Property (Digital Assets etc) Bill

Lord Vaizey of Didcot Excerpts

Second reading committee
Wednesday 6th November 2024 Grand Committee

[Lord Vaizey of Didcot (Con)]

My Lords, it is an honour to have an opportunity to speak on this Bill. I refer to my entry in the register of interests, which includes sitting on the advisory board of two crypto- currency companies and, indeed, one environmental company that uses tokens and the blockchain.

I begin by saying what an honour it is to follow two such distinguished speakers, including the noble Lord, Lord Holmes, who has established himself over many years in this House as a real expert in the emerging technologies that are going to transform not just the British but the global economy. Hearing his thoughts about the use of blockchain going forward was very instructive. I am also following a Lord Chief Justice, who made a point that I was going to make at the end of my speech but will now move up the agenda in terms of where this Bill sits in the international context of different legal systems and jurisdictions.

I thank the Government for fielding such a heavyweight team of hereditary Peers, because it reminds us yet again of the incredible contribution that our hereditary Peers make in this House, particularly on technical but very important, narrowly focused Bills. I hope that they will do so for many years to come.

Obviously, today we are welcoming—well, welcoming may be too strong a word, but we are noting—the election of President Trump. I have been looking at my bitcoin holdings as they soar on the back of it, because he is, apparently, the crypto president. It will be interesting to see the developments that happen in the US, because I want to focus on crypto and technology.

Two important points—I hope that does not sound too patronising—have been made by my noble friend Lord Holmes and the noble and learned Lord, Lord Thomas, on whether the Bill is necessary and whether the common law already defines what a digital asset is or could be. The Minister said that a digital asset is considered property if it has the necessary characteristics of property, by which I assume he means it exists as a unique and unchangeable asset that can be passed from one party to another. He referred to intangible assets and made the point that multiple copies of a Word document can be made. However, within that word “document” sits the intangible asset of intellectual property. Legislation has made it clear what can count as property, including copyright Acts dating back to the beginning of the 18th century, so this Bill may well be necessary to make it clear that the courts have jurisdiction to define a digital asset as property.

That links very well with a point from my noble friend Lord Holmes. Interestingly, this is a Ministry of Justice Bill which resulted from a Law Commission report, but it is also a digital and technology Bill. It is in many ways a flagship not just of our English legal jurisdiction keeping up with the times but of this Government leading on digital policy. I feel strongly as a former Minister in this area that the British Government need to maintain their lead and status as one of the jurisdictions to which people look for policy innovations. I recently spoke to the Malaysian Digital Minister, who was in London last week and made it very clear that Malaysia looks to us on policy for such things as artificial intelligence and digital identity. I appreciate that I am straying somewhat from the core of this tiny Bill, but within it lies the important message that the Government are prepared to bring forward legislation that will maintain Britain’s status in this important area.

My noble friend Lord Holmes mentioned that he has been talking about blockchain since 2017; I am pleased to get one over on him, as I was lucky enough to write the preface to the Government’s consultation on distributed ledger technology in 2015. Those were the days when George Osborne, echoing what I have just said, wanted the British Government to be at the forefront of emerging technologies and the Treasury to be on the front foot in embracing them. Rather like with artificial intelligence and the metaverse, we have been through so many iterations of how this will eventually play out. The market will eventually show that, but we have talked about central bank digital currencies, for example, and the Bank of England has done many reports on it.

I will dwell a bit on what we call cryptocurrencies and know as bitcoin, which is becoming more and more mainstream. It is interesting that there are now these things called exchange-traded funds, through which normal consumers can go to very well-established financial institutions and effectively buy bitcoin, rather than going to the Wild West of the many crypto companies that have emerged over the last few years. I find bitcoin and cryptocurrency a fascinating development. In theory, there is no reason why bitcoin cannot be currency. It has all its attributes; it can be traded and used to purchase things—just as gold can effectively be a currency because we decided that it has a value and we are willing to exchange it for value. However, bitcoin and cryptocurrency quickly get involved in the geopolitical debate—the prominence of the dollar and the role of the nation state in issuing currencies—which is why it is so controversial. It is also controversial because it can be misused by nefarious elements, but it can be a fantastic asset for people excluded from normal banking facilities. The ability to use bitcoin to transfer aid to Ukraine is an obvious example.

I would like the Minister perhaps to reflect on this. I appreciate that it is not really his department that would oversee cryptocurrency regulation—it would be the Treasury and perhaps the Department for Science, Innovation and Technology—but it is the case that the last Government were very much on the front foot in talking about putting regulation in place for crypto- currencies. In February 2024, the then Economic Secretary to the Treasury, Bim Afolami, said that the UK Government were going to get new rules governing stablecoins and staking services for crypto assets approved by Parliament within the six months ahead of the general election. That consultation has obviously run into the sand, but this plays to my fundamental point about technology: once the genie is out of the bottle, it will not go away. It is much better to regulate these technologies than simply to allow them to develop in a grey area. In that respect, we encourage this Government to review the effectiveness of the new rules that the last Government introduced governing the financial promotions of digital assets, to ensure that this new regime is working. This was only recently introduced, at the end of last year, and people would like clarity on whether these rules are effective.

