Dormant Assets Bill [HL]

Lord Parkinson of Whitley Bay Excerpts

3rd reading
Tuesday 23rd November 2021 Lords Chamber

Moved by

[Lord Parkinson of Whitley Bay]

That the Bill do now pass.

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

My Lords, I beg to move that this Bill do now pass and, in doing so, take the opportunity to thank noble Lords from all sides of your Lordships’ House for their interest and contributions to the progress of the Bill so far. I am grateful for the scrutiny that they have brought, and the co-operative and constructive spirit in which the debates have taken place. I am also grateful for the broad cross-party support that the Bill has received so far. It is clear that all corners of your Lordships’ House share the same ambition to ensure the scheme’s continued success in unlocking dormant assets for public good.

I first thank my noble friend Lady Barran, who expertly led the Bill through Second Reading and Committee. I am very grateful for the opportunity to follow in her capable footsteps. I pay tribute also to the Front Benches opposite. The noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Merron, have helpfully challenged the Government’s approach, and I thank them for the collaborative way in which they have done so. I also thank the noble Baronesses, Lady Barker and Lady Kramer, from the Liberal Democrat Benches, for all their invaluable contributions, which have been detailed and thoughtful. Noble Lords from across your Lordships’ House have contributed to a rich discussion on the Bill, and I am very grateful for all the points which have been raised.

As ever, I am grateful to the House authorities and parliamentary staff for their hard work behind the scenes. I acknowledge the extraordinary work of the officials who have worked so hard on the Bill for many months: the Bill team, the policy teams at DCMS and at Her Majesty’s Treasury, the lawyers in both departments, my own private office, the Office of the Parliamentary Counsel and the clerks in this place.

I take this opportunity to clarify aspects of the debate on Report regarding the additionality principle, an issue I discussed with the noble Baronesses, Lady Barker and Lady Kramer. Section 24 of the 2008 Act empowers the Secretary of State to add or remove named distributors of dormant assets funding. Currently, the only named distributor is the National Lottery Community Fund, and all funds, including those distributed through the four independent spend organisations in England, flow through it. Section 24 also provides for making consequential amendments, including to Schedule 3, where responsibility for reporting on the additionality principle is set out.

The Government consider additionality to be critical to the scheme’s success, and we have reiterated this position throughout our debates on the Bill. Indeed, we are clear that the voluntary participation of the industry is dependent on it. While we emphasise that there are no plans to change or add new distributors, I can reassure noble Lords that it is the Government’s policy that any new distributor added should be required to report on this principle in the same way that the fund is required to do so now.

The dormant assets scheme has spent the last decade working to tackle systemic social and environmental challenges and to level up communities which need it most. This Bill is set to unlock almost £1 billion of additional funding to ensure that the scheme continues to support innovative, long-term initiatives that seek to address some of the UK’s most important challenges.

[Lord Bassam of Brighton (Lab)]

My Lords, the Minister will be pleased to hear that I will be brief, but some thanks are worth echoing. I thank the Minister; it is never easy taking up another person’s Bill halfway through. I have had to do it myself and, at times, I lurched from being completely out of my depth to being a total shambles, so I know how it feels. The noble Lord was neither of those things; he was courteous and considerate of the points that we made and the amendments we moved.

Like the noble Lord I am delighted that we are moving to unlock previously untapped assets. I hope that the next iteration of this legislation—this is, after all, the second Bill on dormant assets—will bring forward even more dormancy and unlock it, so that communities can benefit.

I also thank the Minister’s predecessor, the noble Baroness, Lady Barran, for her time spent on the Bill. She was, like him, very courteous and open-minded about ways in which we can forge improvements. She was also willing to meet and discuss aspects of the legislation. I echo his thanks to my noble friend Lady Merron—my good friend—for her part in this. It is always a pleasure to work with her. I also thank the noble Baronesses, Lady Kramer and Lady Barker, on the Lib Dem Benches, who also played an active and energetic part.

Of course, the noble Lord, Lord Hodgson, played a decisive role on Report in helping to support the amendment that we sponsored on the community wealth fund, for which there was all-party support. Before the Commons is invited to reject that amendment, I suggest to the Minister that it might be an idea to sponsor some discussion between his ministerial colleagues and other Benches in your Lordships’ House to see if there is a way in which we can find some common ground on this—because I am very persuaded, as I know others are, of the benefit of the community wealth fund as a way forward. As he said, these resources can do a lot to take forward the shared agenda of levelling up and bring additional resources to bear in hard-pressed communities. We for our part would be very happy to meet and discuss this to see what common ground we can secure, because this is an important opportunity for us all, if we want to make it stick.

We wish the Bill well. It has been improved by your Lordships’ House, not just by the amendment on the community wealth fund but in other aspects as well. I thank the Minister for his comments on additionality, which will be very helpful. I am happy to support the Bill as it goes on its way.

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[Baroness Barker (LD)]

My Lords, I also thank very much the Minister, his predecessor—the noble Baroness, Lady Barran—and the team. As is always the case with a Bill that is very technical and arcane, they had to display endless patience with the opposition as we painstakingly made our way to the place that they were already at. I also thank my noble friends Lady Bowles and Lady Kramer, who brought to the Bill a completely fresh eye from the financial sector and who set a very high standard of scrutiny for a Bill that is normally given over to those of us interested in the world of charity.

We achieved three things during the passage of the Bill. First, we made it clear that this is not simply an exercise in spending dormant money because it is there. We made sure that the scheme is about achieving impacts on financial inclusion in areas of deprivation. Secondly, we enabled it to be run using far more difficult asset classes than just bank accounts, and we made sure that the reporting systems for that were fit for purpose. Thirdly, we made sure that everyone involved in the scheme is under a duty to report—this is about additionality, not giving the Government a fund that they can dip into in difficult times.

In years to come, we will have reports from the disbursing body and the Secretary of State that I hope will show the impact of this, particularly in one respect: the endeavour to get rid of moneylenders in poor communities. If we achieve that, we will together have achieved something good and which we can be proud to support.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to the noble Lord and the noble Baroness for their comments, and I echo the tributes that they paid to the noble Baroness, Lady Bowles of Berkhamsted, my noble friend Lord Hodgson of Astley Abbotts and many others who contributed to the debates on this.

I will certainly discuss the point that the noble Lord raised with my honourable friend Nigel Huddleston, the Minister with responsibility for the Bill, in his capacity as Minister for Charities and Civil Society, as we just heard in Questions. I am sure that he will want to continue the discussions that we have had on community wealth funds as the Bill goes to another place but, as I say, I am very grateful that it does so with genuine cross-party support and a fair wind behind it. I grateful to all noble Lords who have ensured that this is so.

Age Assurance (Minimum Standards) Bill [HL]

Lord Parkinson of Whitley Bay Excerpts

2nd reading
Friday 19th November 2021 Lords Chamber

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

My Lords, I thank the noble Baroness, Lady Kidron, for bringing forward this Bill, as I thank all noble Lords who have taken part in this morning’s debate. We have heard from campaigners, lawyers, educators, scientists, parents and grandparents. We all share the same goal: protecting children online and ensuring that the tools used to do so are effective and can be trusted. The Government share that goal; child online safety is a priority for Her Majesty’s Government and our online safety legislation is designed to make the UK the safest place in the world to be a child online. Protecting children is at the heart of that legislation and the strongest protections in the regulatory framework that we wish to set up will be for children.

Let me speak first about the scope of the noble Baroness’s Bill, which proposes setting mandatory standards for age-assurance technologies, if or when they are used by companies. It particularly focuses on user privacy and data security. As my noble friends Lady Harding of Winscombe and Lord Gilbert of Panteg, and others, have rightly highlighted, it does not introduce new requirements on companies to use age assurance for the purposes of child safety or for other age-gating purposes. I think we are all in agreement that children should be protected from experiencing harm online and provided with age-appropriate environments. This will be delivered through the Government’s new online safety legislation, which is currently going through pre-legislative scrutiny and benefits from the expertise of the noble Baroness, Lady Kidron, my noble friend Lord Gilbert, the noble Lord, Lord Clement-Jones, and others.

We fully agree with the objectives of the noble Baroness’s Bill. Age-assurance technologies must be privacy preserving, secure, effective and inclusive. This is needed to ensure that children are appropriately protected and that the public have trust in the solutions that protect them. Standards are key to this. Importantly, they will provide regulators with agreed benchmarks so that they can regulate with confidence. However, as the noble Baroness rightly anticipated, the Government are not supporting her Bill. As I have said, while we strongly agree with its aims, we have reservations about whether this is the right vehicle to deliver them, and I will set out why.

The Government believe that the online safety Bill is the better route to deliver these objectives, through the regulator’s codes of practice. As the online safety regulator, Ofcom will set out in codes of practice the steps that companies can take to deliver their safety duties. Given the importance of age-assurance technologies to the Bill’s higher level of protection for children, we expect Ofcom to include steps on age assurance in its regulatory codes, as part of which Ofcom can include specific standards and name them. Companies will be required to follow the code or demonstrate that they have achieved equivalent outcomes, or they will face enforcement action.

The noble Baroness and others asked why age verification is not required in the online safety Bill. I am mindful that this draft Bill is undergoing pre-legislative scrutiny at the moment, but I will say a little bit about it, as drafted, and the approach that we have taken to it. It is important that it is future-proofed, because what is most effective today may not be so effective in the future. To ensure the future-proofing approach, the Bill will not mandate that companies use specific technologies for protecting children online. However, in its codes of practice, Ofcom will set out the steps that companies need to take to comply with their duties, which will include the use of age-assurance technologies. Companies would need to put in place these technologies or demonstrate that the approach they are taking delivers the same level of protection for children. Ofcom will also be able to take action against companies that fail to take action to protect children from online pornography.

My noble friend Lord Gilbert and the noble Baroness, Lady Merron, asked about protecting children from online pornography on services that do not currently fall within the scope of the draft online safety Bill. Again, I am mindful of the work that the Joint Committee is doing to scrutinise it, and we are grateful for its work on this issue. As my right honourable friend the Secretary of State mentioned during her evidence session to the Joint Committee, we are exploring ways to provide wider protections for children from accessing online pornography through the Bill, including on sites not currently within the draft Bill’s scope.

DCMS already has a programme of work under way to develop an international standard for age-assurance solutions. This includes the development of an international standard, through work with the British Standards Institution and the International Organization for Standardization. A specific objective of this work is to provide regulators with a robust standard to refer to in their codes of practice and guidance.

I return to the noble Baroness’s Bill, which is our focus today. It rightly highlights the importance of data protection and safeguarding users’ privacy. I certainly do not criticise her for including that in her Bill. This was an issue that the noble Baroness, Lady Kennedy of The Shaws, and others picked up on. The Government also take privacy very seriously.

Under the online safety Bill, companies will be required to have regard to the importance of protecting users’ privacy when putting in place measures, including age-assurance technologies. In addition, Ofcom will be required to set out safeguards for privacy in the codes of practice. Where relevant, we expect Ofcom to draw on the ICO’s existing expertise in developing its codes. Here I highlight that companies are already required to protect users’ data privacy via regulations under the remit of the Information Commissioner’s Office.

A number of standards in the noble Baroness’s Bill duplicate existing data-protection regulations. For example, providing “sufficient and meaningful information” for users in an accessible way is already addressed in the age-appropriate design code. Existing data-protection regulation also sets out how data should be securely used. The Government are keen to work closely with the Information Commissioner’s Office to ensure that this is clear to companies. Ofcom and the ICO are working closely on the issues of user privacy and age-assurance technologies to deliver clarity to companies.

So it is understandable that the noble Baroness’s Bill focuses on user privacy, but it duplicates existing regulation and gives Ofcom responsibility for regulation in areas already overseen by the Information Commissioner’s Office. We think that this risks creating a confusing regulatory landscape for companies and regulators and may undermine the Bill’s central intention.

It is also important that Ofcom is able confidently and robustly to enforce expectations relating to age assurance, regardless of where a company is based. I am sure that that is something with which all noble Lords would agree. The Government believe that the online safety Bill will achieve this more effectively than the Bill before us. First, it gives Ofcom the power to develop mandatory risk assessments for companies, which is essential for supporting the proportionate use of age assurance. Secondly, the online safety Bill considers the global nature of the internet and the companies in scope. It provides Ofcom with additional business-disruption powers, which will allow it to prevent services based abroad from disregarding UK requirements in relation to age assurance.

So we fear that seeking to deliver those objectives through the noble Baroness’s Bill risks being less effective than delivering them through the online safety Bill, which will ensure that all companies in scope adhere to high standards and are held to account when using age-assurance technologies.

I hear the anxiety of noble Lords and the urgency that many underlined. I also hear the challenge that the noble Baroness set me in her opening speech about what we are doing today. The Government are clear that companies should take steps now to improve user safety, particularly for children, and not wait for legislation to protect them. That is why we as a Government are taking action now, in advance of the online safety Bill, to help bring about change.

I will give some examples of that. The Government have published the interim codes of practice on terrorist content and child sexual exploitation and abuse online, which companies can follow now to remove illegal content and behaviour from their services. Earlier this year, we also published safety by design guidance, which sets out clearly for companies how to design and build safer online platforms. As the noble Baroness said, age assurance is not a silver bullet; it is just as critical that companies design safe and age-appropriate online environments for their users.

Published alongside this was a one-stop shop for companies on protecting children online that sets out their current legal requirements, making it easier for them to understand precisely what is expected of them. In July this year, the Government published the Online Media Literacy Strategy, which sets out our approach for supporting the empowerment of users of all ages with the key skills and knowledge that they need to make informed and safe choices online. So we are acting, even as we await the report of the Joint Committee on the draft online safety Bill.

That is why the Government believe that the approach that I have outlined today, delivering robust standards for age-assurance technologies through the online safety Bill, is the right one. We think that this will achieve the same objectives as the noble Baroness’s Bill and be appropriate for Ofcom’s regulatory remit. So, while I know that this will be disappointing to the noble Baroness today and to all the noble Lords who have spoken, I echo the tributes that have been paid to her for her industry, urgency and passion in this hugely important area.

My honourable friend the Minister for Technology and the Digital Economy and I have spoken to the noble Baroness about our shared objectives in this area and, importantly, our shared desire to move quickly, and we are very grateful for her time and engagement. At their appearance before the Joint Committee on the draft online safety Bill, my honourable friend and my right honourable friend the Secretary of State said that they were interested in exploring whether it would be possible to expedite key parts of the online safety Bill, including work relating to age assurance.

I stress that the Government welcome open discussion and are keen to continue our conversations with the noble Baroness and all noble Lords who have raised issues today on this vital subject. The Government have been clear that they do not hold all the answers, which is why the online safety Bill is currently going through pre-legislative scrutiny. I am very grateful to the noble Baroness and others for their work on that. I look forward to the debates that we will have on it—it is a very important piece of legislation—but I am afraid that we cannot support the noble Baroness’s Bill today.

Charities Bill [HL]

Lord Parkinson of Whitley Bay Excerpts

Thursday 18th November 2021 Other Business

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I shall talk very briefly to this amendment. I agree with the noble Baroness, Lady Barker, that it is a privilege to be part of this technical Bill. It is one where I suspect that I, among other lay Members of this Committee, have learned a lot. I also thank the noble Lord, Lord Hodgson of Astley Abbotts, for introducing this amendment. He has explained a particular problem that is a big problem for a small number of charities. I understood that to be the problem that he outlined. The potential solution is not agreed between the Law Commission and certain specialist lawyers. Whether there is a way out of the problem through either dissolution or merger of the charity is something on which there is no overwhelming consensus.

I do not know what plans the noble Lord, Lord Hodgson, has for his amendment at either this or later stages of the Bill. I shall listen to the Minister’s response to the issues raised by the noble Lord and then take a view, depending on what he does at a later stage.

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

My Lords, before responding to this group of amendments, I first extend my best wishes to the noble and learned Lord, Lord Etherton, who has so ably chaired this Special Public Bill Committee so far. I hope he gets well soon and is back with us swiftly.

I thank my noble friend Lord Hodgson of Astley Abbotts for tabling Amendments 1 and 2 to Clause 3 and for the way he set out not just the amendments but, helpfully, the background to the Bill’s importance to charities and the people it will affect. Of course, he has long-standing interest and experience in this important area.

On my noble friend’s Amendment 1, which would insert a new subsection (2A) at line 9 on page 3 of the Bill, we consider that new Section 280A can be used to replace all the stated governing document in its entirety, with Charity Commission consent in respect of the particular provisions that fall within Section 280A(8). We do not think that a legislative solution is necessary and, as has been noted, this view is supported by the Law Commission and the Charity Commission—we have discussed the issue with both of them. I am grateful to my noble friend for raising this point, as it has prompted us to consider ways in which we can make the position clearer, but I hope that, on that basis, he will feel able to withdraw his Amendment 1.

On Amendment 2, which would insert subsection (9A) at line 14 on page 4 of the Bill, although my noble friend again makes an important point, we can in fact already achieve what the amendment sets out to do under the clause as it stands. Under the Bill, the Charity Commission’s consent is required for an amendment that would alter any unincorporated charity’s purposes. That is equivalent to one category of regulated alterations for charitable incorporated organisations, which requires the consent of the Charity Commission. By way of comparison, the Charity Commission currently treats amendments to the purposes of charitable incorporated organisations of the same type referred to in the amendment as not being a regulated alteration and therefore not requiring Charity Commission consent. Given the similarity between the statutory provision concerning charitable incorporated organisations and the new Section 280A(8)(a), the same approach would be taken in relation to changes to unincorporated charities’ purposes. Therefore, Section 280A(8) as it stands already looks at substance over form, and an amendment to a governing document would require Charity Commission consent only if it makes a substantive change, not if it is a pure drafting change. I hope that provides reassurance to noble Lords. As with the previous amendment, this is a view supported by the Charity Commission and the Law Commission.

