Digital Markets, Competition and Consumers Bill

Lord Vaizey of Didcot Excerpts

Committee stage
Monday 5th February 2024 Grand Committee

[Lord Harris of Haringey (Lab)]

My Lords, first, I should apologise to the Committee that this is my first involvement in the Bill. Secondly, I declare my interest as chair of the Fundraising Regulator, which overseas and regulates charitable fundraising. I want to say how important the amendment moved by the noble Lord, Lord Mendoza, is. The number of charities that are potentially affected by this is enormous.

I am quite clear that this is an accidental consequence of what the Government are trying to do in the Bill. It was never aimed at undermining the financial position of charities but the reality is that, because of the rules that exist on the way in which gift aid operates, it would have that effect. It would mean that you would be entitled, as a consumer, to change your mind suddenly. Okay, I believe that people can change their mind, but most people who enter into subscriptions do so on the basis that they have made that decision and want to give money to the charity concerned.

The problem arising is that the HMRC rules would not allow gift aid to be paid on any contribution where there was such an opportunity to return in that way. The whole purpose of a charitable donation is that you have given it to the charity concerned not because you are looking to get a series of benefits back but because you are making a donation. That is why gift aid is allowed. This was an unintentional consequence of what is otherwise a series of sensible protections for consumers. I hope that, when he responds, the Minister will make it clear either that he can accept his noble friend Lord Mendoza’s amendment or that this loophole will be closed.

[Lord Vaizey of Didcot (Con)]

My Lords, I support the amendment of the noble Lord, Lord Mendoza, as well and declare my interest as a trustee of Tate. Everything that has been said is absolutely accurate. This is one of those situations where we are all on the same page, in the sense that I think the Government recognise that this is an issue that needs some clarity. It is certainly not their intention at all to put charities in a position where they will lose access to gift aid based on subscriptions or donations that are given to them on a regular basis by the people who support them.

The noble Lord, Lord Mendoza, indicated that many charities depend on membership subscriptions; that is the vernacular used when you join an organisation such as the National Trust or take out a membership with Tate. Certainly, by my now being poacher turned gamekeeper, as it were, and being on the board of a large museum, I see at first hand just how important subscriptions are to Tate. They are a really important revenue generator; we are very successful in securing memberships. They are a way forward for a lot of our national charities to engage a wide community who may not be able physically to visit the museum or organisation. People who live abroad can also potentially become members, although I appreciate that they would not necessarily be able to give gift aid in that respect. This is a huge way forward and it would be a retrograde step if charities found themselves in a difficult situation.

I gather that the Government have made it absolutely clear that, if you take out a subscription and receive nothing in return, that will to all intents and purposes be an annual or monthly donation on which gift aid can be claimed. However, as the noble Lord, Lord Mendoza, indicated, a lot of ancillary benefits now come with membership as a way of attracting people to take it. Obviously, in the case of museums, that might be free entry to their paid exhibitions and a regular magazine. I was unaware until the noble Lord rose that silent discos are now part of the mix—although I gather that the Natural History Museum calls them dino discos, which makes them even more attractive and means that I will leave this Committee and immediately take out a subscription.

The reason that the amendment has been put forward is to provide clarity in the simplest way. Charities are exempt from VAT and can claim gift aid. This does not provide a Trojan horse, where a private company says “Okay, the way to get around the welcome consumer protections that the Government are bringing in is to claim that we are a charity”. Charities have to go through a lot of hoops to become a charity, so exempting them from Schedule 20 would provide exactly the clarity that is needed.

As I say, we are here to listen to the Government because we know that they recognise that this is—I was going to say “a problem”—an issue. The Government are therefore in a great position to tell us what their thinking is as this is a discussion between those of us who have concerns and the Government who recognise those concerns and want to allay them with either their own amendment or clarity from the Minister.

