Post Office Horizon Scandal: Racism

Lord Offord of Garvel Excerpts

Monday 19th February 2024 Lords Chamber

[Lord Sahota]

To ask His Majesty’s Government what assessment they have made of the reports from sub-postmasters involved in the Post Office Horizon scandal that racism affected the way they were treated by the Post Office.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

I thank the noble Lord for his Question. Some of the evidence that has been brought to light through Sir Wyn Williams’s inquiry has been appalling and regrettable. The Government are committed to ensuring that lessons are learned and events are never repeated, but it is important that Sir Wyn is given the time and independence he needs to draw conclusions and report to Ministers on his findings.

[Lord Sahota (Lab)]

My Lords, I thank the Minister for that Answer. My heart goes out to all the sub-postmasters, whatever community they belong to, who were victims of this miscarriage of justice. I thank Balvinder Gill, who is in the Public Gallery and who has been through a horrendous experience, along with his mother. Just like Balvinder’s mother, many victims were hard-working, first-generation immigrants, who had accumulated wealth and had a good status in the community. They generally did not have a full grasp of the English language and were treated like second-class citizens by the Post Office. As the Minister will know, over 40% of sub-postmasters were from minority communities. Why was such a high percentage of Asian females prosecuted by the Post Office when, in reality, the prison population of Asian females is less than 5%?

[Lord Offord of Garvel (Con)]

I thank the noble Lord. We are all deeply distressed by the events that have happened during this 25-year sorry saga. The noble Lord refers to one of the documents that was used by Post Office Ltd, which was released in 2023 under the Freedom of Information Act. That did have language in it using descriptors that were very much out of date and should have been updated; it was offensive language and the Post Office has now, rightly, completely changed its methodology. But, once again, Sir Wyn Williams will go into this in great detail.

[Lord Fox (LD)]

My Lords, it is easy to see why the noble Lord was shocked by the racist terms uncovered, which were used by the investigating team in Post Office Ltd. It is even more shocking to note how recently those terms were being used, and still more shocking that many of the people who were using those terms are still employed by Post Office Ltd. We do not need the conclusion of the inquiry to know that Post Office Ltd is rotten to the core. When will the new chairman be appointed and when will the work start on cleaning this rotten business out?

[Lord Offord of Garvel (Con)]

I share the noble Lord’s frustration with this process. There was indeed offensive language used in the official documentation, which had not been updated since the 1980s and for which the Post Office has clearly apologised. As far as the culture in the Post Office is concerned, there is a rebuilding job required. The chairman has been removed and live conversations are going on right now to appoint a new chairman. My department is fully focused on rectifying this sorry situation.

[Lord Sikka (Lab)]

My Lords, none of the racist terms in the report, codenamed Project May, could have been used without the approval of directors, all of whom were appointed by the Government. Rather than hiding behind the claim that the Horizon inquiry might look at it, the Minister needs to be accountable to Parliament. An inquiry is not a substitute for parliamentary accountability. So, can he tell us when he first became aware of these racist terms and why he has not already referred the Post Office to the Equality and Human Rights Commission for investigation?

[Lord Offord of Garvel (Con)]

I thank the noble Lord. He is referring to the historical document that was released under the Freedom of Information Act in 2023. It has clearly been identified to have offensive language in it, which had not been updated since the 1980s. There is an ongoing inquiry into this. We all want to know the answer. The reason we got into this position in the first place is that people were deemed guilty rather than innocent without due process. Let us not do the same thing again.

[Lord Forsyth of Drumlean (Con)]

My Lords, is it not obvious, as the noble Lord, Lord Fox, said, that there has been a complete failure of corporate governance here, and the only way to deal with that in the real world is to clear out the people responsible and put in some people who are capable of bringing order and good management to the Post Office?

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[Lord Offord of Garvel (Con)]

I thank my noble friend. We both come at this from the same point of view: the private sector board. The board currently in place is not the board that prosecuted any of these postmasters. In fact, of the non-executive directors, three have been appointed in the last 12 months. There is no question that there has been a failure of governance. As we discussed last time, the governance of this company goes through the chair to the Secretary of State to Ministers. That is where we need accountability and where the inquiry will focus.

[Lord McNicol of West Kilbride (Lab)]

My Lords, as we have heard, the BBC recently reported a number of concerns and comments made by Post Office staff. One sub-postmaster was told:

“All the Indians are doing it. They have relatives so they take the money and send it to them abroad”.


But neither the terms of reference nor the completed list of issues for the inquiry explicitly mentions racism or discrimination. Is the Minister comfortable that the Wyn Williams investigation will deal with these specific issues of racism and discrimination in his report?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. The inquiry was set up by this Government in 2020, initially on a non-statutory basis, immediately following the case with Lord Justice Parker in 2019. That was then upgraded to a statutory inquiry. So Wyn Williams has the full authority of the judicial process to get to the heart of this matter. We are also being advised, as we know, by the noble Lord, Lord Arbuthnot, and the advisory committee. It is very clear that we will get to the bottom of all these issues.

[Baroness Brinton (LD)]

My Lords, the question asked by the noble Lord, Lord Sahota, about why there were more Asian subpostmasters treated harshly and sent to prison is important. Nick Wallis, who has written the book on this scandal, said:

“As I spoke to them I did start to wonder why Asian sub-postmasters seemed to be getting far more punitive sentences than their white counterparts”.


It is good that the Minister said that the Government want to learn from the mistakes. Is anyone looking at the difference in sentencing terms between white and Asian sub-postmasters?

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for that question. Absolutely—this is fundamental to looking at the overturning of the convictions. There were 983 wrongful convictions and the Ministry of Justice is now working through that process and it absolutely needs to understand exactly how these convictions came about and to whom.

[Lord Berkeley (Lab)]

My Lords, the chairman of the Post Office, who has now resigned, was recently quoted in the press as being advised several times on the quiet by officials in Government to go slow with giving money back after prosecutions in order to save government expenditure. Was that the reason he was sacked or was it because the Government wanted to have a new broom there? It does not reflect very well on what the civil servants were reported to be telling him.

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[Lord Offord of Garvel (Con)]

I thank the noble Lord for that. I can inform the House that the Secretary of State for the Department for Business and Trade will be giving a detailed Statement in the other place on this in about half an hour’s time, where she will categorically refute the allegations made by Henry Staunton—with evidence that we will put in the House of Commons Library to demonstrate that that was absolutely not the case. It does not match the facts. The fact of the matter is that we have compensated 64% of all the postmasters already and in the HSS scheme 100% already had offers in Henry Staunton’s time—so the facts do not match the article.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, listening to the noble Lord, Lord Sahota, has made me question whether or not misogyny and sexism played a role in the sentencing of the Asian sub-postmasters. Is that being looked into as well?

[Lord Offord of Garvel (Con)]

I thank the noble Baroness. As I said, these are all issues that will be looked at. Sir Wyn Williams has complete authority to look into all these matters and he will be guided by the public interest—where this is clearly in the public interest—and also by the advisory committee, with the noble Lord, Lord Arbuthnot, and Mr Bates et cetera.

[Lord Kamall (Con)]

I refer noble Lords to my interests as set out in the register. I ask the Minister: does this not show one of the concerns that we should have about arm’s-length bodies, where they are supposed to be accountable but there are many questions over their accountability? They can act in this way but actually not be held responsible. I wonder whether that has wider lessons for who regulates the arm’s-length bodies and how they are accountable, not only to Parliament but to the British people.

[Lord Offord of Garvel (Con)]

I thank my noble friend for that. I have said at the Dispatch Box before that there will quite a lot of examination required following the Wyn Williams report. There are number of arm’s-length bodies that are set up to look like plcs but do not behave like plcs, largely because there has not been the challenge and the scrutiny typical of non-execs and from Ministers in terms of oversight. That is, I imagine, something which will be very much focused on following the Wyn Williams report.

[Baroness Lawrence of Clarendon (Lab)]

The Minister mentioned Wendy Williams as looking into the sub-postmasters. Is it the same Wendy Williams who looked into the Windrush scandal? The mere fact is that the Government took no notice of that and have not implemented anything there, so how is that going to work with this new thing around the Post Office scandal?

[Lord Offord of Garvel (Con)]

My understanding that the judge in this inquiry is Sir Wyn Williams. I will have to write and find out whether there is a connection to Windrush. I am afraid I am not aware of that.

Digital Markets, Competition and Consumers Bill

Lord Offord of Garvel Excerpts

Committee stage
Wednesday 7th February 2024 Grand Committee

[Lord Clement-Jones (LD)]

My Lords, this has been very interesting debate. There is a common theme—that these clauses are a very blunt instrument. At one end of the spectrum, we have the amendments in the name of the noble Baroness, Lady Jones, which attempt to get to grips with what this is all about and whether these clauses are fit for purpose; and at the other end we have had clear demonstrations that they are not. I am very grateful to the noble Lord, Lord Black, in particular, for his comprehensive and persuasive introduction. I started off fairly convinced of the case—I did not sign all his amendments, but I signed two clause stand part notices—but, like the noble Lord, Lord Bassam, I am now pretty convinced that the clauses are not quite fit for purpose. For the digital economy, we need to be much more wary about how the prescribed cooling- off period works.

I started off thinking that this is an issue that only the subscription and video-on-demand side should be concerned about, but having listened to the noble Lord, Lord Black, I realised that there is a much wider set of interests. The noble Lords, Lord Lucas, Lord Vaizey and Lord Bassam, described a much wider landscape that should be concerned.

I started by considering the disruption to subscription video-on-demand services—the so-called streamers. That is why I signed the notice from the noble Lord, Lord Black, opposing Clause 262 standing part. All the representations I received pointed out that this is really business-critical for UK operators such as Netflix and Disney+. I think the noble Lord, Lord Vaizey, used the expression binge-watch; if you can do that and get a refund, why bother keeping your subscription? We need to make sure that those services are safeguarded.

A number of noble Lords pointed out that Ministers in both the Commons and this place have expressed concern, saying that they understand the issue and are going to consult; but in the meantime, there is a huge amount of uncertainty. We potentially have it in black-letter law that the cooling-off periods are as set out in the Bill. We do not know what kind of consultation will take place, what kind of flexibility might be operated, and so on. In the meantime, we have a perfectly workable set of consumer contract regulations, which the parties would be happy to apply. That was very much the case the noble Lord, Lord Black, rightly made.

Important principles are set out in the CCRs, such as that consumers can request that the supply of digital content begins before the end of the 14-day cancellation period. So it is perfectly possible to have a provision that safeguards both the service provider and the consumer in these circumstances, but that principle is not imported into the Bill. I do not know why. On Monday, I asked the Minister what consultation had taken place. I have used the expression “blunt instrument”, but these are really important new provisions. The noble Lord, Lord Bassam, was absolutely right: they are based on the best of intentions, but they are so blunt that they will be a real problem for some of our digital services.

I hope the Minister will not regard our proposals as “not invented here”, and that the Government will not motor on with these provisions without taking a long, hard look at them. This is one of those circumstances where we would all be a lot happier if we reverted to a regulation-making power, got rid of some of these clauses and had a proper super-affirmative provision in the Bill, for example, enabling a discussion about all these aspects of subscription contracts. We heard about the absolute unhappiness with the impact on charities and gift aid when discussing the previous group; that demonstrates the total bluntness of these provisions. I do not think anybody will be very happy with them —the charities, the streaming businesses, the subscription media services or the dating services. There is a huge amount of unhappiness, which I hope the Minister will respond to.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

I thank noble Lords and noble Baronesses for their amendments and their interesting and informed contributions to the debate on this first group of amendments, on subscription contracts.

I will first address the amendments tabled by my noble friend Lord Lucas, which relate to the cooling-off period. Amendments 168 and 191 would create an additional requirement for businesses to inform consumers of the charges they may incur if they use a subscription but later cancel their contract during a cooling-off period. I agree that it is important for consumers to know what charges they could incur when they exercise a right to cancel during a cooling-off period. However, I assure my noble friend that the Bill already makes sufficient provision for this. The full pre-contract information listed in Schedule 21 provides information on the consequences of a consumer exercising their right to cancel during a cooling-off period. This includes information on any refund the consumer may be entitled to and any reason why that refund might be diminished. That information must be given or made available to consumers as close in time as is practicable to a consumer entering into the contract. Therefore, although I appreciate the intent behind my noble friend’s amendments, I hope he is reassured that sufficient provision is already made in the Bill.

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[Lord Clement-Jones (LD)]

My Lords, I am sorry to interrupt the Minister, but it might give the Box a chance to answer the question before the end of his response. Do the current provisions in the Bill contain the principle that I mentioned, which was set out in Regulation 37 of the consumer contracts regulations, where consumers can request that the supply of digital content begins before the end of the 14-day cancellation period, acknowledging that they would then cease to have the right to cancel from that point of supply? If not, why not, as that would be the ultimate protector of these digital services?

[Lord Offord of Garvel (Con)]

I will come to that once I have some input from behind me. This is obviously a key part of the group.

Amendments 169 and 193, tabled by the noble Baroness, Lady Jones of Whitchurch, address the provision of information in relation to the consumption of digital content during the renewal cooling-off period. I understand that the noble Baroness wishes to ensure that the Bill provides sufficient protection for digital streaming platforms if a consumer has accessed digital content and then cancels their contract during the renewal cooling-off period. The Government will consult on the relevant return and refund rules that apply in this situation and other similar circumstances. This will ensure that rules are fair and practical for businesses and consumers. It will also enable consideration of any specific issues for particular industries or circumstances if needed—for example, digital content, perishable goods or bespoke products.

As part of that consultation, we will include a policy proposal of introducing an explicit waiver from refund rules for digital content, recognising the circumstances that the noble Baroness set out. We aim to consult before the end of the year. This is directly to avoid the scenario that these digital steaming firms fear. It is also important that those rules can be reviewed—

[Lord Clement-Jones (LD)]

My Lords, I apologise. If the Minister is undertaking this consultation and looking at a provision of that description, can he also describe which power, in the part of the Bill we are dealing with, will give the Secretary of State the ability to do that, as well as the process by which it would be introduced and the timing?

[Lord Clement-Jones (LD)]

My Lords, it could answer the Regulation 37 question.

[Lord Offord of Garvel (Con)]

The point is that we have to consult on this. The matter has been raised by all sides of the Committee and there are specific reasons for it. The consultation is as it says. Rather than trying to go through this line-by-line at the Dispatch Box, I will try to set it out in writing for everyone, so that we can see exactly what we mean by it. If I have any input in the meantime from behind me, I will share it with noble Lords.

I turn now to the clause stand part notices tabled by my noble friend Lord Black—that Clauses 262, 263 and 264 should not stand part of the Bill—and his consequential Amendment 194. The net effect of these changes would be to reverse the cooling-off period in the Bill to the status quo established by the 2013 consumer contracts regulations. In particular, the cooling-off period for consumers after a free trial or year-long subscription automatically renews, introduced by this Bill, would be removed. The Government’s objective is to protect consumers from the specific harms associated with subscription contracts, while also considering the needs of businesses. We believe that the Bill correctly finds that balance. The Government expect that the protections provided through the Bill will have £400 million- worth of consumer benefit per year.

This measure protects consumers who have signed up to a trial period that then rolls into a higher-cost term. It also applies when contracts automatically renew on to a period of 12 months or longer, which usually, by definition, incurs a substantial financial outlay. Indeed, our consultation showed that many people forget to end their subscriptions before they automatically renew, especially after a trial, so we view this as an important provision that must remain in the Bill.

We understand that some businesses, particularly digital streaming services, are concerned about how the cooling-off periods will work in practice. As I mentioned, noble Lords should be assured that we will publicly consult on the cancellation return and refund rules to make sure that we get this right and—to be clear—to avoid refunds being payable to consumers exploiting the cooling-off period. The Bill allows for the Secretary of State to make the necessary regulations by affirmative procedure. That will be done before the subscription rules come into operation, following the consultation. I hope that this reassures the noble Lords on these points.

I turn now to the final amendments in this group, Amendments 221 and 224, also tabled by my noble friend Lord Black. The amendments would mean that the subscription contract provisions in the Bill come into force two years after the day on which the Act receives Royal Assent. The Government fully understand that businesses need clarity about when the new rules will come into effect and that they need sufficient time to make appropriate preparations. I am pleased to assure noble Lords that the subscription regulations will commence no earlier than October 2025. In the meantime, we will continue to engage with stakeholders to understand the impact of implementing the new rules and to ensure that businesses have enough time to adapt their operations accordingly.

The detail on return and refund rules will be set out in secondary legislation and the Government have committed to consult publicly on those rules. Clause 265 gives the Secretary of State the power by regulations to make further provision in connection with the consumer’s cooling-off right. Those regulations are subject to affirmative procedure, which I hope will assure my noble friend. I am grateful for my noble friend’s amendments and I hope that he feels reassured by my remarks.

[Baroness Jones of Whitchurch (Lab)]

Did the noble Lord get a response from the Box?

[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.

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In speaking to his Amendment 190, the noble Viscount, Lord Colville, highlighted an important gap in consumer protection, giving the good example of Flickr. We need to find some way of accommodating that as we go forward. I do not put my photos on Flickr, strangely enough, so I have not come across that, but I can see that it could be a real problem. I suppose that it could also be a real problem with Instagram and a number of other sites. It would be interesting to hear what the Minister thinks about that. Given that the Government have prescribed just about everything else in the Bill, it seems perfectly possible to accommodate that in Schedule 22, or wherever, but no doubt that is for another day.

[Lord Offord of Garvel (Con)]

My Lords, we come to the second group of amendments, on subscription contracts and reminder notices. Again, I thank all noble Lords for their amendments and interventions. I appreciate that there is a lot of interest in this area of the Bill and I look forward to continuing this discussion with noble Lords between now and Report.

I will first address the amendments tabled by my noble friend Lord Black of Brentwood, for which I am most grateful. Amendments 170 and 175 to 184 relate to reminder notices. The requirement to send reminder notices is one of the targeted duties that we are placing on traders to ensure that consumers pay only for subscription contracts that they want or need. Of course, we recognise that there is a balance to be struck and we have listened to views from a range of stake- holders to ensure that we get this right. Indeed, the Government made changes to the reminder notice provisions in the other place following further consultation with industry. The Bill reflects the Government’s commitment to delivering proportionate regulation, ensuring that consumers are suitably protected from the harms of subscription traps without overburdening businesses.

I wish to reassure my noble friend that for an average monthly subscription contract, a trader will have to send only one reminder notice within a six-month period. We believe that this strikes the right balance between informing consumers about their subscriptions and not overburdening businesses.

Reducing the frequency of reminder notices, as my noble friend’s amendment seeks to do, would increase the risk that consumers end up paying for unwanted subscriptions for longer periods. To be clear, the Bill already allows for the Secretary of State to make regulations to update or modify these provisions in a number of ways, including the frequency, content and timing of reminder notices. This ensures that the Government can adapt the reminder notice requirements in future if evidence about consumer behaviour or operational practice indicates that adjustments are necessary.

Amendment 189 relates to end-of-contract notices, which a trader must send when a consumer has ended or cancelled their contract. In a similar way to my noble friend’s other amendments, Amendment 189 seeks to remove detail from the Bill. However, as with reminder notices, we think that the requirements for end-of-contract notices strike the right balance between informing consumers and not overburdening businesses.

Amendments 185 to 188, which relate to contract cancellations, were also tabled by my noble friend Lord Black. The Government are committed to the principle that consumers should be able to easily exit their subscriptions if they wish and businesses should not place undue barriers to doing so. Consumers should not, for example, be hindered when trying to leave a subscription contract or when stopping its renewal. Those are the principles behind these provisions.

However, I can assure my noble friend that we are continuing to listen to businesses and other stakeholders. We are absolutely committed to ensuring that this legislation gets the balance right between protecting consumers and supporting businesses. We of course appreciate that any communication to end a contract must be clear to a business. That is why, in the event of a dispute, the onus is on a consumer to prove that their method of ending the contract or cancelling it is sufficiently clear to the business for these purposes.

I hope that this lays to rest any concerns that your Lordships might have that a single tweet into the ether or a message via carrier pigeon, as suggested by my noble friend Lord Vaizey, could be an acceptable means of a consumer leaving a contract. We will also provide clarification through guidance for these kinds of scenarios and engage with stakeholders as we develop it. Furthermore, the Government are clear that nothing in the easy-exiting principle should prevent a trader from requesting voluntary feedback from a consumer who wants to end their subscription or from offering to give the consumer information on other products. However, these must not unduly hinder the consumer from ending their contract.

For the reasons that I have set out, including our commitment to continue to get feedback from all stakeholders on these issues, I hope that my noble friend will feel able not to press his amendments and that noble Lords who spoke to the amendments feel suitably reassured.

Amendments 173 and 174 were tabled by noble Baroness, Lady Jones of Whitchurch. Amendment 173 would impose a requirement on traders to ask their customers to agree, before entering the contract, that their subscription will renew automatically every six months or, if the period between renewal payments is longer than six months, agree each time payment is due. Amendment 174 would apply equivalent requirements but would also accommodate contracts that renew automatically after a free or low-cost trial.

I agree wholeheartedly that consumers must be protected from getting trapped in unwanted subscriptions. However, as I mentioned, the Government’s position is that the Bill currently strikes the right balance of protecting consumers without overburdening businesses and potentially reducing consumer choice. Requiring opt-ins would burden businesses and consumers with emails requiring them to confirm that the subscription can continue. Consumers who forget could inadvertently see their favourite subscriptions lapse.

I turn now to Amendment 190 in the name of the noble Viscount, Lord Colville of Culross, which would ensure that consumers can have their non-personal data returned to them after they cancel their subscription contract and would stop traders continuing to use this data. I thank the noble Baroness, Lady Jones, the noble Lord, Lord Clement-Jones, and my noble friend Lord Lucas for their contributions on this issue. I assure the noble Viscount that, where data can be used to identify a living individual, this information is already protected by the UK GDPR regime; statutory provisions therefore exist for it to be returned to a consumer. This includes data that is directly identifiable to an individual, or indirectly identifiable from that data in combination with other information.

For information that may be considered non-personal or anonymised, the Data Protection and Digital Information Bill will create a test in legislation to help organisations understand whether information is personal or anonymous. This will help bring clarity to businesses as to how to process the type of information the noble Viscount discussed. I am grateful to the noble Viscount for his amendment and hope he feels satisfied with my explanation.

Finally, I turn to the points made by my noble friend Lady Stowell. I assure her that the Government consulted on the principles of the Bill in 2021 and will publicly consult on the details of the return and refund rules. The purpose of consulting on those rules is to take account of a wide range of products, including perishable and bespoke products and services, that have been used during the cooling-off period; that is why we think it appropriate to set out this detail in secondary legislation following the consultation. I am grateful to my noble friend for her remarks and hope she feels satisfied with my explanation.

[Lord Clement-Jones (LD)]

Can the Minister reassure me that he will write to say how these provisions were consulted on? There is further work to be done, clearly, but it would be good to know what baseline consultation was carried out for all these extremely new, comprehensive, detailed—and sometimes vague—provisions. That is an important part of the knowledge we need to have going forward.

