Data (Use and Access) Bill [HL]

Lord Stevenson of Balmacara Excerpts

Report stage
Tuesday 28th January 2025 Lords Chamber

[Lord Black of Brentwood (Con)]

My Lords, I strongly support Amendments 44A and 61 to 65 in the name of the noble Baroness, Lady Kidron, who is to be congratulated on raising this incredibly important and timely subject, her doughty leadership on these issues, and an absolutely first-class speech. I regret that I was unable to take part in Committee.

I will talk about the profound significance of these amendments for the media, although they are equally important across all the creative industries, which I know we will hear about. I declare my interest as deputy chairman of the Telegraph Media Group and note my other interests in the register.

The key point is that an effective, enforceable and comprehensive copyright regime is absolutely fundamental to the sustainability of a free, independent media. Without it, the media cannot survive. Publishers have to invest huge amounts of money in high-quality journalism, investigative reporting, world-class comment and content. That they can do so is because copyright laws protect this content, ensuring the commercial viability of publishers —print and broadcast—as well as the livelihoods of individual journalists and freelancers.

We talk a lot in this House about the threats to the free media resulting from digital, which smashed to pieces the business model that once sustained publishing and quality journalism. Publishers from across the spectrum have found innovative ways to adapt to that and produce new paths to commercial success to maintain their investment in independent investigation and reporting, which is the very lifeblood of a democracy. Parliament, with cross-party support, has assisted through the Digital Markets, Competition and Consumers Act, which establishes a tough competition regime to control the untrammelled power of vast, unaccountable platforms. But just when the media has been successfully adapting to the new world, along comes a far graver threat—AI—and government proposals flying in the face of the DMCC Act to weaken, through a sweeping text and data-mining exception, the UK’s gold-standard copyright regime, which is the absolute bedrock of quality, independent, regulated media.

I know how strongly noble Lords opposite and from across the House value the fundamental role our free media plays in our democratic society, because without it, all of our freedom is in peril. The Bill and the connected government consultation will either help it or kill it; I am afraid it is as stark as that. Of course I welcome the Government’s apparent aim to provide transparency and facilitate licensing, but their preferred option of an exception—on which there has been no impact assessment, as the noble Baroness, Lady Kidron, said—is fundamentally flawed and wholly impractical.

Instead, we need with these amendments to ensure three things happen to make investment in journalism possible through an effective legal regime protecting copyright, creativity and innovation. That is transparency, the power of control over how news content is used, and fair remuneration. Only that will drive the dynamic licensing market that is necessary to ensure both the media and AI sectors flourish and grow. These imaginative amendments will achieve that by expanding UK copyright law to cover any AI model linked to the UK, compelling, in a strikingly simple way, AI firms to provide information about how they scrape content and what they scrape, and ensuring we have the enforcement powers necessary to make big tech—which is so adept at arrogantly ignoring what it does not like and what this House says—take notice. That is why I will support these amendments, and I am proud to do so.

I must add that I am deeply disappointed that the long-standing commitment of my party to upholding the values of a free press and supporting the sustainability of the British media has not extended to formal support for these amendments. It is incredibly short-sighted.

If these amendments pass, as I hope they will, this legislation can complete a landmark trio of laws—with the Online Safety Act and the DMCC Act—to make the giant platforms regulated and accountable. Like others in this debate, I want to make it clear that I support the noble Baroness’s absolutely vital amendments not because I am anti-AI but because I am pro free independent media, pro the creativity which fuels it, and pro the commercial foundations that support it.

If these amendments are successful, we can create a situation where the tech and AI sectors can flourish alongside the creative industries, thereby powering economic growth between them. Because of the vital role the media plays in our democracy, I genuinely believe that this is one of the most crucial debates that we will have in this Parliament. I have this stark warning: without adequate transparency, control and reward, publishers will no longer be able to invest as they have in the creation of the original, high-quality investigative content on which our democracy and the accountability of those in power are based. Without that, our democracy will die in the dark at the hands of Silicon Valley, as we become dependent on the morass of fake news and social media clickbait. I strongly urge all noble Lords to support the amendments.

[Lord Stevenson of Balmacara (Lab)]

I am grateful to the noble, Lord Black, for daring to respond to the wonderful speech that opened the debate; I thought I might come in immediately afterwards, but I was terrified by it, so I decided that I would shelter on these Benches and gather my strength before I could begin to respond.

I feel that I have to speak because I am a member of the governing party, which is against these amendments. However, I have signed up to them because I have interests in the media—which I declare; I suppose I should also declare that I have a minor copyright, but that is very small compared with the ones we have already heard about—and because I feel very strongly that we will get ourselves into even more trouble unless action is taken quickly. I have a very clear view of the Government’s proposals, thanks to a meeting with my noble friend the Minister yesterday, where he went through, in detail, some of the issues and revealed some of the thinking behind them; I hope that he will come back to the points he made to me when he comes to respond.

There is no doubt that the use of a copyright work without the consent of the copyright owner in the United Kingdom is an infringement, unless it is “fair dealing” under UK copyright law. However, because of the developments in technology—the crawlers, scrapers and GAI that we have been hearing about—there is a new usage of a huge number of copyright works for the training of algorithms. That has raised questions about whether, and if so how, such usage has to be legislated for as “fair dealing”—if it is to be so—or in some other way, if there is indeed one.

It is right, therefore, for the Government to have required the IPO to carry out a consultation on copyright and AI, which we have been talking about. However, given the alarm and concern evident in the creative sector, we certainly regret the delay in bringing forward this consultation and we are very concerned about its limited scope. Looking at it from a long way away, it seems that this is as much a competition issue as it is a copyright issue. It seems to me and to many others, as we have heard, that the IPO, by including in the consultation document a proposed approach described as an “exception with rights reservation”, has made a very substantial mistake.

This may just be a straw-person device designed to generate more responses, but, if so, it was a bad misjudgement. Does it not make the whole consultation exercise completely wasteful and completely pointless to respond to? When my noble friend the Minister comes to respond, I hope that he, notwithstanding that proposed approach, will confirm that, as far as the Government are concerned, this is a genuine consultation and that all the possible options outlined by the IPO—and any other solutions brought forward during the consultation—will be properly considered on their merits and in the light of the responses to the consultation.

What the creative industries are telling us—they have been united and vehement about this issue, as has already been described, in a way that I have never seen before—is that they must have transparency about what material is being scraped, the right to opt in to the TDMs taking place and a proper licensing system with fair remuneration for the copyright material used. The question of whether the GAI developers should be allowed to use copyright content, with or without the permission of the copyright owner, is a nuanced one, as a decision either way will have very wide-ranging ramifications. However, as we have heard, this issue is already affecting the livelihood of our creative sector—the one that, also as we have heard, we desperately need if we are to support a sustainable creative economy and provide the unbiased information, quality education and British-based entertainment that we all value and want to see flourish.

We understand the need to ensure that the companies that want access to high-quality data and copyright material to train their AI models respect, and will be happy to abide by, any new copyright or competition regulations that may be required. However, the proposals we have heard about today—the ones that would come from the consultation, if we have to delay—will probably be very similar to the amendments before the House, which are modest and fair. We should surely not want to work with companies that will not abide by such simple requirements.

[Viscount Colville of Culross (CB)]

My Lords, I support Amendments 44A and the consequential amendments in this group in the name of my noble friend Lady Kidron, whose speech has, I think, moved the whole Committee across all Benches.

Data (Use and Access) Bill [HL]

Lord Stevenson of Balmacara Excerpts

Report stage
Tuesday 28th January 2025 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am pleased to follow the noble Baroness, Lady Morgan, who did so much during the Online Safety Bill—now Act—to champion the issues that are now before us. She should get full credit for the first steps she made. I think I said it before, and I will say it again in her presence, that we thought we had achieved much of what we are talking about today in the final wind-up of that Bill, but we had to swap it for a slightly bigger prize and it fell down slightly on the list, so I feel very guilty about this and want to help to redress somehow the balance of the deficit that was created.

I do not want to get, in this House, any reputation for being a person who asks geeky questions about Third Reading issues, but the Minister will know that getting access to debates at Third Reading is tricky. It often requires the graven head of the clerk to nod very slowly at an appropriate moment, and I wonder if we could just rehearse that slightly so that we are quite clear exactly what the noble Baroness, Lady Morgan, was saying.

Am I right in saying that the intention—and good intentions are great—is that there will be a government amendment at Third Reading? Since it is being produced by the Government, there is not an issue for the clerk to nod at, because that is allowed. If there is a government amendment dealing with all the issues we raised today, then we are all in a good place. It is right that this House, which has done so much to come together to create it, gets the credit for this Bill going down to the Commons. That is appropriate and something that we should get right.