[Baroness Young of Old Scone (Lab)]

My Lords, I regret my inability to be present at Second Reading. I support Amendment 149 from the perspective of having been chief executive of two membership charities—the RSPB and Diabetes UK—and my current experience as chair of the Woodland Trust. All three of these charities, and many others about which noble Lords have heard tonight, rely significantly on membership subscriptions and the associated gift aid for their important works. There are big numbers of people involved. As noble Lords heard, the RSPB has more than 1 million members and the Woodland Trust is hotly pursuing it and increasing its membership.

However, I take a slightly different perspective from that of the noble Lord, Lord Mendoza, because it is important to understand that the relationship of membership charities with their members is not transactional. It is not about saying, “You give us this money and we will give you these services”. It is not like that at all. There are ancillary things that members get, but I would not have thought that there are many cases of people giving money to these charities simply in return for the services that they might receive. It is more of a relationship of trust, in which members become part of the charity’s family. The membership donation is unconditional and unrestricted. The member says, “I trust you, as an organisation, to continue to do good things with my money, as you have demonstrated in the past”.

As noble Lords have heard, eligibility for gift aid means that membership subscriptions cannot be cancelled, although they might not be renewed if members fall out with the organisation. The risk is that that very different non-transactional relationship is swept up with the idea of subscription contracts and that, somewhere along the line, these charities lose their valuable gift aid. I am sure that the Minister will assure the Committee that that is not intended but, as much as I trust his assurances, it would be safer if Amendment 149 were agreed and added to Schedule 20 to the Bill.

--- Later in debate ---

[Lord Vaizey of Didcot (Con)]

On that point, if the Minister is saying that charities should not be exempt from the law, of course we all agree. If an employee of a charity is treated badly, they are perfectly entitled to take the charity to court and get compensation. The key point here is that membership subscriptions have been able to have gift aid claimed on them and HMRC has made it clear that gift aid is claimable. Now that charity subscriptions are being brought actively within the scope of the Bill by not being exempted, gift aid will be removed by HMRC as a result.

It would be different if we were starting from a position where charities had never been able to claim gift aid and had, in effect, been offering commercial subscriptions. In the same way, when you go into a shop at Tate and buy something that is defective, you have all the consumer protections available to you. You are not giving a gift aid donation when you buy a mug at Tate; you are buying a mug and if it falls on your cat’s head when you get home, you will be able to sue Tate. That is fine, but subscriptions are clearly gift-aidable donations which are now being actively brought within the scope of this Bill.

[Lord Harris of Haringey (Lab)]

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

[Lord Mendoza (Con)]

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

[Lord Vaizey of Didcot (Con)]

On a point of information, every time I make a speech where I am sycophantic about noble Lords, I end up in Private Eye. I hope my noble friend is aware of that.

[Lord Mendoza (Con)]

I hope that results. I am grateful to the noble Baroness, Lady Young, for her intervention. Of course, she is right: people contribute to charities because they care deeply about the charity’s mission. Although, as she said, there is no transactional element, if you go on the website of the Natural History Museum or the Tate and to “Buy a membership”, they will clearly list all the benefits that you get, so there is an element of transaction to it. I wanted to bring that out, so that it is clear to the Treasury and HMRC when they concoct whatever regulations they are concocting that we make sure that gift aid is still claimable and that these membership subscriptions still count as a donation to support the charity’s mission. It may be that some charities describe their membership differently from others. I have not checked the Woodland Trust’s website; it may well be completely different from that of a museum or the National Trust.

I am grateful for the support of my noble friend Lady Harding, who could not have been clearer in her request to my noble friend the Minister. I am also grateful to the noble Lord, Lord Clement-Jones, for supporting this amendment and contributing his remarks.

To add to the last point that was made about the simplicity of our amendment, we are trying to exclude charities not completely but just from this narrow point of gift aid, which was carefully defined at great length in the Income Tax Act 2007. We are trying to exclude just this one thing. Perhaps my noble friend the Minister will be able to go back to HMRC or the Treasury to see whether they can find some way of supporting this amendment. It seems clear and simple, without introducing a whole set of other complexities.