[Lord Offord of Garvel (Con)]

I thank the noble Lord and agree that it would be helpful for all of us if this were written down so we could examine it in more detail.

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Moved by

[Lord Offord of Garvel]

195: Clause 285, page 190, line 2, leave out “or” and insert “and”
Member's explanatory statement
This amendment ensures that both limbs of the test of whether a trustee is independent of the trader in relation to a trust need to be satisfied.

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[Lord Offord of Garvel (Con)]

My Lords, I am delighted to speak to this group of amendments, and I thank my noble friend Lord Holmes, the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones, for their amendments. I will first briefly address the government amendments, and the other amendments in my closing remarks.

Amendment 195 is a minor and technical amendment which aims to clarify independence requirements for trustees overseeing funds in a consumer savings scheme, strengthening safeguards against potential conflicts of interest. Trustees must have no association with the trader or interests in the trader’s assets, ensuring that funds are controlled for the benefit of savers and independently of the trader.

This measure is essential to safeguard consumer funds against insolvency and ensure that they are used for their intended purpose. I hope that noble Lords will accept this amendment. I look forward to addressing in closing any questions or points that they may have about the amendments in this group. I beg to move.

[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.

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[Baroness Jones of Whitchurch (Lab)]

Gosh—I cannot help feeling that this is the beginning of a much longer conversation. We may not want to have that conversation now, but this is an important issue; I absolutely understand why the noble Lord, Lord Clement-Jones, is raising it. We need to find a way to ensure that consumers are properly informed.

On standard-essential patents, I am grateful to the noble Lord, Lord Clement-Jones, for explaining the background to his amendment. Again, this is an issue with which I was not familiar, but the noble Lord spoke persuasively. I hope that the Minister will agree to follow up on the Intellectual Property Office’s review and provide some reassurance that the issue is in hand.

The Minister will be pleased to hear that we support his Amendment 195. With that, I look forward to hearing his response to the various issues that we raised in this group.

[Lord Offord of Garvel (Con)]

My Lords, I thank noble Lords for their valuable contributions on the amendments in this group. I will address each one in turn.

I thank my noble friend Lord Holmes of Richmond for his Amendments 199 and 200, relating to consumers and artificial intelligence. I also thank the noble Lord, Lord Clement-Jones, for his remarks on this matter.

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[Lord Clement-Jones (LD)]

Can the Minister do any better than “in due course”? Perhaps he can say “shortly”.

[Lord Offord of Garvel (Con)]

In a matter of time. Why do we not get the Box to define “in due course”?

I therefore assure the noble Lord that the Government’s position on what interventions may be appropriate in respect of standard-essential patents, including specifically on injunctions, will be set out more clearly in the very near future. As the Government are already addressing this issue and are due to make their policy position public soon and separately, I hope the noble Lord feels able not to move his amendment.

For the reasons set out, I hope noble Lords will not move their amendments.

Amendment 195 agreed.

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These probing amendments allow us to consider what should be placed in the Bill on Report. Should my noble friend the Minister find himself unable to support these amendments, I very much hope that, on Report, he will come back to a number of the specific recommendations and requests made by the Competition and Markets Authority and the FanFair Alliance, which has been commented on. This is the Digital Markets, Competition and Consumers Bill; this is an opportunity for the Minister to ensure that it lives up to its name.

[Lord Offord of Garvel (Con)]

My Lords, I thank the noble Baroness, Lady Jones of Whitchurch, for her amendment, which the noble Lord, Lord Leong, spoke to so eloquently. I also thank the noble Lord, Lord Clement-Jones, for his amendment and my noble friend Lord Moynihan for adding his contribution on a subject he speaks about with great passion. I recognise that many noble Lords have a great interest in ticketing an on a personal level, as an avid sports fan, I share a lot of their frustration.

Buying on the secondary market is a matter of consumer choice. So long as consumer rights are complied with, the Government do not wish to prevent consumers having that choice. In recent years, the Government have further strengthened those rights with respect to secondary ticketing. In 2015, we legislated to ensure that consumers received fuller information on tickets they were buying on the secondary market. In 2016, we commissioned an independent study of consumer protection in the secondary ticketing market under an economist, Professor Waterson. He concluded that, providing they were enforced, the measures in the Consumer Rights Act 2015 should be sufficient to protect consumers. He also noted that there was more the primary market could do to help consumers get tickets there.

Since then, enforcement work undertaken by the CMA and trading standards has resulted in better information being provided by platforms, and the successful prosecution and fining of a number of ticket touts. We have also added further clarifications to the CRA and introduced legislation outlawing the use of bots to buy tickets for profit, on which I know my noble friend Lord Moynihan was very influential. I thank him for his work in this area. The current legislative framework is producing successful enforcement action. It will be strengthened further by the provisions in Part 3 of the Bill.

I turn to the amendment in the name of the noble Lord, Lord Clement-Jones, on ticket limits. In the last year, the Government have consulted further with the industry on applying limits on ticket purchases in the primary market to sales in the secondary market, in line with the commitments in the response to the CMA recommendations. However, we continue to believe that this will be difficult in practice. The Government’s approach—

[Lord Clement-Jones (LD)]

My Lords, I am sorry to interrupt the Minister. How often do the Government turn down very firm recommendations from a regulator that knows the market, such as those made in the secondary ticketing report? It is quite unusual and rather like they are second-guessing the regulator. The Minister said that it is impractical, but is the regulator not in the best position to decide whether that is the case and whether it can be enforced?

[Lord Offord of Garvel (Con)]

I thank the noble Lord. Yes, the Government absolutely expect the CMA to do its job but in the consultation which comes from that, there are other voices to be heard and other stakeholders to be listened to. As I said, in 2016 we had an independent study on the secondary ticketing market and we went to an economist, Professor Waterson, to give us his opinion on these matters. There is a balance to be struck.

[Lord Clement-Jones (LD)]

I am sorry, but Professor Waterson could not have been clearer in his 225 pages—and that was in 2016, so we have had quite a long time to chew over his recommendations.

[Lord Offord of Garvel (Con)]

I thank the noble Lord. The Government’s approach is definitely always to protect consumers, where necessary, and to ensure that business regulation is proportionate. We do not believe that the evidence to date justifies new and onerous secondary ticketing measures. Indeed, it may drive sellers to try to avoid compliance by selling on social media or platforms beyond the reach of UK enforcers, making buying riskier. Banning resales or resale for profit altogether risks reducing consumer protection. For example, Ireland has banned resales, yet Taylor Swift tickets for Dublin are on offer for similar prices to those at Wembley.

[Lord Moynihan (Con)]

I have listened to my noble friend’s argument, but what does he think the reasons would have been for the Government to ban the secondary ticket market for the Olympic and Paralympic Games?

[Lord Offord of Garvel (Con)]

My noble friend Lord Moynihan, who was intimately involved in them, will know about the specific case arising there. In general, the feeling in the department is that we wish to protect consumers by keeping this activity within a regulated environment. If we ban it outright, we fear that we will drive the secondary market underground. We see evidence of that in everyday activity, including concerts and football matches. We worry about what happens as sales move out of reach of the local regulators and on to the black market.

I appreciate the points made by my noble friend, who speaks passionately about this topic; I know that he cares deeply about it. On his points about football, for example, I point out that ticket resale is banned in the football market in England and Wales for public order reasons. That does not mean that we should extend it to other markets, for the reasons I have set out. I hope that noble Lords will not press their amendments.

[Lord Leong (Lab)]

My Lords, first, I thank the noble Lords, Lord Moynihan and Lord Clement-Jones, so much for their very kind words. This is really personal; I took a lot of time to look into this. I thank noble Lords and my friend Sharon Hodgson for their relentless and tireless work here and in the other place. I hope that, with this Bill, we can help to move this issue forward.

The days of ticket touts in dirty macs standing outside venues is gone—well, not quite: they have been replaced by bots. We have to address this. There are still examples of bad behaviour, as the noble Lord, Lord Clement-Jones, mentioned. If we do not do anything about it, the bad behaviour will continue. With the deepest respect, I humbly disagree with the Minister: this is not consumer choice; this is consumer exploitation against consumer protection. How many more consumers need to be fleeced before we do something about this?

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Moved by

[Lord Offord of Garvel]

203: Clause 295, page 199, line 20, leave out “more limited” and insert “different”
Member's explanatory statement
The amendment would ensure that when an application to vary an accreditation is made, the Secretary of State can make variations that differ in any way from what is applied for, and not just variations that are less onerous.

[Lord Offord of Garvel (Con)]

My Lords, I will speak briefly to the government amendments in this group. I look forward to hearing from those who have other amendments in the group, which I will address in my closing remarks.

Amendments 203, 204 and 205 are minor and technical amendments to Clauses 295 and 296. They clarify that the Secretary of State has flexibility to impose suitable limitations and conditions on an ADR provider’s accreditation, including to reassess existing conditions, when an ADR provider applies to alter its accreditation or breaches its accreditation requirements.

Amendments 210 and 211 make consequential amendments to other legislation, including updating statutory provisions which extend limitation periods to facilitate ADR, to ensure that ADR does not result in consumers being timed out from taking court proceedings. I hope that noble Lords will accept these minor amendments, and I look forward to a debate today on ADR. I beg to move.

[Lord Etherton (CB)]

My Lords, I draw attention to my Amendment 209 in this group. It would require the Secretary of State, within 12 months of the commencement of Chapter 4 of Part 4, to complete a review of the provision of alternative dispute resolution—ADR—in relation to consumer contract disputes in each relevant sector. It would also require the Secretary of State to publish a report on the steps the Government intend to take to ensure the provision in each sector of accessible and affordable ADR for the resolution of consumer contract disputes.

Chapter 4 of Part 4 addresses the issue of ADR, subject to the government amendments currently being proposed. Essentially, these provisions are concerned with the terms of accreditation of ADR providers. What is lacking is any provision for making ADR schemes more available and accessible for the resolution of disputes, or even any provision for a review of potential ADR arrangements for inexpensive, speedy and efficient disposal of consumer disputes.

The noble Baroness, Lady Jones of Whitchurch, has two amendments in this group that would improve the position. One relates to a money award under ADR that is enforceable in the ordinary courts and the other seeks a review of ADR in the aviation sector. I support both those amendments, but my provision is much wider; it calls for a more general review, by the Government, of appropriate arrangements for ADR across the various economic sectors.

Earlier in Committee, I tabled my amendment on the introduction of class actions for consumer disputes, under Chapter 7 of Part 1. The Minister, the noble Viscount, Lord Camrose, said that the Government opposed anything that would provide complexity of litigation at this stage. ADR is at the other end: it provides a very accessible, simple and straightforward means to resolve consumer disputes that should be relatively inexpensive. Resorting to court proceedings is always expensive and time-consuming. They can also be intimidating for consumers. The current delays in the delivery of civil justice are well known.

It is significant that the Government are well aware of the desirability of ADR in other areas that may, in policy terms, be broadly described as those that concern consumers. In the Renters (Reform) Bill, currently in the other place, there are provisions for landlord redress schemes in the private rental sector. It is likely that all private landlords will be required by regulations to join such schemes, which will, in effect, provide an ombudsman service for tenants in the private rental sector. These schemes will provide a swift, inexpensive and accessible means to resolve disputes and pay compensation to tenants who have suffered from landlords’ wrongful action. Joined-up government policy strongly supports the extension of that kind of redress mechanism to consumer disputes generally.

For those reasons, I suggest that the Bill should provide for a government review of ADR for consumer disputes to make it more readily available as a means of accessible, inclusive, swift and appropriate resolution of consumer disputes that is appropriate for the needs of all consumers, regardless of age, income, educational level and vulnerabilities.

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I should have said, in introducing my interest, that the two ombudsmen together resolved disputes amounting to 150,000 cases in 2023.

[Lord Offord of Garvel (Con)]

I thank the noble and learned Lord, Lord Etherton, and the noble Baroness, Lady Jones, for their amendments and the discussion. I also thank the noble Lord, Lord Clement-Jones, for his remarks.

Amendment 208A from the noble Baroness, Lady Jones, seeks to enhance the visibility and specificity of ADR information provided by traders. I understand her concerns, and I am glad to hear that she welcomes the provisions currently in the Bill. The Government believe that, for traders in regulated sectors, specific information requirements should be left to sectoral redress schemes. Many already make such requirements. For traders who voluntarily sign up for ADR, requirements as detailed as those suggested by this amendment would not be in keeping with the spirit of that good practice. For many businesses that voluntarily participate in ADR, doing so is a USP to their consumers.

On the proactive duty suggested by noble Baroness’s amendment, we think it important that traders and consumers have the opportunity to resolve differences through the traders’ complaints process before proceeding to ADR. Once concluded, a trader required to participate in ADR must inform the consumer about that. We consider that Clause 306, as it stands, is proportionate. It is designed to ensure the effective and useful provision of information to consumers. I therefore hope the noble Baroness will not move her amendment.

Amendment 209, tabled by the noble and learned Lord, Lord Etherton, requires the review of ADR in each economic sector within 12 months of commencement of the Bill, followed by the publication of a report. The provisions on ADR information in Clauses 301 to 304 facilitate ongoing monitoring of consumer ADR, including its accessibility and affordability. This includes the monitoring of accredited ADR providers, ensuring that consumers consistently receive fair and effective ADR services. It also facilitates the provision of information by exempt ADR providers and regulators, facilitating the oversight of redress schemes in regulated sectors.

In terms of affordability, Clause 292 ensures accredited ADR providers cannot charge consumers unless their fees are approved by the Secretary of State and are published. Nothing in the Bill prevents future mandates requiring businesses to participate in ADR in specific sectors. Legislation already compels businesses in some sectors to participate in redress schemes. Clause 306 requires traders to draw consumers’ attention to any such scheme when responding to consumer complaints.

I also highlight the July 2023 Ministry of Justice announcement, which demonstrates that ADR continues to be a topic of live government work. The MoJ has introduced integrated mediation for claims valued up to £10,000 in county courts and expects this to come into force later this year. Under this scheme, all such defended small claims would be referred to the small claims mediation service before their claim can progress to a court hearing. For the reasons I have just set out, I hope that the noble and learned Lord will feel comfortable not moving his amendment.

I again thank the noble Baroness, Lady Jones, for her Amendment 209A. This would provide that a money award resulting from an ADR process should be enforceable as if it were payable under a court order. Many forms of ADR are not binding. Here, the amendment might be counterproductive. Non-binding ADR retains a level of flexibility and informality distinct from the rigidity of court proceedings. This flexibility is crucial, as it encourages participation from businesses that might otherwise be hesitant about entering into ADR. If the consumer is dissatisfied with the outcome of this kind of ADR, they can, of course, take the matter to court. By contrast, where settlements are reached through binding ADR, they are already enforceable, and the amendment is not needed.

More generally, I hope that the noble Baroness will be reassured that Chapter 4 of Part 4 of the Bill will enhance the quality of consumer ADR in consumer markets, in particular by making the accreditation of ADR providers mandatory, subject to appropriate exemptions, which should contribute significantly to the reliability and effectiveness of ADR outcomes for both sides. I hope that the noble Baroness agrees that the Bill provides a balanced approach that maintains the effectiveness and attractiveness of ADR. I therefore hope that she will feel satisfied in not moving her amendment.

Amendment 209B, also tabled by the noble Baroness, Lady Jones, seeks to ensure that the Government conduct a review of ADR provisions in the aviation sector. The Department for Transport conducted a consultation in January 2022—the aviation consumer policy reform consultation—which examined existing ADR provisions within the sector. The consultation sought views on whether ADR membership should be mandatory, the effectiveness of ADR compliance and enforcement mechanisms, and the merits of the current system when compared to alternatives such as a single ombudsman.

The DfT’s June 2023 consultation response included commitments to improve complaint resolution for aviation customers. The DfT will work with the industry, the CAA and complaint-handling bodies to consider best practices so that airlines can best manage their own complaints processes, thereby reducing the necessity for ADR intervention for passengers.

The DfT committed to legislate when parliamentary time allows, to mandate ADR for all airlines operating to, from and within the UK, as well as encouraging more voluntary uptake from airlines and airports. The DfT also committed to explore improvements to ADR processes, including better data collection, training and increased transparency in decision-making. There is an ongoing commitment to review the current ADR model to ensure its continued effectiveness within the aviation sector. I hope the noble Baroness, Lady Jones, will feel comfortable not moving her amendment.

Amendment 203 agreed.

Moved by

[Lord Offord of Garvel]

204: Clause 295, page 199, line 26, leave out from beginning of line to “the” in line 27 and insert “If the Secretary of State decides to vary the accreditation under subsection (8)(b)(i) or (ii),”
Member’s explanatory statement
The amendment would ensure that the Secretary of State can alter or impose conditions whenever an accreditation is varied, and not just in cases where limitations are imposed or altered.

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Moved by

[Lord Offord of Garvel]

205: Clause 296, page 200, line 37, at end insert “, varying any existing condition or removing any existing condition”
Member’s explanatory statement
The amendment would ensure that the Secretary of State has power under clause 296(4)(a) to vary or remove existing conditions, in addition to being able to impose new conditions on an accreditation.

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Moved by

[Lord Offord of Garvel]

206: Clause 302, page 205, line 24, leave out subsection (7)
Member’s explanatory statement
This amendment would omit subsection (7) of Clause 302, which is superseded by the new Clause in my name on data protection.

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Moved by

[Lord Offord of Garvel]

207: Clause 303, page 206, line 3, leave out subsection (4)
Member’s explanatory statement
This amendment would omit subsection (4) of Clause 303, which is superseded by the new Clause in my name on data protection.

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Moved by

[Lord Offord of Garvel]

208: Clause 304, page 207, leave out lines 4 and 5
Member’s explanatory statement
This amendment would omit the definition of “data protection legislation” in Clause 304, as my amendment to Clause 328 would define that term for the purposes of the whole Bill.

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Moved by

[Lord Offord of Garvel]

210: Schedule 25, page 381, line 2, at end insert—
“Prescription and Limitation (Scotland) Act 1973
A1 (1) Section 14 of the Prescription and Limitation (Scotland) Act 1973 (computation of prescriptive periods) is amended as follows.(2) In the following places, for “relevant consumer dispute” or “relevant dispute” substitute “consumer contract dispute”—(a) subsection (1D);(b) subsection (1F);(c) subsection (1G) (in each place where it occurs).(3) In subsection (1D)—(a) after “this Act is” (in the opening words) insert “, in a case where ADR is carried out in respect of the dispute,”;(b) in paragraph (a)—(i) for “the non-binding ADR procedure” substitute “the ADR”, and(ii) for “such a procedure” substitute “it”;(c) in each of paragraphs (b) and (c), for “a non-binding ADR procedure” substitute “the ADR”.(4) In the following places, for “the non-binding ADR procedure” substitute “the ADR”—(a) subsection (1E); (b) subsection (1G)(b) and (f);(c) subsection (2) (in the definition of “qualifying request”).(5) In subsections (1F) and (1G), for “a non-binding ADR procedure” substitute “ADR”.(6) In subsection (2)—(a) omit the following definitions—“ADR entity”;“ADR procedure”;“consumer”;“non-binding ADR procedure”;“relevant consumer dispute”;“sales contract”;“service contract”;“trader”;(b) before the definition of “holiday” insert the following definitions—““ADR” has the same meaning as in Chapter 4 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;“ADR entity” means a person who carries out ADR in compliance with section 291(1) of that Act (which prohibits persons from carrying out ADR unless exempt, accredited, or acting under special ADR arrangements, in accordance with Chapter 4 of Part 4 of that Act);“consumer contract dispute” has the same meaning as in Chapter 4 of Part 4 of that Act.”Limitation Act 1980
A2 (1) Section 33B of the Limitation Act 1980 (extension of time limits because of alternative dispute resolution) is amended as follows.(2) In the heading, for “cross border or domestic contractual” substitute “consumer contract”.(3) For subsection (1) substitute—“(1) In this section—“ADR” has the same meaning as in Chapter 4 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;“ADR entity” means a person who carries out ADR in compliance with section 291(1) of that Act (which prohibits persons from carrying out ADR unless exempt, accredited, or acting under special ADR arrangements, in accordance with Chapter 4 of Part 4 of that Act);“consumer contract dispute” has the same meaning as in Chapter 4 of Part 4 of that Act.”(4) In the following places, for “relevant dispute” substitute “consumer contract dispute”—(a) subsection (2)(a) and (b);(b) subsection (5);(c) subsection (6);(d) subsection (7) (in each place where it occurs);(e) subsection (9).(5) In the following places, for “a non-binding ADR procedure” substitute “ADR”—(a) subsection (2)(b);(b) subsection (6);(c) subsection (9).(6) In the following places, for “the non-binding ADR procedure” substitute “the ADR”—(a) subsection (2)(c);(b) subsection (3);(c) subsection (7) (in each place where it occurs); (d) subsection (8);(e) subsection (9).Foreign Limitation Periods Act 1984
A3 (1) Section 1B of the Foreign Limitation Periods Act 1984 (extension of limitation periods because of alternative dispute resolution) is amended as follows.(2) In the heading, for “cross border or domestic contractual” substitute “consumer contract”.(3) For subsection (1) substitute—“(1) In this section—“ADR” has the same meaning as in Chapter 4 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;“ADR entity” means a person who carries out ADR in compliance with section 291(1) of that Act (which prohibits persons from carrying out ADR unless exempt, accredited, or acting under special ADR arrangements, in accordance with Chapter 4 of Part 4 of that Act);“consumer contract dispute” has the same meaning as in Chapter 4 of Part 4 of that Act.”(4) In the following places, for “relevant dispute” substitute “consumer contract dispute”—(a) subsection (2)(a) and (b);(b) subsection (5);(c) subsection (6) (in each place where it occurs);(d) subsection (8).(5) In the following places, for “a non-binding ADR procedure” substitute “ADR”—(a) subsection (2)(b);(b) subsection (5);(c) subsection (8).(6) In the following places, for “the non-binding ADR procedure” substitute “the ADR”—(a) subsection (2)(c);(b) subsection (3);(c) subsection (6) (in each place where it occurs);(d) subsection (7);(e) subsection (8).Limitation (Northern Ireland) Order 1989 (S.I. 1989/1339 (N.I. 11))
A4 (1) Article 51B of the Limitation (Northern Ireland) Order 1989 (extension of time limits: non-binding ADR procedure) is amended as follows.(2) In the heading, for “: Non-binding ADR procedure” substitute “because of alternative dispute resolution in certain consumer contract disputes”.(3) In paragraphs (1)(a) and (3), for “a non-binding ADR procedure” substitute “ADR”.(4) In the following places, for “the non-binding ADR procedure” substitute “the ADR”—(a) paragraph (1)(b) (in each place where it occurs);(b) paragraph (2);(c) paragraph (4) (in each place where it occurs).(5) In paragraph (1)(b)(i), for “that such a procedure” substitute “on which it”.(6) In the following places, for “relevant dispute” substitute “consumer contract dispute”—(a) paragraph (1)(a);(b) paragraph (3);(c) paragraph (4) (in each place where it occurs).(7) For paragraph (5) substitute—“(5) In this Article— “ADR” has the same meaning as in Chapter 4 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;“ADR entity” means a person who carries out ADR in compliance with section 291(1) of that Act (which prohibits persons from carrying out ADR unless exempt, accredited, or acting under special ADR arrangements, in accordance with Chapter 4 of Part 4 of that Act);“consumer contract dispute” has the same meaning as in Chapter 4 of Part 4 of that Act;“qualifying request” is a request by a party that another (A) confirm to all parties that A is continuing with the ADR.””Member’s explanatory statement
This amendment makes consequential amendments in connection with Chapter 4 of Part 4 of the Bill (alternative dispute resolution for consumer contract disputes).

