Channel 4: Annual Report

Lord Parkinson of Whitley Bay Excerpts

Thursday 21st July 2022 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

The department laid Channel 4’s annual report before Parliament on 13 July with no changes to its content from Channel 4’s draft. The timeline for the department receiving the draft annual report from Channel 4 and laying it before Parliament follows last year’s timetable. It is usual practice for departments to review annual reports ahead of publication.

[Lord Bassam of Brighton (Lab)]

My Lords, rather than trying to sex up Channel 4’s annual report to suit the privatisation agenda, is now not the time for the Government to do a bit of a Lynton Crosby, “scrape the barnacles off the boat” and finally admit that neither the public—nor, for that matter, the parliamentary Conservative Party—want Channel 4 flogged off?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, given that Channel 4 is currently publicly owned, the Government are fully entitled to comment on the contents of its annual report. As I say, it is usual practice for departments to review annual reports. We cannot direct a public body to change what it says but it is quite proper for us to make representations. The Government are clear that we have the long-term interests of Channel 4 at heart in want to ensure that it continues to access the capital and funding it needs to continue doing the brilliant work that it has done for 40 years.

[Lord Hannan of Kingsclere (Con)]

My Lords, is my noble friend the Minister aware of something that struck me as quite a striking feature of this report, which is that the chief executive of Channel 4 has had a 20% pay increase? Obviously, I look forward to the day when this is none of the Government’s business but, as long as we have the current arrangement, perhaps he would like to comment on the disparity between many viewers of Channel 4 dealing with real-terms pay cuts and what strikes me as an extreme level of high remuneration in this instance.

[Lord Parkinson of Whitley Bay (Con)]

My noble friend is correct. The chief executive of Channel 4 received a 20% pay rise last year, taking her total salary to £1.2 million. That is twice the salary of the director-general of the BBC and more than the chief executive of ITV. Salaries are a matter for Channel 4 but I think this shows that the company is in rude health, one of the many things that make it an attractive asset to a potential buyer.

[Lord Foster of Bath (LD)]

My Lords, the Minister says that the Government are happy with the Channel 4 report, which he will know shows that Channel 4 has significantly exceeded the quotas set for it. In the unnecessary privatisation plans, the Government say they want the new owner to

“deliver outcomes in line with those we see today”.

Can the Minister explain whether those are the outcomes that the channel is actually achieving, the ones we see today, or the much less ambitious outcomes laid out in the remit?

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

My Lords, we want Channel 4 to continue what it is doing in terms of commissioning from the independent sector. The difficulty is that, because of the global streaming giants driving up the costs of our thriving and very successful independent production sector, Channel 4 needs access to larger sums of money in the decades to come. That is why we want to ensure that it is able to raise that private capital and continue to compete in the global market.

[Lord Vaizey of Didcot (Con)]

My Lords, I refer to my entry in the register of interests, including my work with LionTree. When I was Minister, I would regularly review the reports and accounts of the bodies that I oversaw and we regularly had huge rows, mainly because there were not enough photos of me or sections detailing my excellent work as a Minister. Is it not the case that while the Government own Channel 4 they are perfectly entitled to see a draft of its report and accounts and perfectly entitled to have a grown-up discussion with Channel 4’s very grown-up board, which of course includes my wonderful noble friend Lord Holmes?

[Lord Parkinson of Whitley Bay (Con)]

My noble friend is right. I have been looking through the annual reports of many arm’s-length bodies that it is my responsibility to lay before Parliament. The Government are entitled to make representations to Channel 4 as its current owner. Of course, if it were privately owned, we would not have that role. We cannot force it to change things but we are perfectly entitled to disagree. In this instance, Channel 4 laid the annual report it had originally drafted.

[Lord Stevenson of Balmacara (Lab)]

My Lords, Parliament was involved in the setting up of Channel 4. Indeed, it was an Act of Parliament that created it. In that sense, we in this House and the other House have an interest in the arrangements under which Channel 4 is supervised. The Minister did not give a very explicit Answer to the original Question from my noble friend. Could he sketch out for us, very briefly and perhaps later in writing, what the points were that the Government wished to raise with Channel 4, so that we are better informed about the debate?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am happy to say that we wrote to Channel 4 on 9 June, three weeks, I believe, after receiving the draft copy of the report, outlining our concerns relating to some of the language in the report, which we believed to be at odds with commitments, given to the department at official and ministerial level, to work collaboratively on this issue of its future ownership. As I say, we may have disagreements with some figures at Channel 4 about that, but the Government’s intention is to ensure that Channel 4 has a secure future and the access to capital it needs to continue to entertain and inform audiences in the decades to come.

[Lord Kirkhope of Harrogate (Con)]

My Lords, the Government very rightly supported the headquarters of Channel 4 moving to Leeds. Those of us from Yorkshire are particularly proud that we now have that Channel 4 presence in Leeds. I think some Ministers indicated that it was part of the so-called levelling-up process. Can my noble friend confirm that whatever decision the Government might take, they will do their very best to ensure that the headquarters of Channel 4 remains in Yorkshire?

[Lord Parkinson of Whitley Bay (Con)]

We are very proud to see the benefits that Yorkshire and other parts of the country have accrued from Channel 4 moving its headquarters. Under private ownership, we will maintain Channel 4’s existing obligations for regional production across the whole of the UK. That is one of the things that is so distinctive about the channel, and which would make it an attractive asset to a buyer.

[Lord Addington (LD)]

My Lords, if the Government have decided that Channel 4 is doing well, which apparently it is, and they would like it to carry on with some of the things it has been successful with, where is the Conservative principle of “if it ain’t broke don’t fix it”, or have we dumped that?

[Lord Parkinson of Whitley Bay (Con)]

It is not about this year’s results; it is about securing the long-term sustainability of Channel 4. Channel 4 is particularly dependent on advertising revenue. Fewer people are watching live advertising. The cost of independent production is rising because of the entry into the market of global streaming giants, so we want to make sure that, in the decades to come, Channel 4 is able to raise the capital to continue doing what it is doing so successfully now.

[Lord Berkeley of Knighton (CB)]

My Lords, is the Minister at all concerned that privatisation might mean that artistic innovation is sacrificed? Very often, that is where money can be lost, simply in terms of views, as the Minister has just outlined. Therefore, that is the first thing that tends to go.

[Lord Parkinson of Whitley Bay (Con)]

No, I am not. According to PACT, only 7% of the total independent production sector revenue came from Channel 4 commissions. Channel 4 spends less on commissioning than ITV, which is of course privately owned. We think the things that Channel 4 does are what make it so successful. We are convinced that any future owner would want to continue to build on those things.

[Lord Watts (Lab)]

My Lords, the Government continue to say that they do not like to interfere with board decisions, and here is a board that has been very successful. The reason members had that salary increase was that it was linked to the company’s productivity, yet this Government think they know better than the board about the future of the Channel.

[Lord Parkinson of Whitley Bay (Con)]

As I say, this year’s report shows that Channel 4 is performing well. It is doing well in the current climate but, as the responsible owners of Channel 4, the Government are looking to the decades to come to make sure that it can continue to do that for the next 40 years and beyond.

[Lord Hamilton of Epsom (Con)]

My Lords, is it not a Conservative principle that no Conservative Government have any business owning television companies?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the Government do not own the BBC. It is set up in a particular way to make it a state broadcaster, not a government broadcaster. We benefit from having a range of different channels with different ownership models. We are focused on making sure that Channel 4 can continue to thrive in the market, which is fast evolving.

[Baroness Featherstone (LD)]

My understanding of the public consultation was that 96% of respondents wanted Channel 4 to remain as it is. So why are the Minister and the Government not listening to people?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, we had a referendum and the noble Baroness’s party did not listen to the latter. We received 56,000 responses to the consultation, 40,000 of which were organised by the campaign group 38 Degrees, which is perfectly entitled to make its views known. We looked at all the consultation responses, but the Government have set out their thinking and their rationale for safeguarding the future of Channel 4.

Digital Regulation: Communications and Digital Committee Report

Lord Parkinson of Whitley Bay Excerpts

Thursday 21st July 2022 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I am very grateful to my noble friend Lady Stowell of Beeston for moving and so expertly teeing up this debate on your Lordships’ committee’s report. It is yet another example of the committee’s foresight in placing digital regulation at the centre of public debate—something it also did very effectively through its 2019 report Regulating in a Digital World. I am very grateful to all the members of the committee for their work and to the noble Lords who have spoken today.

I certainly add my voice to the commendation of my noble friend on the constructive way she goes about her engagement and the scrutiny she gives the Government on behalf of your Lordships’ committee, and I also join her in paying particular tribute to our noble friend Lord Gilbert of Panteg, who chaired the committee so ably during the course of this and previous inquiries.

Before I turn to the specific recommendations made in the report, it may be helpful to set out briefly the fundamental issue which lies at the heart of this inquiry: how we approach the regulation of digital technologies. Your Lordships’ committee has done great work to highlight the importance of ensuring that our regulatory approaches can keep pace with the opportunities and the challenges posed by digital technologies, enabling us to maximise the benefits they bring while minimising the risks they pose. Crucially, that is not just about ensuring that our regulators are able to work effectively together, or that we have effective horizon scanning in place, important as these considerations are. It is also, more fundamentally, about how we design and implement our overarching regulatory approach.

The Government take this issue extremely seriously. In July last year we published the plan for digital regulation, setting out our overarching approach to digital regulation for the first time. The plan outlined our commitment to develop regulatory policy which is capable of delivering our core objectives: to promote competition and innovation, to keep the UK safe and secure online, and to promote a flourishing democratic society.

Momentum since the publication of the plan has been steady. Indeed, we have continued to make rapid progress even in the relatively short time since the committee concluded its inquiry. In March, the Online Safety Bill was introduced to Parliament, which will equip the UK with powerful regulatory and legal tools to keep internet users, especially children and vulnerable people, safe. As your Lordships know, it is still on Report in another place, which means that, regrettably, we will not have our Second Reading in the first week back after the Summer Recess. However, I hope that it will reach your Lordships’ House expeditiously so that we can do that swiftly.

Also in March, the Secretary of State wrote to the Digital Regulation Cooperation Forum outlining the Government’s priorities for digital regulation, including more effective horizon scanning and greater regulatory join-up, key elements of which are being addressed through the current work programme of the forum.

In May, we confirmed our approach to delivering the new pro-competition regime for digital markets, which will help to deliver lower prices for UK families, enable entrepreneurs to compete and grow, and give consumers more choice and control over the services that they use online.

In June, we confirmed our data reform proposals, setting out how we intend to update our data protection laws, implement a more flexible approach to compliance and ensure that the Information Commissioner’s Office is better able to account for the increasing importance of its remit for competition, innovation and economic growth.

In July, we published our approach to regulation in the UK Digital Strategy, including new research on regulatory innovation, as well as an “initial outcomes monitoring framework”, which will enable us better to understand and assess the evidence base for regulatory policy.

In addition, only this week, as my noble friend Lord Vaizey of Didcot spotted through his assiduous monitoring of the DCMS Twitter feed, we published a policy paper on the governance of artificial intelligence, setting out our proposals for a new approach to AI regulation, which will unleash growth and innovation while safeguarding our fundamental values and keeping people safe and secure, and we introduced the Data Protection and Digital Information Bill to Parliament.

I list all this to emphasise how seriously the Government take this issue, and I hope to provide some reassurance to noble Lords. Like your Lordships’ committee, we are committed to making sure we have a coherent approach to regulation which will deliver the full benefits of digital technologies, and we are taking the steps we needed to do this.

I turn now to the specific recommendations made by the committee in its report, beginning with its proposals on regulatory co-ordination and co-operation. As we have been discussing, the report made two connected recommendations: to expand the Digital Regulation Cooperation Forum and place it on a statutory footing as the “digital regulation board”, and to implement new statutory duties to strengthen and facilitate regulatory co-operation.

On the proposal for a digital regulation board, I emphasise the points that we made in our response to the committee’s report. Although the Government agree that the forum has a fundamental role to play in the regulatory landscape, we do not currently support the idea of converting it into a statutory body with the power to direct and oversee other regulators. That is partly due to the complexity that such a body would create in the regulatory landscape at a time when regulatory regimes and remits are quickly evolving, as noble Lords noted. In particular, we are concerned that such a move would confuse issues of accountability and ownership, at a point when consumers and industry are looking for more—not less—clarity on where regulatory responsibilities sit.

Our reticence to create more formal architecture at this stage also reflects the value that we attach to the agility of the forum. The former Minister for the Digital Economy, Chris Philp, made this point in evidence to your Lordships’ committee when he noted that the forum has to work much more quickly than would have been possible with a statutory body. Statutory bodies can be cumbersome to create and operate, whereas less formal approaches can enable us to move more quickly and make more rapid progress, which is critical given the fast-moving nature of digital technologies.

Indeed, I point noble Lords to the impressive work which the forum is doing, to some of which my noble friend Lady Stowell alluded in her opening speech. This year alone it has published a landmark statement on online safety and competition regulation, major publications on algorithmic processing and auditing and an ambitious work plan for 2022-23, as well as launching its digital market research portal. I also venture to suggest that it is the flexibility afforded by the forum’s model of co-ordination that has made it such a strong focus of international interest, with comparable bodies already established in the Netherlands and Australia, and other countries such as Singapore following its work with close interest.

I recognise that it was not only the legislative basis of the forum but the extent and scope of its membership that was a central concern in the committee’s proposal for a digital regulation board. As the Government have made clear in our plan for digital regulation, the digital strategy and the Secretary of State’s letter of priorities to the chief executives of the forum, effective co-ordination will need to involve a wider set of regulators than those currently included in the forum, although clearly they will play a central role in digital regulation. We therefore welcomed the commitment that the forum made in its current work plan and letter to the Secretary of State to engage comprehensively with other regulators via quarterly round tables and to identify opportunities for collaborative work on that basis. Those round tables have already seen the forum engage with the Gambling Commission, the Bank of England, the Payment Systems Regulator, the Advertising Standards Authority, the British Board of Film Classification, the Intellectual Property Office and the Electoral Commission. There is clearly scope for further engagement, although it is important to note that there is inevitably a trade-off between the breadth of the forum’s activities and its ability to progress specific projects quickly.

I turn to the second element of the committee’s recommendations on co-ordination. I am pleased to confirm that we are in the process of implementing a range of statutory measures to enable regulators to collaborate and share information in the delivery of new regulatory regimes. As recently discussed in another place in relation to the Online Safety Bill, we are updating Section 393 of the Communications Act 2003 to ensure that Ofcom can disclose information with other regulators including the Competition and Markets Authority, the Information Commissioner’s Office, the Financial Conduct Authority and the Payment Systems Regulator for the purposes of its functions under that Bill. We will likewise introduce a duty for the Digital Markets Unit to consult the Financial Conduct Authority, Ofcom, the Information Commissioner’s Office, the Bank of England and the Prudential Regulation Authority as part of the planned measures for the new pro-competition regime. Finally, in reforms to the data protection regime and ICO, the Data Protection and Digital Information Bill introduces a new duty for the ICO to consult regulators and other relevant bodies when exercising its duties to have regard to growth, innovation and competition.

We are confident from intensive discussions with regulators that these measures will provide them with the powers they need to address key points of intersection between the new regulatory regimes while being proportionate and tight in scope. Of course we recognise that further measures may be needed to address other challenges that may be raised in the future. For example, issues of co-ordination are likely to become a major area of focus as we develop our proposals for AI regulation and governance which will be outlined in our forthcoming White Paper. I assure noble Lords that we will continue to keep such issues under review.

I turn to the next key area of the committee’s recommendations: the need to ensure greater consolidation in regulatory horizon scanning. I agree that this is vital, given the speed and suddenness with which disruptive digital technologies can transform society. The Government have made science and technology policy, driven by evidence, a major priority. There are strong networks across government for sharing insights from the horizon-scanning teams in different departments. This is led by the national science and technology council, chaired by the Prime Minister, and the Government Office for Science, led by the Chief Scientific Adviser. These organisations bring together expertise from inside and outside government to identify the mechanisms required to deliver our ambitions for innovation.

It is also an area where the regulators, the DRCF in particular, are making rapid progress. Last year, for example, the forum launched its technology horizon-scanning programme, which is explicitly designed to enable join-up with small and medium-sized enterprises, start-ups and academia—partnerships which bring great benefit, as my noble friend Lady Stowell rightly said. In March, it followed this with the launch of a research portal to help regulators and others access existing knowledge about topical issues, and has undertaken the first of a projected series of symposia on issues such as fintech, the metaverse and Web3. Alongside this, it has continued to strengthen its engagement with international counterparts.

Government and regulators are also supported by a network of advisory bodies. These include the Alan Turing Institute, which specialises in data science and artificial intelligence, the Regulatory Horizons Council, an independent expert committee which identifies the implications of technological innovation and provides government with impartial expert advice on regulatory reform, and the AI Council, another independent expert committee that provides advice to government and high-level leadership of the artificial intelligence ecosystem.