Fundamentally, the opportunity for the UK potentially to take a lead in this important area would be the licensing of digital asset firms by the Financial Conduct Authority. It remains the case that this kind of licensing is very slow. It takes more than a year—about a year and a half—to get a licence in order to be a digital asset firm. The number of applications has fallen by more than 50% because of the bureaucracy involved. It is also difficult for a lot of these firms to get access to banking services and other professional services, such as insurance and external auditors. Some G7 jurisdictions have leaned into this issue and taken action to mandate banks to provide bank accounts to these kinds of firms.

There needs to be continued—indeed increased—engagement between the Government, the digital assets industry and the blockchain industry. As I say, the UK remains a technology leader. There was a moment in time a couple of years ago when people expected the UK—particularly under the last Prime Minister, given his interest in technology and financial services—to put the UK at the forefront.

So the digital assets Bill is seen by this industry as an important step forward and a recognition that digital assets can be exchanged and have value. My message to the Minister is that the Treasury and the Department for Science, Innovation and Technology need to step up alongside him and at least give clarity on the Government’s thought about this industry, how and whether it should be regulated, and whether they want the UK to be a centre for it.

Public Libraries

Lord Vaizey of Didcot Excerpts

Thursday 12th September 2024 Grand Committee

[Lord Vaizey of Didcot (Con)]

My Lords, my noble friend Lady Sanderson has done a cracking job with a fantastic report. I offer five thoughts on libraries.

First, libraries have always been funded by local government; they have never been funded by central government. There was a massive row in the 19th century, when Parliament brought in a law to allow local government to raise money on the rates to pay for libraries. Knowledge was then considered a dangerous thing for what was then the working man.

Secondly, libraries are no longer just about books; they are community hubs. They are about access to local government services, access to computers, safe spaces and homework clubs. As such, there is no one-size-fits-all model; it could be a public/private partnership or it could be a charitable trust. Local government—this is one area where it has a degree of autonomy—should set up library services as it thinks fit.

Thirdly, statistics about libraries closing are completely misleading. Sometimes it is good to close a library that is hugely expensive to maintain, particularly if it means you can extend opening hours in other libraries.

Fourthly, libraries come under the Arts Council—it was something I did when I was the Libraries Minister—but they should actually be part of the department of local government. They are a local government service; they are not actually a cultural service, which is ironic considering that the DCMS used to be called the Office of Arts and Libraries.

Finally, I offer one free policy for the Government, which is to double the public lending right. That would cost very little money, but it would allow the authors mentioned by the noble Baroness, Lady Rebuck, to live the lifestyle to which they are now accustomed. It would earn massive plaudits from the authorial community.

--- Later in debate ---

[Baroness Twycross (Lab)]

I have another minute and a half or so. I have heard noble Lords’ request for more time to discuss libraries going forward. It was helpful that the Chief Whip was here in the chair at the beginning and heard that.

I have covered the fact that the Secretary of State has a statutory power to intervene. DCMS monitors proposals by library authorities to make changes to their library service provision. Conversation with councils enables discussion of proposed changes to service provision and insights into local delivery. So far this year, the department has engaged, either in person or virtually, with 31 local authorities.

I will cover a couple more points that were raised. The noble Baroness, Lady Sanderson, asked whether DCMS will address the data black holes in libraries. I believe I have covered that, but we are keen to make sure that there is more robust, meaningful and consistent data so that councils can make sound decisions.

A number of noble Lords mentioned the British Library attack. DCMS remains in close discussion with it about the ongoing impact of the cyberattack. DCMS hugely values the British Library’s contribution to the library landscape, not just in this country but internationally, where it is a huge asset.

A library is not a stand-alone service, as highlighted by the range of points raised. It supports other public services to achieve outcomes vital for individuals, communities and the nation to flourish. The Government fully recognise the importance of libraries. They recognise the pressures facing public libraries and the important services they provide to local communities. The Government are committed to giving stability back to local councils so that services such as public libraries that they are responsible for can best meet the needs of those communities.

[Lord Vaizey of Didcot (Con)]

As we have so much time left in the debate, I will make a quick point following on from the excellent intervention by my noble friend Lady Bottomley—I do not know why noble Lords opposite were so grumpy about that. I remind the Minister that the one policy that central government has complete control of is the public lending right. I would be interested to hear whether she will communicate with the Libraries Minister about the opportunity to review it, because the budget has been frozen for many years.

[Baroness Twycross (Lab)]

I will make the noble Lord’s point to the Libraries Minister.