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[Lord Leong (Lab)]

My Lords, I thank the noble Baroness, Lady Wheatcroft, for tabling Amendment 212, and I thank all noble Lords who have spoken. I will be brief.

In 2019, the European Union introduced the second shareholder rights directive, which sets out stipulations regarding the utilisation of specific shareholder privileges linked to voting shares during general meetings of companies that are headquartered in a member state and have their shares traded on a regulated market located or functioning within a member state. It was brought into UK law by secondary legislation, amending the occupational pension schemes regulations of 2005, and it has now been assimilated into UK law. As per the Explanatory Notes to the regulations, they encourage investors to be transparent about how they invest and approach their engagement as shareholders. It was a negative statutory instrument, so no debates were tabled.

The amendment of the noble Baroness, Lady Wheatcroft, carries greater weight than the shareholder rights directive. It would mandate the FCA to establish regulations necessitating investment managers and life insurers to furnish standardised reports concerning company voting activities upon request. Furthermore, it would instruct the FCA to offer guidance to firms on the specific format for such reporting.

We agree in principle with the amendment that it is right for shareholders to be more transparent. The noble Baroness, Lady Sheehan, mentioned being transparent about where investments are made, which we need to know if we are to achieve net zero. This was fully supported by the noble Lord, Lord Lucas. Fund managers need to be more transparent about informing where their funds are invested.

I ask the Minister: what impact has there been on investor transparency in the four and a half years that the SRD has been in UK law? I look forward to his response.

[Lord Offord of Garvel (Con)]

I thank the noble Baroness, Lady Wheatcroft, for Amendment 212, which would require the Financial Conduct Authority to make rules requiring regulated persons to give consumers certain information regarding voting rights attached to assets in which the consumer has an interest. I also thank the noble Baroness, Lady Sheehan, the noble Lords, Lord Clement-Jones and Lord Leong, and my noble friend Lord Lucas for their contributions.

I appreciate the strength of feeling on this issue. I suggest that we speak to the Treasury and write to the noble Baroness on a number of her questions, in particular to draw on the comparisons with the US, with which we are so close on so many things, to understand what its experience is and where we are in comparison.

The Government recognise that transparency is crucial to effective stewardship and corporate governance by pension and other investment funds. We also acknowledge the argument that the existing voting disclosure framework is not working as well as it could. That is why, as the noble Baroness mentioned, the FCA set up the independently chaired vote reporting group in November 2022, following recommendations made by the task force on pension scheme voting implementation to develop a standardised and decision-useful framework for voting disclosure.

It is important to take a proportionate approach in implementing changes to vote reporting. Mandatory voting disclosure would be a significant departure from the FCA’s existing rules on voting disclosure. It is important that we have a globally competitive asset management sector. This means designing and implementing regulatory change in a way that considers regulatory costs as well as benefits. That is why the Government support the FCA’s approach to work closely with industry stakeholders and build consensus.

The group has made significant progress and recently consulted on its proposals for a comprehensive and standardised vote reporting framework. The Government believe that it continues to be more appropriate to wait for the group’s final output before requiring the FCA to produce further rules and regulation. I can assure the noble Baroness, Lady Wheatcroft, that, when reviewing the group’s final proposal, the Government will carefully consider whether its recommendations go far enough to address the existing issues around transparency for consumers that the noble Baroness so eloquently described, as well as what further action may be appropriate. We therefore hope that she will feel comfortable withdrawing her amendment.

[Baroness Wheatcroft (CB)]

I thank the Minister for what I think was an unusually conciliatory reply. I am quite cheered by what he said. I understand that we will wait to see what the FCA comes up with. I cannot say that I am overly optimistic about the FCA being effective with anything other than mandatory reporting—that will require the Government to act—but I look forward to seeing that action before too long. I beg leave to withdraw.

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Moved by

[Lord Offord of Garvel]

213: Schedule 26, page 383, line 30, at end insert—
“5A In Schedule 14 to EA 2002 (specified functions), at the appropriate place insert—“Chapter 2 of Part 5 of the Digital Markets, Competition and Consumers Act 2024.”5B In Schedule 15 to EA 2002 (enactments conferring functions), at the appropriate place insert—“Chapter 2 of Part 5 of the Digital Markets, Competition and Consumers Act 2024.””Member's explanatory statement
This amendment ensures that: (a) information that comes to a public authority in connection with the exercise of its functions under Chapter 2 of Part 5 of the Bill is information to which section 237 of the Enterprise Act 2002 applies (which imposes a general restriction on disclosure of certain kinds of information unless permitted under Part 9 of that Act), and (b) that information to which section 237 applies can be disclosed to a public authority for the purposes of enabling that authority to carry out its functions under Chapter 2 of Part 5.

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Moved by

[Lord Offord of Garvel]

214: After Schedule 27, insert the following new Schedule—
“ScheduleMinor and consequential amendmentsPart 1Amendments to Acts of ParliamentCompetition Act 1980 (c. 21)
1 The Competition Act 1980 is amended as follows.2 In section 11B(1) (references under section 11: powers of investigation and penalties), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force and,”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.3 In section 11C(1) (references under section 11: further supplementary provisions), in the words before paragraph (a)— (a) after “shall apply” insert “, as it had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force,”; and(b) for “applies” substitute “applied immediately before that date”.4 In section 11D(7) (interim orders), in paragraph (d), after “penalties)” insert “as it had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force”.Telecommunications Act 1984 (c. 12)
5 In section 101 of the Telecommunications Act 1984 (general restrictions on disclosure of information), in subsection (3)—(a) omit paragraph (v);(b) after paragraph (w) insert—“(x) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Companies Act 1985 (c. 6)
6 In paragraph 17 of Schedule 15D to the Companies Act 1985 (disclosures), after sub-paragraph (m) insert—“(n) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Airports Act 1986 (c. 31)
7 In section 74 of the Airports Act 1986 (restriction on disclosure of information), in subsection (3)—(a) omit paragraph (v);(b) after paragraph (y) insert—“(z) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Gas Act 1986 (c. 44)
8 (1) Section 41EB of the Gas Act 1986 (references under section 41E: application of EA 2002) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In subsection (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After subsection (6) insert— “(7) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Water Act 1989 (c. 15)
9 In section 174 of the Water Act 1989 (general restrictions on disclosure of information), in subsection (3)—(a) omit paragraph (lp);(b) after paragraph (o) insert—“(p) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Electricity Act 1989 (c. 29)
10 (1) Section 56CB of the Electricity Act 1989 (references under section 56C: application of EA 2002) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In subsection (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After subsection (6) insert—“(7) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Water Industry Act 1991 (c. 56)
11 The Water Industry Act 1991 is amended as follows.12 (1) Section 14B (references under section 14: powers of investigation) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”(b) at the end insert “as those provisions had effect immediately before that date”.(4) After subsection (5) insert—“(6) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”13 (1) Section 16B (CMA’s power of veto following report: supplementary) is amended as follows.(2) In subsection (6), in the words before paragraph (a)— (a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (9)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After subsection (10) insert—“(11) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”14 (1) Section 17M (references under section 17K: powers of investigation) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After subsection (5) insert—“(6) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”15 (1) Section 17Q (section 17P: supplementary) is amended as follows.(2) In subsection (6), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (9)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After subsection (10) insert—“(11) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”16 In Part 2 of Schedule 15 (enactments etc in respect of which disclosure may be made)—(a) at the end of the list insert—“The following provisions of the Digital Markets, Competition and Consumers Act 2024—(a) Part 3;(b) Chapter 1 of Part 4;(c) Chapter 2 of Part 5.”(b) omit the entry for subordinate legislation made for the purpose of securing compliance with Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market. Railways Act 1993 (c.43)
17 The Railways Act 1993 is amended as follows.18 (1) Section 13B (references under section 13: application of EA 2002) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In subsection (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After subsection (6) insert—“(7) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”19 (1) Section 15C (sections 15A and 15B: supplementary) is amended as follows.(2) In subsection (2D), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (2G)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In subsection (2H)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After subsection (4) insert—“(5) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”20 In section 145 (general restrictions on disclosure of information), in subsection (3)—(a) omit paragraph (qu);(b) after paragraph (v) insert—“(w) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”21 Schedule 4A (review of access charges by the Office of Rail and Road) is amended as follows.22 (1) Paragraph 10A (references under paragraph 9: application of EA 2002) is amended as follows.(2) In sub-paragraph (1), in the words before paragraph (a)— (a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In sub-paragraph (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In sub-paragraph (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After sub-paragraph (6) insert—“(7) In this paragraph “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”23 (1) Paragraph 15 (paragraphs 13 and 14: supplementary) is amended as follows.(2) In sub-paragraph (2D), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In sub-paragraph (2G)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In sub-paragraph (2H)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After sub-paragraph (4) insert—“(5) In this paragraph “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Coal Industry Act 1994 (c. 21)
24 In section 59 of the Coal Industry Act 1994 (information to be kept confidential by the Coal Authority), in subsection (4)—(a) omit paragraph (q);(b) after paragraph (t) insert—“(u) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Greater London Authority Act 1999 (c. 29)
25 In section 235 of the Greater London Authority Act 1999 (restrictions on disclosure of information), in subsection (3)—(a) omit paragraph (ru);(b) after paragraph (v) insert—“(w) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.” Utilities Act 2000 (c. 27)
26 In section 105 of the Utilities Act 2000 (general restrictions on disclosure of information), in subsection (6)—(a) omit paragraph (w);(b) after paragraph (z1) insert—“(z2) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Transport Act 2000 (c. 38)
27 In Schedule 9 to the Transport Act 2000 (air traffic: information), in paragraph 3(3)—(a) after paragraph (rh) insert—“(ri) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”(b) omit paragraph (sa).Communications Act 2003 (c. 21)
28 In section 393 of the Communications Act 2003 (general restrictions on disclosure of information), in subsection (5)—(a) omit paragraph (q);(b) after paragraph (s) insert—“(t) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Wireless Telegraphy Act 2006 (c. 36)
29 In section 111 of the Wireless Telegraphy Act 2006 (general restrictions), in subsection (6)—(a) omit paragraph (o);(b) after paragraph (p) insert—“(q) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Companies Act 2006 (c. 46)
30 In Part 2 of Schedule 2 to the Companies Act 2006 (specified descriptions of disclosures), in section (A) (United Kingdom), in paragraph 25, after paragraph (l) insert—“(m) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Legal Services Act 2007 (c. 29)
31 In section 60(9) of the Legal Services Act 2007 (duties of the CMA), in the words before paragraph (a)—(a) after “apply”, in the first place it occurs, insert “, as they had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force,”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”. Postal Services Act 2011 (c. 5)
32 In section 60(6) of the Postal Services Act 2011 (section 59: supplementary), in paragraph (a), after “CMA),” insert “as they had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force,”.Civil Aviation Act 2012 (c. 19)
33 In Schedule 6 to the Civil Aviation Act 2012 (restrictions on disclosure of information), in paragraph 4—(a) in sub-paragraph (3), in the list of relevant statutory provisions, after the entry for “Water Act 2014” insert—“the following provisions of the Digital Markets, Competition and Consumers Act 2024—(a) Part 3;(b) Chapter 1 of Part 4;(c) Chapter 2 of Part 5.”(b) in sub-paragraph (4), omit paragraph (b).Part 2Amendments to other legislationEnergy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6))
34 The Energy (Northern Ireland) Order 2003 is amended as follows.35 In Article 63 (general restrictions on disclosure of information), in paragraph (6)—(a) omit sub-paragraph (w);(b) after sub-paragraph (x) insert—“(y) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”36 (1) In Schedule 2 (orders altering licensable activities), paragraph 5 (references under paragraph 3: application of EA 2002) is amended as follows.(2) In sub-paragraph (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In sub-paragraph (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In sub-paragraph (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After sub-paragraph (6) insert—“(7) In this paragraph “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Water Services etc. (Scotland) Act 2005 (Consequential Provisions and Modifications) Order 2005 (S.I. 2005/3172)
37 The Water Services etc. (Scotland) Act 2005 (Consequential Provisions and Modifications) Order 2005 is amended as follows.38 (1) Article 5 (references: powers of investigation) is amended as follows. (2) In paragraph (1), in the words before sub-paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In paragraph (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After paragraph (5) insert—“(6) In this article “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”39 (1) Article 10 (Article 9: supplementary) is amended as follows.(2) In paragraph (3), in the words before sub-paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In paragraph (7)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After paragraph (7) insert—“(8) In this Article “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Water and Sewerage Services (Northern Ireland) Order 2006 (S.I. 2006/3336 (N.I. 21))
40 The Water and Sewerage Services (Northern Ireland) Order 2006 is amended as follows.41 (1) Article 23 (references under Article 21: powers of investigation) is amended as follows.(2) In paragraph (1), in the words before sub-paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In paragraph (4)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After paragraph (5) insert—“(6) In this Article “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”42 (1) Article 27 (CMA’s power of veto following report: supplementary) is amended as follows.(2) In paragraph (6), in the words before sub-paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In paragraph (9)— (a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After paragraph (10) insert—“(11) In this Article “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”43 In Article 265 (restrictions on disclosure of information), in paragraph (5)—(a) omit sub-paragraph (s);(b) after paragraph (t) insert—“(u) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Postal Services (Appeals to the Competition Commission) (Investigations and Extension of Time Limits) Order 2011 (S.I. 2011/2749)
44 In Article 3 of the Postal Services (Appeals to the Competition Commission) (Investigations and Extension of Time Limits) Order 2011 (application of sections 109 to 117 of the 2002 Act), in the words before paragraph (a), after “shall apply,” insert “as they had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force and”.Postal Services Act 2011 (Disclosure of Information) Order 2012 (S.I. 2012/1128)
45 In Article 4 of the Postal Services Act 2011 (Disclosure of Information) Order 2012, in the list of prescribed enactments—(a) omit the entry for the Consumer Protection from Unfair Trading Regulations 2008;(b) after the entry relating to the Consumer Rights Act 2015 insert—“the following provisions of the Digital Markets, Competition and Consumers Act 2024—(a) Part 3;(b) Chapter 1 of Part 4;(c) Chapter 2 of Part 5.””Member's explanatory statement
See the explanatory statement for my amendment inserting a new Clause after Clause 330.

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[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.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I realise that it is late in the day and that I am raising a fundamental issue at a late point. Perhaps it is straying a little beyond the main intent of the Bill; nevertheless, it is a fundamental issue, and it is important that we have aired it. I am grateful to the noble Lord, Lord Clement-Jones; as he said, our high streets are far too important to lose. As both he and the noble Lord, Lord Lucas, said, the digital world cannot meet all the needs of society, and high streets still have a fundamental role to play. We absolutely need to ensure that the community focus in high streets is revitalised. I am grateful that the noble Lord, Lord Lucas, said that we should look at other models of funding and taxation; it was a point well made.

I listened carefully to what the Minister said. It is easy to say that he is wholeheartedly committed to revitalising the high streets; that is great—we all are—and I have no doubt that initiatives such as levelling up and the pilots will have some impact, but none of those addresses the fundamental fact that it is the economic costs for the shops that is at heart here. You can make a high street look lovely, provide better police and tackle anti-social behaviour, but if the shops cannot afford to trade because they are being undercut by their online competitors, they will not stay around. Unless we take more fundamental actions on that basis and face up to what is happening at the moment, sadly, we will face continuing long-term decline.

I hear what the Minister says. I realise that this is a much bigger debate, but I really feel that the Government do not have a grip on this. They have had 14 years to sort it out but there has been a long decline on their watch. I am sorry to end on such a negative note. As I said, I am sure we will have a further chance to debate this, but I really think that our policy on reforming business rates will make a fundamental difference. Nevertheless, I beg move to withdraw my amendment.

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Moved by

[Lord Offord of Garvel]

216: Clause 328, page 232, line 1, at end insert—
““the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act);”Member’s explanatory statement
This amendment would define “the data protection legislation” for the purposes of the whole Bill.

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Moved by

[Lord Offord of Garvel]

217: After Clause 328, insert the following new Clause—
“Data protection(1) This section applies to a duty or power to process information that is imposed or conferred by or under any provision of this Act.(2) A duty or power to which this section applies does not require or authorise the processing of information which would contravene the data protection legislation (but the duty or power is to be taken into account in determining whether the processing would contravene that legislation).”Member’s explanatory statement
This amendment would make it clear that provisions in the Bill imposing or conferring duties or powers to process information do not require or authorise the processing of information which would contravene the data protection legislation.

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Moved by

[Lord Offord of Garvel]

218: After Clause 329, insert the following new Clause—
“ConsultationA duty to consult under or by virtue of this Act may be satisfied by consultation that took place wholly or partly before the passing of this Act.”Member’s explanatory statement
This amendment clarifies that consultation required under or by virtue of the Bill may begin before the Bill is passed (so long as it is in compliance with the requirements for consultation as enacted).

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Moved by

[Lord Offord of Garvel]

219: After Clause 330, insert the following new Clause—
“Minor and consequential amendmentsSchedule (Minor and consequential amendments) contains minor and consequential amendments.”Member's explanatory statement
This new Clause introduces a new Schedule that contains minor and consequential amendments relating to the Bill generally (there are other Schedules of consequential amendments relating to particular Parts of the Bill).

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Moved by

[Lord Offord of Garvel]

223: Clause 334, page 235, line 9, after “Part” insert “other than section (Minor and consequential amendments) (and Schedule (Minor and consequential amendments))”
Member’s explanatory statement
This amendment provides that the new Clause and Schedule in my name making minor and consequential amendments come into force in accordance with regulations made by the Secretary of State.

Carer’s Leave Regulations 2024

Lord Offord of Garvel Excerpts

Wednesday 7th February 2024 Lords Chamber

Moved by

[Lord Offord of Garvel]

That the draft Regulations laid before the House on 11 December 2023 be approved.

Relevant document: 8th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 6 February.

Motion agreed.

Post Office Appointments: Ministerial Responsibility

Lord Offord of Garvel Excerpts

Wednesday 7th February 2024 Lords Chamber

[Lord Touhig]

To ask His Majesty’s Government what responsibility ministers have for the appointment of the Board and Chief Executive Officer of the Post Office.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, I thank the noble Lord for his Question. As set out in the Post Office’s articles of association and shareholder relationship framework document, the Secretary of State for Business and Trade appoints the chair and directors of the Post Office and approves the appointment of the chief executive officer. Strong and effective leadership of the Post Office is a necessity and the Government therefore take their role in making the right appointments very seriously.

[Lord Touhig (Lab)]

My Lords, I believe that the shortcomings of the Post Office board and senior executives were responsible for this unparalleled injustice. Last week, the Minister said that the Government were looking at tightening the governance of the Post Office. Can I suggest that one way of doing this would be for the Ministers making the appointments to also ensure regular appraisals of those they have appointed? After all, who among us in this Chamber has not gone through an appraisal at some time? If such an appraisal scheme already existed, perhaps sub-postmasters across Britain would not be in despair, feeling that they were—I think of the words of Toby Jones, who played Mr Bates in the TV drama—the “skint little people” who are

“fighting a war against an enemy owned by the British Government”.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that. The whole House shares the noble Lord’s sentiments that this is a deeply shameful episode, which went on for over 20 years. It is quite incredible to think back on the scale of the failure here, both of governance and of corporate life. Since the Horizon scandal came to light, the Government have taken quite a lot of steps to strengthen the governance of the Post Office. However, there are a number of ongoing reviews, including one by Simmons & Simmons, to look at exactly how the appraisal system works. Once the Wyn Williams review—a statutory inquiry—has concluded, we will be able to take steps around corporate governance going forward.

[Lord Arbuthnot of Edrom (Con)]

My Lords, in an arm’s-length organisation, to whom in practice is the chief executive accountable? Is it the department’s Permanent Secretary?

[Lord Offord of Garvel (Con)]

I thank my noble friend for his question and for all his efforts on behalf of the postmasters. We have to realise that this is a limited company owned entirely by the Government, with one share owned by the Secretary of State. It separated from Royal Mail Group when that went private, but the Post Office is actually classified as a public non-financial corporation. Public corporations include, for example, Ordnance Survey, Royal Mint and British International Investment. They are typically owned by the appropriate Secretary of State in that department, the reason being that they are hybrid: the Post Office has commercial activity, it makes revenue through the post offices, but it also receives public money to support the network. As a result, the governance is such that the chief executive reports to the chair, the chair reports to the Secretary of State, and the chief executive also reports to the Permanent Secretary when it comes to public money.

[Lord Fox (LD)]

My Lords, I am not sure that the Minister answered the question from the noble Lord, Lord Arbuthnot. We agreed that the Post Office needs leadership, and last week the Minister said:

“We will appoint an interim chair as soon as possible”.—[Official Report, 30/1/24; col. 1122.]


Perhaps with another week, the Minister can dwell a little more on the process. When will the details of the process be published? How will the job description of this appointment differ from the job description that was used by Business Secretary Kwasi Kwarteng when he appointed Henry Staunton as recently as September 2022? What will change in the job description of the chairman from the last appointment?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. The corporate answer is that the chief executive reports to the chairman; the job of the chairman is to fire the chief executive on behalf of the shareholder; the shareholder is the Government and, since these matters came to light in 2020, we have had the new shareholder relationship document that outlines all the governance on this. Indeed, the Minister for the Post Office has had monthly meetings, starting with Minister Scully through to the current Minister, Minister Hollinrake, with the chief executive. When the new chair is appointed, that chair will step into the position and continue to run the board on behalf of the Government.

[Baroness Butler-Sloss (CB)]

My Lords—

--- Later in debate ---

[Baroness Butler-Sloss (CB)]

My Lords, as a member of one of the departments is a member of the board of the Post Office, at the relevant time—and the board knew quite early on that Horizon was not working properly—why did that representative not tell the Government, or did he do so?

[Lord Offord of Garvel (Con)]

I thank the noble and learned Baroness: this is the whole purpose of the inquiry. I cannot answer the specific questions, not having been there myself. The inquiry will look into this. What is clear is that there has been a failure of governance. On the face of it, Post Office Ltd is set up with the right checks and balances in place. There have been non-executive directors, there is the government representative on the board, there is a chairman: on the face of it, it should be subject to the governance that we see in private companies. For some reason, there has been a lack of inquiry and of challenge and we need to understand why and find out who is accountable for that.

[Lord Hain (Lab)]

My Lords, is this not a systemic failure of the whole state? The answer to the question from the noble Lord, Lord Arbuthnot, is that the Permanent Secretary is the accounting officer for the Post Office, and the department puts a director on the board of a public corporation. This is not just about the failings of Post Office managers; it is about the failings of the whole state, which sacrificed pillars of the community to suffer one of the gravest injustices committed in recent times.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that: no one can disagree with his sentiments. As I said, the machinery was put in place, but there was a lack of scrutiny, inquiry and challenge from the non-executive directors, from, perhaps, the chair, and from, perhaps, the Ministers. The Permanent Secretary role is a key one because, using the public accounting model, they meet with the DBT on a quarterly basis to have that line of communication as well. There was no shortage of lines of communication here.