As the noble Lord, Lord Clement-Jones, noted—

[Lord Clement-Jones (LD)]

Can the Minister say a bit more about the Regulatory Horizons Council? It seems to be one of these shadowy bodies that very rarely publish anything or make updates. The Minister mentioned many other bodies that clearly do useful work, but I have my doubts about the Regulatory Horizons Council.

[Lord Parkinson of Whitley Bay (Con)]

I would be very happy to provide an introduction for the noble Lord so that he can speak to it directly.

I was going to follow the point the noble Lord made about the report this week from the Alan Turing Institute on how regulators can address the challenges and opportunities of regulating AI. That report echoes the Government’s national AI strategy and plan for digital regulation in concluding that there is a greater need for regulatory co-ordination; it proposes enabling co-ordination, including resource pooling, as my noble friend Lord Vaizey mentioned in his points about joint hiring, to increase readiness for AI across the UK’s regulatory landscape. All these bodies provide us with useful insights. I am very happy to provide an introduction for the noble Lord, Lord Clement-Jones, to the Regulatory Horizons Council.

As ever, there is much more work to be done and the Government will continue to analyse how we can best support work across the different institutions involved in the complex science of horizon scanning. Again, this is likely to become a particularly salient issue as we develop our thinking on AI governance and regulation, and one where we expect to offer further suggestions in due course.

I turn to the committee’s recommendation for a new parliamentary Joint Committee to scrutinise digital regulation. Again, I refer noble Lords to the position we outlined in our response: we believe it would be unnecessary to establish a permanent Joint Committee of this kind when we already have rigorous scrutiny provided by established committees such as your Lordships’ committee and the DCMS Select Committee in another place. We will therefore not take forward the recommendation for a new Joint Committee, although, as the former Minister for the Digital Economy made clear in Committee on the Online Safety Bill, we continue to assess whether some form of additional scrutiny is needed in the context of that piece of legislation. We remain open-minded on that and I look forward to discussing it with noble Lords when the Bill comes to your Lordships’ House.

My noble friend Lady Stowell asked about the timing of the digital markets Bill. As she knows, the Queen’s Speech outlined that we will publish a draft digital markets, competition and consumer Bill. Publishing in draft allows us to engage with Parliament and interested parties on the details of the regime to ensure that the legislation is effective, balanced and proportionate. Pre-legislative scrutiny certainly improved the Online Safety Bill, and I hope the engagement that the publication of a draft Bill will allow us will help sharpen its proposals.

In the meantime, the Government will continue to work with the Digital Markets Unit to ensure the operational readiness of the regime, ahead of the legislation being passed. We have engaged with interested parties extensively, through a public consultation, and published our responses earlier this month. As I say, we committed in the Queen’s Speech to publish a draft Bill in this parliamentary Session, and that remains our commitment.

My noble friend also took the opportunity to ask a slightly off-topic question about BBC funding. As this is her last chance to do so before the Summer Recess, I am happy to say that DCMS will begin preparatory work over the summer, including considering the findings of your Lordships’ committee. We will look at what lessons we can learn from other countries on how they have reformed public service broadcasters in their jurisdictions in recent years. Although it has not been possible to launch a review of the licence fee funding model before the Summer Recess, the next Prime Minister will obviously have a role in deciding how we approach it.

To conclude, I reiterate the point about the speed with which new opportunities and challenges are being generated in the regulatory space. By necessity, the decisions that we make today about our regulatory approach and institutions will not be the final word on any of these questions, and the Government are fully committed to reviewing our regulatory approaches and structures.

I thank noble Lords for their willingness to engage so constructively with us as we chart our course through these new challenges. I encourage them to continue doing so as digital innovation continues to transform our lives still further—but perhaps not until after they have all enjoyed a well-earned summer break.

Gambling White Paper

Lord Parkinson of Whitley Bay Excerpts

Wednesday 20th July 2022 Lords Chamber

[Lord Foster of Bath (LD)]

In asking my question on the Order Paper, I declare my interest as the chairman of Peers for Gambling Reform.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, Ministers and officials have worked tirelessly on the Gambling Act review for 18 months. We remain committed to delivering our manifesto commitment and will publish the White Paper as soon as possible.

[Lord Foster of Bath (LD)]

My Lords, sadly, the Minister is back-tracking on his usual reply, which is “within weeks”. He will know that there are already one or more gambling-related suicides every single day, and that 60,000 children are already classified as gambling addicts. The consultation on measures to reduce those figures began over two and a half years ago. The resulting White Paper has been delayed five times; it has already been approved by the Cabinet on two separate occasions. Does the Minister accept that each delay is costing lives and sets more young people on the road to becoming addicts? Will he press for the rapid delivery of the White Paper, full and undiluted, as the former Gambling Minister, Chris Philp, intended?

[Lord Parkinson of Whitley Bay (Con)]

I take the opportunity to pay tribute to my honourable friend Chris Philp, who led a lot of the work on the preparation for this White Paper. There will be a new Prime Minister in place in a matter of weeks, and we want to ensure that the hard work that has gone into the review sees its speedy publication. We have not waited for the review to take action where it is needed to address the sorts of harms that the noble Lord points to. For instance, we have banned gambling on credit cards; tightened restrictions on VIP schemes; strengthened the rules for how online operators identify and interact with people at risk of harm; and updated the advertising codes of practice to make sure that content that has a strong appeal to children is banned.

[Lord Vaizey of Didcot (Con)]

I congratulate my noble friend the Minister on his appearance at “My Fair Lady” last night, indulging his passion for musical theatre. It was a great pleasure to see him. I also congratulate him on the real progress that he has made in publishing the Government’s response to the call for evidence on loot boxes. I congratulate the Government on adopting a light-touch regulatory but vigilant approach on the use of loot boxes in video games—and could he tell me when the video games body mentioned in that response will be established?

[Lord Parkinson of Whitley Bay (Con)]

It is always a pleasure to see my noble friend at cultural events. To quote the musical:

“Every duke and earl and peer”


was there last night. We are committed to ensure that video games are enjoyed safely by everybody, and we undertook the call for evidence to look at loot boxes. We believe that the games industry can and should go further to protect children and adults from the risks of harm associated with loot boxes. If that does not happen, we will not hesitate to consider legislative change. As my noble friend points out, we will pursue our objectives to get better evidence and research and improved access to data through the technical working group led by DCMS and through the development of a video games research framework.

[Lord Watts (Lab)]

My Lords, many people are disappointed by the Government’s decision to defer this matter again. The Lords committee that looked at this made some strong recommendations, which I think that most people agreed with, and which struck a balance between allowing people who want to have a flutter to do so and protecting vulnerable gamblers. Will the Minister look at whether the Government can use their existing powers to implement some of those changes now?

[Lord Parkinson of Whitley Bay (Con)]

I had the pleasure of serving on the committee which the noble Lord mentions. As I say, we have not waited for the publication of our review—the most extensive review of gambling laws since 2005—to take action where needed, including banning gambling on credit cards and raising the age for playing the National Lottery. We are taking action while making sure that we give the issue the thorough consideration that it deserves.

[The Lord Bishop of St Albans]

My Lords, I declare my interest as a vice-president of Peers for Gambling Reform. We should be shocked at the statistics that the noble Lord, Lord Foster, gave—60,000 young people not just gambling but addicted to gambling. How many children who should not be gambling at all are caught up in this? This is damaging lives and families every day of the year. Surely we need to take some firm action, such as addressing this ubiquitous advertising on sports occasions which is normalising gambling instead of encouraging people simply to participate and enjoy sport for its own sake. When will the Government take some action on this?

[Lord Parkinson of Whitley Bay (Con)]

The right reverend Prelate is right to point to the need for better data. We welcome and encourage work to build the high-quality evidence base which is needed to inform policy. As he knows, that is an area we looked at through the review, as is the question of advertising. We have considered the evidence on that carefully, including the different risks of harms associated with certain sports and on children. We will set out our conclusions in the White Paper.

[Viscount Colville of Culross (CB)]

My Lords, the government response on loot boxes says that all players will have access to spending controls. Will this involve a compulsory cap on spending for young people and, if not, why not?

[Lord Parkinson of Whitley Bay (Con)]

The Government’s response makes clear that the purchase of loot boxes should be unavailable to all children and young people unless they are enabled by a parent or guardian, and all players should have access to and be aware of spending controls and transparent information to support their gaming. That is the right approach to address this issue.

[Baroness Merron (Lab)]

My Lords, as noble Lords have already pressed home, each delay to the long-awaited gambling White Paper potentially puts people at greater risk of falling into problem gambling, with all the human and societal costs that it brings. Does the Minister recognise that, in addition to the delayed review of gambling, the online safety agenda has stalled again, broadband targets are constantly watered down, and creatives are still waiting for support initiatives to come on stream? Why does DCMS struggle so much with delivery?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the noble Baroness is being a little unfair, particularly on broadband. Our rollout of gigabit-enabled broadband continues apace, bringing connectivity to many more households across the country. The department is still hard at work on all six Bills that we have this Session. I enjoyed speaking to her this morning about the Online Safety Bill and look forward to debating that and other measures in your Lordships’ House.

[Lord Kirkhope of Harrogate (Con)]

My Lords, the right reverend Prelate is quite correct in what he says, and I support fully his remarks. I had responsibility in the Home Office in the 1990s for gambling and the Government at that time were extremely cautious about allowing the development of gambling, particularly its effect on young people. I remain deeply concerned about what is actually being talked about. My noble friend also must take into account the views of the responsible gambling organisations, which actually feel just as strongly as the rest of us that gambling should be properly regulated and that we should be careful to ensure that it does not do untold damage to young people in particular.

[Lord Parkinson of Whitley Bay (Con)]

My noble friend is right. Through the work that we have done on the review of the Gambling Act we have, of course, engaged with lots of people, including from the industry, many of whom have been taking forward important actions to make sure that people can gamble safely, fairly and without a problem. All the thoughts we have had through that consultation will be reflected in the White Paper.

[Baroness Symons of Vernham Dean (Lab)]

The Minister has said that he needs better data. What better data does he require than the fact that 60,000 children in this country are addicted to gambling? Surely, for most of us, that data is sufficient for the Government to be taking far stronger action than he has outlined.

[Lord Parkinson of Whitley Bay (Con)]

We are also looking at the way that we can collate data from the industry and from academia to make sure that we have proper evidence-based data such as the noble Baroness suggests fed into the review, which will be published in the coming weeks.

[Lord Austin of Dudley (Non-Afl)]

My Lords, one problem gambler is of course one too many, but the vast majority gamble safely. Will the Minister make sure that any affordability checks do not force customers to provide intrusive personal information such as pay slips and bank statements? Will he also tell us what modelling DCMS has done on requiring customers to consent to companies accessing private financial data? That would cause—as it has in Europe—an exodus of gamblers from the regulated industry to the growing, unsafe, unregulated, online black market.

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord is absolutely right to point to the dangers of taking action that would drive people further into the black market, which is unregulated, pays no taxes and does not have protections for people. He is also right to say that the vast majority of people who gamble do so safely and legally. We have conducted the review to take all these issues into account, which will be reflected in our White Paper.

Broadcasting Sector White Paper

Lord Parkinson of Whitley Bay Excerpts

Monday 11th July 2022 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, as set out in the White Paper, the Government are taking action to support British broadcasters and our creative industries more widely. Among other things, we are supporting original British content by including it in a new and more focused public service remit for television. We will continue to support our highly skilled and innovative creative industries through world-leading creative sector tax reliefs and by protecting the UK’s hugely successful terms of trade regime.

[Baroness Bonham-Carter of Yarnbury (LD)]

I thank the Minister for his reply. Our PSBs are the backbone of our creative industries; they support original British content, talent, skills and exceptional journalism. Does the Minister agree that this will become increasingly difficult as BBC funding continues to be depleted, coupled with the commitment to sell Channel 4 off? This is something that the independent film, TV production and advertising sectors are against. Will the Minister accept that pursuing this is completely inappropriate, considering that it is deeply unpopular among the industry and the public—92% of those responding to the Government’s own consultation were against it—it is not a manifesto commitment, and the noble Lord is now a Minister in a caretaker Government? I see no mandate there.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, it remains the policy of Her Majesty’s Government to ensure that our public service broadcasters are equipped for the decades ahead. As we have discussed, although we may disagree on this issue, I hope all noble Lords agree that Channel 4 needs the investment to be able to compete with the American streaming giants. I look forward to debating this more with noble Lords.

The BBC will continue to receive around £3.7 billion in annual public funding, which allows it to deliver its mission and public purposes.

[Lord Fowler (CB)]

My Lords, does the present political interregnum not give the Government the opportunity to think again about their whole broadcasting policy—and not just for television? If they are pushing ahead, will the Minister say what the Government’s future policy is on supporting BBC Radio, which still has a massive audience in this country—and abroad, for that matter—and today serves us well in its reports on the Ukraine conflict?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord is absolutely right about the vital role played by BBC Radio, including both national and local radio stations. I greatly enjoyed the programme last night celebrating the centenary of The Waste Land, which, like the BBC, turned 100 last year. That is the sort of distinctly British content that only the BBC can provide. I am sure that any incoming Prime Minister and Administration will see the same challenges that beset the BBC and Channel 4 in continuing to do their excellent work in an increasingly competitive field. They would want to address things such as the declining number of people paying the licence fee for the BBC and Channel 4’s reliance on live advertising to ensure that they continue to be sustainable in future.

[Lord Vaizey of Didcot (Con)]

I congratulate my noble friend the Minister on staying in his post; he is a sea of calm amid a frenzy of turbulence. I also congratulate the Government on the broadcasting White Paper; I know my noble friend the Minister had nothing to do with it, but it is a truly excellent piece of work. I thought I would be dramatically changing the subject, but the noble Lord, Lord Fowler, already raised the importance of radio. I point out that radio is one of our most successful creative industries, so can my noble friend the Minister update us on the progress of digital radio, where Britain leads the world?

[Lord Parkinson of Whitley Bay (Con)]

I am conscious that I still have many years to go to equal my noble friend’s length of tenure in office. The Government remain committed to legislating to give effect to the conclusions of the 2017 consultation on radio deregulation as soon as parliamentary time allows. We are also very keen to continue the co-operation between the BBC and both commercial and community radio, as the digital radio and audio review encouraged.

[Lord Wigley (PC)]

My Lords, the Minister will be aware that Wales has a vibrant television and film industry and that back-to-back films have been exported to over 100 countries. Given that ministerial responsibility for the creative arts in Wales is devolved but that for television is not, will he ensure that S4C is adequately funded to maximise the benefit that comes from this sector?

[Lord Parkinson of Whitley Bay (Con)]

The forthcoming media Bill will remove the current geographic broadcasting restrictions so that S4C can broaden its reach and offer its content on a range of new platforms throughout the UK and internationally. The recent funding settlement ensured that S4C was able to continue the work that is much valued in Wales and more widely.

[The Lord Bishop of Chichester]

My Lords, the Government’s Up Next policy paper claims that

“public service broadcasters … develop skills and talent, drive growth right across the creative industries”.

Will the Minister undertake to widen the Government’s vision for broadcasting to ensure that we also hear how skills and talents will be developed among pupils, students and young performers and designers when at present curriculum incentive and public investment are so often lacking in this area in our schools, colleges and universities?

[Lord Parkinson of Whitley Bay (Con)]

The right reverend Prelate points to an important issue in talking of skills. The British Film Institute has looked at this very carefully and published its film and high-end TV skills review at the end of last month, which we strongly welcome and look forward to discussing with the industry to see how it engages with the findings. The Government are doing their bit by, for instance, the new pilots of flexible apprenticeships and through our regular support of more than £2 million a year to the National Film and Television School.

[Lord Bassam of Brighton (Lab)]

My Lords, given that the current cost of living crisis is problematic across all sectors and can have a particularly adverse impact on the creative industries, which are sensitive to changes in economic conditions even without the continued fallout from the pandemic, what assessment has the department made of the impact of inflation and energy price increases across the whole sector, whether on huge production companies, small venues or the dedicated workforce that keeps the show on the road?

[Lord Parkinson of Whitley Bay (Con)]

We talk about inflation and energy bills with all the sectors and industries that the DCMS has the privilege of representing. I spoke about them this morning at the Imperial War Museum when I visited it. Our settlement for the BBC will, as I say, ensure that it continues to receive around £3.7 billion in annual public funding, which will allow it to deliver its mission and public purposes.

[Viscount Colville of Culross (CB)]

My Lords, I declare an interest as a television producer. The White Paper gives the public service broadcasters the right to move their content to less-watched digital channels. Can the Minister confirm that if Channel 4 is privatised, the new owners—and any other public service broadcaster—will have the right to move, say, “Channel 4 News” to a digital channel such as E4, or even a specially set up obscure digital channel?

