Digital Economy Bill (First sitting)

Calum Kerr Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 11th October 2016 Public Bill Committees

[The Chair]

The acoustics in the room are terrible. If Members and witnesses could really speak up, that would be very helpful.

Sean Williams: To answer from our perspective, we are willing to enter into a binding legal commitment that we will deliver at least 10 megabit broadband to 100% of premises by the end of 2020. Our objective with this is really to give the Government and Ofcom comfort that we can get on and do this.

I would emphasise that I think that there is a lot of competition, as the Baroness just mentioned. We have Virgin expanding their network, we have Gigaclear and Hyperoptic expanding their network and we have the mobile operators expanding networks that can deliver 10 megabit broadband by 4G. There is a lot of competition to deliver this. For our part, we are willing to undertake to make sure that every single premises can get 10 megabits by the end of 2020.

Baroness Harding: The MP for Devizes raised a very good question. I am a firm believer that competition will do the majority of this, and we should try our damnedest to make the private sector fund most of this through competition, but I think there is a fair chance that in three or four years’ time a number of your constituents will not have broadband that they think is good enough.

I promise that I will not take up the whole session on this, but I think that the solution is to separate Openreach completely and put a universal service obligation on an independent Openreach. Once you have an infrastructure entity that is not owned by one of the retail providers, that takes away a lot of the industry issues with the public subsidy in some shape or form needed to get proper fibre for that final few per cent.

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

Q Given that broadband speeds have doubled in the past three years, and that the pace of demand is accelerating, I find it staggering that we should say to rural constituents, “You are second-class digital citizens and must accept 10 megabits.” How do we bring forward a scheme that ensures that, in areas where they want to go further to ensure that they keep up or even get ahead, the universal service obligation does not peg them at a low speed? How could we design a flexible, regional USO model? Has that been considered by anyone on the panel?

Sean Williams: I do not want to occupy a disproportionate amount of air time here. We think that, by the end of 2020, we will be able to deliver fibre broadband speeds to probably 97% or 98% of households across the whole country, and at least 10 megabits to everybody by then, unilaterally and without any public funding or a USO. That will continue to go on after that as we continue to innovate networks.

We also have a commitment to deliver ultrafast broadband—more than 100 megabits—to 10 million premises, and fibre-to-the-premises deployment to another 2 million premises by 2020. There is going to be an awful lot of network investment, which, by the way, can only happen in an integrated, end-to-end business case.

[Calum Kerr]

Q Mr Williams, do you think that a tactical, on-demand USO only provided by BT can really provide the strategic outcome—a direction toward “gigabit Britain”—that I think we all agree is a matter of when and not if? If we continue to do this in a piecemeal fashion surely all we are going to do is cement the digital divide, rather than close it.

Sean Williams: To get these networks out to as many premises as possible, by as many providers as possible, through competition and commercial market action is exactly the right solution. To get good networks out to everybody, both mobile as well as fixed, it is important that everybody has an incentive to invest. Through competition and commercial investment, we will get to the answer.

[The Minister for Digital and Culture (Matt Hancock)]

Q I welcome the commitment from BT to reach 100% of premises by 2020, but I ask for a point of clarification on language. Mr Williams, you referred in the percentages to “fibre” and, separately, to “fibre to the premises”. Can you confirm that by “fibre” you mean a combination of fibre and copper and that by “fibre to the premises” you mean pure fibre? The use of the term “fibre” reflects statistics that I understand mean fibre to the cabinet, so I find confusing the offer to households being “fibre plus copper”. I would be grateful if you clarified that.

Sean Williams: I am happy to. When I use the term “fibre broadband”, I mean fibre to the cabinet, which is a combination of rolling out fibre further into the network but with copper into the end premises. When I use the term “fibre into the premises” I mean fibre all the way into the building. I apologise for being unclear.

When I say we will deliver fibre broadband, it will largely be, in my view, through a combination of fibre and copper, but we are also very positive about fibre to the premises and typically deploy fibre to the premises in all new building sites and in lots of Broadband Delivery UK areas. We are developing fibre to the premises solutions that are particularly targeted at small and medium-sized enterprises. We have made a commitment that we will get ultrafast broadband speeds, which is both fibre and copper, and also fibre-to-the-premises solutions to 1 million SMEs by 2020. We have heard the prioritisation that the Government have put on getting very good broadband speeds to small and medium-sized enterprises and we have made a commitment we will get that to 1 million of them by 2020 as well.

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[Nigel Adams]

Q I suspect that the Bill is not going to be subject to the most detailed discussion around the country. However, as a question to both of you, having had an opportunity to analyse the Bill, if we were all pitching this to our constituents across the country, what do you see as the key benefits for consumers?

Pete Moorey: The telecoms sector needs to catch up with where consumers are. That is part of what the Bill is trying to do: we need to recognise that people increasingly see their mobile phones and broadband as essential items. Yet we know that customer satisfaction is very low and that people are increasingly frustrated about their inability to get a signal or to get the broadband speed they are paying for.

There are critical things in the Bill that will start to bring the telecoms sector kicking and screaming into the 21st century. For me, those elements include switching—I think it is incredible that we do not have provider-led switching in the telecoms sector. Automatic compensation is very important. With water, electricity and gas, if we lose a connection we get a compensation payment, but that is not the case in telecoms. The appeals process, which we have heard a lot about this morning, has had a chilling effect on the regulator’s ability to introduce measures that would both improve competition in the sector and better protect consumers.

The final area, for us, is nuisance calls, which we know are some of the biggest bugbears that people face—they are sick to death with receiving annoying calls and texts. To put the ICO guidance on nuisance calls into statute is another step towards tackling that everyday menace.

James Legge: Yes, I think that switching and compensation are important: it is important to hold the feet of the telecoms companies to the fire. But there is possibly an opportunity in the legislation to empower the consumer. At the moment, we have a sort of opaqueness around data and provision. We do not have address-level data. If I want to decide where I am going to get my mobile or broadband from, I cannot just put in my address and find out that the company that provides the best service is x. I have to sign up to someone. Then I can test the level of my service through their internet connection as a customer.

If there was more transparency, and if people had the information to hand, they would be able to make better choices. The market would also be more competitive for mobile or broadband providers, because if they do not provide the coverage, they will lose customers. It is no good waiting for someone to sign up and then find out that switching is jolly difficult, so customers say, “Well, I’ll just put up with this and complain”. We do that terribly well.

We should be able to say, “No, sorry. You didn’t tell me this. I didn’t have the data. Your service is appalling. I’m switching, and it is easy.” The level of switching at the moment is extremely low. A previous witness suggested that there was general contentment, which is not my experience.

[Calum Kerr]

Q There has been a lot of discussion in this session about fixing mobile coverage. Do you think that the Bill will achieve that? It comes down to licence obligations. If we want to do it, we need to set the right licence obligations. I accept that you are going to get less money.

On the electronic communications code changes, if we want the measures to be about driving more coverage, should we actually just exclude existing sites—you will have a lot of landowners and we will have local government bodies that will lose a lot of money—and say, “Access will change but, in terms of valuations, let’s exclude existing sites; this is about you going to new sites and doing them more cheaply”?

James Legge: I had thought—if I have understood the question correctly—that the Minister indicated previously to the House that it was not going to be retrospective.

[Calum Kerr]

Q It is not retrospective, so you will not revisit deals. Essentially, when a site comes up for renewal, the valuation of that land will be treated differently, so costs will drop dramatically. My suggestion is that they should be excluded from a valuation perspective, and the old rules apply for valuation.

James Legge: So you keep the old rules at the renewal point for old sites.

[Calum Kerr]

So you will still see some price erosion, but not as much.

James Legge: I would have thought that anything that brings the cost down for the providers when it comes to rolling out and upgrading infrastructure—

[Calum Kerr]

Q This is existing infrastructure.

James Legge: But a lot of it needs upgrading.

[Calum Kerr]

Q They will be allowed to do it, but the rental cost of that land would go down.

James Legge: Well, we would agree with that. If the rental goes down and it costs less to upgrade the infrastructure, that is a good thing from our point of view. Presumably that would be under the newer system, not the older one. My understanding—and this may be wrong—is that the new code values land and access in a slightly different way, and the cost should be less to the person putting the infrastructure in. I had a discussion with the Local Government Association about that issue. The LGA said that it would potentially get slightly less money on public land, but that there are savings at the other end. If, for example, you have more efficient provision of digital government—“digital by default”—there could be savings at the other end. The LGA has a slightly mixed view. Yes, it might lose some income but, ditto, landowners will—

[Calum Kerr]

Okay. I do not think you understood my question, but I will leave it there.

[The Parliamentary Secretary, Cabinet Office (Chris Skidmore)]

Q Mr Moorey, let us return to your comments about Which? being hamstrung by a lack of data sharing. Could you give a fuller explanation of that? Will you put on record the views of Which? about the public services delivery power, and the potential benefits that it might bring, particularly to the most vulnerable in society?

Pete Moorey: As I said, we are broadly supportive of the measures in the Bill. We are hamstrung from two perspectives. The first is a service delivery perspective. When we are delivering something such as our Which? elderly care website, we want to have the richest possible data available to help people make decisions. Yet on occasions when we have gone to certain local authority providers or certain care home providers, we have had an inability to gather that data and provide it in a comparable way. There is also the need to get that information in a clear and comparable format so that organisations like us can do that much better. It is something we have worked on a lot over the past few years with regard to universities. We are starting to see some of the data coming through at the kind of level that students want when they are making those choices. Clearly, having such legislation would better allow us to do that.

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[The Chair]

It was not the last question.

[Calum Kerr]

Q Have you considered whether automatic compensation should be not just for download speed but for upload speed? On the USO, have you put forward proposals on other, more granular levels, such as cost and latency as well as upload and download?

Pete Moorey: Our general view on compensation is that it really should be down to the regulator to set the specific areas that are covered. It needs to do that with consumers, and it needs to be based on consumer expectations. We need to look hard at what the consumer expectations in this world are. If you look at things like water and energy, actually a lot of those compensation levels and what they cover have not been reviewed for some time. We would not want a situation in telecoms where an arbitrary figure of £30 or £40 was set for particular things and then over time that was not addressed.

[Calum Kerr]

Q They are on or off-type services, though, which, to go your point, should do what it says on the tin. There should be a more granular—

Pete Moorey: Absolutely, and it should meet customers’ expectations for that service.

[The Chair]

I am afraid that brings us to the end of the time allotted for the Committee to ask questions. On behalf of the whole Committee, I thank the witnesses for their evidence. Thank you very much.

Examination of Witnesses

Jeni Tennison and Mike Bracken gave evidence.

Digital Economy Bill (Second sitting)

Calum Kerr Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 11th October 2016 Public Bill Committees

[The Chair]

We have given the witnesses a good half-hour grilling, so if no one is seeking to catch my eye—yes, Calum?

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

May I move on to intellectual property?

[The Chair]

Fire away, sir.

[Calum Kerr]

Q Thank you. There are some welcome measures in the Bill relating to making the protection of intellectual property online as same as it is offline. I note, though, that there is some concern about search engines and how intellectual property would be policed. What is your view on how that will work? Do there need to be additional powers?

David Austin: To be honest, we do not deal with intellectual property. Our core work is the protection of children, and intellectual property is another issue. We do work with an industry for which the protection of intellectual property is very important, but I am afraid I am not the person to ask.

Alan Wardle: I am not an expert on intellectual property, regrettably.

[The Chair]

Colleagues, are there any other questions for these excellent witnesses? No. In that case, thank you very much indeed, David and Alan, for your evidence. We appreciate it.

Examination of witnesses

Dr Edgar Whitley and Mr Scott Coates gave evidence.

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[The Chair]

That is known in the trade as a comprehensive reply. Thank you.

[Calum Kerr]

There was a Coates who played for Liverpool. He was from Uruguay, so they called him Co-ah-tez.

Scott Coates: He played against England once.

[Calum Kerr]

Q He will again.

I would like to ask you about the USO, and then I would like to come on to the mobile environment. I have a problem with the USO not just because of the lack of ambition and what 10 megabits means for people living in those areas, but because the tactical low-speed USO will not push fibre a lot further. The lines between wired and wireless are blurring all the time, so would a more ambitious USO with faster speeds help you, in terms of pushing fibre further and putting other infrastructure out there?

Scott Coates: I think it comes down to the cost element. The further out you go with fibre, the more expensive it becomes. Our infrastructure in rural areas tends to be bigger pieces of infrastructure, so quite often there is fibre coming through it or it links to a site that has fibre, and that creates more bandwidth to power the wireless services coming over it. More generally, I would say that the USO is a start. No one is going to be happy with 10 megabits in a few years, but I would say that you need to start somewhere and it needs to be manageable from a cost point of view.

[Calum Kerr]

Q I will not ask you, then, whether the Scottish Government’s policy to have 30 megabits everywhere is more appropriate. I think that everyone is in agreement that the electronic communications code needed to be reformed, and there are some welcome measures in there, but as an independent infrastructure provider, do you honestly think that that will lead to more coverage by mobile providers, or will it simply give them a better bottom line?

Scott Coates: There are certainly measures that will make it easier to get rid of the bottlenecks and faster to resolve disputes. Running cables to connect up mobile sites has been a real challenge, so being able to fix those problems—that is not really about economics; it is about having faster resolution. Some of the pricing elements I do not think will have a material impact in rural areas when the commercial case to invest is not really there for the mobile operators anyway. The only way you can deal with that is through the licences. The new code will help to remove some of the ransom costs that we see in the industry and certainly give us a much more powerful weapon against those, but on a day-to-day basis, we do not expect to be moving towards compulsory-based conversations with our customers. The industry needs to work on a voluntary basis. That is absolutely essential; it is how it works everywhere else in the world. We have busy infrastructure facilities. We are there on average every 12 days. We need to have a good partnership with our land providers. The code is a really helpful and powerful new tool of last resort, but our whole industry needs to maintain a voluntary basis of engaging as our MO for dealing with landowners.

[Calum Kerr]

May I ask two quick follow-ups?

[The Chair]

Very quickly.

[Calum Kerr]

Q Thank you very much. Mr Coates, I thought you gave a great overview of why independent infrastructure is really important. You obviously feel a concern, so is there specific wording that you would like to see in the Bill that we could discuss at the next stage to ensure that you are protected and the value of your assets is not lost?