I am grateful to my noble friend the Minister for giving me the opportunity to talk with the Secretary of State today. I certainly received reassurances from her and, as I say, that should bring some comfort to the Room. I am grateful to noble Lords for this debate. I beg leave to withdraw the amendment.

Digital Markets, Competition and Consumers Bill

Lord Vaizey of Didcot Excerpts

Committee stage
Monday 29th January 2024 Grand Committee

[Lord Faulks (Non-Afl)]

My Lords, may I crave the indulgence of the Committee? Unfortunately, I missed the first minute of the speech made by the noble Baroness, Lady Jones, as I was trying to comply with etiquette and remain in the Chamber until the conclusion of the opening speeches on the Rwanda Bill. If the Committee permits, the points I was going to make have largely been made by others, so I can be particularly brief.

At the heart of this legislation is the decision: do we want the regulation to be done by the DMU or, de facto, by the courts? This is, effectively, a twin attack. First, there is the proportionality provision inserted into the statute, and now we have the change in the test of appeals on sentences. The combination of those two seems inevitably to lead to further court involvement, and it is not the intention that courts should be the regulator. The courts are there, as the noble Lord said, to stop executive overreach or some illegality in the approach based on usual JR principles. They are not there to second-guess what the DMU has done.

If the amendments, or something like them, are not accepted, I fear that an appeal of the merits will involve going into everything, as other noble Lords have said. We would have the war of the lever arch files, so eloquently described by the noble Lord, Lord Vaizey, at Second Reading. Lawyers will act, and continue to act, and it will frustrate what we are trying to achieve.

[Lord Vaizey of Didcot (Con)]

My Lords, as I have been cited by the noble Lord, Lord Faulks, it is incumbent on me to speak on the same principles as him. Everything that I want to say has already been said, but that will not stop me putting in my two pennies’ worth. This is the stuck-record part of the debate, where I repeat what I said at Second Reading and simply put on record my support for all these amendments.

I will pick up on what some noble Lords said in their comments. I wholeheartedly endorse what my noble friend Lady Stowell said. In the real world, if you have an appeal on the merits of a fine, it seems almost impossible to see how you stop leakage into an appeal on the merits of the case. So you are, in effect, back to square one and, as the noble Lord, Lord Faulks, put it, the war of the lever arch file.

The speech by the noble Lord, Lord Tyrie, was fascinating and a master class on the different aspects of judicial review: an appeal on the merits, an appeal on JR-plus, or an appeal on JR. When I was a Minister, I dealt with this debate with Ofcom, when it started the process of wanting to move from appeals on the merits to appeals on JR. To the layman, an appeal on the merits is in effect a full rehearing of the case: you go back to square one and simply have the trial all over again. An appeal on JR means that you at least have to identify a flaw in the reasoning of the regulator when it comes to a judgment. If, in effect—here, I bow to the expertise of the noble Lord, Lord Tyrie—settled law informed by European directives means that some element of the merits of the case are taken into account in a JR appeal of a regulator, so be it. It may be the difference between a passive and an active decision, as it were.

In this Committee, we understand how you can judicially review a decision by a government department. When a regulator is making an active decision to bring a prosecution, and it then finds guilty the company that it is prosecuting, some element of the merits may well be taken into account. It seems to me that how it is drafted may well be important, but the clear intent should be that any appeal, whether on the actual decision or the level of the fine, should be an appeal based on JR, when it comes to how a judicial review is understood when appealing a decision by a regulator.

I finish with the simple point—this is the stuck-record part—that it clearly is the settled will of this Committee, and I suspect it will be the will of the House when this comes to Report, to constantly guard against giving the SMS companies too much opportunity to wriggle out of decisions made by the regulator.

I should add that a lot of the tone of my remarks at Second Reading and in Committee might make it seem that I am in the pocket of the regulator. I am certainly not. I have lots of concerns that, at other times, would make me say that I think the regulator often strays too far and interferes in far too many cases. I am not resiling from the fact that there clearly should be an opportunity to appeal its decisions. Often, it backs away before it gets to a decision, but its interference in mergers and takeovers sometimes leaves me slightly baffled, particularly when it involves companies that have very little presence in the UK market. I am not saying, by any stretch of the imagination, that the regulator is perfect, but I know that any procedure it undertakes, as it will do when this law is passed, will be long and expensive, so we must guard against making it even longer and even more expensive.