[Lord Parkinson of Whitley Bay (Con)]

These details and more will be set out in the media Bill, which I look forward to debating with noble Lords. Giving Channel 4 the freedom to diversify its revenue streams as well as to address issues such as the intellectual property of the content it provides are important in making sure that it can continue to compete in the years to come.

[Lord McNally (LD)]

My Lords, very few people agree with the Minister’s analysis or the solutions he has put forward for either Channel 4 or the BBC. I put it to him again that it would be far better to withdraw this rather ill thought-out White Paper and allow the new Secretary of State coming into office in September to look at these matters afresh. If he does not think that there will be a new Secretary of State, would he like to take a bet on it?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, it remains the policy of Her Majesty’s Government to take forward the work that went into the White Paper.

[Baroness Fraser of Craigmaddie (Con)]

My Lords, the independent television sector in Scotland is worth more than £300 million to our economy. I declare an interest as a board member of Creative Scotland. Why do a Conservative Government propose to undermine the successful and growing business model of entrepreneurial producers to create a bureaucratic, grant-giving, centrally directed levelling-up fund, and how would that fund support the regional production centres in any way more efficiently or successfully than the current ownership model of Channel 4?

[Lord Parkinson of Whitley Bay (Con)]

My noble friend points to the success of independent production companies that are privately owned. We want to ensure that Channel 4, whose remit was to promote that important sector 40 years ago, is able to continue to commission from those companies at a time when costs are going up because of the greater budgets and commissioning spending of the American streaming giants.

Musicians and Creative Professionals: Working in the European Union

Lord Parkinson of Whitley Bay Excerpts

Thursday 7th July 2022 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I am very grateful to the noble Earl, Lord Clancarty, for raising the vital issue of touring, and I am glad that further time has been provided for the debate. I know that the noble Earl is a great champion of our musicians and creative professionals. I am grateful to him for the meetings we have had about it and for bringing people into the department to discuss these matters directly with me. I am also grateful to all noble Lords who have taken part in today’s debate. I agree with the noble Baroness, Lady Bull, that there has been great harmony in what has been said, and with the final remarks by the noble Baroness, Lady Merron, about the constructive tone that noble Lords have rightly taken.

The UK’s creative and cultural sectors are internationally renowned. They contribute a huge amount to our economy, but also to our culture and our lives more broadly. Touring is a significant part of their work, enabling us to share the best of the UK’s talents with our friends in the European Union and on a wider international stage, as well as all the economic and cultural benefits that touring brings.

The UK has left the European Union, and we recognise that the way in which creative professionals work and tour in the European Union has changed. I know that this, exacerbated by the pandemic, has in recent years caused uncertainty for the sector, which can be particularly challenging for newer or emerging creative professionals, for whom touring is a key part of their development and professional lives. That is why the Government have been working hard to support the touring sectors to clarify arrangements, to help them to adapt where needed, and to explore what we can do, both bilaterally with EU member states and unilaterally, to make touring easier.

Throughout this period, we have remained in close contact with representatives of the sector. My former colleague Julia Lopez, who was Minister of State for Media, Data and Digital Infrastructure, recently attended the eighth meeting of the touring working group and heard feedback directly from the sector on its experience of touring so far this summer, which is of course the first full summer of touring following the lifting of the Covid-19 restrictions. It is clear that some issues remain, but we should also note that, in many areas, arrangements are more workable than is sometimes reported.

Today, I want to discuss both the work that we have done so far and the areas where we can continue to work together to ensure that our excellent creative professionals continue to tour widely, growing their audiences, honing their craft and sharing the joy of the work they produce.

Touring can broadly be categorised by the movement of people, goods and vehicles, so I will address each of those in turn. I turn first to the movement of people. The Government have worked very hard to clarify arrangements across the member states of the EU that are principally responsible for deciding the rules governing what work UK visitors can undertake there. Our engagement so far has resulted in the confirmation that almost all EU member states offer visa-free and work permit-free routes for musicians and other creative professionals, many for up to 90 days, including major touring markets such as France, Germany and Italy.

Where visa-free and work permit-free routes were not initially available, we worked hard, in collaboration with the sector, to encourage easements, which I am pleased to say has resulted in a further two member states—Spain, and most recently Greece, as the noble Earl mentioned—taking unilateral action to enable UK creative professionals to perform and tour visa-free. This is a happy outcome and testament to the success that can be achieved when the Government and the industry combine their voices.

I recognise that the situation for touring has changed since we left the European Union and that this has required adaptation, but it is important to recognise that these visa-free and permit-free routes exist. As definitions can vary, travellers should check the specific requirements before travelling. We are aware that, in the period immediately following our departure from the EU, much of the information that was available from member states online led to confusion in the sector. That is why we engaged with those member states, and I am pleased to say that our engagement has resulted in a number of them amending their online guidance to provide further clarity. We have also published enhanced guidance on the UK Government’s website, GOV.UK, to support British nationals, including creative and cultural professionals, to navigate the new arrangements. We have worked closely with representatives of the sector through the touring working group, and have shared details with it directly as we receive new information from member states.

This means that there are now only three member states—Portugal, Malta and Cyprus—that do not offer visa-free and work permit-free touring. We have engaged with these remaining member states extensively, using the diplomatic means at our disposal. Most recently, the Minister for Europe, my right honourable friend James Cleverly—now the Education Secretary, as noted by the noble Lord, Lord Hannay—met the Portuguese ambassador to the United Kingdom and raised the importance of touring with him.

We should acknowledge that, ultimately, it is up to member states to align their requirements more closely with the UK’s generous rules to enable them to enjoy the cultural and economic benefits of visa-free and work permit-free touring. As the noble Baroness, Lady Merron, said, it is to their benefit as well.

On the movement of goods, there are new requirements related to ATA carnets, the movement of merchandise and the movement of instruments made from protected materials, as was raised by the noble Earl, Lord Clancarty. These again have required adaptation, and we have worked across government to provide the information and clarity needed. ATA carnets are not new to touring, and have previously been required when travelling beyond the European Union, such as through Switzerland. This is a case of adaptation. Where a carnet is required, it is a single document that can be used for multiple items, as many times as required, in approximately 80 countries around the world, over a 12-month period.

Most significantly, we have confirmed that portable musical instruments, accompanied by their owner, can be transported cost-free and should not require a carnet. I am aware that there have been some issues, such as inconsistent enforcement of these rules in certain member states and challenges regarding the commercial policies of transport operators. Where these issues have arisen, we have worked urgently with colleagues across government and the creative sector, as well as with transport operators and the relevant member states, to address them. If noble Lords are aware of issues, I am always happy to receive information, so that we can continue to follow them up swiftly. Similarly, the EU’s rules state that each individual is able to take up to €1,000-worth of merchandise, with a total weight of 1,000 kilograms or less, into the European Union to sell on tour without paying EU customs duties.

The noble Earl asked about the designation of St Pancras as a CITES port. We have been engaging with the sector on this and I am grateful to the Musicians’ Union, the Incorporated Society of Musicians and the Association of British Orchestras for providing some detailed information at the end of May to inform that work and those discussions. The number of CITES ports has already increased from 24 to 36. Thanks to the information provided by the sector, discussions are taking place now between Defra and Border Force. We will continue to engage closely with the sector and keep it up to date on progress, as well as continuing to listen for whether there are clear steps we can take to support our musicians to tour, this summer and beyond.

The noble Earl also asked about the CITES COP meeting which takes place in Panama, in November. We are indeed preparing for that meeting and will consider any proposal put forward to extend the duration of musical instrument certificates. In principle, that would certainly seem sensible, but of course we will need time to look at the particulars of what is put forward, along with the other proposals advanced ahead of the COP meeting.

I know that much focus of recent discussion about touring understandably revolves around the challenges that new rules pose to the movement of vehicles and the impact on the UK’s specialist haulage industry. It is worth reiterating that during negotiations on the trade and co-operation agreement we proposed specific market access rules for specialist hauliers carrying out tours for cultural events, but the EU did not agree to this. I agree with the noble Baroness, Lady Bull, that it is important that we focus on the future and on practical steps we can take to advance solutions.

To address these challenges, the Government have engaged extensively with the specialist haulage industry, including via a public consultation earlier this year on support for specialist events hauliers working on cross-border tours. As a result of this engagement, the Department for Transport is currently working on the implementation of dual registration to enable it to come into force this summer, with an interim measure in place in the meantime. Dual registration will enable operators who establish a UK and EU base temporarily to transfer their EU-registered vehicles to their GB operator’s licence, enabling full UK and EU single market access rights, without swapping vehicles. I do not wish to suggest that this measure will address all the challenges faced by the specialist haulage industry, as noble Lords rightly point out, but it is again important to recognise that this step is being taken.

I mentioned earlier that we appreciate that some of the new requirements are a particular concern for newer and emerging artists, as the noble Viscount, Lord Stansgate, rightly stressed. I know that the sector was therefore pleased to get confirmation that splitter vans, carrying both equipment and up to nine passengers, do not fall in the scope of the trade and co-operation agreement market access rules regarding cabotage and cross trade, and instead are subject to member state law.

I turn to the range of wider support that Her Majesty’s Government provide to our excellent creative and cultural industries. To help artists navigate the new requirements, we have developed creative sector-specific landing pages on the GOV.UK website, providing relevant guidance for people touring the European Union. We continue to support our music sector through a range of export support programmes, such as the music export growth scheme and the international showcase fund. Creative businesses in England can also access the internationalisation fund, which provides matching grants for export support, including attendance at trade shows. We also launched the export support service last year, through which UK businesses, including touring professionals, can get online and telephone support to answer practical questions about exporting to Europe. We want to do everything that we can to maintain and strengthen the international reach and reputation of our creative workers, who support us to be a truly global Britain.

The right reverend Prelate the Bishop of Manchester asked about support for regional arts organisations. My noble friend Lady Fleet referred to the national plan for music education, which reiterated our commitment to music hubs, with £79 million per annum to support them in their work around the country. The current national portfolio round of funding from the Arts Council reflects the Government’s instruction to make sure that that taxpayer subsidy is spent more equitably and fairly around the country. Presently, £21 per capita of funding is spent in the capital compared to £6 per capita outside; we have asked that that gap be closed.

I would be very happy to meet the right reverend Prelate and other colleagues from the Church of England to talk about church music specifically. It would be remiss of me not to mention my visit to Lincoln Cathedral—particularly noting the presence of my noble friend Lord Cormack and the noble Baroness, Lady Merron—where I heard the joyful music at evensong. I would certainly be delighted to attend the launch of the All-Party Parliamentary Group on Music’s report on 19 July if my diary allows.

[Lord Hannay of Chiswick (CB)]

The Minister may be drawing to a close since he has gone past his time, but he has managed, quite brilliantly, to fail to answer any of the questions that I put to him. I would be grateful to have responses. He has spoken about bilateral and unilateral action, but could he not just put a clove of garlic around his neck and tiptoe into the TCA machinery? This was raised by a large number of speakers. If that is coming, it will be very welcome.

[Lord Parkinson of Whitley Bay (Con)]

I was watching the clock, but my response to the noble Lord was on the very next page of my notes. I was just about to mention the comments of my noble friend Lord Moynihan in relation to winter sports. I will certainly write to him with an update after discussing that with my honourable friend Nigel Huddleston, his successor as Sports Minister.

The noble Lord, Lord Hannay, asked about the views of my noble friend Lord Frost in relation to the TCA. I did indeed read his comments in Zurich with interest. I know that my noble friend devotes many of his considerable talents to thoughts for the future—not always in relation to your Lordships’ House. I look forward to hearing his further thoughts on this topic, particularly as he knows far more than anybody what was discussed and the way it was discussed in our negotiations with the EU.

It is important to note that, during the negotiations, the EU tabled text regarding the paid activities which can be conducted without a visa. The proposals would not have addressed the concerns from the sector: they were non-binding, they did not include touring or technical staff, and they did not address work permits. However, as the noble Baroness, Lady Bull, invited me to, I want to keep my comments focused on the future and on practical steps.

We recognise that our departure from the EU has meant a change for touring professionals, as it has for people in other areas of the economy. The Department for Digital, Culture, Media and Sport and the Government as a whole have worked very hard to support them and will continue to do so. The UK music industry is one of our great national assets and the Government will back it every step of the way.

I am very glad that my noble friend Lady Fleet was here to talk about the work we are doing through the national plan for music education, the £25 million we are providing for school instruments and equipment, and the progress fund which will enable more people from a diverse range of backgrounds to forge careers in our music sector.

Later today, I am meeting UK Music. I was pleased to meet the All-Party Parliamentary Jazz Appreciation Group and hand out awards at its annual awards ceremony, where I talked to people from the jazz music sector. I am always grateful for opportunities to meet representatives of the sector to hear what we can do to support it.

Across the movement of people, goods and vehicles, we have engaged consistently and extensively to clarify arrangements and help people adapt. We know that this summer is the first full summer of touring since the pandemic, and we will engage particularly to make sure that we are hearing from people who are on the ground and touring, so that we can follow up where issues remain. We want to do that and get it right for the sake of our economy, for the sake of our shared culture and for the far wider benefits that music brings in enriching our lives. I am very grateful to the noble Earl for the opportunity he has provided today to keep this issue rightly prominent.

Clearview AI Inc

Lord Parkinson of Whitley Bay Excerpts

Tuesday 5th July 2022 Lords Chamber

[Lord Clement-Jones]

To ask Her Majesty’s Government what assessment they have made of the decision by the Information Commissioner’s Office to fine and issue an enforcement notice against Clearview AI Inc. in respect of its use of images of United Kingdom residents collected from the internet without their knowledge or consent.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, organisations based in the UK and those based overseas which process data of UK residents for the purposes of providing services must comply with our data protection legislation. Where personal data are more sensitive in nature, such as where they relate to a person’s biometric information, stricter rules and safeguards apply. The Information Commissioner’s Office enforces legislation independently of government. In the case of Clearview AI, it decided that the data protection principles were not complied with and enforcement action was needed. Further details can be viewed on the ICO’s website.

[Lord Clement-Jones (LD)]

My Lords, Clearview is a US company that is in clear breach of data protection laws, collects facial images for its database without our knowledge or consent, uses it to train its algorithms and then offers special deals to schools and the police to use the database on their live facial recognition systems. What are the Government doing to prohibit public authorities contracting with Clearview? Clearview has said it will not even pay the ICO’s rather limited fine. What will the ICO and the Government do now to ensure that it pays?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, Clearview is appealing the ICO’s finding, which it is entitled to do, but I note that the ICO is not the only regulator to have taken action against it: its French, Italian, German, Canadian and Australian counterparts have reached similar conclusions. The ICO has issued a fine and served an enforcement notice issuing orders for Clearview to delete the data. Subject to its appeal, that is what it will have to do.

[Viscount Colville of Culross (CB)]

My Lords, a video from the States appeared to show Nancy Pelosi drunkenly slurring her way through a speech. It later transpired that it was a deep fake in which her face and voice had been digitally altered. Hackers and activists can use this technology to discredit public figures and affect the democratic process of this country. What is the Government’s counter disinformation unit doing to combat deep fakes in this country?

[Lord Parkinson of Whitley Bay (Con)]

The noble Viscount rightly points to an emerging area of concern. Last year, the Government published a national AI strategy and committed to a White Paper setting out our approach to regulating artificial intelligence. We will publish that White Paper later this year, setting out how we intend to address the opportunities as well as the risks that arise from AI in a proportionate and nimble way.

[Lord Scriven (LD)]

My Lords, the Clearview AI service was used on a free trial basis by several UK law enforcement agencies. Do the Government now accept the Ryder review’s recommendation that new statutory regulations are required to stop the police using facial recognition technology in such a cavalier fashion?

[Lord Parkinson of Whitley Bay (Con)]

We are looking at Mr Ryder’s report and recommendations. We have yet to assess them as they came out only recently but we think that the current framework offers strong protections.

[Lord Browne of Ladyton (Lab)]

My Lords, the scale of Clearview’s ambition is global: to have 100 billion face images on its database by next year. That is 14 images for every person presently on this planet. It also gave evidence recently of what it intends to do with this. It gave the Ukrainian Ministry of Defence free access to its software. I am not sure whether the Minister knows this, but the Ministry of Digital Transformation in Ukraine has said that it is using the technology to give Russians the chance to experience the true cost of the war by searching the web for images of dead Russians and contacting their families to say, “If you want to find your loved ones’ bodies, you’re welcome to come to Ukraine”. I can imagine what our attitude would be if that was happening in reverse. Are the Government aware that this company has ambitions well beyond what is within the jurisdiction of the ICO? It can be regulated only by Governments, and our Government should be at the forefront.

[Lord Parkinson of Whitley Bay (Con)]

I have seen the reports to which the noble Lord refers. As I said, our Information Commissioner’s Office has taken action, and so have its French, Italian, German, Canadian and Australian counterparts. I hope that that sends a clear message to companies such as Clearview that failure to comply with basic data protection principles will not be tolerated in the UK or, indeed, anywhere else. All organisations that process personal data must do so in a lawful, transparent and fair way.

