Digital Markets, Competition and Consumers Bill

Lord Mendoza Excerpts

2nd reading
Tuesday 5th December 2023 Lords Chamber

[Lord Mendoza (Con)]

My Lords, it is a great joy to follow the outstanding words of the noble Baroness, Lady Kidron. I should declare that I am the chairman of Historic England and a member of the board of the Ashmolean Museum. Like everybody else, I support much of the intention of the Bill, but I shall confine myself narrowly to the topic that has been raised multiple times on the charities point by my noble friend Lord Vaizey.

I take my noble friend Lord Kamall’s point that perhaps not all charities operate their processes with the most benign of intentions, but I think we have to be careful about placing additional regulation on charities, which are already regulated by the Charity Commission. I want to talk about this in special relation to the heritage sector, because so many organisations in that sector use the annual subscription method to fund memberships—it is incredibly important. Looking at Clause 252, the noble and learned Lord, Lord Etherton, read out some of the definitions of what a subscription contract is, but it is clear that when charities sell such subscriptions and memberships they are providing goods and services. Sometimes it is free entry to places, sometimes it is parking, sometimes it is digital content or magazines, but they are supplying stuff.

They also look not unlike things that could be defined as subscription traps: they involve auto-renewal and people having to make a conscious effort to cancel, but they are an important part of the operating models of charities. For example—if I can add some colour— the noble Baroness, Lady Bennett of Manor Castle, mentioned her favourite charity, English Heritage. The English Heritage Trust was established just in 2016 under its new name and in its new incarnation as a subsidiary of Historic England. It is a charity, and it holds the licence to care for and look after the national heritage collection—our stuff, if you like: 400 sites, dozens of museums, 1 million objects, from Dover Castle up to Hadrian’s Wall and including Stonehenge. I looked at the accounts, and its revenue is £130 million a year. Of that, £48 million—almost 40%—is membership income. If you fiddle with that, it could be very significant. If it makes a surplus, it all goes back into the restoration, maintenance and improvement of the national heritage collection.

Many noble Lords have raised the issue of gift aid, and there is a threat to that. As we have heard, HMRC treats these kinds of subscriptions as donations. However, if there is a repayment option in a donation, it no longer qualifies for gift aid. Again, that is a really big number. For example, the National Trust’s revenue last year was £682 million, which is very significant. Of that, £276 million—again, about 40%—was memberships and, of that, £47 million related to gift aid, so it is a non- trivial part of the operating models of a lot of these heritage organisations. As my noble friend Lord Vaizey said, that applies to all sorts of others, such as Kew Gardens or my own museum, the Ashmolean.

I hope that we can find a way in Committee, subject to my noble friend Lord Kamall’s point, of either working on the definition of a subscription contract or, as the noble and learned Lord, Lord Etherton, said, adding charities to the “Excluded contracts” provisions in Clause 253 and Schedule 20. I hope my noble friend the Minister finds a way of coming back to us with an answer on this question, because it is so important to the operating model of so many heritage organisations, museums and theatres up and down the country. It is a non-trivial point.