In the absence of the Bill—and I recognise that there are difficulties about drafting, and it may well be that we have a very short time between Report and Third Reading—would it not be appropriate for the Minister to say to the clerk that it is his intention that, if necessary, the noble Baroness, Lady Owen, may bring forward an amendment on these issues so that at least we get, if not all of the package, the parts that are relevant and most important to it in the Bill as it leaves this House? That would be helpful all round, and it would be in accordance with the sentiment of the House.

[Lord Arbuthnot of Edrom (Con)]

My Lords, I share in the congratulations of my noble friend Lady Owen. It has taken me about 10 years to begin to understand how this House works and it has taken her about 10 minutes.

I want to pursue something which bewilders me about this set of amendments, which is the amendment tabled by the noble Baroness, Lady Gohir. I do not understand why we are talking about a different Bill in relation to audio fakes. Audio has been with us for many years, yet video deepfakes are relatively new. Why are we talking about a different Bill in relation to audio deepfakes?

--- Later in debate ---

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, the opening amendment in this group is a government amendment that we are withdrawing, so we are setting up the debate. There could be a similar mechanism at Third Reading. I do not know how it will actually be worked out, but there is an undertaking on behalf of the Government to say how far we have got on the solicitation issue, with a view to moving amendments in the other place.

[Lord Stevenson of Balmacara (Lab)]

Before the Minister sits down, that was exactly the point I was trying to make, and I am very grateful to the noble Lord, Lord Pannick, for raising it again. It does need the Minister to say to the clerk that it is possible for the noble Baroness, Lady Owen, to bring an amendment, if necessary, at Third Reading. If the Minister could repeat that at the Dispatch Box, I think we would both be happy.

[Lord Ponsonby of Shulbrede (Lab)]

Yes. If the noble Baroness wants to bring back a similar amendment on this issue, that indeed can be debated at Third Reading.

--- Later in debate ---

[Lord Tarassenko (CB)]

My Lords, I speak in support of the noble Baroness, Lady Kidron, on Amendment 58, to which I have also put my name. Given the time, I will speak only about NHS datasets.

There have been three important developments since the Committee stage of this Bill in mid-December: the 43rd annual J P Morgan healthcare conference in San Francisco in mid-January, the launch of the AI Opportunities Action Plan by the Prime Minister on Monday 13 January and the announcement of the Stargate project in the White House the day after President Trump’s inauguration.

Taking these in reverse chronological order, it is not clear exactly how the Stargate project will be funded, but several US big tech companies and SoftBank has pledged tens of billions of dollars. At least $100 billion will be available to build the infrastructure for next-generation AI, and it may even rise to $500 billion in the next four years.

The UK cannot match these sums. The AI Opportunities Action Plan instead lays out how the UK can compete by using its own advantages: a long track record of world-leading AI research in our universities and some unique, hugely valuable datasets.

At the JP Morgan conference in San Francisco, senior NHS management had more than 40 meetings with AI companies. These companies all wanted to know one thing: how and when they could access NHS datasets.

It is not surprising, therefore, that it was reported in November that the national federated data platform would soon be used to train different types of AI models. The two models mentioned were Open AI’s proprietary ChatGPT and Google’s medical AI, Med-Gemini, based on Google’s proprietary large language model, Gemini. Presumably, these models will be fine-tuned using the data stored in the federated data platform.

Amendment 58 is not about restricting access to UK datasets by Open AI, Google or any other US big tech company. Instead, it seeks to maximise their long- term value, driven by strategic goals rather than short-term, opportunistic gains. By classifying valuable public sector datasets as sovereign data assets, we can ensure that the data is made available under controlled conditions, not only to public sector employees and researchers but to industry, including US big tech companies.

We should expect a financial return when industry is given access to a sovereign dataset. A first condition is a business model such that income is generated for the relevant public body, in this case the NHS, from the access fees paid by the companies that will be the authorised licence holders.

A second condition is signposted in the AI Opportunities Action Plan, whose recommendations have all been accepted by the Government. In the third section of the action plan, “Secure our future with homegrown AI”, Matt Clifford, the author of the plan, writes that

“we must be an AI maker, not just an AI taker: we need companies … that will be our UK national champions … Generating national champions will require a more activist approach”.

Part of this activist approach should be to give companies and organisations headquartered in the UK preferential terms of access to our sovereign data assets.

These datasets already exist in the NHS as minimum viable products, so we cannot afford to delay. AI companies are keen to access data in the federated data platform, which is NHS England’s responsibility, or in the secure data environments set up by the National Institute for Health and Care Research, NIHR.

I urge the Government to accept the principles of this amendment as they will provide the framework needed now to support NHS England and NIHR in their negotiations with AI companies.

[Lord Stevenson of Balmacara (Lab)]

I have signed Amendment 58. I also support the other amendment spoken to by the noble Baroness, although I did not get around to signing it. They both speak to the same questions, some of which have been touched on by both previous speakers.

My route into this was perhaps a little less analytic. I used to worry about the comment lots of people used to make, wittily, that data was the new oil, without really thinking about what that meant or what it could mean. It began to settle in my mind that, if indeed data is an asset, why is it not carried on people’s balance sheets? Why does data held by companies or even the Government not feature in some sort of valuation? Just like oil held in a company or privately, it will eventually be used in some way. That releases revenue that would otherwise have to be accounted for and there will be an accounting treatment. But as an accountant I have never seen any company’s assets that ever put a value on data. That is where I came from.

A sovereign data approach, which labels assets of value to the economy held by the country rather than a company, seems to be a way of trying to get into language what is more of an accounting approach than perhaps we need to spend time on in this debate. The noble Baroness, Lady Kidron, has gone through the amendment in a way that explains the process, the protection and the idea that it should be valued regularly and able to account for any returns it makes. We have also heard about the way it features in other publications.

I want to take a slightly different part of the AI Opportunities Action Plan, which talks about data and states:

“We should seek to responsibly unlock both public and private data sets to enable innovation by UK startups and researchers and to attract international talent and capital. As part of this, government needs to develop a more sophisticated understanding of the value of the data it holds, how this value can be responsibly realised, and how to ensure the preservation of public trust across all its work to unlock its data assets”.


These are very wise words.

I end by saying that I was very struck by the figures released recently about the number of people who opted out of the NHS’s data collection. I think there are Members present who may well be guilty of such a process. I of course am happy to have my data used in a way that will provide benefit, but I do recognise the risks if it is not properly documented and if people are not aware of what they are giving up or offering in return for the value that will be extracted from it.

I am sure we all want more research and better research. We want research that will yield results. We also want value and to be sure that the data we have given up, which is held on our behalf by various agencies, is properly managed. These amendments seem to provide a way forward and I recommend them.

[Lord Freyberg (CB)]

My Lords, I support Amendments 58 and 71, which address what I consider to be a fundamental oversight in our nation’s stewardship of public data assets.

While these amendments embrace intentionally broad definitions of sovereign data assets and a national data library, their purpose is precise: to recognise, protect and optimise the public value of these critical national resources for generations to come. The amendments’ dual emphasis on robust consent mechanisms and a transparent licensing framework—one that provides preferential access to UK entities—strikes a careful balance between fostering public trust and safeguarding our national interests.

Central to these amendments is the requirement for the Secretary of State to provide comprehensive reporting on both the current value and projected returns from these assets. This addresses a striking accountability gap in our governance framework. While the National Audit Office maintains rigorous oversight of our physical infrastructure, previous Administrations have failed to adequately account for the taxpayers’ substantial investment in public data infrastructure and intangible or knowledge assets.

Consider this striking disparity: Ernst & Young’s 2019 analysis projected that a curated NHS dataset could generate £5 billion annually for the UK, while delivering £4.6 billion in patient benefits through enhanced infrastructure. Yet we lack robust mechanisms to track whether these substantial benefits materialise or are captured and flow back into our healthcare system. This speaks directly to the Tony Blair Institute’s prescient call last year, endorsed by none other than the Minister, the noble Lord, Lord Vallance, for the establishment of an NHS data trust or comparable stewardship vehicle.

As we navigate an AI revolution, we must shift our focus from simply managing risks to proactively harnessing opportunities for social impact and economic growth. This raises two fundamental questions. How can we leverage this technological transformation to maximise public benefit, and how will Parliament effectively scrutinise future trade agreements, particularly with nations like the United States, without established evaluation methodologies or transparent licencing systems of our valuable data assets?