Scott Coates: Thank you for that question. We have had a really engaging journey with the Minister’s officials. They have been very diligent and transparent in engaging with us all the way through this fairly long process on the communications code. Our concern generally is that there is a fine line between the technical drafting that says that what we do on land is not covered by the communications code, and the risk of a legal challenge that it might be and might have nil or low value. What we have really asked for is as much clarity as can be provided. That will help to enhance the investability of our business. We are in a different place from the mobile operators and some other network providers, because we do not get any economic benefit from our own infrastructure; it is built for other people to use, so we are not a net user of infrastructure.

[Calum Kerr]

Q So that is a, “Yes, if possible, please.” It is okay; do not answer that. You have already answered. My final quick question is this. Although this is not retrospective, is there any case for excluding existing sites, if this is really about building out more network, in terms of the valuation element, given that a lot of those sites are actually on publicly owned land?

Scott Coates: There is certainly a difference in the substance of a transaction when you are approaching a farmer, a sports club, a university or whatever and asking for access to build a new piece of infrastructure where there is new coverage, and you are having that negotiation in the context of a new communications code that has tighter reference points on pricing. You will have more leverage for that conversation. You will still end up, I believe, paying them a rate way in excess of what zero value would be because that is just how you have those conversations, but it will be less than what is paid today, that is for sure, because you have got this new reference point. The substance of that is very different from the substance of a voluntary agreement you entered into with a firm six or seven years ago and that comes up for renewal in two to three years and the infrastructure is already there.

I think it is important that we have a robust set of tools as an industry but, as I mentioned earlier, it is equally if not more important that the industry acts responsibly and avoids behaviour such as forcing situations where they need a new compulsory purchase tool, even though they have already got access today. There is definitely a way of engaging on existing sites that should be a bit different from new sites, as part of a package of trying to maintain the voluntary support of the land and property sector for our industry.

[Matt Hancock]

Q Could you set out in more detail—you have already gone into this a bit—about what you mean when you say that the code should include land owned by the infrastructure providers but not the apparatus, and the distinction there in the written evidence?

Scott Coates: It comes back to this. Under UK property law, anything that affixes to land could be considered land. At the moment, the code effectively is to regulate land coming into the telecom sector, not to regulate the relationships between telecoms companies. It carves out from land the apparatus.

I am advised that there is a risk of ambiguity. That is probably the best way I could describe it. It may be challenged down the line. This is an evolving and dynamic industry where we don’t exactly know the physical things we are going to be deploying in future. There is a risk that some of the things we do might receive a challenge that it is land not apparatus. I do not know.

Is a new runway at Heathrow infrastructure or land because it sits on top of land? Is the national grid transmission network an infrastructure asset or land because it sits on land? It is a fairly technical point. Like all these things, once the lawyers are running around looking at them, they will find concerns.

All we are saying is that we invest over 20 to 30-year horizons. The more clarity that can be provided is helpful. We acknowledge and clearly appreciate the intent behind Government policy to protect investment and passive infrastructure but more clarity around that will only help the investability of what we do.

Digital Economy Bill (Third sitting)

Calum Kerr Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 13th October 2016 Public Bill Committees

[The Chair]

Welcome. I remind everyone to switch electronic devices to silent. First, I believe that Calum Kerr would like to declare an interest.

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I would like to declare that I am a trustee and voluntary director of Advice Direct Scotland, which also operates as Citizens Advice Direct.

Examination of Witnesses

Peter Tutton, Alistair Chisholm and Dr Jerry Fishenden gave evidence.

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[The Chair]

Please continue, witnesses. We are running out of time.

Dr Fishenden: I would like to see some precision around what is meant by data sharing. Some earlier drafts from about three years ago reflected much better cyber-security and privacy practice around defining what that meant and how we would make sure it was not slopping people’s personal data around, but just confirming specific pieces of data to enable someone to make a decision or undertake a process.

Alistair Chisholm: It is not enough to say on data sharing powers that the organisation should “have regard to” the code of good practice. It must be stronger than that. We need something in the Bill to make sure that the code of practice is not just a one-page set of high-level principles, but will make a difference. That means some conversations with collecting Departments that might have to be quite robust on occasions. Stronger protection around debt protection practices are needed.

[Calum Kerr]

Q Building on that question, if you are sending Mr Brennan emails, copy me in.

We have seen in this session a number of Members trying to drag out of you the positive benefits of data sharing. I hope we have all bought into the positive benefits, but if that is done in the wrong way, there may be a mess with unintended consequences which could be disastrous for individuals. Dr Fishenden, your exasperation with what is in the Bill is shared by other witnesses. We are faced with whether we can strengthen it in such a way that it is workable, or whether we should just oppose it, despite all the benefits. What is your view on whether it is saveable—clearly there is a desire for this—and can you help us to put in enough guarantees so that there will not be unintended consequences?

[The Chair]

Very quick answers please.

Peter Tutton: There is an opportunity here and we will be very happy to help and to work with all of you to make sure there is benefit from that opportunity.

Dr Fishenden: It is important not to lose the opportunity to do the right thing. My concern is the complete lack of detail and, seriously, how quickly that can be put in the Bill in both legal and technical terms. If we have sight of the codes of practice, there may be elements in them that could be in the Bill itself to help to narrow down and define the scope of what it is talking about and to get those safeguards embedded in primary legislation.

Alistair Chisholm: The way that people in financial difficulties are treated has been transformed in this country since 2008 and the pocket where it has not is the public sector, so please do not miss the opportunity to sort that out. Let us work on good principles. It really can be done.

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[Mark Menzies (Fylde) (Con)]

Q All our constituents are victims of nuisance calls. Do you think the law as it currently stands is sufficient to protect them? What measures in the Bill do you think will offer enhanced protection, and when we are dealing with companies that are out to drive a coach and horses through the law, what measures do you think we can put in place to provide protection for customers? If I could lead you down a path, at the moment, if you want to lodge a complaint against a company you have to have the phone number and the website address. When I have asked nuisance call companies, “Can I have your phone number; can I have your website address?” guess what? They have neither of those things.

Lindsey Fussell: We absolutely recognise that nuisance calls remain a huge concern to consumers. We estimate that consumers in the UK will receive about 4 billion nuisance calls this year. If I sit, as I have, and listen to calls coming into our contact centre, I know how distressing and frightening some of them can be to consumers.

As I mentioned earlier, the provisions in the Bill relate to the powers of the Information Commissioner, relating particularly to direct marketing calls. That forms a substantial proportion of the concerns that I know consumers have, and it is great to see the Information Commissioner being given more power to enforce against companies that break the rules, including companies that either do not have consent, or have very aged consent, if I can put it that way, for those calls to be made.

Ofcom’s specific interest is in silent and abandoned calls, which can be especially frustrating and frightening for more vulnerable consumers, particularly. We believe that the best way—because of the nature of the companies, as you have been saying, that are now making the majority of the calls—is to encourage more network blocking of those calls before they reach the consumer. That is something that we are making good progress on with a number of companies. You may have seen recent announcements from Vodafone in this space.

We also encourage companies to roll out software—and BT, again, is doing so shortly—free of charge to consumers to give consumers more power to block calls themselves. It is a really difficult problem but we are absolutely not complacent about trying to tackle it.

[Calum Kerr]

Q Perhaps I can bring you on to the universal service obligation. While we are frustrated by the lack of ambition in terms of the speed offers, if designed correctly it need not hold back regions and countries that want to go further. As you design the scheme, could you perhaps reassure me that it will not hinder but help a Government, such as the Scottish Government, who want to aim for 30 megabits and not 10 megabits?

Lindsey Fussell: Absolutely. As you know, our research shows that the current level of 10 megabits per second is suitable for consumers who need to access at least a reasonable level of communication service. Ofcom is supportive of the fact that the level needs to be reviewed over time, and we would expect it to rise. On our specification, as you know we will be providing advice to the UK Government by the end of this year. We will absolutely look at both the nature of that specification and what 10 megabits could mean in different contexts, and also at how we would future-proof that specification so it is able to deliver faster speeds under a USO if required to in future.

[Calum Kerr]

Q I think there are mechanisms, for example voucher schemes—of which BDUK already has some experience—that could provide foundational funding that allows 30 megabits to be the target, rather than settling for 10 megabits. I hope that is something that will be made possible. You talk about a review period for speed. How often do you think the speed should be reviewed?

Lindsey Fussell: To be honest with you, I think it is probably a bit of a trap. The answer is that it is very difficult to tell. I suspect that, if we were all sat here a decade or even five years ago, we would not be talking in the way we are now. Setting a definitive review period will probably feel too short or too long, depending on how technology develops. The Government have placed the power in the Bill to direct us to carry out reviews, and we will obviously do so whenever asked.

[Calum Kerr]

The danger is that we leave it open-ended, we all get busy and it does not happen. Mr Streeter, may I ask one more question?

[The Chair]

One more.

[Calum Kerr]

Q The very good document from the Minister and DCMS gives us a bit more information on the USO and talks about upload, download, latency and capacity. One of the other factors is cost. I get frequent complaints from constituents, as I am sure my colleagues do, that they do not receive a service that, as Ronseal would say, “Does what it says on the tin.” To what extent are you going to go to a granular level and look at the service, and also include cost as a key metric, so people are getting what they pay for or paying for what they get?

Lindsey Fussell: I understand. The Government have made public the letter that has been given to Ofcom and have specifically asked us to look at the cost of different technological solutions. That will clearly give a range of factors to weigh up when the Government decide how to implement the USO. Some of the issues you go to about how the USO will be enforced and how we will measure performance against it are implementation issues that we will have to consider once we know what type of USO we are implementing. It might be worth saying that, to the extent that we designate a universal service provider, either in one or in several areas, we would have the ability to enforce if they do not meet the commitments they signed up to and to provide the appropriate remedy.

[Nigel Huddleston]

Q I have a question for each of the witnesses. Starting with Mr Close, under the Bill, Ofcom will be given quite significant new oversight responsibilities over the BBC. Can you confirm what skills and attributes Ofcom currently has in terms of broadcasting, and are you confident, given this substantial increase in responsibilities, that you will have the skills and resources to do this job in the future?

Tony Close: There are two parts to my answer. I will begin with the specific provisions in the Bill and then talk about skills. The Bill removes some constraints that were placed in the Communications Act 2003 on our ability to regulate the BBC. We already regulate the BBC but we are subject to some constraints. At the moment, for example, we cannot consider the competitive impact of a significant change to the BBC’s website. The Bill removes those constraints so we can discharge the full range of functions that the charter and agreement would give Ofcom.

Are we currently sufficiently skilled to regulate the BBC to a high standard? Absolutely. We have been regulating broadcasting and making complex editorial judgments for the past 13 years, covering 2,000 separate television and radio broadcasters. Do we need more people and more skills to ensure that we do a great job from day one? Yes, and we are doing that at the moment by ensuring that we have the right number of people and the right skill mix.

Digital Economy Bill (Fourth sitting)

Calum Kerr Excerpts

Committee Debate: 4th sitting: House of Commons
Tuesday 18th October 2016 Public Bill Committees

[The Chair]

Thank you. This is not a flying start, colleagues. I am sure we can up our game as we move on. There will be no meeting of the Committee this afternoon. The Committee will next meet on Thursday at 11.30 am.

Clause 1

Universal service broadband obligations

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I beg to move amendment 56, in clause 1, page 1, line 14, after “the” insert “upload and download”.

[The Chair]

With this it will be convenient to discuss amendment 83, in clause 1, page 1, line 15, after “services” insert “and mobile network coverage”.

[Calum Kerr]

I welcome the opportunity as a new boy in the Bill Committee process to go first. This is the first time I have spoken in this place with my jacket off.

We support the universal service obligation and think it is a positive move, but one of our concerns is the lack of detail on it. The document put out by the Government last week was welcome and provided more context. However, something that is continually missing when talking about speed is that speed is about not just download but upload. We are trying to make that more explicit. The amendment is a small word change, but it is required as we start to recognise what broadband and connectivity is all about. It is more than just the headline speed at which we can download at certain times of the day.

[Louise Haigh (Sheffield, Heeley) (Lab)]

I rise to support amendment 83, which stands in the name of my hon. Friend the Member for Cardiff West and I, and amendment 56, tabled by the hon. Member for Berwickshire, Roxburgh and Selkirk.

All members of the Committee agree that we must do everything we can to ensure that individuals have access to superfast and, soon, ultrafast broadband. It is not only important but, in an ever more connected age, an absolute necessity for both businesses and residences. That is why we support the Government’s tacit aim to designate broadband effectively as a utility in the same way that water and energy are classed as a must-have in the modern world.

We will speak later about our concerns about the universal service obligation, but broadly we believe that there is coalition of support for a much more ambitious USO. That is why we were pleased to hear that the USO can be amended in secondary legislation later when it becomes outdated. However, I fear that, by the time it is introduced, it will already be becoming seriously outdated and, indeed, by 2020, it may feel like a relic of a bygone age when superfast and ultrafast broadband, even in rural areas, will be readily accessible. That is the subject of our new clause, which we will consider shortly.

On amendment 56, it is absolutely right to specify upload and download in the Bill. As we have seen all too often, businesses and residences see a particular speed advertised with no correlation between what they can download and upload. For someone with a business and working from home, accessing online services and transferring files to them can take a lot of time if the upload speed is not up to scratch. That is an obvious cost to businesses. It is not merely an irritant, but a loss in pounds and pence, and in productivity to the UK economy.

There is no mention in the Bill of upload speeds in the USO. That leads to a broader problem of lack of ambition throughout the Bill. Factors such as distance from the telephone exchange and other considerations such as old household wiring can slow down speed. That is why the USO, although welcome, will seem extraordinarily dated in just half a decade, when the roll-out of the USO will have been completed and there will be little appetite for providers or the Government to return to those hard-to-reach places for some time.

On tackling upload and download speeds, we would have preferred the USO to be under the superfast designations from the beginning. An example of the impact of superfast roll-out on one small business demonstrates this perfectly. Within the first year of having superfast broadband, the business reported a 30% increase in sales. We should be ambitious for our small businesses. Instead, this USO potentially condemns them to distinctly average speeds for a decade.

Amendment 83 is a probing amendment to test the Government’s ambition, which certainly needs to be tested throughout the Bill. It is based on a simple principle. We are at the start of a digital revolution that will transform how we work and how we communicate and interact with one another. Access to water and electricity in the home bookmarked our evolution to a more civilised society, so the essentials of the modern era should be similarly guaranteed. The Bill does that in part for broadband and we strongly believe it should cement further ways to roll out universal or near universal coverage for mobile communication.