However, I thank my noble friend for keeping us on our toes and for rightly probing this issue. Of course we want the situation to be clear to everybody who will be affected by the new law, so we will consider whether the Explanatory Notes could be expanded on this point to make that clearer. I hope that, on the basis of that reassurance—not the third of the options that my noble friend outlined in his opening speech but looking again at the Explanatory Notes to make this clear to all concerned—he will feel able not to press his Amendment 2.

[Lord Hodgson of Astley Abbotts (Con)]

I am grateful to the noble Baroness, Lady Barker, and the noble Lord, Lord Ponsonby, for their contributions. My noble friend the Minister has, of course, elegantly found a third way: it was not that the Charity Commission was wrong; it was not that we need to produce some new change to the Bill; there are powers within the Bill as it stands to find a way around the problem through Section 280A and ancillary provisions. I talked about getting barnacles off the boat, and this was certainly a barnacle. I will reflect on this, talk to the people from Spilsby, who are obviously at the front line of this to see if they have any comments. In the meantime, I beg to withdraw the amendment.

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[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to the noble and learned Lord, Lord Etherton, for tabling this amendment and to the noble Lord, Lord Ponsonby of Shulbrede, for moving it in his absence. I had a very helpful conversation with the noble and learned Lord, Lord Etherton, yesterday and am grateful to him for his time.

By way of background, there are six financial thresholds in the Bill, which directly or indirectly ensure proper regulatory oversight of charities by the Charity Commission. These thresholds can be amended by secondary legislation to ensure that they remain at an appropriate level, based on how they are working in practice and on changes in inflation. The Delegated Powers and Regulatory Reform Committee of your Lordships’ House recommended that any future amendment of these thresholds should be subject to the affirmative, rather than the negative, parliamentary procedure. This means that there would need to be a parliamentary debate any time the Government sought to amend these thresholds.

The department rejected the committee’s recommendations because the powers are narrow in scope and the negative procedure would be consistent with similar amendment powers that already exist in the Charities Act 2011. However, we recognise the difference between the delegated powers in Clause 12 and the delegated powers in the other five clauses that were discussed in the report. The powers in Clause 12 vary the proportion of permanent endowment that may be borrowed and the period over which such borrowing must be repaid; the other delegated powers are concerned with amending monetary sums.

I can see how this amendment to change the parliamentary procedure from the negative to the affirmative for the thresholds in Clause 12 would work in principle, and I am grateful to the noble and learned Lord and the Committee as a whole for putting this suggestion forward. I thank noble Lords who have made the case for it again today and acknowledge the points they have made. I will take them away and consider them carefully, and I expect to return to this issue on Report but, for now, I invite the noble Lord, Lord Ponsonby, on behalf of the noble and learned Lord, Lord Etherton, to withdraw his amendment.

Amendment 3 withdrawn.

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[Lord Ponsonby of Shulbrede (Lab)]

My Lords, similarly, I will be reading out the comments that the noble and learned Lord, Lord Etherton, has supplied me with on Amendment 4.

Section 115(5) of the 2011 Act provides that, if authorisation of the Charity Commission is required to take charity proceedings and it is refused, leave to take proceedings may be obtained from a judge of the Chancery Division of the High Court. There is a problem, however, with obtaining a timely decision of the Charity Commission one way or the other, as no application may be made to the Chancery Division for leave until the Charity Commission has made a decision to refuse authorisation. The result of delay by the Charity Commission in making a decision is that there may be a lengthy period of uncertainty and enforced inactivity.

This amendment addresses that problem by imposing on the Charity Commission a time limit of 60 days for refusal of authorisation. This is a typical time limit under the provisions of the 2011 Act, such as Sections 270 and 271 on a resolution to transfer all the property of a charity to take effect at the end of the period of 60 days, unless the Charity Commission notifies the charity before the expiry of the 60 days that it objects to the resolution, and Sections 277 and 278 on a resolution to modify the purposes of the charity to take effect at the end of the period of 60 days, unless the Charity Commission notifies the charity before the expiry of the 60 days that it objects to the resolution. Under Clause 11(3) of the Bill, where there is a resolution to spend the endowment fund of a charity under Section 282 of the 2011 Act, the commission is to state within 60 days whether it concurs with the resolution or not. If it fails to do so, the fund or relevant portion of it can be expended free of the restrictions that would otherwise apply. I beg to move.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble and learned Lord, Lord Etherton, for his proposed amendment and again to the noble Lord, Lord Ponsonby, for speaking to it. It is important that we consider both the concern that the amendment seeks to address and the practicalities of implementing such a suggestion.

We are not currently aware of any particular issue with the amount of time taken by the Charity Commission to respond to applications to pursue charity proceedings. There was mention during the evidence sessions which the committee has heard of some perceived delays at the Charity Commission, but I do not think they were in relation to decisions under Section 115. If an issue were raised in relation to the time taken by the Charity Commission for these considerations, that could be looked at without the need for legislation, for example by looking at internal processes.

By way of background, requests for Section 115 charity proceedings are rare. The Charity Commission’s consideration of such requests is often complex, being different from that of other requests of the Charity Commission, which tend to be more transactional in nature. Charity proceedings relate to the internal or domestic affairs of a charity. There are a number of considerations in relation to such requests that the Charity Commission must resolve, as set out in its guidance. The Charity Commission has therefore raised concerns about the appropriateness of a statutory timescale.

To illustrate one such complexity, these applications do not always result in either a grant or refusal of consent. In order to protect charitable funds, the Charity Commission tries to see whether there are routes the charity can take to avoid going to court. This has previously led to the charity resolving the issue itself, or the Charity Commission using its powers, such as by making an order or providing an action plan to resolve the issue.

The need for Charity Commission permission is intended to protect charitable funds and the courts from claims that have no reasonable prospects of success or which could be addressed more appropriately in other ways. It is also important for the Charity Commission to be satisfied that it is in the best interests of the charity that the matter be adjudicated on by the court. For the most part, these cases relate to internal disputes. While these issues can be complex and involve a lot of information, they also typically relate to one charity and therefore have a low impact on the sector as a whole.

The issue with having a timescale imposed on the Charity Commission for a decision of this nature, when no equivalent timescales are imposed for other Charity Commission decisions, also means that resolving these requests may become a higher priority for the commission than other higher-risk or higher-impact work. This would not be conducive to the Charity Commission’s role as a regulator of the sector when taken in the round.

If after a certain time cases were automatically to proceed to court without the consent of the Charity Commission, we would be concerned about the potential for court time and costs being spent on unnecessary or meritless claims. There is also the issue of cases where the Charity Commission has not received enough information to make a decision, which often happens with such requests, and further information or advice may also be sought by the commission following legal referrals. We are therefore apprehensive about the implementation of the 60-day time limit proposed and would invite the noble Lord to withdraw this amendment too, but we have heard the points of concern which have been raised and will of course reflect further on them.

[Lord Ponsonby of Shulbrede (Lab)]

I thank the Minister for responding to the points that I read out on behalf of the noble and learned Lord. The gist of his response, as far as I understood it, was that he was not aware of any particular issues, and internal processes could be adapted to meet this problem. I too have spoken to the noble and learned Lord, Lord Etherton, in the past couple of days. He said to me that he thought it was self-evident that there was a problem. He will no doubt read the Minister’s response with interest and the various reasons for which the Charity Commission is resisting this amendment. If more evidence is readily available, I am sure he will bring it to the Minister’s attention. In the meantime, I beg leave to withdraw the amendment.

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[Lord Ponsonby of Shulbrede (Lab)]

I thank the noble Baroness for that clarification. I understand her point: she does not want a “never-ending prevarication”, to use her words. I will draw her question to the attention of the noble and learned Lord, Lord Etherton, so that he can respond to her.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I thank my noble friend Lord Hodgson of Astley Abbotts for tabling this amendment and the other noble Lords who put their names to it. As the Committee knows, when we responded to the Law Commission’s report in March the Government rejected the recommendation that the Charity Commission should be able to make a reference to the charity tribunal without first having to get consent from the Attorney-General.

Having noted the oral and written evidence taken by the Committee, we remain of the view that the Attorney-General’s consent function represents an important check in the system. As the noble Lord, Lord Ponsonby, noted, the evidence received by the Committee underlines the difference of opinion that exists among experts with regard to the Attorney-General’s consent requirement for references to the tribunal. This difference strengthened our conviction that the role of the Attorney-General as the constitutional protector of charities is important, and that this is a different role from the regulatory function of the Charity Commission. It is a mechanism that we feel must be protected.

I am grateful to my noble friend Lady Stowell of Beeston for her support for the Bill. Indeed, this is a Bill that she advocated during her time as chair of the Charity Commission. She is right to point to the excellent work it does in this important sector, but we see this mechanism as not an obstacle for the Charity Commission but rather a safeguard for it. The mechanism is already narrowly drawn, and a second opinion prior to the tribunal can help filter out claims that are not in the public interest before they burden the tribunal and, potentially, the charity in question if applicable to that case.

The Charity Commission may refer to the tribunal questions that have arisen in connection with the exercise of its functions which involve the operation of charity law or its application to a particular state of affairs. The requirement for the Attorney-General’s consent reinforces this approach.

The Charity Commission has an array of statutory functions, the vast majority of which it performs without the involvement of the Attorney-General. The two referrals that have been made to the tribunal followed close discussions between the Charity Commission and the Attorney-General, where both agreed that it was in the public interest to proceed. The Attorney-General’s consent function does not undermine the regulator’s role; rather, it supports and complements it by ensuring that referrals are made to the tribunal only where there is a clear public interest in doing so. That is why the Government cannot support the amendment and why I hope my noble friend will withdraw it.

I thank the noble and learned Lord, Lord Etherton, for his Amendment 6, which proposes a time limit of 60 days for the Attorney-General to make a decision on applications for references to the tribunal. Imposing a 60-day time limit on that decision to give or withhold consent is a suggestion that requires due consideration.

The perceived delay in the most recent case, on the Royal Albert Hall, was due to the particularly complex nature of that case, which can often be the nature of such references. The Royal Albert Hall case was a matter for the Charity Commission and the Attorney-General. The Government support the role of the Attorney-General in making references, given that the Attorney-General values the importance of charity and her role as protector of charities. I recognise the amount of time taken to reach a decision in that case, but it was a very complex issue, illustrated perhaps by the length at which my noble friend set it out. I am glad that the case has now been concluded, and the Attorney-General continues to be grateful for the excellent work the Charity Commission does in regulating charities in England and Wales.

[Baroness Barker (LD)]

I am sorry, but this is getting a bit Jarndyce v Jarndyce. That case has not been concluded. There has been no clarification on that point of charity law. That is the problem.

[Lord Parkinson of Whitley Bay (Con)]

I am sorry, I should have said that I am glad that the long saga to which my noble friend referred has come to an end, but these are complex issues. We do not think we should give too much prominence to one case, long and complex though it may be. We do not think we should look to legislate to remove what is an important check and balance in the system on the basis of the evidence from that unique case, but I have heard the points of concern raised by noble Lords not just today but throughout our consideration of this Bill. We will certainly take away Amendment 6 from the noble and learned Lord, Lord Etherton, to consider it further ahead of Report, but I repeat that I hope my noble friend Lord Hodgson will withdraw Amendment 5.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I thank the noble Baronesses, Lady Stowell and Lady Barker, for supporting my amendment and for their powerful interventions. I also thank the noble Lord, Lord Ponsonby. He spoke on behalf of the noble and learned Lord, Lord Etherton, who was kind enough to speak to me over the weekend about his proposal.

Somebody said that the art of the diplomat is to create ladders down which people can climb. With respect to the noble and learned Lord, it seems to me that the law’s gain has been diplomacy’s loss, because a very elegant ladder has been presented to us here. The Attorney-General preserves his power but he accepts restrictions to it of the sort described by the noble Lord, Lord Ponsonby; namely, the 60-day limit—we will possibly need some clarification on that along the lines of what my noble friend Lady Stowell referred to—and on the comprehensive statement referred to in the second part of Amendment 6. When the noble and learned Lord, Lord Etherton, and I discussed this, we noted that it was very important that “not in the public interest” could not be an explanation, because that took us back to where we are now. If the Minister accepts this, we will certainly want to explore with him exactly what a comprehensive statement would mean and how it would work.

I understand and think this is a very elegant mid-way, but it is half a loaf and not full-fat milk, if I may change the analogy. It does not address the central problem of a divided command and the fact that the Charity Commission is beholden to the Attorney-General. The Minister slightly reminds me of one of those subalterns on the Western Front in the First World War. He is in a very desperate position and has sent a message back to the chateau behind the lines saying, “It is pretty tricky out here.” They say, “No, no. You stay there and hold the position to the last man.”

I will pick up just a couple of the things the Minister said, but I will not detain the Committee long. He said that the issue of the Attorney-General did not really affect many of the commission’s objectives. That is not true. The commission’s objectives concern: first, public confidence, which is affected here; secondly, public benefit, which relates to the public schools case; thirdly, compliance, which relates to the Royal Albert Hall case; and, fourthly and fifthly, charitable authorities and accountability. I would argue that in at least three—possibly three and a half—of those, the Attorney-General would take an active interest in points referred to as a result.

I understand the second point about the Royal Albert Hall case being particularly complex, but every one of these cases will be complex. Cases on public schools, religion and poverty will be extremely complex and complicated. None of the things that will rise to the top in respect of the Charity Commission’s position will be easy, because they are difficult moral questions affecting all sorts of views about public values and the way our society operates. I therefore do not accept that the Royal Albert Hall case was particularly complex.

As the noble Baroness, Lady Barker, said, four and a half years in, we do not have a decision. Is it a conflict to profit from the management of an organisation of which you are a trustee and so profit from the decisions you make? Should that be allowed? Since April 2017, the Charity Commission has been waiting to resolve that and the Royal Albert Hall is sailing on unaffected. Maybe that is right and reflects what the tribunal would find, but surely we need to get this resolved, in fairness to the Charity Commission and the sector.

I have gone on long enough today. This is an issue which remains thoroughly unsatisfactory in every way. We are a small group here today and I am not a member of the committee. I will withdraw the amendment, but I serve notice to the Minister that I reserve the right to bring it back when we come to the next stage of the Bill. I also look forward to hearing further about what the Government propose to do in response to the amendment from the noble and learned Lord, Lord Etherton. I beg leave to withdraw the amendment.

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[Baroness Stowell of Beeston (Con)]

My Lords, I will speak briefly on this amendment. I am assuming I have understood it correctly—do not look at me like that, Lord Ponsonby! If I have, the amendment seeks to introduce a right of appeal to trustees, after they have arrived at a resolution on a decision. Under the proposals from the Law Commission, it requires that they go to the Charity Commission for formal approval or refusal. If I understand it, this amendment perpetuates the appeals process. That is in contrast to the Law Commission’s proposal, which is that, at the point that the approval is sought from the Charity Commission on a decision reached by the trustees, it is final. This introduces an extra level of appeal.

I offer a few thoughts on this because, quite often with smaller charities—we are talking about small amounts of money here—the underlying problem is a dispute between trustees. A lot of the commission’s time can be eaten up by disputes between trustees over quite small matters. The Law Commission was trying to remove that or force trustees, on these modest matters, to arrive at a decision on their own and take responsibility in the way they are required to and not, therefore, to allow an ongoing battle.

My fear is that if this appeal process is brought in, it would lend itself to those trustees who will never ever give up. That is why I caution against the amendment. I understand the intention behind it and it is of course well-intentioned, but it brings with it a burden that it might not have meant to. I counsel against it.

[Lord Parkinson of Whitley Bay (Con)]

I thank the noble and learned Lord, Lord Etherton, for tabling Amendment 7, the noble Lord, Lord Ponsonby, for moving it, and those who raised this issue in the written and oral evidence that the Committee heard. By way of background, new Section 280A will create a new power for unincorporated charities to amend any provision in their governing documents. This brings the amendment powers available for unincorporated charities more in line with those for incorporated charities, supporting the Bill’s policy to create greater consistency for different legal forms of charities. In a similar vein, charitable incorporated organisations and charitable companies both have the right to appeal a decision by the Charity Commission to give or withhold consent to a request to make a regulated alteration to their governing documents.

[Lord Bellingham (Con)]

The Minister talked about appeal to the Charity Commission. One of the matters the Committee looked at in some detail was the time it took for those appeals to get processed and transacted. He said that he would look at that matter and at some stage report back to the Committee on how he feels we could improve the whole process and speed it up.

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[Lord Parkinson of Whitley Bay (Con)]

I will come to that point.

In addition, new Section 280A repeals and replaces some sections that already carry a right of appeal in respect of Charity Commission decisions, namely Sections 268 and 265. It is therefore clear why the suggestion to give a similar appeal right to unincorporated charities has been put forward in respect of new Section 280A. However, making provision for a right of appeal for Charity Commission decisions under new Section 280A would, first, give unincorporated charities greater appeal rights than companies and charitable incorporated organisations as there are more types of regulated amendment and, secondly, expand unincorporated charities’ existing appeal rights under Schedule 6. Therefore, this is not a simple amendment to agree to and requires further consideration.

A different policy consideration is required for new Section 67A, inserted by Clause 7. Under new Section 67A, trustees will now be able to apply funds from a failed or surplus fundraising appeal for new purposes without Charity Commission consent unless the funds exceed £1,000. This modernises the regime and changes the nature of the Charity Commission’s jurisdiction in failed or surplus fundraising appeal cases.

In cases where Charity Commission consent is required, under this amendment an appeal to the tribunal would be possible if the commission refuses consent. Under the current framework, the commission may be asked to make a scheme to apply fundraising money for similar purposes. A decision not to make a scheme is not currently appealable to the tribunal.

Although it is appropriate for the commission to have a level of regulatory oversight for failed or surplus fundraising appeals being spent on different purposes, the context is different compared with the changing of a charity’s purposes. The general regulatory experience of the Charity Commission demonstrates that fundraising appeal cases are often contentious areas but lower risk in relation to the issues seen in the sector.