[Lord Forsyth of Drumlean (Con)]

My Lords, my noble friend has vast experience in private equity and elsewhere in business. Does he not agree that, faced with this kind of disaster, the first thing any private business would do is clear out the entire board, without necessarily attributing any blame, and put in a new team of people who did not have any baggage in order to sort it out. Why do the Government not get on and do that?

[Lord Offord of Garvel (Con)]

Three new non-executive appointments were made in 2023 and there will be a new senior independent director appointed and a new chair. Two postmaster directors have also been appointed to the board. The current chief executive, who came in in 2019 at the point of the judgment, remains in place. We continue to have faith in him to move this thing forward quickly, with the right amount of oversight. We have confidence in the board as it is reconstituted. But, as has been said, the question is: why did the original failure happen? We need to find that out.

[Lord McNicol of West Kilbride (Lab)]

My Lords, the financial cost of the Horizon scandal is going to be in excess of £1 billion, and that does not take into account the personal cost to the postmasters and postmistresses, some of whom are here with us. Fujitsu has offered to pay a voluntary contribution but, more importantly, should the Post Office wish to sue Fujitsu, is it still in time to do that and when did the Post Office agree a standstill?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. On the specifics, I will write to him on the actual timeline, but the reality is that Fujitsu knows it has a major part to play here. It knows that it is under serious investigation. It has pre-empted that by coming out and saying that it feels a moral responsibility. My colleague, the Minister in the other place, has made it very clear that the cost of this debacle cannot land purely on taxpayers and I am sure there will be a very full investigation and compensation required from Fujitsu.

[Lord Stirrup (CB)]

My Lords, further to the question from the noble Lord, Lord Forsyth, when in an earlier Question Time I asked the Minister whether the Post Office brand was not now too toxic for it to continue as currently constituted, the Minister replied that, in his view, the brand image of the Post Office had improved as a consequence of what had happened. Now, while the reputation of the people who run sub- post offices has no doubt been greatly enhanced, to suggest that of the reputation of the organisation which so cruelly and illegally persecuted them cannot possibly be true. So I repeat what I asked then: is it not now time for a wholly new organisation, with new leadership and a new business model incorporating the appropriate ethical principles?

[Lord Offord of Garvel (Con)]

I thank the noble and gallant Lord for his question. To clarify my remarks, last time I said that the reputation of the postmasters had been enhanced and most people in the community think of the Post Office as being the postmasters. In the last 12 months, the churn of postmasters—those leaving and those coming in—has gone up. We have a record number of post offices—11,700—in the country; 5,000 of those are in rural areas and one-quarter are the last shop in the village. They form a vital role in the community and, as I said before, the reputation of the postmasters has only been enhanced by this sorry tale.

Carer’s Leave Regulations 2024

Lord Offord of Garvel Excerpts

Tuesday 6th February 2024 Grand Committee

Moved by

[Lord Offord of Garvel]

That the Grand Committee do consider the Carer’s Leave Regulations 2024.

Relevant document: 8th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, I was pleased to note the positive debates last year, when the Carer’s Leave Bill received cross-party support in both Houses. The Carer’s Leave Act, under which these regulations are being brought forward, obtained Royal Assent on 24 May 2023. The Carer’s Leave Regulations were laid on 11 December 2023. I should start by thanking Wendy Chamberlain MP and the noble Lord, Lord Fox, for their work in getting us to this stage. I want again to thank everyone who participated in relation to this significant matter in both Houses last year. I am delighted to be here today for this debate on these draft regulations.

I should also take this opportunity to flag a correction slip in relation to page 2 of the SI. Regulation 5(1), line 1 stated:

“is entitled one week”,

but now reads,

“is entitled to one week”.

The context of these regulations is to recognise the importance of unpaid carers. This Government appreciate the time dedicated by unpaid carers to help those dependants who rely on them for their everyday needs. These regulations will provide valuable additional flexibility to support all unpaid carers who are in employment across the country.

Statistics from the Family Resources Survey 2021-22 show that there are 4.9 million adult informal carers in the UK. Just over half of those are also holding down a job. Around 2.5 million people are trying to balance work with their caring responsibilities, which is a significant proportion of the workforce. We know that an additional leave right is important for them. A survey published by Carers UK in 2022 found that 75% of the unpaid carers who responded worry about continuing to juggle work and care, two-thirds have given up opportunities at work because of caring and a quarter said they needed better support to return to or maintain paid work, while a quarter said they need unpaid carer’s leave to do so.

In addition to the new entitlement to carer’s leave, it is also the case that having flexibility with start and finish times at work, or working from home where this is possible, can make it easier for carers to balance work and their caring needs. The Employment Relations (Flexible Working) Act 2023, which also comes into force in April 2024, will increase the number of requests an employee can make in a 12-month period and reduce the time allowed to administer requests. Separate regulations, also expected to come into force in April 2024, will remove the continuity of service requirement for the right to request flexible working. Therefore, employees will be able to request flexible working arrangements from the first day of their employment. These changes will also support the ability of carers to remain in, and progress in, work.

I turn to the regulations, which will fulfil our 2019 manifesto commitment to introduce one week of leave for unpaid carers. I shall set out briefly what they do. The first key element is that the carer’s leave entitlement will be a day one right for employees, so it will be available from the first day of employment. It can be used for providing care or making arrangements for the provision of care for a dependant with a long-term care need. These definitions have purposefully been kept broad to encompass a range of different care needs and circumstances. Flexibility is key: no two care dependants have the same care needs—and the circumstances of the carer’s employment will be different, too.

Employed carers can take the leave flexibly, from half a day at a time up to a block of one week. This ensures that carers can use their carer’s leave in a proportionate way that suits their needs. For example, they could accompany their dependants to an appointment or visit a potential care home and get back to work on the same day. If necessary, they could care for their dependant for a whole week—for example, if they are recovering from a major medical procedure. These are just examples to illustrate how the leave may be used. In claiming the leave, there will be no evidential requirement to demonstrate how the leave will be used or who it is used for. The purpose of this approach is to remove undue stress for the employee, including any concerns that they may have about providing potentially sensitive information about a third party. It will also minimise the administrative burden for employers and reduce bureaucratic obstacles.

The regulations put in place a minimum notice period requirement, which is similar to the existing annual leave entitlement. This will mean that employed carers must give notice of twice the length of time being requested plus one day, subject to a three-day minimum notice period. Furthermore, the notice can be given in multiple forms, whether that is via email, verbally or through an existing application within the workplace. We also recognise that there may be circumstances in which granting the leave may be difficult for the employer, such as during a busy week for an urgent deadline. The regulations will give employers the power to postpone the leave, but they may not deny it completely. It will be down to the employer and employee to come to an alternative arrangement that works best for both parties. Lastly, employees taking carer’s leave will have the same employment protections associated with other forms of family-related leave, including protection from dismissal or detriment as a result of having taken the leave.

In conclusion, these measures will provide invaluable support to unpaid carers balancing work with their caring responsibilities. Employees and employers are set to benefit from this Act. Employees will receive an extra bit of flexibility. By providing that extra flexibility, employers will be able to retain valuable staff members who would otherwise have struggled to remain in work. The Government are very pleased to have supported the Private Member’s Bill and be delivering these regulations.

[Baroness Tyler of Enfield (LD)]

My Lords, I rise briefly, primarily to say how delighted I am that this legislation will come into force on 6 April. As the Minister said, there was strong cross-party support for the Bill when it had its passage through the House. I thank those who were involved in drawing up the regulations, as they have done a good job of it. I have been involved in this area for some time now, and in previous attempts to get legislation of this type on the statute book that were not successful, and that is why I am delighted that this one was successful. However, I have not been involved for anywhere near as long as my noble friend—and I think of her very much as my noble friend—the noble Baroness, Lady Pitkeathley, who has tirelessly campaigned in this area for many decades.

This is landmark moment and one we should celebrate. For the very first time, those juggling paid work and unpaid care are going to have dedicated rights in the workplace. It will provide them with more flexibility, and it will make a very real difference to the quality of those carers’ lives. It has been estimated that at least 2 million people will be able to take advantage of the provisions in this legislation, which is going to provide real support to help people, particularly women, to stay in work. I emphasise that point, because we know that it is women who are more likely to be juggling work and care and are more likely to be in part-time than full-time work. Also, we know that women in their 50s are more likely to leave the labour market—more likely than men—to provide unpaid care for family members. I am hoping that this is something that will mean that fewer women will have to leave the labour market.

I have one question for the Minister. Thinking back to our previous debates, I think the provisions of this Act will also apply to parents who have children with a long-term disability. That is an important point. What sort of steps are the Government thinking of taking to make sure that those parents are aware that this applies to them and not only to carers of adults with disabilities or older relatives?

This is an incredibly important milestone. I hope that we can build on this important first step, which will benefit the labour market as well as individuals, so that in future we can move to having a paid leave provision.

--- Later in debate ---

[Lord Leong (Lab)]

My Lords, first, I thank the Minister for setting out these regulations and the correction. Correct me if I am wrong, but is it now two weeks instead of one week?

[Lord Offord of Garvel (Con)]

One.

[Lord Leong (Lab)]

It is one week—okay.

I thank all noble Lords who have spoken: the noble Lord, Lord Fox, the noble Baroness, Lady Tyler, and my noble friend Lady Pitkeathley, whom I thank for her 30 years of campaigning—I do not think I will last 30 years in this House, but I thank her for her dogged perseverance and congratulate her on getting this on the statute book. We support this instrument to establish a statutory entitlement to carer’s leave from 6 April this year and ensure leave is available for employees caring for a dependant with long-term needs in England, Scotland and Wales.

With the introduction of this additional legislation, we will be providing a little more support, albeit limited and unpaid, to around half of the 4.2 million people across the UK who are trying to square the circle of holding down a job while providing unpaid care for elderly or disabled loved ones. The majority of these carers are women over 50. As my noble friend Lady Blake said at Second Reading, some more enlightened employers already have provisions to support workers who are carers, removing the silent shame that sometimes exists for those who provide care while working.

This instrument ensures that all workers become legally entitled to take unpaid leave for caring responsibilities from day one of their employment for up to one week in any 12-month period. This may be taken in increments of half or full days, so long as eligibility for carer’s leave is met. Employees will not be required to provide evidence in relation to their request, and they will be able to use carer’s leave specifically for foreseen and long-term care needs, rather than solely for emergency caring situations. This should enable better planning for employers and employees alike, with the minimum of bureaucracy. In addition, carer’s leave will be available for a wider range of caring situations, excluding general childcare, which better suits those caring for dependants over 18, who fall outside the scope of parental leave legislation.

I am struck by a sense of déjà vu. Last week, I spoke in this Room in support of another statutory instrument, on which noble Lords were broadly agreed, which supported workers who were pregnant or on maternity or parental leave when their employer was considering redundancies. As in this case, the legislation had come through a Private Member’s Bill from this side of the House. As in this case, we were adding legislation that improved the situation for workers, predominantly women, to protect those affected by particular family responsibilities. Once again, I feel compelled to ask the Minister why the Government seem to place such a low priority on such important legislation, as evidenced by the complete absence of an employment Bill despite more than 20 pledges to introduce one.

The Government seem to recognise the importance to our economy of encouraging the cohort of around 5 million people who could work but are not working back into employment, yet they seem to be relying on Private Members’ Bills to identify the problems and bring forward legislation that recognises the realities of the workforce: that many people have family responsibilities which some employers see as barriers to employment. I am afraid it is simply not good enough for them to point to the fact that we have 33 million people in work when, with a growing and ageing population, we are underutilising the skills and talents of millions. These are people who would be contributing to the economy and to the Exchequer if they were better supported to enter or re-enter the workforce.

To turn back to the instrument before us, is the Minister aware that half of all young carers in the UK are carers for their brothers and sisters? However, the definition of dependant does not include siblings by default, unless they live in the same household or come under some vague definition. Although a broader definition is welcome, the room for interpretation of “reasonably rely on” will inevitably leave gaps or create conflict with employers. What consideration have the Government given to this? Furthermore, has any consideration been given to the unlikely but not impossible case where somebody has more than one dependant? Can the Minister clarify whether the one week of carer’s leave entitlement over 12 months is calculated per employee or per dependant?

--- Later in debate ---

Finally, can the Minister assure us that this new employment right, which will improve the situation of hundreds of thousands of workers, will be communicated to those who may benefit from it, as well as employers, so that the onus and responsibility does not fall on those already juggling complex situations to alert their employers to these changes, as the noble Lord, Lord Fox, and my noble friend Lady Pitkeathley mentioned? I look forward to the Minister’s response.

[Lord Offord of Garvel (Con)]

I thank noble Lords for their observations and questions. The great thing about this topic is that we all have consensus about the way forward and why we are doing this.

A number of points have been raised. To take them in a certain amount of order, to answer the noble Baronesses, Lady Tyler and Lady Pitkeathley, the characteristics of the carers being referred to cover 2 million to 2.5 million people, especially women, and especially older women. When we think about the characteristics of those folks, these are, by definition, some of the most conscientious people we have in our communities and are, on the whole, very good employees. It is interesting how, post Covid, employers have worked out that the most important resource they have is the labour force and that they have to work hard to keep the labour force together. It is interesting that, although this is unpaid leave, a number of employers who advertise themselves as Employers for Carers allow this to take place without it being unpaid. We might see more of that as employers begin to understand that this is a very important part of their workforce.

The noble Baronesses both raised the issue of childcare. This SI does not specifically relate to childcare because many regulations are in place specifically for childcare, but I can confirm that carer’s leave can be used for a child where it falls within the definition—the definition being caring for a child with a disability.

The communication of this is interesting. In preparing for this I came across a number of other child provisions, one of which I did not know about. For example, if you have more than a year’s continuous employment with an employer you are entitled to 18 weeks of unpaid parental leave per child up to the child’s 18th birthday, which could be one week a year. I am not aware that many people know about that. That makes the point really well about comms, which will be a key part of this. The Government need to work with a number of agencies to do that.

To be fair, the Government will be promoting this largely through the business channels, the business stake- holder groups for employers, and then through the voluntary organisations such as Care UK. Picking up on the point made by the noble Baroness, Lady Pitkeathley, about the comms and the awareness campaign, a number of pieces of legislation are coming through on carer’s leave—the one we have today—on flexible working, on redundancy protection, and on parental leave, as mentioned by the noble Lord, Lord Leong. They all need to be promoted as those Private Members’ Bills go through, so that together we are able to present the improvements for employees in the workplace,

I turn to the issue raised by the noble Lord, Lord Fox. I thank him, and particularly his colleague, Wendy Chamberlain MP, in the other place—a very effective MP. This relates to safe conversations and the comms to employers. I am confident that good employers will want to promote this measure but, again, it is down to us to make sure that the awareness campaign is raised and is effective. The economic case mentioned by the noble Baroness, Lady Pitkeathley, can be made. It should not necessarily be the only case but it certainly helps with the arguments.

Finally, turning to the noble Lord, Lord Leong, I guess we understand why there was no employment Bill, putting aside the fact that perhaps Covid got in the way of parliamentary time. Philosophically, also, there is a feeling within the Government that we are in a situation where progressive legislation has been put through by many Governments to get UK labour and employment law into a pretty good place. That is evidenced by the fact that there are a record 33 million people working out of 66 million—a record number for the UK. In particular, the noble Lord highlights that 5 million adults are not in work. They are not classified as unemployed but they are not in work and many of them are long-term sick and have lost the pathway back to work. A lot of effort now needs to go into helping them. There is a lot of talent there, which employers can employ. Therefore, the Government are turning our attention to that. However, as far as the overall programme of employment regulations is concerned, these Private Members’ Bills have come in on specific rifle-shot issues, reflecting, as the noble Baroness, Lady Pitkeathley, said, long-term campaigning from many of the groups involved. They have been very specific in a number of the areas that we mentioned and have, therefore, created improvement to the rights of employees in the UK.

In closing, I thank all noble Lords for participating in the debate. It is a pleasure to be involved in legislation that brings all parties together. I hope that this new leave right will make it easier for carers to balance their work commitments and their caring duties. Finally, I thank again the noble Lord, Lord Fox, for his previous work in taking the Act forward: without that, we would not be here today. This is an important piece of legislation and I commend these regulations to the Committee.

Motion agreed.

Digital Markets, Competition and Consumers Bill

Lord Offord of Garvel Excerpts

Committee stage
Monday 5th February 2024 Grand Committee

[Lord Bassam of Brighton (Lab)]

My Lords, I was initially going to say that this is a disparate group of amendments but, as I have heard the arguments adduced, I have realised that it has more coherence to it.

The Committee should pass a vote of thanks to the noble Baroness, Lady Morgan, for tabling her amendment. This is an incredibly sensitive issue and one that in spirit we completely support—why wouldn’t you? If I were in the noble Baroness’s position, having dealt with cases of the sort that she has, I, too, would probably be mounting a campaign on this. We should be grateful to the Mental Health Foundation for the support that it has given. It cannot be right that usually harmless algorithms are used for another purpose like this and it would be helpful if we could get some clarity to the law.

This issue raises highly sensitive issues about online purchases. It is hard to envisage that any commercial undertaking, whether online or trading on our high streets, would deliberately market a product knowing that it was likely to be used for acts of self-harm and far worse. I will listen carefully to what the Minister has to say on this. If there is something that can usefully be done in legislation and there is an opportunity to do it here, we should take that opportunity.

I turn to the amendment tabled by the noble Lord, Lord Lucas, which initially I thought put the cart before the horse, but I do not think so any more. It is a neat amendment that is usefully placed. The noble Lord is looking at how the effectiveness of trading standards is measured and looking at their resource and support.

About 20 or 30 years ago, I was a trading standards national officer. I was not a trading standards officer, but I used to lobby government for resources on behalf of trading standards, which always used to say they did not have enough resource. The answer from the Government at the time was pretty much the same as I am expecting the answer to be this afternoon: that the Government are resourcing trading standards well and that they do a very good job. However, there is a good case for reviewing their effectiveness, particularly in the light of the other amendments in this group.

I will come back to Amendment 111 in a moment, but Amendments 112 to 120 relate very neatly to the scope and jurisdiction of weights and measures—ie, trading standards. They would significantly broaden the responsibilities of trading standards officers, who presumably would take on investigatory and enforcement responsibilities on a shared basis with the CMA. We have sympathy with these amendments because there is a strong case for local enforcement. I understand that people living in a locality might want to go to their local authority trading standards officers for advice, support and encouragement in seeking enforcement against rogue online traders. If we embark on this route there will need to be protocols in place so that duplication does not occur and so that there is good advice and information from officers locally working in tandem with CMA officials, and of course there would be a question of resource and support for local trading standards officers. Ministers and the Government may think that this is a valuable route, but the relationship between central and local enforcement needs to be explored. These amendments valuably focus light on that, because people in any community anywhere in the country will want to know how they can access their rights as consumers dealing as much online as in the high street and offline. We have a lot of sympathy for the amendments in the name of my noble friend Lady Crawley, the noble Earl, Lord Lindsay, and the noble Baroness, Lady Bakewell.

I will go back to Amendment 111. As the noble Lord, Lord Clement-Jones, argued, it is really about the detail of the enforcement of penalties and their range and scope. In general terms, we support the notion that penalties should take account of the profitability of the company which is in breach of enforcement orders—breaking the law. Again, it will be interesting to hear the Minister set out the Government’s policy in this field and explain to us how it is going to work. I look forward to the Minister’s response.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, I am extremely grateful to noble Lords for their amendments in this group and for their valuable contributions on these important issues. I will start by discussing Amendment 110. moved by my noble friend Lady Morgan, whose continued leadership on this very serious and hugely important topic is commendable. Amendment 110 would make the marketing of products intended to be used to take one’s own life a specified prohibition, which would therefore be enforceable under Part 3. Like everyone who spoke, I—and the Government—recognise the tragic consequences of suicide and how so many lives and families have been devastated by it. The Government do not underestimate the gravity of this issue, and that is reflected by the measures already in place around suicide prevention and, indeed, the steps we have taken to clamp down on the advertising and supply of pro-suicide materials.

First, we have strong, well-defined laws in relation to complicity in another person’s suicide, such as the Suicide Act 1961. Building on that, where content on the internet reaches the threshold for a criminal offence under the Suicide Act 1961, the Online Safety Act will place new duties on all in-scope user-to-user services proactively to tackle it.

Under the Online Safety Act, search services have targeted duties that focus on minimising the presentation of illegal search results to users, and protecting children from such search content. These duties will play a key role in reducing traffic directed to websites with content that encourages or assists suicide, reducing the likelihood of users encountering this content. The Act also places duties on providers to protect children from harmful content that encourages, promotes or provides instructions for suicide but that does not meet the criminal threshold. Separately, the independent Advertising Standards Authority bans adverts that may cause harm or serious or widespread offence, including adverts containing references to suicide.

These approaches are supported by the Government’s suicide prevention strategy for England. As part of that, the Department of Health and Social Care leads a cross-government and cross-sector group established to rapidly identify and proactively tackle emerging methods of suicide. Through this group’s close working, there are currently over 30 live actions and interventions to reduce public access to, and limit awareness of, emerging methods, with further commitments made in the strategy. These include seeking to tackle at source the suppliers of harmful substances for the purposes of suicide, and the development of a new national process that both captures intelligence and subsequently issues alerts to relevant parts of the health, care, education and justice systems on any emerging methods or risks to be aware of.

Amendment 110 is set against this background. Its laudable intent does not fit with the purpose of Clause 149 and, by extension, Part 3. This amendment would use Part 3, which is merely an enforcement vehicle for existing duties, prohibitions or restrictions, to define and impose on traders a substantive legal prohibition. Once again, I am extremely grateful for my noble friend’s amendment. I applaud her passionate sponsorship of this vital issue and would be delighted to meet, as requested. However, at this moment, I hope she feels reassured enough by existing measures to withdraw the amendment.

I am grateful to my noble friend Lord Lucas for Amendment 110A. The Government fully agree with him that, as with any statute, Part 3 needs to be kept under review to ensure that it achieves its intended real-world impacts. However, it is important to note that the court-based consumer enforcement regime under Chapter 3 of Part 3 is not new. In general, it updates and simplifies the current court-based enforcement regime in Part 8 of the Enterprise Act 2002. There are therefore existing mechanisms for reviewing the effectiveness of consumer enforcement, which we believe to be sufficient.

First, public designated enforcers already review and report on the enforcement interventions they undertake. For example, since 2019, the Association of Chief Trading Standards Officers has produced annual impacts and outcomes reports that show the impact of local authority trading standards services in England and Wales. Both the Chartered Trading Standards Institute and the Society of Chief Officers of Trading Standards in Scotland conduct workforce surveys and publish reports that cover issues such as staffing and enforcement actions. Regulators such as the CMA, the Financial Conduct Authority and Ofcom provide transparent statements about their enforcement work and publish annual reports that evaluate their past year’s performance. These regulators are accountable to Parliament and subject to scrutiny by parliamentary Select Committees.