We broadly support the changes to clause 2 and the amendments to the electronic communications code. Assisting mobile network operators in some of the challenges facing them is obviously important. That includes access to land and knocking down some of the absurd hurdles they must jump through to make what most people would consider sensible adjustments to infrastructure to update existing technology with little visual impact.

The Bill contains changes to a highly complex piece of legislation, which the industry has been seeking to change for some time. Indeed, the Law Commission commented that the legislation is not one of Parliament’s finest efforts. We recognise that. It clearly is not. However, although simplification and amendments to the code are important, there can be little doubt that mobile network operators will receive a substantial boon. That is why this amendment is so important and it is puzzling that the Government did not include it.

Evidence to the Committee suggested that the Bill could reduce the cost of site rental for mobile network operators, which make up a substantial portion of their costs at 40%. With the operators receiving effectively all they have asked for—no one blames them with such a complex and restrictive code—it is clear that our sights must be set firmly on delivery and the Government should not set their ambitions too low. That is what our probing amendment covers and why it is important that, during the passage of the Bill, we receive at least some commitment to improved targets on mobile network coverage.

We are slightly dismayed that the industry will benefit from such a clearly beneficial piece of legislation and that the Government will impose few or no conditions on them beyond what has already been agreed. We are aware that the £5 billion investment and the statutory target were tied to changes to the code, but we are not convinced that the benefits for consumers are greater than the benefits that are being approved for mobile network operators and we would certainly welcome greater reassurance on that from the Minister.

Let us look quickly at the targets set out in the binding agreement in 2014, signed by the then Culture Secretary, the right hon. Member for Bromsgrove (Sajid Javid). They were: guaranteed voice and text coverage by each operator to 90% of the population and full coverage to 85% by 2017. Currently, only 46% of premises have access to 4G from all mobile network operators and a substantial 7% of the population—1.5 million homes nationwide—do not have basic voice or text coverage across the three networks.

The failed Mobile Infrastructure Project, supposed to reach the final notspots, closed in 2015-16. It had erected only 76 of 100 masts, leaving a substantial number of homes without the prospect of having complete voice and text coverage. Given that 71% of businesses rated mobile network access as “critical” or “very important” to their business we believe that mobile network coverage, as broadband is tacitly designated in this Bill, should also be considered a utility. That is what our probing amendment seeks to test.

Clearly, everyone in the country, if asked, would agree. Businesses that rely on mobile networks, local authorities and individuals that use them to communicate would welcome a right to have mobile network coverage within their place of work or at home. This is extremely achievable but the Opposition are concerned that institutional defensiveness from the major network operators is getting in the way of full or near universal coverage for consumers. More than 99% of residents in the UK have access to 2G or 3G of some kind and 90% have access to 4G of one kind. However, for all operators, the figure drops to just 46%.

The infrastructure is in place and it understandably infuriates people working in an office or at home when their colleagues can get network coverage and access to data services while they cannot. While we recognise the concerns around commercial incentive, surely it is right that, once the current phase of the roll-out is complete and significant gaps in full coverage across all mobile network providers still remain, we at least reconsider the case for national roaming and national infrastructure, as is commonplace on the continent.

We are a relatively small island and it should not be the case that commercial defensiveness makes the aspiration of near universal coverage far from a reality. That is why we will table another new clause relating to this part of the Bill to test it before the whole House. It will establish a review of the roll-out of mobile network coverage, which is a critical piece of infrastructure for businesses, residents, and emergency services. As yet, due to what appears to be institutional wrangling and commercial defensiveness, this coverage is not being extended to the entire population in a way they would expect.

As we know from evidence given to the Committee last week, currently more than 60% of communications towers globally are held in an entity separate from the networks that use them. The review will have to take another look at greater diversity in mobile infrastructure and national roaming in order to deliver a universal service. In countries such as the United States, the figure for independent infrastructure is more like 90%. In the United Kingdom, as the Committee knows, it is more likely that that infrastructure is erected on an economic case for the network and operated for the benefit of the network that makes the investment. That is fine up to a point, in that it undoubtedly encourages competition among network providers in areas where they can receive a substantial return, but it makes universal network coverage more difficult to achieve when there is 90% of coverage for 4G of some kind, but only 46% for all kinds.

Our review will also look at open data and how, by routinely publishing costs, location of masts, service quality and plans for roll-out, consumers, particularly in rural areas, but also in urban “nearly and notspots” can make better decisions about which network operator to use.

Throughout the Bill, Labour Members will look to the Government to turn the £l billion concession, however welcome, for the mobile industry into something approaching a near universal service for the country. We should be ambitious about the kind of mobile network coverage we can deliver and not shy away from the challenge.

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[Calum Kerr]

We welcome anything that increases mobile coverage commitments. The Government have done a deal with mobile operators for increased coverage, but the people who will pay for that increased coverage are the local authorities, the Forestry Commission and the landowners—they will suddenly find their rents drop through the floor to nothing. The Government could have revisited the annual licence fees that they collect from the mobile operators and done a deal on that basis, rather than making someone else pay for the increased coverage.

[Matt Hancock]

The hon. Gentleman leaps ahead to the next clause, and no doubt we will have that debate, but I think it is entirely fair for landowners and those on whose land the infrastructure is provided to get a similar return on the value of the land to them, rather than on the value once the land has this infrastructure. That is the change that we will be making because, ultimately, we have put in place a deal to get better service for customers, to get more geographic coverage and to reduce the costs of rolling that out, which is the right deal for the country.

As the hon. Member for Sheffield, Heeley calls for exactly what is to be delivered and as there are other clauses in the Bill to ensure that that delivery happens, I hope that the hon. Member for Berwickshire, Roxburgh and Selkirk will withdraw his amendment.

[Calum Kerr]

I am willing to withdraw the amendment because the document that came out last week provides a level of clarity. There remains a concern that the Bill is light and passes off the detail, which is both an opportunity and disconcerting. This is an opportunity to do something transformational with broadband, but the Bill is not transformational in itself. It will come down to the detail. We were keen to see more specific clarification in the document, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Calum Kerr]

I beg to move amendment 57, in clause 1, page 2, line 4, at end insert—

“(4A) In subsection (4) after “OFCOM” insert “, the devolved administrations in Scotland, Wales and Northern Ireland,”

[The Chair]

With this it will be convenient to discuss new clause 10—Procurement process—

“(1) The Secretary of State must ensure an open procurement process is held in respect of the allocation of the universal service order.

(2) The Secretary of State must appoint a body to undertake an alternative dispute resolution role to arbitrate in instances of disagreement over designation.”

[Calum Kerr]

We have discussed the USO and what it could mean, particularly in last week’s evidence sessions, but there is an opportunity to go further. If the USO is simply passed over to BT because it is willing to provide 10 megabits to everybody by 2020, I am afraid that 10 megabits will be the ceiling rather than the floor. We should be considering how we facilitate a USO that empowers communities and devolved Administrations to go further. The Scottish Government have made a commitment to reach 30 megabits over the course of the Parliament, by 2021, and a flexible USO—particularly a voucher scheme, rather than a monetary or contractual agreement with the likes of BT—could help them to deliver.

Through our amendment we seek to ensure proper consultation and the involvement of not only the Scottish Government but all the devolved Administrations. Previous dialogue has been largely tokenistic, so we need to set it out in the Bill and insist that there is proper consultation that empowers the regions of the UK to take the USO as a platform, as a floor of their ambition, rather than as a ceiling.

[Louise Haigh]

New clause 10 would require the Secretary of State to ensure that there is a completely open procurement process, and an alternative dispute resolution role to arbitrate in instances of disagreement over the designation.

We welcome the Minister’s clarification last Wednesday about the statement of intent in relation to the USO. However, we want to mention—I am sure it will not be the first time in this Committee—how rushed and unsatisfactory the publication of Bill documents has been. Some of the documents that should accompany the Bill are yet to be published. I know from talking to people in the industry that that is their concern as well.

I was pleased to note from the statement of intent that the Minister intends the USO to act as an effective complement to commercial, community and publicly-funded roll-outs of broadband, and that it will not displace any planned roll-out of higher speed broadband. There is an argument that there should be a combination of the USO and Broadband Delivery UK to fulfil the last 5%, given that the work of BDUK is still ongoing.

The industry has raised concerns that a USO could risk distorting the UK’s broadband market and potentially hamper the goal of universally available good quality broadband access, if it is not designed in the right way, with the industry and consumers in mind. I note what the Minister said earlier about Ofcom’s being better situated for future-proofing, and I agree. I will discuss that on clause 1 stand part if that is acceptable, Mr Streeter. It is important that there should be parliamentary scrutiny of Ofcom’s role in the consultation.

The USO should not displace any planned roll-out of higher speed broadband. I mentioned the industry’s concerns that it could distort the UK broadband market. If it is done badly, there is a risk that it will undermine commercial investment, in hard-to-reach areas where industry is able profitably to deliver good quality broadband at competitive prices, or by passing on to existing users any rising costs that come about as a result of the USO.

For example, TechUK has argued that the Government should strictly limit the USO to the most remote areas of the UK. Failure to limit the availability of a USO tightly means there is a risk that commercial investment will be diverted, and that there will be wasteful intervention. It is suggested that urban areas, and any rural areas where there is a prospect of market investment, should be explicitly excluded from the USO. It would be helpful to hear the Minister’s thoughts on that and on how Ofcom will take forward the consultation.

Furthermore, satellite connectivity should be considered in scope for the most remote households. It is already available to virtually all households in the UK, and it can be the most cost-effective route to providing superfast broadband. Essentially, we believe—and I hope that this is the Government’s intention—that the USO should be seen as a safety net to prevent social exclusion, facilitate access to online public services, and encourage social and economic development.

The question is whether we need a more transparent and competitive regime for that to happen. Smaller providers are currently put off, because they do not know whether BT currently has plans for, or is working in, any place at any given time. There are allegations from other players in the industry that when smaller providers move into areas where BT is not investing or working, it swoops in, purely to crowd out the competition.

The Government’s statement of intent cites thinkbroadband estimates that suggest about 4% of premises are unable to receive speeds above 10 megabits per second. That really should be open data available to the public and all service providers. We clearly need to know where the assets are, who can do the work and where the cabinets are. There should be a register that contains all that information and is available to make the market more competitive and efficient.

For the process to be trusted, transparent and fair, all the information should be in the open and part of the procurement process, allowing as many providers as possible to participate to ensure that the playing field is as level as possible. It was therefore also welcome that the Government’s statement of intent included consideration of different types of providers, such as regional providers and smaller ones using innovative technologies.

Clearly, it was less than desirable that the BDUK process ended up with only one contractor. We do not believe that we can lay the blame for that entirely on the design of the contracting process, but we think that much greater care needs to be given in the future to ensuring that a richer diversity of providers is catered for in the process.

We should also ensure that the Government are not effectively blackmailed by providers to protect their market position. The mess-up around the procurement process for the roll-out of the broadband framework in 2012 left BT as the only supplier, after Fujitsu pulled out. That was condemned by the Public Accounts Committee for failing to deliver meaningful competition or value for money.

It is also important that the Government consider different tenders for the different problems we are faced with in the last few per cent. For example, we could have one contractor for the rural areas and another for the inner-city areas, as they obviously present different challenges. We could do with some further clarity from the Minister on that.

The amendment is merely designed to be probing. Does the Minister genuinely envisage that anyone other than BT will implement the universal service obligation? How will the tender process be designed? Given the Government’s commitment to encouraging SMEs and community providers to tender, will the likes of Broadband for the Rural North be considered? If the Minister can provide some clarity on that either now or later in writing, I will not press the new clause to a vote.

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[Matt Hancock]

I think that those lessons were learned about three or four years ago, so I do not think that the new clause is needed. That is why, in the second phase of the BDUK contracts, we managed to succeed in getting six different providers to bid successfully, precisely because we learned the lessons from what I agree was an unsatisfactory outcome of the first contract. So the hon. Lady is right; it is just that I think that that work has been done and so it is not necessary to legislate on it.

The hon. Lady also made the point about open data on where cabinets have been put in place and part-fibre broadband or superfast broadband has been delivered. BT has given me a commitment that it will make those data openly available. I have yet to see them, but I look forward very much to their being made public very soon; I was given that commitment some weeks ago by BT and I am surprised that they are not yet public. I will take that up with BT immediately after this—I wonder whether it might have heard what I have just said.

Given those assurances both on consultation with the devolved Administrations and on delivery of a competitive regime, with distortions to competition taken into account by Ofcom, I hope that hon. Members will withdraw or not press the amendments.

[Calum Kerr]

I thank the Minister for his words and I take on board his comments, but I will not withdraw the amendment. The challenge is the degree to which consultation is effective and actually feeds into the process. I know from personal experience, having met Ofcom and spoken to the Scottish Government, that much of the engagement to date between the Scottish Government and Ofcom on areas such as the USO has been tokenistic. It needs to go much further.

I have myself facilitated a workshop with the Scottish Government, the Scottish Futures Trust and Ofcom. Sharon White has met Fergus Ewing, the Minister responsible for these matters in Scotland. I think that we have to be far more explicit in legislation, because that will ensure not just a tokenistic consultation but proper engagement in the process so that in areas where the Scottish Government have set a higher target—30 megabits, superfast, for 100% of the Scottish population—the USO is designed in a way that supports and helps that. If it is done in a UK-wide, pragmatic sense, that will not help, so I will press the amendment to a vote.

Question put, That the amendment be made.

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[Calum Kerr]

I beg to move amendment 58, in clause 1, page 2, line 13, leave out “The Secretary of State may” and insert—

“Within 12 months of this Act coming into force, the Secretary of State shall”.

[The Chair]

With this, it will be convenient to discuss the following: amendment 59, in clause 1, page 2, line 16, at end insert—

‘(1A) The report shall consider the comparative costs of introducing the universal service order in rural and urban areas, and identify measures to ensure costs in rural areas are not disproportionately higher than in urban areas.”

Amendment 82, in clause 1, page 2, line 21, at end insert—

“72B Universal service order: annual report

(1) The Secretary of State must lay before each House of Parliament an annual report about the implementation of the universal service order for all areas pursuant to the provisions of this Act.

(2) The annual report must include information on—

(a) the number of premises that have been supplied with the minimum download speed as specified in the USO secondary legislation

(b) the number of premises that have been required to cover some of the cost of connection,

(c) of the premises in (b) the average cost of connection per premises covered by residents, disaggregated by local authority area,

(d) the number of premises that have chosen not to be connected via the universal service order after being provided with an estimate, and

(e) the amount of time on average it takes to provide an estimate and connect a premise, disaggregated by local authority area.