[Baroness Harding of Winscombe (Con)]

My Lords, I seem to have found my space in this Committee following my noble friend Lord Vaizey again. I have put my name to Amendments 65, 67, 71 and 72 in the name of the noble Baroness, Lady Jones.

I would like to add a possible new element to the discussion, as I am conscious that otherwise we are all just literally repeating each other’s words. My noble friend Lady Stowell talked about the practicalities of a full merits appeal for fines and her concerns. We should also think about the incentives on the designated firms and on the CMA.

Much of what we are debating in this Committee is about how we balance the inequality of arms between companies with enormous resources, and the concern that independent regulators, given a large amount of power, can occasionally make mistakes. That is the essence of this debate. The noble Lord, Lord Tyrie, spoke eloquently about the risk of regulators making mistakes. I wish to add to the discussion some facts about the sheer scale of the inequality of arms.

According to a number of different sources, the best public assessment we can get of Apple’s legal budget is that it is north of $100 billion a year. Bruce Sewell, who stepped down in 2017 after eight years as Apple’s general counsel, gave an interview to a student at Columbia Law School in 2019 in which he set out how he thinks about the legal department and the legal budget in a technology company. He said that, rather than take clearly safe actions, the job of the general counsel is to

“steer the ship as close to that line as you can, because that’s where the competitive advantage lies … you want to get to the point where you can use risk as a competitive advantage”.

So, when you have a $1 billion legal budget, you can afford to play the risk card on every review. You can afford to fully resource every full merits review, whereas when you are the regulator, with a substantially smaller legal budget, you cannot risk every single one of your decisions going to a full merits review.

The incentives are equally divergent. The incentive on the regulator is to be really risk-averse; to not risk being challenged. That means that you will not bring the case in the first place. As the noble Lord, Lord Tyrie, said last week, we know that we need to embolden our competition regulator. One of the big opportunities on leaving the EU is to have a much stronger competition regime because we know that that will drive stronger economic growth. But a full merits regime, in any part of the process, will make the regulator more risk-averse and will drive the incentive to sail closer to the wind, as Bruce Sewell said. Sailing closer to the wind means less collaboration with the regulator, because you are much better off playing your legal cards in the courts. In both those cases, that is not the regime that we are trying to design. We need to recognise that it is not just about practicalities; incentives are really hard to avoid if you have a full merits appeal process at any stage.

I am therefore left asking why the Government are proposing to do this for fines. The argument we have heard up to now is that the reason for doing so is to align with the Enterprise Act. However, as the noble Lord, Lord Tyrie, beautifully set out, they are not really aligning with anything in this regime, so that argument does not wash. It is not the same as the regulatory regime for appeals in the sector I come from, telecoms. As I said at Second Reading—I apologise for repeating it—I do not really understand why small telecoms companies, tiny in comparison with these tech giants, are fine to cope with a JR on fines decisions, but the large tech giants need the extra protection of a full merits review, in case they are fined too much money. It sounds like the worst form of tech exceptionalism. Looking at digital regulation in this House in the last couple of years, we have learned that the era of tech exceptionalism should be over and that technology companies are just the same as other companies. They are not wicked and evil but driven by incentives to do a good job for their stakeholders, and if we define the rules of the game to encourage them to use their legal budgets to challenge the regulator, that is what they will do.

Therefore, I am left to believe, as the noble Lord, Lord Tyrie, said, that the only reason for the change made on Report in the House of Commons was that it was part of some form of explicit or implicit deal to open a back door that will weaken the Bill, which will therefore not achieve what we want. I strongly support the amendments in the name of the noble Baroness, Lady Jones. Later we will come to how, if we accept them, we will ensure strong parliamentary scrutiny. I hope very much that we do not think we trade one for the other.