This ongoing reporting is complemented by dialogue with government about enforcement priorities and capability. For example, the CMA, which has a central co-ordination role in the network of public designated enforcers, already has a statutory role to provide advice to government on matters relating to its functions, including consumer enforcement. The Government may therefore request the CMA to provide information or advice on any gaps in enforcers’ powers or capabilities. The Government have committed to respond publicly to such advice within 90 days, clearly indicating the steps we will take in response.

--- Later in debate ---

[Lord Clement-Jones (LD)]

Before the Minister moves on, would he be so kind as to point out which bit of the Long Title prevents the amendment of the noble Baroness, Lady Morgan, from being incorporated into the Bill? This is an important issue and he gave us no real comfort about what other powers might be available to remedy the kind of situation that the noble Baroness talked about. Secondly—I sound like a taxi driver—Amendment 110A talks about resources for trading standards but, as the Minister well knows, local authorities are in dire straits. It is not just a question of saying that their funding is not ring-fenced; it is also about the Government making sure that trading standards are adequately resourced for consumer protection. How are they going to ensure that?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his intervention. As I said on my noble friend Lady Morgan’s Amendment 110, we are dealing with a serious issue. I took great pains to run through the various layers of protection currently on the statute book and outlined why the Government believe that this is covered elsewhere and is not within the scope of the Bill. I have also said that I will meet my noble friend and look at this in more detail to see whether we need to look further at the Long Title, to which the noble Lord referred.

[Lord Bassam of Brighton (Lab)]

Is the noble Lord saying that it is not outside the scope of the Bill?

[Lord Offord of Garvel (Con)]

We are saying that there is extensive protection built up around this sensitive issue and that there should not be further legislation made within the scope of the Bill, but that, if we need to look at it further, we can do so before Report.

Every local authority always wants more money. It is a feature of UK public life and it is up to local authorities to decide how to spend their money appropriately. As we all know, some are better run than others. Funding is not ring-fenced and it is up to local authorities to make sure that standards are maintained in their area.

Amendments 111 and 122, tabled by the noble Lord, Lord Clement-Jones, pertain to profits from infringements and the calculation of penalties. They would ensure that profits made from engaging in an infringing commercial practice can be expressly reflected in the calculation of a monetary penalty imposed through an enforcement order made by the court or a final infringement notice given by the CMA. I thank the noble Lord for his amendments and I absolutely agree with the intent behind them. In fact, work is under way to produce a comprehensive set of regulations, which could be made under Clause 203, to set out the amounts that are to be treated as comprising a person’s turnover when calculating the maximum penalty that can be levied.

Our intention is that any profits accruing from the relevant infringement will be captured by this methodology, but we consider that this maximum penalty calculation will be a technical exercise that needs to be supported by robust and detailed methodology, which is therefore better suited to secondary legislation. I hope that the noble Lord is sufficiently reassured that this important issue will be addressed.

[Lord Clement-Jones (LD)]

My Lords, I am sorry to keep interrupting the Minister, but this is quite an important factor. Is he saying that secondary legislation can expand the way that the primary legislation is interpreted? I was talking in my amendment about trying to get hold of the profits of abuse, so that the penalties should include a profit-based penalty, but the Minister seems to be saying, “Yes, we can do that with secondary legislation”. Is that really what he is saying?

[Lord Offord of Garvel (Con)]

Yes, that is exactly what I am saying. In order to get a profit, one has to start with turnover. A detailed mechanism is required to look at how these P&Ls work and, rather than being in the Bill, this needs to be examined as a technical exercise. There needs to be a methodology put together for it; we will therefore do that in secondary legislation.

Amendments 112 to 120 relate to online content take-down powers and were tabled by my noble friend Lord Lindsay but presented by the noble Lord, Lord Clement-Jones. These amendments would give trading standards departments in Great Britain the power to apply to a court for online interface orders and interim online interface orders to modify, restrict or take down illegal content displayed online.

We welcome the spirit of my noble friend’s amendments. Indeed, the Government have published their consultation response on proposals to empower additional enforcers, besides the CMA, to apply to a court for online interface orders. We have committed to give this additional power to public designated enforcers. These enforcers include, but go beyond, trading standards departments—for example, sector regulators such as Ofcom, which already have consumer enforcement powers under Part 3 of the Bill. We would be pleased to discuss with noble Lords how best to enact these important changes to ensure that the use of this power is governed by adequate procedures.

[Lord Bassam of Brighton (Lab)]

Is it therefore envisaged that the Government will give extra support to local trading standards officers, so that they will have these take-down powers? That seems to be the implication of what the Minister is saying—that it is not just Ofcom or the CMA but that there will be local enforcement as well, so there will be that combination.

[Lord Clement-Jones (LD)]

Just to add to that question, is the Minister saying, “It’s going to happen but we just need to get the procedures right and add them”? Is that really all we are waiting for?

[Lord Offord of Garvel (Con)]

I thank the noble Lords. That is indeed the spirit of what we are saying. We are, in the Bill, giving a power to the courts that will contain the online interface orders. The Government have published a consultation to enable additional enforcers, including the CMA, to apply to a court for these online orders. We are saying that, within the current architecture, we believe that we have the power to do what is required, but that we can make changes after the fact to ensure that the power is governed by adequate procedures.

[Lord Clement-Jones (LD)]

My Lords, that is slightly eliding the situation. The Minister was talking about the CMA but, earlier, I understood him to be talking about trading standards. Are trading standards going to get those powers and is it just a question of ensuring that we get the procedures sorted out?

[Lord Offord of Garvel (Con)]

I thank the noble Lord. There is obviously a little confusion about this, so we will need to set it out, which we will do between Committee and Report, to ensure that we know precisely the order of events here.

[Lord Bassam of Brighton (Lab)]

That is important, because the Minister was talking about the actions in the court while the noble Lord, Lord Clement-Jones, and I were concerned not just with that but with where the enforcement law is going to come from. In the Minister’s letter to us, it would be most helpful if he could set out who will have those enforcement powers and how the mechanisms will work, given the interface between the different enforcing agencies. That would give consumers a degree of comfort.

[Lord Offord of Garvel (Con)]

I am happy to do that. We will look at that in a bit more detail and write accordingly.

We come to some minor technical government amendments, Amendments 121, 123, 124 and 128, which in the main are minor and consequential. They are intended to provide clarity on how the relevant provisions function and on continuity between the current consumer enforcement regime and the reformed regime under Part 3. I hope these government amendments will be supported. I thank noble Lords once again for their amendments and for their considered remarks on this group.

[Lord Clement-Jones (LD)]

My Lords, before the Minister sits down, I wonder if he will take another look at Clause 157(5) regarding the amount of monetary penalty that can be imposed. The limitations seem to be there in black and white, yet the Minister is saying that secondary legislation can change that subsection in due course. If he cannot give me an answer now, would he be able to write to all of us? This is an important point.

[Lord Offord of Garvel (Con)]

I am happy to clarify that in writing.

[Baroness Morgan of Cotes (Con)]

My Lords, I am grateful to my noble friend the Minister for his response, which I will come back to in a moment.

I thank the noble Lords, Lord Clement-Jones and Lord Bassam, for their support for my amendment. It is small but, I hope, would be highly effective if it were accepted. The noble Lord, Lord Clement-Jones, and I spent a long time debating the Online Safety Act last year. It is clear that online marketplaces are not covered. My noble friend the Minister mentioned user-to-user sites and search engines. They are obviously online marketplaces and highly significant businesses—I have mentioned Amazon but there are others—and I do not think the Department for Business and Trade should be agnostic about harmful materials sold on these sites.

I thank the noble Lords who have spoken on Amendment 110 for the sensitivity that they have shown on this difficult topic. I am grateful to my noble friend for the offer of a meeting to look at the scope of the Bill before Report. I will of course withdraw Amendment 110 at this stage, but I look forward to that meeting and further discussions on this important topic.

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Moved by

[Lord Offord of Garvel]

121: Clause 167, page 110, line 29, after “daily rate,” insert “for each day,”
Member's explanatory statement
This amendment would clarify that references in this Clause to maximum amounts of daily penalties are maximums per day, not in total.

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Moved by

[Lord Offord of Garvel]

123: Clause 189, page 126, line 31, after “daily rate,” insert “for each day”
Member's explanatory statement
This amendment would clarify that references in this Clause to maximum amounts of daily penalties are maximums per day, not in total.

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Moved by

[Lord Offord of Garvel]

124: Clause 192, page 129, line 4, after “daily rate,” insert “for each day”
Member's explanatory statement
This amendment would clarify that references in this Clause to maximum amounts of daily penalties are maximums per day, not in total.

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[Lord Leong (Lab)]

My Lords, I thank all noble Lords who have spoken. We are grateful to the noble Lord, Lord Lucas, the noble Earl, Lord Lindsay, the noble Baroness, Lady Bakewell, and my noble friend Lady Crawley for bringing forward this group of amendments relating to Schedule 16, which is introduced by Chapter 6, Clause 207. They seek to amend Schedule 5 to the Consumer Rights Act 2015.

Amendments 124A and 124B appear to add clarity without altering the intention of the Bill as written. Having said that, we would be interested to hear from the Minister whether there is any reason these changes should not be enacted.

Amendment 124C would make a more substantial change to financial penalties. The current level 3 is no deterrent or obstruction. A mere £1,000 is just petty cash for most businesses, whereas level 5, which is an unlimited fine, would serve as a deterrent and perhaps support some co-operation in investigation. We would like to hear from the Minister whether there has been any assessment of the suitability of obstruction being a level 3 fine since the Consumer Rights Act came into law in 2015. We also seek clarification on whether this is the right place to make such a change, given that its impact would be much wider.

Amendments 125, 126 and 127, tabled by the noble Earl, Lord Lindsay, with the support of my noble friend Lady Crawley and the noble Baroness, Lady Bakewell, make a lot of sense in pursuing investigations in all parts of the United Kingdom, not just England and Wales. That was succinctly explained by the noble Lord, Lord Clement-Jones, so I shall not repeat the point. This would obviously be a matter for the Scottish Government. If the Government agree on the merits, is this something they have discussed with their Scottish counterparts?

The amendments in this group are sensible and designed to be helpful. They should be supported. We look forward to the Minister’s response.

[Lord Offord of Garvel (Con)]

My Lords, I thank noble Lords for their amendments and their considered contributions regarding Schedule 5 to the Consumer Rights Act 2015, which details the investigatory powers available to consumer law enforcers. As many noble Lords have noted, building a case against rogue traders and rectifying bad business practices not only starts with but depends on enforcers having the right powers to investigate suspected breaches. This is important for all enforcers, but especially so for local authority trading standards departments that typically exercise the full range of Schedule 5 powers. The Government are committed to ensuring that trading standards and other consumer enforcers have the requisite powers to carry out their important work, so we value the perspectives shared by noble Lords today.

Amendment 124A, moved by my noble friend Lord Lucas, would allow “articles” that fall outside the definition of “goods” to be seized and detained by enforcers when exercising their seizure power under paragraph 28 of Schedule 5. I thank my noble friend for this amendment and hasten to reassure him that its intent is, in our view, comprehensively achieved by the statute as it stands. The definition of “goods” under Schedule 5 already encompasses any tangible moveable items. It is not restricted to the goods sold by the trader to consumers. Further, other provisions in Schedule 5, such as the power under paragraph 29 to seize documents where an enforcer reasonably suspects they may be required as evidence in proceedings, can be relied on should there be any doubt as to whether such items are seizable. For these reasons, I hope my noble friend will agree to withdraw his amendment.

On Amendment 124B, on breaking open a vehicle, I again thank my noble friend Lord Lucas for tabling it. This relates to the power under paragraph 31 that allows enforcers either to require a person to break open a container or to open a container themselves in order to seize and detain goods, among other things. It is indeed important that investigators are not frustrated by arguments about what constitutes a “container” and therefore the current definition is broad and means anything in which goods may be stored. Therefore, the definition is capable of including a vehicle that is storing, or may be being used to store, goods which may disclose a breach of legislation.

However, enforcers must consider what exercise of investigatory powers is appropriate in the circumstances. For example, an enforcer may inspect products under paragraph 25 of Schedule 5 for the purposes of checking the compliance of those products with relevant legislation. If the product in question is a vehicle, an enforcer cannot break open the vehicle as that is allowed only for certain purposes, which do not include product inspection. Therefore, I hope my noble friend is reassured that the statute is already sufficiently permissive in the appropriate circumstances and will not press his amendment.

[Lord Clement-Jones (LD)]

My Lords, the Minister seems to have said two directly conflicting things—that you cannot do something, but that he hopes that his noble friend is convinced that the powers are wide enough. Did we mishear him?

[Lord Offord of Garvel (Con)]

I hope that the noble Lord did not misunderstand me. I think we said that this is already covered in legislation. The definition is capable of including a vehicle that is or may be being used to store goods that may disclose a breach of legislation. We are being clear that the definition of “goods” is sufficiently broad to include goods or vehicles. I was coming on to say that an enforcer may inspect products under paragraph 25 of Schedule 5 for the purposes of checking the compliance of those products with relevant legislation, so we are tying this back to the relevant legislation. We believe that the definitions are already sufficiently wide and therefore there is no need to further legislate.

[Lord Fox (LD)]

That is beginning to be helpful, but the Minister will be aware that different local authorities are receiving different legal advice. Some are comfortable with the definition that he has given and others are uncomfortable with it. At some point, possibly during Report, a Pepper v Hart definition that solidly allows legal officers in local authorities to make the decision that a car is a container in particular circumstances would, at the very least, be helpful. Perhaps adopting the amendment of the noble Lord, Lord Lucas, would be even more so.

[Lord Offord of Garvel (Con)]

I was not aware that there are different definitions in different local authorities. That seems a valid point to address, so we will look at it before Report.

Amendment 124C is on fines for obstructing enforcement officers, for which I again thank my noble friend Lord Lucas. This addresses the question of the appropriate level of fines for the offence of obstructing an enforcement officer, under paragraph 36 of Schedule 5. Currently, the fine must not exceed level 3 on the standard scale, which is £1,000. Amendment 124C would increase that to level 5—an unlimited amount. I fully agree with my noble friend that any sort of obstruction, whether intentionally failing to comply with instructions or knowingly giving misleading information, is a serious matter that must be subject to criminal enforcement.

The current level of the fines was subject to previous government consultation ahead of the introduction of the Consumer Rights Act 2015. It was set to reflect the deterrent purpose of the offence, proportionately and consistently with comparable criminal offences. For example, the penalty for obstructing a police officer or an officer of His Majesty’s Revenue and Customs is set at a maximum of £1,000, which is level 3. We consider that the current level of these fines continues to be proportionate to the offence, consistent with comparable regimes. I once again thank my noble friend for his consideration of this issue and hope that my explanation persuades him not to press his amendment.

I thank my noble friend Lord Lindsay and the noble Baronesses, Lady Bakewell and Lady Crawley, for tabling Amendment 125, which was presented by the noble Lord, Lord Clement-Jones. It would end the prohibition on enforcers to use information provided by a person in response to a written information notice in criminal proceedings against that person. Prohibitions of this sort apply throughout the UK legal system and serve to help protect a person from self-incrimination when enforcement authorities are given broad powers to send information notices to compel the production of information.

The Government have listened carefully to trading standards departments, which consider that removing this prohibition would enable them to gather evidence needed for consumer prosecutions more easily. We have been told that using other information-gathering powers comes with operational challenges, such as having to resource travel outside the local area to carry out investigations. We are keen to work with enforcers to address these challenges. However, this prohibition is an important protection. It safeguards a right that is recognised under English common law and the Human Rights Act.

In summary, Amendment 125 stems from an operational issue that does not justify rolling back well-established legal protections. I therefore hope the noble Lord will feel able not to move this amendment.

[Lord Clement-Jones (LD)]

Are the Government really saying, more or less, that they do not recognise that the world has gone digital? Will the Minister spell out the principles of common law that prohibit them from allowing trading standards officers to do what we set out in the amendments?

[Lord Offord of Garvel (Con)]

This says that the Government have the overarching legislative position, but the trading standards departments operate locally, and it is important that central government listens to local government. That consultation listened carefully to the trading standards departments and has come back saying that they believe that removing this prohibition would enable them to gather evidence better and more easily for consumer protection. We follow the local authorities in their requirements.

I turn to the use of investigatory powers across the UK. Amendments 126 and 127, again tabled by my noble friend Lord Lindsay and presented by the noble Lord, Lord Clement-Jones, would permit any trading standards department based anywhere in Great Britain to carry out investigations anywhere in the UK. Current law already allows English and Welsh trading standards departments to use their investigatory powers in parts of England and Wales outside that department’s local area. The same is true for trading standards departments in Scotland, which can already use their investigatory powers anywhere in Scotland.

Extending the powers to investigate across the UK fails to recognise that Scotland has its own legal jurisdiction separate from the single legal jurisdiction of England and Wales. I draw noble Lords’ attention to the fact that consumer protection is a transferred matter in Northern Ireland, where trading standards are a central government function, in contrast to Great Britain’s local authority model. These differences across the UK’s nations provide examples that I hope will persuade the noble Lord not to move Amendments 126 and 127.

[Lord Bassam of Brighton (Lab)]

I want to tempt the noble Lord to give us a bit more explanation on this. If I understood what he said rightly, it is quite in order for trading standards officers to begin an investigation in their local authority areas and, because it is clearly a broader issue and a company they are looking at operates nationally, it is okay for them to go after it elsewhere. But, when an English trading standards authority wishes to pursue someone in Scotland, is the Minister really saying that, because the Scottish law is different and so on, they could not mount an investigation that had to take place partly in Scotland because that is where the company is operating or trading from? That seems a bit of a gap in provision if it is the case and, if it is not, I would have thought that there needs to be some form of understanding and set of protocols between and across the authorities operating on each side of the border. I am thinking particularly of border authorities in Northumbria and Cumbria working with trading standards authorities in the lowlands. This must be an issue there quite regularly.

[Lord Offord of Garvel (Con)]

What we are referring to here is that, within these legal jurisdictions, there are differences, not least of all the way prosecutions are conducted in England and Wales versus Scotland and Northern Ireland. Each of those jurisdictions can operate holistically within these jurisdictions. I will write to clarify, but I am pretty sure that the UK remains a united kingdom and, if there is a requirement for someone in England to speak to someone in Scotland, that can still happen. I will find out exactly how it does.

[Lord Bassam of Brighton (Lab)]

The noble Lord is such a strong unionist that I would be surprised if that were not the case.

[Lord Fox (LD)]

When the Minister writes that letter, perhaps he could extend it to include the United Kingdom Internal Market Act because that seems not to have been taken into consideration. Some of us here today—at least two of us—participated in the lengthy discussions about differing standards across borders and how they might be enforced, and this seems to fall well into that territory. What consideration has been made of that Act in drawing up the terms of the Bill? It would be helpful if the letter set out the various positions within the internal market Act and how they have been represented in the Bill.

[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.

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Moved by

[Lord Offord of Garvel]

128: Schedule 17, page 348, line 13, at end insert—
“Estate Agents Act 1979
A1 In section 3 of the Estate Agents Act 1979 (orders prohibiting unfit persons from doing estate agency work), in subsection (1)—(a) in paragraph (ba) for “section 217, 218 or 219 of the Enterprise Act 2002” substitute “section 155, 158 or 162 of the Digital Markets, Competition and Consumers Act 2024”; (b) in paragraph (bb) for “section 217 of the Enterprise Act 2002” substitute “section 155 of the Digital Markets, Competition and Consumers Act 2024”.”Member's explanatory statement
This amendment makes a consequential amendment to the Estate Agents Act 1979 as a result of the repeal by the Bill of Part 8 of the Enterprise Act 2002.

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I actually have a story about the Balmacara Hotel in Scotland, where I think I was the victim of a fake review. If it was not a fake review, it was certainly a review done less than accurately—but the noble Lord, Lord Stevenson of Balmacara, is not here to hear the full story. I beg to move.

[Lord Offord of Garvel (Con)]

I thank noble Lords for the amendments in this third group, concerning banned practices. I will take them not necessarily in numerical order.

I start with Amendment 132, tabled by the noble Baroness, Lady Jones of Whitchurch. It would ban in all circumstances the marketing of counterfeit and dangerous products online. Misleading claims in marketing are already offences under consumer protection law and, for unsafe products, product safety law. The Bill makes it clear that online marketplaces, which can facilitate the sale of these products, must act with professional diligence. This can include taking appropriate steps to ensure that counterfeit and dangerous products are not sold or promoted in a marketplace.

The Government recently consulted on strengthening the public understanding of those duties. Our response to that consultation committed us to undertake further work with stakeholders, including platforms, other business stakeholders and consumer groups, in order to identify the scope and content of further guidance in this area and how that work should best be communicated and set out; I would welcome the noble Baroness’s input into that work. Further, the product safety review includes proposals specifically aimed at tackling the sale of unsafe goods online. The Government will publish a response to that consultation in due course; again, I look forward to being able to share that with the noble Baroness and to discussing next steps.

Ultimately, online platforms have brought huge consumer benefits, including by vastly increasing the range of products available to consumers. The Government are committed to ensuring that platforms bear appropriate responsibility for ensuring that unsafe or counterfeit products do not reach consumers, but we seek to do so thoughtfully and in consultation with the public and industry to ensure that any new regulation does not jeopardise those consumer benefits or harm economic growth. I hope that the noble Baroness, having heard this, will feel able not to move her amendment.

Amendment 144, also in the name of the noble Baroness, Lady Jones, would give public enforcers a tailored power to require that the marketing of fake or counterfeit products was removed from the internet. The Government consultation response that I just mentioned also includes a commitment to empower additional enforcers to apply to court for interim and final online interface orders under Chapter 3 of Part 3 of the Bill. These orders facilitate the removal of online content that breaches consumer law. In that context, I assure the noble Baroness that we welcome and intend to honour the spirit of the amendment. I look forward to further discussion on this matter with noble Lords. I hope that, with this reassurance, the noble Baroness will not move Amendment -144.

I thank my noble friend Lord Lindsay for Amendment 135 and his input on this matter of fake reviews. Amendment 135 would add commercial practices related to fake reviews to the list of banned practices in Schedule 19. The Government agree that the law against fake reviews should be strengthened. Following our recent consultation on proposals to tackle fake reviews, and recognising the strong parliamentary interest in this issue, the Government have set out in their response our intention to add the relevant practices to Schedule 19 to the Bill.

It is important to get the details right. I would like to work with your Lordships to ensure that the new rules meet our shared aims of reducing the number of fake reviews that customers encounter online and being clear to businesses on what their duties are when publishing reviews. I would be delighted if noble Lords would meet me to discuss this further. I hope that what I have just set out will mean that my noble friend Lord Lindsay feels comfortable not to move his amendment.

I thank the noble Baroness, Lady Jones, for Amendment 133. It would add drip pricing to the list of banned practices in Schedule 19 to prevent traders adding mandatory fees to the price of a product during the purchasing process. Likewise, the Government agree that the law should be strengthened to protect consumers from hidden fees that can cause them to pay more than they have been led to expect. As we set out in our response to the consultation on improving price transparency, published on 24 January, it is the Government’s intention expressly to prohibit the drip pricing of mandatory fees in this Bill. I would be delighted to discuss this with noble Lords. I hope this means that the noble Baroness will feel comfortable not to move her amendment.