Internal charity disputes might occur where there is a disagreement over how money from a failed or surplus fundraising appeal should be used. As is often the case with disagreements, any result decided by the Charity Commission on how those funds should be used might result in one disgruntled party. Making a decision of the commission in relation to a trustees’ resolution under new Section 67A appealable to the tribunal might therefore open the commission up to challenge, time and cost in a way not commensurate to the benefit or risks. The most appropriate avenue of challenge in respect of these Charity Commission decisions might therefore be judicial review, which would be the default position if no new appeal right was listed in Schedule 6.

I would therefore like to take Amendment 7, in relation to the expansion of Schedule 6 appeal rights to cover new Sections 67A and 280A, away to give some more thought to the policy behind these proposed changes and their potential implications. I hope that, while we do, the noble Lord, Lord Ponsonby, will be willing to withdraw the amendment he moved on behalf of the noble and learned Lord, Lord Etherton.

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Moved by

[Lord Parkinson of Whitley Bay]

8: Clause 37, page 28, line 23, leave out subsection (1) and insert—
“(1) The Charities Act 2011 is amended as follows.(1A) In section 337 (other provisions as to orders of Commission)—”Member’s explanatory statement
This amendment is consequential upon the amendment at page 28, line 31.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I will speak to Amendments 8 to 12 in my name. I informed the Committee of these amendments at a private meeting on 20 October and wrote to the Committee following that meeting on 8 November. I will place a copy of that letter in the Library so that noble Lords who are not members of the Committee can see it.

I will speak first to Amendments 8 to 11, all of which are related. They make minor and technical changes to Sections 337 and 338 of the Charities Act 2011 to ensure that the policy intention of the Bill is achieved and that there is no misinterpretation of the law. Before this Committee started gathering evidence, the noble and learned Lord, Lord Etherton, met the Law Commission to discuss the Bill. During that meeting, he raised the issue that Amendments 8 to 11 address. We are grateful that he did so as it has enabled us to work with the Law Commission and the Charity Commission to bring forward these amendments to clarify the position.

Section 337 of the Charities Act 2011 currently gives the Charity Commission a discretionary power to give public notice or require public notice to be given when it makes an order under the Act. The Bill expands that discretionary power so that the Charity Commission can give public notice or require public notice to be given when it provides written consent under certain provisions of the Act. For example, where the Charity Commission is required to consent to the amendment of a charity’s purposes under new Section 280A, the Charity Commission could require the charity to give notice of its proposed change and invite comments from the public. The policy intention is that this public notice requirement may occur before the Charity Commission gives its consent so that it can consider any comments from the public when making its decision.

In its current form, the Bill does not make this as clear as it could be. Amendments 8 to 11 would make sure that this is expressed as clearly as possible. It is important to note that these amendments do not represent any change in the policy of the Bill or the Charities Act 2011; they are simply minor and technical clarifications to remove any chance of misinterpretation in these provisions. Once again, I am grateful to the noble and learned Lord, Lord Etherton, and the Committee for bringing this to our attention.

Amendment 12 would insert a new provision in Schedule 2 to the Bill, making a consequential amendment to the Cathedrals Measure 2021. That consequential amendment is considered appropriate as a result of the provisions in Clauses 10 and 12. Clause 10 makes changes to Section 282 of the Charities Act 2011, which allows charities to release permanent endowment, while Clause 12 creates a new power at Section 284A of that Act to allow charities to borrow from their permanent endowment, with thresholds set on the amount that can borrowed and the timeframe for paying those funds back.

We have been made aware that these provisions may circumvent the intentions of the Cathedrals Measure 2021, which was passed in April this year. That measure provides financial controls in relation to Church of England cathedrals and the funds held by such organisations. It also provides for cathedrals to be jointly regulated by the Church Commissioners and the Charity Commission. After seeing the provisions in the Charities Bill allowing charities to use their permanent endowment more flexibly, the Church Commissioners approached the Government and asked to make an amendment to place an additional safeguard in these two clauses on the use of these powers by Church of England cathedrals to resolve the potential inconsistency that would otherwise arise between the frameworks established in the two pieces of legislation.

Amendment 12 therefore provides that Church of England cathedrals must also seek the consent of the Church Commissioners when seeking to use the powers in relation to Clauses 10 and 12 to make use of their permanent endowment. As such, this amendment is in line with the wider arrangements already in place for the regulation of Church of England cathedrals’ funds, which includes the oversight of both the Charity Commission and the Church Commissioners. The Church of England has made it clear that it considers there to be advantages in maintaining the financial safeguards that were put in place by the Cathedrals Measure 2021, which sets out a regulatory framework that protects the valuable assets of Church of England cathedrals. We do not wish for the Charities Bill to undermine those safeguards.

I hope noble Lords will agree that Amendment 12 is appropriate to ensure consistency between the framework established by the Cathedrals Measure and that of wider charity law, and to ensure appropriate continued oversight in the regulation of Church of England cathedrals. I beg to move.

Amendment 8 agreed.

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Moved by

[Lord Parkinson of Whitley Bay]

9: Clause 37, page 28, line 24, at end insert—
“(a) after subsection (2) insert—“(2A) Where an application is made for an order under this Act or the Commission proposes to make such an order, the Commission—(a) may itself give such public notice as it thinks fit of the contents of the order applied for or proposed to be made, or(b) may require it to be given by—(i) any person making an application for the order, or(ii) any charity that would be affected by the order.”;”Member’s explanatory statement
This amendment makes provision for public notice of the contents of an order applied for or as proposed to be made, including provision enabling the Charity Commission to require another to give public notice.

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Moved by

[Lord Parkinson of Whitley Bay]

12: Schedule 2, page 36, line 18, at end insert—
“19A_ In section 24 of the Cathedrals Measure 2021 (No. 2) (investment powers, etc), after subsection (7) insert—“(7A) The members of the Chapter of a cathedral may not pass a resolution under—(a) section 282 of the Charities Act 2011 (resolution to spend larger fund), or(b) section 284A of that Act (power to borrow from permanent endowment),unless the Chapter has obtained the consent of the Church Commissioners.””Member’s explanatory statement
This amendment of the Cathedrals Measure 2021 relates to clauses 10 and 12 and requires a cathedral chapter to secure the consent of the Church Commissioners before resolving under section 282 to spend part of a larger endowment fund or under section 284A to borrow from permanent endowment, as a chapter must for similar matters under that Measure.

Channel 4: Consultation

Lord Parkinson of Whitley Bay Excerpts

Tuesday 16th November 2021 Lords Chamber

[Lord McNally (LD)]

My Lords, in the absence of my noble friend Lady Bonham-Carter, and at her request, I beg to move the Question standing in her name on the Order Paper.

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

My Lords, the consultation on the potential change in ownership of Channel 4 received around 60,000 responses. We are grateful for the public’s engagement on this matter and, indeed, for the response from the noble Baroness, Lady Bonham-Carter, and her Liberal Democrat colleagues. We are now working hard to analyse every response and to ensure that all evidence feeds into any final decision.

[Lord McNally (LD)]

My Lords, is there not a lot of evidence that the overwhelming response, particularly from those with individual or organisational experience of the collective creative industries, was to warn against the privatisation of Channel 4? Will the Minister publish the advice that the department has received and, once he has analysed and considered it, would it not be a good idea to drop this piece of ideological vandalism?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord is rather getting ahead of the process. No decision has been taken yet and we are carefully processing all the responses received. The consultation ran from 6 July to 14 September; as I said, it received around 60,000 responses, including more than 100 from the industry, all of which will be carefully analysed before any decisions are made.

[Lord Bassam of Brighton (Lab)]

My Lords, independent analysis from Ernst & Young, which explored potential business models and remits for a privatised Channel 4, suggested that any change could significantly reduce the organisation’s economic contribution in the supply chain, with the effects felt disproportionately north of the M25. The Government claim they want to level up, but time and again their action has knocked down the UK’s nations and regions, rather than giving them a boost. Can the Minister tell us what in-house analysis the Government are undertaking, and whether the Government’s findings are consistent with Ernst & Young’s? Will they publish their analysis along with the results of the consultation?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord mentions the work done by Ernst & Young. Our analysts, UKGI, and our corporate finance advisers, JP Morgan, take a different view and that is why we are taking a range of views on the suggestions. On the work that Channel 4 does across the United Kingdom, I say simply that Channel 4’s strengths in this regard are to be celebrated and maintained, and that is not at odds with private investment; in fact, Channel 4’s access to networks outside London and its ability to speak to such a diverse range of audiences are likely to be attractive assets to nurture and develop for any potential buyer, if that is the route we go down.

[Lord Birt (CB)]

My Lords, there is a meme of the moment that Channel 4 and, indeed, the BBC are being marginalised by the awesome economic power of Netflix. Does the Minister accept that Netflix’s programme proposition, though wholly admirable, bears no relationship whatever to the breadth of the public service propositions offered by both Channel 4 and the BBC? Moreover, will the Minister remind his department that in terms of hours of consumption per adult per week, far from being marginalised, the BBC enjoys six times the consumption of Netflix, and that Channel 4 is level-pegging?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord speaks with great experience of the sector. I am about the same age as Channel 4; the environment in which it was launched in 1982 was very different from the environment now. The Government should never stand still when it comes to ensuring the success of our public service broadcasters and the growth of competitors such as Netflix, as the noble Lord mentioned. That is why it is appropriate to reflect on Channel 4’s future and consider whether the current model gives it the best chance to succeed in the new environment as we seek to ensure that it is set up for success for decades to come.

[Baroness Fraser of Craigmaddie (Con)]

I declare an interest as a board member of Creative Scotland. For producers in Scotland, Channel 4 is a key buyer. Regional independent production companies have said very clearly that they believe that the privatisation of Channel 4 will cause great harm to their businesses. What evidence does the Minister have that they are wrong and what reassurances can he give them for their future?

[Lord Parkinson of Whitley Bay (Con)]

Channel 4’s access to networks outside London and its work with independent producers right across the UK are likely to be attractive assets that any potential buyer would nurture and develop. Whatever decision we take, however, will not compromise the Government’s commitment to the independent production industry. That is why we have consulted on these issues and are working through the responses to inform our decision-making.

[Lord Fowler (CB)]

I am grateful to the noble Lord, Lord McNally, and indeed to everyone else who has spoken so far. I gently point out that privatisation has often been to the benefit of the public and the organisations being privatised. In the first privatisations of the Thatcher years, in which I was involved, we achieved the first employee buyout of a major company and the ability of British companies, who were starved of cash, to get the resources necessary to expand. Surely the important challenge for the Government is for them to give an assurance that their priority is to develop Channel 4 rather than simply to raise money.

[Lord Parkinson of Whitley Bay (Con)]

I thank the noble Lord for that important point. Channel 4 is uniquely constrained in its ability to meet the challenges facing the media landscape today; in comparison with other public service broadcasters, its access to capital is highly constrained. That is why we are looking at reform to protect Channel 4’s long-term future, so that it can continue to be a valued public service broadcaster, serving audiences with great public service content for years to come.

[Lord Inglewood (Non-Afl)]

Does the Minister agree that Channel 4 is not just any old media company but rather a sui generis British institution established by Act of Parliament—a hub at the centre of networks reaching out deep into broadcasting and the digital world, the creative industries, skills, minorities, the regions, entrepreneurialism and culture?

[Lord Parkinson of Whitley Bay (Con)]

Yes, and Channel 4’s inherent characteristics are also its strengths: its ability to make distinctive content, its work with independent producers and, in turn, its ability to attract diverse audiences. However, those strengths are not at odds with private ownership. They are things that we think would be attractive to potential buyers, things that they would seek to nurture and strengthen. We do not think that there is a false choice between public service remit and privatisation. As the noble Lord, Lord Fowler, pointed out, it is possible to have both.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, Channel 4 is not everybody’s cup of tea, including, I suspect, many in the Conservative Party. Some also say that there is an overabundance of reality TV programmes. There were major faults with the subtitles, which are essential to certain viewers. However, does the Minister agree that the flagship Channel 4 news output, which goes out at 7 pm and is repeated at 8 pm, headed up by the veteran anchorman Jon Snow, the inimitable Matt Frei, the incomparable Krishnan Guru-Murthy and the professional Cathy Newman, is essential viewing for those who do not get home in time for the 6 o’clock news? Can the Minister use his undoubted influence to ensure that this essential contribution to cutting-edge journalism continues?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the Government want Channel 4 to succeed as a public service broadcaster, and all PSBs are required to broadcast news. They are regulated under Ofcom’s Broadcasting Code, which ensures that all the news is reported with due impartiality and accuracy. That would not change under private ownership. Our consultation document sets out our current view that Channel 4’s existing obligations relating to news and current affairs provision should be broadly retained in any potential reform.

[Lord Londesborough (CB)]

My Lords, for the sake of perhaps as little as £500 million, after you have netted off adviser and transaction fees, does the Minister feel that the risk/reward equation stacks up for privatising when we take into account the potential disruption to thousands of jobs, not just within Channel 4 but across hundreds of small independent producers spread across the country? I repeat the question: levelling up or levelling down?

[Lord Parkinson of Whitley Bay (Con)]

Again, the noble Lord slightly pre-empts our response to the consultation. A range of views have been made in it and that is why we held it. As I said previously, whatever decision we take will not compromise the Government’s commitment to the independent production sector and to the wider creative economy. I am glad to say that the independent production sector is now flourishing and increasingly less reliant on income from UK public service broadcasters, but these are the very issues that we are taking into account as we look at the consultation and the responses that we received.

Dormant Assets Bill [HL]

Lord Parkinson of Whitley Bay Excerpts

Report stage
Tuesday 16th November 2021 Lords Chamber

[Baroness Barker (LD)]

My Lords, when I initially heard about community wealth funds, I was rather sceptical, and I perhaps remain on the more sceptical end of the spectrum in your Lordships’ House. But during discussions on the Bill, I have become less sceptical about the idea, as the noble Lords, Lord Bassam of Brighton and Lord Hodgson of Astley Abbotts, have talked to me, along with the groups mentioned by the right reverend Prelate the Bishop of Ely.

Two things in particular have caused me to think again. The first is the experience of the pandemic and how everybody’s sense of locality and place has changed. I happen to live in south London, and one of the many things that got me through the toughest of times was discovering local parks that I had never come across before. Watching other people having to live their lives in a much more geographically restricted scope has made a new sense of place. I now understand —in a way that I perhaps did not before—that being able to appreciate and develop your community space will be a very important part of people’s physical, economic and mental well-being in future.

The second reason why I have changed my mind is this. The noble Baroness gave a long list of community initiatives that have flowed out over the past 30 years, many of them from the National Lottery, the new deal for communities and so on. Pretty much all of them were the release of resources into a community, with varying degrees of restriction on how they could be spent—but they were resources to be spent in poor communities.

This is about something different. It is about an investment fund that has to generate wealth within those communities. To do that, the people who will be managing it locally will have to learn and display economic development skills themselves. That is a different proposal from the ones before. The noble Baroness is right that, as we move through a huge period of economic change—green development and the green economy—if we get away from the old idea of development solely in buildings and talk about investment in economic skills and new jobs, managed in a much more local way, that has the potential to be different.

The noble Lord, Lord Hodgson of Astley Abbotts, was absolutely right: we had to grab a passing Bill and shove something on to it. But the very purpose of this Bill is to take assets that are lying dormant and put them into communities where people are financially excluded, do not have business skills or need some help with the generation of wealth and well-being. This is about doing that with people in their community, not yet another building. So I have changed my mind and think this is something different, and therefore I now think it is worthy of support.

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

My Lords, I thank the noble Lord, Lord Bassam of Brighton, the noble Baroness, Lady Kramer, the right reverend Prelate the Bishop of Newcastle, and my noble friend Lord Hodgson of Astley Abbotts for tabling this amendment relating to community wealth funds. I am also grateful to the right reverend Prelate the Bishop of Ely, who spoke on behalf of his right reverend friend, who, as he explained, has made her valedictory speech to your Lordships’ House and is therefore unable to speak today. I offer my best wishes to her as she leaves your Lordships’ House for a well-earned retirement and thank her for her contributions, both here in your Lordships’ House and across the diocese; it is one I hold particularly dear, having been baptised in it and having many relatives who live there still. I know that she will be much missed, but we are delighted that, through the apostolic succession, the right reverend prelate the Bishop of Ely was able to speak for her today.

I hope that, during my remarks, I can reassure all noble Lords who have spoken that it is already possible for community wealth funds to be a named cause in an order made under Section 18A, and that I can demonstrate why this amendment, even in its semi-skimmed form—if that is the evolution from the full-fat version to which the noble Lord, Lord Bassam, alluded earlier—is still unnecessary.

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[Baroness Barker (LD)]

My Lords, I will just add two points to the very convincing case made by noble friend Lady Kramer. First, the Minister knows from all our discussions that we on these Benches have concerns about the loose nature of this scheme and the somewhat loose definition of its purposes. Therefore, it remains a concern that it is a not insignificant pot of money that can be very easily diverted. Part of what we are trying to do this afternoon, in a number of different ways, is to bring this scheme under a much tighter definition and close loopholes.

Secondly, we listened very carefully to the noble Baroness, Lady Barran, and the noble Lord himself, when we had discussions. They explained to us, in particular, that the new purposes under the Bill—financial inclusion and the very ambitious programme that Fair4All Finance has of putting loan sharks out of business—might necessitate the sorts of skills that are not commonly found within the social enterprise or charitable sector. It might require there to be companies in forms that are not usually found within the social enterprise sector, either. So I would like the Minister to acknowledge, in dealing with this amendment, that it is specifically that part of the scheme which has caused us to move. We are not talking about private companies entering into the other parts of the Bill, to my mind—unless he can make a case for them to do so.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Baronesses for their amendment and for their vigilance and scrutiny in this area. I am grateful also for their time the other day, when we had a helpful discussion.