--- Later in debate ---

[Lord Clement-Jones (LD)]

My Lords, it is lovely to be reminded of previous remarks but, of course, that was then and this is now. We were talking about the standard for Ofcom then; today, we are talking about the CMA standard. The noble Lord would need to produce evidence that that standard did not in fact have a really poor outcome as a result of the power of big tech not being as limited as it could have been. He talked about us needing to recognise the power of big tech, but that is exactly what adopting the JR standard—the Wednesbury “unreasonable” standard that the noble Lord, Lord Faulks, talked about last week, and which all of us are content to stick with—would do.

Of course, what we are trying to do, if possible—if the amendments in the name of the noble Baroness, Lady Jones, are accepted—is to revert back to a JR standard for penalties. I believe that consistency across the board is rather more important than trying to revert to a form of appeals standard that obtains in a different part of the regulatory forest. However, as the noble Lord said, the danger of executive overreach is much more easily cured by increased parliamentary scrutiny than by trying to, in a sense, muddy the waters of the test for appeals.

What the noble Baroness, Lady Harding, said about incentives was entirely right. Litigation has clearly been used and is being used by big tech for strategic business purposes. We are trying to make sure that this does not drag on for ever and that appealing against the penalties does not open up the whole caboodle as a result. The noble Lord, Lord Black, and others who talked about the change of standard for penalties infecting other aspects of a CMA decision, made very strong points.

Ultimately, the Minister has a large number of questions from noble Lords. The noble Baroness, Lady Stowell, asked what would be relevant for an appeal on penalties. What is the motivation for the Government in putting forward this new standard for penalties? What is so special about it and what evidence did they use to come to that view? Is not the danger of using a merits appeal basis that the decisions on which the penalty was based will be unpicked? The practicalities were also raised by a number of noble Lords.

[Lord Vaizey of Didcot (Con)]

I intervene on the point that the noble Lord, Lord Tyrie, made to the noble Lord, Lord Clement-Jones. There is a difference. The noble Lord was absolutely right to raise his concerns about Ofcom moving from a merits-based to JR-based appeal, in 2017. As the noble Baroness, Lady Harding, knows very well, Ofcom often makes decisions on extremely complicated pricing mechanisms. The telecoms companies had a point in saying that a merits-based appeal for Ofcom decisions is worth while, because going through the calculations again could sometimes be worth £50 million, £100 million or £200 million.

Ofcom was right in finally moving to JR for those cases when it took quite important strategic decisions about the marketplace—for example, forcing Sky Sports to offer its content wholesale to competitors. The noble Lord, Lord Clement-Jones, had a point then and he has one today.

[Lord Clement-Jones (LD)]

It is very nice and helpful to be reminded of things that I had forgotten entirely. We need to make sure that we are consistent across the board. A full merits-based standard is not, for example, used to appeal against fines issued by Ofcom under the Online Safety Act. These Benches have serious concerns regarding the insertion of two different appeal standards in the Bill, as it may decrease the deterrent effect and risk lengthier appeals, as we have heard.

If we are not successful in persuading the Government to change back to JR for penalty appeals, and a merits appeal is to be included, a number of amendments—the amendment in the name of the noble Baroness, Lady Stowell, that in the name of the noble Lord, Lord Holmes, and my amendment—are of great relevance to make sure that we do not see that drift that the noble Lord, Lord Black, talked about. A failure to do so could run the same risks as an entirely novel appeals standard. On that basis, we very much support the amendments in the names of the noble Lord, Lord Holmes, and the noble Baroness, Lady Stowell, and my own Amendment 68, which would ensure that there is no further extension of the merits appeal standards into any other part of the Bill. It is intended to have the same impact and draw a clear line in the sand beyond which no court can go.

