.

For example, businesses such as a farm shop or corner shop providing local food subscriptions, or a vineyard providing locally produced wine on subscription, will be caught by the subscriptions chapter if they are incorporated, but not if they are unincorporated. To me, this appears to be an unfair technicality impacting these businesses; many small micro-businesses may fall through the cracks of the exclusion. That is why Amendments 148A and 148B in my name would change the requirement for a business not to be a body corporate to a requirement for a business to be a micro-business, as defined by Section 33 of the Small Business, Enterprise and Employment Act 2015.

These amendments would ensure that micro-businesses delivering foodstuffs locally benefit from the exclusion even if they are incorporated. They would retain all the other requirements so that the exclusion rightly remains targeted on only the smallest businesses. I hope that the Government understand the need for tweaks to this exclusion and are therefore minded to support these amendments.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I think I should write to the noble Lord to give that in detail.

I turn to the exclusion for microbusinesses. Amendments 148A and 148B, tabled by my noble friend Lord Mott, would replace the requirement for a business to be unincorporated in order to benefit from the delivery of foodstuffs exclusion, with the requirement to be a microbusiness as per Section 33 of the Small Business, Enterprise and Employment Act 2015. The purpose of the unincorporated aspect of the exclusion is to safeguard against larger businesses restructuring in such a way as to benefit from the exclusion, ensuring that only microbusinesses benefit and that there is greater consumer protection in the food subscriptions market.

My noble friend has raised an interesting point about the application of this chapter to certain incorporated microbusinesses, such as local farm shops, that I am keen to explore. However, the amendment as drafted may not work as intended. That is because Section 33 of the Small Business, Enterprise and Employment Act sets out only broad criteria by which microbusinesses should be defined and defers much of the detail to regulations that have yet to be made. With that said, I am happy to work with my noble friend further to understand his concerns and to ensure that the exclusion captures the right businesses. I therefore hope he is suitably reassured.

In her remarks, the noble Baroness, Lady Jones, raised the important point about ensuring that the exclusion for microbusinesses remains narrow and well-targeted to ensure maximum consumer protection. I wholeheartedly agree with her on this matter, and I assure her that that is the Government’s intention. I thank noble Lords once again for their amendments and for their valuable contributions to this debate.

[Lord Lucas (Con)]

I am grateful to my noble friend for his response to my amendment, which I will read with care when I have Hansard in front of me. For now, I beg leave to withdraw the amendment.

Amendment 148 withdrawn.

Digital Markets, Competition and Consumers Bill

Lord Lucas Excerpts

Committee stage
Wednesday 31st January 2024 Grand Committee

The noble Baroness, Lady Kidron, asked me to say that she supports these amendments, but unfortunately is unable to be here. Your Lordships can see that there is broad support for them across the Committee. We need to see action from the Government on climate, greenwashing and the right to repair.

[Lord Lucas (Con)]

My Lords, I very much like Amendment 134 and hope that the Government will find their way to supporting it. It seems to me important that, since it is well drafted, we should go down this route of making sure that claims of environmental effectiveness are real.

In that context, I was delighted by the exposition of the noble Baroness, Lady Bennett of Manor Castle, on Amendment 109, which makes it clear that it is a bit of greenwashing: a Labour Government, should we ever have one, would not put this amendment into effect because it is so broad, all-encompassing and dangerous that they would never do it. Labour is merely proposing it now so that it can seem a bit green.

I like the electrical repair direction. When I moved my daughter into her student flat, I was able to test the fire alarm by turning on the Hoover. I am cautious about amateurs repairing electrical goods and, if we did anything along that line, I would want to make sure that it was focused on professional repairs. It is iniquitous that mobile phones are being made with glued-in batteries so that you cannot renew them. Therefore, I very much support the direction that my noble friend Lord Holmes has taken, as something that is implementable now—I like its breadth too—to make sure that consumers are given the information about whether the product they are buying can be repaired and, therefore, will have a good second-hand value and a long life. As we start to focus on the iniquity of throwing stuff away, it will start to move manufacturers, because such products will become more popular.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I speak in support of the noble Baroness, Lady Hayman, on Amendments 128A and 145A—inserting a new clause on the right to repair—to which I added my name. The noble Baroness set out very clearly the arguments that support this detailed and transparent amendment. I regret that I was unable to take part at Second Reading.