The British public, already bearing a significant tax burden to fund public services, deserves assurance that our valuable digital assets will not be transferred today, only to be transformed into expensive treatments tomorrow, benefiting companies that pay tax overseas. Amendments 58 and 71 provide essential safeguards against the inadvertent undervaluation or transfer of these critical national assets. They ensure proper stewardship of our digital resources for the public good, and I therefore support the intentions behind these amendments.

Data (Use and Access) Bill [HL]

Lord Stevenson of Balmacara Excerpts

Report stage
Tuesday 21st January 2025 Lords Chamber

[Lord Russell of Liverpool (CB)]

My Lords, I have also put my name to most of the amendments. As with the noble Baroness, Lady Harding, that some of them do not have my name on them is because I arrived too late. Between her and my noble friend Lady Kidron, they have said everything that needs to be said very powerfully. As one who has more recently become involved in a variety of Bills—the Policing and Crime Bill, the Online Safety Bill, and the Victims and Prisoners Bill—in every case trying to fight for and clarify children’s rights, I can say that it has been an uphill battle. But the reason we have been fighting for this is that we have lamentably failed to protect the interests of children for the past two decades as the world has changed around us. All of us who have children or grandchildren, nephews or nieces, or, like me, take part in the Learn with the Lords programme and go into schools, or who deal with mental health charities, are aware of the failure of government and regulators to take account, as the world changed around us, of the effect it would have on children.

In our attempts to codify and clarify in law what the dangers are and what needs to be put in place to try to prevent them, we have had an uphill struggle, regardless of the colour of government. In principle, everyone agrees. In practice, there is always a reason why it is too difficult—or, the easy way out is to say, “We will tell the regulator what our intent is, but we will leave it up to the regulator to decide”.

Our experience to date of the ability of a regulator entirely to take on board what was very clearly the will of Parliament when the Bill became an Act is not being made flesh when it comes to setting out the regulation. Unless it is in an Act and it is made manifestly clear what the desired outcomes are in terms of safety of children, the regulator—because it is difficult to do this well—will not unreasonably decide that if it is too difficult to do, they will settle for something that is not as good as it could be.

What we are trying to do with this set of amendments is to say to the Government up front, “We want this to be as effective as it possibly could be now”. We do not want to come back and rue the consequences of not being completely clear and of putting clear onus of responsibility on the regulators in two or three years’ time, because in another two or three years children will have important parts of their childhood deteriorating quite rapidly, with consequences that will stay with them for the rest of their lives.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I was one of those who was up even earlier than the noble Baroness, Lady Harding, and managed to get my name down on these amendments. It puts me in a rather difficult position to be part of the government party but to seek to change what the Government have arrived at as their sticking position in relation to this issue in particular—and indeed one or two others, but I have learned to live with those.

This one caught my eye in Committee. I felt suddenly, almost exactly as the noble Lord, Lord Russell said, a sense of discontinuity in relation to what we thought it was in the Government’s DNA—that is, to bring forward the right solution to the problems that we have been seeking to change in other Bills. With the then Online Safety Bill, we seemed to have an agreement around the House about what we wanted, but every time we put it back to the officials and people went away with it and came back with other versions, it got worse and not better. How children are dealt with and how important it is to make sure that they are prioritised appears to be one of those problems.

The amendments before us—and I have signed many of them, because I felt that we wanted to have a good and open debate about what we wanted here—do not need to be passed today. It seems to me that the two sides are, again, very close in what we want to achieve. I sensed from the excellent speech of the noble Baroness, Lady Kidron, that she has a very clear idea of what needs to go into this Bill to ensure that, at the very least, we do not diminish the sensible way in which we drafted the 2018 Bill. I was part of that process as well; I remember those debates very well. We got there because we hammered away at it until we found a way of finding the right words that bridged the two sides. We got closer and closer together, but sometimes we had to go even beyond what the clerks would feel comfortable with in terms of government procedure to do that. We may be here again.

When he comes to respond, can the Minister commit to us today in this House that he will bring back at Third Reading a version of what he has put forward—which I think we all would say does not quite go far enough; it needs a bit more, but not that much more—to make it meet with where we currently are and where, guided by the noble Baroness, Lady Kidron, we should be in relation to the changing circumstances in both the external world and indeed in our regulator, which of course is going to go through a huge change as it reformulates itself? We have an opportunity, but there is also a danger that we do not take it. If we weaken ourselves now, we will not be in the right position in a few years’ time. I appeal to my noble friend to think carefully about how he might manage this process for the best benefit of all of us. The House, I am sure, is united about where we want to get to. The Bill does not get us there. Government Amendment 18 is too modest in its approach, but it does not need a lot to get it there. I think there is a way forward that we do not need to divide on. I hope the Minister will take the advice that has been given.

[Lord Clement-Jones (LD)]

My Lords, we have heard some of the really consistent advocates for children’s online protection today. I must say that I had not realised that the opportunity of signing the amendments of the noble Baroness, Lady Kidron, was rather like getting hold of Taylor Swift tickets—clearly, there was massive competition and rightly so. I pay tribute not only to the speakers today but in particular to the noble Baroness for all her campaigning, particularly with 5Rights, on online child protection.

All these amendments are important for protecting children’s data, because they address concerns about data misuse and the need for heightened protection for children in the digital environment, with enhanced oversight and accountability in the processing of children’s data. I shall not say very much. If the noble Baroness pushes Amendment 20 to a vote, I want to make sure that we have time before the dinner hour to do so, which means going through the next group very quickly. I very much hope that we will get a satisfactory answer from the Minister. The sage advice from the noble Lord, Lord Stevenson, hit the button exactly.

Amendment 20 is particularly important in this context. It seeks to exclude children from the new provisions on purpose limitation for further processing under Article 8A. As the noble Baroness explains, that means that personal data originally collected from a child with consent for a specific purpose could not be reused for a different, incompatible purpose without obtaining fresh consent, even if the child is now an adult. In my view, that is core. I hope the Minister will come back in the way that has been requested by the noble Lord, Lord Stevenson, so we do not have to have a vote. However, we will support the noble Baroness if she wishes to test the opinion of the House.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab)]

I am presuming a little here that the Minister’s lack of experience in the procedures of the House is holding him back, but I know he is getting some advice from his left. The key thing is that we will not be able to discuss this again in this House unless he agrees that he will bring forward an amendment. We do not have to specify today what that amendment will be. It might not be satisfactory, and we might have to vote against it anyway. But the key is that he has to say this now, and the clerk has to nod in agreement that he has covered the ground properly.

We have done this before on a number of other Bills, so we know the rules. If the Minister can do that, we can have the conversations he is talking about. We have just heard the noble Baroness, Lady Kidron, explain in a very graceful way that this will be from a blank sheet of paper so that we can build something that will command the consensus of the House. We did it on the Online Safety Bill; we can do it here. Please will he say those words?

[Lord Vallance of Balham (Lab)]

I am advised that I should say that I am happy for the amendment to be brought forward, but not as a government amendment. We are happy to hear an amendment from the noble Baroness at Third Reading.

[Lord Stevenson of Balmacara (Lab)]

Let us be quite clear about this. It does not have to be a government amendment, but the Government Minister has to agree that it can be brought forward.

[Lord Vallance of Balham (Lab)]

I have said that.

[Lord Stevenson of Balmacara (Lab)]

He said yes.

[Lord Clement-Jones (LD)]

We take that as a yes.

[Lord Stevenson of Balmacara (Lab)]

This is a self-governing House.

[Baroness Kidron (CB)]

I thank the Minister for that very generous offer. I also thank the noble Lord, Lord Stevenson, for his incredible support. I note that, coming from the Government Benches, that is a very difficult thing to do, and I really appreciate it. On the basis that we are to have an amendment at Third Reading, whether written by me with government and opposition help or by the Government, that will address these fundamental concerns set out by noble Lords, I will not press this amendment today.

These are not small matters. The implementation of the age-appropriate design code depends on some of the things being resolved in the Bill. There is no equality of arms here. A child, whether five or 15, is no match for the billions of dollars spent hijacking their attention, their self-esteem and their body. We have to, in these moments as a House, choose David over Goliath. I thank the Minister and all the supporters in this House —the “Lords tech team”, as we have been called in the press. With that, I beg leave to withdraw the amendment.