(3) The annual report must be laid before each House of Parliament as soon as practicable after 31 March each year.”

New clause 9—Review of broadband delivery UK—

‘(1) The Secretary of State shall commission an independent evaluation of the delivery of superfast broadband by Broadband Delivery UK.

(2) The evaluation under subsection (1) shall consider—

(a) The financial impact on customers of a single provider delivering superfast broadband;

(b) Value-for-money for the taxpayer, and

(c) Competition in the delivery of superfast broadband.

(3) The Secretary of State shall lay the report of the review before each House of Parliament by 1 July 2018.”

[Calum Kerr]

That Division was rather exciting; it woke everybody up and got them away from their iPhones and iPads.

Inevitably, the focus of this first part of the Bill is on the USO, trying to make it fit for purpose and ensuring that we get the outcome that I believe we all want: better connectivity all across the country.

Amendments 58 and 59 would put into the Bill something ensuring a proper evaluation of how this USO is implemented and how it is borne out. There is a real concern that, as I have heard, the USO could follow similar lines to the telephony USO. If we remember what the telephony USO is, people have the right to demand a phone line up to a certain cost; I think it is £3,400, but I stand to be corrected if that is wrong. Thereafter, they pay the difference.

If we really mean universal broadband, what we must not have is a scenario whereby, although there is a USO, people in rural areas still end up paying more for a lesser service, which is what we have today. I am sure that we have all had complaints from constituents that, “I pay the same amount per month as someone else in an urban area for an on-the-surface 10 meg service, but I get only 1.5 or 2 meg.”

Let us accept that that is the reality on the ground—that people pay different amounts for different levels of service—but let us also put something in the Bill that actually means that stock is taken and a review is conducted. It should seek to ensure that in the future such problems do not happen and that people in rural areas—in fact, any people with a poor broadband service—get a fair speed with a fair price and all the other measures that the Government are introducing, as a result of the USO.

I should say at this point that we also support amendment 82, which puts rather more meat on those bones that I have just outlined.

[Louise Haigh]

We have had quite an exciting start to the Committee. The Minister turned up late; one Government Member went astray; and we nearly had a Government rebellion from the new PPS in the voting. [Laughter.] I hope that we continue in this vein. I also hope that the Minister is sensitive with his brand new PPS; I hope that she is not up for the chop this early in their relationship.

I will speak to amendment 82 and new clause 9, which would place a requirement on the Secretary of State to lay an annual report before Parliament on progress of the USO and to commission an independent review of the progress of BDUK respectively. As we have said, we very much welcome the USO. It could be somewhat more ambitious and it should extend to mobile, but we believe that it is an important step in the right direction. The purpose of these amendments is for Parliament to be kept abreast of progress, both on the USO and on the continued roll-out by BDUK.

Clearly, there have been issues with the roll-out of BDUK, not least the fact that, as we have just discussed, BT was the sole beneficiary of the contract in phase 1. If we are to avoid a repeat of that, we need to ensure not only that the procurement process is right but that Parliament takes a proper oversight role in assessing the performance and whether it is on target.

For example, we heard on multiple occasions last week about the problems around the fact that business parks have not been connected to superfast broadband, let alone ultrafast broadband. Similarly, we have heard of issues around local authorities being threatened with legal action should they so much as discuss procurement with a supplier other than the official one.

MPs’ mailbags are full of correspondence on issues about Openreach and about broadband more generally, so it is only right that they should have full disclosure on progress on an annual basis.

The first phase of the procurement process for BDUK included a mandatory requirement for copper local loop access rather than fibre, which meant old and outdated technology was being used and paid for with taxpayers’ money, entrenching the problems with existing infrastructure and holding back the future-proofing of the network.

There was also a requirement in that procurement process for the use of open access networks, which are the slowest option available, as opposed to local access networks which are much faster. It is good to see Ofcom consulting on the design of the USO over the next couple of months, and I am sure that they will learn from these mistakes. It is vital that this process is as transparent as possible, to ensure the best structure and outcome for consumers across the country.

On Second Reading the Minister called on Members to promote the take-up of broadband in areas where BDUK is providing access to broadband, so that local communities could benefit from the gainshare. That is absolutely right, and I am confident that relevant Members will be doing just that, but what are the Government doing to promote this? Are they, for example, paying for advertising and promotional materials? Is the Minister confident that access is the same as capacity, and that there is sufficient capacity in the cabinets in those areas where BDUK has been rolled out to allow take-up?

A very compelling case was put forward on Second Reading by the hon. Member for North Swindon, who described the problems he had with his local council and the lack of availability for his constituents even after BT had ticked all the boxes in that area under the BDUK contract. It seems to us that common sense dictates that BDUK should be measured on take-up rather than simply access to broadband. This is so that areas can be assured of their return from the gainshare, and also so that we can be absolutely sure that residents are able to use the broadband in practice rather than having access to it only in theory.

It is also important that we have a review of the progress of BDUK to consider whether they should be given any further direction or powers in relation to accessing land or infrastructure, for example. The statement of intent published last week references the question of how often, and on what basis, a USO may need to be reviewed. Again, we would have liked to see that in the Bill. I hope we can have clarity from the Minister on that because, as we all know, the minimum speed and quality of access that we all require are travelling in one direction only and at an exponential rate. It is difficult to imagine that 10 megabits will still be considered acceptable in 2020, let alone 2025, given that superfast is now defined as 24 megabits. The European Commission is hoping to set a new target for broadband and mobile coverage, which will aim to ensure that all European households can get a minimum internet download speed of 100 megabits per second by 2025.

The existing digital agenda for Europe programme currently seeks to ensure that every home in the EU can access a 30 megabits-plus capable, next generation access, superfast broadband connection, with 50% subscribed to a 100 megabits-plus service by the year 2020. At present it is widely expected that BT’s commercial G.fast roll-out, which will commence from next summer, and Virgin Media’s ongoing cable network expansion should bring broadband speeds of around 100 to 300 megabits to most of the UK, around 60% to 70%.

[Calum Kerr]

The hon. Lady is making some excellent points. The EU, which has apparently been holding us back for so long, is now leaving us behind as they run off to 100 megabits by 2025 while we set our ambition at 10 megabits by 2020. That is an excellent point. It comes back to the critical importance of how this USO is designed. Simply allowing BT to continue with more of the same, stretching their copper assets further, is not going to hit the long-term vision that is required. That is what this Government need to do. They need to set a target for fibre. I hope that when the Minister speaks tomorrow morning at the broadband convention he will say more about that, because we need to show far more ambition.

[The Chair]

Order. I remind all colleagues that interventions should be short.

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[Christian Matheson]

It is a great pleasure to see you in the chair this morning, Mr Streeter. May I also say what a pleasure it is to see the Minister for Digital and Culture. I think it is the first time we have served together. He is of course a Cheshire man like me, and we are all very proud of him in Cheshire. Indeed, when I met headmaster Chris Ramsay of King’s school recently, he asked me to urge the right hon. Gentleman to come back and visit his alma mater. I encourage him to do so, though he might not want to do any political campaigning while he is there.

I rise in support of amendment 82 in the name of my hon. Friend the Member for Sheffield, Heeley. It is absolutely right that what is becoming a piece of essential national infrastructure, and one which is developing all the time, should come under the purview of Parliament. My view on the roll-out of broadband, which is not shared by all hon. Members, is that BT has done a very good job of getting a decent proportion of the country up to a decent standard fairly quickly, using existing infrastructure. However, as we have seen, the continued reliance on copper local links can hold back the development of that infrastructure. There has been very little scrutiny of that infrastructure development in Parliament. It is good to see my fellow members of the Select Committee on Culture, Media and Sport, the hon. Members for Mid Worcestershire and for Selby and Ainsty, in this Committee. Our Select Committee’s report was one of the few areas where Parliament has been able to scrutinise the development of broadband, and scrutinise we did, strictly and fairly, as I am sure the hon. Gentlemen would agree.

[Calum Kerr]

I feel somewhat left out because the hon. Gentleman does not know where I went to school, but never mind. He is making an excellent speech on this whole area of BT and its contract. I agree with him. It is very easy to kick BT, but it is delivering on its contract and what it has been asked to do. Does he agree with me, though, that as we set a 10 megabits objective, it is important also to consider the future, because if BT continues to sweat copper assets we are going to come unstuck at some point. Simply going for now and not thinking about tomorrow is too short-sighted and it is catching up with us already.

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[Claire Perry (Devizes) (Con)]

I sympathise with many of the things that the hon. Member for the City of Chester has said. I cannot promise that I will not visit during a political campaign, because it is a seat I would like to see returned to the fold, despite his good efforts.

While I understand the spirit in which amendment 82 and new clause 9 have been tabled, I reject their premise. We heard clearly in the evidence sessions what is wrong with the Government—and, indeed, one provider—trying to over-specify and push out a solution. I know from my own constituency that, although there has been decent progress, it has not gone far enough—I absolutely agree with the hon. Gentleman on that. There are specific communities—for instance Shalbourne, a beautiful village—where there are insoluble notspots. These houses seem unable to be connected to the exchange because they connect to a Hampshire exchange, not a Wiltshire one, so all the good work Wiltshire council has done putting in local taxpayers’ money and working with BT Openreach is of no benefit whatsoever to those constituents. In Worton, where we actually had the discussion with BT, there is a dividing line right down a street: some houses are connected and some are not. We all know that that is increasingly very bad for house prices and really does affect people’s mindset when they move into the constituency. In my area, the Lydeway business park, which includes a very fine farm shop and other small businesses, is desperate to get better broadband connectivity, but we cannot seem to get it.

We heard from TalkTalk and other witnesses that the job is not to specify what the solution should look like and have lots of arduous burdens on Government to report back, but to empower consumers to say, “Let’s go out and talk to Gigaclear.” Or we could look at what has been done in a part of Cumbria, represented by one of my hon. Friends, where communities have come together, worked with farmers to waive fees for crossing land and come up with a community-led solution.

Empowering consumers, as the Bill will do, would enable them to demand a legal right to a decent level of broadband connectivity. I accept that 10 megabits per second is an aspiration for many premises already—they do not get anything like it—and I completely accept the point that that may not be enough in future.

We also heard in the witness sessions that technology in terms of compressing more and more data and information down existing fibre or copper is improving all the time. It might actually be sufficient for some families. I have managed to upgrade with the cabinet in Upavon to about 15 down and 10 up. It is nowhere near enough when all the kids are home and they are on Netflix and other things but it is not bad. If I yell at them loudly enough to get off the wi-fi, I can actually get my constituency work done, albeit from home.

I contrast that with what it was like before when, if the hamsters pedalled fast enough, I might have been able to send one email an hour. It is a massive improvement to productivity in the Perry household.

[Calum Kerr]

I hope the hon. Lady would not yell at me to get off the wi-fi. She is making some good points but I would try to draw her back to the substance of the amendments. There is no focus on technology. We want to ensure that the USO is delivering for all our constituents. All we want is a review to monitor progress and ensure that the design is fit for purpose. It is not about technology so I urge the hon. Lady to think again.

[Claire Perry]

I accept the spirit of what the hon. Gentleman is saying, but I did sit until recently on the inter-ministerial Committee looking at how to upgrade the digital services right across the country.

It is clear that Ofcom is taking its responsibilities very seriously, both to report on the number of premises that are connected and to tighten up on some of the issues where broadband companies advertise the maximum speed a customer might ever get if connected rather than the average speed. Ofcom is a very good regulator under Ms White’s chairmanship and it is absolutely stepping up to the plate.

I am afraid that I cannot support the amendment or the new clause because they are stuck in the past, looking at how we push out a good solution rather than empowering consumers to pull through the best solution that works for them. That solution might look very different in my constituency of Devizes from how it might in Cheshire or the highlands of Scotland. We have made decent progress but it is not far enough. I applaud the Government for bringing forward both the USO as an underlying obligation and the flexibility to amend that as technology changes.

--- Later in debate ---

[Matt Hancock]

We have had support of spirit throughout this sitting. The amendments and the new clause are all about reviews of and reports on progress. I have reviewed my broadband this weekend, and I can report that while I was looking at myself discussing the importance of broadband in East Anglia on a local TV programme, I was actually under my desk because my broadband went down. I know how frustrating it is when one’s broadband goes wrong. I am very grateful to the BT engineers who are working to fix it right now. That is my report.

The best comment was made by my hon. Friend the Member for Selby and Ainsty about the Select Committee. Reports and reviews are important, but the Select Committee is there to ensure that Parliament has its say. More than that, as Ofcom carries out its consultations, it will of course report on progress.

I wish to pick up on a few of the comments that were made. The hon. Member for City of Chester, which is a great city and the city of my birth—the Bill is all about connectivity and we have been making all sorts of connections in this sitting—made the argument very strongly for the importance of not only getting better connectivity, but describing it right. I will have no truck with people who say they are providing a fibre solution when, in fact, it is a part-fibre solution. Fibre-to-the-cabinet is not fibre and anybody who says so is taking people for fools. We should talk about fibre when we mean a full fibre connection that goes all the way from the fibre backbone into the premises. Anything short of that is merely part-fibre.

That point demonstrated some of the confusion from Opposition Front Benchers and shows why it is so important to get these things right, instead of just calling for a report when that is already going to happen. The hon. Member for Sheffield, Heeley called for use of G.fast, which is an important interim technology. However, she then said, “and therefore, it is important we have more fibre.” G.fast is not a fibre technology; it is a copper-based technology. While it is important and useful interim technology that will undoubtedly increase speeds, it is not full fibre.

[Calum Kerr]

The Minister is slightly taking liberties there. The reality is that G.fast is distance-constrained to about 300 to 400 metres, so fibre will have to be pushed much further. I am sure that the hon. Member for Sheffield, Heeley is aware of at. It comes ack to the same principles: we need more ambition and we need to push fibre further. Yes, G.fast will have a place, but it will not fix my or my colleagues’ rural challenges.

[Matt Hancock]

Exactly, absolutely right. We are seeing the long-feared Labour-SNP alliance in action. The hon. Gentleman is right that G.fast is a useful technology but it is not a full fibre technology and is, by physics, distance-constrained, although BT continues to do important work on driving as much delivery out of copper as possible.