[Lord Bellingham (Con)]

My Lords, the Minister said that Clearview is appealing the ICO’s decision. What happens if it loses its appeal? What action will HMG take?

[Lord Parkinson of Whitley Bay (Con)]

If it loses its appeal, the £7.5-million fine it has been issued with will stand and the enforcement notice to delete the data that has been taken unlawfully, in the ICO’s view, will have to be complied with.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, does the Minister agree that facial recognition is an important tool for the police in the detection of crime, and we should not throw the baby out with the bath-water.

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord is absolutely right. There is a comprehensive legal framework for police use of live facial recognition, which includes ensuring that it is proportionate and necessary. Generally, the police can use that technology without people’s consent only where it is strictly necessary for law enforcement purposes. The College of Policing has rightly produced national guidance on this important issue.

[Baroness Uddin (Non-Afl)]

My Lords, I live in the borough of Tower Hamlets. The borough next to it —Newham, where I grew up—is among those with the greatest number of video cameras, surveying its citizens in all their various aspects. The Minister has just said that he is well aware of the risks and opportunities presented by new and emerging technologies. What are he and the Government doing seriously to ensure that consent, education and awareness are a central part of all the strategies and actions implemented?

[Lord Parkinson of Whitley Bay (Con)]

CCTV can help people to feel safe on the streets and can help in the prosecution of crimes committed against people. We support the police using new technologies to keep the public safe, and we are simplifying the oversight of biometric and overt surveillance technologies such as CCTV cameras. The ICO will continue to provide independent oversight and regulation of all biometrics and surveillance camera use, including by the police.

[Baroness Merron (Lab)]

My Lords, as is so often the case, companies such as Clearview AI operate across the world and may attract the attention of multiple regulators. Given that these bodies may exchange information, can the Minister confirm whether a firm’s bad behaviour in another jurisdiction will provide grounds for investigation by the ICO? Also, what weight, if any, does the ICO give to events elsewhere when determining sanctions such as fines?

[Lord Parkinson of Whitley Bay (Con)]

The noble Baroness is right: global co-operation is needed on this. Our new Information Commissioner, who was previously commissioner in New Zealand, has recently been to Brussels to discuss how best the ICO can co-operate with international partners to tackle threats to privacy such as this, so he is indeed engaged globally, as noble Lords would hope.

[Baroness Lawrence of Clarendon (Lab)]

Racial profiling comes to mind when looking at the police and others using this device. I have great concerns—we know that racial profiling happens. We must take that into account as well.

[Lord Parkinson of Whitley Bay (Con)]

The noble Baroness is right: there are important ethical questions which need to be fed in. The College of Policing provides guidance on the use of surveillance technology and facial recognition technology, which should take these into account. The general principles of facial recognition technology are that it should be lawful, transparent and fair to the individual.

[Lord Clement-Jones (LD)]

My Lords, is not the bottom line that Clearview AI should have no business dealing with our public authorities, whether the police, schools or otherwise? Should not the Government be banning Clearview AI from any public contracts?

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

Those public bodies are independent from the Government. They are subject to data protection law and if they break any data protection rules, they could be investigated and fined accordingly. But the ICO’s investigation, the fine and the enforcement action it has taken show that our law is robust and is being enforced by the ICO.

[Baroness Chakrabarti (Lab)]

Are noble Lords aware of the recent statement from Big Brother Watch about Hikvision, the Chinese company that has sold many cameras to many public authorities and government departments in the UK? These cameras can speak back to the mother ship in China. Is this really a good idea?

[Lord Parkinson of Whitley Bay (Con)]

I have seen those reports in the media. I know that your Lordships’ House takes great interest in ensuring that the companies whose hardware is purchased are those that the people of this country would want it to be purchased from.

[Lord Vaux of Harrowden (CB)]

My Lords, has the Minister seen the report into biometrics generally by Matthew Ryder QC, on behalf of the Ada Lovelace Institute? Does he agree with the overriding recommendation that we need a new framework governing the use of biometrics?

[Lord Parkinson of Whitley Bay (Con)]

We have seen but not yet assessed all of Mr Ryder’s recommendations. However, the current framework offers strong protections, and the action taken by the ICO in this case is a demonstration of that.

Product Security and Telecommunications Infrastructure Bill

Lord Parkinson of Whitley Bay Excerpts

Lords Hansard - Part 1 & Committee stage
Wednesday 29th June 2022 Lords Chamber

[Baroness Merron (Lab)]

My Lords, I was very pleased to put my name to the amendment tabled by the noble Baroness, Lady Harding. As she says, this is simple, limited in scope and extremely practical. It is a clarification of and an improvement to this aspect of the Bill, which works for all parties. I hope the Minister will agree, even if what we end up with is not the exact wording that we start with today.

As the noble Baroness, Lady Harding, explained, poles, like ducts, are regulated under Ofcom’s PIA mechanism, so extending this provision to pre-2017 poles on private land would allow all operators to speed up their rollout equally. That is the essence of what we are talking about in the Bill: extending provision and allowing fair access. This amendment will greatly assist us, not least because if the reforms in the Bill do not work properly we will see more streets being dug up, which is never popular, and in this case might perhaps require the installation of new poles—again, something we could do without.

I hope that when the Bill is amended we will drastically contain the time, cost and disruption caused by the rollout. Although people want to see the rollout, the practical effects in communities create unwelcome disruption. This amendment is needed to confirm that sharing pre-2017 poles on private land needs to be included in the Bill. It will speed up the deliver of rollout and it is welcomed by all across the industry.

I shall briefly refer to the comments by the noble Lord, Lord Vaizey. I do not want at this stage to dwell on the amendments we did not have the benefit of discussing properly, but perhaps the noble Lord can look forward to Amendment 48, which we have tabled. It takes a different tack from the noble Lord’s amendments and puts the onus on government and the industry to find a way forward. I hope that when we get to that amendment the Minister will be open to detailed, cross-party discussion before Report on how we resolve the issue that we were not able to attend to earlier in the debate. I support this amendment and hope the Minister will feel similarly.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I think the whole House is grateful to its former Leader, my noble friend Lady Stowell, for moving Amendment 18 and keeping us on the right procedural track. Amendment 18, spoken to by my noble friends Lady Harding of Winscombe and Lord Vaizey of Didcot, the noble Lord, Lord Fox, and the noble Baroness, Lady Merron, who signed it, concerns rights to upgrade and share telegraph poles.

Clauses 59 and 60 will help to optimise use of the UK’s extensive duct networks through greater upgrading and sharing, but ducts and cables under land do not represent our entire digital network, as noble Lords have reminded us today. Telecommunications lines flown over land play a substantial role too. These lines are dependent on the telegraph poles that support them. Over 1 million such poles are installed across the UK, as noble Lords have noted, providing coverage and connectivity to entire communities, particularly in rural parts of England such as Herefordshire, as the noble Lord, Lord Fox, will know, and urban areas of Scotland.

Since the Bill’s introduction, the Government have been called on to introduce measures to facilitate the upgrading and sharing of poles. We understand that there are substantial public benefits in coverage, connectivity and consumer choice, so we welcome the attention that this amendment has drawn to the significance of poles and lines in network delivery, but as I anticipated at Second Reading, we have concerns as to whether the amendment would deliver material change.

I take on board fully my noble friend Lady Harding of Winscombe’s point about the constructive spirit in which the amendments are brought forward and agree that we must look beyond the drafting of this specific amendment, but as the noble Earl, Lord Lytton, says, this is a legally complex matter. For example, it is not clear whether this amendment would permit pole sharing or allow operators to carry out works beyond those needed for a line to be flown. That might exclude upgrade works that would allow a pole to be used for fibre rather than copper lines.

It is important to note that paragraph 74, to which this amendment refers, deals with land adjacent to or in the vicinity of that on which poles are situated. We need to think about works that might involve the land on which that pole is placed. The Government are looking closely at ways to optimise the use of telegraph poles, but we must ensure that if changes are made in this area, they not only deliver public benefits but include sufficient protections for individuals with poles situated on their land. We will continue to look closely at this issue, but I am not able to accept this amendment today. I repeat the assurance I made at Second Reading that we are actively looking at this issue, and we will continue to consider it ahead of Report.

In response to some general points about requests from the industry, we certainly agree that operators should be able to obtain the rights they need to install and maintain the apparatus needed for robust network coverage throughout the UK. The department undertakes regular engagement with the industry and, if we receive compelling evidence that the Bill can be improved, we are happy to consider whether there is a good case for going further. When doing so, however, the Government will always consider the effect that any potential changes could have on landowners.

My noble friend Lord Vaizey inventively asked why telegraph poles were less contentious than multiple dwelling units, the subject of the amendments lost to today’s debate. We must also bear in mind that a good regulatory framework encourages competition and investment, which are both crucial in delivering consumer choice and supporting deployment to hard-to-reach areas. Measures beneficial to one operator may not always encourage the market competition needed to deliver better outcomes for customers. Indeed, it is important to stress that there is no consensus from the industry on this issue. In fact, many operators have opposed the proposal on the grounds that it would create an unfair advantage for operators that already have equipment inside buildings, and so could potentially have anti-competitive effects.

[Lord Vaizey of Didcot (Con)]

Now that I am in the swing of things, does my noble friend genuinely believe that outside the main metropolitan areas there is genuine competition between telecoms providers? Is it his view that he should support measures from the competitors of Openreach to prevent the rollout of broadband in rural areas, simply to protect their interests in the main metropolitan areas?

[Lord Parkinson of Whitley Bay (Con)]

As I am explaining, we think that the views from other operators point out that my noble friend’s amendment, which was not moved, would create an unfair advantage for operators who already have equipment; that would itself be anti-competitive. Given that the amendment was not put and, as I hope he has heard, would have been resisted in any case—certainly from the Liberal Democrat Benches—perhaps it may be best if he and I discuss it over a cup of tea, which he can add to his tab, between now and Report. I hope that he will not feel it necessary to bring these amendments back on Report.

On Amendment 18 regarding telegraph poles, while reassuring noble Lords that we will continue to look at this actively, I hope that my noble friend Lady Harding —or my noble friend Lady Stowell, who moved it—will be happy to withdraw that amendment for now.

[Baroness Harding of Winscombe (Con)]

 I rise, somewhat hesitantly, having consulted the oracle that is the former Leader of this House, to respond. I thank my noble friend for that response. As a brief aside, I am pleased to hear his conviction and belief in competition before we come back on Report, if we do, to the amendments that have not been debated.

I am cautiously optimistic that we will find a solution to this. I was slightly worried when I heard my noble friend say “if” we bring something back, rather than when. I would feel considerably more optimistic about solving this problem if I had heard him say “when”. I would also feel a bit more optimistic if I had heard him say that he and the department will be considering alternatives, rather than observing and watching. We have been observing and watching since Second Reading, and the department has proposed no alternatives to my amendment. I look forward to some more active discussions about alternatives to the amendment but, on that basis, I am happy to withdraw it.

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[Lord Parkinson of Whitley Bay (Con)]

My Lords, as we expected, we have had a lively and somewhat polarised debate on this group, which goes to the heart of quite a lot of what the Bill seeks to do. A number of amendments in it relate to the valuation regime, and they all seek to do slightly different things. I will certainly try to address all of them, although not in numerical order.

However, it might be helpful if I first set out some details about the current position. In England and Wales, agreements can be renewed in two different statutory ways: one is contained in part 5 of the code and the other is in the Landlord and Tenant Act 1954. The position in Northern Ireland is similar: agreements can be renewed using either part 5 or the Business Tenancies (Northern Ireland) Order 1996.

The main difference between the procedures at present is that they have different frameworks against which the financial terms of a renewal agreement are calculated. In the code, the consideration paid to a landowner is calculated on a no-network basis, as was helpfully explained by the noble Earl, Lord Lytton. But this framework does not currently apply to agreements renewed under the 1954 Act or the 1996 order, where rents are calculated on a different basis. The Government do not believe that maintaining this difference is right.

Clauses 61 and 62 will ensure that the approach taken to rent calculation for renewals under the 1954 Act or the 1996 order is consistent with the approach in the code. This means that the same approach will be applied throughout the United Kingdom, reducing disparities in deployment costs in different jurisdictions which could otherwise contribute to a digital divide.

Before turning to the specific amendments, I will pick up a few points raised by noble Lords. The noble Earl, Lord Lytton, mentioned the Central Association of Agricultural Valuers—CAAV—with which DCMS has engaged closely, both in developing the 2017 reforms and in our subsequent discussions regarding their implementation. We welcome the CAAV’s input on these and the wider initiatives aimed at embedding better working practices in the negotiation and completion of code agreements. I am grateful to the noble Earl for sending on further points from the CAAV; these were rather lengthy and detailed, and I do not think that it would be helpful, or do them justice, to discuss them in detail today, but I would be happy to write to him on those matters and copy other noble Lords in.

I welcome the noble Earl’s comments on the code valuation framework and ordinary market valuation principles, and I bow to his expertise in this field. I confirm that DCMS engaged closely with the Royal Institution of Chartered Surveyors in developing the 2017 reforms to the code. In 2019, it produced a specific guidance note for surveyors working in this field, and I understand that this makes clear the relationship between the code valuation framework and the red book global standards of valuation.

The noble Earl referred to independent infrastructure providers, which have a key role to play in the delivery of robust and resilient networks. They invest substantially in the deployment of new apparatus, which can then be shared by multiple operators, expanding coverage and extending choice for consumers. Their role was lauded during the passage of the 2017 reforms, both in another place and in your Lordships’ House, where the noble Lord, Lord Foster of Bath, referred to them having

“some of the most productive telecommunications facilities in the country”.— [Official Report, 31/1/17; col. 1181.]

So I was a little surprised to hear concerns expressed today about the possible disadvantages of this important part of the sector, but I would certainly be happy to discuss those concerns further if noble Lords would like to.

On whether independent infrastructure providers are passing on savings, we are not aware of situations where such providers who have secured new arrangements following the 2017 reforms have failed to pass on any decrease in costs to operators using their installations. It must be remembered that many independent infrastructure sites will still be subject to pre-2017 agreements and, as such, there may not yet be any consequential savings to pass on.

It has been suggested, including by my noble friend Lord Vaizey in his intervention on the noble Earl, Lord Lytton, that the code creates the potential for intermediaries to acquire sites cheaply, using the code valuation framework, and then to charge operators excessive sums to use them. It is important to note that, if such an intermediary has not installed apparatus on the land but is the occupier of the land for the purpose of the code, it would be open to a code operator to seek code rights to do so from that party. However, if the intermediary invests in infrastructure on the land, we think it right that they can agree commercial terms for the use of it with the operators. Naturally, if competitive terms are not offered, operators will go elsewhere.

My noble friend Lord Northbrook and the noble Lord, Lord Clement-Jones, referred to the report by the Centre for Economics and Business Research. I am conscious that we have much to cover, so I do not intend to discuss this in detail, but I will say that, generally, DCMS is aware of it and its findings. We note that it was commissioned by the Protect and Connect campaign, and our understanding is that it focused primarily on the valuation regime, rather than providing a broader view of how the code is working in practice, which is what DCMS aims to do in its engagement with interested parties and through the consultation that has informed the development of the Bill.

Turning to the amendments, I will first address those tabled by the noble Earl, Lord Lytton, the noble Lords, Lord Clement-Jones and Lord Thurlow, and my noble friend Lady McIntosh of Pickering, which relate to paragraph 24 of the code. These go to the crux of the argument regarding the valuation framework. Before the 2017 reforms, the amount of rent payable reflected the value of the site to the operator. Site providers were therefore potentially able to charge an operator thousands of pounds a year to house apparatus on small pieces of land that were otherwise of low or nominal value.

The 2017 reforms were intended to rebalance the relationship: operators would pay a fair rent that reflected the true value of the land, and site providers would remain able to receive additional sums to cover any loss or damage incurred as a result of the operator exercising code rights, or that may be incurred in future, including professional fees. To address a point made by my noble friend Lady McIntosh, those payments should take into account any alternative uses that the land may have and any losses that may be incurred, among other things.

As we have said throughout, and even following the helpful conversations that I have had with a number of noble Lords so far on the Bill, we continue to believe that this balance is right to ensure the cost-effective and efficient delivery of robust digital services. As was noted today, these are becoming ever more necessary in our daily lives, as was thrown into sharp relief during the pandemic.

In his admirably pithy contribution, the noble Lord, Lord Fox, asked whether we believe that incentives still exist for site providers and landowners to enter into agreements. We think that they do. We have been told that the amounts offered by some operators are now so drastically reduced that landowners are less willing to let their land be used, but we maintain that the 2017 valuation provisions created the right balance between the public need for digital communications and landowner rights. We were aware that the valuation framework would result in reductions to rental payments but, in our view, prices being paid for rights to install communications apparatus before 2017 were too high. With digital communications becoming increasingly important, that needed to be addressed.