I declare my interest in being married to an engineer who believes, as did my father before him, that everything should be capable of repair, and who suffers frustration and fury when he finds that a product has been designed in such a way as to deliberately prevent this from happening. “Planned obsolescence” is the phrase that manufacturers use to justify their manufacturing methods.

As a country, we are already committed to the right to repair through EU regulations of 21 June. This is limited to fridges, dishwashers, washing machines and TVs. However, this provides no consumer protections on the cost of parts, and limits consumer rights of repair to a small number of specified operations. It deprives them of the right to buy parts or even see repair manuals. There is no timeline for extending the right to other electrical or electronic products. We need a general right to repair all electronic and electrical products now. Otherwise, we will wait until 2030 just to legislate for a few consumer products at a time. Consumers are struggling to make their money go round; repair and reuse would help them now.

The evidence suggests that the UK is falling behind. The EU has legislated for access to software updates for five years, and spare parts and manuals for mobile phones and tablets for at least seven years after a product is withdrawn. It mandates repairability information for consumers at the point of sale, and it is now in trilogues on a more far-reaching right to repair, including prioritising repair over replacement inside guarantee, and the right to repair at a reasonable cost outside guarantee.

As has been said, this is not limited to the EU. Six US states have already legislated for right to repair, with 10 more considering legislation to start this year. These right-to-repair laws cover a range of products, from smartphones to farm equipment, and offer consumers access to spare parts, tools, and repair information to enable repair for minimum periods.

The Government’s argument against this amendment is that it will be burdensome for manufacturers, especially smaller manufacturers, but its effect would be to require firms to retain some spare parts and manuals, and make arrangements for paid-for repair, as they already have to for some kitchen goods and TVs for five to seven years. This is not disproportionate.

Current restrictions on the right to repair favour larger firms over smaller employers, such as independent repair companies and parts suppliers. This is why the amendment proposes banning within one year the most egregious anti-competitive and anti-consumer measures pursued by larger firms. The legislation allows five years for the Government to legislate for the right to repair in order to get the legislation right. Were the Government minded, they could exclude the smallest manufacturers to give them more time to comply.

I am at a loss to see how this might stifle innovation by industry. The amendment would put consumers in the driving seat by enabling them to choose when to switch to more innovative products when it is in their interest, rather than be forced to do so by prohibitively expensive or unavailable spare parts, or by perfectly functional products that stop working only due to software updates. Surely the Government want the consumer to be in control.

The right to repair is genuinely popular. Research by Cardiff University found that 65% of respondents are regularly frustrated by products that break before they should; 62% believe products are currently too difficult to get repaired; 75% agree that the Government should require manufacturers to make products more repairable; and 85% support expanding the right to repair to cover all consumer products. Men’s sheds and repair shops are springing up all over the place in our market towns. Repair is popular.

I know from my own experience that a quote for a repair can be eye-watering and that I can buy a cheaper model that does the same job, especially when it comes to washing machines, dishwashers, and fridge-freezers. Households on tight budgets are forced into a cycle of regularly replacing cheap machines with new cheap machines, rather than repairing existing machines to keep them in use for longer. This also leads to the cost of disposal of the redundant machine, often resulting in fly-tipping—the scourge of the countryside.

Throwaway products are fuelling climate change, growing our toxic waste mountain and ripping off the British public. People are stuck in a cycle of throwing things away and then buying costly new electronics, which is bad for their wallets and bad for the environment. Right now, the UK is the second-largest producer of electronic waste in the world per capita, as the noble Baroness, Lady Hayman, said; it is worth repeating. Too often, inefficient waste management is prioritised over waste prevention. This has to be minimised. This amendment would address these issues.

I turn to the other amendments in this group. Amendment 201 in the name of the noble Lord, Lord Holmes of Richmond, is very similar in essence to Amendments 128A and 145A. We support it as a means of ensuring that consumers are protected in terms of repair and maintenance.

Amendments 109 and 134, in the name of the noble Baroness, Lady Jones of Whitchurch, attempt to ensure that consumers are protected. They would help the country move towards net zero and would assist with climate change mitigation. Consumers are reliant on the information provided for them and this has to be accurate. Greenwashing tactics need addressing. Both the Government and the CMA must ensure greenwashing does not happen, or is at least minimised. We support all the amendments. We are all singing to the same tune; there is cross-party support across the Committee and I look forward to the Minister’s positive response.