Data (Use and Access) Bill [HL]

Lord Stevenson of Balmacara Excerpts

Report stage
Tuesday 21st January 2025 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, I do not think the noble Baroness, Lady Harding, lost the audience at all; she made an excellent case. Before speaking in support of the noble Baroness, I should say, “Blink, and you lose a whole group of amendments”. We seem to have completely lost sight of the group starting with Amendment 19—I know the noble Lord, Lord Holmes, is not here—and including Amendments 23, 74 and government Amendment 76, which seems to have been overlooked. I suggest that we degroup next week and come back to Amendments 74 and 76. I do not know what will happen to Amendment 23; I am sure there is a cunning plan on the Opposition Front Bench to reinstate that in some shape or form. I just thought I would gently point that out, since we are speeding along and forgetting some of the very valuable amendments that have been tabled.

I very much support, as I did in Committee, what the noble Baroness, Lady Harding, said about Amendment 24, which aims to clarify the use of open electoral register data for direct marketing. The core issue is the interpretation of Article 14 of the GDPR, specifically regarding the disproportionate effort exemption. The current interpretation, influenced by recent tribunal rulings, suggests that companies using open electoral register—OER—data would need to notify every individual whose data is used, even if they have not opted out. As the noble Baroness, Lady Harding, implied, notifying millions of individuals who have not opted out is unnecessary and burdensome. Citizens are generally aware of the OER system, and those who do not opt out reasonably expect to receive direct marketing materials. The current interpretation leads to excessive, unhelpful notifications.

There are issues about financial viability. Requiring individual notifications for the entire OER would be financially prohibitive for companies, potentially leading them to cease using the register altogether. On respect for citizens’ choice, around 37% of voters choose not to opt out of OER use for direct marketing, indicating their consent to such use. The amendment upholds this choice by exempting companies from notifying those individuals, which aligns with the GDPR’s principle of respecting data subject consent.

On clarity and certainty, Amendment 24 provides clear exemptions for OER data use, offering legal certainty for companies while maintaining data privacy and adequacy. This addresses the concerns about those very important tribunal rulings creating ambiguity and potentially disrupting legitimate data use. In essence, Amendment 24 seeks to reconcile the use of OER data for direct marketing with the principles of transparency and data subject rights. On that basis, we on these Benches support it.

I turn to my amendment, which seeks a soft opt-in for charities. As we discussed in Committee, a soft opt-in in Regulation 22 of the Privacy and Electronic Communications (EC Directive) Regulations 2003 allows organisations to send electronic mail marketing to existing customers without their consent, provided that the communication is for similar products and services and the messages include an “unsubscribe” link. The soft opt-in currently does not apply to non-commercial organisations such as charities and membership organisations. The Data & Marketing Association estimates that extending the soft opt-in to charities would

“increase … annual donations in the UK by £290 million”.

Extending the soft opt-in as proposed in both the Minister’s and my amendment would provide charities with a level playing field, as businesses have enjoyed this benefit since the introduction of the Privacy and Electronic Communications Regulations. Charities across the UK support this change. For example, the CEO of Mind stated:

“Mind’s ability to reach people who care about mental health is vital. We cannot deliver life changing mental health services without the financial support we receive from the public”.


Oxfam’s individual engagement director noted:

“It’s now time to finally level the playing field for charities too and to allow them to similarly engage their passionate and committed audiences”.


Topically, too, this amendment is crucial to help charities overcome the financial challenges they face due to the cost of living crisis and the recent increase in employer national insurance contributions. So I am delighted, as I know many other charities will be, that the Government have proposed Amendment 49, which achieves the same effect as my Amendment 50.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I declare an interest that my younger daughter works for a charity which will rely heavily on the amendments that have just been discussed by the noble Lord, Lord Clement-Jones.

I want to explain that my support for the amendment moved by the noble Baroness, Lady Harding, was not inspired by any quid pro quo for earlier support elsewhere —certainly not. Looking through the information she had provided, and thinking about the issue and what she said in her speech today, it seemed there was an obvious injustice happening. It seemed wrong, in a period when we were trying to support growth, that we cannot see our way through it. It was in that spirit that I suggested we should push on with it and bring it back on Report, and I am very happy to support it.

[Lord Davies of Brixton (Lab)]

I do not want to try the patience of the House at this late hour. I am unhappy about Clause 77 as a whole. Had I had the opportunity, we could have debated it in Committee; unfortunately, I was double-booked, so was unable. Now we are on Report, which does not really provide a platform for discussing the exclusion of the clause.

However, the noble Baroness has provided an opportunity for me to make the point that combining data is the weak point, the point at which we lose control. For that reason, I am unhappy about this amendment. We need to keep high levels of vigilance with regard to the ability to take data from one area and apply it in another, because that is when personal privacy disappears.

Data Protection and Digital Information Bill

Lord Stevenson of Balmacara Excerpts

Committee stage
Wednesday 24th April 2024 Grand Committee

[Viscount Younger of Leckie (Con)]

Indeed, I think we are going back to the debates that we had on Monday. However, this chimes with a question from the noble Lord, Lord Clement-Jones, so it might be helpful briefly to rehearse what we are doing here and to be clear about the limitations and the checks and balances on the power that we are bringing forward.

As per paragraph 1(2) of Schedule 11 to the draft legislation, the DWP can use this power only for the purposes of checking whether someone is eligible for the benefit that they are receiving. In practice, this means that the DWP will request information only on specific criteria, which I laid out on Monday, linked to benefit eligibility rules, which, if met may—I emphasise “may”—indicate fraud or error. If accounts do not match these criteria, no data will be shared with the DWP. The effect of paragraphs 1 and 2 of the draft legislation is that the DWP can ask for data only where there is this three-way relationship between the DWP, the third party and the recipient of the payment. In addition, the DWP can ask for data only from third parties designated in secondary legislation, subject to the affirmative procedure. There are debates to come as further reassurance to your Lordships.

As per paragraph 4(2) of Schedule 11 to the draft legislation, the power does not allow the DWP to share personal information with third parties, which means that the power can be used only with third parties who are able to identify benefit recipients independently. Just to add further to this, we are obliged, under Article 5(1)(c) of the UK GDPR, to ask only for the minimum of information to serve our purposes. In accordance with the DWP’s existing commitments on the use of automation, no automatic benefit decisions will be taken based on any information supplied by third parties to the DWP. As I said earlier and on Monday, a human will always be involved in decision-making. I hope that helps.

[Lord Stevenson of Balmacara (Lab)]

I am sorry to interrupt the noble Viscount, but I just want to be clear about what he is saying in relation to the code of practice, which obviously is at the heart of this section of the debate, although there will be other things to come. Am I right that he said—obviously he has to cover himself—that there is a chance that the Report stage of this Bill might be entered into before we have sight of the draft code of practice? He makes the point that that is not an unusual occasion. I understand that—we have both served in Parliament long enough to know that that is the case—but this is clearly an issue on which the Committee has made very strong representations to the Government. Will he do what is in his power to make sure that we do not enter Report without seeing at least an early draft, if that is possible, of the code of practice?

[Viscount Younger of Leckie (Con)]

I will certainly take that back. I do not want to make any commitments today. I have already set out our stall as to where we are. I make the further point—I am perhaps repeating myself—that given the sensitivities that there clearly are, which I have been listening to carefully, it is important that this code of practice is developed at a pace that is right for what is needed, in bringing those involved along and making sure that it is right, secure, safe and with all the safeguards involved. It is quite a serious piece of work, as noble Lords would expect me to say. I will take that back. I will certainly not be able to guarantee to produce anything before Report, which may disappoint the noble Lord, but at least I have gone as far as I can. I hope that that is helpful.

[Lord Stevenson of Balmacara (Lab)]

I am grateful to the noble Viscount. This is just a thought, but we are happy to help, as we often have done in the past on other Bills. If there is any opportunity for us to be shown early drafts, to give some help and assurance to the noble Viscount that he is on the right track, I am sure that that would be accepted.

[Viscount Younger of Leckie (Con)]

I appreciate the tone of the noble Lord and, if there is anything that comes from behind me before I conclude my remarks, to be helpful, I will certainly do that.

Our debates on this measure have covered many issues. This group, as mentioned earlier, focuses primarily on the operational delivery of the power, so it would be quite good to move on. Just before I do, for the benefit of the noble Lord, Lord Anderson, in terms of the late introduction—his words—of this measure, as mentioned on Monday the DWP published a fraud plan in May 2022, where it outlined a number of new powers that it would seek to secure when parliamentary time allowed. In the parliamentary time available, DWP has prioritised our key third-party data-gathering measure, which will help it to tackle one of the largest causes of fraud and error in the welfare system. That is a short version of what I said on Monday, but I hope that it might be helpful.