The code still makes separate provision for landowners to recover compensation for loss or damages. We think that, taken together, the provisions on consideration and compensation mean that landowners should receive a fair payment for allowing their land to be used, despite the fact that overall amounts will normally be lower than they were before the 2017 reforms—but we believe that the incentive remains.

Amendment 23 seeks to amend the valuation framework, moving away from the no-network approach that was introduced in 2017. The amendment appears to us to be a retrograde step, taking the market away from the clear approach established by the 2017 reforms and moving back towards the status quo ante. This could reintroduce some of the problems that were addressed by those reforms, including a return of payments that were unfairly too high, and leave us with a dual approach to valuation on the renewal of agreements, potentially causing confusion for operators, site providers and courts. The Government, therefore, cannot accept this amendment.

Amendments 26 and 27 both relate to agreements renewed under Part 5 of the code. Amendment 26 seeks to phase in rent reductions in these cases through a two-year grace period during which site providers would continue to receive consideration at the previous level. Amendment 27 looks to introduce a tiered phase-in period that would last for three years. The code valuation framework was introduced in 2017 and there has been much publicity on how this has affected payments to landowners for hosting telecommunications apparatus on their land. I believe it has been relatively clear to interested parties for a substantial period that the market has changed significantly, and that, in most cases, reductions in rental payments are to be expected. For this reason, the Government do not think that it is necessary for additional time periods to be given, when the effect will be to increase operational costs and to slow down the rollout of 4G and 5G coverage that the population rightly wants and expects.

Amendment 25 would require the Secretary of State to issue guidance on how paragraph 24 of the code should be interpreted and the maximum permitted reduction in consideration. Statutory guidance can certainly play an important part in ensuring legislative measures achieve their intended aims, but this must be considered on a case-by-case basis. We have concluded that guidance in this area would not be appropriate; code agreements cover a hugely diverse range of circumstances, and the code sets out a clear framework approved by Parliament, which establishes valuation principles which can be applied across different scenarios. We think it is right that, when disputes arise, further interpretation of these principles should rest with the courts. Indeed, the courts have been doing this since the reforms were introduced in 2017 and a body of case law is now well established. We believe that introducing statutory guidance on valuation at this stage would undermine the progress that has been made in that respect, introducing uncertainty and confusion, not least because the status of the proposed guidance from the Secretary of State, and the degree of influence it would have on the courts, is unclear.

Instead, we consider it much better for a court to be able fully to consider all the circumstances of a particular given case and all the relevant evidence before it, and then to act in accordance with the statutory framework set by Parliament. For the same reason, we do not think a statutory cap on rent reductions is appropriate; this would fetter the parties and, ultimately, the courts from proper consideration of all the relevant circumstances. It is also important perhaps to consider non-legislative action that can be taken to promote better relationships: as well as the steps taken in this legislation, there are non-legislative steps the Government are taking to ensure that the code works well in practice. For example, the department’s Barrier Busting Task Force is holding monthly workshops with a broad range of groups with an interest in the code. Those workshops are attended by network operators, landowner representative groups and local authority representatives, as well as professionals and surveyors. The workshops aim to encourage greater collaboration in relation to code negotiations and agreements through identifying and implementing better ways of working. They touch on key issues which parties have raised with us; for example, stakeholders are currently working to agree on standard template wording for common clauses within code agreements.

Amendments 20 and 22 seek to disapply much of the valuation framework to agreements renewed under the 1954 Act and the 1996 order. The Government cannot accept those amendments, as they serve only to entrench the inconsistencies in the different renewal frameworks, which I mentioned at the outset. Were Amendments 20 and 22 to be accepted, some landowners would receive higher rental payments for longer. However, this would allow network costs to remain unacceptably high, penalising swathes of consumers and businesses who may face price increases for digital services, or may have to wait longer for the high-quality, reliable connections they need.

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[Lord Northbrook (Con)]

I am sorry to interrupt the Minister. Would he be able to produce any written evidence of these improved relationships between landlords and operators for the Committee?

[Lord Parkinson of Whitley Bay (Con)]

My letter that was sent just before Committee outlined some of the engagement that the department has had and listed some of the groups with which we have spoken. That goes some way towards that, but I will certainly see whether there is anything further that I am able to share with noble Lords in addition to that table, which was appended to the letter I sent yesterday.

As I say, we believe that the measures in the Bill will address the complex areas that have led to protracted litigation and emphasise the value of collaborative relationships between operators and site providers. I therefore invite noble Lords to withdraw or not to press their amendments in this group.

[The Earl of Lytton (CB)]

My Lords, I thank the Minister for that detailed reply. I will obviously not try to cover everything he said, but just touch on one or two points.

The Minister referred to the RICS, and it is true that the RICS produced a guidance note in relation to code changes. It was of course produced in the light of those changes, rather than in an attempt to influence them, and it points out the strong likelihood of very low rents resulting from those changes. Of course, being a guidance note, it does not predict or advise on what the market outcomes are likely to be in practice. I have not had a moment to check, but it is my belief that the manual of valuation and appraisal—otherwise known as the Red Book—produced by the RICS and Institute of Revenues, Rating and Valuation, has made the valuation of mast sites an exception to the market value criteria within the Red Book. It is, if you like, a derogation from that market value principle.

I go back to the point that I made: you cannot have market value in the terms that I described it and the internationally recognised specification and then say that you disregard it and the matter gets to court. So what does that mean? You go to court because you can get it disregarded. Is that the way that the world functions? I am sorry, but I just do not get it—this is an oxymoron of a principle.

That apart, there still remains the fact that reducing rents to around about £750 or so per annum—if that is indeed what will happen, because all these things are hemmed in by confidentiality clauses so that the information does not get out, thus preventing any sort of transparency that would give rise to a market in those terms—calls into question the existence of willing participants, regardless of the valuation assumptions to the contrary. You can make all the assumptions you like, but the market will tell you what it is going to do. If you have people who are disengaged, then that is it.

The Minister is in denial that the market is moving towards, or is effectively at, a point at which it is bust. I hope that he will be able to produce some statistics to back what he says. While he says that, on one hand, the comments from organisations such as the CAAV may be regarded as apocryphal, I have difficulty in understanding that what he says his department is receiving is of any better or worse quality than that. We are in a land of the unknown, with people saying one thing and meaning another. We are effectively relying on a lack of evidence. That really is not good enough.

If we are getting to a stage where the market is not functioning, what then? How long will the Government wait before they decide that something needs to be done? And what will they do—more compulsion, more work for the law courts and legal profession, more time spent getting these masts in place and rolled out? I do not see it. I would really love to know what the greater vision is. The Minister referred to “greater collaboration”; I am sorry, but I do not see it. I see anything other than greater collaboration coming out of this. It takes two to tango—the old business about taking a horse to water may well apply.

I will not press these amendments and will withdraw them at this juncture; they can be resisted, but the real world outside will continue notwithstanding. It does not matter what sort of bubble you live in and what sort of vision you create—whether the commercial vision of code operators or the vision of what is happening from the point of view of the department that wishes to defend the policy that it has had in place since 2017—the situation on the ground will work out the way that it will work out. There is no changing that any more than one can change the basic DNA of transactional analysis in property markets. I beg leave to withdraw Amendment 20.

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[Baroness Merron (Lab)]

My Lords, the debate on this group raises a number of interesting points, but they are all on the same theme. They are about what happens should disputes arise. No one wants to be in dispute, but when one arises, it is crucial that everybody knows what the rules are and that the resolution creates an environment and practice which means that the same issues do not continually arise. The contributions from noble Lords today have talked a lot about fairness, respect and calling to heel those who need to be called to heel for fairness and respect to occur. It is about getting the balance of rights and responsibilities between the parties right. I hope the Minister will consider the valid points raised by this group.

In particular, it would be helpful to hear how the Minister feels about the present situation, where the operator must only consider the use of the dispute resolution system—and even then, only if it deems it is reasonably practicable to do so. Has that been satisfactory, because this set of amendments clearly suggests not? I was particularly struck by the words of the noble Earl, Lord Lytton, who spoke about such resolution being easily avoidable. That does not give us confidence. I therefore hope that the Minister will reflect on the spirit and intent and, perhaps, come to us with some practical measures to improve the current situation.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I shall first address points made by the noble Earl, Lord Devon, as well as my noble friends Lord Northbrook and Lady McIntosh, about some of the case studies. I certainly agree entirely with the noble Earl, who speaks from personal experience and makes the point that some of the lobby groups which have been vocal on the Bill are painting a very different picture to those directly involved, and with whom we have had extensive discussion. Your Lordships’ House benefits from having people such as the noble Earl and my noble friends who can speak from personal experience.

In particular, at Second Reading, the noble Earl showed how he speaks not just as a landowner and the litigator but as a consumer who shares the objective of wanting better connectivity. I am very happy to make absolutely clear that I understand that his point and those of other noble Lords are made in that spirit. I hope he can see that, for my part, we have been willing to listen and continue to be receptive to hearing contrary points; it is just that, in our discussions with the industry, we have had a clear picture painted.

The noble Earl asked a general but important question: why should site providers bother, given the other ways they could use their land? Without wishing to reopen the debate on valuation, we believe that the 2017 provisions created the right balance between the public need for digital communications and landowners’ rights. The code makes separate provision for landowners to recover compensation for loss or damages and, taken together, we think the provisions on consideration and compensation mean that landowners can still receive a fair payment for allowing their land to be used.

The new pricing regime is more closely aligned to those for other utilities, such as water, electricity and gas. We do not think it is less attractive than other comparable uses. As I said on a previous group in relation to a point raised by my noble friend Lady McIntosh, landowners should still receive their payments—which, among other things, take into account any alternative uses that the land may have and any loss or damage that may be incurred.

Turning to the amendments in this group, the purpose of Clause 68, as probed by my noble friend Lady McIntosh of Pickering and the noble Earl, Lord Lytton, is to encourage more collaborative discussions between landowners and operators and to ensure that litigation is only used as a last resort. We know that code negotiations can be difficult—my noble friend Lord Northbrook referred to that from his experience—and that, in some cases, landowners have felt pressured to accept any terms offered to avoid the risk of being taken to court. To address this, Clause 68 encourages the use of alternative dispute resolution to minimise the risk of landowners feeling pressured and to facilitate co-operative discussions.

At Second Reading, my noble friend Lady McIntosh suggested that alternative dispute resolution is optional for operators. I hope I can give her and other noble Lords some assurance on this matter, given the requirements for parties to consider use of ADR and for the courts to consider unreasonable refusal to engage in ADR when awarding costs.

ADR not being mandatory is a deliberate feature of this policy. That choice was made for two reasons. First, ADR may not be suitable in certain cases. For example, where a disagreement is based on differing interpretations of the law, this may have to be determined by a court. Mandatory ADR would add cost and time to this process without any benefit. Secondly, where ADR is appropriate, mandatory ADR would compel some parties to participate in a process they do not want to be involved in, making them less inclined to actively engage. This would increase the risk of failure, and the parties would then have to go to court anyway—only adding further time and costs for landowners. The clear majority of groups—including the Country Land and Business Association—opposed compulsory ADR when we consulted them.

I turn to Amendment 39, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, and the noble Earl, Lord Lytton. This amendment would require evidence of a breach of Ofcom’s code of practice to be taken into account in ADR judgments. It should be noted that not all forms of ADR have judgments. Mediation is one such alternative. Furthermore, the Ofcom code of practice gives guidance on best practice; it does not set out specific requirements to be adhered to. As such, using the code of practice to underpin or effect decisions made in alternative dispute resolution risks creating further disagreements and disputes, rather than resolving them.

Finally, and most crucially, the amendment would undermine the open and collaborative approach on which successful ADR relies by forcing operators to enter any ADR process on a defensive footing. The outcome would be simply to blunt the effectiveness of alternative dispute resolutions and add to the administrative and cost burden for all parties. It is on this basis that I invite noble Lords not to press their amendments.

I turn to the Ofcom code of practice. We know that, in some cases, landowners are reluctant to enter into code agreements because they are concerned about how the operator or their contractors will behave when they carry out their works. Clause 69 addresses this issue by requiring guidance to be prepared by Ofcom, following consultation, regarding operators’ handling of complaints about their conduct. This guidance will be added to Ofcom’s code of practice. To complement this, the Government also intend to bring forward secondary legislation—in consultation with Ofcom and others where appropriate—to make regulations to achieve three things: first, to create a requirement on operators to have a complaints procedure in place to handle complaints relating to their conduct; secondly, to set out minimum standards which this process must meet; and, thirdly, to oblige operators to have regard for the Ofcom code of practice when handling complaints.

Amendment 40, tabled by the noble Lords, Lord Clement-Jones, Lord Fox and Lord Blunkett, and the noble Earl, Lord Lytton, would make adherence to Ofcom’s code of practice obligatory and make breaches of that code punishable by a fine of £1 million. As I mentioned in relation to Amendment 39, the Ofcom code of practice is intended to set out guidance. Deciding whether a particular course of action is a breach would be very subjective. The code of practice applies to both operators and landowners, and this amendment does the same. While some operators may have the resources to sustain such fines, very few landowners would.

We all want network rollout to proceed as quickly as possible. However, making compliance with the Ofcom code of practice mandatory and failure to do so subject to a heavy fine means that operators and landowners would be disincentivised from seeking to reach agreements at all. For those who might proceed, one can imagine them doing so as slowly and gingerly as possible to avoid the risk of breaching a code of practice that was never designed to be used in such a way.

Amendment 41, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, and the noble Earl, Lord Lytton, and Amendment 42, tabled by the noble Lord, Lord Fox, set certain requirements regarding complaints handling, such as time limits for responding and compensation payable. As I noted earlier, Clause 69 will require Ofcom to amend its code of practice to include guidance on complaints handling. The Government also intend to make regulations to set out minimum standards for operators’ complaints processes. Both of these could feasibly include elements similar to those proposed in the amendments, and both will be developed through consultation. The Government firmly believe that this is the best way to encourage all parts of the sector to welcome and comply with the new procedure.

Also related to the code of practice is Amendment 42A, tabled by the noble Earl, Lord Lytton. Currently, for a private organisation to seek and exercise rights under the Electronic Communications Code, it must be the subject of a direction from Ofcom that the code applies to it. The first part of the noble Earl’s Amendment 42A would require Ofcom to reconsider each operator’s status as an operator for these purposes every five years, taking into consideration, among other things, complaints made against it for breaches of the code of practice. His amendment would make an operator’s rights to install, maintain and upgrade infrastructure potentially subject to adherence to a code of practice which, as I described just now, would serve only to disincentivise operators from extending their networks swiftly.

The second part of his amendment concerns obligations for operators to report to Ofcom about complaints that they receive, and for Ofcom to publish an annual summary of these reports. These are also the sorts of matters that will be considered when the Government make their regulations to set minimum standards for operators’ codes of practice, and when Ofcom amends its own code of practice.

Amendment 44, tabled by the noble Lords, Lord Fox and Lord Clement-Jones, concerns building safety. The importance of building safety is self-evident, and the Government are committed to doing everything possible to ensure that it is maintained at all times. None the less, the amendment is unnecessary since the code already contains ample protections to ensure that building safety is maintained. Paragraph 23(5) of the code requires that when a court imposes an agreement under part 4, that agreement must include terms for ensuring that the least possible loss and damage is caused in exercise of the rights. Such terms will provide significant building safety protections.

Paragraph 99 of the code makes it clear that the code does not authorise the contravention of laws passed before the code came into force. This means that legislation that was in place before the code came into force, including that on building safety, would not be superseded by measures in the code. Regulation 10 of the Electronic Communications Code (Conditions and Restrictions) Regulations 2003 requires that if an operator receives a report that its apparatus is in a dangerous state, it shall investigate and, if necessary, make the apparatus safe. Therefore, together these provisions already provide robust protections to ensure that building safety is maintained.

The noble Lord, Lord Fox, rightly mentioned Dame Judith Hackitt’s report, which places great importance on the clarity and simplicity of systems to ensure building safety. The Government believe that this amendment would add further unnecessary complexity to the robust protections that already exist in this area. Therefore, Amendment 44 is not needed.

[Lord Fox (LD)]

As I explained earlier, it is a probing amendment designed not to go into legislation but to get an answer, and the answer was not forthcoming.

First, the code is designed to comply with building safety that has come before it. The Building Safety Act is subsequent to the code so in this respect, that is not a helpful answer. Secondly, there are specific statutory instruments, as a result of the Building Safety Act, which deal with utilities. I asked a very clear question: will the Government be considering this function of digital infrastructure to be a utility? Also, will there be statutory instruments as a result of that Act which cover this issue, or does it need to be covered in another way? It is not covered in the answer the Minister has just given, so this must be specifically opted into the process that the Building Safety Act has ushered in as a result of the Hackitt review.