[Baroness Jones of Whitchurch (Lab)]

My Lords, all these messages about being prepared to talk further are very welcome; I am sure that we will take the Minister up on them.

Part of the issue about drip pricing and the Government’s response to it is the distinction that they have now made between mandatory extra charges and optional ones. I have a horrible feeling that most of the examples we can think of, such as the airline example, will be classified as optional extra charges, which will not be covered by Schedule 19. Can the Minister say more about that?

I think we are all on the same page but a lot of optional charges are misleading in the sense that they are really charges; the noble Baroness, Lady Bennett of Manor Castle, talked about families sitting together or your luggage going on a long-haul flight. I am sorry that we keep quoting flights, because there are many other areas where this applies, but it seems to me that the Government have made a false distinction here between things that you have to pay, which are mandatory and which the Minister is saying will go under Schedule 19, and the rest, which are most people’s experience of drip pricing; as the Minister was explaining, that will not be covered—but I might have misunderstood what he was saying.

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for that. A distinction has been made as per that wording. As the consultation has come back, there has been a view on the distinction between those two areas, but the whole point of consulting noble Lords between Committee and Report is to allow further investigation, discussion and/or justification of that.

[Lord Bassam of Brighton (Lab)]

I want to persist a bit more on that. We are now almost at the end of Committee, and Report is probably two or three weeks away. That is not a lengthy period in which to get the drafting right and for us to have that discussion, so I ask that we get a really early draft of these amendments. The wording is important and that will help my noble friend Lady Jones to form a view about whether it covers what we are after here.

[Baroness Bennett of Manor Castle (GP)]

This is of great concern to many consumer groups, so it is important to publish and make it publicly available so that people are able to examine, think about and get legal advice on it. It is not just the people in this Committee but broader society that really needs to have the chance to input into this crucial issue.

[Lord Offord of Garvel (Con)]

I thank both noble Lords for those interventions. I am happy to get this to noble Lords as quickly as possible. The whole point of the consultation is to allow consumer groups, which are very vocal on this issue, to be heard, and they have already fed into the process, but I take the point about expedition.

I thank the noble Lord, Lord Clement-Jones, for his Amendment 130 on product packaging. It seeks to legislate against traders potentially copying packaging or other reference material in order to mislead consumers into thinking that the product in question is from the original manufacturer or mislead them about the specifications or characteristics of the product. I thank the noble Lord for giving us a number of examples, which we can all recognise. I agree with him about the importance of ensuring that consumers are not misled.

However, we believe the concerns underpinning this amendment are already addressed through the prohibition on misleading actions in Clause 224 and the banned practice in paragraph 14 of Schedule 19 to the Bill. These prohibit promotions that mislead consumers into thinking that they are purchasing a product or service from a particular manufacturer when they are not. The provision in Schedule 19 achieves what this amendment seeks to do and applies equally to all products and services. Should a trader try to copy another well-known product’s packaging, this would be deliberately misleading to the consumer looking to purchase a product, as currently set out in the banned practice in paragraph 14 of the Schedule and Clause 224.

The noble Lord, Lord Clement-Jones, referred to previous CMA work on this issue. I am pleased to say that there is currently an in-depth CMA study of the grocery section, which has already spurred government action on price labelling rules. The study continues and I would expect it to pick up poor practices of the sort he highlighted. The noble Lord also made an important point about the importance of effectiveness. The additional powers given to the CMA and the courts under Part 3 aim to achieve just that. I hope he will feel comfortable in withdrawing his amendment.

I thank my noble friend Lord Lucas for his Amendment 131, which seeks to exclude universities from the currently banned practice of advertising that includes a direct appeal to children to buy products or to persuade their parents or other adults to buy products for them. This schedule replicates the banned practice in paragraph 28 of Schedule 1 to the Consumer Protection from Unfair Trading Regulations 2008.

There is no evidence that these regulations, which have stood since then, have prevented universities or similar institutions from providing information on themselves or the courses they offer. The banned practice in question is unlikely to stop universities or other providers advertising their courses. However, to ensure that there is no misunderstanding, further information on application can be clarified in a non-statutory way, such as through the guidance that will be issued for the Bill. The noble Lord, Lord Bassam, also pointed out the importance of universities providing accurate information. This is an area where there has previously been enforcement action, which highlights the importance of it being within the scope of consumer law. I hope that my noble friend Lord Lucas will feel comfortable not moving his amendment.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords who have spoken in this debate. I am pleased to have added my name to Amendment 137 in the name of the noble Lord, Lord Clement-Jones, which deals with the issue of submitting or creating fake reviews by adding it to the list in Schedule 19 of commercial practices which would always be considered unfair. This is the issue that we touched on in the earlier debate. I am pleased that we have the chance to raise this today because it has been an issue of concern for some time. It is good to get the chance to debate and pursue this, and it is good to hear that the Government are also keen to do that.

We argue that this is not just about the effect fake reviews have on consumers; they affect businesses as well. They damage the livelihoods of many small traders—restaurants and hotels, for example—when their business is deliberately targeted by damaging reviews, or the local competition down the road receives glowing fake reviews which take trade away from the legitimate trader, so this has a business element as well as a consumer element. At the same time, Which? reports that the proliferation of fake reviews for online product sales results in consumers being more than twice as likely to choose poor quality products. We heard a little bit about how that works in the earlier debate.

Urgent action is undoubtedly needed to bring quality standards back into online sales and marketing so that people are not duped. As we have heard, since the amendment was tabled, the Government have produced their response to the consultation on improving price transparency and product information for consumers. It proposes that the Government will add fake reviews to the list of banned practices in Schedule 19. I am grateful to the Minister for hosting a meeting last week where we had a chance to discuss this. It is good to hear that the Government have finally decided to act on it.

However, there are still some outstanding concerns. Concerns have been raised by Trustpilot and others that the fact that the proposed wording lacks clarity. The Government saying that they will work with the Office of the Parliamentary Counsel to clarify the wording is a sign that they have not yet got this quite right. Can the Minister clarify the timescale for that additional work? When will we see the outcome of it?

Concern has also been raised that the Government’s proposals do not address the role played by internet service providers and social media in promoting fake reviews. The noble Lord, Lord Clement-Jones, raised this issue. What action will we take against those who host and reproduce these fake reviews, often knowingly?

Concern has been expressed that the penalty for promoting fake reviews is subject only to civil, not criminal, enforcement. Can the Minister explain a bit more about why that decision was taken? In the meantime, we argue that our Amendment 137 addresses those concerns. We look forward to further talks along the lines that the Minister has proposed, and we hope that he will agree to work with us and the Committee to produce a government amendment that is both clear and comprehensive.

The noble Lords, Lord Lucas and Lord Holmes, helpfully sought greater clarity on consumer rights to prevent consumers being misled or manipulated. The noble Lord, Lord Clement-Jones, rightly mentioned the additional measures needed to protect us from rogue traders. I am grateful to the noble Lord, Lord Lucas, for asking a series of small but important questions around his almost probing amendments. It is important to have clarification on the record, and I hope that the Minister will be able to give it.

The noble Lord, Lord Holmes, helpfully raised the issue of good faith and asked how we can bring some standards back into trading and the exchange of information. Again, I hope that the Minister will be able to clarify that.

We have had a positive discussion on these important points. It is good to hear that there will be further discussion. In the meantime, I look forward to hearing what the Minister has to say.

[Lord Offord of Garvel (Con)]

My Lords, I turn now to the fourth group of amendments, which concern unfair commercial practices.

I thank the noble Lord, Lord Clement-Jones, for Amendment 137, which would add commercial practices related to fake reviews to the list of banned practices in Schedule 19. The Government agree that the law against fake reviews should be strengthened. Following our recent consultation on proposals to tackle fake reviews and recognising the parliamentary interest in this topic, the Government have set out their intention to add the relevant practices to Schedule 19. It is important that we get the details right.

The noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones, mentioned the concerns raised by Trustpilot around the hosting of fake reviews as well as the hosting and facilitation of fake review training. The Government are sympathetic to these issues. My ministerial colleagues have previously met Trustpilot to discuss such matters. I assure both noble Lords that the hosting of fake reviews is already addressed by our proposals; that said, I would be happy to meet them to discuss this topic further. For the time being, I hope that the noble Lord, Lord Clement-Jones, will feel comfortable to withdraw his amendment.

I again thank my noble friend Lord Lucas for his amendments. Amendment 138A specifically references “pricing” when considering whether a trader is misleading the average consumer. Clause 224 already states that

“an overall presentation which is likely to deceive the average consumer”

is a misleading action. Price clearly forms a part of this overall presentation. I understand the importance of the regulations being robust and clear and I greatly appreciate my noble friend’s close scrutiny of these clauses, which was very much apparent in his remarks. We believe, however, that such a point is better reflected in the accompanying guidance to the Bill. I will ensure that my noble friend’s point is reflected as such.

Amendment 138B specifically seeks to add ignoring or denying consumer rights to the definition of a misleading action. Should a trader make a false or misleading claim about the rights that the consumer has, with a view to denying, ignoring or misinforming them, the existing wording in Clause 224(1)(a), which prohibits the provision of “misleading information” on a

“matter relevant to a transactional decision”,

would apply.

Amendment 140 on misleading omissions would in effect require information that is relevant to a decision about the purchase of a good or service to be provided to the consumer. I believe that the current Clause 225 is an appropriate requirement for information that a consumer needs to be provided. As this requirement is well established in law, it gives traders and consumers certainty on what the information requirements are. The amendment could also give rise to uncertainty in the legislation, which may place additional burdens on traders, such as the potential costs of gathering such information. Although I understand and appreciate what my noble friend is trying to achieve with this amendment, I believe that the Bill as drafted strikes the right balance between consumer protection and not overburdening traders.

Amendment 142 would add examples of where a trader is not acting in good faith to the definition of professional diligence in this chapter. I am grateful to my noble friend Lord Holmes for raising these issues. Misleading consumers in any way that may cause them to take a different transactional decision is already prohibited. Furthermore, there are specific provisions that protect consumers against undue influence and prohibit exploiting vulnerabilities. Clause 226, for example, protects consumers against aggressive practices that exploit any vulnerability. Given the nature of these exploitative practices, we consider that they would be better explained in guidance accompanying the Bill. I would be happy to discuss this with my noble friend ahead of that new guidance being prepared.

I thank my noble friend Lord Lindsay for tabling Amendment 143 to change what constitutes an invitation to purchase. Actions that are considered an invitation to purchase attract specific consumer rights. For example, traders making an invitation to purchase must provide the individual with the information listed in Clause 228. The Government believe that the changes proposed by this amendment would expand the definition too far; it therefore has the possibility of bringing with it unintended consequences. We are of course committed to protecting consumers. Provisions in Chapter 1 of this part of the Bill already achieve a similar aim to this amendment, prohibiting traders from making misleading statements or omissions in respect of all commercial practices.

Amendment 145B, tabled by my noble friend Lord Lucas, seeks to extend the discovery period of an offence under Chapter 1 of Part 4 of the Bill from one year to two years. Again, I understand his rationale for this. It can often take time for trading standards to gather the evidence to pursue a prosecution against a trader who is breaking the law. However, it is also a key principle of our justice system that investigations should be carried out efficiently and in a timely manner. This is important in protecting the rights of both consumers and those accused of criminal offences. We believe that one year to bring criminal proceedings following discovery is the right balance between expedience and giving authorities the time that they need to carry out investigations.

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[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.

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Moved by

[Lord Offord of Garvel]

138: After Schedule 19, insert the following new Schedule—
“ScheduleChapter 1 of Part 4: consequential amendmentsAdministration of Justice Act 1970 (c. 31)
1 In section 40(3A) of the Administration of Justice Act 1970 (punishment for unlawful harassment of debtors), for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.Trade Descriptions Act 1968 (c. 29)
2 In section 12(3) of the Trade Descriptions Act 1968 (false representations as to royal approval or award, etc.) for the words from “and” to “2008” substitute “has the same meaning as in Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024 and, for the purposes of this section, a commercial practice is unfair if it would be unfair for the purposes of that Chapter”.Hallmarking Act 1973 (c. 43)
3 In section 1 of the Hallmarking Act 1973 (prohibited descriptions of unhallmarked articles)—(a) in subsection (4C) for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”;(b) in subsection (4D) for the words from “satisfying” to “action)” substitute “an unfair commercial practice involving a misleading action for the purposes of that Chapter”.Prescription and Limitation (Scotland) Act 1973 (c. 52)
4 In paragraph 1 of Schedule 1 to the Prescription and Limitation (Scotland) Act 1973 for paragraph (af) substitute—“(af) to any obligation arising by virtue of rights of redress under Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;”.Companies Act 1985 (c. 6)
5 In paragraph 17 of Schedule 15D to the Companies Act 1985 (disclosures), omit sub-paragraph (k).Copyright, Designs and Patents Act 1988 (c. 48)
6 (1) The Copyright, Designs and Patents Act 1988 is amended as follows.(2) In section 114A(2)(bb) (forfeiture of infringing copies, etc.: England and Wales or Northern Ireland) for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.(3) In section 114B(15) (forfeiture of infringing copies, etc.: Scotland), in paragraph (d) in the definition of “relevant offence”, for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.(4) In section 204A(2)(bb) (forfeiture of illicit recordings: England and Wales or Northern Ireland), for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.(5) In section 204B(15) (forfeiture of illicit recordings: Scotland), in paragraph (d) in the definition of “relevant offence” for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.(6) In section 297C(2)(bb) (forfeiture of unauthorised decoders: England and Wales or Northern Ireland) for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.(7) In section 297D(15) (forfeiture of unauthorised decoders: Scotland), in paragraph (d) in the definition of “relevant offence” for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.Trade Marks Act 1994 (c. 26)
7 (1) The Trade Marks Act 1994 is amended as follows.(2) In section 91 (power of commissioners for revenue and customs to disclose information), for paragraph (d) substitute—“(d) Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024.”(3) In section 97(8)(d) (forfeiture; England and Wales or Northern Ireland) for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.(4) In section 98(14) (forfeiture; Scotland), in paragraph (d) in the definition of “relevant offence” for “the Consumer Protection from Unfair Trading Regulations 2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.Enterprise Act 2002 (c. 40)
8 In EA 2002—(a) in Schedule 14 (provisions about disclosure of information) at the appropriate place insert— “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024.”;(b) in Schedule 15 (enactments conferring functions) at the appropriate place insert—“Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024.”Licensing Act 2003 (c. 17)
9 -In paragraph 23 of Schedule 4 to the Licensing Act 2003 (personal licence: relevant offences), for the words from “regulation” to “2008” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.Companies Act 2006 (c. 46)
11 In paragraph 25 of Schedule 2 to the Companies Act 2006 (specified persons, descriptions of disclosures etc for the purposes of section 948), omit paragraph (j).Regulatory Enforcement and Sanctions Act 2008
12 In Schedule 3 to the Regulatory Enforcement and Sanctions Act 2008, at the appropriate place insert—“Digital Markets, Competition and Consumers Act 2024, Chapter 1 of Part 4.”Consumer Rights Act 2015 (c. 15)
13 (1) Schedule 5 to the CRA 2015 (investigatory powers: enforcer’s legislation) is amended as follows.(2) In paragraph 10—(a) omit “regulation 19(1) or (1A) of the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277);”;(b) at the appropriate place insert—“section 229(1), (2) or (3) of the Digital Markets, Competition and Consumers Act 2024.”(3) In paragraph 18(b) for “the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277)” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.Online Safety Act 2023 (c. 50)
14 (1) The Online Safety Act 2023 is amended as follows.(2) In section 59(6) (“illegal content” etc) for “the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277)” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.(3) In section 218(3)(b) (power to amend section 40) for “the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277)” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.(4) In section 222(6)(b) (power to amend Schedule 7) for “the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277)” substitute “Chapter 1 of Part 4 of the Digital Markets, Competition and Consumers Act 2024”.”Member’s explanatory statement
This Schedule makes amendments that are consequential on the revocation of the Consumer Protection from Unfair Trading Regulations 2008 and the commencement of Chapter 1 of Part 4 of the Bill.

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Moved by

[Lord Offord of Garvel]

147: Clause 249, page 164, line 20, leave out subsection (2) to (6) and insert—
“(2) Schedule (Chapter 1 of Part 4: consequential amendments) contains further consequential amendments relating to this Chapter.”Member’s explanatory statement
This amendment moves the consequential amendments to primary legislation that were previously in clause 249 into a new Schedule (see my amendment to insert a new Schedule after Schedule 19). The new Schedule contains the moved consequential amendments and additional ones.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, I will speak briefly on this group because I am very aware that we will have a more substantive debate on subscriptions in the coming groups, so forgive me if I am very brief on some of the issues raised.

I am very grateful to the noble Lord, Lord Lucas, for his amendment. We have consistently argued for clarity, and he is right to hold our feet to the fire over the meaning of the consumer bringing the contract to the end. I am grateful for him probing a little more on what that actually means, and I look forward to hearing the Minister’s clarification on this.

I was concerned when I first read the amendments of the noble Lord, Lord Clement-Jones, that they seemed to be an unnecessary watering down of the rights of consumers under the consumer contracts regulations and introduced some ambiguity where there had previously been clarity. He has gone some way to clarifying what he meant by this. It is very unusual for me to be at odds with him. He might know far more about the subject than I did, because I was just going on what I was reading. I would be happy to talk to him more about it.

I of course understand that some mobile devices are too small to display complex pre-contract information. I am sure that we have all been guilty of ticking the box to say that we accept the terms and conditions when we have not actually read them. However, there should be a responsibility on traders to publish the pre-contract details in a simpler form, using better digital design, rather than being given more legal flexibility about how that information is communicated, which rather lets them off the hook. Maybe this is a discussion that we could carry on outside this debate.

Meanwhile, I am grateful to the noble Lord, Lord Mott, for raising the question of microbusinesses and what conditions should apply before the subscription contract regime kicks in. He raised a very interesting question which I have some sympathy with, about very local traders in a locality such as a farmer’s vineyard. I would be interested to hear what the Minister has to say on this, because we need to protect against the unintended consequences of what he is saying. We need to double check that we are not encouraging rogue businesses to re-describe themselves to get through the loophole, but I am sure that he will address that point when he replies.

As noble Lords can see, I am sitting on the fence on most of these amendments, and I am happy to stay there for the time being. I look forward to hearing what the Minister says, which might persuade me either way.

[Lord Offord of Garvel (Con)]

I thank noble Lords for their contribution to the group of amendments, which is concerned with subscription contracts. I again thank my noble friend Lord Lucas for introducing this topic and for his amendment. Amendment 148 would alter the definition of a subscription contract, meaning that contracts where a consumer does not have the right to bring a contract to an end would be brought within the scope of the chapter.

If we were to expand the definition in this way, many parts of the chapter would serve no purpose. For example, if a consumer were to enter a one-year contract for a service which had fixed payments spaced throughout the year, but the contract expires automatically at the end of the year and no further payment would be taken, the consumer would not need regular reminder notices about their contract as they would not have the right to end that contract before it expires. If, however, the contract automatically renews at the end of the year, rolling over into to another year-long contract, then the consumer has an opportunity to bring a contract to an end and therefore would benefit from being reminded that they can end their contract before it auto-renews.

I will give another example, as my noble friend requested, which may illustrate the point more clearly. If a consumer were to enter a contract with a builder for house renovations and pays in instalments, the consumer would rightly not have a right to cancel the contract before the payment period ends. The provision in the Bill would therefore not apply. Of course, where contracts do not contain a right to be brought to an end, they will continue to be regulated by the existing consumer contracts regulations 2013, where applicable. I hope that my noble friend finds this explanation satisfactory, and that he will therefore feel comfortable withdrawing his amendment.

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[Lord Clement-Jones (LD)]

I thank the Minister for the way he has set that out. Will he explain how much consultation there was and the nature of it over the introduction of Schedule 21?

[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.

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[Lord Bassam of Brighton (Lab)]

My Lords, I congratulate the noble Lord, Lord Mendoza, for scripting such a simple and clear amendment. We are acting as co-signatories, and it seeks, very simply, to exempt third sector charities from the effective limitations on subscription contracts in the Bill.

I appreciate that there have already been several attempts to find a solution to this conundrum, including amendments in the Commons. I understood that Ministers were not particularly attracted to this solution, which seeks to list charity membership subscriptions which qualify for gift aid as an excluded contract pursuant to Clause 253. We were a bit reassured by the letter that Kevin Hollinrake, the Minister in another place, wrote to the National Trust, setting out the Government’s position. He said that it was not their intention to create uncertainty about how different legislation might apply. His letter, dated 23 November, also said that cross-departmental work was being undertaken to consider whether clarification would be beneficial. Having listened to everybody this evening, it is pretty clear that it would be beneficial.

If this approach does not meet the happiness threshold for Ministers, this debate is the opportunity for the Minister to explain where the Government’s internal departmental thinking has got to and what other solutions might be available. The Minister argued in his letter to the National Trust that Chapter 3 of Part 4 is unlikely to apply because there is no contract to be deemed a subscription contract. Given the net value of gift aid to charities—for the National Trust it is £47 million, English Heritage is £100 million et cetera—we think there needs to be clarity. We cannot leave a degree of uncertainty. It certainly does not appeal to us to do that at this stage, given the law of unintended consequences. We cannot rely on an assurance that it is deemed unlikely that the legislation would have the effect that many of the charities that we have been talking to have said it would. The charities need certainty and clarity as well.

If it is not this amendment, what amendment will be brought forward? As the noble Lord, Lord Clement-Jones, said, carnage could definitely occur on Report if we do not get a ready-made solution. It needs to be put right and put right now.

[Lord Offord of Garvel (Con)]

I am extremely grateful to my noble friend Lord Mendoza for moving this amendment and for his compelling speech. I also thank other noble Lords who spoke so passionately on this issue.

Amendment 149 would exclude charity membership subscription contracts eligible for gift aid from the scope of the Bill’s subscription contracts chapter. Many of us have heard strong representations from stakeholders on this matter and it has been valuable to hear the contributions from noble Lords today. It is clear that a number of charitable organisations have concerns about the interaction between the Bill, the existing gift aid rules and the potential implications for their operating models.

Like everyone who spoke, I fully understand the valuable additional income that gift aid provides to charities; as my noble friend Lord Vaizey put it, we are absolutely on the same page as far as that is concerned. Moreover, I assure your Lordships that it is absolutely not the Government’s intention to undermine this critical income for charities.

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[Lord Bassam of Brighton (Lab)]

Before the Minister replies to that point, what is it about the amendment moved by the noble Lord, Lord Mendoza, that is so objectionable? I heard the Minister say that charities are not usually excluded from the effects of legislation in the way that the amendment suggests, but I do not see why they could not be made exempt for this particular purpose.