I am sorry that we do not have the noble Lord, Lord Lansley, here to reveal perhaps another letter from a Minister. We had an interesting discussion last Wednesday, when the noble Lord, Lord Lansley, quoted the letter, sent to Damian Collins and Sir Robert Buckland, about the nature of the intention behind including “proportionate”. It said:

“In practice this means that firms will be able to challenge whether the DMU could have achieved its purpose for intervention through less onerous requirements”.


In a sense, that is a massive invitation to litigation, compared to ordinary JR. If that move is an invitation to litigation, think how much further along the road we are travelling if we go for a merits test for the fine and the penalties. I hope the Minister will therefore reverse course back to the pre-Report situation in the Commons; that would give a great deal of satisfaction around this Committee.

--- Later in debate ---

To address the points made by my noble friends Lady Stowell, Lord Vaizey and Lord Kamall, and the noble Lord, Lord Tyrie, which were echoed by other noble Lords, firms will be able to appeal penalties only on their merits. The CAT will be able to quash the penalty and change its value or the date by which it is required to be paid. Appeals against all other digital markets decisions will be under judicial review principles. Where a penalty is quashed, the underlying breach decision still stands, unless it is separately reviewed under judicial review principles. If an SMS firm breached a conduct requirement enforcement order and was fined for it, it could appeal the breach decision on JR.

[Lord Vaizey of Didcot (Con)]

I found my noble friend’s remarks very helpful, because they shone a brief light on the Government’s position. Is he saying that, by introducing an on-the-merits appeal for fines, the Government are effectively allowing the CAT to substitute its decision for that of the regulators, whereas if it were a judicial review it would simply have to send back the decision on the quantum or the timing of the fine back to regulator; in which case, he may have a point?

[Viscount Camrose (Con)]

I hope very much that I have a point. I think it would be best for me to write to my noble friend and the members of the Committee to clarify that.

Digital Markets, Competition and Consumers Bill

Lord Vaizey of Didcot Excerpts

2nd reading
Tuesday 5th December 2023 Lords Chamber

[Lord Vaizey of Didcot (Con)]

My Lords, I am grateful for the opportunity to speak so early in this debate, ahead of many noble Lords who actually know what they are talking about and have specific expertise in this area. I begin by declaring my interests in the register, specifically my role as a trustee of Tate, adviser to Pixel United and broadcaster on Times Radio, which is owned by News UK.

I should say from the outset that I am a huge supporter of this Bill. As the Minister set out at the Dispatch Box, updating our competition regime—for the first time comprehensively, I think, for some 25 years —is long overdue, to take account of how the digital tech giants have changed the landscape. It is one of a number of pieces of legislation that this Government are putting through, including the Online Safety Act, the forthcoming media Bill and the data protection Bill, providing a much-needed framework for regulation of digital companies.

I shall concentrate on two issues in the Bill, but I have to say that I was extremely grateful to all the Front Benches for highlighting some of the other issues, which I was blissfully unaware of, particularly aspects such as copyright—so I may well get stuck into some other issues in Committee. But we all know what we are talking about, when we talk about giving the competition authority power: we are talking about the power to take on big tech and big platforms such as Apple and Google, which have effectively established a duopoly. They set the terms and conditions and the rents, and there is very little comeback.

It is an unusual position to be in, because as consumers we all benefit from this technology. During my speech, as it becomes duller and duller, noble Lords will whip out their iPhones and androids and have a range of apps to choose from. But this is really a Bill which puts small businesses in the place of the consumer, because small businesses are being shut out from these opportunities —and who knows what other apps noble Lords could have taken advantage of if this Bill was already law.

One key issue for me is the appeals standard, because it is vital that the regulator has the opportunity to take on big tech, reach judgments and levy fines. I know from my time as the Telecoms Minister, working closely with Ofcom, that an appeal on the merits was a gift to the big companies and a burden on the regulator. It wildly extended the time in which a proper conclusion could be reached, it cost huge amounts of money and the firepower that could be deployed against the regulator, in terms of the quantity of lever-arch files, was something to behold. So, it is quite right that we have judicial review as the appeals standard in the Bill—which I think only adds to everybody’s confusion as to why the Government appear to have muddied the waters.