[Lord Parkinson of Whitley Bay (Con)]

The Building Safety Act received Royal Assent on 28 April, as the noble Lord knows. It will strengthen oversight and protections for residents in high-rise buildings, it will give a greater say to residents of tall buildings and it will toughen sanctions against those who threaten their safety. Its focus will help owners to manage their buildings in a better way while giving the housebuilding industry the clear and proportionate framework it needs to deliver more and better-quality homes.

Building regulations to be made under the new powers inserted by that Act will provide for more stringent requirements, separate from the Electronic Communications Code, regarding building work on high-rise buildings. People undertaking such work as employees or contractors of companies, including network operators, will have duties to ensure that their work complies with all the relevant building regulations. That will include the provision of information as part of the golden thread which will be handed over to accountable persons on completion of the building work.

I note also that the building regulations already include requirements to install infrastructure to support high-speed electronic communications networks in new buildings. DCMS has consulted on plans further to amend the building regulations to mandate gigabit-ready infrastructure and gigabit-capable connections to new homes. When such work is carried out it is required to meet all relevant requirements of the building regulations, include those for fire safety, so we do think that this is provided for already. I understand that it is a probing amendment; none the less—

[Lord Fox (LD)]

Without labouring the point tonight, the Minister can perhaps pander to my curiosity and come back with the specific statutory instruments that are expected to implement this. As I understand it, statutory instruments were laid and then withdrawn, and I do not think that they included digital infrastructure in the initial wording. I have a specific concern that there is a slight falling between the cracks. Perhaps the Minister can reassure me with some specifics in a letter.

[Lord Parkinson of Whitley Bay (Con)]

I am very happy to consult my colleagues at the Department for Levelling Up, Housing and Communities and to provide the letter the noble Lord requires. I invite him now to withdraw his probing amendment, and other noble Lords not to move theirs.

[Baroness McIntosh of Pickering (Con)]

Did I hear my noble friend correctly regarding the Country Land and Business Association? If so, I can put his mind at rest. It is most definitely in favour of the alternative dispute resolution being made mandatory. He should be aware of a briefing that was sent to us at a much earlier stage. This dates back to January, so I hope it is not still the case:

“Throughout the Government’s consultation on the Bill, the Department of Digital, Culture, Media and Sport has repeatedly refused to meet with our organisations”,


including the CLA and others,

“to hear the views of our members. The Bill was subsequently published without any economic impact assessment.”

I am slightly concerned that my noble friend appears to be unaware of something as fundamental as the difference between a mandatory and a voluntary ADR, and I wanted to correct him on that.

[Lord Parkinson of Whitley Bay (Con)]

I am sorry to disagree with my noble friend, but the CLA’s response to the consultation opposed compulsory ADR. I would be very happy to speak to her and triple check that with officials afterwards, but we clearly have different understandings of its position. I would be happy to speak to her afterwards to make sure that we can clarify that.

[Lord Clement-Jones (LD)]

My Lords, we clearly have some clearing up to do between Committee and Report on who said what and who supports what. I too was quite surprised to hear that the CLA would be opposed to compulsory ADR in these circumstances.

I thank noble Lords for their support for the amendments and the Minister for his very detailed reply. I do not think there is any dispute between us. We all want greater connectivity and to see 1-gigabit rollout. The whole question is whether we want greater trust—the word that I think the noble Earl, Lord Lytton, used. Quite frankly, across the Committee there is a view, on the valuation questions, on retrospectivity in the previous group and on the lack of compulsory ADR, that this will lead to more disputes. The Government seem to be going down this track where they plan for there to be more disputes so that more tribunals can be brought into effect and more lawyers will be employed, no doubt with rejoicing in various parts of the City. Everything in these amendments was designed to minimise the number of disputes, and to make sure that we had compulsory ADR and that Ofcom’s code actually bites.

It was very disappointing to hear what the Minister had to say. I hope that, between Committee and Report, he will reflect on some of the points made in this respect and that we can check to see whether landowners are unanimous on this, because using ADR as a filter would be a perfectly acceptable way of doing things. Once certain aspects are established as a matter of law then a dispute can of course be referred, but a mediator can, by agreement of the parties, refer it to a court to be determined. There is no impediment to using ADR as that initial filter, which would mean that there would be many fewer disputes. We would actually have faster rollout as a result and the Bill’s purposes would be entirely achieved.

I am sure that this will be a candidate for Report as well. In the meantime, I beg leave to withdraw the amendment.

Product Security and Telecommunications Infrastructure Bill

Lord Parkinson of Whitley Bay Excerpts

Lords Hansard - Part 2 & Committee stage
Wednesday 29th June 2022 Lords Chamber

[Lord Fox (LD)]

My Lords, if there is an abiding theme in this group, it is transparent reporting and then using the data within those reports to make sensible decisions.

Notwithstanding the Minister’s special day tomorrow, I am guessing that he is quite a lot younger than me, so he might be able to remember his childhood. I can remember a game that we used to play, of running down hills with our eyes closed. This was tremendous fun, until it stopped—and it usually stopped when you fell over or hit something. The argument advanced by the Government is, “We mustn’t do a review. We can’t have data because it’ll upset the market”—in other words, we cannot open our eyes because it will stop us running down the hill fast enough. That is the nature of what we are doing. In order to make sure that we do not fall over and that we are running in the right direction, we need to have our eyes open. In their different ways, these amendments seek to open our eyes to the effect that the Bill and all of this public and private investment will have on the objective that we all share: putting fibre in every home in this country. Without information, and without transparency in that information, we will not know how fast we are going and in which direction.

I care little about whether the Government accept the words in these amendments, but I do care about a Government who have enough sense to get the information, publish it and then act on it.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I am particularly grateful to my noble friend Lady Stowell for her early birthday wishes. Finishing Committee a day ahead of schedule is a delightful early present. There are still to hours to go before tomorrow, and I hope that we will rise before noble Lords have to sing “Happy Birthday”.

Amendments 45, 47 and 49 seek to impose duties on the Government to assess and report on various impacts of the 2017 code reforms and, indeed, of this Bill once brought into force. I certainly appreciate the spirit of these amendments, which are designed to ensure that the Government are held to account; the noble Baroness, Lady Merron, referred to the conversations we had right at the beginning of our discussions on the Bill. Noble Lords will know that there are already ways in which some or all of the effects of these amendments can be achieved. For instance, Ofcom publishes its annual Connected Nations report, which it updates a further two times a year; this provides a clear assessment of the progress in both fixed and mobile connectivity. I hope that noble Lords will agree that the independent regulator is well placed to provide information on the progress of gigabit-capable broadband. Moreover, the Government continue to answer questions and provide clarity on all aspects of their work in this area, both in your Lordships’ House and in another place.

Amendment 45, tabled by the noble Baroness, Lady Merron, and the noble Lords, Lord Bassam of Brighton and Lord Blunkett, seeks an assessment of the legislation passed in 2017 to update the code, and particularly the impact of changes to the valuation regime. When the 2017 reforms were introduced, we recognised that the market would need time to adapt and settle. We have engaged with interested parties since the reforms came into force to identify any emerging issues. In our view, there is not yet enough evidence for a properly robust and comprehensive analysis to be made of the impacts that the 2017 reforms have had, of which the valuation framework was only one aspect. That is particularly the case given the impact of the Covid-19 pandemic, which has caused major shifts both in the demands on telecommunications operators and on their ways of working. However, in light of the feedback we have received through our engagement and our public consultation, the Government believe that the changes we are making in the Bill are needed to ensure that the 2017 reforms have their intended effect. That is not to say that we think the 2017 reforms failed—much progress has been made; we simply think that more can and must be done to maximise their impact. Making these changes now through the Bill will help to meet the Government’s 2025 connectivity target for at least 85% of homes and businesses to have access to gigabit broadband.

The noble Baroness, Lady Merron, asked how often our engagement has taken place. The access to land workshops is one part of it; there are in fact three separate groups which have been going for over a year. They met this month and will meet again in July, so we are undertaking that engagement on a regular basis.

Amendment 47, tabled by the noble Lords, Lord Fox and Lord Clement-Jones, asks the Government to review and report on the impact of Part 2 of the Bill against our gigabit delivery targets. Again, I appreciate that noble Lords will be keen to ensure, as they should, that the Government are on track with their commitments. DCMS currently carries out monitoring, and regular updates are published on a quarterly basis by Building Digital UK. That monitoring and reporting will naturally capture and reflect any accelerations that occur after this Bill comes into force.

The most recent Project Gigabit quarterly update highlighted the progress we are making. This includes reaching a milestone of over 100,000 broadband vouchers issued, worth more than £185 million, with 65,000 claimed to date to support households and businesses with the additional costs of securing gigabit-capable connections; launching two new regional procurements in Norfolk and Suffolk and two local supplier procurements in Cornwall, bringing our total live procurements to 10 and extending gigabit-capable connectivity to up to around 380,000 premises; completing over 20 market engagement exercises across the UK further to inform our future procurement pipeline; and launching as an executive agency of DCMS and publishing our first corporate plan setting out our key strategic objectives for 2022-23 and how Building Digital UK will drive the expansion of gigabit connectivity to all parts of the country.

[Lord Fox (LD)]

Briefly, if it is going so well, why are the Government changing everything? The Minister has just told us how well it is going, and now they are changing everything.

[Lord Parkinson of Whitley Bay (Con)]

From our engagement, to which I have referred, we believe it is going well and progress has been made, but our engagement with stakeholders suggests that the reforms that we are putting forward through this Bill are needed. We are extending that progress following consultation.

[Lord Clement-Jones (LD)]

I am sorry to interrupt the Minister. As he knows, certainty is absolutely crucial for business. What is always created when new legislation supersedes old legislation is uncertainty. What confidence can the Minister possibly have that the impact of this Bill will be beneficial to rollout?

[Lord Parkinson of Whitley Bay (Con)]

With such an accelerating market, thanks to the pro-investment environment that the Government are creating, it is quite challenging to quantify the extent to which progress is attributable to any single piece of legislation in a market that reflects so many factors. That is one reason why we think it would be of limited value.

My noble friend Lord Northbrook asked me to comment on the Centre for Economics and Business Research report on the 2017 reforms. We believe that the CEBR report does not provide a sufficiently rounded picture in its assessment of how the 2017 reforms have affected the pace of telecommunications delivery. The Government, as I have said, acknowledged in 2017 that reductions in payments could make landowners less keen to enter into agreements to host apparatus on their land. We expected an initial slowdown following the implementation of the 2017 reforms while the market adapted to them, but our understanding, informed by our conversations and consultation, is that both new and renewal agreements are now being successfully concluded. For instance, we were informed in January this year that, since 2017, 900 agreements had been renewed and that 83.5% of those agreements were concluded consensually, to give noble Lords some data.

[Lord Fox (LD)]

By extension, is the Minister expecting a slowdown again as the market gets used to these changes? Clearly, the Government expected a slowdown when they made the last set of changes; are they anticipating a similar slowdown this time?

[Lord Parkinson of Whitley Bay (Con)]

These changes build on the changes of 2017, so we do not expect there to be such an impact, because there is not such a change for the market.

We think it is too simplistic to attribute the changes in the market since 2017 solely to the valuation framework. The reforms in 2017 also made it easier for operators to share equipment, which will have reduced the demand for new mast sites to be built. Of course, we all hope that there will not be disruptive effects of a pandemic, as we have seen in the years since 2017.

Amendment 49, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, and the noble Earl, Lord Lytton, asks the Government to conduct an implementation review of the Act after it is brought into force. However, we believe including such a requirement in the legislation is not necessary. The Government will of course monitor the effect of this legislation to understand how it is working in practice. Requiring an assessment at a specific time and which is focused on such specific elements would fetter the Government’s ability to judge when a meaningful review of progress can most sensibly be completed and what information it should include. I am happy to reassure my noble friend Lady Stowell that of course we want to monitor the effect of this legislation and to see and understand how it is working in practice.

Amendment 50, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, the noble Earl, Lord Lytton, and the noble Baroness, Lady Merron, seeks to impose duties on telecommunications operators to provide a variety of annual data to Ofcom. It must be remembered that imposing reporting obligations on the industry necessarily diverts resources away from delivering the very targets that the Government have challenged them to deliver and on which noble Lords are rightly pressing us for progress. Any such obligations must therefore be proportionate.

The Communications Act 2003 already gives Ofcom substantial powers to collect and publish data. Procedures are therefore in place to monitor the progress that is being made and to ensure that details of this progress are published. For example, licence obligations for the shared rural network require mobile network operators to report on coverage and the number of new sites built through the programme. Operators also provide Ofcom with information on the geographic availability of coverage to enable consumers to make informed decisions. This is all data that is, or will be, published in Ofcom’s Connected Nations report.

Suicide: Online Products

Lord Parkinson of Whitley Bay Excerpts

Monday 27th June 2022 Lords Chamber

[Baroness Morgan of Cotes]

To ask Her Majesty’s Government what plans they have to address online retailers’ algorithmic recommendations for products that can be used for the purposes of suicide.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

Her Majesty’s Government recognise the gravity of this issue and are investing in suicide prevention through the NHS long-term plan. The Advertising Standards Authority already regulates adverts containing references to suicide. The Government are considering how to tackle illegal and legal consumer harms associated with the contents, targeting and placement of online advertising through the online advertising programme. The consultation closed on 8 June and will help us determine how to tackle such harms.

[Baroness Morgan of Cotes (Con)]

As my noble friend knows, I am a great supporter of the forthcoming Online Safety Bill but, as we have discussed, it will not regulate all harmful content online. When a particular well-known suicide manual is searched for on Amazon, the site’s algorithmic recommendations then specifically suggest material that can be used, or easily assembled, into a device intended to take one’s own life. If this is not to be regulated as harmful content under the Online Safety Bill, how can this sort of harm be regulated? It is broader than just advertising. Has my noble friend discussed this with Ministers in the Department of Health and Social Care?

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

Yes, we have discussed this matter with our colleagues in the Department of Health and Social Care and continue to do so. I am grateful to my noble friend for raising this issue. It is important in the context of the forthcoming Bill, which she knows so well, and through our work on the online advertising programme that is designed to look at the full range of harms that exist in online advertising. The Online Safety Bill will empower users to know what a company’s policies are and how to assert their rights to make sure they can be safe online.

[Lord McNally (LD)]

My Lords, there is a general welcome for the structure that has been set up by Ofcom and the CMA’s Digital Markets Unit to cover the area raised by the Question from the noble Baroness, Lady Morgan. A lot will depend on the remit of the regulators. In a recent Ofcom consultation, there was a push-back by the industry, with regulators having a responsibility not for citizens’ interests but for consumers’ interests. In the words of the great political philosopher Mandy Rice-Davies, they would, wouldn’t they? Will the Government resist this push-back?

[Lord Parkinson of Whitley Bay (Con)]

The CMA, the FCA, the ICO and Ofcom all play a critical role through the Digital Regulation Co-operation Forum, which has an important role to play in delivering the regulatory landscape that protects users from harm. We will continue to work with that forum to explore the role that it and the regulators can have. Of course, these days almost all citizens are consumers online, but the noble Lord makes an important point. We want to make sure that everybody who uses the internet is safe.

[Baroness Uddin (Non-Afl)]

My Lords, I am really grateful to the noble Baroness, Lady Morgan, for raising this important matter. What work is under way to ensure that the Online Safety Bill is being taken seriously by the major platforms on which these systems lie? What are the Government intending to do to ensure that parents are educated in, and made aware of, the danger of these kind of platforms?

[Lord Parkinson of Whitley Bay (Con)]

The strongest protections in the Online Safety Bill will be for children. The noble Baroness is right that there is an important part for parents and guardians to play in making sure that their children are safe online. We are working through Ofcom and the education system to make sure that children and their guardians are aware of the risks of using the internet and the safeguards available. The Online Safety Bill will make sure that people’s recourse to Ofcom, if the terms and conditions or duties that are placed on companies are not being enforced, is upheld.

[Baroness Neville-Rolfe (Con)]

Can my noble friend estimate when the provisions of the Online Safety Bill in relation to suicide, and indeed wider problems with children, are likely to actually come into effect?

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

The Bill is in another place. It may well finish in Committee this week. I look forward to debating it in your Lordships’ House and seeing it on the statute book as quickly as possible.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, does the Minister agree that the people drawn to these platforms, particularly young people, are on the whole extremely vulnerable? What discussions is his department having, if any, with the Department for Health and Social Care to ensure support for young people who perhaps are drawn to these things but lack the kind of support that would turn them away?

[Lord Parkinson of Whitley Bay (Con)]

Under the self-regulatory system, the Advertising Standards Authority already advises that marketers must take particular care over adverts which contain references to suicide. There is careful guidance for advertisers in this area but we are discussing this with colleagues at the Department of Health, as I say. Through the long-term plan for the NHS, we are also investing to the tune of many millions to try to prevent as many suicides as we can.