There is one other point that it is important for the Committee to consider: there was a simultaneous call from the Opposition for the statement of intent to be included in the Bill and for there to be flexibility in the speed of the USO. These two things are inconsistent; it takes time to change primary legislation. It is incredibly important that we can revise the USO potentially—and hopefully—upwards. It is wrong to set a USO speed now for several years hence. I think we agree on that. We should not, therefore, put the speed on the face of the Bill.

The Scottish Government have said they want 30 megabits per second by 2021. We, of course, want the USO before then and we want the speed to reflect the reality of the time. Demands are increasing very quickly, so I would not want to put a figure on it for five years hence, as the Scottish Government have done. That is a mistake and it is far better to do it as we are planning in this Bill.

[Matt Hancock]

I am delighted to have that clarification. I am also glad that the hon. Lady welcomed the fact that Ofcom is doing the consultation, which is necessary before we can put those details in place. The way the provisions are structured in the Bill is the right way to proceed.

In ensuring that we get the best possible broadband connectivity, we must make sure that we have both a vision of the future with high-speed and superfast—and then ultrafast—connectivity, and flexibility to get there in the most cost-efficient way possible. That unites the Committee in purpose, and the Bill as it stands provides for it.

Finally, following the mention of the Labour Government by the Opposition, I will not rise to any partisan points other than to note that in 2003, the then Labour Government legislated to set a USO. They set the USO in stone in legislation and instead of including a review clause, they set it at 28 kilobits per second. Let that be a lesson to anyone who wants to put more on the face of the Bill. It is far better to ensure that we can constantly keep pace with technology, as the Bill does.

[Calum Kerr]

I am enjoying this; the debate is getting a little more spirited. I hope that some Government Committee members will vote the wrong way for their party and the right way for the people of this country and their connectivity. We are not advocating that a figure is put in the Bill. At no point have we suggested that. We have been advocating greater ambition and a desire to ensure that the USO is designed and rolled out to meet the demands of our constituents and the expectations of the country. Unless the Minister or anyone else can tell me that this place is particularly good at doing perfect legislation that always gets the desired outcome, it seems eminently sensible that we put in place a review process. On that basis, I am happy to withdraw the amendment and instead support amendment 82.

[The Chair]

Does the hon. Lady wish to say anything more about the amendments?

[Louise Haigh]

We have heard support for the spirit of the amendment and for the Select Committee to review the progress of the USO. The amendment certainly does not specify to which element of Parliament the report should go. We would be satisfied with progress being reported to the Select Committee. Government Committee members will be interested in, and their mailbags will be full of concerns on the progress of the USO, so they should have the ability to review that. Also, I was not old enough to vote in 2003, so I do not think I can be held responsible for decisions made then.

[Calum Kerr]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 82, in clause 1, page 2, line 21, at end insert—

“72B Universal service order: annual report

(1) The Secretary of State must lay before each House of Parliament an annual report about the implementation of the universal service order for all areas pursuant to the provisions of this Act.

(2) The annual report must include information on—

(a) the number of premises that have been supplied with the minimum download speed as specified in the USO secondary legislation

(b) the number of premises that have been required to cover some of the cost of connection,

(c) of the premises in (b) the average cost of connection per premises covered by residents, disaggregated by local authority area,

(d) the number of premises that have chosen not to be connected via the universal service order after being provided with an estimate, and

(e) the amount of time on average it takes to provide an estimate and connect a premise, disaggregated by local authority area.

(3) The annual report must be laid before each House of Parliament as soon as practicable after 31 March each year.”—(Louise Haigh.)

Question put, That the amendment be made.

--- Later in debate ---

[Rishi Sunak (Richmond (Yorks)) (Con)]

Ninety per cent. of UK households can access superfast broadband this year, and that number is set to improve in the next 12 months. However, many of the households that do not have access are in places such as my constituency in rural North Yorkshire, creating a digital divide between those who have access and those who do not. On behalf of my constituents, I welcome clause 1, which provides a safety net so that on reasonable request and at an affordable price they will have access to some measure of broadband connectivity.

Week in, week out, while I am doing my job, I see the benefits that that will bring, and the problems experienced today. Of course, economic development is important. My area is known for its tourism, but when I speak to the owners of holiday cottages or bed-and-breakfast accommodation, they tell me they must advertise across the world on the internet. When people come to visit the beautiful Yorkshire dales, when they have finished their day’s walking in the beauty and splendour of Swaledale, they want to come home and check their emails. It is important that my owners can provide that service.

I was at a school last weekend talking to a group of young pupils who are embracing a new course on coding. Obviously, we are not blessed with Silicon Valley yet in the Yorkshire dales, but they were accessing the resources of Code Academy online at school and wanted to continue that at home in the evening.

Beyond that, the internet keeps families together—not just grandparents who want to see their new grandchildren living abroad on Skype, but also a father to whom I spoke the other weekend who is unfortunately going through a difficult divorce. He told me that his children, with whom he was desperate to maintain a good relationship, were less keen to spend the weekend at his house because of his poor broadband connection.

The Government are moving to a “digital by default” approach to delivering public services, which is commendable, but it is important that everybody, especially farmers in rural areas, have the means to access those Government services.

For all those reasons—the tangible differences that the Bill will make to people’s lives—I welcome the Government’s delivering on their manifesto commitment to put in place the universal service obligation. The Government have the view that this should be an economy and society that works for everyone. Providing good digital connectivity to everybody is certainly part of making that aspiration a reality. On behalf of my constituents, I wholeheartedly welcome and support the measures in clause 1.

[Calum Kerr]

We also support clause 1. I will not repeat the points I made during the debate, but I want to bring a couple to the fore and ask the Minister one specific question, which I hope he will answer. We should not just be looking at closing the divide in the short term; we should be looking at a longer-term fix. We should consider what a minimum speed is today, but we should also be looking to what that might become in the future.

The hon. Member for Sheffield, Heeley pointed out that the EU target is 100 megabits per second by 2025. While we can aim for 10 megabits per second, if we do not set a horizon of where we want the target to go, we risk putting sticking plasters all over the country and getting solutions that will have no lifespan. We will all be back here in a few years’ time, saying, “I wish we’d listened to the hon. Member for Sheffield, Heeley who wanted an annual review.” We would know that this provision had not been delivered.

Let us try to avoid that scenario and ensure that as the USO goes through the process, what Ofcom designs not only looks at where we are today, but where we want to go in the future. When the Minister gives the main event speech tomorrow at the INCA event, which is advocating a strategy for gigabit Britain, he should set forward a truly ambitious vision of what the UK can offer in this space. Perhaps his response will provide me with some reassurance.

As we have looked at amendments, I have tried to ensure that not only have the Scottish Government and other Administrations been consulted, but they are part of the formulation of the USO. Consultation can be tokenistic or it can be fully engaged and evolved. We need to be fully involved in the design of this process, so that where we set an ambition, a target of 30 megabits per second, the USO supports it—for example, through foundational funding through a voucher scheme. Where any one of the regional councils want to do the same and set an ambitious higher target, the USO should support that, rather than offer a solution that forces them into a corner.

Will the Minister reassure me that the USO designed by his Government with Ofcom will support devolved Administrations and regions and provide foundational funding—not just 10 megabits, take it or leave it?

[Nigel Huddleston]

There is obviously a growing consensus and recognition of the importance to all our constituents of the universal service obligation. As always, the devil is in the detail. I understand that some of those details will be provided or revealed in secondary legislation. I do not buy some of the concerns expressed today about a possible lack of scrutiny in the progress of the USO. As a member of the Culture, Media and Sport Committee, alongside other members of this Committee, I am confident that we will continue to do that job robustly and effectively to raise issues and concerns.

I cannot imagine how many times we have heard issues related to broadband and mobile brought up in the Chamber, in Westminster Hall and elsewhere in this place, so we can scrutinise in multiple ways. We also have to be careful that we do not constrain our ambition by thinking of current technology and current speeds. It is important that we go with the flow and update our ambitions accordingly as technology develops.

--- Later in debate ---

[Matt Hancock]

I repeat what I have just said: the floor of 100 homes has come down to 30 homes for fibre connections, but all new buildings will be required to have access to a superfast connection from 1 January. Those points have been taken on board.

[Calum Kerr]

Will the Minister clarify, especially given his comments earlier about what fibre means, whether that is fibre to the premises or access to superfast over copper?

[Matt Hancock]

To channel the Prime Minister, fibre means fibre. If hon. Members want to know what fibre means, it means fibre.

On the point about measuring BT and BDUK on take-up not access, both BT and BDUK are measured on take-up as well as access. Both are important. In fact, the contracts have take-up embedded in them, because the clawback from higher take-up allows money to be spent on further roll-out. The contracts that are being rolled out at the moment are from that clawback. The hon. Lady is therefore absolutely right that both take-up and access are important, and in the county-by-county figures from BDUK we have both take-up and access.

I also strongly agree with the hon. Lady on advertising. The Advertising Standards Authority has consulted for some time on descriptions of both “up to” speeds and pricing arrangements, both of which can be wholly misleading. I very much hope that the ASA will come out with new rules shortly—it has been working on that for some time. However, advertising is policed on a non-statutory basis and I think it would be a significant step for us to legislate on that matter because we do not want political interference in the rules around advertising. That is a step that I do not want to take. I do want the ASA to come to its conclusions as soon as possible. I hope that that answers all the questions that were asked on that point.

[Matt Hancock]

Of course there will be parliamentary scrutiny, because the Bill provides for the USO details to be put in place via secondary legislation. There will be scrutiny then and, as my hon. Friend the Member for Selby and Ainsty pointed out, there will also be the opportunity for Select Committees to scrutinise in their usual way. I hope that without reading the rest of my speech, which is all about how important and wonderful broadband is, the Committee will accept what I have said as a full response.

[Calum Kerr]

Perhaps the Minister missed my request. Will he reassure me that the schemes put in place will be designed to support national commitments such as the Scottish Government’s 30 megabits and other regional commitments? The issue is all down to how the USO is designed. If it is simply put out as a 10 megabit service—take it or leave it—it will not help, whereas a regional, flexible model such as the voucher scheme that BDUK has done before could provide the foundational funding.

[Matt Hancock]

In short, although the precise design is subject to the Ofcom consultation, my view is that the potential in the Bill for the USO is more ambitious than the Scottish Government’s, because theirs is to be delivered later and has already specified a speed. Instead, we have proposals coming in sooner and with uprating built in from the start.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

General conditions: switching communications provider

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Calum Kerr]

I beg to move amendment 60, in clause 3, page 2, line 35, at end insert—

“(db) require a communications provider to allow an end-user to terminate a contract on repeatedly failing to meet a specific standard or obligation;”.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 84, in clause 3, page 2, line 35, after “obligation”, insert “within reasonable timescales”.

New clause 2—Ability of end-user to cancel telephone contract in event of lack of signal at residence—

“A telecommunications service provider must allow an end-user to cancel a contract relating to a hand-held mobile telephone if, at any point during the contract term, the mobile telephone is consistently unable to obtain a signal when located at the end-user’s main residence.”.

[Calum Kerr]

The area of compensation is one that we have all probably been hearing about from our constituents for quite some time. Before speaking to the amendments, which are about mobile coverage, let me first welcome the important move in the Bill that not only puts compensation in place but makes it automatic. Telecoms and connectivity can feel like the dark arts to some of our constituents and it is important that whatever is put in place does not depend on their understanding the details of what they are entitled to. However, the point has already been made today that when people sign up for a broadband service, there should be far clearer, granular detail on what they should expect. We have wrestled today with what a USO should be; we have talked about download; we have talked about upload; the Minister rightly mentioned other areas such as latency and data limits; and of course cost comes into it.

In terms of compensation, it is important to recognise that broadband is different from telephony. Telephony is fairly binary—it is on or off. It works or it does not. There might be some interference, but it remains a fairly binary service. Broadband, however, is defined by many different characteristics.

As we look at a compensation regime, we need to look at the speed expectations. When someone signs up for a broadband service, they sign up for a service that is, by definition, contended. It is shared, which is why, as those who have ever been at home when the kids all get home from school, broadband speeds sometimes plummet. That is the reality of the service that is signed up for and that reality has to be accepted on a contended service—those who want a less contended service need to sign up for an appropriate service with BT or another provider—but there should still be levels of expectation. There should be a top-line download speed, an average speed and, in my view, a baseline speed, below which the service does not drop.

As we look at compensation, I would like to see some flexibility. Given the complete lack of information in the Bill—in keeping with the earlier clauses—there is the ability here for Ofcom to show flexibility and design an appropriate system. The telecoms providers all have huge challenges to face on their performance standards—the digital communications review called them out. BT was singled out, but it was not the only one. They all have a way to go in improving their service standards, so a compensation regime should be designed to incentivise them. We have to remember that this is about incentivising good performance, not about penalising bad performance, although the two obviously go side by side. We should design a scheme that is automatic and ensures people are compensated but that, most importantly allows people to get the service that they are promised and the providers are contracted for. That is important.

My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey instigated work on the areas addressed in amendment 60 and new clause 2 some time ago. There are huge chunks of the country, not least the highlands but also the equally beautiful Scottish borders in my constituency, where there are notspots—in fact, it feels like there are more notspots than onspots most of the time, as I found on my summer tour. My hon. Friend brought forward proposals, which were put to the then Minister and Ofcom, to allow individuals who have signed up for a mobile service and then found that they cannot get proper service at home to be allowed out of their contract. Some providers—I think Vodafone was mentioned in the evidence session—have started to offer that. I hope that—hope is not a strategy, as we always used to say, but sometimes it is all we have—the Government will accept the sense of the amendment and new clause and put it in the legislation, to make it absolutely clear that, if I sign up for a mobile service and cannot use my device in my home, I am entitled to cancel that contract.

[Louise Haigh]

I rise to support the amendment in my name and the name of my hon. Friend the Member for Cardiff West. I also support the amendments tabled in the name of the hon. Member for Berwickshire, Roxburgh and Selkirk. I understand from the debate and the statement of intent that the baseline speed mentioned—10 megabits per second, as the Minister clarified—is the absolute minimum. The Opposition welcome the Government’s proposals to amend the requirements on automatic compensation, which will bring broadband services in line with other essential services such as energy and water. That recognition naturally extends to a form of automatic redress when things go wrong.

[Calum Kerr]

I am sorry to intervene so quickly, but this is an area where we need a bit of clarity. We have said that 10 megabits per second is a minimum, but as I understand it, it is a minimum maximum speed. It does not mean that under the USO, users will always get 10 megabits per second; it means that they sign up for a service where the maximum is 10 megabits per second. I think that is an important point to clarify.