Amendment 2 concerns the direction of the English portion of dormant assets funding and seeks to ensure that money cannot be used purely for profit but must have public good at its heart. It is already enshrined in primary legislation that dormant assets funding must be distributed to initiatives with a social or environmental purpose. This is a clear and core function of the scheme and it remains unchanged in the Bill. The Government of course agree that private profit is not the purpose of the dormant assets scheme.

The noble Baronesses’ concerns, as expressed in the amendment and their contributions today, relate to the scheme’s current support for social investment. As I mentioned in the debate on the previous group, dormant assets funding has provided £465 million to Big Society Capital and Access over the last 10 years. During that time, social impact investing in the UK has grown almost eightfold, increasing from £830 million in 2011 to £6.4 billion now, thanks in large part to those two organisations. It is largely by leveraging private capital alongside dormant assets that the market has been able to expand in this way, providing the voluntary, community, and social enterprise sector with access to billions of pounds of investment.

To give an example, dormant assets funding enabled Big Society Capital to invest £6 million in the Fair By Design fund, which aims to eradicate the poverty premium by 2028. Fair By Design invests in several initiatives, including some businesses with considerable impact which provide services in sectors such as energy, insurance, borrowing, transport and food, to support over 340,000 people across the country. Its work has helped those people collectively to save £12 million per year on goods and services for which they were previously paying more than those who were financially better off. The scheme advances important opportunities such as this for collaborating with the private sector and civil society organisations to amplify its impact, within the boundaries of governance structures which ensure that the money is managed appropriately.

I hope I can reassure noble Lords that robust systems are in place to ensure that the money funds projects delivered by organisations that prioritise impact. As a registered charity itself, Access employs strict eligibility criteria for its funding, which ensures that money flows only to those social enterprises and charities that it was created to support. Similarly, £2.5 billion from Big Society Capital and its co-investors is being used to support over 1,500 social enterprises and charities across the country. Both organisations apply layers of due diligence to ensure that the intermediary fund managers with whom they work also have impact embedded in their approaches. Fund managers applying for Big Society Capital funding are required to present a social impact plan during the due diligence process, and Access requires its funds to be held in finance structures that cannot be used commercially.

As these existing structures have operated effectively over the past decade, we do not consider it necessary to place in primary legislation a requirement such as that proposed by Amendment 2, though we understand the concerns the noble Baronesses had and the vigilance which led them to table it. The scheme already ensures that funds go towards organisations with the overall aim of delivering public good, and we will ensure that this continues to be the case.

Ultimately, it remains the Government’s priority to afford people the opportunity to have a say in how funds are distributed in the country, including whether social investment should remain a priority. That is why we have committed to a public consultation to welcome wide-ranging views on how these funds can best have an impact on social and environmental priorities in England. Those are the reasons we cannot accept the amendment, and I hope that the noble Baroness will be satisfied to withdraw it.

[Baroness Kramer (LD)]

My Lords, I am glad to have raised the issue and I will be withdrawing the amendment, but I hope very much that the point that I have made will carry through into the Government’s thinking, because this is a constantly changing field. As the Minister knows, with mission-focused companies there is nothing to say that they cannot pay their directors what they like; they can pay what salaries they like and make what returns they like to their core investors. We very much hope that in the reporting requirements that he will talk about later there will be real clarity around this issue. He can expect to find quite a number of Written Questions asking him to detail those kinds of benchmarks, so that we understand what is actually happening with this dormant assets fund. I beg leave to withdraw the amendment.

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Moved by

[Lord Parkinson of Whitley Bay]

3: Clause 29, page 22, leave out lines 17 to 20 and insert “—
(a) carry out a public consultation about the purposes for which, or the kinds of person to which, the money apportioned under section 17 for meeting English expenditure should be distributed, and(b) consult the Big Lottery Fund about a draft of the order.”Member’s explanatory statement
The amendment would have the effect of adding to 18A(3) of the Dormant Bank and Building Society Accounts Act 2008 (as inserted by Clause 29) a new duty to carry out a public consultation before making a section 18A(1) order, in place of the duty in the current section 18A(3)(b). The consultation would relate to what, or who, should be supported by dormant assets money distributed in England.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, a number of noble Lords tabled and signed amendments in Committee which sought to broaden the range of consultees listed in Clause 29 of the Bill, which I believe remains the primary intention of this group of amendments. We share the view about the importance of considering how dormant assets funding can be used most effectively, and we are keen to get a wide range of views to help shape our position, as I said in previous debates. That is why we have consistently committed to launching a public consultation on the social or environmental focus of the English portion of funding before the first order is laid under Clause 29.

In response to the multiple calls which have been made in your Lordships’ House, we are happy to formalise this commitment in legislation. Amendment 3, in my name, therefore makes a public consultation a requirement before any changes can be made to the focus of the English portion of funds now or in the future. I thank the noble Lord, Lord Bassam of Brighton, for adding his name and the support of Her Majesty’s Opposition to our amendment.

Amendment 3 takes the broadest and most inclusive approach to ensuring that the scheme benefits the most pressing social or environmental priorities in England. The Government plan to launch the first of these consultations after the Bill receives Royal Assent and are happy to commit to this lasting at least 12 weeks. Our amendment requires the Secretary of State to consult the National Lottery Community Fund, as the named distributor of dormant assets funding, about a draft of this order. The order would then be subject to the scrutiny of both Houses through the draft affirmative procedure. I beg to move.

[Lord Bassam of Brighton (Lab)]

My Lords, I am speaking on behalf of my noble friend Lady Merron, who signed Amendment 4 but is unable to participate in today’s debate. I should explain that one of our concerns has been a lack of clarity around future consultation. We have already had some discussion this afternoon about consultation, and, of course, it was raised by a number of colleagues during the Bill’s Second Reading and featured fairly heavily during the debates in Grand Committee.

On the face of it, we do not really understand why Amendment 4, which lists a variety of topics and proposed participants, is not acceptable to the Government, but we are nevertheless grateful to the Minister for tabling Amendment 3. For that reason, I agreed to co-sign it on behalf of our Benches. That amendment ensures that there will have to be a full public consultation, as the noble Lord, Lord Parkinson, has already described, which will have to take place before uses for dormant assets funds are determined in regulations.

I am grateful to my noble friend Lady Lister of Burtersett for tabling Amendment 5, which seeks to ensure that future consultations include consideration of the merits of establishing community wealth funds. This is a good addition, and we hope that the Minister can address this point explicitly in his response—not least, of course, because we have passed and supported the community wealth fund amendment this afternoon.

I am therefore looking for further reassurance from the Minister that the public consultation will be run in accordance with Cabinet Office best practice, including the Secretary of State being proactive when engaging with charities and social enterprises, rather than merely posting a notice online. We are satisfied by the Government’s amendment, but we would like to see them go further. I guess that our amendment is inviting them to flesh out exactly how they see this working in some more detail.

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[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have put my name to Amendment 5 in the name of the noble Baroness, Lady Lister. I was reassured by my noble friend’s introductory speech and the deal that has been hacked out between him and the noble Lord, Lord Bassam of Brighton. The noble Baroness, Lady Kramer, has, in part, shot my fox because I wanted to talk about the usual suspects, which she referred to. That is the danger, although I say to the signatories to Amendment 4 that it looks to me like a pretty good list of usual suspects in that amendment. I was not sure that we were not just going back down the track that we were trying to avoid going down.

My reason for supporting the amendment in the name of the noble Baroness, Lady Lister, was to make sure that we would make a big effort to get down to the smaller organisations, which often had unique insights into the problems of a particular area. From my point of view, I rather doubt whether that goes well into legislation, but it is the sort of area where a good strong ministerial Statement, given on the Floor, would reassure a lot of us that there will be words that we can go back to if the consultation does not reach as far, as deep and as wide as some of us think it should.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I thank noble Lords for their recognition of the action the Government have taken on this, even if it is conditional at the outset. I am grateful to the noble Baronesses, Lady Kramer, Lady Merron and Lady Lister of Burtersett, for the important issues they have raised in tabling Amendment 4. I thank the noble Baroness, Lady Lister, my noble friend Lord Hodgson, and the noble Lord, Lord Blunkett, for Amendment 5.

We have had a good debate, both in Committee and again today, and I welcome the support shown for securing the widest possible input into determining the future spending priorities for England. I share the desire raised by noble Lords to ensure that the public, beneficiaries, both Houses of Parliament, social enterprises and charities can have their say on the future focus of dormant assets funding; although I disagree about the means and submit that Amendment 3 is a better way to achieve this, we all share the same intent.

As my noble friend and predecessor Lady Barran outlined in Committee, it is our position that everybody who is interested, rather than a collection of predetermined or specified stakeholders, should be consulted. That is why we have chosen to take the broadest approach available in Amendment 3, and why we believe that Amendment 4 is not as inclusive.

Dormant assets funding is not government money; it originates from individuals who have lost or forgotten about their asset and is voluntarily transferred into the scheme by responsible industry participants who, despite their best efforts, have not been able to reunite those moneys with their owners. The scheme is a unique example of collaboration between the public, private and civil society sectors, responding to the imperative to put forgotten money to better use, rather than letting it gather dust in inactive accounts. Because of the wide range of organisations and individuals that are potentially affected by the scheme, we want to avoid at all costs making further specifications in this clause which could imply that certain groups are more important than others that it might be equally appropriate to consult.

The government amendment is sufficiently broad and, in line with common practice, parliamentary committees will continue to be able to consider relevant issues as they see fit in the future. That is why we do not think it is appropriate or necessary explicitly to name parliamentary committees as a consultee. However, we are happy to commit on the record to engaging with relevant and interested parliamentary committees for the first consultation.

As noble Lords have highlighted, the social and environmental focus of the English portion is a significant and important question. The Government agree that the consultation must be open for a proportionate amount of time to allow for considered and good-quality responses. That is why I am happy to place on the record our commitment that the first consultation under this section will last for at least 12 weeks. I am grateful to the noble Baroness, Lady Lister, and others for their appreciation of that.

I also reassure noble Lords that our intention is to consult widely, taking care to welcome local community voices into the discussion to ensure that we capture as many views as we can, as the noble Baroness, Lady Kramer, my noble friend Lord Hodgson and others rightly pressed.

The Government will continue to consider the most appropriate length of future consultations, in line with Cabinet Office guidance. I hope that our previous conduct in this area has proven we take that seriously and are committed to ensuring fair and open consultations on the dormant assets scheme. The 2020 consultation on its expansion, for example, was extended from 12 to 21 weeks, as requested by voices in the industry in response to the Covid-19 pandemic, to ensure that everybody had the time to contribute meaningfully. I am pleased to say that that was very successful: we received 89 responses, representing over 500 organisations and individuals, which informed the development of this legislation. Given the range of interested parties involved and the complexity of the policy area, we will always ensure that a proportionate length of time is provided for consultation. In order to preserve the integrity and protect the impact of the scheme, we also do not anticipate changing the causes regularly.

The consultation would seek views on what social or environmental causes should be supported with dormant assets funding in England. However, we do not think it is appropriate to specify the scope and content of the consultation in primary legislation, including the extent to which the scheme is meeting some of its underlying policy objectives or what additional assets or operational changes would improve its performance. We believe it would be most appropriate and effective to consider those as part of Amendment 7. We therefore do not support combining aspects of this equally important work with the duty to consult, particularly as the latter relates only to England.

Our commitment to an open, fair and inclusive consultation is also the reason why we cannot accept Amendment 5, from the noble Baroness, Lady Lister, which seeks to require the Government to consult on community wealth funds every time an order on English expenditure is considered. I am conscious that we went into a more detailed discussion of the community wealth fund model in our debate on Amendment 1. Even if I did not convince your Lordships’ House not to support that amendment, I hope I convinced noble Lords that the Government are by no means against the proposals for community wealth funds but maintain that putting them in the Bill, and in the case of this amendment legislating for them to be consulted on every time an order was considered, would be inappropriate.

[Baroness Lister of Burtersett (Lab)]

I am conscious that the Minister has said “every time” every time. Could he give the commitment on the record that the noble Lord, Lord Hodgson, was looking for: that the first time—that is, in the first consultation—the Government will give serious consideration to including a reference to community wealth funds and an explanation of what they are?

[Lord Parkinson of Whitley Bay (Con)]

The noble Baroness has anticipated my next remarks: I was going to reiterate the commitment given by my noble friend Lady Barran in Committee that the Government will consider including community wealth funds in the first consultation launched under Clause 29. I have already noted that the Government are considering the community wealth fund model as part of the wider development of the levelling-up White Paper. As the work on that is ongoing, now is not the right time to commit to any particular source of funding to be associated with the proposals, but we will continue to look into this matter. As I committed earlier today, the Government will ensure that the consultation provides the opportunity for people to respond with their view, including advocates of community wealth funds and those who think that is their preferred course of action.

For these reasons, the Government feel that our amendments to bolster the consultation requirements and to introduce a separate review and reporting requirement better accomplish our joint aspiration to secure the scheme’s success. I believe that Amendment 3, which I am pleased to say has cross-party support, strengthens the Bill and addresses the House’s desire that any consultation on the use of future dormant assets funding in England must not be restricted to a limited number of perspectives.

In the light of that, I hope the noble Baronesses, Lady Kramer and Lady Lister, will be content with what we have proposed in our amendments and the assurances that I have given today and so may be minded not to press their amendments. With thanks again to the noble Lord, Lord Bassam, for putting his name to it, I commend Amendment 3 to the House.

Amendment 3 agreed.

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[Baroness Barker (LD)]

My Lords, I wish to add two points to those made by my noble friend Lady Kramer. It is right that in the next government amendment there is reference to a report and the additionality principle being included in that report. The reason why we drafted this amendment in the way we did was the requirement for the Secretary of State to certify the matter. One of the criticisms that was initially made of this Bill by the Delegated Powers Committee was the number of Henry VIII powers being assumed by the Minister.

The second reason is that the next government amendment refers to:

“Periodic review and report to Parliament”.


It does not say what those periods should be. Therefore, we are trying to deal with exactly the sort of scenario outlined by my noble friend Lady Kramer, where the Government suddenly dip into this back pocket of money and start to use it. That is the reason why it is there and why we think it is so important.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Baronesses, Lady Kramer and Lady Barker, for tabling Amendment 6 on the additionality principle. I also thank the noble Baronesses for their time in the productive discussion that we had on this issue. I hope that during the course of my remarks I can reassure them and other noble Lords that the intentions of this amendment are sufficiently covered both in the 2008 Act and through the Government’s Amendment 7, to which the noble Baroness, Lady Barker, just alluded.

The principle of additionality has successfully under- pinned the scheme since its inception and will continue to be a core principle of its distribution across the UK. In line with the proposed wording in Amendment 6, the 2008 Act already describes additionality as the

“principle that dormant account money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by … a Government department”

or devolved Administration. Therefore, the principle as defined by this amendment is already enshrined in legislation.

[Baroness Kramer (LD)]

Can I just ask for some clarification? Does not that responsibility apply only to the one distributive entity—to the Big Lottery Fund, or whatever it is called—and very conspicuously not to any other distribution sources or to the Secretary of State?

[Lord Parkinson of Whitley Bay (Con)]

Without having the 2008 Act in front of me as well as the Bill, I am afraid that I may not be able to give the noble Baroness the speedy response that she seeks.

I shall address the point that she also raised—while seeking an answer, if I can give her a definitive answer now—about the £150 million that was released last June. As she noted, the scheme released £150 million of dormant assets funding to support the response to the Covid-19 pandemic and recovery across England. That was distributed by the four spend organisations in line with the 2008 Act. In this instance, it is important to note that the funding was entirely separate from the UK-wide charity support package of £750 million, which was announced in April 2020.

[Baroness Kramer (LD)]

The reference is in Schedule 3 to the 2008 Act—on page 24—under Part 3, headed “Reports and Accounts”, where it says in paragraph 9(3), in relation to the Big Lottery Fund:

“The report shall set out the Fund’s policy and practice in relation to the principle that dormant account money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by”—


and then it lists

“a Government department … the Welsh Ministers … the Scottish Ministers, or … a Northern Ireland department”.

That does not appear to apply to anything other than the Big Lottery Fund. When the 2008 Act went through, the only distribution entity was the Big Lottery Fund. There are now three others, and the new Bill anticipates potentially creating more distributors, whose responsibilities will be directed by the Secretary of State.

I fully accept that, in the original concept and structure of the Act, additionality was a fundamental underlying principle. That does not appear to have carried over into the expansion that is embedded in the new Bill. That is my concern.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Baroness for that, and I hope that what I go on to say will address that point. If there is a change in distributor or an additional distributor is established, there are already powers in the 2008 Act to amend the legislation to ensure that any new or additional distributor must similarly report on their policy and practice in relation to the additionality principle. The noble Baroness is very welcome to intervene again, if I have not addressed her point.

The question to consider is not about the definition of additionality but where the accountability for that principle should lie. We fully support all the points raised in Committee regarding the fundamental importance of ensuring that the principle is adhered to, but we believe that how the 2008 Act positions the additionality principle, plus the new provisions in government Amendment 7, is the right approach to ensuring this and I welcome the opportunity to clarify why.

The Labour Government which brought in the 2008 legislation ensured that the accountability for the additionality principle lies with the named distributor responsible for all the funds across the UK, rather than the Secretary of State. This Government agree that it remains the most appropriate place for its inclusion in primary legislation. As we outlined in Committee, Schedule 3 to the 2008 Act requires the National Lottery Community Fund, the current distributor of dormant assets funding across the UK, to set out in its annual report its policy and practice in relation to the additionality principle. These reports must be laid before Parliament, and this Bill does not change that requirement. In fact, Amendment 7, to which we will come in a moment, seeks to bolster this further by requiring additionality to be included in periodic reports of the scheme’s effectiveness, as the noble Baroness, Lady Barker, noted. Your Lordships’ House will continue to have the opportunity to scrutinise how the National Lottery Community Fund approaches this in practice. This will ensure that funding continues to be directed to causes which fulfil the scheme’s objectives while being additional to central or devolved government funds.