Before I turn to the amendments, it might be helpful to set out how the legislation will frame the delivery of this measure. When we issue a request for data to a third party or, as it is set out, an account information notice or AIN, which is in the Bill, we can only ask it to provide data where it may help the DWP to establish whether benefits have been properly paid in accordance with the rules relating to those benefits. As mentioned earlier, this is defined clearly at paragraph 1(2) of the new schedule. This is where the data that DWP receives may signal—to use the word raised by the noble Lord, Lord Clement-Jones—potential fraud and error. The noble Lord asked for further clarification on that point. To be clear, a signal of fraud and error is where the rules of benefit eligibility appear not to be met. For example, this might be where a claimant has more capital than the benefit rules allow. As I made clear on Monday, all benefits and payments have rules that determine eligibility, which Parliament has agreed are the right rules in its consideration of other social security legislation. To issue an AIN, we must also have designated a third party in affirmative regulations, which need to be passed by both Houses.

As has been covered, we can also only request data from third parties where there is this relationship, which I will not repeat again and which I think the Committee will be familiar with. Our intention is to designate banks and financial institutions as the first third parties that we can approach, enabling us to request information on accounts only held in the UK. Just to clarify that point, we will not be able to request information on overseas accounts.

On the question raised by the noble Baroness, Lady Sherlock, on examples of non-financial organisations that the power could appropriately be used on, we will bring forward regulations to specify the data holders in scope. I hope that this is helpful. In the first instance, this will be, as mentioned, banks and financial institutions. The power also has potential use cases with other third parties, such as housing or childcare providers, but, just to reassure the Committee, this would be subject to further parliamentary approval.

Digital Markets, Competition and Consumers Bill

Lord Stevenson of Balmacara Excerpts

Committee stage
Wednesday 24th January 2024 Grand Committee

[Lord Lansley (Con)]

My Lords, I am grateful to the noble Lord, Lord Clement-Jones, for introducing Amendment 18A. On Monday, in the previous day of Committee, we looked at the list of conduct requirements—both the obligations placed on designated undertakings and the capacity to set conduct requirements preventing designated undertakings doing certain things. The noble Lord is asking whether we have covered the ground sufficiently, and so am I.

In Amendment 31, I come at it from the position that I took in earlier amendments, but I wanted to separate this out because it is in a different case. The train of thought is the same: to look at the detailed obligations included in the EU’s Digital Markets Act and to say that we are approaching it in what I hope is a better way that sets broader, more flexible definitions and looks to see how they will be implemented in detail by the Digital Markets Unit. That is fine; I am okay with that, but we need to be sure that the powers are there. For example, Amendment 18A is about whether the requirement to trade on fair and reasonable terms in Clause 20 comprises this power. It is a simple question: would it be possible for such conduct requirements to be included by the DMU under that heading?

Mine is a different one. In paragraph (6) of Article 5 of the Digital Markets Act, the European Union sets an obligation for gatekeepers—that is, its comparable reference to designated undertaking; in this sense it is dealing with platforms—that:

“The gatekeeper shall not directly or indirectly prevent or restrict business users or end users from raising any issue of non-compliance with the relevant Union or national law by the gatekeeper with any relevant public authority, including national courts, related to any practice of the gatekeeper”.


For our purposes, I have rendered that in the amendment as something slightly simpler in our language—that is to say, that an obligation may be placed on designated undertakings that they shall not seek

“directly or indirectly to prevent or restrict users or potential users of the relevant digital activity from raising issues of non-compliance with any conduct requirements with any relevant public authority”.

It is not just the CMA, of course; there may be others involved, such as the Information Commissioner and other public authorities.

For this purpose, I looked at the conduct requirements laid out in Clause 20 to find where this might be covered. I do not think it is covered by the material about complaints handling processes. This is not about whether you can make a complaint to the designated undertaking; this is about whether one is subject to the provision, as a user or potential user, such as an app seeking to complain about the non-compliance of a designated undertaking to the Digital Markets Unit. That is not the same as having a complaints process in place.

Do we think this could happen? Noble Lords will make their own judgments about that. All I am assuming is based on the fact that, for example, in April 2021, in the Judiciary Committee hearings on competition in app stores in the US Senate, Senator Klobuchar said, to paraphrase, that a lot of providers of apps were afraid to testify. They felt that it was going to hurt their business and they were going to get intimidated. So I am not having to invent the proposition that there may be a degree of intimidation between the providers of apps, for example, and the platforms that they wish to use.

In a sense, we do not actually need to know that it is happening to know that we should give the power to the Competition and Markets Authority to set conduct requirements as and when necessary to prevent such a thing happening. I do not think that it is comprised within the existing text of Clause 20.

I hope that my noble friend will take this one away, with a view to thinking positively about whether it is required to be added to the conduct requirements in Clause 20 at Report.

[Lord Stevenson of Balmacara (Lab)]

I am grateful to the noble Lords, Lord Clement-Jones and Lord Lansley, for raising this point. Clause 20 is very important, as has been mentioned, as it puts flesh on the bones of what we have been talking about for most of the first and half of the second day in Committee—which is whether we have in place the ability to deal with the important firms likely to be designated as SMS and the challenger firms. We have said before, and I am sure that we will repeat it, that this is a very innovative approach to regulating. We are very much trusting those who are appointed to take this forward with a great deal of power and not a lot of overarching scrutiny —or, if it is, it will be retrospective and not prospective.

Therefore, we have to understand that the CMA must have the ability to do all this and have the range of functions that are important. The noble Lord, Lord Clement- Jones, raised one in particular—a very important one to consumers—around seeing on the internet the goods of your dreams and then finding a payment system that siphons your money away but does not deliver the goods; that is not a palliative one for any Government to propose. I hope that the Minister has some reassuring words about the points raised by the noble Lord.

I had to read the amendment proposed by the noble Lord, Lord Lansley, three or four times to understand what he was getting at, so I am very grateful to him for his brief introduction. It was only on this occasion; normally, he is as a lucid as we would wish—and sometimes as pellucid. He raises a very subtle question about whether the measures that are not sufficiently exposed here will cover the question of those who have innovative lawyers thinking about ways in which they can avoid some of the very broad measures in Clause 20.

--- Later in debate ---

[Viscount Camrose (Con)]

I thank the noble Lord, Lord Clement-Jones, and my noble friend Lord Lansley for bringing these important amendments. It is enormously valuable and important to kick the tyres of Clause 20 and understand or assure ourselves that it works.

Amendment 18A, tabled by the noble Lord, Lord Clement-Jones, would create a new permitted type of conduct requirement, allowing the CMA to require an SMS firm to provide users with a way to pay for products and services that would provide consumer protection. I thank him for the amendment; it highlights the vital issue of ensuring that consumers are protected when using online marketplaces.

We feel that conduct requirements are already able to require that SMS firms have effective processes for handling complaints by and disputes with users or potential users. This will allow the CMA to intervene when competition issues arise in this area. My noble friend Lord Offord will be talking to the consumer provisions in Part 4 in a later sitting, and I will not tread on his toes here. However, those provisions put it beyond doubt that, where platforms promote or facilitate consumer transactions, they must act with professional diligence, in addition to more specific duties such as refraining from misleading omissions or actions or aggressive practices.

We recognise that public understanding of the requirements of professional diligence could be clearer, and we recently consulted on how price transparency and product information for consumers can be improved. The Government’s response to that consultation was published this morning, and, in the light of this, we will be undertaking further work with stakeholders to ensure that platforms’ obligations to consumers are more widely and easily understood. I would of course welcome the noble Lord’s input during that process.

Amendment 31, tabled by my noble friend Lord Lansley proposes to add a new permitted type of conduct requirement to deal with the issue of SMS firms attempting to stop third parties raising possible non-compliance with the CMA. I thank my noble friend for tabling this amendment and highlighting the importance of this issue, on which I have also received representation from affected firms.

Alongside information gathered through its own monitoring, the CMA will rely on information from third parties that will have direct knowledge of market conditions. It is therefore crucial that third parties have the confidence to speak to the regulator. I can provide assurances that the CMA will have strong powers to tackle discriminatory or unfair behaviour seeking to frustrate the regime or interfere with enforcement, where it occurs within the scope of a designated activity. Both conduct requirements and PCIs will be available to combat such behaviour, supported by the usual robust enforcement powers and penalties. I draw my noble friend’s attention specifically to Clause 20(3)(a), which, in addition to the conduct requirement

“on fair and reasonable terms”

in Clause 20(2)(a), can be used where relevant.

The CMA will also be able to intervene outside the designated activity, but not in an unconstrained way: it can use conduct requirements to prevent leveraging, or a PCI to address an adverse effect on competition in a designated activity.