[Louise Haigh]

We look forward to the Minister’s clarification.

More than 13 million households suffer from some form of broadband problem. It is about time that automatic compensation was introduced. As we know, seeking redress and compensation is often difficult for consumers, and brings little reward; many simply give up. Currently, users must lodge a formal complaint with their provider, then escalate that complaint to the ombudsman after eight weeks if they are not happy with the response. The onus certainly should not be on the customer to prove that they have lost service or that the service has not met the standard required. Where possible, automatic compensation should be made when a service provider becomes aware of a possible loss or reduction in service.

However, as has been mentioned, the legislation is not entirely clear on how the provision will be enforced, although we welcome the broad powers given to Ofcom. For example, if the fault is with the service provided to the retailer by Openreach, will the retailer pass on the compensation to the consumer who has been affected? How much will then reach the consumer? What will the level of compensation be? Which? has called for households to get £75 in compensation each time their broadband connection goes down, in line with compensation levels for power cuts. Will there be separate levels of compensation for broadband being slow or not working at all? Will the compensation cover planned network outages? Will the new regime come into effect on Royal Assent? Has Ofcom now completed all necessary consultation work?

Our amendment simply seeks to provide compensation within reasonable timescales. Consumers certainly would not want compensation payouts to drag on and on or broadband providers to drag their feet when there has been a clear outage and they are entitled to compensation. The automatic compensation model for the energy market is that it should be paid within 10 days of the customer claiming, or within 10 days of the end of the power cut if they are being paid automatically. That seems reasonable, but the Minister and Ofcom might have other ideas about what is reasonable.

Either way, we believe that it is important to set a clear timescale to ensure that consumers know exactly what they are entitled to, when they are entitled to it and how to go about claiming it if it is not forthcoming. We welcome the provisions and the recognition that consumers have a right to broadband and therefore a right to compensation if it goes wrong, but we would like assurances written into the Bill that compensation will be paid quickly.

Digital Economy Bill (Fifth sitting)

Calum Kerr Excerpts

Committee Debate: 5th sitting: House of Commons
Thursday 20th October 2016 Public Bill Committees

[Matt Hancock]

No, I do not, but I do think it is useful for the period in which contracts can be cancelled to be limited. The law currently provides for that.

Amendment 84 seeks to define the parameters of any general condition that Ofcom sets regarding compensation to customers. It is our intention that providers should offer prompt and proportionate compensation when their services do not meet agreed standards. It is right that any decision by Ofcom to set general conditions needs to be based on evidence drawn from its consultation process and applied proportionately. In June, Ofcom issued a call for input on the aim and scope of the automatic compensation scheme, and it will consult on the introduction of the regime in early 2017. We support Ofcom in that approach. I think that the way the clause is drafted is the right way to drive the policy, but until we have the benefit of Ofcom’s consultation, it would be wrong to constrain the parameters of a general compensation condition.

With that explanation, and given my point that there is already a time-limited period in which contracts can be cancelled, I hope that hon. Members will withdraw their amendments.

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I am disappointed but not surprised that the Minister will not consider the change. There seems to be an unwillingness to amend the Bill other than by adopting one of the hundreds of Government amendments. I hoped that we might enter into a more constructive spirit.

We agree that the clause itself is a good move. As I said in my opening remarks, there is an opportunity to go to a high level of granularity—I contrasted the black-and-white, binary nature of telephony to the complex world of broadband—and I would like the Minister to assure us that the devolved Administrations will play a key role in that. Scotland is a disproportionately rural environment, and we must ensure that the rural voice is heard, although these issues are not unique to Scotland, or to my constituency, or that of my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey. This must go to a granular level and incentivise good performance, rather than provide compensation, as is currently set out in the Bill. All that our constituents want is a good level of service, rather than some money back for poor service.

--- Later in debate ---

[Louise Haigh]

Clause 4 contains changes to the highly complex electronic communications code, as we heard earlier in the debate. We recognise and support the amendments tabled in the Minister’s name, which seek to clarify the web of legal technicalities and ensure that it interconnects with the existing legal landscape; that the new code does not infringe on access to land where the person does not agree to that access being obstructed; and that subsisting agreements continue in place.

Our primary concern is to ensure that the significant savings that the clause will clearly create for the mobile industry are invested in their entirety into infrastructure and roll-out for the public benefit.

We would also like to explore what consideration has been given to how we can ensure that independently-owned infrastructure can have a significant role in the sector and, if possible, make up a larger proportion of our infrastructure in line with the global market. The much-discussed difficulties of the broadband roll-out highlight the issues when infrastructure is owned by a private monopoly. We should seek to break up this market as much as possible. For that to happen, investment incentives for independent infrastructure need to be maintained as they are under the current ECC.

The assets of these small infrastructure providers, which are a valuable part of the market, are dependent on land. We would like a commitment from the Minister that further inevitable redrafts continue to carve out electrical communications apparatus from the definition of land. The benefit of independent infrastructure is the much higher capacity available for all networks to use on an open and non-discriminatory basis. Operators in this space filled more substantial towers, which send signals much further than an average mobile operator-owned mast. That is particularly important in rural areas, where more than half their investments have been made. More networks operating from better infrastructure enable transformational improvements in capacity.

The sector also unlocks significant new inward investment with a low cost of capital from the same funds that invest in UK energy, transport and utility assets. Clearly, significant investment is needed in the UK’s wireless infrastructure. Improving mobile connectivity needs substantial and sustained investment. New communication masts are needed in rural and suburban areas to improve coverage. In urban areas, to support the exponential growth in mobile data usage and provide ubiquitous high-speed connectivity, 5G networks will need hundreds of thousands of small cells connected with a dense network of fibre.

Analysis from Ernst & Young highlights that independently operated towers across Europe and North America host, on average, twice as many networks as vertically-owned towers. The UK is now lagging behind competitive telecoms markets around the world in respect of adopting the more efficient independent model; more than 60% of global and 80% of US masts are now operated independently of the networks that use them. Independent infrastructure can deliver investment in a way that maximises its productivity and enables the greatest level of connectivity.

Furthermore, we are aware that the industry has concerns about the clause given what is known as “stopping up”. That is the procedure that highway authorities use to decommission stretches of public highway. Under the new code, when streets are stopped up, the occupier of the land can give notice to quit and mobile operators would not then be able to cover the cost of relocation.

As I understand it, unlike the other reforms, this reform is intended to apply retrospectively, so we would be interested to hear the Minister’s thinking. More broadly on the clause, clearly the Minister and officials are attempting to make revisions to this enormously complex code, which obstructs or interferes with the means of access to this land.

There is a broader point. Despite the additional powers that the Bill provides to telcos over the landowners, in practice there absolutely must remain a solid working relationship between the two. As we heard in evidence last week, if good relationships are not continued, the industry might as well just go home for the next four to five years and forget about further expanding the network, such is the importance of good relationships and access to allow for upgrading and installing new infrastructure.

Industry evidence suggests that, on average, infrastructure facilities will need to be accessed every 12 days, so we must ensure that the legislation strikes the right balance between increasing access, which will help to upgrade the network, and maintaining a good relationship with the landowners who will help that roll-out.

The clause is intended to improve mobile coverage, so I will go back to something that the Minister said on Tuesday in Committee:

“That is why delivery on this commitment by the MNOs”—

that is, by the mobile network operators—

“is so important. The deal as agreed, which is a legally binding commitment, will result in nearly 100% of UK premises receiving 3G/4G data coverage, and 98% coverage to the UK landmass by the end of 2017.”—[Official Report, Digital Economy Public Bill Committee, 18 October 2016; c. 124.]

Those figures were not immediately familiar to me at the time. As I understand it, they were not in the legal agreement between the Government and the mobile network operators, which only requires guaranteed voice and text to each operator by 2017 to 90% and full coverage to 85% by 2017.

I believe that the Minister may have been referring to the new emergency service contract, which is being delivered by EE. That is exactly the point I was making: that is only one operator. Furthermore, is it not the case that currently only 46% of premises have access to 4G from all mobile network operators and that there remains a substantial 7%, or 1.5 million homes nationwide, that do not have basic voice or text coverage across the three networks?

The roll-out of this vital infrastructure by EE for the benefit of emergency services is obviously welcome and the coverage figures for the UK landmass are impressive. However, that does not constitute universal coverage, as it will be only for the benefit of EE customers, unless some kind of agreement that we are not aware of has been reached. Clearly, although that means that data coverage is reaching all corners of the UK, there is no parity of provision across the mobile network operators and that near-universal coverage, which is so needed, is still far from a reality.

New clause 20, to which we will return later, seeks to do something about that. It would empower the Secretary of State to commission a strategic review of mobile network coverage and to consider measures to enable universal coverage for residences across all telecommunications providers. That would enable the Government to take a second look at ways, including national roaming, genuinely to extend coverage across 3G and 4G to all network providers, because, as the Minister said in Committee on Tuesday, it is no good having full coverage with one provider if the others are not covered.

[Calum Kerr]

That was an excellent introduction from the Opposition spokesperson, highlighting a lot of the issues. I will try not to repeat them.

What I will do, however, is start by welcoming these overdue changes to the electronic communications code. We absolutely need to make it much easier for infrastructure to be rolled out—not just for masts; this also applies to the likes of Virgin, which is very concerned about wayleaves and access and how it can roll out wire networks. We very much welcome anything that will help increase coverage across the whole of the UK, and in particular across Scotland.

--- Later in debate ---

[Calum Kerr]

Spectrum licensing is our most effective tool for ensuring we get the coverage model we want. The form of the code will help, but it is through licensing that we will drive the level of coverage we want. Will the Minister confirm that the Government will leave nothing off the table in that? One option might be taking back spectrum where appropriate—for example, in rural areas that cannot be covered, as has happened in the US.

[Matt Hancock]

Of course, the management of spectrum needs to be as efficient as possible. The new dynamic spectrum management in clause 8, which we just agreed to, will help to deal with white space—spectrum that is not used but could be. New technology allows that to be used far more efficiently. I am delighted that we got unanimous support for clause 8. On clause 9 and setting out a set of strategic priorities, I am sure that the hon. Gentleman’s comments will be taken on board.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.

Clause 10

Penalties for contravention of wireless telegraphy licences

--- Later in debate ---

[Matt Hancock]

The amendments will amend the Wireless Telegraphy Act 2006 to extend the time limit for bringing prosecutions for some summary offences—for example, those relating to unauthorised use of wireless telegraphy equipment. Amendment 10 makes provision about when proceedings in Scotland are deemed to have commenced for the purposes of the extended time limits. Amendments 8, 9 and 11 make minor changes to clarify the drafting.

[Calum Kerr]

Some of the amendments specifically relate to the law in a way that goes back to my earlier point. Will the Minister confirm whether the Scottish Administration have been consulted on this issue, given that it is clearly a devolved matter?

[Matt Hancock]

Yes—although I have had no discussions with them at a ministerial level about the amendments, I understand that discussions have taken place between officials. The effect of the amendments will be to make the law work better, so I hope they will have cross-party support.

Amendment 8 agreed to.

Amendments made: Government amendment 9, in clause 14, page 17, line 18, leave out “Subsections (3A) and (3B)” and insert

“Section 41(7) and subsection (3B) above”.

Subsection (3C), inserted in section 107 of the Wireless Telegraphy Act 2006 by the clause, lists enactments displaced by the time limits mentioned in subsections (3A) and (3B). Subsection (3A) merely refers to section 41(7), and the amendment substitutes a direct reference to that provision for the reference to subsection (3A).

Government amendment 10, in clause 14, page 17, line 26, at end insert—

“(3D) In relation to proceedings in Scotland, subsection (3) of section 136 of the Criminal Procedure (Scotland) Act 1995 (date when proceedings deemed to be commenced for the purposes of that section) applies also for the purposes of section 41(7) and subsection (3B) above.”.

The amendment adds provision about when proceedings in Scotland are deemed to be commenced for the purposes of the time limits in section 41(7) and new subsection (3B) of section 107 of the Wireless Telegraphy Act 2006.

Government amendment 11, in clause 14, page 17, line 31, at end insert—

“() for subsection (8) substitute—

“(8) For further provision about prosecutions see section 107.””.—(Matt Hancock.)

Existing section 41(8) of the Wireless Telegraphy Act 2006 applies to section 41(7) and is superseded by section 107(3C) inserted by the clause (see amendment 9). Amendment 10 also inserts provision applying to section 41(7) into section 107. Amendment 11 therefore substitutes a subsection referring the reader to section 107.

Clause 14, as amended, ordered to stand part of the Bill.

Clause 15

Internet pornography: requirement to prevent access by persons under the age of 18

Digital Economy Bill (Sixth sitting)

Calum Kerr Excerpts

Committee Debate: 6th sitting: House of Commons
Thursday 20th October 2016 Public Bill Committees

[Louise Haigh]

Obviously, I completely agree with my hon. Friend. We appreciate that the Government have consulted extensively with partners and representatives of all the relevant stakeholders, but it is not clear to us why they have not allowed ISPs that ultimate backstop power to block. For that reason, and to meet the objective of tackling providers outside the UK, we support amendments tabled by the hon. Lady the Member for Devizes.

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I rise to support the amendments. It will not surprise the Committee to learn that I seek clarity about the impact on Scots law. It comes back to the same point: a lot of the issues that are being wrestled with in this place apply in a different legal jurisdiction. Perhaps the Minister could address that.

[Christian Matheson]

I should like to add to the comments made by hon. Friends. My concern is that if there are too many gaps and loopholes in the legislation, that may, perversely, put greater pressures on the enforcement authorities, because they will have to seek out so many different mouse-holes down which some of the content providers may run and disappear. I am slightly concerned and ask the Minister to consider the danger of an unintended consequence, because if it is not possible to stamp out content immediately, vital resources and focus will be diverted.

--- Later in debate ---

[Calum Kerr]

I beg to move amendment 62, in clause 20, page 22, line 13, at end insert—

“(14) Within 12 months of this Act coming into force, the Secretary of State shall commission a review of the effectiveness of the enforcement of sections 15 and 19 and shall lay the report of the review before each House of Parliament.”

[The Chair]

With this it will be convenient to discuss amendment 81, in clause 82, page 80, line 18, at end insert—

“(4A) Part 3 will come into force at the end of the period of one year beginning on the day on which the Act is passed.”