[Baroness Manzoor (Con)]

My Lords, the Online Safety Bill is an important piece of legislation, but some are querying it in relation to freedom of speech. Can my noble friend say that this will not be used as a reason not to ensure that there is a strong regulatory framework in place, so that those platforms are legislated for and accountable for what they put on those platforms?

[Lord Parkinson of Whitley Bay (Con)]

My noble friend makes an important point. There are important protections for freedom of expression in the Online Safety Bill. The Bill works by setting out expectations for internet companies to have clear terms and conditions, which users will know of when they sign up to them and which give them recourse to speak to Ofcom if they feel that those terms and conditions are not being upheld. This will empower users, keeping them safe while protecting freedom of expression.

[Baroness Merron (Lab)]

My Lords, there are disturbing reports of TikTok users adopting the term “unalive” as a means of promoting suicide content, while others use shorthand hashtags, such as #ED for eating disorders, as a means of getting round censorship. Can the Minister tell the House whether the Online Safety Bill will do anything to tackle this dangerous creativity of social media users? How will social media platforms be directed to take steps to deal with this as part of their duty of care?

[Lord Parkinson of Whitley Bay (Con)]

The Online Safety Bill will protect users by putting in place systems and processes to mitigate risks. We know that algorithms play an important part in how companies operate their services. Companies will need to consider how these could cause harm and take steps to mitigate them, but the noble Baroness makes an important point about how people use social media. We are setting out a list of priority harms, such as those she mentions, to make sure that people—particularly vulnerable and young people—are kept safe online.

[Baroness Berridge (Con)]

My Lords, my noble friend has mentioned various statutory agencies, but is this not a particular category of legal but harmful content? Assisting suicide is a criminal offence, as is potentially conspiring to assist suicide. Will he ensure that all those statutory bodies involved really relate to the boundaries of the criminal law that exists today? These companies should be ensuring that they are not assisting or conspiring to assist suicide.

[Lord Parkinson of Whitley Bay (Con)]

My noble friend is right: there are existing criminal sanctions here and content which encourages or assists suicide, and therefore breaks the existing law, will be covered as well by the safety duties providing for illegal content under the Online Safety Bill. We want to ensure that the Bill adds to the armoury that we have to prevent as many suicides as we can.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, I think the Minister may have misunderstood the question from my noble friend Lady McIntosh about working with the health services in England and Wales, and in Scotland. It is very important that much more is done to train professional people—health visitors, district nurses, social workers and a whole range of others—about the signs indicating that people might be contemplating suicide. It is also very important that something is done about the waiting lists for access—[Interruption.] I thought someone had committed suicide there. But to be serious about the access to counselling and other services in the National Health Service, there are huge waiting lists for psychological and psychiatric counselling in Scotland, and in England and Wales. Can the Minister take this up with his colleagues in all the departments of health?

[Lord Parkinson of Whitley Bay (Con)]

If I misunderstood the noble Baroness’s question, I apologise. I will consult the official record and make sure I got it right. The noble Lord is right to reinforce the important role of the National Health Service. The Government are investing an additional £57 million in suicide prevention by 2023 through our NHS long-term plan. That will see investment in every part of the country. In addition, the Department of Health and Social Care provided more than £500,000 to the Local Government Association in the last financial year to bolster the work done by local authorities, which, as he said, play an important role as well.

Product Security and Telecommunications Infrastructure Bill

Lord Parkinson of Whitley Bay Excerpts

Lords Hansard - Part 1 & Committee stage
Tuesday 21st June 2022 Lords Chamber

[The Earl of Erroll (CB)]

My Lords, I want to say just a couple of words because, having read this and listened, I think the amendment has a very good point. I like the concept of a duty of care, because if we do not have that, who are we worrying about? In fact, Clause 7, on “Relevant persons”, is all about the manufacturers, importers, distributors, et cetera, with nothing about the customer, the poor person who is going to get hit by it. It is a very good idea to put that in at the beginning, setting down some principles and duties, because the other trouble is that by the time that we have done all these bits and pieces, made the regulations and the provisions, we are always acting after the event. What we need is a bit of proactivity, and we get that in this suggested new clause, because manufacturers, importers and distributors would have to make sure that products met certain minimum requirements. They would need to understand what “emerging security threats” there were; in other words, thinking ahead to the next stage and not just saying, “Oh, well, it complied with those things last year”, by which time the horse has bolted and we are far too late. So, I like it.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

I am grateful to the noble Lord, Lord Fox, and, in his absence, the noble Lord, Lord Clement-Jones, for their Amendment 1 and for the wholly positive intention with which it has been tabled. I was grateful to have had the opportunity to talk to them about it before Second Reading as well. As the noble Lord set out today, he has argued that customers deserve some high-level principles setting out the security protections they should expect when purchasing consumer-connectable technology. In fact, Amendment 1 goes further, as noble Lords have noted, and would require manufacturers to owe their customers a “duty of care” to protect them. We are not as keen as the noble Earl, Lord Erroll, on that.

The first problem we have with a duty of care is that it could give consumers a false sense of security. If consumers buy well-designed technology products which meet the best standards, it considerably lowers risk, but with cybersecurity there is no such thing as zero risk: the most aggressive and well-resourced hacker will find a way. Somebody may have a quality product, but have they secured their wi-fi router? Do they have some legacy technology on their network? Manufacturers of a single device do not control the whole range of apparatus which constitutes the attack surface so cannot always provide an absolute security warranty, and they cannot always predict the next attack vector.

The second problem we have is that we have learned that the security of devices is best served by standards rather than principles. If one sets standards, one can send a device to a laboratory and assure oneself that those standards have been met. If one sets principles, that does not apply. That is why the Bill is designed to give force to standards. Those standards, developed here in the UK and now adopted by Governments and jurisdictions across the globe as well as by international standards bodies, are widely recognised significantly to lower risk for consumers.

Of course, we believe that the responsibility for the security of connectable products most effectively lies with the manufacturer. We expect manufacturers to take security seriously, to implement measures to develop and maintain an awareness of the security of their products, and to be up front with customers about the security support they can expect. We have tried voluntary compliance, with our code of practice which was published in 2018. We now need mandatory requirements, and that needs specific security requirements that can be independently assessed. The legislation must enable the Government to keep pace with market dynamics and the changing technological landscape—as the noble Baroness, Lady Merron, said, it is important that we move with the times. The flexibility to be able to set different security requirements for manufacturers, for importers and for distributors is key to this.

Amendment 1 in the form drafted would place an equal weight on the duties of each of these three groups to secure products. Compelling the Secretary of State to have regard to this general duty could constrain the Government’s ability to set specific security requirements in the future. Crucially, these principles could restrict the use of powers in this part of the Bill, working against the Government’s ability to bring this regime into force and impeding our ability to keep that regime future-proof. I should also say to noble Lords that industry and consumer groups have not raised the need for general principles such as this. Our efforts to engage and communicate our intentions have been clear, and the requirements we have set out for the relevant persons have been widely understood and are in line with international standards.

The noble Lord, Lord Fox, asked why the Government have chosen these three specific security requirements rather than others. During the consultation in 2019, we explored a number of options including mandating that all consumer-connectable products meet all 13 guide- lines in the code of practice. They are all important, but the majority of respondents supported the option that the top three security requirements represented the most appropriate baseline, by balancing the important requirements that are testable, being applicable across a range of devices and creating the right incentives to improve security in these products. That is why the Government are initially mandating the implementation of security requirements that will make the most fundamental impact on the risks posed by insecure consumer-connectable products for consumers, businesses and the wider economy.

The noble Lord also asked about where products end and apps begin. The powers in Part 1 allow Ministers to set out requirements that include products and software. The proposals in the consultation he mentioned relate to those who operate app stores. So, while I acknowledge the good intentions behind it, I hope I have been able to set out why the Government feel that this amendment—

[Lord Fox (LD)]

I thank the Minister for giving way. That does not answer the question of where an app starts. If I am downloading Nest for my heating system, I am getting it from an app store, so where is the regulation coming? Is it the app that is coming from the app store, or is it the connectable device law that is coming through here? In which case, I think some explicit connectivity between the apps that run the connected devices needs to be written into the Bill.

[Lord Parkinson of Whitley Bay (Con)]

Perhaps, if the noble Lord is happy, we can explore this. The example he gives, as he knows, includes software and technology. Perhaps we can have a detailed discussion where we can work through some of those examples. I would be very happy to talk to him about them because on the question he poses the line is drawn in a different place depending on the product and its nature.

[The Earl of Erroll (CB)]

The Minister talked about standards a moment ago. If we are going to rely on standards, who is writing them? I presume that he is talking about British standards; to write a standard will take a year or two. I hope that the Government are going to fund it. We got no help from them in trying to fund stuff around age verification, even though that was core to the Digital Economy Act. If we are going to elevate it to an international standard, that will take another year or two, so we will not see any action for a long time if we are going to rely on externally written standards. I have chaired two BSI standards so far, and it does not happen just like that.

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

Some of the standards in this area have been set in the UK and have already been adopted by other jurisdictions, so I hope that we can give the noble Earl some reassurances. While I acknowledge his point about the time it takes for these to be adopted internationally, in some areas the UK is setting the way, and these are being picked up across the globe.

As I said, while I note the good intentions behind Amendment 1, these are the reasons why the Government are unable to support it. However, I am very happy to pick up the questions about apps and products with the noble Lord and others who wish to join that conversation. I hope that, for now, the noble Lord will be content to withdraw his amendment.

[Lord Fox (LD)]

My Lords, while that was a relatively disappointing response, I am pleased that we can have the discussion about apps. I thank noble Baroness, Lady Merron, and the noble Earl, Lord Erroll. I think he put his finger on it. If we are to keep pace with the speed of change only through a standards regime without making the companies delivering these products in some way responsible—whether through a code of practice or a duty of care, I am not quibbling—there is no way that a standards regime can keep pace with the innovative speed that international crime is running at on cybercrime.

The idea that we can chase this down the road is wholly wrong. I ask the Minister to sit down with the department and perhaps we can come up with a different way of doing it. I am totally agnostic about how we go about it, but some sense that we are not just chasing this needs to be in this Bill, otherwise it is going to be after the fact. That said, I am happy to beg leave to withdraw Amendment 1.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, I will speak to Amendments 3 and 5 and in support of the other two amendments in this group. All these amendments refer to Clause 1 and seek to add some specificity to its general nature. The first amendment in my name and that of my noble friend Lord Clement-Jones is Amendment 3. This inserts a new paragraph (c) into Clause 1(1), adding the text

“children where they are not primary users of products but are subjects of product use”.

Why is this necessary? Here I am indebted to a report on cybersecurity, the UK Code of Practice for Consumer IoT Security produced by the PETRAS National Centre of Excellence for IoT Systems Cybersecurity. Noble Lords may be aware of this group; it has a very strong record in this area. It is a consortium of leading UK universities dedicated to understanding the critical issues of the privacy, ethics, trust, reliability, acceptability and security of IoT. I commend this organisation to the small number of noble Lords in this Chamber interested in this area.

This report highlighted, among other things, the importance of children’s connected toys receiving the necessary scrutiny, due to the implications of embedded cameras and microphones, with the aim of ensuring the child’s and the parents’ protection and right to privacy. Such devices include a wide range of everyday artefacts with internet connectivity intended for use by children or in caring for them, such as interactive toys, learning development devices and baby or child monitors.

These connected toys and tools have the potential for misuse and unauthorised contact with vulnerable minors. The British Toy & Hobby Association has responded by offering a range of guidance notes and by interpreting the code of practice, but with SMEs manufacturing most of these devices, there is much more to be done to ensure that those organisations are sufficiently informed and equipped to produce and market toys that are secure.

Security is not straightforward, as the Minister has already pointed out. While these devices offer a range of advantages through their connectivity, they also potentially expose children and their families to risks that have not yet been fully articulated to many of the consumers who are buying these toys.

A real-life example is that the toy giant Mattel launched Hello Barbie. The Minister may be familiar with it—I do not know. This was as far back as 2015. It was a very innovative toy which it launched with a start-up business called ToyTalk. The principle of this toy was that it could converse using internet connectivity with speech recognition, so as well as talking it could listen. Hello Barbie also allowed parents to log in later and eavesdrop on their children’s conversations with their toys. I will leave your Lordships to decide the ethics of that.

But this connectivity raised some concerns, primarily around who could listen in and record these devices and store conversations and behavioural and location data, and for what purpose this data could be used. Toys like these are now prevalent and they raise significant questions about the appropriate support and guidance for the toy manufacturers, which understand an awful lot about conventional safety—they know how to make physically safe toys—but do not have a track record on developing informationally and data-safe toys because they have never been asked to do that before. This is a new venture for them, and it requires a totally new set of skills and standards, as the Minister might say.

As technology evolves hacking is increasing in sophistication, so it is necessary to keep moving forward. The challenge for cybersecurity in remaining ahead of the risks is inevitably a technological one, and the Minister may remember that the Hello Barbie toy, having been launched and lauded for its security, was ultimately found at some point to have serious security issues. Even that toy, from a very large manufacturer, fell foul of the progress of information crime.

Nevertheless, it is clear that today some toy manufacturers are releasing connected toys without adequate safety and security features. This is a competitive and dynamic marketplace—a lot of it is to do with price—and first movers are rewarded. In addition, the skillset and knowledge base, as I have just said, for conventional toy safety is mismatched with these new toys and we need to find a way of addressing that divergence. This is going to require investment and new learning and will not happen unless the toy manufacturers are required to do it.

Secure software development and cybersecurity are novel demands on this sector. However, the fact remains that these toy manufacturers are potentially placing consumer safety and privacy at risk. It does not matter whether this occurs due to the immaturity of the sector, market pressures or the lack of sectoral attention to the problem.

In the view of the Petras report,

“there are no indications that this will be addressed through market forces. Instead, the certainty of legislation to maintain standards would level the playing field and make clear for SMEs where they need to invest to make their toys market ready.”

Thus, more than the technological challenge of staying ahead of hackers, what is salient here are the challenges to the implementation of basic security features in manufacturing such as basic authentication and encryption, without which children’s safety and security is at risk.

This amendment explicitly places child security front and centre in this Bill. In other legislation involving the internet and digital issues, such as the Online Safety Bill, the Government have imposed more onerous duties on those delivering services to children than to adults. This amendment would be entirely consistent with that approach—very much in the spirit of understanding that our children and young people are more vulnerable and therefore need more protection from harms.

I turn next to Amendment 5. The eagle-eyed among your Lordships will spot that it is very similar to Amendment 4, proposed by the noble Baroness, Lady Merron, and set out very elegantly by the noble Lord, Lord Bassam. In fact, I would suggest that, largely, its construction is better than ours because they managed to do the same thing in fewer words. I will speak to Amendment 5 but my comments apply to Amendment 4 as well.

Amendment 5 seeks to ensure that:

“Regulations under this section must include provision that all security requirements specified in accordance with this Act are included as essential requirements in statutory conformity assessments and marking procedures under the Radio Equipment Regulations 2017 … and in any other such assessments and procedures applicable to relevant connectable products.”


I am speaking to the spirit of both these amendments. Amendment 5—similar to that of the noble Lord, Lord Bassam—follows on from the advice and help of Which? I thank that organisation, which has really been at the forefront of the consumer issues involved. In essence, the amendment picks up on three of the issues that the Minister tells us will be dealt with in SIs as soon as the Bill becomes an Act, but it takes the rather stronger approach of placing them in the Bill.

Paragraph (a) of proposed new subsection (2A) goes further than the general principle in specifying that passwords are not to be weak. As Which? explains, many smart products push the user to create a password themselves, rather than use a default password. However, they then allow weak and easily guessable passwords to be created, meaning that the risk of compromise stays high.

One of the outcomes of this amendment would be the introduction of a requirement for responsible password policy guidance to be adopted by the industry to ensure that security liability is not simply passed from the device manufacturer to the consumer. The Bill and associated guidance should be amended to clarify that every individual device must have a unique or user-set password that meets effective complexity requirements.

Paragraph (b) of proposed new subsection (2A) seeks to avoid the risk of disclosures going into a black hole or taking many years to fix. The Bill and associated guidance should be amended to make clear what is required of manufacturers, importers and distributors on provision of disclosure policy information, particularly around vulnerabilities. The appointed regulator should also clearly define and distribute a risk assessment framework for vulnerabilities that removes any sense of subjectivity and ensures that the response is effectively mandated.

Paragraphs (c) and (d) of our proposed new subsection concern the length of time a product is supported. The Government should introduce mandatory minimum support periods for smart products and consider whether these periods should reflect how long consumers, on average, continue to use such products. There is a precedent here. New ecodesign and energy labelling requirements came into force in England, Scotland and Wales in 2021. They include a requirement for electronic display items, including televisions, to be provided with firmware and security update support for a minimum of eight years after the last unit of a model has been placed on the market. A consistent approach to support periods for a range of products therefore needs to be considered, and it has already been considered in this other legislation.