The great opportunity, obviously, of a Second Reading debate is to raise these issues, to explore them in Committee and to give the Government ample time to explain why these changes have been made and why they think they are the right ones, because I obviously approach it with an open mind. For example, if there is going to be a merits appeal on fines resulting from an adjudication, that may work provided it is clearly limited, effectively, to the quantum of the fine and no more. Nevertheless, I would still like to know why this slightly confusing change has been made from a simple JR standard throughout the process. Then—and it has already been raised by both opposition Front Benches—there is the idea of proportionality in the JR appeal standard and imposing conduct requirements. Some people say that this, in effect, creates a new appeals standard of JR-plus: again, this is very confusing. It would be much better to keep it simple and straightforward, because, goodness knows, those big companies have enough resources to tie the regulator up in knots without the Government, perhaps unintentionally, giving them a helping hand.

There are numerous other, smaller points within this framework of how the investigative process works which are important to highlight. They have been highlighted, as I am sure noble Lords are aware, by a number of organisations and campaign groups that wish to bring them to our attention. These include the consultation rights for challenger tech firms to be involved from the very beginning of a CMA process to avoid the circumvention of any solutions by strengthening the leveraging principle, so that, in effect, big tech cannot extract rents by using a different method. We have already heard, as well, about the countervailing benefits exemption—the ability for companies to argue that they are benefiting the consumer; and the removal of the word “indispensable”, which I understand is a clear legal term and therefore has a slew of case law on which the regulator could rely, again causes more confusion. My overwhelming message to the Government is that they have got it absolutely right in applying the JR principle; why are they therefore setting these slightly confusing mini changes throughout the process, because they do not really add up?

I also want to talk about a separate issue. I am sure, looking around the Chamber at some of those who are due to speak, that subscriptions will come up. I hugely support the idea that it should be as easy as possible, in a digital age, to cancel a subscription. I remember well once taking out a subscription to an online publication because I wanted to read a particular article and then, when I wanted to cancel the subscription, there was literally no way of doing it—it was a US magazine. Luckily, I knew the chief executive, so I found myself ringing him and begging him to allow me to cancel it: that cannot be the right way.

We all know, with our iPhones, that it is only recently that they have changed the way we can cancel subscriptions on an iPhone. It is, I am afraid, a truism that many companies that offer subscription products have an incredible imagination when it comes to making it as difficult as possible to navigate your way out. Most people should be confident enough about their product to know that they will keep their consumers if they continue to provide a fantastic product, and they will lose them if they do not.

Let me, however, completely contradict myself by asking the Minister—he knows what is coming—to exempt charities from the rules that are coming in the Bill. The Bill treats charitable membership, as I am sure he is aware, as a commercial transaction rather than a donation. That means that memberships or subscriptions would have to be refundable, and it means that charities cannot claim gift aid on the subscription, because gift aid applies only to donations which cannot be refunded.

Numerous charities have contacted me and, I am sure, other noble Lords, including very well-known ones such as the National Trust, the Zoological Society of London and the Royal Horticultural Society—you cannot say no to the Royal Horticultural Society—and Tate finds itself in the same basket. The changes would put pressure on Tate’s budget—I will not read out the cost it has estimated—and therefore could force the Government to look at their grant in aid for not just Tate but many other museums. It would have deep implications for Tate’s ability to fulfil its public service. As well as the financial costs, there would be huge additional bureaucratic burdens.

As I am sure we are all aware, charities are calling for charitable membership organisations to be included in the list of exemptions. For example, Tate is already regulated by DCMS and there are exemptions in the Bill for suppliers of services regulated by Ofcom. In the other place, the Minister introduced an amendment excluding the lottery as having charitable ends and already being regulated elsewhere. Surely, something similar should apply to other charities too. Have the impacts on charitable memberships been considered, in particular the pressures on national museums and their grant in aid allocations? If an exemption is applicable to the lottery as being already regulated and having charitable good, why does it not apply to museums and other charitable membership organisations?