This amendment ensures that Part 3 will be implemented by ensuring the Part comes into effect a year to the day the Act is passed, rather than on the day the Secretary of State determines through regulations.

[Calum Kerr]

It took me a while to get out of my seat: I was astonished that we actually got some agreement there. Perhaps we have a new spirit of progress as we near the end of the day.

[Kevin Brennan]

I doubt it.

[Calum Kerr]

I doubt it too, but never mind. It is better to be an optimist, especially on the Opposition Benches.

[Christian Matheson]

You’ve got me behind you.

[Calum Kerr]

No comment. Had we made more progress, amendment 62 might not have been necessary, but as I feared, we have not. I am confident that we all agree on the merit of the intent of this part of the Bill. We all want to protect young children from accessing inappropriate pornographic material. I do not want any of my children doing so, and I know how much they use electronic devices. My youngest, Robert, is only seven, and he is phenomenally tech savvy. It would not be that difficult in this world to stray, even with some of the blocking systems that are in place.

A lot of the problems that we have here are to do with international sites. I am dismayed at the Government’s unwillingness to move and not even so much as listen to Opposition Members, the regulator or charities, who all insist that ISP blocking is the kind of extra measure that we should put in place. Given that broader context and the Minister’s conviction, which I believe is sincere, that he has a package of measures that will work, in light of our concerns and those of many others, a review should be put in place. I know that in the past the answer to anything involving a review has been, “That’s what the Select Committee process is for; they will have a review,” but we should not leave something as important as protecting young children to a Select Committee. The Government should take responsibility rather than abdicate it to a Select Committee. The Government should put ISP blocking in the Bill, show that they treat the issue seriously and have a review to ensure that we get the outcome that we all want: a safer environment for our children on the internet.

[Louise Haigh]

Given that the Government have been so intransigent on the sensible suggestions for how their proposals could be strengthened, certainly on the issue of internet service provider blocking, I completely agree with the hon. Gentleman. The Minister keeps saying that he does not want to be too prescriptive, but we argue that the phrase “on a commercial basis” is too prescriptive and limits the powers of the age-verification regulator. Given the broad support for additional powers, we want the age-verification regulator and any other regulator involved in enforcement to come back to the House and tell us what additional powers they need to make this work. There are significant loopholes in the Bill and it could have serious unintended consequences for our young people. We completely support the SNP amendment.

[Matt Hancock]

I entirely understand the enthusiasm for commencement, and I have given the commitment that we would expect it within 12 months of Royal Assent. I hope that that deals with the demand for a timing of commencement to be put on the face of the Bill. Unfortunately, that renders the SNP amendment slightly impractical, because it would require a review within 12 months of Royal Assent, but if the Act commences only 12 months after Royal Assent, a review at that point might not show as much progress as we would hope.

[Calum Kerr]

I like the way the Minister is engaging. Is he telling me that he likes the idea, but it is just that we have worded it slightly wrongly? If that is the case, I would happily move the review 12 months on, if that is what he is suggesting.

[Matt Hancock]

Unfortunately, the hon. Gentleman has lost his opportunity for that because the deadline for tabling amendments has passed. We should have an enduring assessment of the effectiveness of the Bill and an ongoing review of how effective the policy is. Select Committees have an important role to play in doing that. I resist the amendment on the grounds that it is impractical, because of the timings I have discussed, and because it is far better that such matters are reviewed constantly, rather than just on a one-off.

--- Later in debate ---

[Matt Hancock]

We thought you might be the regulator for part 4, Mr Stringer.

I suppose this is the difference between the two sides of the House: for the Opposition, an ongoing review means never; for the Government, an ongoing review means always.

[Calum Kerr]

My background is in telecoms, latterly as a global consultant coaching front-line leaders. People always said to me, “Oh yeah, we always have reviews,” but unless there is a cadence on it and it is put down in black and white, it is not done properly. They would not do it in the business world, and Opposition Members would not do it; perhaps Government Members are a bit more blasé than we are.

[Matt Hancock]

That tells us all we need to know about consultants. There we are. I commit that we will keep the effectiveness of the legislation under review. I know that that will happen anyway because I know that my hon. Friend the Member for Devizes is not going to let this one go.

Digital Economy Bill (Seventh sitting)

Calum Kerr Excerpts

Committee Debate: 7th sitting: House of Commons
Tuesday 25th October 2016 Public Bill Committees

[The Chair]

It may help the Committee to know that we will not reach votes on new clauses today; that will come at the end of our proceedings, in case anyone is getting terribly excited.

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I am sure that the Minister will be glad to hear that I will not be quite as thorough, because everything has been covered already. He was looking somewhat exasperated. I do not know what he was googling; “How to make this Bill go quicker”, perhaps.

[Christian Matheson]

Does the hon. Gentleman not agree that one way to make the Bill go quicker would have been for the Minister not to have tabled so many Government amendments?

[Calum Kerr]

That is an excellent point. I think that the ambition is to make the amendment paper longer than the Bill. If the Bill is a Christmas tree, the baubles must be hollow, with a little note inside saying “IOU a lot more detail, or an apology.” It has made my first Bill Committee an interesting experience.

Of course we support clause 26 and the spirit behind it. It is important that copyright be protected. Our creative industries in these isles are a huge success story, and they should be fully supported. The hon. Member for Cardiff West gave a thorough and excellent overview of the issues; I know that my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) was delighted to hear that he was on the Bill Committee, as the subject is close to his heart. I would hazard a guess that he has made more than £10.60 from his past efforts. Before I come to the substance of what the hon. Member for Selby and Ainsty said, I put on record my appreciation and admiration for his contribution last Friday. That day showed the worst and best of democracy in this place, and he was part of the best.

On the new clauses, I have been sitting here messaging my staff asking, “Why didn’t we add my name to these?”. We need to learn how things operate a bit better. We fully support the amendments. New clause 3 is an essential addition. As the hon. Member for Cardiff West said, I am sure that the Government will add something at some point, because that is a logical step to take. As has been outlined in some detail, there are millions of sites flagged to the search engines by the relevant bodies. It is not as though they have to go and find them themselves; it is the process by which the search engines do or do not take the sites down that needs to be brought into sharp focus. Clearly, there are efforts at a voluntary approach, but this is the perfect opportunity to put into legislation something that might drive the right outcome and behaviour without the need for follow-through. Past experience supports that idea. We must see some movement in that area.

We support new clause 33 on IPTV boxes. It is necessary to move with the times. This Christmas tree of a Bill has a lot of aspects to do with the broader digital economy, but people will continue to innovate and find new ways of delivering content, and IPTV is one example. Someone in this place recommended an IPTV box to me for my London flat because it is quite a cheap way of accessing content, but I did not follow that advice because I would not want to access any illegal content. These boxes come pre-loaded, and there should be no pretence about it: they are designed to give people a way of avoiding paying for content that they know they should pay for. There is no excuse for that. New clauses 33 and 3 are essential additions to the Bill, and we are delighted to support them both.

[Rishi Sunak (Richmond (Yorks)) (Con)]

New clause 3 is about protecting content owners from copyright infringement. Most of the discussion we have heard today has centred on online platforms and their particular abuse of music content. However, has the Minister considered the connected issue of the newspaper industry? Historically, newspapers used revenue from advertising to help support their news-gathering operation, and to provide a vital service, especially in regional and local communities—I am sure that Members on both sides of the Committee will have experienced that service in their constituencies. Today, there is a concern that some online platforms are benefiting from such news-gathering, but are not always paying for it in the most appropriate way. That raises questions about the sustainability of the newspaper industry and the vital service it provides. Has the Minister considered the connected issue of newspapers? Will he share any thoughts with the Committee?

--- Later in debate ---

[Calum Kerr]

I thank the Minister for his explanation. I know that he and the Government are not fans of amendments that would oblige them to do a report to see how they are doing in the area. However, is there a way of looking at it on an ongoing basis, so that progress can be monitored and we can see how many prosecutions are actually occurring under the current legislation?

[Matt Hancock]

That would be an excellent idea, if the Culture, Media and Sport Committee chose to take it up. That is what Select Committees are for; I know the hon. Gentleman does not like them, but I think they are excellent at scrutinising the Government and everything that is going on. With that response, I ask the hon. Member for Cardiff West to withdraw his amendment.

--- Later in debate ---

[Kevin Brennan]

I rise to speak to our amendments 189 and 94. I note the well-informed and cogent points made by the hon. Member for Selby and Ainsty, and I understand why the Government want to repeal section 73 of the Copyright, Designs and Patents Act 1988, as he laid out. Clearly apps such as TVCatchup cannot be allowed to profit from public service broadcasting content without making any sort of contribution to its creation, either by paying for it or in some other way; without agreeing some kind of licence for its use; and without abiding by public service broadcasting standards for its distribution. It is entirely logical to repeal the section and we support the intention to prevent TVCatchup from doing what it does, but the Government need to explain the knock-on effects on the market.

[Calum Kerr]

The SNP also supports and welcomes the repeal of the section 73 of the 1988 Act. I agree with supporting original drama, but I wonder about how Virgin in particular is affected, because Virgin is also rolling out broadband and helping the Government in their other targets. Perhaps the Minister can assure us that that has been considered and that pricing will not prohibit meeting other Government objectives.

Digital Economy Bill (Eighth sitting)

Calum Kerr Excerpts

Committee Debate: 8th sitting: House of Commons
Tuesday 25th October 2016 Public Bill Committees

[Kevin Brennan]

The hon. Gentleman is right to probe me on that. The truth of the matter is that there is a convenient clause to which we could add our amendments, which starts things two months after Royal Assent. As I said, amendment 94 is a probing amendment and I am sure the Minister will tell us all the reasons why it is technically defective. I will not push it to a vote so I am prepared to hear that, but we want to use it as a method of finding out the Government’s position.

Section 73 was originally introduced to encourage the roll-out of cable and to help a fledgling platform compete against terrestrial television by ensuring that cable platforms had access to public service broadcasting content. The Government have agreed that this policy objective was met some time ago, and in July reported that they were

“satisfied that the objective of ensuring that PSB services (as well as other TV services) are available throughout the UK has been met, and therefore section 73 is no longer required to achieve that objective.”

Subsection (3) states:

“The Secretary of State may by regulations make transitional, transitory or saving provision in connection with the coming into force of this section.”

Inasmuch as this generally means that the state will repeal section 73 when it sees fit, there are concerns among some public service broadcasters about understanding more clearly the Government’s intentions in relation to the timetable for that repeal. It would not be such a pressing issue were section 73 merely a harmless hangover and simply moribund. However, as we have heard, it is more than a legal anachronism. It is a loophole through which taxpayers’ money is effectively funnelled into private businesses.

As we have heard, section 73 allows companies, such as TVCatchup and FilmOn, to live stream the content of public service broadcasters and other channels online without permission. In other words, the money the public pay through their licence fee pays for content that is then, in effect, given away for free to companies other than public service broadcasters. Those companies then monetise that public service broadcasting content by placing their own advertising around it.

Public service broadcasters are granted public funding and the other advantages we have talked about on the understanding that, in exchange, they are obliged to air content that works for the public’s benefit, rather than solely for the benefit of commercial interests. Section 73, in effect, allows TVCatchup and FilmOn to benefit from that same public funding, but those companies are clearly not held to the same standards. That amounts not only to the taxpayer unwittingly subsidising those businesses, it effectively directs funds away from PSBs and impacts on their ability to generate legitimate commercial revenues and to reinvest in the wider creative economy. Those live-streaming sites increase public service broadcaster reliance on public money and can fuel a vicious cycle of under-funding.

There is cross-party agreement that that is wrong and has to be put right, which is what the Government are seeking to do, but why do we have to rely on the Secretary of State to

“make transitional, transitory or saving provisions”

for repealing section 73? Is it not the case that broadcasters and the public deserve a more explicit timeframe, for the reasons I have laid out, so that this does not persist for any more time than is absolutely necessary? Not only is that fair, but it would provide more certainty for public service broadcasters and ensure that their investment in UK content is protected. Amendments 63 and 64, which the hon. Member for Selby and Ainsty tabled, would mean the repeal of section 73 immediately after Royal Assent, which offers one way forward. Our probing amendments offer another alternative if the Government need more time.

Public service broadcasters first wrote to the Intellectual Property Office to ask for the repeal of section 73 in 2008. In the meantime, TVCatchup has obviously made millions on the back of PSB content and the European Commission has launched infraction proceedings against the UK Government, on the basis that section 73 denies public service broadcasters their intellectual property rights for their content, which is guaranteed under the 2001 copyright directive. It would also be helpful to know from the Minister how he believes that infraction proceeding plays into our discussion on the amendment, the repeal of section 73, and what role it has to play if the Bill indeed repeals section 73. In short, will the Minister explain why he is not offering a clear timetable for repeal in the Bill?

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I feel that I should thank you for your chairmanship, Mr Streeter; I feel a bit left out, given that the Opposition spokesperson did it. Thank you so much for your chairmanship. It is nice to see a smile at the top table.

I will add a couple of brief points. I am surprised the hon. Member for Cardiff West earned only £10.60. I thought he displayed some creativity. I have never heard so many song lyrics or titles; I do not know if he is on commission for that. Hopefully, journalists across the country are googling—that is appropriate, given what we are discussing today—for what content he has earned £10.60, so that number may go up.

[The Minister for Digital and Culture (Matt Hancock)]

Other search engines are available.

[Calum Kerr]

Indeed—I thank the Minister. There is an interesting point here about the importance of parity across channels. The Scottish National party is clear in supporting the repeal of section 73. The hon. Member for Cardiff West made a point about the many different ways in which people can access content, which he articulated well, and the importance of being consciously competent across all areas when making legislative change. I am interested in hearing the Minister’s remarks on that.

We noted earlier the concerns specifically in relation to Virgin as a large cable company, but I want to put on the record very clearly that we absolutely support the Government in repealing section 73. As these models change and people access content in different ways, the ability for them to earn revenue from the content they produce becomes all the more important, because they cannot necessarily rely on its being consumed in a way that ensures that advertising revenues naturally flow. I emphasise that we support this, we welcome the Government’s bringing it forward but we would like a bit more clarity from the Minister around the broader picture.

[Matt Hancock]

I am delighted to respond to these points. I take this opportunity to commend the Opposition Front Benchers and, in particular, the hon. Member for Sheffield, Heeley, for how she proved, earlier in Committee, how it is possible to put points with great clarity and precision, such that on Thursday we rose early—somehow that seems unlikely today.