[Lord Offord of Garvel (Con)]

I thank both noble Lords for their interventions. To take the latter point first, it is absolutely the case that charities are required to live within the statute book generally and are not given exclusions. To take the point made by the noble Baroness, Lady Young, I accept that there are commercial elements to these donations. That may not be the primary purpose but they are commercial none the less, and there are examples where benefits are given to donors in return for donations.

[Baroness Young of Old Scone (Lab)]

That is the exact opposite of what I was trying to get across, so obviously I was not being very clear. The point is that the vast majority of donors give donations to an organisation for the good work that it carries out, rather than because it is a subscription to a particular service. It is therefore not a transactional relationship. It is not, “I will pay you to get this delivered”; it is, “I will pay you because you do really good stuff and I want you to keep doing it”. It is a non-transactional relationship, while subscription contracts are a very transactional relationship. That is the point I was trying to get across.

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[Lord Harris of Haringey (Lab)]

My Lords, the Minister said that he would come back on Report, but it would be helpful if he would come back before Report so that all noble Lords can consider how he does so and table amendments accordingly.

[Lord Offord of Garvel (Con)]

I thank noble Lords for their contributions. I can confirm that we will come back before Report. The objective is to get a solution for this issue and to have a satisfactory outcome, so that we avoid carnage in the other place.

[Lord Mendoza (Con)]

My Lords, I am so grateful for the support of noble Lords. The range of experience and advice we have had in this Room is admirable. It is incredible and so helpful that we have the chairman of the Fundraising Regulator right here. I am grateful for the comments of the noble Lord, Lord Harris, and the interjection of my noble friend Lord Vaizey. I had the same thought.

Digital Markets, Competition and Consumers Bill

Lord Offord of Garvel Excerpts

Committee stage
Wednesday 31st January 2024 Grand Committee

Moved by

[Lord Offord of Garvel]

84: Clause 117, page 74, line 16, at end insert—
“(c) references to the supply, provision, acquisition or use of goods or services include the supply, provision, acquisition or use of digital content.”Member's explanatory statement
This amendment confirms that references to the supply, provision, acquisition or use of goods or services include the supply, provision, acquisition or use of digital content.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords who have spoken in this debate. I have added my name to Amendment 85 in the name of the noble Lord, Lord Clement-Jones. He raised an important point about the loss of exemplary damages which could otherwise be awarded for those involved in collective proceedings. In the cases that will be considered under these regulations there may be thousands of small businesses harmed, but only those which prove that harm was done and losses were incurred would be compensated, as the Bill stands. However, it may well be that smaller players cannot afford to take a case, so there needs to be an overarching remedy to ensure compliance with the law, otherwise the defendant may profit from their own wrongdoing. The noble Lord gave some powerful examples to illustrate that. An amendment along these lines should be considered to incentivise the defendants to uphold the rule of law.

The amendment in the name of the noble Lord, Lord Holmes, raises an interesting challenge about the oversight of claims. We agree that it is important that the regulators continue to have a say on the merits of private cases that go to court. They can already intervene in private actions by submitting written observations to the tribunal. The tribunal itself has a role in which it grants a collective proceedings order before a case can go ahead. However, in recent years there has been an increase in the number of private actions brought to court, often by litigation funding firms. These tend to focus on cases where the funders anticipate the largest returns.

In the meantime, the CMA is still trying to focus its public enforcement on cases that will generate the greatest strategic significance and the widest benefit, but its resources are being stretched as the scope of its enforcement power widens. We have to find the right balance between public and private actions to achieve the widest public benefit. We need to take into account the capacity of the Competition Appeal Tribunal to deal with the increased burden of cases. The noble Baroness, Lady Stowell, pointed out that there is a solution to this: the model that Ofcom already uses, which could be used in this case. There may be other solutions, but we need to find a way forward to get this balance right.

At a recent conference Sarah Cardell, the CEO of the CMA, said that the CMA sees public and private enforcement as two complementary parts of a single overall regime. We agree with this approach and, while we are sympathetic to the proposal of the noble Lord, Lord Holmes, we would like to consider the wider functioning of the CAT first.

This leads to the amendments of the noble Lord, Lord Tyrie, who raised significant issues about the workings of the Competition Appeal Tribunal. He obviously has first-hand knowledge of this issue, and I listened carefully to what he said. He shared with us a very deep understanding of the workings of the CAT and the challenges that it faces but, the more that I listened to him, the more that I felt that trying to resolve this with two amendments to this Bill did not seem the right way forward. It felt that this was a bigger issue for another day. Just as the noble Baroness, Lady Stowell, made a fantastic exposition about the issues at stake, I did not want to put my name to those amendments, as I felt that they were too superficial to address the issues that the noble Lord, Lord Tyrie, raised.

Having said that, it might be that a fundamental review of the CAT is necessary or that another way could be found to address this in the Bill. I hope that the Minister listened carefully to the noble Lord’s concern and can offer a way to progress the issues raised by him and others in the debate to ensure that they are addressed. I therefore look forward to the Minister’s response.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

I thank noble Lords for their thoughtful amendments and considered remarks during this debate. I start by speaking to Amendments 85, 86 and 87 tabled by the noble Lord, Lord Clement-Jones, which would enable the CAT to award exemplary damages in collective proceedings.

Clause 125 amends the Competition Act 1998 to allow the courts and the Competition Appeal Tribunal to award exemplary damages in private competition claims involving individual claimants, but not in collective proceedings before it. The competition collective proceedings regime was introduced in 2015. This is an important mechanism allowing redress to be sought on behalf of large groups of customers. The bar on the availability of exemplary damages in collective actions was one of the many safeguards put in place when the Consumer Rights Act 2015 was enacted, to ensure a balanced system of collective actions before the CAT which will not lead to a culture of undue litigation and US-style class actions. These safeguards ensure that defendants are protected by avoiding vexatious and unmeritorious claims—or fishing expeditions—while allowing legitimate claims for redress to proceed, without defendants feeling pressurised to settle, despite the likelihood of a strong defence.

While Clause 125 reverses the complete ban on exemplary damages introduced by an EU directive in 2017, keeping the bar in place for collective proceedings before the Competition Appeal Tribunal remains appropriate for the same reasons that it was put in place when the regime was introduced in 2015. I thank the noble Lord and the noble Baroness, Lady Jones, for Amendment 85 and I hope that he feels reassured and comfortable in withdrawing it.

I turn to Amendment 106 on private enforcement, tabled by my noble friend Lord Holmes of Richmond. I thank him and my noble friend Lady Stowell for their contributions. This amendment would require complainants in private enforcement claims to obtain prior approval from the CMA to bring their cases in front of the CAT or High Court.

The ability to bring private enforcement claims through the CAT is an important mechanism for consumers to seek redress. This amendment would add an extra hurdle for claimants and might therefore reduce their ability to access redress and potentially limit their access to justice. Adopting an Ofcom-style approach would provide a very broad power to the CMA, which would unnecessarily add to the existing range of functions that it currently discharges. While this approach may exist in other jurisdictions, the complexity and size of competition private actions and the well-established jurisprudence of the CAT mean that it would not be appropriate in this context.

The CAT already has a specialised, well-established legal framework through which it manages cases, including certifying collective actions. This amendment would risk overcomplicating the existing framework and unnecessarily bring the CMA into highly complex and contentious litigation. I hope that my remarks have helped to address the concerns of my noble friend Lord Holmes of Richmond and that, as a consequence, he does not press his amendment.

I move now to the review of the CAT and the two amendments put down by the noble Lord, Lord Tyrie. Amendment 107A would require the Secretary of State to conduct and publish a review of the performance, governance and operation of the CAT. I thank him for his amendment and for the expertise and wisdom he brings to our debates. The CAT plays an important role in the UK’s competition regime and in providing avenues for consumers collectively to seek redress. It is right that we consider how the CAT operates to ensure that it effectively fulfils these important roles.

The CAT is already subject to significant review and scrutiny. Under the Competition Appeal Tribunal Rules 2015, which govern proceedings in front of the tribunal, the Secretary of State has a duty to review the CAT rules, including making an assessment of how the rules meet the objectives they are intended to achieve. Indeed, the Competition Appeal Tribunal Rules 2015 are currently under review following a post-implementation review in 2021. This process will ensure that the CAT continues to deliver first-class justice expeditiously.

The CAT is also in scope for the public bodies review programme, which assesses the governance, accountability, efficacy and efficiency of arm’s-length bodies. Moreover, the CAT is already subject to a variety of forms of scrutiny by Parliament and the Government. This includes laying its annual report and accounts before Parliament, ministerial appointments to the Competition Service board and regular ministerial oversight as part of departmental sponsorship arrangements.

Given the crucial role it plays in the competition system, it is right that the CAT is sponsored by the Department for Business and Trade. However, the DBT recognises the important commonalities with tribunals under the purview of the Ministry of Justice, and the CAT president and chairman are appointed by the Lord Chancellor through the judicial appointments process. We also continue to encourage the CAT to engage with its counterparts in other tribunals to continue to develop best operational practice. The scrutiny currently in place ensures that it continues to function effectively and deliver a world-class competition regime. For these reasons, I hope that the noble Lord will not move this amendment.

The noble Lord’s second amendment, Amendment 128ZA, concerns

“Economic interests of consumers duty”.


It would place a new duty on the CMA and the CAT when carrying out their functions to ensure that the economic interests of consumers and their protection from detriment are paramount. This amendment also places a duty of expedition on the CAT. The Government considered this issue when the noble Lord, Lord Tyrie, proposed such a duty in his recommendations to the BEIS Secretary of State in 2019 and concluded that this would not lead to improved consumer outcomes. There was no compelling evidence that an overarching consumer duty would allow the CMA to do anything it could not already achieve within its existing remit or that it would increase enforcement levels.

I thank the noble Lord for raising this important issue. We are in full agreement on the importance of protecting consumers, and the Bill stands testament to the Government’s commitment. The Bill will support consumers through new and improved rights, as well as enhanced powers for the CMA and the civil courts to enforce these rights. New measures will protect consumers’ hard-earned cash, boosting consumers’ rights so they have confidence in businesses and markets. However, we do not believe that placing a further statutory duty on the CMA is the right approach.

The CMA’s existing primary duty is to promote competition for the benefit of consumers. This places a clear, unambiguous and paramount duty on the CMA to deliver with consumer benefit as the end goal. We can see the impact of this work: in the three years to 2021-22, the CMA’s competition work delivered £2.1 billion in average annual consumer savings. This is important to the Government, and we have given the CMA a strategic steer to prioritise action in its discretionary activities that addresses cost of living challenges to deliver better value for businesses and individual consumers.

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[Lord Offord of Garvel (Con)]

I turn first to litigation funding and Amendments 88 and 89. I thank my noble friend Lord Sandhurst and the noble and learned Lord, Lord Thomas of Cwmgiedd, for their passionate and eloquent contributions on this important issue, both in this Room and outside.

On Amendments 88 and 89, tabled by my noble friend Lord Sandhurst, I thank him for tabling these two amendments and for giving Members the opportunity to discuss this important issue. It has offered the unique opportunity to hear from a number of noble Lords with unparalleled expertise on the UK’s legal system. As my noble friend outlined, these amendments would reverse the effect of the Supreme Court judgment in PACCAR for competition and consumer claims. This would remove the requirement for litigation finance agreements in these cases to comply with the damages-based agreements regulations.

To be clear, it is government policy to return to the pre-PACCAR position at the earliest legislative opportunity. We are committed to delivering that reversal for all the reasons that noble Lords rightly highlighted, there perhaps being no better example of the benefit of litigation funding than the case of the postmasters impacted by the Horizon scandal. That is why the Government acted within weeks of the Supreme Court’s judgment to mitigate its impact on live collective actions before the CAT.

I and my ministerial colleagues at the Ministry of Justice have been pleased to receive my noble friend’s representations regarding his amendments and the Government’s position on PACCAR. I recognise the efforts that he and colleagues have made, working within the scope of the Bill, to return proceedings in front of the CAT to their pre-PACCAR condition. However, any action taken through the Bill must be aligned with the Government’s intention to return to the pre-PACCAR position across the whole of the justice system, as publicly set out by the Lord Chancellor. I assure noble Lords that we and our colleagues in the Ministry of Justice are examining this matter urgently and considering the best possible way to achieve this objective. In the meantime, I ask my noble friend not to press his amendments, with the assurance that the Government will continue to work closely with him, ahead of Report, to identify opportunities to address his laudable concerns, within the scope of the Bill or elsewhere.

I turn to Amendment 89A on a review of the litigation funding industry, I thank my noble friend Lord Hodgson of Astley Abbotts for tabling this amendment and for his contribution to the debate in this Committee on this important issue. My noble friend raises some important considerations about the litigation funding sector. Ensuring that access to justice is maintained and properly managed is a critical issue, and I welcome this debate.

As my noble friend outlined, this amendment would require the Secretary of State to conduct a review of the application of litigation funding arrangements to competition and consumer law matters. My noble friend’s amendment sets out the factors that he believes such a review should consider. To be clear, although there has been much debate about litigation funding during the passage of the Bill, responsibility for litigation funding remains a matter for the Ministry of Justice. Although I appreciate the limited remit of this amendment, it is right that any review considers the application of litigation funding across the entire justice system.

On competition matters, I note that the CAT rules and guide to proceedings provide for significant scrutiny of funding agreements in collective proceedings, which are looked at as part of the tribunal’s consideration of whether it is just and reasonable for a person to act as a class representative. The CAT has also extensively considered the application of these rules, including in the light of the PACCAR ruling. Although this is not a matter for my department, I assure my noble friend that the Government are already considering options for a wider review of the litigation funding market and its regulation. The Civil Justice Council may be asked to undertake such a review, given the need to ensure access to justice and the attractiveness of the jurisdiction. Given its independence, it may be unhelpful to specify the scope and timing of such a review at this stage. However, I expect colleagues from the justice department to update this House once that review is agreed. To that end, I thank my noble friend Lord Hodgson and hope that he is sufficiently reassured not to move the amendment.

[Lord Sandhurst (Con)]

My Lords, I am very grateful for the words of my noble friend the Minister. I should perhaps say this in respect of what my noble friend Lord Hodgson had to say: I accepted at the beginning that it is time now for regulation. Funding has been around since at least 2003 and I know, because I acted as leading counsel—I have no interest now—for funders in the case of Arkin. It was, in effect, a failed competition case, and the question was whether it was lawful and so on. To cut a long story short, the Court of Appeal said that the agreement was perfectly lawful; the case having been lost, it ordered the funders to pay the defendant’s costs up to but not exceeding the amount that they had underwritten—a cap, known as the Arkin cap. It is not always followed, but that is the general rule. It may well be that it is time for a review.

I remind the Committee of something that I drew attention to in my Second Reading speech, namely the statement by the then Parliamentary Under-Secretary of State, my noble friend Lady Neville-Rolfe, in Committee on the Consumer Rights Bill on 3 November 2014. In respect of legal litigation funding agreements, as opposed to damages-based agreements, she said that

“there is a need for claimants to have the option of accessing third-party funding so as to allow those who do not have a large reserve of funds or those who cannot persuade a law firm to act pro bono to be able to bring a collective action case in order to ensure redress for consumers. Blocking access to such funding would result in a collective actions regime that is less effective … Restricting finance could also create a regime which was only accessible to large businesses. This would weaken private enforcement in competition law, which is of course not the Government’s wish or intention”.—[Official Report, 3/11/14; col. GC 583.]

I think that is enough said, in the light of my noble friend the Minister’s observations about my noble friend’s Amendment 89A. I am very grateful for what has been said by the Minister about my amendments. I say only this: something will have to be delivered by the time we get to Report, or it will be a very interesting day out in the main Chamber. I beg leave to withdraw my amendment.

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Moved by

[Lord Offord of Garvel]

90: Schedule 5, page 249, line 22, at end insert—
“(4) In subsection (7), after “(3)” insert “, (3A)”.8A (1) Section 40 (section 39: supplementary) is amended as follows.(2) In subsection (4), after “section 39(3)” insert “or (3A)”.(3) In subsection (5), before “or (4)” insert “, (3A)”.”Member's explanatory statement
This amendment would amend sections 39 and 40 of the Enterprise Act 2002 so that extensions under the new subsection (3A) of section 39 (inserted by paragraph 8(3) of Schedule 5 to the Bill) are treated in the same way as extensions under subsection (3) of that section.

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Moved by

[Lord Offord of Garvel]

91: Clause 130, page 80, line 24, leave out from “any” to end of line 26 and insert “subsection of section 39 may also be extended under any other subsection of that section.”;”
Member’s explanatory statement
This amendment would make it clear that a period extended under any subsection of section 39 of the Enterprise Act 2002 can also be extended under any other subsection of that section (rather than just specified subsections).

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Moved by

[Lord Offord of Garvel]

92: Clause 131, page 81, line 26, leave out from “any” to end of line 28 and insert “subsection of section 51 may also be extended under any other subsection of that section.”;”
Member’s explanatory statement
This amendment is for consistency with my amendment to Clause 130.

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Moved by

[Lord Offord of Garvel]

94: Schedule 9, page 270, line 10, after “daily rate,” insert “for each day”
Member’s explanatory statement
This amendment would clarify that references in 40A of the Competition Act 1998, as amended by this Schedule, to maximum amounts of daily penalties are maximums per day, not in total.

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Moved by

[Lord Offord of Garvel]

98: Schedule 10, page 283, line 24, after “daily rate,” insert “for each day”
Member’s explanatory statement
This amendment would clarify that references in new section 35B of the Competition Act 1998, inserted by this Schedule, to maximum amounts of daily penalties are maximums per day, not in total.

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Moved by

[Lord Offord of Garvel]

104: Schedule 13, page 303, line 7, at end insert—
“(za) omit “Regulations made by the Secretary of State under section 68A or”;”Member’s explanatory statement
This amendment, and my other amendment to this Schedule, are to take account of an amendment made by the Energy Act 2023 to section 124(5) of the Enterprise Act 2002 (which this Schedule also amends).

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We support these amendments. They have raised an important debate today and I hope that in his response the Minister will be able to say how the Government intend to take it forward.

[Lord Offord of Garvel (Con)]

My Lords, this group of amendments concerns package travel. I will address Amendment 108, along with Amendments 129, 136, 139, 141, 145 and 146. I thank the noble Lord, Lord Clement-Jones, for tabling them and the noble Lord, Lord Fox, for speaking to them so eloquently. These amendments cover the same theme: the use of third parties in contracts between consumers and traders.

I reassure the noble Lord that the protections sought in these amendments are mostly provided for in other parts of consumer law, which I will detail. For example, Clauses 224 and 226 prohibit traders using misleading information or aggressive practices. This prohibition would already cover situations involving a consumer’s decision on whether to use a third-party agent. Similarly, Amendments 145 and 146 seek to make clear in the legislation that a consumer enjoys consumer rights, whether they purchase from a trader directly or via a third-party agent. However, in either situation the contract is between the trader and the consumer, and therefore the consumer benefits from the relevant consumer rights. Amendment 146 focuses on the transactional decisions related to purchases from a trader. Whether the decision is carried out by the consumer themselves or a third party is not relevant. The consumer that the contract is with will receive the relevant consumer rights. The practical effect of Amendments 145 and 146 is already achieved through consumer law.

I shall record two instances in which these amendments would have an adverse and unintended effect and thus why the existing wording of consumer law is set out the way it is. Consumer protection requires a consumer-to-trader relationship for consumer rights to apply. If, as suggested in Amendments 108 and 129, the definition of a consumer were changed to include third-party agents, they would in effect also become consumers in the eyes of the law. That means that the consumer’s relationship with the agent would be classed as a consumer-to-consumer relationship instead. Should there be an issue between the consumer and the third-party agent, the consumer would then no longer benefit from the same consumer rights as ordinarily apply. The amendment suggested by the noble Lord would broaden a very established principle of consumer law with this unintended effect.

I shall conclude my response—including the matters raised by Amendment 136—with reference to travel agents and the sale of package travel holidays, as I believe that may have inspired some of the noble Lord’s amendments. This is a sector in which it is common for consumers to use agents on their behalf. I am aware that issues have arisen between online agents and flight operators. Ministers in my department were pleased to meet representatives from an online travel agent and an airline recently to understand the issues from all perspectives.

Through our markets regime, the Government have ensured that the CMA has significant powers to investigate and act if it finds that businesses are behaving anti- competitively in a market. It is right that those matters are for the CMA to determine itself.

Separately, the Department for Business and Trade carried out a call for evidence on the Package Travel and Linked Travel Arrangements Regulations 2018 during September-December 2023. Those rules set the consumer protection framework for package holidays. It is vital that consumer protections for package holidays, as a key consumer leisure activity and expense, provide strong protections and that regulations support consumers to access choice and a competitive market. I am pleased to confirm that we are now analysing a substantial volume of responses, including from consumer groups, package organisers and suppliers, such as airlines. The operation of airlines and travel agents is governed by PTRs and ATOL. Those are being reviewed. That is the appropriate way to consider these issues.

Given the noble Lord’s interest, once further analysis has been undertaken, I will be eager to share with him the Government’s response to that consultation. I hope that, in light of what I have set out, he will be comfortable to withdraw his amendments.

[Lord Fox (LD)]

I thank the Minister for his response and for his offer to look through the data, which we will be happy to pick up. I thank the noble Baroness, Lady Jones, for her support and for enlightening me on the intricacies of airline ticketing. I suggest that there may well be a new class Z, which she and I will get, where our luggage gets lost as a result of what we have been saying here today.

Central to the Minister’s response is that all this exists already in some form or other, or the words have not been quite crafted correctly. Saying that the existing protections are there belies the fact that there are problems today. If those existing protections were 100% where they should be, doing what they should, the noble Baroness and I would not be able to stand up and list the problems that exist. It behoves us and the Minister to talk between Committee and Report, including my noble friend Lord Clement-Jones, to set out where there are clear issues at the moment and where there could be changes, even if we did not use the words contained in these amendments.

There are problems, and it would help if the Minister acknowledged that. The existing wording and the use and interpretation of those laws is not solving those problems, so there is something to sort out here, one way or another. With that said, I beg leave to withdraw the amendment.

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[Lord Offord of Garvel (Con)]

My Lords, on this group of amendments on net zero and the collective interests of consumers, I thank the noble Baronesses, Lady Jones and Lady Bennett, for their Amendment 109, which would explicitly provide that consumers’ collective interests include avoiding any detrimental effects that they may incur by not reaching net-zero carbon emissions by 2050. I am grateful to the noble Baronesses for raising the important issue of protecting consumers during the transition to net zero. At present, where environmental issues arise, the court or enforcers already have the requisite powers to take action, including by tackling misleading green claims which affect consumers’ purchasing decisions. In addition, in its annual plan, the CMA listed

“helping to accelerate the UK’s transition to a net zero economy”

as one of its priorities.

We are already making strong progress towards net zero by 2050. The UK has reduced its emissions further and faster than any other major economy. To that end, we feel that there are sufficient measures already in place to protect consumers during the transition to net zero. I hope that the noble Baroness, Lady Jones, will feel sufficiently reassured to withdraw her amendment.

On the right to repair, I thank my noble friend Lord Holmes and the noble Baroness, Lady Hayman, for their Amendments 128A, 145A and 201 and, in the latter case, for our recent discussion on the issue, where we had much of a meeting of minds.