Customers need absolute clarity on the support period manufacturers will offer, so that they are able to make more informed purchasing decisions. There must be a clear definition of what the “point of sale” means and how this relates to the definitions of “supply” in Clause 55. Without clearer specifications on what form the transparency requirements will take, there is a risk that this information could be hidden, obfuscated or even mislead. This amendment is designed to probe the Government’s thinking on these very important issues.

Finally, and very briefly, as a signatory to Amendment 2, I give it my full support.

[Lord Parkinson of Whitley Bay (Con)]

I am very grateful to noble Lords for setting out the cases for Amendments 2, 4 and 5. Since January 2020 the Government have been clear on introducing security requirements based on the three guidelines to which I referred in the previous group.

The commitment to set requirements has been made in response to consultations, published strategies and indeed to the Explanatory Notes to this Bill. Our notification to the World Trade Organization also contained reference to some of these documents. We have put manufacturers, trade bodies and industry representatives on notice. Supply chains are long and surprises unwelcome, so the Government have been very clear on whither we are heading.

Amendment 2 would remove any discretion the Secretary of State has to make regulations. I appreciate that the intention behind tabling it is to explore this issue, and I hope I can assure noble Lords that it is not needed. The regulations will be made, and swiftly. Indeed, we have already consulted on them, in 2020, which I hope gives noble Lords some reassurance that we intend to move swiftly in this area.

Amendments 4 and 5 would insert specific security requirements into the Bill. As several noble Lords mentioned at Second Reading, it is important that technology regulation enables the Government to respond to changes in threat and technology, and to the regulatory landscape. That is precisely why the Bill does not contain details of the requirements that the Government have assured industry they will set out.

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[Lord Fox (LD)]

Perhaps the Minister should consult whoever drew up the legislation that managed to mandate that televisions should be updated for firmware and software for up to eight years after they have stopped being manufactured. Clearly, those people managed to find consensus among the industry—or decided to ignore consensus—and deliver something. If it can be done for electrical display devices, such as televisions, I do not see why it cannot be done here if there is a will to do it. However, I think the Minister is telling us that there is no will to do it.

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord referred to mandatory minimum support periods for electronic display items and the Ecodesign for Energy-Related Products and Energy Information Regulations 2021. It is not quite correct to say that those requirements are applicable. They ensure that the last available security update continues to be available for at least eight years after the last unit of a product has been placed on the market but the requirement does not ensure that manufacturers continue to provide new security updates over that period to ensure that the product remains secure in response to changing threats.

[Lord Fox (LD)]

I did not say that those requirements are applicable; I implied that they are analogous. Frankly, the fact that there is some mandating of security support after the product has stopped being manufactured is a heck of a lot better than the situation for all the connectable devices we are currently talking about, where there is no requirement at the moment.

[Lord Parkinson of Whitley Bay (Con)]

I do not think that they are quite analogous. As I say, it is about the requirement to keep the last available updates available to consumers for eight years rather than evolving them. We do not yet consider that there is sufficient evidence to justify minimum security update periods for connectable products, including display equipment—certainly not before the impact of the initial security requirements is known.

It is important to stress that, as consumers learn more, they will expect more. This will drive industry to respond to market pressure. If the market does not respond to this effectively, the Government have been clear that they will consider the case for further action at that point, but we think that consumer expectation will drive the action we want to see in this area.

Amendment 3, tabled by the noble Lords, Lord Clement-Jones and Lord Fox, refers to children. All noble Lords will agree, I am sure, that protecting children from the risks associated with connectable products is vital. I assure noble Lords that the security requirements we will introduce are designed with consideration for the security of all users, including children, alongside businesses and infrastructure. The Bill already gives the Government the flexibility to introduce further measures to protect children, whether they are the users of the products or subject to other people’s use of a product. We therefore do not think that this amendment is necessary as this issue is already covered in the Bill.

The Bill, and forthcoming secondary legislation, will cover products specifically designed to be used by or around children, such as baby monitors and connectable toys; they include Hello Barbie, which I was not familiar with but on which I will certainly brief myself further. However, we recognise that the cyber risks to children are not limited to the connectable products in the scope of this Bill; indeed, a lot of the issues referred to by the noble Lord, Lord Fox, were about the data captured by some of the technology, rather than the security of the products themselves. That is precisely why the Government have implemented a broader strategy to offer more comprehensive protection to children—including through the Online Safety Bill, to which the noble Lord, Lord Bassam, referred.

I hope noble Lords will agree that Amendment 3 is not needed to make a difference to the Bill’s ability to protect children from the risks associated with insecure connectable products—this is already provided for—and will be willing either to withdraw their amendments or not move them.

[Lord Bassam of Brighton (Lab)]

My Lords, this has been a useful and interesting exchange.

In my lordly world, “may” and “must” are sort of interchangeable; they were a useful peg on which to hang our discussion about the statutory instrument nature of this piece of legislation. I am somewhat reassured by what the Minister had to say about that, and acknowledge that some of the regulations were brought forward and consulted on at an earlier stage. However, we on this side of the House—I am sure that I speak for the noble Lord, Lord Fox, as well—want to see increased transparency throughout this process. So much of what is in front of us will be in secondary legislation; it is essential that we, the industry and the sector are properly consulted so that we understand exactly what we are dealing with. I make that plea at the outset.

I was pleased to hear what the Minister said about children as the primary users of particular products. I am glad that we have got beyond the “Peppa Pig” world that the Prime Minister occasionally occupies and are giving this issue proper, serious consideration. It certainly needs to be that way.

I am not entirely convinced by what the Minister said on Amendment 4. I look at our amendment; it is pretty basic, actually. It is hard to argue against setting out a particular prohibition in legislation. The ones that we have picked out for prohibition and restriction are quite important and essential. Of course, the Minister is right that those subjects will change and technology will overtake the words we use. We understand that point but we are trying to secure some basic minimum standards and protections here. Clearly, we will retreat with our amendment and give it some further thought before Report, but we may need some further persuasion on this. That said, I am quite happy to withdraw Amendment 2 and not move Amendment 4.

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[Lord Parkinson of Whitley Bay (Con)]

The feast of amendments in this group aim to implement the recommendations of your Lordships’ Delegated Powers and Regulatory Reform Committee. We welcome the committee’s report and are considering its recommendations, as we always do. It will infuriate the noble Lords who have asked detailed questions when I say that, ahead of setting out our response to the committee, I will not be able to cover all the issues they have pressed the Government on today. I am happy to say that we will set out our response in writing ahead of Report. Perhaps once we have done that, and noble Lords have seen the Government’s full thinking in their response to the committee, it might be helpful for us to speak in detail.

The legislation has been designed to protect people, networks and infrastructure from the harms of insecure consumer connectable products, while minimising the unnecessary regulatory burden on businesses. It does so in the context of rapid technological and regulatory change, evolving cybercriminal activities and a growing impact on people in businesses, all of which require us to ensure that the legislation can evolve quickly and effectively. The UK, as I have noted, is leading the world with its approach to regulating connectable products. As other jurisdictions increasingly turn their attention to this important issue, we will use this flexibility to achieve alignment with equivalent regulatory regimes, avoiding unnecessary duplication. These powers, and the others conferred by the Bill to make delegated legislation, are crucial for it to remain effective. We have carefully considered the number, scope and necessity of these powers, and believe we have struck the right balance between the need for that flexibility and the importance of Parliamentary scrutiny, which noble Lords rightly stressed again today.

We welcome the report of your Lordships’ committee and are considering its recommendations. I am afraid I cannot, at this stage, pre-empt our response, which has to be made while considering the recommendations’ impact on the broader framework. We will return to these matters on Report, and I am very happy to have a detailed conversation with the noble Lords about our response after we have responded to the DPRRC.

The noble Lord, Lord Fox, focused on Clauses 9 and 11. I am happy to confirm that nothing about how the powers are drawn in Clause 9 is inadvertent; this was our intent. Clause 9 contains four delegated powers; they will be used predominantly to provide administrative detail deemed too technical for primary legislation. For example, they will explain what must be included as a minimum in a statement of compliance, what steps must be taken to determine compliance, where appropriate, and for how long a manufacturer should keep a statement of compliance. They will also provide flexibility to respond swiftly to changes in the market. In addition, the delegated powers in this clause may be used in the future to provide that the statement of compliance is equivalent to certain product markings, or external conformity assessments, such that a manufacturer may be deemed to have provided a statement of compliance where such markings or assessments have been made or completed. This is dependent on regulatory changes to product markings and on the development of the assurance sector for product security.

At this stage, and awaiting our response to your Lordships’ committee, I hope noble Lords will agree that it goes without saying that the Government feel these clauses should stand part of the Bill.

[Lord Fox (LD)]

I sort of thank the Minister for his response, which is really no response at all. He did say that it would infuriate me and he is fairly accurate about that.

As correctly noted, I am merely a cipher for the DPRRC, a very serious committee that does not produce these reports lightly. The point it is making, particularly on Clause 27, is front and centre to this Bill. Who is going to enforce it? Who decides who will enforce the Bill, and how will Parliament know if the Secretary of State decides not to tell it, under the current regulations? These are very serious matters and not ones that your Lordships’ House should step back from. I am sure that the Minister will, on reflection, understand that the DPRRC has a very important point to make. The others are important points, particularly around Clause 3, but the Clause 27 piece is absolutely central to the future of this Bill. That said, I beg leave to withdraw Amendment 6.

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[Lord Fox (LD)]

My Lords, I rise to speak to Amendment 8 in my name and that of my noble friend Lord Clement-Jones. These are two ways of doing the same thing so I support the spirit of Amendment 7, about which we have just heard from the noble Lord, Lord Bassam.

This amendment adds the following wording to Clause 7:

“Any person who is a provider of an internet service that allows or facilitates the making by consumers of distance contracts with traders or other consumers for the sale or supply of a relevant connectable product is to be regarded as a distributor for the purposes of this Act, if not a manufacturer or an importer of the product.”


This amends the language that defines a distributor in the scope of the Bill. Online marketplaces are a mainstream form of today’s retail. Which? research in 2019 found that more than 90% of the UK population had shopped through an online marketplace within the month it was polling. That has increased during the pandemic. However, its research also consistently highlighted how online marketplaces are flooded with insecure products. It has previously demonstrated issues with the lack of legal responsibility of online marketplaces for the security and safety of products sold through their platforms.

The Government have recognised the problem, in their response to the call for evidence on product safety, that current safety rules were designed to fit supply chains as they operated before the world of internet shopping. In the realm of product safety, the Government have acknowledged that this can result in the peculiar situation where no actor is responsible for ensuring product safety. This has resulted in organisations such as Electrical Safety First repeatedly finding unsafe and non-compliant products listed on online marketplaces. Therefore, the traditional conception of actors in the supply chain is now outdated.

The Bill defines “distributor” as

“any person who … makes the product available in the United Kingdom, and … is not a manufacturer or an importer of the product.”

At present, it seems unlikely that certain online marketplaces, including eBay, Amazon Marketplace and Wish.com, will be included within the scope of that definition of distributors in the Bill. This will leave, without overstating it, a sizeable gap in the regulatory scope of this market.

Given the amount of insecure tech readily available on online marketplaces, it is paramount that these platforms are given obligations in the Bill to ensure the safety and security of the products sold on their sites, regardless of whether the seller is a third party. However, the Clause 7(5) definition of “distributor” in terms of making products available on the market is in line with existing product safety law, so we know that certain marketplaces are not classed as distributors and hence not obligated to take action. Amazon Marketplace, Wish.com and eBay are marketplaces where other people are selling; this is the issue.

This amendment seeks to expand the definition of distributors in Clause 7 to include appropriate online retailers, such as listings platforms and auction sites, including eBay, Amazon Marketplace and AliExpress. I feel sure that the Minister did not intend for the legislation to miss these marketplaces out; rather than risk this loophole going any further, we will work with the Minister and Her Majesty’s loyal Opposition to come up with some wording that absolutely iron-clads the Bill to ensure that these sorts of marketplaces are also included.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to noble Lords for speaking to their amendments in this group, both of which seek to make online marketplaces a “distributor”. It is vital that all products offered to consumers are secure, including those listed through online marketplaces, and we want to ensure that this is achieved in the most efficient way.

The explanatory statement for Amendment 7 suggests that products listed on online marketplaces might not be protected by the security requirements set out in the Bill. I reassure noble Lords, particularly those who tabled Amendment 7, that the security requirements will need to be met for all new connectable products offered to consumers in the UK, including those offered through online marketplaces. These marketplaces often act as a manufacturer, importer or distributor and, in those cases, they are subject to the same duties and security requirements as those three types of economic actor. If, however, the online marketplace does not fall into one of these three categories, the manufacturers, importers and distributors of those products are all still fully responsible for complying with security requirements.

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[Lord Fox (LD)]

This has piqued my interest; how does this exercise relate to the Bill? This process of dealing with the online acquisition of unsafe products would seem to be what the Bill is doing front and centre, so what is that process? How do the two connect?

[Lord Parkinson of Whitley Bay (Con)]

They are complementary; the new product security framework sits alongside existing legislation on product safety, which is why we want to conduct a review of the safety framework and publish the consultation. I am certainly happy to write and endeavour to explain.

The noble Lord asked whether products sold through online marketplaces fall into a gap in the Bill. The Bill requires in-scope products offered for sale through online marketplaces to customers in the UK to be as secure as in-scope products sold, for example, in physical stores. We are mindful of the variety of services offered by different online marketplaces. Some act only as advertising platforms, while others facilitate transactions and store and ship products on behalf of the seller. As noble Lords have noted, this changes all the time. This must be carefully considered to ensure that businesses can comply with their legal obligations and that any regulation is necessary, appropriate and proportionate to provide the best protection to consumers.

[Lord Fox (LD)]

I am sorry to keep popping up; being a practical person, I will try to give the Minister a scenario and, if he cannot answer straightaway, he can write. I have bought a product through an online auction that turns out to be unsafe; I go back to the auction site, which tells me, “Not my problem. You have to return to the international manufacturer which made this product”, which turns out to be a brick wall and nothing comes back. First, is that online auction site correct in handing me over to the international manufacturer, which turns out to be a dead end? Secondly, if that site is correct, to whom do I go? Do I go to my local council trading officer or to the person who, under Clause 27, has been mysteriously made the enforcer for the Bill? I may or may not know who they are. How do I seek redress, and from whom?

[Lord Parkinson of Whitley Bay (Con)]

I will try answer the noble Lord’s question, and I am happy to write with further detail. Products sold on online marketplaces are covered by the Bill. All products sold to customers in the UK will have to comply with the security requirements set out under this framework. Where a product is sold on a third-party online marketplace, the seller will be responsible for ensuring that it is compliant. Third-party sellers who sell new products directly to customers on those platforms will also be covered under the “distributor” definition. I will happily write to the noble Lord with further detail ahead of Report but I hope that, for now, that goes some way towards addressing his question.

[Lord Lucas (Con)]

My Lords, I would be grateful if my noble friend included me in his replies and letters. Is he aware of the lamentable performance of Her Majesty’s Revenue and Customs when it comes to trying to enforce VAT in similar circumstances, and the enormous difficulty it has had with third-party sellers operating out of the Far East in particular? It is extremely difficult, and the volume of VAT lost runs into the billions. This is a large-scale enterprise and it will easily channel a large volume of unsatisfactory products into the UK if we do not take effective action.

I hope that the Government, in their new consultation, which I look forward to learning about, will be taking a robust attitude towards the platforms. For instance, it is entirely unsatisfactory that there should be a way in which unsafe toys can get into the hands of children at Christmas, and for which there is no effective means of prevention or redress. In other jurisdictions, these online marketplaces have proved amenable to a forceful approach by government. I very much hope that we will be joining in with that.

[Lord Parkinson of Whitley Bay (Con)]

I am happy to include my noble friend in the replies and the letter I send. This touches on work which falls under the Department for Business, Energy and Industrial Strategy, and the points he raised, of course, fall to Her Majesty’s Revenue and Customs. We will make sure that, having consulted officials there, we provide some details of the work those departments are doing as well.

[Lord Bassam of Brighton (Lab)]

My Lords, I am looking forward to the correspondence on this; I fancy that the noble Lord’s civil servants will have a tricky job on their hands. I do not think I quite got a response to what the nature of “being kept under review” really meant, but I await word in the future.

I have been reading the Explanatory Notes, as the Minister will probably be unhappy to hear, and I can see the difficulties. In trying to ensure that the legislation is focused, rightly, on the producers, manufacturers, importers and distributors, it is hard to work round that and not capture people who are simply installers of a product. On the other hand, there are circumstances where installers are primarily responsible for the effectiveness and working of the product, and if it was not for the way they install it, it would not be effective. The terms of the contract are such that it makes that difficult.

I can see the difficulty here, but for now I am happy to withdraw our amendment. In doing so, we are equally supportive of the amendment in the name of the noble Lord, Lord Fox, because the two are contiguous in their formulation.