As has been noted, the principle as it stands is critical to the scheme’s success, and our partners in industry have made it clear that their participation is reliant on it. As this is not central government funding, and as the Government have limited control over only the English portion, it is appropriate that the primary accountability for the principle should sit with the UK-wide distributor of the funding and its accounting officer—namely, the National Lottery Community Fund. Indeed, the fund is well versed in making this assessment, as an additionality principle also applies to its other portfolio of funds. To date, there has never been a breach of this principle of which the Government are aware.

We feel there is no evidence that the principle needs to be altered, and we believe the current approach is serving the scheme well. It has been upheld for 10 years, and we do not think it necessary or desirable to significantly change a demonstrably successful approach.

[Baroness Kramer (LD)]

Is the Minister saying he is making a commitment from the Floor that, when additional distributors are added—and this Bill contemplates that —they will be put under the same additionality requirement as the Big Lottery Fund?

[Lord Parkinson of Whitley Bay (Con)]

The commitment is already made in the 2008 Act. If there is a change in distributor, or if an additional distributor is established— and I should stress that there are currently no plans for that—there are already powers in the 2008 Act to amend the legislation to ensure that any new or additional distributor must similarly report on their policy and practice in relation to the additionality principle.

However, we have responded to the noble Baroness’s desire to see the Secretary of State more specifically held accountable to the principle, and we have reinforced its importance even further by including it within Amendment 7, which we will come on to shortly, on reviewing the scheme and reporting to Parliament. The noble Baroness, Lady Barker, said in Committee:

“We must also be able to work out from all the reporting that we do get to see that the principle of additionality is being adhered to.”—[Official Report, 21/6/21; col. GC 9.]

We thoroughly agree, which is why our Amendment 7 will ensure that the report must include any policies and practices of the principle by the Secretary of State as well as the National Lottery Community Fund. This provision responds to requests made by noble Lords that the Secretary of State should be held more expressly accountable for ensuring that and explaining how dormant assets funding is used in ways that are genuinely additional to central Government expenditure. This demonstrates our ongoing commitment to ensuring that the principle continues to be honoured, including the ways in which funding flows to distributing bodies and on to beneficiaries.

That is why we cannot accept the amendment. I hope I have reassured the noble Baronesses that we understand their concerns, and that is why we have brought forward the additionality provision in our review and reporting amendment, Amendment 7. I can see the noble Baroness is rightly consulting the 2008 Act for the references to it. I hope on that basis she will be content with what we have proposed and content to withdraw her amendment.

[Baroness Barker (LD)]

My Lords, I thank the Minister for the attention he has given to this, but I will pick him up on one issue. A power to do something is only a power; it is not an undertaking that the thing will be done. I do not think he has spelled out, as I hoped he would, how exactly the Secretary of State would be reviewing the additionality and demonstrating the additionality. It may be that he is going to come on to that under Amendment 7. But it seems to me that it is only the Secretary of State who can determine whether something is additional or not, because only the Secretary of State can have full knowledge of what the Government’s overall intentions were. I think this is important. I think we have had the example my noble friend talked about, and I would therefore like to test the opinion of the House.

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Moved by

[Lord Parkinson of Whitley Bay]

7: After Clause 29, insert the following new Clause—
“Periodic review and report to Parliament
(1) The Secretary of State must carry out periodic reviews of the following matters—(a) the operation of the dormant assets scheme and the alternative scheme under section 2 of the 2008 Act during the period to which the review relates;(b) the effectiveness of the steps taken during that period (by institutions holding or providing assets within the scope of the dormant assets scheme or the alternative scheme) to reunite assets with their owners;(c) any use made of the powers conferred by section 19 during that period;(d) any use that may be made of those powers after that period.(2) In reviewing the matters described in subsection (1)(a) the Secretary of State must consider—(a) how many institutions have made transfers;(b) how much money has been transferred;(c) the effectiveness of the arrangements made with institutions for meeting repayment claims.(3) The steps referred to in subsection (1)(b) include anything done with a view to tracing, and verifying the identity of, either (or both) of the following, in relation to a particular asset—(a) the person whose right to payment (or right to direct payment) is or would be extinguished by a transfer;(b) where the asset is the proceeds of another asset, the owner or beneficiary of that other asset (before its conversion into proceeds).(4) In subsections (2) and (3)— “transfer” means a transfer of an amount to an authorised reclaim fund as mentioned in section 1(1)(a) or 2(1)(a) of the 2008 Act or section 2(1)(a), 5(1)(a), 8(1)(a), 12(1)(a) or 14(1)(a) above;“repayment claim” means a claim against an authorised reclaim fund relating to a right to payment arising as mentioned in section 1(2)(b) or 2(2)(b) of the 2008 Act or section 2(2)(b), 5(2)(b) or (3)(b), 8(2)(b), 12(2)(b) or 14(2)(b) above. (5) The matters within the scope of a review do not include the regulation by the Financial Conduct Authority of an authorised reclaim fund or any other institution.(6) The Secretary of State must—(a) make arrangements to enable anyone with an interest in any aspect of a review to make representations,(b) consider all representations received, and(c) set out the results and conclusions of the review in a report and lay it before Parliament.(7) The report of a review must also include—(a) information about the uses made by any authorised reclaim fund of its financial resources during such period as the Secretary of State considers appropriate,(b) information about the uses made of dormant assets money for meeting English expenditure during such period as the Secretary of State considers appropriate,(c) the text of any directions given by the Secretary of State under section 22 of the 2008 Act which have effect during the period mentioned in paragraph (b), and(d) information about any policy and practice in relation to the additionality principle of—(i) the body or bodies specified in section 16(1) of the 2008 Act, and(ii) the Secretary of State, in exercising functions under Part 2 of that Act.(8) The report of a review may include information about the uses made of dormant assets money for meeting Welsh expenditure, Scottish expenditure or Northern Ireland expenditure during such period as the Secretary of State considers appropriate.(9) In this section—(a) “the additionality principle” is the principle that dormant assets money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by a government department, the Welsh Ministers, the Scottish Ministers or a Northern Ireland department;(b) “dormant assets money”, “English expenditure”, “Northern Ireland expenditure”, “Scottish expenditure” and “Welsh expenditure” have the same meaning as in Part 2 of the 2008 Act.(10) The first report under this section must be laid no more than 3 years after the day on which this Act is passed.(11) Any subsequent report must be laid no more than 5 years after the day on which the previous report was laid.”Member’s explanatory statement
The amendment would require periodic reviews of the dormant assets scheme and the alternative scheme, with a report to Parliament on the results. A report would include certain additional information, on matters such as the expenditure of the reclaim fund, and the use made of dormant assets money, and the additionality principle, in England. Information about use of dormant asset money in the rest of the UK would be optional. For practical reasons information included about the use of dormant assets money, or the additionality principle in England, is likely to be information publicly available elsewhere.

[Lord Parkinson of Whitley Bay (Con)]

I thank noble Lords for their amendments in this area and for the issues raised in Committee and during meetings with me and my predecessor, my noble friend Lady Barran. We have carefully considered the different concerns raised about the need for the dormant assets scheme to be periodically reviewed and reported on to Parliament. We have both heard the strength of feeling about the importance of transparency, and welcome and echo the enthusiasm for maintaining momentum beyond this phase of expansion.

That is why the Government have brought forward Amendment 7, as many noble Lords invited us to do in Committee, which would require the Secretary of State to review and report on various aspects of the scheme on an ongoing basis. I again thank the noble Lord, Lord Bassam of Brighton, for adding his name to it.

Our amendment mirrors Section 14 of the 2008 Act, which some amendments tabled in Committee also sought to replicate. It goes further, however, responding to noble Lords’ calls for maintaining momentum for further scheme expansion, greater transparency over the use of funds as well as reporting on how the principle of additionality has been met. We heard in the debate on the last amendment about the importance of ensuring that this principle flows through to not only the National Lottery Community Fund but any new or additional distributors, were there to be any. To clarify, the National Lottery Community Fund is the only named distributor, and the four independent organisations receive funding from it rather than being named distributors themselves under the Act.

I would also like to draw noble Lords’ attention to the very deliberate phrasing of subsection (7)(d)(i) of our Amendment 7, which refers to any distributor or distributors named in Section 16(1) of the 2008 Act. We have done that, rather than specify the National Lottery Community Fund, so that in the event that a distributor is changed—which Section 24 of the 2008 Act allows the Secretary of State to do as well as allowing them to make consequential amendments to Schedule 3 to ensure that the principle of additionality similarly applies—this would ensure that it is still covered by our Amendment 7.

Amendment 7 will require the Secretary of State to carry out periodic reviews of specified matters, including the operation of the scheme from transfer to reclaim; the effectiveness of tracing and reunification efforts by scheme participants; and any efforts to expand it to include new dormant assets. The amendment will require the results of the review to be laid in a report before Parliament within three years of the Bill receiving Royal Assent and every five years thereafter. This is in line with Amendment 8 in the name of the noble Lord, Lord Bassam of Brighton.

In Committee, my noble friend Lady Barran explained that a number of mechanisms for reviewing and reporting on various aspects of the scheme already exist. We agree, however, with the helpful suggestion of the noble and learned Lord, Lord Etherton, that it is sensible to bring these together in one place. Therefore, Amendment 7 also requires the report laid before Parliament to include information about the uses of dormant assets money, including the principle of additionality. This will build on reports already published by Reclaim Fund Ltd and work done by the National Lottery Community Fund and, currently, the Oversight Trust, which oversees the four existing distribution organisations, to assess the scheme’s impact.

I hope that this amendment provides reassurance that the Government are committed to ensuring the ongoing success of the scheme and reflects a number of the helpful suggestions that noble Lords have made in our debates on the Bill hitherto. I beg to move.

[Lord Bassam of Brighton (Lab)]

My Lords, I should first say that our amendment, signed by me and the noble Baroness, Lady Bowles, was an attempt to combine different aspects of previous amendments into a single text. The result is, as noble Lords can see, a fairly lengthy shopping list. The thing about shopping lists is that something is always forgotten; something always falls off the end. That makes their operability in legislation perhaps less than perfect.

We envisaged, in construct, that the amendment would cover what had happened during the relevant period and whether the funding was delivering on the scheme’s priorities. So, we are grateful—I am certainly very grateful—to the Minister for his constructive approach to discussions since taking up his post. I believe that Amendment 7 represents a fair compromise. I think the Minister has said the reports will combine information that was already available from other sources —annual reports et cetera—but also require the Secretary of State to go somewhat further, including by giving information on whether and how the additionality principle has been adhered to. We have heard in earlier debates how important that is.

We hoped to gain more from the Government, including more concrete data on the contribution that funds make to people and communities subject to high levels of deprivation and inequality, but I am sure that there will be further consideration of such issues in the other place, and perhaps in our debates here as well, as this legislation kicks in. I am impressed with the approach the Government have taken, and they have certainly listened to our Committee considerations, taking on board the core of what we are after. Nothing is ever perfect, but this goes a long way in the right direction. While I would have preferred our amendment, I was more than happy to sign up to the Government’s, as it represented real progress in the way we considered the Bill.

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That suggests some of the things that concern us and why I would still have preferred Amendment 8, or for more of its content to be reflected in government Amendment 7. I am glad that we have this extensive review, but it is important that we know that it will actually do a proper analysis and not just give facts and figures essentially extracted from the annual report—that it will do a kind of audit, if you like, of how well the processes have worked and whether they are actually delivering, particularly on the criteria and principles that have surrounded the dormant assets scheme right from the start.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I welcome the collaborative and pragmatic approach of the noble Lord and the noble Baroness in relation to government Amendment 7. I am also grateful for the contributions on that and on Amendment 8 on reviewing and reporting, which would require a review of the performance of an authorised reclaim fund and the Big Lottery Fund, now operating as the National Lottery Community Fund, in administering the scheme. Although I recognise the intention to ensure that the scheme’s success is maintained, bringing such details within the scope of a review would only duplicate processes that already exist.

Both the National Lottery Community Fund and Reclaim Fund Ltd are arm’s-length bodies, of DCMS and Her Majesty’s Treasury respectively. As they are public bodies, robust mechanisms are already in place for the monitoring of both organisations’ delivery against their objectives. These are more frequent than every five years and enable regular assessment of whether they are running effectively and efficiently. Instead, Amendment 7 will ensure that there are periodic reviews of the operation of the scheme from transfer to reclaim and that relevant information from both organisations’ existing reports is included in the report laid before Parliament. This will enable it to track the journey of dormant assets money from participant to beneficiary. This includes how the principle of additionality has been approached, and we can confirm that it is the intention of this part of Amendment 7 to ensure that the principle has been met and that Parliament receives information about how.

As a scheme that is led by industry and backed by the Government, it is appropriate that the scheme’s primary policy objectives—namely, to reunite customers with their money, to ensure voluntary participation and to guarantee full restitution—are similarly the primary focus of the periodic reviews. However, as part of the journey from participant to beneficiary, the scheme’s impact on social and environmental initiatives will, of course, be an important aspect to report on. There have been calls to assess the impact of the scheme here as well as at previous stages of our debates on the Bill. It is absolutely crucial that the funds have a positive impact on social and environmental initiatives. However, Amendment 8 seeks to assess the scheme against more narrow criteria than social and environmental causes. In line with the scheme’s impact to date, it specifically focuses on the benefit to people and communities subject to high levels of deprivation or inequality, and the impact on developing the capacity of social enterprises and charities.

I understand that the overarching purpose of this is to ensure that the scheme has maximum impact on the communities that need it most. However, the Government are clear that the nature of this impact should be subject to a future consultation. That is why we tabled Amendment 3, which would require this to be realised through a public consultation. The Bill must therefore be sufficiently broad to accommodate the outcome of this and future consultations, and to ensure that it is captured by the requirement to report on the scheme’s impact. It may be, for instance, that the public wish to see more of the funds being targeted at environmental initiatives, which would not be satisfactorily covered by the more narrow definition of the scheme’s objectives in Amendment 8.

Amendment 8 also seeks to review the extent to which administrative, investment policy or other changes to the scheme would improve its performance. Government Amendment 7 will ensure that the relevant information from organisations in the ecosystem are presented in the report. In particular, subsection (7)(a) provides that it must include

“information about the uses made by any authorised reclaim fund of its financial resources”.

The amendment should not encroach on the governance arrangements and regulations in place for managing and maintaining an authorised reclaim fund by both Her Majesty’s Treasury and the Financial Conduct Authority.

Finally, Amendment 8 would also require the Secretary of State to consider the views of specific groups when conducting the review. We agree that the review should be informed by a range of views, including those of social enterprises and charities. However, as I said in relation to previous amendments, we believe that prescribing a set list would be too restrictive. The Government’s amendment will instead enable anyone with an interest in the review to make representations and all representations received must be considered by the Secretary of State.

We think that the changes proposed in Amendment 7 strike the balance that noble Lords have called for today and in previous stages. I am again grateful to the noble Lord for his support. I hope that our Amendment 7 demonstrates that we have listened and are committed to transparency and robust reporting. That is why I hope your Lordships’ House will support the amendment and that the noble Lord will be minded not to move Amendment 8.

Amendment 7 agreed.

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

As the noble Baronesses, Lady Barker and Lady Kramer, have said, Amendment 9 has been tabled with a view to ensuring that the Oversight Trust is appropriately resourced and empowered to monitor the distribution of dormant assets funding. The DCMS and the National Lottery Community Fund have worked closely with a range of partners to ensure that the right levels of accountability and transparency are in place for the organisations that are given the task of distributing dormant assets money in England. We have sought to support their independence while respecting that dormant assets funding is money which comes from the public.

The four spend organisations’ operations are regularly reviewed by the Oversight Trust, which, as the noble Baroness said, is an independent organisation that ensures accountability and transparency in each of the spend organisations’ activities. I should flag that the trust’s reviews are not conducted in-house; it commissions external experts to conduct them independently. The Oversight Trust does not intervene in day-to-day operations, which are of course the responsibility of the organisations’ boards; rather, its aim is to ensure that each remains true to its objectives, which involves having oversight of the general operations of the spend organisations, as referred to in subsection (2)(a) of the new clause proposed in the amendment. In particular, the Oversight Trust is required to ensure that the four organisations are well governed and that their strategic plans and budgets are in accordance with their objects; and to review their achievement of social impact and transparency of financial and impact reporting.

Those powers are formalised in legally binding governance contracts between the Oversight Trust and each organisation. These contracts empower the Oversight Trust, for example, to remove directors in the case of significant mismanagement; to approve any changes to remuneration policies; and to be involved in the process of appointing new chairpersons, including ratifying their formal appointment. The contracts set out the key processes to enable the Oversight Trust to fulfil these responsibilities, and the trust may make reasonable requests from each spend organisation, in addition to those set out in the governance arrangements, if necessary, to help it meet its obligations.

The Oversight Trust receives quarterly updates, conducts annual deep dives and publishes quadrennial reviews on each organisation, which is required to co-operate to ensure that it can perform its duties effectively. This includes a commitment to participate with the independent review panel and to provide any information and assistance that may be necessary. We therefore do not believe it would be necessary or appropriate to provide the Oversight Trust with further powers in legislation for it to perform its current mandate effectively.

Access to up to £500,000 per annum from the English portion ensures that it can draw on sufficient resources to fulfil these important objectives. We are confident that this enables the Oversight Trust to meet its objectives, but we continue to keep that under review. Last year the Oversight Trust published its first quadrennial review, which focused on Big Society Capital, with the review of Access following in June this year. The next review, which will be of Fair4All Finance, is due next year.