Input from third parties will be crucial in ensuring the success of this regime. However, some stakeholders may have concerns about sharing information or experiences for fear of retaliation. The CMA has well- established processes for handling information and maintaining the anonymity of those providing evidence, whether informally or as part of an investigation. Recognising the importance of engagement, the CMA has also announced plans to expand this approach; for example, by establishing representative panels—one for consumers and civil society, and one for businesses and investors. This will facilitate input from third parties, which in turn will support the design and implementation of interventions.

I therefore hope that the noble Lord will feel able to withdraw his amendment.

[Lord Stevenson of Balmacara (Lab)]

The Minister mentioned in his address—I was grateful to him for doing so—that there was a recent announcement from the department about sneaky hidden fees or drip prices that are unavoidable, and the press report that I am reading says that they will be banned. Does not this bear directly on points made during this debate, and in particular on Clause 20? Does this mean that the Minister will bring forward amendments at a later stage?

[Viscount Camrose (Con)]

My preference would be to consider so doing once the Committee has had a chance to debate later sections of the Bill which go directly to consumers.

[Lord Stevenson of Balmacara (Lab)]

So it is not ruled out at this stage.

[Viscount Camrose (Con)]

I am ruling nothing out at this stage.

[Lord Stevenson of Balmacara (Lab)]

The Minister is very generous.

[Lord Clement-Jones (LD)]

My Lords, I think there is quite a lot of meat in what the Minister said just now, both in respect of the amendment in the name of the noble Lord, Lord Lansley, and my amendment.

I appreciate that we have a set of moving parts here, including the response to the consultation on smarter regulation, improving consumer price transparency and product information for consumers, which came out this morning.

The answer to the noble Lord, Lord Stevenson, was quite interesting. However, if what the Minister said about the conduct requirements in Clause 20 is to be put into effect, I suggest that he has to bring forward amendments on Report which reflect the response to the consultation. I do not think this can be done just as a sort of consumer protection at the back end of the Bill; it has to be about corporate conduct, and at the Clause 20 end of the Bill.

Obviously, we will all read the words of the Minister very carefully in Hansard. It is interesting. I have written down: “Why are we kicking the tyres on Clause 20?” As the noble Lord, Lord Stevenson, said, this is absolutely central to the Bill. Basically, it could not be more important; getting this clause right from the outset will be so important. This is why not only we but the CMA will be poring over this, to make sure that this wording absolutely gives it the powers that it needs.

I take the point of the noble Lord, Lord Stevenson. These are very important powers, and we have to make sure that they are used properly, but also, as the noble Lord, Lord Lansley, said, that the powers are there. Otherwise, what are we spending our time here in Committee doing, if we are going to put forward a Bill that is not fit for purpose? We have to make sure that we have those powers. I like what the Minister had to say in reference to the Clause 20(3)(a) provision. Again, when people look at Pepper v Hart and so on, that will be an important statement at the end of the day.

We have certainly managed to elicit quite a useful response from the Minister, but we want more. We want amendments coming down the track on Report which reflect some of the undertakings in the response to the consultation on consumer price transparency and product information for consumers.

The only other thing to say—exactly as the noble Lord, Lord Stevenson, has said—is that comments about the consultation are that it was half a loaf. There is a whole lot more to be said on drip pricing. We have a discussion coming down the track on that, and we will reserve our fire until then.

Online Safety (List of Overseas Regulators) Regulations 2024

Lord Stevenson of Balmacara Excerpts

Tuesday 16th January 2024 Grand Committee

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for his introduction. We all welcome the fact that the Bill is now an Act, of course. In a sense, these regulations are the first swallow of spring. We have many more affirmative SIs to come, I have no doubt, along with the codes of conduct that will eventually come to us in their final form. Like the Minister, I very much hope that we will proceed at speed in how we implement the terms of the Act.

Although this SI looks quite narrow in what it is about, it raises the whole question of co-operation between regulators. It is not just going to be about Ofcom helping overseas regulators, as set out in the regulations, in what they do; obviously, the Communications Act provisions will be important as well. It would be useful if the Minister could give us an idea of the areas of co-operation between the regulators that he thinks would be particularly fruitful. For instance, relationships with the Irish regulator will be extremely important in understanding how the DSA is working for it. How might its redress mechanism work? The DSA has explicit redress mechanisms under it whereas we are going to be working towards that in future; that is quite a long way away.

As the Minister will recall, other aspects are still somewhat inchoate under the Act. There is the question of research, which is an important area. How is that working? How are the other regulators seeing it operate? There is also the app store aspect, the other area of the Act that is not quite there in the way that its other parts are. It would be useful if the Minister could give us an idea of the areas that Ofcom will be working on.

I very much welcome the Minister’s assurances about the use of personal data and the kind of information that will be available. I assume that this will be of some importance, and that these case studies will involve some of the category 1 platforms to be discussed between the regulators. They will be helpful in making sure that, on an international basis, we see conformity by these large platforms to the kinds of regulation that are being installed. Does the Minister have an idea about the scale of the exchange of information that will be required? Clearly, it will require some resource by Ofcom in making security absolutely certain and being able to deliver on the assurances that the Minister has given.

Finally, it would be interesting to hear from the Minister whether other candidates will be coming down the track. Clearly, this instrument sets out the key regulators. Might others come along that are a speck in the eye, or does the Minister think that we have pretty much settled who the key regulators are and that, for the moment, they will be the ones with which we will co-operate under the terms of this SI?

[Lord Stevenson of Balmacara (Lab)]

My Lords, I join the noble Lord, Lord Clement-Jones, in welcoming this SI, and I thank the Minister for his kind comments about the work that went into the Bill. I share with him our pleasure that it is now in force and up and running; this instrument is proof positive that it is indeed so. Like the noble Lord, Lord Clement-Jones, I have many questions about what is happening, but certainly no objections to what is proposed.

The helpful Explanatory Memorandum explains that the context for this instrument is

“the global nature of service providers”

and how they operate. In that sense, I recognise that there are some gaps as regards the areas from where difficulties and troubles might come. For instance, Poland and parts of the eastern European bloc are thought to be centres from which emanate quite a lot of damage and a certain amount of material that is almost certainly illegal, yet I see no reference to any organisation—maybe there is none—that might be able to help Ofcom explore what is happening there. I am also concerned about Canada, because it hosts the biggest—I think—pornography company in the world. Again, I would have thought it would be helpful to Ofcom to be able to contact a collaborative organisation in Canada to work with, but I do not see one in the list.

That leads me on to another, related point. There is, and has been for some time, a network of likeminded organisations with which Ofcom has worked well in the past. There is a list of them on its website. Not all of them are in the Government’s proposals before us, and I wonder whether that in any way reflects a clash of views by the Government. Perhaps the Minster will comment on why we do not see Korea or South Africa, for instance. I would have thought that at least those with which Ofcom has a good working relationship at the moment should have been close to appointment. Perhaps there is some sort of competition there or element that I am not aware of. Any light that could be shed on that would be helpful.

Paragraph 7.5 of the Explanatory Memorandum attached to the SI very helpfully specifies that these regulations have certain minimum standards by which they are judged—a point picked up by the noble Lord, Lord Clement-Jones. I felt they were very appropriate to the ones that the Minister mentioned, including the bespoke regulatory framework itself,

“whether its autonomy is protected in law; and whether the … jurisdiction that empowers them, upholds international human rights”.

These are all good things, and I am pleased to see them mentioned in the Explanatory Memorandum and referenced in his speech.

That raises the question: what happens if any of these organisations depart from these standards? Will another procedure or SI be required to remove them from the list, or would they just cease to be part of the group with which Ofcom discusses things? It would be helpful to have on the record some idea of what the procedure would be if that were required.

My last two points are relatively small. There is a hint that more regulators will be considered and brought forward. That is good; I think we are all in favour of more places, since, as has been said, this is a global issue. What is the timing of that, roughly? Perhaps we could have some speculative ideas about it.

Finally, as the noble Lord, Lord Clement-Jones, pointed out, this is the first of many SIs coming forward for consideration by the House. In Committee on the Bill, we discussed at length how Parliament could be involved. This SI is probably not a very good example of that, but in the codes of practice considerable work will be required by Parliament to make sure that the affirmative resolutions are properly researched and discussed.

The proposal we made, which was accepted by the noble Viscount’s colleague, the noble Lord, Lord Parkinson, was the Parkinson rule: that the statutory instruments would, in fact, be offered to the standing committees. I do not think that would have been necessary for this instrument; I just wonder whether that is still in progress and whether it is the Government’s intention to honour the idea announced at the Dispatch Box that the legwork for many of the substantial SIs that will come forward could be done with advantage by the committees, which would inform the debates required in both Houses before these instruments can be approved. I look forward to hearing from the noble Viscount whether that is likely to happen.

