Product Security and Telecommunications Infrastructure Bill

Baroness Merron Excerpts

Consideration of Commons amendments
Tuesday 22nd November 2022 Lords Chamber

This is in the context of the Government continually failing to hit targets on broadband connectivity and digital deployment. I am sorry to say that their reluctance to agree to a review of this nature is just another example of their unwillingness to be scrutinised. I hope that the Minister can give us a better answer, but so far it has been extremely disappointing.

[Baroness Merron (Lab)]

My Lords, I am sure the Minister has picked up on the mood of your Lordships’ House today, as I know he will have done in previous debates. I am grateful to him for outlining the Government’s approach on infrastructure rollout and the concerns regarding a review. However, like other noble Lords who have spoken today, I feel that the department is still missing the point. It is appreciated that the Minister acknowledged the sentiments behind the original amendment. In common with other noble Lords, I am also grateful for the time that he and his officials have given to the discussion and consideration of the points that have been raised.

However, the original amendment before this House, which we are looking at again today, was intended to help the Government—something I emphasised in the meeting with the Minister—not least because it is an attempt to bring together balance, fairness and efficiency and to take a rather different approach from the one we have seen thus far, which the noble Lord, Lord Clement-Jones, has just referred to, of a trajectory of continually watering down ambitions because the regime is simply not delivering at the required pace. It would be better to tackle the root problems to find a way forward than moving the goalposts, which is what has been happening so far.

The creation of new stakeholder bodies could prove to be a positive step, but we need to acknowledge that this is not the first time we have seen such an initiative. DCMS already runs a number of working groups, and the discussions within them have rarely led to any significant breakthroughs. It would be of interest to hear why the working groups in this setting will be any different. While wishing the national connectivity alliance well in its efforts, establishing new groups or structures will be of little use if they become—as other noble Lords have said—talking shops, or, very significantly, if underlying regulation becomes ineffective.

We welcome both sides of the rent debate getting around the table, but it is important to say that our concerns about rollout go beyond issues around the valuation of land. In any event, as the Minister has said, Parliament will not have a full role in the upcoming discussions. As the noble Earl, Lord Devon, has indicated, we could do with some more detail about the reference the Minister made to the way in which Parliament will be referred to in the deliberation. I would also appreciate the level of detail that has been requested.

These problems are not going away—if anything, the situation is likely to get worse before it gets better, particularly given the increased volume of tribunal cases and the Government’s refusal to make their new arbitration process mandatory. It seems that the Government hide behind existing processes, claiming that an independent review would unnecessarily duplicate Ofcom’s role, but the fact remains that the current system is not working, and that is what we have to address. The disputes and regulatory ambiguity mean that we are not delivering the upgrades that millions across our country so badly need.

I am sure we all agree that better connectivity is crucial to future economic growth—which is supposed to be the Government’s priority—but with every delay to our rollout and every problem that is being faced, we are losing ground to international partners. Yes, the Bill will deliver progress in some areas, which is why we will not delay its passage any further, but without concerted efforts, we are likely to simply rerun these very same debates again and again in the years to come. There was a window of constructive opportunity here, and I put on record my great disappointment that the Government have not recognised this.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to noble Lords for the points they raised in the debate today. I will try to respond to the questions that they have asked. I understand your Lordships’ desire to ensure that the Government are held accountable, as we should be, for the legislation that we enact, and that we are taking appropriate steps to monitor its impact. I would certainly not disagree with that sentiment.

I will start with the comments on the valuation regime, raised particularly by the noble Lord, Lord Cromwell. This, of course, has been debated at length throughout the passage of the Bill, both in your Lordships’ House and in another place. I am grateful to the noble Lord and others for their time to discuss this in more detail, but we are now reaching the point where we are at risk of repeating ourselves. There are no new points to be added at length. I ask noble Lords to bear in mind that the valuation regime was introduced through the Digital Economy Act 2017. In the intervening period, the public interest in access to digital services has only increased—a fact underlined, of course, by our reliance on those services during the Covid-19 pandemic. The case for a framework which encourages investment has, therefore, never been stronger, and we think the statutory valuation regime is an important part of that framework.

My noble friend Lord Northbrook and others mentioned our scepticism about the CEBR report. This is not to denigrate the CEBR itself, and I will not expand on the points contained in the note that he and other noble Lords have seen, to which he referred. I underline, however, that it was commissioned by the campaign group Protect and Connect, as the noble Lord, Lord Clement-Jones, acknowledged, and there are certain campaigning groups that have been, throughout the passage of this Bill, seeking to influence the debate, which have vested interests in the matter. They are perfectly at liberty to make their points in the way that they wish, but it should be borne in mind that the organisation funding this campaign stands to make significant financial gains if the changes to the 2017 valuation framework are reversed.

I hope I can give greater reassurance to my noble friend Lord Northbrook on the point he raised about transitional measures. The Government are considering the implementation strategy for this Bill very carefully, including possible transitional provisions. I reassure noble Lords that the implementation of the Bill will be discussed with all interested parties, including those representing the interests of landowners. The Government are committed to ensuring that the Bill is brought into force not only in a timely manner but in a sympathetic and responsible way, taking into account the range of impacts that different approaches may have on different groups.

The noble Earls, Lord Lytton and Lord Devon, the noble Lord, Lord Cromwell, and others flagged the evidence base on which the Government’s conclusions are based. The Government’s position is based on a wide range of information. That includes data on coverage and connectivity, which is collated by Ofcom and which demonstrates that substantial progress has been made since 2017. I repeat my apology to the noble Earl for the delay in sending him the data during our debates on this Bill, partly because of the interruption in service on my part. It is true that we have taken into account data provided by the industry on the number of agreements completed since 2017, but these are data that can be supplied only by the industry. If the valuation framework had stalled the market or slowed down deployment, it would not be in the sector’s interests to try to maintain that framework.

A number of noble Lords talked about the reduction in rent, which we have seen since the 2017 reforms. It sounds as though we might not come to an agreement on the precise figure, but rent is only one element of the financial package that operators may offer to landowners. Within the legislative framework, separate sums can be offered as compensation to cover potential loss and damage; other variations might occur in practice within the market. For example, as part of the financial package, operators might choose to offer an early completion incentive payment. I am concerned that some of the case studies that have been drawn to noble Lords’ attention may ignore the overall package offered to landowners or fail to acknowledge that figures presented might have been an opening offer, when ultimately very different terms might have been agreed once proper negotiations have taken place. The amount of rent received will, in practice, often depend on the much wider circumstances in which financial offers are made and final terms are agreed.