I am very glad that the noble Baroness has had the opportunity to meet the Oversight Trust. Since Committee, my noble friend Lady Barran has met the trust as well, to press the importance of in-depth quantitative impact data. The trust has been working with the four organisations that it oversees on this issue, including through its annual governance review meetings. The trust provides robust governance, transparency and accountability over the four organisations’ use of dormant assets funding in England. As ever, though, we are mindful of our commitment to consult widely and with an open mind about the best social or environmental uses of this money.

When the Government consider the outcome of this consultation, we will also need to determine the best approach to ensuring continued good governance over the scheme. This could include asking the Oversight Trust to consider expanding its role to oversee any additional bodies if necessary and appropriate. If so, we would review whether the trust would need additional resources to fulfil a broader remit. It is worth noting that the trust would not be involved in decisions around what, if any, new distributing bodies may be chosen in England.

As it is too early to pre-empt the outcome of that assessment and, given that the Oversight Trust is independent and not an arm’s-length body, I hope the noble Baronesses will agree that it would be inappropriate in the Bill to mandate its role in the way that the amendment suggests. However, we have included a requirement to report on the uses of dormant assets funding as part of the Government’s Amendment 7. The National Lottery Community Fund will also remain responsible for ensuring that funds are distributed in line with legislation. We hope that this, alongside our record to date in ensuring that the distribution of funds is appropriately monitored, will provide the noble Baronesses with reassurance that this is an area that we will continue to take very seriously.

[Baroness Kramer (LD)]

While the Minister is on his feet, could he tell me with a straight face whether he thinks that £500,000 a year is sufficient for the wide range of responsibilities that he just described? He might wish to talk to some of his colleagues who work in the world of consultancy.

[Lord Parkinson of Whitley Bay (Con)]

We do; we keep it under review and, if the oversight trust took on a broader role, would review whether it would need additional resources. For the reasons I have set out, we cannot accept Amendment 9, and I hope the noble Baroness will be content to withdraw it.

[Baroness Barker (LD)]

My Lords, I thank the Minister for his full answer. It will come as no surprise to him that we do not intend to seek to put the amendment in the Bill, but the issues we have raised have a great deal of merit.

When we met Sir Stuart Etherington, the chair of the oversight trust, he set out clearly to us, as the Minister just has, exactly what the responsibilities of the trust are and how it goes about discharging them. He said that, although it has a responsibility to look at governance and management arrangements that impact on reporting, and has the power to remove directors and the chair, the oversight trust regards that as being a nuclear option—it would have to be something rather major for it to do that. By the time it got to that stage, there would already have been a significant scandal. That is what we are worried about with this whole scheme, and have been since the very beginning, because there are so many loopholes.

However, I hear what the Minister says about this being kept under review, alongside the periodic review of the whole scheme. With that assurance, I am quite happy to withdraw the amendment.

Telecommunications (Security) Bill

Lord Parkinson of Whitley Bay Excerpts

Consideration of Commons amendments
Monday 15th November 2021 Lords Chamber

Moved by

[Lord Parkinson of Whitley Bay]

That this House do not insist on its Amendment 4, to which the Commons have disagreed for their Reason 4A.

4A: Because the Commons consider it appropriate and sufficient for oversight and scrutiny of decisions made by the Secretary of State for DCMS in relation to telecommunications diversification to be conducted by the departmental select committee.

--- Later in debate ---

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

My Lords, noble Lords will recall that this Bill will create one of the toughest telecoms security regimes in the world and ensure the security and resilience of the UK’s telecommunications networks and infrastructure.

Amendment 4, which was tabled by the noble Baroness, Lady Merron, and the noble Lords, Lord Alton of Liverpool and Lord Fox, would insert a new clause into the Bill. The clause would require the Secretary of State to report on the impact of the Government’s diversification strategy on the security of telecommunication networks and services, and would allow for a debate in another place on the report.

I ask that this House do not insist on its amendment for two reasons. Our first objection to this amendment relates to the flexibility necessary for diversification. The reporting requirement, which is based on the risks as we find them today, is restrictive and premature for a market and technology that is evolving and rapidly changing. Policy work is at an early stage, and the criteria for how we measure its success is evolving in line with our policy. It would not be suitable to set out specific reporting criteria in legislation.

The diversification strategy and any reporting on its progress must be flexible so that we can focus on achieving the greatest impact. As we hope diversification to be a short-term problem, enshrining it in legislation—a long-term solution—would be counterintuitive and unnecessary. We are currently focused on diversifying radio access networks, for instance, but that may change in the future.

The Government take diversification seriously. I reassure noble Lords that mechanisms are already in place, through Parliamentary Questions and Select Committees, to thoroughly scrutinise the strategy and its progress now and in the future. This is the appropriate method of scrutiny for an evolving, time-limited strategy.

Secondly, this is principally a national security Bill intended to strengthen the security and resilience of all our telecoms networks. The Government’s 5G telecoms diversification strategy has been developed to support that objective but it is not the sole objective of the strategy. In addition, the strategy is focused on a specific subset of the telecoms supply market, not the security of public networks as a whole.

From debates in your Lordships’ House so far, it is clear that this amendment intends to hold the Government to account on the impact of the diversification strategy on the security of public networks. We will be happy to provide updates on the strategy’s progress through existing channels, and are encouraged by the developments that we have seen since the strategy’s launch. The amendment would extend the Bill beyond its intended national security focus and creates an inflexible reporting requirement on a strategy that, as I say, will evolve as it fulfils this important work. That is why I ask your Lordships’ House not to insist on Amendment 4.

I shall also speak to Motion B, which asks that this House do not insist on its Amendment 5, to which the Commons have disagreed for their Reason 5A. As noble Lords will recall, Amendment 5 was tabled by the noble Lords, Lord Alton of Liverpool, Lord Coaker and Lord Fox, and my noble friend Lord Blencathra. The amendment would require the Secretary of State to review decisions taken by Five Eyes partners to ban telecommunications vendors on security grounds. In particular, it would require the Secretary of State to review the UK’s security arrangements with that vendor and consider whether to issue a designated vendor direction or take similar action in the UK.

As I said on Report, I welcome the intention of the amendment. It demonstrates that noble Lords across the House take the security of this country and its people incredibly seriously. However, while we support the spirit of the amendment, we cannot accept it for four reasons.

First, this amendment is unnecessary as the Bill already allows the Secretary of State to consider the policies of Five Eyes countries. Clause 16 includes a non-exhaustive list of factors that the Secretary of State may take into consideration when issuing designation notices regarding high-risk vendors. That list illustrates the kinds of factors we will be considering proactively and on an ongoing basis as part of our national security work. A decision by a Five Eyes partner or indeed any other international partner to ban a vendor on security grounds could be considered as part of that process. The amendment asks the Government to do something that has been part of the Bill from the outset. We believe that our existing approach is the right way to continually consider the decisions of all our international allies and partners.

Secondly, the amendment is unnecessary because we are already committed to a close and enduring partnership with the Five Eyes countries. We engage with our partners regularly and, where relevant, consider their actions when developing our own policies. The Five Eyes intelligence and security agencies maintain close co-operation, which includes frequent dialogue between the National Cyber Security Centre and its international partners. This dialogue includes the sharing of technical expertise on the security of telecoms networks and managing the risks posed by high-risk vendors. Engaging with our partners in this way is at the very core of our national security work.

In another place, members of the Intelligence and Security Committee agreed that the amendment was not necessary as the existing intelligence relationship with the Five Eyes, and other international parties, is strong. The chairman of the Intelligence and Security Committee, Dr Julian Lewis, said:

“We looked at Lords amendment 5 and we understood the temptation to flag up the importance of the Five Eyes relationship. We agreed ... whenever a serious objection is raised on security grounds by one of the Five Eyes partners, we take that with the utmost seriousness.”—[Official Report, Commons, 8/11/21; col. 119.]


The chairman of the DCMS Select Committee, Julian Knight MP, agreed and said that

“any Government worth their salt would take very seriously the approach of our closest security partners.”—[Official Report, Commons, 8/11/21; col. 117.]

Our third reason is that naming individual countries in legislation would be restrictive to the development of wider international relations and set an unhelpful precedent on national security legislation. The Five Eyes alliance was not created through legislation and it has not required legislation for us to develop and strengthen that relationship in the past. Moreover, we need to consider the policies of a wide range of countries, including those of our European neighbours such as France and Germany, and those of other nations such as Japan, South Korea and India, to name but a few. It is highly unusual to refer to specific countries in legislation in this way, and the amendment would set an unhelpful precedent for future legislation.

Finally, the amendment is impractical because of the many different ways other countries operate their national security decision-making. It may not be immediately clear when a country has taken a decision to ban a vendor, particularly if it relied on sensitive intelligence. It also may not be clear why a country has taken this decision, and it may not always be based on national security grounds. So, while I welcome the intentions behind the amendment, we cannot accept it and that is why I ask that the House does not insist on Amendment 5 either. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, I hope my noble friend Lord Fox has given his apologies to the Minister for being unable to be here due to a Select Committee engagement. However, that does not mean that on these Benches we are any less disappointed—or indignant, as I think my noble friend Lord Fox would put it—about the Government having turned down both amendments, which my noble friend signed. The Minister is developing a fine turn of phrase in turning down amendments that appear perfectly sensible. On Report he talked about sharing the ambition and warmly welcoming the intent and then said that they did not quite fit the Bill and the Government could not accept these amendments. It is rather baffling since both are built very firmly on the Government’s expressed intentions —indeed, ambitions—set out in the integrated review. That was very clear in our debates on Report. It seems that the Government’s motives are much more firmly based on resistance to scrutiny and the idea that, somehow, they would be constrained in their work on diversification by having to report, in the case of Lords Amendment 4. However, the words he used were:

“legislating for a reporting requirement would be limiting and inflexible.”—[Official Report, 19/10/21; col. 86.]

Having reread the debate and heard again what the Minister had to say, I still cannot understand the Government’s rationale for this.

The rejection of Lords Amendment 5 is equally baffling because the Minister talks again about the limitation of the amendment to a particular set of countries. Surely, one of the reasons we are where we are, and the Government had to backtrack on their treatment of high-risk vendors, is precisely that they were not in step with their other Five Eyes allies. Therefore, the Government are not even learning from experience. We are where we are, however, and clearly we are not going to take this further, but I believe that the Government will regret not accepting both amendments.

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I certainly hear the disappointment and perhaps, as the noble Lord, Lord Clement-Jones, said, even the indignation of his noble friend Lord Fox, in his absence. I am sure that if the noble Lord, Lord Alton of Liverpool, who is not able to be with us today, were here he would have had something to say as well. However, I hope to be able to reassure all noble Lords that the Government certainly have listened to and taken on board the points which have been made. Where we respectfully disagree, I would point to the fact that another place has disagreed as well, but, as I said in my opening remarks, we are very conscious of the spirit of scrutiny in which these amendments have been put forward. Noble Lords have wanted to ensure that the Bill does what the Government intend: to set up a framework to protect the national security of our country. We simply disagree about the practicalities of some of the amendments which remain at this late stage.

It may be helpful to say a little more about the opportunities for parliamentary oversight of the diversification strategy which noble Lords and Members of another place will have been able to take advantage of. Since its publication, Members of another place and noble Lords have had the opportunity to scrutinise and provide feedback on the strategy. The Science and Technology Select Committee in another place held an inquiry earlier this year on 5G Market Diversification and Wider Lessons for Critical and Emerging Technologies. The Government responded to the committee’s report in April, agreeing with its assessment of the scale of the diversification challenge and that there is a need to work swiftly to make early progress and build momentum as we work towards our long-term ambitions. We have not yet committed to a specific way of reporting progress, as policy work is at an early stage and the criteria for how we measure its success is evolving in line with our policy, as I said in my opening remarks.

However, we have made and announced a lot of progress on our diversification strategy already: for example, on our programme of targeted R&D support, including the future RAN open competition, the winners of which will be announced soon. We will continue to update on progress and are planning to launch further policy commitments at the same time as announcing the winners of that competition later this year. I know that noble Lords, if they agree with us and do not insist on their amendments today, will certainly continue to watch this issue vigilantly and find every opportunity to pursue these important issues in your Lordships’ House and through Parliamentary Questions and Select Committees, and it is right that they do.

I end by thanking again the Bill team and all officials who have been involved in the development of this important Bill. I listed them in full last time, so I will not try the patience of the Hansard editors by repeating their names but I will add one final name: Daniel Wilson, who has been of great support to me and my noble friend Lady Barran in working on this issue in private office.

I commend the Bill to your Lordships’ House. It will create one of the toughest telecoms security regimes in the world and ensure the security and resilience of the UK’s telecommunications networks and infrastructure.

Motion A agreed.

--- Later in debate ---

Moved by

[Lord Parkinson of Whitley Bay]

That this House do not insist on its Amendment 5, to which the Commons have disagreed for their Reason 5A.

5A: Because the Commons consider it inappropriate to specify the steps to be taken by the Secretary of State where decisions in relation to telecommunications vendors are taken on national security grounds by other countries.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I have already spoken to Motion B, and I beg to move it formally.

Motion B agreed.

Racism in Cricket

Lord Parkinson of Whitley Bay Excerpts

Wednesday 10th November 2021 Lords Chamber

[Lord Bassam of Brighton (Lab)]

My Lords, I welcome the appointment and early actions of the noble Lord, Lord Patel of Bradford. He surely has shown more leadership in a few short days than we have seen from the entire Yorkshire County Cricket Club over many years.

I would also like to place on the record our sympathy and respect for Azeem Rafiq: sympathy, because nobody should suffer the racist abuse in the workplace that he has suffered; respect, because he blew the whistle and has set in motion a process which we hope will ensure that any form of abuse within cricket at any level can be swiftly identified, properly challenged and appropriately punished. While it is of course for individual sporting bodies to consider and respond to these kinds of incidents, can the Minister confirm whether the Government have plans to review the procedures in place across different sports and, in the light of events at Yorkshire County Cricket Club, governance arrangements, to ensure that they are fit for purpose? Finally, what support are the department considering or planning to offer the noble Lord, Lord Patel, in the difficult task that he has taken on?

[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 for his support for the noble Lord, Lord Patel of Bradford, whom I spoke to this morning. Understandably he is rather busy, focusing his attention on the matter at hand, but I reassured him that there is huge support across your Lordships’ House for him and the important job he has in addressing this appalling situation at Yorkshire County Cricket Club.

We are very glad that the noble Lord, Lord Patel, began by apologising to Azeem Rafiq for the appalling behaviour and the unacceptable way in which his case was dealt with. The Government will closely scrutinise the actions that the Yorkshire County Cricket Club and the ECB take in response to these very concerning allegations. We want that investigation to be thorough and transparent but also swift, to ensure that the public’s faith in cricket can be restored—in Yorkshire and beyond. If not, the Government will not hesitate to step in and act.

[Baroness Verma (Con)]

My Lords, I welcome the actions of the noble Lord, Lord Patel, but can my noble friend the Minister look at all sports? It is not just cricket: it is football—it is every sport. If you are a person of colour, the pain that you suffer, as those sitting here of colour will know, stays with you for life. It is important that we start looking at these clubs. They make huge amounts of money. They need to look at their codes of practice and what they are doing, and the leadership must come from the top. It would be useful for us all to know how they will report what they are doing in their clubs across the country to improve the situation and ensure that local communities are better represented within their own movements.

[Lord Parkinson of Whitley Bay (Con)]

My noble friend makes a very important point. Sport, like all areas of society, has a very important role to play in tackling discrimination where we see it. In June of this year, Sport England, UK Sport and the other sports councils published the results of a detailed independent review into tackling racism and racial equality in sport. The findings made it clear that, sadly, racism still exists in sport in the UK and that there are long-standing issues for us all to tackle. Each council is working swiftly to develop its own specific action plan to deliver on these commitments and address the recommendations, but, as she says, working with communities and individuals is a hugely important part of that.

[Lord Addington (LD)]

My Lords, it is quite clear from what has happened that the capacity of those sitting in darkened rooms to talk about themselves to themselves is still very alive in sport, as in other sections of our society. When the Equality and Human Rights Commission gets involved, it shows that something has gone wrong. What are the Government going to do to tell people, even if they will not change—even though it is good to do so—that they must change because society will not tolerate them carrying on like this? Can we have an action plan?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord makes an important point. Something clearly went catastrophically wrong with the culture at board level at Yorkshire County Cricket Club. It is good that the former chairman and two other members of the board have resigned, and that the noble Lord, Lord Patel of Bradford, has come in to drive the culture change that is needed there. It also makes the important point, as he does, about the need for diversity and representation at senior levels in sport, which we are aware of.

[Lord Haselhurst (Con)]

My Lords, I should first point out that I am a member of Yorkshire County Cricket Club, Essex County Cricket Club, Middlesex County Cricket Club and MCC. With our friend, the noble Lord, Lord Patel, now installed in Yorkshire, a committee of inquiry being undertaken in the other place and an investigation being carried out by the England and Wales Cricket Board, do the Government not have some space to consider whether any specific action on their part is required to confront the appalling incidents that have come to light? At the same time, perhaps to get some sense of perspective, we should remind ourselves that cricket has its finer aspects, which hopefully will be on display again in Abu Dhabi this afternoon.

[Lord Parkinson of Whitley Bay (Con)]

My noble friend is right: the vast majority of people who play and enjoy cricket have the right attitude. He is a well-published author on the subject as well as being a member of all the clubs he mentioned. My honourable friend the Sports Minister met the England and Wales Cricket Board at the department on Friday to seek the assurances we wanted to hear about the approach it is taking. We are following that very closely and will not hesitate to take action ourselves if we think it necessary.

[Lord Mann (Non-Afl)]

My Lords, a year and two weeks ago, Imam Qari Asim, who advises the Government on Islamophobia, and myself, who advises on anti-Semitism, wrote to the ECB offering advice and requesting a meeting. In effect, we have had no response whatsoever. Does the Minister think it a good idea for cricket to take some advice, and should not Kick It Out, which has done such good work in football, be properly resourced to do similar work in cricket?