[Viscount Camrose (Con)]

As ever, I thank noble Lords for their valuable contributions to this debate. Needless to say, it is vital that we recognise the global nature of regulated service providers under the Online Safety Act. This SI will ensure that Ofcom can co-operate and share online safety information with specified overseas regulators where appropriate.

As set out, we will review on an ongoing basis whether it is desirable and appropriate to add further overseas regulators to the list. That is an ongoing activity. I anticipate that, as more and more jurisdictions enter the online safety regulation business, we will see an acceleration of the rate at which they can join on the lines we have set out.

I will now respond to some of the specific questions raised in the debate. The noble Lord, Lord Clement-Jones, asked about the types of information that Ofcom might share using this mechanism. The Government anticipate Ofcom being able to share information and co-operate with other regulators, which will lead to international regulatory co-operation, which is likely to reduce the regulatory burden on Ofcom, as well as international counterparts—for example, in relation to duties that are quite similar between regulators, such as duties to deal with illegal content. I anticipate that being a particular focus of their co-operative activities.

Positive benefits may also result from Ofcom supporting overseas regulators in carrying out their online safety regulatory functions and co-operating with relevant criminal investigations or proceedings. That co-operation might address a source of harm for UK users—for example, preventing malign actors disseminating suicide and self-harm content on regulated services.

Regarding the scale of the exchange, Ofcom itself would have discretion as to the scale of the information sharing that takes place through these provisions. However, it is likely to be beneficial to both Ofcom and its regulatory counterparts to engage in information exchange of this nature.

On the question from the noble Lord, Lord Stevenson, on why certain regulators have not been added, we will of course work closely with Ofcom and other stakeholders. He raised a number of interesting examples that would have been quite tempting to add to the list of criteria applied by us, which we, along with Ofcom, produced for the time being but on an ongoing basis. The intention is to review that to add other regulators that can add value in this way.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab)]

Can I press the Minister on the point I made at the end? Will the generic approach to SIs in future be that they are offered to the standing and Select Committees of the two Houses before they are brought forward for consideration?

[Viscount Camrose (Con)]

I will commit to going away and thinking about that one, because I feel that is a broader question about parliamentary oversight of regulation in general—if I have understood right.

[Lord Stevenson of Balmacara (Lab)]

It certainly can be taken that way, but actually it was a rather narrow question. His colleague, the noble Lord, Lord Parkinson, gave a statement at the Dispatch Box that the Government would use their maximum efforts to ensure that the two Select Committees—the DSIT Select Committee in the Commons and the Communications and Digital Committee in the Lords—would have the chance to look at draft SIs before they came forward. It is certainly more work, and we do not want that, but it would make it much easier for the Houses to be able to respond positively and accurately as they go forward.

[Viscount Camrose (Con)]

I apologise to the noble Lord; I misunderstood. I very much see the value of this and will strain my sinews to deliver just that. Meanwhile, I commend these regulations to the Committee.

Design Right, Artist’s Resale Right and Copyright (Amendment) Regulations 2023

Lord Stevenson of Balmacara Excerpts

Monday 20th November 2023 Grand Committee

[Lord Clement-Jones (LD)]

My Lords, it is a pleasure to follow the noble Earl, Lord Clancarty; I wholeheartedly agree with everything that he said. I should say from the outset that we on these Benches support both sets of regulations, which will, I hope, gladden the Minister’s heart as we start debating them.

There are, however, a number of points to be made in relation to them. I very much support what the noble Earl had to say about DACS, the not-for-profit visual artists’ rights management organisation. It recently helpfully published a report that highlights the pivotal role that artists’ resale rights play in supporting artists and the wider art market. As the noble Earl said, they have been somewhat controversial in the past, but, now that they have been included in trade agreements, I feel confident that they are now bolted fully into our intellectual and moral property rights. They are an absolutely vital source of income for many artists. The noble Earl talked about more than £120 million in ARR royalties, directly benefiting more than 6,000 artists and their heirs. Artists selling at the lower end of the art market benefit in particular from ARR: two-thirds of ARR payments in 2021 were less than £500 and 10% of artists received ARR royalties for the first time that year.

I will not repeat most of the rest of what the noble Earl had to say, just that I very much agree with a great deal of what he said. More than 90 countries worldwide have implemented some form of ARR legislation so we are in good company as regards what I see as this moral right. We have heard about the trade agreements; it would be useful to get from the Minister an idea of which agreements we have included this in. Christian Zimmermann, the CEO of DACS is definitely worth quoting. He said:

“The Artist’s Resale Right is more than a legislative mandate—it is a commitment to fairness, a recognition of the value of artists’ contributions, and an indispensable support for artists and their estates.”


The Minister may notice that I have used pounds sterling in my figures throughout so, naturally, I support that aspect of these regulations and, of course, the other aspects that are provided for in the regulations.

The Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023 are, in many senses, a much weightier aspect of the regulations we are considering today. I am grateful to the Alliance for Intellectual Property and the British Brands Group for providing briefings and, indeed, their strong views on these issues. I know that the Minister will have heard many of their arguments in person but I want to put on record those views, with which, I should say, I and the All-Party Parliamentary Group for Intellectual Property strongly agree.

Members of both groups strongly consider that the status quo will deliver the strongest overall outcomes for shoppers, business and the UK economy. Following the UK’s departure from the EU, the UK Government now have control over the exhaustion regime. As the Alliance for Intellectual Property says, the importance of the decision on which exhaustion regime the Government choose cannot be underestimated. Although it seems a technical area of policy, it will have a real-life impact on businesses, consumers and regulatory authorities across the UK. Exhaustion regimes have the greatest impact on export-driven UK sectors as they underpin their ability to determine when, how and what goods to sell in international markets and at what price.

The noble Earl quoted the publishing sector. Industries of that kind are particularly successful at exporting; for example, the UK book sector derives 60% of its income from exports. We have heard that the Government have consulted on which regime the UK should select. In January 2022, the Government made an interim decision to select a UK+ regime that would maintain existing protections. As we have heard, this statutory instrument is being introduced by the Government relating to that interim decision. As the Minister said, though, the Government have not made a final decision on which regime to choose but are likely to announce their decision in the next few months. I hope that the Minister will give us some idea of the time in which he expects that decision to be made.

The British Brands Group believes that advice from officials is to make the interim decision permanent—at least, that is its impression—which would be widely welcomed. I want to take this opportunity to voice support for the interim decision and express concerns regarding any shift to an international regime that might arise in future. I am not going to explain what the alternatives are; I do not think I need to. National exhaustion is one alternative and international exhaustion is another; neither is practical nor attractive.

The current regime is regional exhaustion, an approach that has been working well for 50 years. Rights are exhausted once goods are placed on the UK or EU market, although they can be used to prevent the distribution of goods placed on markets outside those countries. This status quo operates well, as we know; it strikes us on these Benches and those organisations as proportionate, hence our strong support. The SI rightly provides for an IP exhaustion regime meaning that the holders of trademarks would not be able to object to the further distribution of their goods once they are placed on the market in the UK and the EU. They would, however, be able to object to imports from other countries.

The Government’s decision on the UK’s future exhaustion regime will be among the most important taken in relation to intellectual property policy during this Parliament. Its impact will affect businesses, consumers and regulatory authorities across the UK; as I have said, it will particularly affect export-driven UK sectors as it underpins their ability to determine how and what goods to sell in international markets and at what price.

Any shift to an international regime would also affect many of the UK’s leading design and branded goods companies. This would make it significantly more difficult to launch new products in countries around the world as those firms would not be able to vary pricing at launch for fear of those products re-entering the UK. A move to an international regime would also lead to consumer confusion since product and regulatory standards differ across countries internationally. Any “free for all” in parallel imports to the UK would undermine the UK’s product standards regulatory framework and would create uncertainty and confusion for the public.

Opponents of maintaining the status quo and supporters of an international regime suggest that there would be a reduction in pricing for consumers from an increase in parallel imports. Where parallel imports occur currently, in contravention of our regime, prices are not lower. As an example, you occasionally see bottles of Coca-Cola with foreign language labelling in some small shops but at the same pricing as compliant products.

We believe that the retail supply chain, including wholesalers and parallel importers, would therefore be the major beneficiary, rather than the UK public. The cost-benefit equation is likely to be between established creative industry sectors that find their home in the UK market but could choose to move elsewhere against a parallel import sector that does not currently exist and would not even need to be located on UK shores, nor to create UK jobs.