The Consumer Protection from Unfair Trading Regulations 2008 are being restated in the Bill and prohibit unfair commercial practices. These include misleading actions which are likely to affect a consumer’s decision-making, so consumers are already protected from misleading statements made by traders on the availability of spare parts. Furthermore, there is a range of activity across government presently which support the aims of the proposed amendments, which in summary focus on sustainability and ensuring that products are repaired, where feasible.

The Department for Energy Security and Net Zero’s eco-design initiative aims to encourage the uptake of products which use less energy, resources and materials through product-specific regulations. The Department for Environment, Food and Rural Affairs is responsible for waste and resources policies, including preventing waste occurring in the first place. Both departments work with the DBT to ensure that, over their lifetime, products use less energy. This ultimately saves carbon, reduces waste and helps households and businesses to reduce their energy bills.

New and updated eco-design measures introduced in summer 2021 have, for the first time, included requirements for manufacturers to make spare parts available and replaceable with commonly available tools, as well as to provide information to professional repairers to assist with repairs. These new requirements cover dishwashers, washing machines and washer-dryers, refrigeration appliances, televisions and other electronic displays. The measures will help to establish a “right to repair” for consumers, as part of a more resource-efficient economy. Defra has recently set out aims in its new waste prevention programme to move to a circular economy by keeping goods in circulation for as long as possible and at their highest value. This includes increasing the reuse, repair and remanufacture of goods. We are consulting now on reforms to the Waste Electrical and Electronic Equipment Regulations and will consult later this year on reforms to the batteries regulations. We have also launched a separate call for evidence on reforms to the WEEE regulations to seek views on how they can further support the circular economy by incentivising more sustainable product design and higher levels of reuse of electrical products.

Further, from 29 April 2024, the new product security regulatory regime will require manufacturers to publish information on the minimum length of time that security updates will be provided for consumer connectable products. However, mandating a minimum security update period before the impact of these measures is known could run the risk of imposing obligations on businesses disproportionate to a product’s lifespan and any associated security benefits. The Government have committed to a post-implementation review of these new measures to understand their impact before any further action is considered.

Similarly, adding rights to repairability to consumer law now will oblige retailers to pre-emptively seek information from the manufacturers of products that they sell. More work is required before this is suitable for the Government to ask. In the meantime, it would mean greater costs and a reduction in choice for consumers. It may also have implications for our WTO and international treaty compliance, as it would constitute a new technical barrier to trade about which we would need first to notify and consult partners.

[Lord Fox (LD)]

I welcome what the Minister says, in some respects. Will the issue of updating electrical and electronic products be part of that review, too? In other Bills, we have discussed who has the obligation to maintain software updates for equipment from the perspective of safety as well as longevity. I hope that the review takes that into consideration, too.

[Lord Offord of Garvel (Con)]

I thank the noble Lord, Lord Fox, for that. There is a lot of information, and it is reasonable that I write to the noble Lord about the gamut of the consultation that is going on. As I said in response to the noble Baroness, Lady Hayman, a lot of consultation work is going on in the two main departments—business and Defra. It is therefore only fair that we spell that out, and we are happy to do so.

To finish what I was saying, I hope, on the basis of what I have said and those assurances, that noble Lords will not press their amendments.

I turn now to Amendment 134, on greenwashing, for which I am grateful to the noble Baronesses, Lady Jones of Whitchurch, Lady Kidron and Lady Bennett of Manor Castle, and the noble Lord, Lord Clement-Jones. The amendment would add specific greenwashing claims to the list of banned practices in Schedule 19. Misleading consumers about the environmental qualities or impact of goods and services so that it leads them to take a different purchasing decision is already against the law. Further, initiatives are under way, including the CMA’s draft guidance on sustainability agreements between businesses, which are aimed at helping to achieve environmental goals. The CMA has also published guidance on environmental claims on goods and services to help businesses understand how to communicate their green credentials without misleading consumers.

Part 3 of the Bill will strengthen consumer protection enforcement by allowing public enforcers to make applications to the court, which will not only stop the infringing conduct but allow the imposition of financial penalties. In addition, the Bill introduces new powers for the CMA to take action more quickly against bad business practices, without needing lengthy court action, and to give penalties of up to 10% of turnover for those breaking consumer law.

In summary, given that greenwashing is already prevented in law, our priority is to keep these existing interventions under review to observe their impact before rushing into further legislative action. For these reasons, I hope that noble Lords will feel comfortable not to press this amendment.

[Baroness Bennett of Manor Castle (GP)]

My Lords, before the Minister sits down, I come back to his response to Amendment 109 about not meeting our net-zero targets. I can probably paraphrase what he said as, “It’s all fine here and everything’s on track”. How would he align that with the statement from the Committee on Climate Change yesterday that there are significant delivery gaps for our NDCs for 2030?

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for that. This is not a perfect science. We are on a journey to net zero and will get there by 2050. We have been very clear on the milestones that we need to hit along the way. As far as the UK is concerned, there is absolutely no going back on our commitment to hit that target, but it is a transition, and it will take a generation. I am very clear that we will get there.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords for their support for my amendments on achieving net zero, tackling those who get in the way of it and tackling greenwashing. I must say that the noble Baroness, Lady Bennett, had a wider interpretation of my Amendment 109 than I had intended. As I said at the outset, it was only a probing amendment, and she has given me good cause to go away and look at the wording of all that again, because it certainly was not going that far. It has provoked a good debate, and we had some genuine issues out on the table on it.

I also thank the noble Baroness, Lady Hayman, the noble Lord, Lord Holmes, and others for making the case so eloquently on the right of repair. We have had a really good debate on this, and I cannot possibly hope to acknowledge all the important points that noble Lords made. Those who know me will know that I have long been an advocate for the circular economy and for the right of repair as an essential part of that strategy, but it feels that action is painfully slow: it is estimated that there are enough unused cables in UK households to go around the world five times, along with 20 unused or redundant electronic items in each. But, instead of having a policy to repair and reuse, electronics manufacturers continue to use up the earth’s scarce resources producing new products, the latest models, which often replace perfectly functioning earlier models.

We cannot go on consuming at this level, as we will run out of the materials needed to produce the goods in the first place, so we need to go back to the design phase and product manufacturing, tackle the scourge of built-in obsolescence, and make spare parts and repair services the norm rather than the exception. The Government’s latest eco-design standards are a step forward, but they deal with only one part of the market. That is why a more comprehensive action plan is needed.

On this issue and others, the Minister said not to worry as they are already covered by current legislation. But it is obvious to all of us that, whatever the wording in the legislation, this is not working in practice. He gave the example of Defra having a policy on, or aiming for, the circular economy, but it has been aiming for this for a long time now. What it needs is action to ban the practice of firms deliberately preventing repair. Consultation, which is what is being proposed, is really not enough. I hope that the Minister can understand our frustration on this. These issues have been around for a long time. They are not new, and it does not feel that sufficient action is being taken.

The Minister said that this is a burden on business, but I do not think it is. It is an opportunity for innovation and new jobs, and an opportunity to save materials and money. We need to ensure that we do not have more waste and that we use the resources we have to best effect. A lot of businesses understand that but not all, and that is the problem.

I also thank the Minister for his response to my amendments. I genuinely believe that he understands and supports the environmental challenge but, again, that is not enough: we need to address the regulatory failings that are allowing greenwashing and global warming to continue. Whatever the current regulations and laws, it is quite clear that those regimes are not properly addressing their responsibility in these areas. Again, we need to look further at that. There is huge frustration that policies are not being translated into action and leading to enforcement. Where are the examples of these policies being enforced?

Post Office Network Subsidy Scheme (Amendment) Order 2024

Lord Offord of Garvel Excerpts

Wednesday 31st January 2024 Lords Chamber

Moved by

[Lord Offord of Garvel]

That the draft order and regulations laid before the House on 11 December 2023 be approved.

Relevant document: 8th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 30 January.

Motions agreed.

UK-EU Trade: Small and Medium-sized Enterprises

Lord Offord of Garvel Excerpts

Wednesday 31st January 2024 Lords Chamber

[Baroness Quin]

To ask His Majesty’s Government what plans they have, if any, to meet representatives of small and medium-sized enterprises to discuss non-tariff barriers to trade between the United Kingdom and European Union.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

I thank the noble Baroness for her Question. We engage extensively with representatives of small and medium-sized enterprises and trade associations across the UK. This includes engagement that I and my fellow Ministers undertake. As Minister for Small Business, Minister Hollinrake routinely meets these representatives and business leaders. As Minister for Exports, I spend a lot of effort meeting SME exporters. We are leading a whole-government effort to break down barriers, including non-tariff barriers with our partners in the EU and across the world.

[Baroness Quin (Lab)]

When the former Prime Minister, Boris Johnson, announced his trade deal with the EU in 2020, he said there would be no non-tariff barriers to trade between us and the EU. That claim has turned out to be spectacularly false, given the extra bureaucracy and costs that many businesses, particularly small businesses, are facing as a result of that deal. As we know, these burdens are due to get worse, not better, in the coming months. Given that in a supplementary question I cannot list all the businesses that I know have been badly impacted, I ask the Minister whether, if I send the details of those firms, his department will look at these things urgently and see in what ways the burdens can be reduced or removed.

[Lord Offord of Garvel (Con)]

I thank the noble Baroness. There is no question that there has been friction in our trade, especially with the EU 27. We have tariff-free trade; a lot of the friction is not of our doing, but we must deal with it.

[Noble Lords]

Oh!

[Lord Offord of Garvel (Con)]

There is a huge amount of effort going on in the department to break down these trade barriers. We have already removed 178 trade barriers—48 of those are worth £6.5 billion alone. Within all our country embassies we have a team working directly with our SMEs to remove these barriers. This will ease the process.

[The Earl of Kinnoull (CB)]

My Lords, the trade and co-operation agreement has a structure of 24 committees, trade specialised committees included, which are meant to work together to produce mutually beneficial improvements in the process of trade. The snappily named Trade Specialised Committee on Technical Barriers to Trade looks into this area, I assume. That committee met only once last year. I realise that committees can work when they do not meet, but will the Minister comment on the fact that it met only once? Can he assure the House that all of the mechanics of the trade and co-operation agreement are sweating hard to try to improve the situation?

[Lord Offord of Garvel (Con)]

I thank the noble Earl. Yes, indeed, there are many committees in Europe—it is one of the reasons we decided to come out. Where we are working most effectively is country by country, and we are finding that, for example, when we deal with Belgium we can solve the problem with British lawyers working in Belgium. We can do the same in Luxembourg. With Sweden we work hard directly with its team on our chilled and frozen food. With Austria we are working on training permits for our staff to move there. We are much more effective on a country-by-country basis than at the higher committee level.

[Lord Fox (LD)]

My Lords, the Minister will have seen yesterday’s reports in the FT that average businesses are facing extra costs of £100,000 to navigate this friction. The Minister has painted a very optimistic and active picture of what his department is doing, but the effects do not seem to be working through. The British Chambers of Commerce and Make UK say that nine out of 10 organisations have seen little progress over the last three years. Does the Minister accept that more has to be done and that perhaps he does have to engage with those committees he just derided?

[Lord Offord of Garvel (Con)]

I thank the noble Lord. We have 5.5 million companies in the UK, of which 3 million are sole traders which operate underneath the VAT threshold. We have 2.5 million SMEs, of which 300,000 export. I meet exporters regularly and what I find when I do the Made in the UK, Sold to the World roadshows in Cardiff, Belfast, Lisburn, Glasgow, Dundee, Birmingham and around the country is that the SMEs are the most innovative when it comes to selling internationally. They are getting around these problems. DBT is working with them. We have a network of international trade advisers who come to their businesses regularly. We have the in-house teams in the embassies. We are working through these issues and, when we move through it, trade will be greatly expanded.

[Lord Lilley (Con)]

My Lords, does my noble friend recall that when the single market began in the early 1990s, the Secretary of State for Trade and Industry at the time—it was me—made many bullish speeches about the beneficial impact this would have on our exports to the EU. Sadly, over the ensuing quarter of a century, our goods exports to the EU stagnated, growing by less than 1% per annum. By contrast, our exports under WTO terms to the rest of the world grew by 90%. Would it not be surprising if, given that membership was not a great benefit to our exports, leaving would do us much harm? Indeed, the Library figures show that our exports to Europe have held up better than our exports to the rest of the world since the referendum.

[Lord Offord of Garvel (Con)]

I thank my noble friend for sharing his great expertise in this area. As we discussed yesterday, Europe’s share of global trade is declining: it has halved from one-third to 16%, and it is heading towards 10%. That is why we are striking trade deals around the world, such as the CPTPP and with India, which we could not do when in the EU. SMEs are enthusiastically taking full advantage of that. I met a company recently that sells high-end tennis wear to US consumers; when it was built during Covid, it could not sell to Australia because it was too expensive and difficult. Now that we have signed a free trade agreement with Australia, the margins have gone up, the time limit has come down and it is trading successfully there.

[Lord Leong (Lab)]

My Lords, small businesses have reported that access to export markets has been hindered lately by import licences and EU regulations and they have either retreated or considered retreating to domestic markets. In addition to the Minister’s meetings with exporters, have the Government made any assessment of the impact of such decisions, and what consideration have they given to possible ways of maintaining access to European markets for these businesses?

[Lord Offord of Garvel (Con)]

I thank the noble Lord. As I said yesterday, Europe remains a massive part of our trade—41% with the EU 27 and 48% with the euro 34—and that will continue to be the case. However, the growth areas for our markets will be the US and the rest of the world. SMEs recognise that and are pivoting to the Indo-Pacific region. DBT is putting a lot of effort into helping them get there fast and profitably.

[Baroness McIntosh of Pickering (Con)]

Will my noble friend make sure that there is complete fairness between exports of food and agricultural products from Great Britain to the EU and those from the EU to this country? Will he update the House on the position of seed potatoes? Can we export them directly to the EU at this time?

[Lord Offord of Garvel (Con)]

I thank my noble friend. Seed potatoes are a specialised area so I will need to write to her on that.

[Lord Watts (Lab)]

My Lords, the Minister says that trade with Europe is as important today as it was three years ago, and it is. However, the Government’s refusal to negotiate positively with the European Union is causing major problems for many industries. Is that not what we are hearing from every source other than the Government?

[Lord Offord of Garvel (Con)]

The reality, as we said yesterday, is that our economy is 80% services and 20% goods, but our exports are 50/50, because our goods are good. We make things that people, especially in Europe, want to buy. European countries are coming to us and saying that they want to get rid of these barriers because they want our goods imported. We are working on a country-by-country basis and it is improving all the time.

[Lord Purvis of Tweed (LD)]

My Lords, yesterday the Minister admitted to me that UK trade with the EU has declined but said that UK trade in services and goods with the rest of the world was going “gangbusters”. I looked up two things this morning. First, UK trade with the EU has declined by 1.4%, which is regrettable, but UK trade with the rest of the world has also declined, by more than 4%. The second thing I looked up was the definition of “gangbusters”, which means “very well”. Would he like to correct the record? Given that EU trade with the rest of the world has gone up while ours has gone down, why does he think that that is the case?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that stat-fest. I said yesterday that the most difficult part of the pie chart is the 24% of our manufactured goods to the EU 27, but the other 70% is increasing in particular services, which have gone up by 19% over the last five years, relative to inflation. That is why I said that the rest of our exports are trading very well.

[Baroness Meacher (CB)]

My Lords, will the Minister reassure the House that we will now spend far more time working with the European Union to enhance our trade with our closest trading neighbours, particularly bearing in mind that the EU represents a pretty high proportion of our trade?

[Lord Offord of Garvel (Con)]

I can absolutely assure the noble Baroness of that. My DBT colleague in the other place, Minister Hands, is putting a huge amount of effort into breaking down these barriers with individual European countries, getting faster access and getting rid of the friction in Europe.

Post Office Network Subsidy Scheme (Amendment) Order 2024

Lord Offord of Garvel Excerpts

Tuesday 30th January 2024 Grand Committee

Moved by

[Lord Offord of Garvel]

That the Grand Committee do consider the Post Office Network Subsidy Scheme (Amendment) Order 2024.

Relevant document: 8th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)]

My Lords, under Section 103 of the Postal Services Act 2000, the Secretary of State for Business and Trade has the power to make payments to support the provision of the Post Office network. This power is subject to conditions, one of which includes a cap on the total amount of funding that can be given to the Post Office in any given financial year. The current cap, set in 2011, is £500 million, and we are proposing to increase this to £750 million per annum.

Raising the legislative cap on funding that can be provided to the Post Office does not reflect a funding commitment but is simply an enabling power to allow the Government to provide appropriate funding to the Post Office when needed. The rationale for the increased cap is simple: we must avoid a situation where the Government cannot legally provide the funding that the Post Office needs for its essential activities.

As all noble Lords will be aware, the Government currently provide funding support to the Post Office in a number of important areas, enabling it to maintain its delivery of key services across the UK.

First, funding is provided for compensating victims of the Horizon scandal. The scandal was one of the biggest miscarriages of justice in living history, and the victims must get the justice that they deserve. As part of this, it is essential that impacted postmasters are compensated fairly and as quickly as possible. The Government are contributing funding for a number of compensation schemes, as well as funding associated with delivering the compensation schemes. It is essential that this process is not held up at any stage of the process.

Secondly, the Government provide significant and vital funding to support the Post Office network. Post offices are the beating heart of communities. Through its network of over 11,500 branches, the Post Office delivers essential services across the United Kingdom. There are currently over 6,000 rural branches, representing 54% of the total network. Over 3,000 of these are described as being the last shop in the village, providing vital retail, mail and banking services together in one space and helping to sustain thousands of rural economies. These services are highly valuable to both individuals and SMEs in urban and rural areas across the UK. It will come as no surprise that, in the Association of Convenience Stores’ recently published annual local shop report, Post Offices were identified as the type of service considered by the public to have the most positive impact on a local area.

The Government have provided significant financial support to sustain the nationwide network: over £2.5 billion in funding in the past decade alone. The Government remain steadfast in their support for the network and have committed to maintaining the annual £50 million subsidy to safeguard services in the uncommercial parts of the network until 2025. Without that funding, most of these Post Office branches would be unsustainable.

The Government provide targeted investment funding to the company. The retail sector is facing challenging conditions. It is still feeling the effects of changing consumer behaviours arising from Covid-19 and the impact of cost of living pressures on consumer confidence arising from a range of factors including inflation and high energy and supply chain costs. As such, the Post Office is experiencing pressures as the business attempts to operate within this challenging commercial environment, while meeting the costs to right the wrongs of the past.

Further pressures have also arisen through the work to replace the outdated Horizon IT system. Although this is a Post Office-led programme, it is essential for the future of the company and the network, and the Government have already committed to providing £103 million to support the development of the replacement system and to ensure that the Horizon system is maintained before the replacement is rolled out. We have provided funding to meet the company’s immediate needs for this programme, and we are working closely with the Post Office to understand what funding may be required beyond that.

These three areas are critical to the future of the Post Office, and the current legislative cap risks the Government not being able to provide the Post Office with the funding it needs for essential activities. Having taken into account the current forecasts and inflationary context since the previous cap was set in 2011, the Government consider a new cap of £750 million to be reasonable, sensible and proportionate. I beg to move.

[Lord McNicol of West Kilbride (Lab)]

My Lords, I thank the Minister for outlining this SI. It is one of the shortest statutory instruments that I have had to deal with. I aim to give it a bit of colour. We on these Benches will not oppose it, but it raises a number of questions, which I will run through, giving the civil servants in the Box a bit of time to answer them and to help the Minister if needed.

A cap has been set at £500 million since 2011—so for quite some time now—and has not risen with inflation over the years. Pre the scandal and having to pay and settle some of the problems—let us deal with the scandal completely separately—has the money from the Government to the Post Office come close to that cap over the last four or five years?

The only question to the DBT from the Secondary Legislation Scrutiny Committee, in paragraph 54 of its eighth report, was not really answered. If this £750 million is not enough, will the DBT come back to Parliament with another SI to uplift it? That is purely in the context of the scandal, because in normal times £750 million should be adequate. It is an uplift of 50% from the previous cap limit, so my expectation is that the cap was never hit. However, the department did not answer the SLSC’s question about whether the Government would return to it. I think the department’s answer was that it was confident that £750 million would be enough. It is worth asking whether, if there is a need to come back for more, the Government would seek to do so.

In dealing with the scandal and the payments from it, is there a gross figure that the Government are expecting or looking to pay across all the compensation schemes? We have individual sums—there is the £600,000, and bits and pieces across different schemes—but is there an expected overall compensation figure on the back of the Horizon scandal?

Also, if I remember correctly, one of the senior executives at Fujitsu commented at Davos that, as a business, Fujitsu would be looking to make some recompense. Do we know what level of financial recompense it is looking to make towards the scandal? Would that money be paid to Post Office Ltd or to the Government, since they are basically underwriting any and all of the compensation payments?

A number of questions have arisen on the back of this very short SI. This will come back to the Floor of the House through Oral Questions and Statements or via Written Questions, so I am more than happy for the department to write to me or put a letter in the Library on some of the detail of my questions, if the Minister does not have them to hand.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for those questions, all of which are perfectly reasonable.

The first question was about the £500 million limit from 2011. Of course, up until 2022 we did not have inflation, so it has not been an inflationary environment. Part of the increase is recognising the inflationary hike that we have had and part of it is recognising that significant compensation has to be paid out. I do not know the precise amount of spend against that £500 million; it has not been above it.

To give some idea of this number, we know that, for example, in the last 10 years we have spent £2.5 billion just supporting the network. If you divide that by 10—although it has not been £250 million a year—you get the idea that that is over or under as a scale. Some £50 million has also been given to support the loss-making branches that we want to keep open, of which there are 3,000 in rural areas. There have also been the IT costs: another £100 million to build the new IT system to replace Horizon.

All of that has been within and is manageable within the £500 million, but now we move to the new world of compensation. So far, £153 million has been paid out. That has, therefore, been within the £500 million cap. On the question of how much will ultimately be paid out, guidance has been given that this could, shockingly, end up being £1 billion, but that would be over a number of years. We expect that to be accommodated within the increase to £750 million. That is how it has been budgeted.

Fujitsu has expressed that it has a “moral obligation”. That has not yet been tested as to amount and recipient. That will now be negotiated. I can see a situation where the Williams inquiry establishes the facts and a lot of repercussions come out of that, as we have said in the Chamber. One of those will be a discussion with Fujitsu about the right amount that it needs to contribute. My ministerial colleague in the other place has been very clear that it should not just be the taxpayer who has to foot this bill. Therefore, Fujitsu will need to off-set that. Quite how that will happen and where it will go is not yet decided, but that will be a significant part of that off-set.

I hope that answers in the main the noble Lord’s questions. Clearly, we all knew the Post Office to be a valuable asset in our own communities, but our awareness of this issue has been raised considerably following the TV series. Therefore, this is effectively a mechanism to ensure that the Post Office is in funds to allow the compensation to be made quickly, as we have indicated many times. We need to right the wrongs of the past in this Horizon scandal. This is an important part of that. This order therefore ensures that the Government can provide appropriate levels of funding to the company over the coming years. I urge noble Lords to support it.

Motion agreed.