[Lord Parkinson of Whitley Bay (Con)]

I am sure that the ECB has heard the reminder; it should reply to the noble Lord and take him up on the offer of his insights and expertise. He is also right to point to the work of Kick It Out. Cindy Butts, who the ECB has appointed to chair its Independent Commission for Equity in Cricket, has experience working with Kick It Out in football and will be known to your Lordships as a lay member of the Conduct Committee. We are very glad to see her appointment and the work that she is taking forward.

[Viscount Hailsham (Con)]

My Lords, may I make a more general point? Does my noble friend agree that one should be rather slow to criticise individuals, or to take action that can cause damage to individuals or institutions, unless one is aware of all the relevant facts? Is there not a danger that, out of a spirit of political correctness, people are saying and doing things rather prematurely?

[Lord Parkinson of Whitley Bay (Con)]

I do not entirely agree with my noble friend. He is right to point to the need for evidence. That is why we are very keen to see the full report and are glad that it has been provided to the Select Committee in another place. However, this case, sadly, has been going on for a number of years. It has not been dealt with with the speed and thoroughness it ought to have been, and we are glad that that finally is happening.

[Lord Cashman (Non-Afl)]

My Lords, the noble Baroness, Lady Verma, is absolutely right that racism goes much wider than sport. I am afraid I disagree with the noble Lord; we must call it out wherever we see it, because through silence we acquiesce and we condone. Therefore, will the Minister work with other government departments to ensure that there is a coherent approach, not only to the forms of racism we see day in and day out, but to the other forms of discrimination that debase the very society in which we live?

[Lord Parkinson of Whitley Bay (Con)]

Yes, absolutely. I am mindful of the Question yesterday on inclusion in sport. That is at the centre of the Government’s strategy Sporting Future. It is critical when confronting the disease of racism that all of us speak out and call it out. Sunlight is the best disinfectant, which is why we want to see the report in full so that everybody can play their part in tackling this.

[Lord Scriven (LD)]

My Lords, the issue goes much wider than cricket bodies. Clearly, cricket is funded by big money and sponsors also have a role, not in calling out individuals, but in dealing with institutional racism of an organisation. Would the Minister like to give any advice to sponsors such as NIC Group, which has refused, like other sponsors, to take a stance against institutional racism, by sitting on the fence and not doing what those like Anchor butter did instantly in withdrawing their funds and standing up to racism?

[Lord Parkinson of Whitley Bay (Con)]

It has been very powerful to see the response of sponsors in focusing the minds of people at Yorkshire County Cricket Club on the very concerning allegations that have been made and the way they have been dealt with. I am sure the other sponsors will have heard the noble Lord’s call for action, but I also hope they will be reassured by the work the club is now finally taking.

Sport: Transgender Inclusion

Lord Parkinson of Whitley Bay Excerpts

Tuesday 9th November 2021 Lords Chamber

[Lord Triesman]

To ask Her Majesty’s Government what assessment they have made of the Sports Council Equalities Group’s Guidance for Transgender Inclusion in Domestic Sport, published on 30 September, and in particular the conclusion that “the inclusion of transgender people into female sport cannot be balanced regarding transgender inclusion, fairness and safety in gender-affected sport where there is meaningful competition”.

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

My Lords, the Government are committed to promoting diversity and inclusion, as well as safety and fairness, across all levels of sport. We believe that this guidance is well researched and well considered. It acknowledges the complexity of balancing inclusion, fairness and safety and it provides a decision-making framework to help individual sports decide what is right for their circumstances. It thereby helps to address a gap which has been present for too long in the sports sector.

[Lord Triesman (Lab)]

My Lords, I thank the Minister for that response and I declare my interest as a former chairman of the Football Association. In 2009, we successfully invested £11 million to boost a brilliant sport: women’s football. As with all sports, the aim was to compete in a fair way and to do it with integrity, player safety and inclusion. The Sports Council Equality Group’s report makes it undeniably clear that including male-bodied transgender people in most female sports vitiates these principles and will undermine those sports. Sports administrators admit that their current confused approach is not fit for purpose but they fear an angry response. Will the Minister meet me and other sports administrators to generate advice on securing appropriate transgender involvement while protecting the fairness and safety of female sports—advice which will wholly guarantee women’s genuine sporting competition and integrity?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, if I may, I will start with the very opening words of the foreword from this guidance:

“We want sport to be a place where everyone can be themselves, where everyone can take part and where everyone is treated with kindness, dignity and respect.”


The guidance is based on evidence and research and it took a lot of views and consultation. It is right that sports bodies have their own rules and will work on implementing these in relation to their own sport. It probably will not be for me to meet the noble Lord, but I will certainly take the request back to the Sports Minister and I am sure he will be happy to have that meeting.

[Baroness Noakes (Con)]

My Lords, the latest guidance allows for the possibility of testosterone suppression to permit transgender women to take part in women’s sports, but this is costly and intrusive for them and does not guarantee fairness for women. Does my noble friend agree that for almost all sports, the only rational solution which is safe and fair for all is to have two categories: an open category for everyone and one reserved for natal women only?

[Lord Parkinson of Whitley Bay (Con)]

The guidance looks into the question of testosterone suppression, and many people working or competing in sport do not consider that that has created fairness or safety in their individual sports. The evidence is clear that there are retained advantages in strength, stamina and physique for the average transgender women, with or without testosterone suppression; that has not proved the silver bullet that many hoped it would be. That is why the sports councils are encouraging governing bodies to consider alternative approaches for their sport. In some cases that will be universal participation and in others it will not, but it is right that they do that on a case-by-case basis.

[Lord Cashman (Non-Afl)]

My Lords, I do not refer to the debate around this question but I am deeply concerned about the public debate around trans issues and trans women in particular, and the continuous depiction of them as a threat. Therefore, does the Minister agree that whenever we raise issues with regard to any minority, we should be specific and evidence-based and should never knowingly or unwittingly fuel prejudice, hatred or misrepresentation, especially against minorities such as trans women, who daily face dangerous defamation and misrepresentation?

[Lord Parkinson of Whitley Bay (Con)]

I strongly agree with the noble Lord and I am pleased to say that the sports councils’ work has followed that approach. The intention of their guidance is to encourage sports to think in innovative ways to ensure that nobody is left out. I am mindful that these exchanges will be followed by many people affected on a personal level, so I want everyone to hear very clearly that we want everybody to have every opportunity to enjoy, compete in and excel in sport.

[Lord Hunt of Kings Heath (Lab)]

My Lords, does not that mean that we should ensure that there is a way to have full, open and tolerant debate; and that those organisations that proselytise a “no debate” concept and accuse people who raise legitimate issues of being transphobic should desist? The Minister cannot instruct sports organisations what to do; he can encourage them to have courage to take on board what is in this guidance.

[Lord Parkinson of Whitley Bay (Con)]

Again, I agree with the noble Lord about the importance of tolerant debate, such as we have in your Lordships’ House. As the sports councils say in their guidance:

“We hope to see sports bodies across the UK engaging in the conversation in a respectful way and develop policies in this area which help facilitate access for everyone to participate.”


A number of governing bodies have already said what they will do in the light of it, and we encourage others to look at it as well.

[Lord Addington (LD)]

My Lords, the report seems a fairly reasonable attempt to try to square a circle between the safety and integrity of sport and the right of inclusion. Will the Government assist those governing bodies in making sure that they do not have a policy that excludes people from low-level recreational sport if they are in the trans category? Will they also ensure that it is not used in any way to restrict people in sports where men and women compete on even terms? I refer to the equestrian sports as a starting point.

[Lord Parkinson of Whitley Bay (Con)]

Yes, I agree. The sports councils’ guidance supports that as well, as it aims to help governing bodies determine the right position for their particular sport. As the guidance says,

“what is right for one sport may not be right for another.”

Of course, it looks at low-level and recreational sport as well as competitive sport, and that is a job for the governing bodies then to take forward in relation to their sport.

[Lord Bassam of Brighton (Lab)]

My Lords, for many of us, sport is a unifying force, whether it is taking to the pitch with a diverse group of teammates or supporting a team from the grandstand. As the Sports Council Equality Group noted, the two main views on this matter “couldn’t be reconciled”, requiring

“a reset and fresh thinking.”

Rather than attempting to shut down this exercise, as some might, does the Minister endorse the group’s suggestion that individual sports explore whether more than one version of their sport can be offered in order to meet different aims?

[Lord Parkinson of Whitley Bay (Con)]

Yes, as the guidance says, there can be no one-size-fits-all approach that covers every sport at every level in the country, and that is why it is right that the governing bodies look at what might be appropriate in their particular sport, so that they can balance, as far as they can, inclusion, safety and fairness.

[Lord Farmer (Con)]

My Lords, allegedly, the Ministry of Defence’s inclusive language guide, which quotes verbatim from Stonewall, advises staff to take care using “female”. The aim is to avoid erasing gender-nonconforming people and members of the trans community. As this risks erasing women instead, and cuts across the Defence Secretary’s drive for the military to become more female-friendly, is this an example of a lobbying group obstructing the policy of the elected Government?

[Lord Parkinson of Whitley Bay (Con)]

I will leave colleagues in the Ministry of Defence to answer about their guide, but the sports councils’ guidance does not contain this wording or offer any advice on language. It aims to helps sports consider how to be inclusive without erasing anybody.

[Baroness Wilcox of Newport (Lab)]

I am sure that the Minister would agree that we should do all we can to increase participation in sport, so does he share the aspiration of the five sports councils to see increased transgender participation in sport and support their message to create novel or modified versions of some sports to increase inclusion?

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

Yes, increasing everybody’s participation in sport is the main aim of the Government’s strategy, Sporting Future, so I certainly support the message from the sports councils to individual governing bodies to think in innovative and creative ways to ensure that no one is left out. As the noble Baroness says, that might involve novel or modified versions of their sport. Creating the right environment is important so that everybody, whoever they are, can take part and get active.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, it is clear that trans women cannot belong in the female sports category because they have a male performative advantage, however they identify, which is inherently unfair. Obviously, trans women should be able to compete fairly in sport. Will the Minister meet Dr Nicola Williams and colleagues from Fair Play for Women, which has some excellent, detailed proposals for including trans people in sport without disadvantaging women, and is courageous enough to open up the debate, not close it down?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, this varies from sport to sport. I took part in your Lordships’ full-bore rifle shooting match against the other place, which I regret to say that we lost. That is a sport on which men and women already compete on an equal basis. Some sports are games of skill, some of stamina and some of strength. That is why it is right that there is a case-by-case approach for each sport. I will take forward the meeting suggestion, as I did for the noble Lord, Lord Triesman.

[Baroness Hoey (Non-Afl)]

My Lords, sport really does have the power to change lives. I saw that when I was Sports Minister. Competition is also hugely important for enjoyment in sport, but it must be fair and it must be seen to be fair. Does the Minister agree that the evidence increasingly suggests that the approach of simply measuring testosterone levels in the blood does not take into account the full breadth of biological differences between those who have gone through male versus female puberty, and that this can lead to unfairness in competitive sport?

[Lord Parkinson of Whitley Bay (Con)]

As I said, the sports councils looked into this and said that

“the research that we currently have shows that testosterone reduction or suppression does not negate all the physiological advantages of having developed testosterone-driven strength, stamina and physique.”

That is why the advice to the individual governing bodies is to look at what is right for their sport and to balance inclusion with fairness and safety, so that people can enjoy sport, whether it is competitive or recreational.

Creative Sector

Lord Parkinson of Whitley Bay Excerpts

Thursday 4th November 2021 Lords Chamber

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

My Lords, I am delighted that the noble Baroness, Lady Featherstone, was able to secure this debate, which has allowed us to recognise the great value of the creative industries to the United Kingdom. I am particularly glad that she managed to secure it now, for I am one month into my new role and still pinching myself at my good fortune to have been given the opportunity to try to do some good for sectors which I hold so dear, as I know all noble Lords who have spoken in today’s debate do. As my noble friend Lord Vaizey said, this is a fantastic job, and one that comes with a big in-tray. It is also a great responsibility to look after one of our economy’s crown jewels: our creative sector.

The Government have a long and deep commitment to supporting our creative industries. That was shown through the 2018 creative industries sector deal, which invested more than £150 million across the life cycle of creative businesses. It was also shown in last week’s Budget where, even in a challenging economic climate, we announced a further £42 million over the next three years to support our world-leading creative industries across the UK.

I was very grateful to the noble Baroness for her recognition of what the Budget and spending review meant for the creative sector. I make no apology for beginning my remarks by dwelling on that Budget. I think she undersold it when she talked about fig leaves; this is a huge investment of taxpayers’ money, going to a part of our economy which is one of our crown jewels, as I said. In addition to the £42 million I just mentioned, last week we announced temporary increases to the headline rates of tax relief for theatres, museums, orchestras and galleries across the United Kingdom until the end of March 2024, which increases—and in some cases doubles—the relief that organisations can claim as they invest in new productions and exhibitions. It is a fantastic and widely welcomed boost for our world-class creative sector and is worth almost a quarter of a billion pounds. We also announced changes to the film and high-end TV tax reliefs to allow production companies to switch between claiming either film or high-end TV during production, ensuring that relief is not lost if a company decides to change its distribution method. We more than doubled the borrowing limit of the BBC’s commercial arm to £750 million in stepped phases between next year and 2026-27, subject to confirmation on oversight arrangements.

We also recognise that there are wider opportunities to improve the efficiency of creative businesses through improved digital connectivity and mobile coverage through a landmark investment to deliver one of the largest ever upgrades to our digital infrastructure. More broadly, as we said in the Budget, we are providing up to £150 million of additional funding for the national museums, galleries and other DCMS public bodies to help them recover from the pandemic and to level up across the country, providing more spaces for creative people to display their work and for people to come and enjoy and engage with it. Again, all of this demonstrates the Government’s commitment to supporting our creative sector and recognises that it contributes to our economic recovery and delivers on the Government’s key priorities on levelling up and extolling the virtues of global Britain.

While the pandemic has heavily affected some of our creative industries, the Government have provided them with unprecedented levels of support which, again, the noble Baroness and others paid generous tribute to. The Culture Recovery Fund was extended by a further £300 million over the summer, taking it close to £2 billion—the largest ever investment in the arts in this country. It would be remiss of me not to pay tribute to my right honourable friend Oliver Dowden, my honourable friend Caroline Dinenage, my noble friend Lady Barran and others who were a part of that work, as well as my right honourable friend the Chancellor, who is the Member of Parliament for the rural and culturally vibrant market town rightly extolled by the noble Baroness, Lady Harris of Richmond, and who has demonstrated his personal and the Government’s wholehearted support for our creative sectors through the Budget. We have gone further still, announcing last week an £800 million live events reinsurance scheme and an extension to the £500 million film and TV production restart scheme, both of which will enable UK events and productions to thrive and plan with certainty.

I am pleased to say that we have seen activity rebound close to pre-pandemic levels across many parts of the creative industries already, but it is clear that this rebound is not spread equally as some audience-facing sectors, such as live music, are still considerably down on pre-pandemic levels. In the visits and engagements I have been doing with organisations up and down the country, I have heard very clearly their concerns about the ongoing effects of the pandemic and the importance of building confidence among the public to book and enjoy what is on offer.

I was sorry to hear that the noble Baroness, Lady Merron, is not as enthusiastic as the Government are about the new Beatles attraction in Liverpool. To reassure her, this is not just a museum. Indeed, it is designed to inspire future generations, as she hopes it will. It may include a new secondary school and there will be rehearsal space for the Royal Liverpool Philharmonic Orchestra. As the director of culture at Liverpool City Council has rightly said, this will be about more than just the Beatles. The Fab Four are the hook, but Liverpool City Council and the Government are really excited about how this gets kids from some of the poorest areas of Liverpool to create and explore their passion for music. I hope that we will be able to convince the noble Baroness as that comes to fruition.

She and other noble Lords talked about freelancers. We are well aware of the effects of the pandemic and its differential impact on people, based on the roles they perform. The Government recognise the vital contribution that freelancers make to our creative industries. We have provided unprecedented support to self-employed people throughout the pandemic, and up until the end of September, freelancers were able to access financial support through the Self-employment Income Support Scheme, which has so far helped nearly 3 million people. Of course, I am keen to engage with freelancers. We speak to the Creative Industries Council, but I want to speak to freelancers on an individual level to understand how the pandemic affected them and what more support they might need.

A great many noble Lords dwelt on the importance of education. That was a point well made in the excellent maiden speech of my noble friend Lord Spencer of Alresford, whom I warmly welcome to your Lordships’ House. He talked about the importance of creativity and innovation for all sectors. Of course, the transferrable skills that creative industries and endeavours give us, such as communication, teamwork, self-confidence, perseverance, lateral thinking and so much more, are of great benefit and have been to companies like his—ICAP—and so many more.

To that end, following the point he, the noble Lord, Lord Aberdare, and others made on R&D and createch, I again point to the 2018 sector deal, through which the Government worked to recognise the importance of R&D to the creative industries and the opportunities to drive local growth by supporting it in creative clusters across the UK. We invested £39 million in the creative clusters programme through UKRI, which connects clusters of creative businesses and academia to take advantage of the most recent research and innovation, so that they can grow. Those clusters are spread across the country, from Cardiff to Edinburgh and Leeds to Belfast. I am pleased to say to my noble friend Lord Dundee that we confirmed in the spending review that we will support the UK games fund, which is based in Dundee, over the next three years.