In summary, an international exhaustion regime would represent a significant policy shift away from innovation and growth. It would weaken competition, harm consumers and not help lower consumer prices, in our view. The SI as drafted sustains the current exhaustion regime until the Government confirm their long-term policy approach. The most recent government consultation identified no evidence at all to support a change in regime, so this debate is important.

I hope that the Minister, IPO and others in government resist calls for any change that could reduce IP rights holders’ ability to influence the distribution of their products in markets outside the EU and weaken their IP rights. A change in the UK’s trademark exhaustion regime would be a significant policy shift negatively affecting consumers, brand owners, UK exporters and public enforcement agencies, while not reducing inflation. I hope the Minister has got my message that this would not be a welcome change away from the current exhaustion regime.

[Lord Stevenson of Balmacara (Lab)]

I apologise for my slightly late arrival at the Committee. I hope that it was not noted too carefully, but we are doing two SIs as one group and I was here for the whole second part. I hope that that qualifies me to speak.

Also, it would be a terrible shame not to recapture the spirit of a few years ago, when a little group of three of four colleagues, including the noble Baroness, Lady Neville-Rolfe, debated a number of issues to do with intellectual property that came up at that time. It was interesting that a group from within the confines of Parliament then was able to get together and become quite expert at some of these issues. We had some very enjoyable debates and some of these issues have played out again today. Those who benefited from going on that journey gained a lot of knowledge and expertise, so I am not able to stun the Committee with some new insights; they have largely been covered by those who have built up their expertise from the same route that I have been on, so what I would say would be otiose.

I will congratulate both the noble Earl, Lord Clancarty, and the noble Lord, Lord Clement-Jones, for covering the points I would otherwise have made and piggyback on them to save the time of the Committee, which is a good thing.

However, it is interesting that we are still talking about issues that were live three or four years ago. I am sure the noble Baroness, Lady Neville-Rolfe, remembers them with some interest. We are still not clear what distinguishes our particular configuration of design rights. I still worry about those and hope that the department is working on a way forward with some of them. We had some clarity when we were thinking, within the EU context, of a way of trying to balance the difference between those which operated within the UK only and those that were being developed in Europe but were not able to go back to that. I do not think we quite got over the variations that can occur between the triad of patent, trademark and intellectual property in other forms, because they bump into each other. Although they have been dealt with rather well within these statutory instruments, there are occasions when they point in different directions and it is very hard to get a sense of the Government’s policy on them. There is still a need to do more work on that.

In turning to the SIs before us today, I want to raise a very narrow point on design right, ARR and copyright, from the Explanatory Memorandum. Although the noble Viscount touched on this in his introduction, he did not spend a lot of time on it. It is a question of broadly taking forward the arrangements that existed before we left the EU and making them slightly up to date as we go forward. I have no problem with the Design Right (Semiconductor Topographies) Regulations 1989, which were notably not mentioned by my two colleagues nor dealt with in any detail. That is a sensible move forward. We covered ARR and the copyright tribunal rules in some detail. That is a good change and an important way forward.

--- Later in debate ---

[Viscount Camrose (Con)]

My Lords, I very much thank the three noble Lords for their valuable and interesting contributions to this debate. As I said in opening, IP matters. The IP system exists to encourage innovation and the sharing of information, creativity and knowledge. It provides individuals and businesses with the confidence to invest their time, money and energy into developing something new. That is why the Government remain committed to a world-leading IP framework. We hope these regulations will ensure that the IP system continues to support innovation across the economy and will make some targeted changes to the benefit of our IP framework.

I shall respond to some of the important questions raised in the debate. The noble Earl, Lord Clancarty, asked about ARR. I thank him for his kind words and support for the changes to ARR in relation to the change of currency. He mentioned the benefits to smaller artists of the ARR regime and the noble Lord, Lord Clement-Jones, expressed similar support. Under that change, artists who continue to receive ARR payments will see an estimated average increase of around 7%, with the highest-value artworks obviously experiencing the largest increase. In addition, when UK inflation is taken into consideration, the minimum threshold resale price for ARR eligibility will actually be lower in real terms than when it was set in 2006.

The noble Earl and the noble Lord, Lord Clement-Jones, asked about government policy for ARR in free trade agreements and why ARR is not included in some negotiations; the noble Lord, Lord Stevenson, also touched on that matter. It is current government policy to support ARR globally via international fora as well as via UK free trade agreements. For example, in our recent free trade agreements with Australia and New Zealand we negotiated provisions to provide ARR on a reciprocal basis—that is, the UK will provide ARR royalties to Australian artists and vice versa.

Noble Lords asked about provisions in FTAs that are still being negotiated, specifically with India and Canada. They will forgive me if I cannot comment at this point on negotiations that have not yet concluded. Needless to say, I am happy to set out more information as it emerges on where we are with these or other free trade agreements.

I turn to the issue of exhaustion. I note the views of the noble Earl, Lord Clancarty, on the UK’s existing UK-plus exhaustion regime and on making the UK-plus regime permanent. As I think everybody in the Room agrees, this is an important matter. As the noble Earl is aware, the Government have consulted widely on it and continue to consider what the UK’s eventual IP exhaustion regime should be. Work to consider the decision on the UK’s future exhaustion regime is ongoing. We intend our future regime to strike the right balance between consumer choice and fair market pricing, protecting creators and promoting competition. The Government are aware that businesses would like certainty about future arrangements that will be affected by this decision. We will let stakeholders know the outcome of the policy decision in due course.

[Lord Stevenson of Balmacara (Lab)]

I think we all asked for a bit more detail than the Minister’s “in due course”. Could he be a bit more specific?

[Viscount Camrose (Con)]

Indeed. DSIT has been making representations to precisely that effect across government and that process is in train. I cannot provide a date for when it is going to be complete.

[Lord Stevenson of Balmacara (Lab)]

Could the Minister perhaps hint at what form it might take? Are we at the White Paper stage of the process or will it just be a statement that the issues are finished?

[Viscount Camrose (Con)]

Perhaps I had better write to all noble Lords present to say exactly what form that will take.

Semiconductors Manufacturing

Lord Stevenson of Balmacara Excerpts

Monday 18th September 2023 Lords Chamber

[Viscount Camrose (Con)]

The noble Lord raises, as ever, an interesting point, but to build an advanced silicon fab would, first of all, cost tens of billions of pounds. It would run into not only costs of operation but substantial risks of uncompetitive yields and, as we have seen several times historically, shifts in demand for semiconductors. I remind the House that, although 40% of the value chain of semiconductors is represented by manufacturing, 30% is represented by design. It makes sense that our strategy should build on the country’s strengths, particularly in design.

[Lord Stevenson of Balmacara (Lab)]

My Lords, may I follow up that point and ask a little more about the detail of who runs this strategy? In addition to the independent regulator, the CMA, there are, as I understand it, three government departments directly involved: the Cabinet Office, the Department for Business and Trade, and DSIT, as represented by the Minister. The focus of the third leg of the national strategy engages with export control, hostile takeovers and mergers. Who is in charge of that, and can the Minister explain it?

[Viscount Camrose (Con)]

Indeed I can, and I recognise the importance of the question around clarity between these various arms of government. The ownership of the semiconductor strategy sits squarely with DSIT. There is a range of Acts—to do with export controls and protection of investment from states seen to be hostile to us—that of course come under other departments, but overall ownership must sit, and continues to sit, within DSIT.

Counter Disinformation Unit

Lord Stevenson of Balmacara Excerpts

Tuesday 18th July 2023 Lords Chamber

[Viscount Camrose (Con)]

The CDU has not been deployed on any side of the small boats debate.

[Lord Stevenson of Balmacara (Lab)]

I accept the point made that the Counter Disinformation Unit sounds rather suspicious. The unit tracks narratives and trends using publicly available information. We all like a good story, so where can we find these narratives and trends. Are they published? Where is the unit established, and what is its budget and its staffing level?

[Viscount Camrose (Con)]

The unit is established within the Department for Science, Innovation and Technology. Its existence and mission, and indeed the legal basis for its activities, are posted on GOV.UK. Because the great majority of its activities are now directed at overseas state actors hostile to our interests, we do not share in a public forum any operational details pertaining to its activity, simply for fear of giving an advantage to our overseas adversaries. However, I recognise the importance and seriousness of the question. To that end, while I cannot in a public forum provide operational details, if the noble Lord or any other noble Lords would like an operational briefing, I would be happy to arrange that.