On innovation more broadly, which my noble friend Lord Spencer talked about, the sector deal supported the Audiences of the Future work programme, which encouraged creative businesses to use innovative new technologies to reach new audiences. To date, that has provided funding of over £37 million, with investment from the industry, to more than 130 businesses and research organisations. Of course the pandemic has put turbochargers on that and I join the noble Baroness, Lady Merron, and others who paid tribute to the way that people across the sector threw themselves into making sure that people could continue to perform and do what they love and that the public more widely were able to see and enjoy that. We have seen across the sector lots of fantastic ways in which organisations have brought their work to new and wider audiences. When I visited the Hallé Orchestra in Manchester I saw how the Cultural Recovery Fund money helped it to invest in some technology which brought its work to wider—indeed, international—audiences, which will have some benefit after the pandemic as well.

Noble Lords talked about the importance of education in schools. I speak as a proud graduate of the state comprehensive system. I pay tribute to the work that teachers do in inspiring creativity in so many pupils up and down the country. The Government are committed to ensuring that all children and young people have a broad and balanced curriculum, of which creative education is a key part. Music and art and design are part of the national curriculum and remain compulsory in all maintained schools for five to 14 year-olds, and pupils have an entitlement to study at least one arts subject at key stage 4 in maintained schools. I am aware of the discrepancies between the private and the state sector. I recently saw my old drama teacher from school. I was very lucky to go to a school which had fantastic facilities: a drama studio, a fully equipped auditorium and music rehearsal spaces. After I left and towards the end of her career my teacher moved into the private sector because the facilities that she was able to enjoy and use for the benefit of her pupils were so much better. It is a discrepancy of which the Government are well aware and which we are keen to address.

Noble Lords talked about the arts premium. With the significant impact of the pandemic on children’s learning, our priorities have inevitably had to focus on educational recovery over the next three years. That is why core funding for schools will rise by £4.7 billion by 2024-25, equivalent to a cash increase of £1,500 per pupil. We value the arts not just for their own sake but as part of our recovery from Covid. That is why we also invest around £115 million a year on a diverse portfolio of music and arts education programmes, including Saturday art and design clubs, the National Youth Dance Company and the BFI Film Academy, which are designed to improve access to the arts for all children, regardless of their background, and to develop talent across the country. I am pleased to say that I am to have a meeting with my colleague Robin Walker, the new Minister of State at the Department for Education, where I will certainly be taking up many of the points that were raised by noble Lords in today’s debate, and I will be pinching my noble friend Lady Fleet’s line about red squirrels, which helps focus minds.

Noble Lords talked about the EBacc. I gently note that it was introduced under the coalition Government in which I had the pleasure of working with the noble Baroness and other noble Lords on the Lib Dem Benches. Schools have time beyond the EBacc to teach other subjects. Indeed, the EBacc was designed to be limited in size in order to allow for that. The best schools in the country combine excellence in EBacc subjects with high-quality arts and cultural education. However, the noble Earl, Lord Clancarty, is right to point to the vocational nature of these subjects in schools and in pupils’ future careers. It is important that we recognise that people are able to have a rewarding career in the arts in every sense, not just lucratively, although there are great opportunities, particularly as we emerge from the pandemic, for people to have careers which pay them well. I saw a brilliant example of that last night at the Royal Albert Hall when I went to see the Music for Youth Remix Prom. Nearly 2,000 young people from state schools and orchestras and youth groups up and down the country, from Cornwall to Teesside, went to the Royal Albert Hall and performed with each other in that fantastic space. The grins on their faces said it all, even before they had produced a note. It was wonderful to see.

Music education remains a central part of a broad and balanced curriculum in schools. That is why it is part of the national curriculum. A new national plan for music education will be published early next year following the publication of the model music curriculum earlier this year. It will aim to ensure that every future pupil has the opportunity to sing, learn a musical instrument and make music with others. My noble friend Lady Fleet knows it well because she chairs the expert advisory panel that has been assembled to guide the development of the plan. It is made up of teachers, music education hub leaders, industry representatives and other music education experts, including representatives from the National Youth Orchestra of Great Britain, UK Music and the Arts Council. Of course, this is another area where I am mindful that the responsibility lies with both DCMS and the Department for Education. I know that my noble friend Lady Barran, who was a Minister in your Lordships’ House for DCMS and is now at the DfE, answered Questions on that. I hope that gives noble Lords reassurance that a joined-up approach to government can be seen from this reshuffle.

The noble Lord, Lord Aberdare, and other noble Lords talked about the importance of careers advice. I share the concern that perhaps in the past careers advice in this area has owed rather a lot to Noël Coward’s “Don’t put your daughter on the stage, Mrs Worthington”, but I am pleased to say that the National Careers Service website is working to address that. It includes more than 120 profiles in the creative and media sector, each profile describing what those roles entail, the qualifications needed and the entry routes. In addition, DCMS funded the Creative Careers Programme as part of our sector deal commitment. It saw £2 million of government funding leveraged by a further £8 million of in-kind support from more than 1,000 creative employers. The programme is designed to reduce the aspirational, informational, postcode and reputational barriers to entry into the creative industries. It has so far informed and inspired more than 115,000 young people about job opportunities which are available in the cultural and creative sectors.

Noble Lords also talked about higher education. The noble Baroness, Lady Bonham-Carter, referred to a 50% cut in some arts subjects. It is important to dwell in some detail on that. What was announced in July this year by the Office for Students was a 50% cut to the strategic priorities grant to some subjects in this academic year. The strategic priorities grant, which is annual funding supplied by the Government to supplement higher education providers’ income where tuition fees alone do not meet the high cost of provision, is just one of the additional funding sources which are available to providers alongside tuition fees. The cut which she mentioned represents a small proportion— around 1%—of providers’ overall income. It was designed as a reprioritisation to target taxpayers’ money towards the subjects which are helping the National Health Service during the pandemic and will help it recover from it; that is, science, technology, engineering and the specific needs of the labour market. We know that high-quality provision in a range of subjects, including the arts, is also critical for our workforce, our economy and our society more broadly, which is why the Office for Students also allocated an additional £10 million this academic year to our world-leading specialist providers, including several top institutions such as the Guildhall School of Music and Drama and the Royal Northern College of Music.

The noble Lords, Lord Foster and Lord Bassam, and others talked about apprenticeships as a further route, and the Government are making apprenticeships more flexible so that they can better meet the needs of employers in all sectors. In August, we launched a new £7 million flexi-job apprenticeship fund to support the greater use of apprenticeships, such as in the creative industries, where flexible working practices are commonplace, including short periods of project-based employment.

I am pleased to point to ScreenSkills, which is piloting a flexi-job apprenticeship training model funded by DCMS with the support of Netflix and Warner Bros. That pilot is funding 20 apprentices in production assistant and production accountant roles, and aims to widen participation in the film sector further. Widening participation is another key point which has come up again and again in today’s debate and about which the Government also feel strongly. Noble Lords will have heard in all the utterances from my right honourable friend the Secretary of State since she was appointed the importance of widening participation and access so that people can enjoy and participate in our creative industries. As she has said, a working-class background should never be a barrier to a successful career in the creative industries. We want to increase access to opportunities across the board as part of our plan to level up. That touches on the points rightly raised by the noble Baroness, Lady Prashar, about racial diversity. We want everybody, whatever their background, to be able to play their part.

That is why, this year, DCMS co-funded the Creative Industries Policy and Evidence Centre’s report on Social Mobility in the Creative Economy. It is why we are working with groups such as the All-Party Group on Creative Diversity, which the noble Baroness, Lady Bonham-Carter, mentioned and the creative industries to look at that vital area. We know that there is much to be done, but with the Secretary of State from Merseyside and a Minister from Tyneside, I hope that noble Lords will be reassured that there is a team of Ministers determined to do it.

I touch on the importance of touring, following our departure from the EU. The noble Baroness, Lady Featherstone, said that no thought had been given to this; I think that was a little unfair. The UK took an ambitious approach during the negotiations with the EU which would have ensured that touring artists and their support staff did not need work permits to perform in the European Union. Regrettably, that was rejected by the EU. I point to our recent trade deal with the three EFTA countries—Norway, Iceland and Liechtenstein—which was based on the same offer and accepted, which shows that our proposals were workable and that we are fighting to help musicians and other touring performers tour abroad.

In many areas, the arrangements are much more straightforward than has at times been reported. For instance, 20 member states offered visa and work permit-free routes for musicians and creative performers. That includes most of the biggest touring markets, including France, Germany and the Netherlands. Portable musical instruments carried or in a vehicle can be transported cost-free and should not require ATA carnets, and small splitter vans are not subject to the TCA limits on cabotage and cross-trade.

We are working with the remaining member states which do not allow visa-free and permit-free touring, such as Spain and Portugal, to encourage them to make touring easier. We want all our European friends to be able to enjoy the economic and cultural benefits that UK touring artists bring, as we do from the EU creative performers who can tour easily here. The noble Lord, Lord Berkeley of Knighton, asked about Spain in particular. I can tell him that my honourable friend Wendy Morton, the Foreign Office Minister, had a meeting with her counterparts in Spain on 30 September, and Her Majesty’s ambassador to Spain met the Spanish Minister of Inclusion, Social Security and Migration on 14 October. We continue to engage actively at ministerial and official level, and I will certainly keep the noble Lord posted on it.

I am almost running out of time but I turn to the publishing industry, which the noble Baroness, Lady Miller of Chilthorne Domer, and many others pointed to. I am very mindful, the morning after the Booker prize was awarded, of the importance of books; I send my congratulations to Damon Galgut on his success last night. I am also the Minister with responsibility for libraries, and point to the fantastic work that many of them did to continue to loan books and be a huge support to people, particularly those who were home schooling during parts of the pandemic. DCMS is incredibly proud of the British publishing industry. It is a huge success story, as the noble Baroness said, and a big part of our soft power. Our books are read the world over, turned into TV shows and films, and boost the economy in all sorts of ways. Publishers have shown incredible resilience during the pandemic. Indeed, the value of the UK publishing sector rose by 2% to nearly £6.5 billion, so clearly a lot of people found solace in books during the pandemic.

Now that we are in recovery from the pandemic, we want publishers to bounce back and build back stronger than ever. The focus for Ministers at DCMS is to ensure that the publishing sector is accessible to all. We want more authors from disadvantaged and underrepresented backgrounds, as well as people working in the industry more broadly.

The noble Baroness and others asked about the IP exhaustion regime. The Government recently held a consultation on the UK’s future exhaustion of intellectual property rights regime. The Intellectual Property Office held constructive discussions with stakeholders across multiple sectors, including representatives from the creative industries and design sectors. The Government are assessing the options and will make a decision in due course.

The noble Baroness, Lady McIntosh, the noble Lord, Lord McNally, and others talked about the BBC. I hope that she heard the words of my right honourable friend the Secretary of State during the party conference season that the BBC is a “beacon for the world”. The appointments of both the BBC chairman and a new chairman for Ofcom have followed the Governance Code on Public Appointments.

I am keen to give the noble Baroness, Lady Featherstone, time to respond, so I will draw my remarks to a close there. I promise to write to all noble Lords whose questions I have been unable to cover. She said that she wanted to see a Government who understand values and promote our creative sector. I hope that she has seen from what I have been able to say in the limited time today that we indeed have such a Government and such a Minister, and I am very grateful for all the thoughts that have been raised in today’s debate.

Ofcom: Appointment of Chair

Lord Parkinson of Whitley Bay Excerpts

Tuesday 26th October 2021 Lords Chamber

[Lord Bassam of Brighton]

To ask Her Majesty’s Government what is the timetable for the appointment of the Chair of Ofcom; and when they expect the appointment to be confirmed.

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

My Lords, the campaign to appoint a permanent chairman of Ofcom will be launched imminently. The announcement will include the timetable, details of the advisory assessment panel and the selection criteria. It remains a priority for the Government to find the best candidate for the role. It will be a fair and open competition run in compliance with the Governance Code on Public Appointments and regulated by the Commissioner for Public Appointments.

[Lord Bassam of Brighton (Lab)]

My Lords, the wheels certainly seem to have come off the latest attempt to instal Paul Dacre as Ofcom chair. Reports suggest that the Government are struggling to identify credible individuals with a record in business or public life even to form an interview panel. If the appointment meets rules for public appointments, does the Minister believe that it will be seen as credible or help with the delivery of important things such as the online harms agenda? What can he say to the House to reassure the public that this and other public appointments will meet the tests of fairness and impartiality?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, of course the process will meet those tests. We want to identify the best candidate for this important role. As I say, the recruitment process will be launched imminently. Preparations are under way to ensure that it is successful in providing Ministers with a choice of high-quality candidates drawn from a broad and diverse field and we encourage lots of people to apply on that basis.

[Lord Holmes of Richmond (Con)]

My Lords, I declare my interests as set out in the register. Are the Government considering the adequacy of Ofcom’s current budget in light of the increasing number of critical functions that it is being asked to regulate, not least, as has been mentioned, the absolutely critical online safety arena?

[Lord Parkinson of Whitley Bay (Con)]

This is an important point that we have also discussed in the context of the Telecommunications (Security) Bill, which has its Third Reading in your Lordships’ House later today. The Government have been working closely with Ofcom to prepare for the new regulatory regime. This includes work to ensure that it has the resources to carry out its functions as regulator effectively and, vis-à-vis telecoms security, that includes another £4.6 million this year.

[Viscount Colville of Culross (CB)]

Will the Minister listen to the Conservative chair of the Culture Select Committee in the other place, who demands that the Government make clear in their new advert for the chair of Ofcom that previously unsuccessful candidates such as Paul Dacre cannot reapply?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the very clear rules about public appointments mean that, in reopening the competition, everybody is allowed to apply, including people who had applied for the first round. I will not be drawn on specific people, but we want to ensure that a diverse and high-quality range of candidates apply and are put to Ministers to choose from.

[Lord Dubs (Lab)]

My Lords, will the Minister confirm that whoever has the post must demonstrate a total and absolute commitment to the highest standards of public service broadcasting? Secondly, can he comment on something that I have heard, which is that for some time now Channel 4 has not been able to appoint full members of the board because Ofcom has not been able to go through the process? Could that be speeded up?

[Lord Parkinson of Whitley Bay (Con)]

I am not familiar with the noble Lord’s second point, but I will certainly take it away and look into it as he asks. Yes, this is an important role with responsibilities not just in broadcast but across the communications framework, which is why we want a high-quality range of candidates to apply for Ministers to choose from.

[Baroness Bonham-Carter of Yarnbury (LD)]

My Lords, I welcome the Minister to his role, this being my first opportunity to do so, although he may not welcome my question. In a recent speech, the noble Lord, Lord Puttnam, who will be much missed in this Chamber, said that

“when the Prime Minister actively—and repeatedly—intervenes to manipulate an ideological ally into the chairmanship of Ofcom, every alarm bell should start to ring.”

Given that one of the most important functions of Ofcom is to uphold the broadcasting impartiality regime, does the Minister agree that it would be unacceptable for the new chair to be someone with a long record of extreme political partisanship?

[Lord Parkinson of Whitley Bay (Con)]

I thank the noble Baroness for her welcome and join her in paying tribute to the noble Lord, Lord Puttnam, whose views will, I am sure, continue to be heard, even if not in your Lordships’ House. This is an important role, which needs impartiality and the appointment of which is governed by clear rules on public appointments. The process has been run along those lines so far and it will continue to be.

[Lord Vaizey of Didcot (Con)]

My Lords, I congratulate the Government on the launch of their great comedy drama “Ofcom Succession”. My understanding is that the first process was stopped because the Government had failed to appoint a headhunter to seek out the highest-quality candidates to apply for this important role. Can my noble friend tell me, first, has a headhunter been appointed? Secondly, if so, who is it? Finally, can I have their phone number?

[Lord Parkinson of Whitley Bay (Con)]

I thank my noble friend for his question. Yes, following Cabinet Office approval and a fair and open tender process, an executive search firm has been appointed. It is Saxton Bampfylde and I am sure that its contact details are available on its website.

[Baroness Wheatcroft (CB)]

My Lords, can the Minister confirm that, in seeking the right person for this role, the qualifications will include knowledge of the radio spectrum and the universal mail service, and not former experience as a newspaper editor?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the full criteria will be set out in the advert, which will go out once the new campaign is being run. The noble Baroness’s point about the range of areas in the sector that need to be regulated is a pertinent one.

[The Lord Speaker (Lord McFall of Alcluith)]

Lord McNulty?

[Lord McNally (LD)]

It is McNally—the noble Lord and I have known each other for only 30 years. It has already been pointed out that Ofcom will shortly be given unprecedented responsibilities for regulation, once the Bill on internet harms has passed this House. Noble Lords have already expressed widespread concern about how this appointment is being made. The Minister mentioned that an appointments panel is about to be appointed. Would it not restore public confidence if that panel were genuinely cross-party and independent in its judgments?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the appointments panel will of course be governed by the public appointments rules. The job description and the names of those on the assessment panel will be available on the public appointments website when the campaign relaunches. The noble Lord is right also to point to the importance of the ongoing preparatory work for Ofcom’s role in online safety.

[The Lord Speaker (Lord McFall of Alcluith)]

Now that I have my glasses on, I offer my sincere apologies to my friend, the noble Lord, Lord McNally. Now I am sure that it is the noble Baroness, Lady Fox of Buckley.

[Baroness Fox of Buckley (Non-Afl)]

Will the Minister note that one specific issue that the new Ofcom chair needs to urgently address is an egregious example of compromised media impartiality due to the powerful lobby group Stonewall, as revealed by the superb BBC Sounds 10-part podcast series “Stephen Nolan Investigates” on the influence of Stonewall’s gender identity on the output of the BBC, skewing impartiality? Perhaps the Minister can comment on the content of episode 9 revealing that Ofcom itself was using its judgments on audience complaints as evidence to Stonewall, as though it was judge and jury, to prove its LGBT credentials. That is not comforting from a neutral regulator.

[Lord Parkinson of Whitley Bay (Con)]

I have not heard that episode but the example that the noble Baroness points to underlines the importance of a free and fair media that scrutinises everyone in power, whether that is those in government or in lobby groups. It also reflects the importance of the BBC broadcasting a range of views in fulfilling that important role.