--- Later in debate ---

[Matt Hancock]

Hear, hear!

[Calum Kerr]

Oh, the curse of a word of praise from the Minister! I thank him none the less.

I support these two excellent new clauses tabled by Labour Members. I was delighted to hear the Minister say in response to the debate on the last clause, “We strongly support public service broadcasting.” Hot on the heels of that, the Opposition have provided him with an opportunity to put his money where his mouth is and show that he truly does. I think—at least, I hope—that we all support public service broadcasting, but there has been a lot of chat in this place about the PSB funding settlement and about it not encroaching on competition. Let us push beyond that to consider how to support public service broadcasters. Let us find a way to ensure that they maintain their place in an adapting world.

I will touch briefly on both clauses. New clause 14, on the review of listed events, is close to my heart. I note that the football World cup is one of them; I do not know whether we can table an amendment to ensure that Scotland has a chance of getting there—

[Kevin Brennan]

You’re going too far.

[Calum Kerr]

I thought so. At least when we eventually get there, we will not expect to win it, unlike others.

[Christian Matheson (City of Chester) (Lab)]

Like in 1978?

--- Later in debate ---

[Calum Kerr]

“We’re on the march with Ally’s Army. We’re going to win the World cup.”

[The Chair]

Order.

[Calum Kerr]

I will keep to the subject with a bit of brevity and levity.

I support the Labour move to review this whole area to ensure that we have a set of listed events that is fit for purpose and, more importantly, to ensure that the protection will continue. Likewise, we fully support new clause 17 on prominence. The Committee has spent a lot of time talking about the changing digital landscape. There is no doubt that if we do not introduce measures to protect listings, the public service broadcasters will disappear, slide down the pecking order and be harder to find. We will then be on the slow road to an argument that says that public service broadcasting is not as popular as it once was, but the reality will be that it is just difficult to find.

I conclude by thanking the Labour party for beating me to it with both amendments, to which I should have added my name and which I fully endorse.

[Graham Jones]

It is a pleasure to serve under your chairmanship for the first time, Mr Streeter. My hon. Friend the Member for Cardiff West encouraged me to talk about children’s programmes—I was thinking about “Play Away”—and I apologise for not being here earlier. I was observing a NATO training exercise as part of the armed forces parliamentary scheme.

I rise to talk about retransmission charges, and I will do so briefly because I am conscious of the time. We obviously have a listening Minister who is deeply concerned about these matters, and I hope he will go away and give due consideration to some of the points that have been raised, perhaps coming back with some thoughts of his own and some changes that could improve the Bill. On retransmission charges, repealing section 73 of the Copyright, Designs and Patents Act 1988—the intellectual property rights element—is important and welcome. It will put Virgin on an equal footing with the public service broadcasters in the marketplace of buying and selling channels.

I will return to that second issue and the financial impact in a moment, but I will first highlight an anomaly. Unless there has been a change in the last few days, the Bill does not include satellite channels, which fall under the Communications Act 2003. The Sky platform is exempt from the Bill and will not be liable for retransmission charges, which seems to be a market anomaly—I stand to be corrected by the Minister. We should have a level playing field for everyone. Sky benefits significantly not only from the five public service broadcast channels but from some of the other channels—my hon. Friend the Member for Cardiff West has just mentioned S4C and Alba, among others—and the radio stations. Sky has a huge commercial advantage in not paying for receiving something that is very complementary to its platform. We are applying a principle to Virgin, and the Bill should treat Sky equally.

We demand a lot from public service broadcasters, particularly the BBC, for which we pay a licence fee, and it is only right that the BBC should be able to recover some of that money for the licence fee payer in the commercial marketplace, rather than the service being literally given away to some platform providers. There is obviously a commercial benefit to the Sky platform or, for that matter, any satellite platform that automatically has to deliver PSBs under the 2003 Act. There ought to be something that provides clarity and a level playing field, because without it, Sky has another advantage among the many it already has.

--- Later in debate ---

Again, I quote from the Government’s consultation.

[Calum Kerr]

It is good to see the shadow Minister back in her place. She is making an excellent start to this section of the debate, pulling out many of the key issues. I am afraid that the ministerial team might not like the scrutiny that the process is supposed to provide—and essentially does. The point about transparency is critical and there is a confidential submission that points out that transparency does not prevent people from doing anything; it simply requires them to be accountable for what they do. We have recently seen the case of HMRC outsourcing to Concentrix the ability to collect tax credits. Data from another source were used, and we all know the damage that can be done when that is not done well.

[Louise Haigh]

I am grateful for that intervention. I am very aware of the Concentrix case and will come on to it shortly.

On the inclusion of non-public sector authorities and the Government’s intention to strictly define the circumstances and purposes under which data sharing with such organisations will be allowed, their statement of intent was clear. However, only one paragraph in the 101-page draft code mentions non-public sector organisations. That paragraph says that an assessment should be made of any conflicts of interest that the non-public authority may have but it does not give any examples of what those conflicts of interest might look like, so perhaps the Minister will elaborate on that when he responds. It states that a data-sharing agreement should identify whether any unintended risks are involved in disclosing data to the organisation—the risk regarding Concentrix was just highlighted—but the code of practice does not list any examples or set out how specified persons might go about ascertaining those. It also states that non-public authorities can only participate in a data-sharing agreement once their sponsoring public authority has assessed their systems and procedures to be appropriate for the secure handling of data, but it does not give any sense of what conditions they will be measured against or how officials should assess them.

That is not the kind of reassurance that was provided in the Government’s consultation response. Given that these are draft codes, I hope the Minister will take what I have said away and improve them, not least because of the recent scandal relating to the US multinational company, Concentrix, which was contracted by HMRC to investigate tax credit error and fraud. Concentrix sent letters to individuals—mostly working single mothers across the country receiving tax credits—in what was essentially a large-scale phishing exercise. Not only did it get things catastrophically wrong by cancelling benefits that it should not have cancelled and leaving working mothers destitute over many weeks and months in some cases, but it performed serious data breaches in sending multiple letters to the wrong individuals and disclosing personal information.

We have made it very clear that the Bill could have done with considerably more work before it was brought before the House. I understand that the civil servant who wrote part 5 has now left, or is in the verge of leaving, the employ of the civil service, so there is even more reason for us to work cross party and with expert organisations on improving the proposals.

As I have said, public trust in Government handling of data is not strong. Unfortunately, the public have not been given any reason to put their concerns to rest. The recent National Audit Office report, “Protecting information across government”, revealed the prevalence of weak controls on the protection and management of personal information in Government. Any continuation of the existing poor information management identified by the NAO, or the further weakening of cyber-security and data protection implied by part 5, is likely to have negative economic and social impacts.

As the Information Commissioner’s Office commented:

“It is important that any provisions that may increase data sharing inspire confidence in those who will be affected. Our research shows that the public are concerned about who their data is shared with and reflects concerns that they have lost control over how their information is used. Even apparently well-meaning sharing of data such as GP patient records for research purposes can arouse strong opinions.”

This is an important time to strengthen cyber-security and the minimisation and protection of data, which is why it is so important to get this part of the Bill right. A huge prize is on offer, but this has the potential of going the way of the care.data scandal. Frankly, it is astonishing that neither Ministers nor civil servants have learnt their lessons from that very regrettable episode, because there was absolutely nothing wrong with the principle of care.data either; it attempted to achieve exactly the kind of aims as the Bill’s reforms.

The idea was to create a database of medical records showing how individuals have been cared for across the GP and hospital sectors. Researchers believed that the information would be vital in helping them to develop new treatments as well as assessing the performance of NHS services. The records would be pseudo-anonymised, meaning that the identifiable data would be taken out. Indeed, they would just contain the patient’s age range, gender and the area they lived in. However, researchers could apply for the safeguards to be lifted in exceptional circumstances, such as during an epidemic. That would have needed the Health Secretary’s permission.

The concept had the backing of almost the entire medical community, many charities and some of the most influential patient groups. The UK’s leading doctors told us how access to so many NHS records would help them to understand the causes of disease, quickly spot the side effects of new drugs and detect outbreaks of infectious diseases.

The problem with care.data was that the advantages and the principles upon which the data would be shared were simply not communicated by the Government or by NHS England, and so it attracted the criticism of bodies as disparate as the British Medical Association, the privacy campaign group Big Brother Watch and the Association of Medical Research Charities. Such was the botched handling of the publicity surrounding care.data that, by April 2014, the launch was aborted. However, it emerged the following June that nearly 1 million people who had opted out of the database were still having their confidential medical data shared with third parties, because the Health and Social Care Information Centre had not processed their requests.

A review by the National Data Guardian, Dame Fiona Caldicott, found that care.data had caused the NHS to lose the trust of patients, and recommended a rethink. That prompted the then Life Sciences Minister, the hon. Member for Mid Norfolk (George Freeman), to announce that the scheme was being scrapped altogether, even though £7.5 million had already been spent on constructing a database, printing leaflets, setting up a patient information helpline and researching public attitudes to data sharing.

The Caldicott review established a set of Caldicott principles, with the primary one being that the public as well as the professionals should be involved in data-sharing arrangements. Dame Fiona Caldicott proposed a simple model that gives people the option to opt out of any of their information being used for purposes beyond care. She said:

“We made it slightly more complicated by saying it was worth putting to the public the choice of having two separate groups of information to opt out of – [those being] research and information used for running the health service. If you put all of the possible uses of data currently in the system together and asked people to opt in or out of that, it’s actually asking them to make a choice about a very big collection of information. [People] may want to have the possibility of saying, ‘Yes, I’d like my data to be used for the possibility of research, but I don’t want it to be used for running the health service’.”

She also made it very clear that the benefits of data sharing and what it means need to be communicated clearly to the public, as there is a lot of confusion around how the data are shared.

Absolutely nothing has changed since that disaster and the subsequent review, so it is concerning not to see those basic principles included in the Bill. I am interested to hear the Minister’s response to those principles laid out by the National Data Guardian. The public need to be able to trust organisations that handle their data and they need to retain control over those data. Both those things are essential to build confidence and encourage participation in the digital economy. The principles have been debated over the past several years at the European level, and we should be told here and now—today—whether the Government intend to implement the EU’s General Data Protection Regulation. If they are, why is the Bill not compliant with it?

The new EU GDPR and the law enforcement directive were adopted in May and will take effect from May 2018. The GDPR includes stronger provisions on: processing only the minimum data needed; consent; requirements on clear privacy notices; explicit requirements for data protection by design and by default; and on carrying out data protection impact assessments.

Although the Government’s arrangements for exiting the European Union have yet to be decided, it seems likely that the GDPR will take effect before the UK leaves, so the Government will have to introduce national level derogations prior to its implementation. If that is the case, there will have to be a thorough consideration of the impact of the new legal framework on all aspects of the Bill affecting data sharing, including implementation arrangements. Indeed, as the Information Commissioner said when giving evidence to the Committee two weeks ago:

“There may be some challenges between the provisions and the GDPR… There would ?be a need to carefully review the provisions of this Bill against the GDPR to ensure that individuals could have the right to be forgotten, for example, so that they could ask for the deletion of certain types of data, as long as that was not integral to a service.”––[Official Report, Digital Economy Public Bill Committee, 13 October 2016; c. 112-13, Q256.]

The GDPR states that data are lawfully processed only if consent has been given by the individual, which is completely lacking in this section of the Bill. It also gives data subjects that right to withdraw consent at any time:

“It shall be as easy to withdraw as to give consent.”

Controllers must inform data subjects of the right to withdraw before consent is given. Once consent is withdrawn, data subjects have the right to have their personal data erased or no longer used for processing.

--- Later in debate ---

[Chris Skidmore]

On the individual point of audit, I will have to write to the hon. Lady. I will further consider her amendments and speak about them when we discuss three-year reviews. I want to ensure that bodies sharing information under the public service delivery power, for instance, strictly observe and follow codes of practice. Although I welcome the intention of the amendments, I think they are unnecessary. The Bill sets out the key conditions for disclosing and using information, including what can be shared by whom and for what purposes. We followed the common approach taken by the Government to set out details of how data are shared in the code of practice.

I want to return to the hon. Lady’s question of whether we use “have regard to” or “comply with”. The wording, “have regard to” already follows common practice in legislation, as illustrated in section 25 of the Immigration Act 2016 and section 77 of the Children and Families Act 2014. As the power covers a range of public authorities and devolved territories we want the flexibility that I mentioned about how the powers are to be operated, so that we can learn what works and adapt the code as necessary. To put it into the Bill, as I mentioned, would hamper that ability to adapt for future purposes. If bodies fail to adhere to the code, the Minister will make regulations that remove their ability to share information under that power, as is indicated, indeed, in part 11 of the code of practice, which states:

“Government departments will expect public authorities wishing to participate in a data sharing arrangement to agree to adhere to the code before data is shared. Failure to have regard to the Code may result in your public authority or organisation being removed from the relevant regulations and losing the ability to disclose, receive and use information under the powers”.

Amendment 106 requires the Minister to run a public consultation for a minimum of 12 weeks before issuing or reissuing a code of practice. The code of practice is essentially a technical document that sets out procedures and best practice with guidance produced by the ICO and Her Majesty’s Government. Clause 35 requires the Minister to consult the Information Commissioner and other persons, as the Minister thinks appropriate. I think that that strikes a good balance. Indeed, as I mentioned, we have been working closely with the ICO to ensure that there is confidence in the codes and the Information Commissioner states:

“I am pleased to report that significant progress has been made since my evidence session and I am content that my main concerns about the codes have now been addressed”.

I think it is very important to put that on record.

[Calum Kerr]

I welcome the Minister to his place. He comes across, to me, as rather bullish now, despite the damning evidence we heard over a very condensed couple of days. Does he think that he has cracked it now, that these codes of practice are all fit for purpose and that we should be sufficiently reassured?

[Chris Skidmore]

The codes of practice remain in draft form and obviously we are in Committee having a discussion around the nature of what is in the codes of practice. We had criticisms last week of, “Where are the codes of practice?” We were still in the process of a conversation about the codes of practice with the Information Commissioner’s Office to ensure that the Information Commissioner was content. If she is content with the codes of practice as they currently stand, I am not one to go against the ICO. I am not saying that that is a form of complacency, although maybe the hon. Gentleman is, but I trust the ICO’s decision and am confident in its ability to deliver on the codes as they currently stand.

[Calum Kerr]

I thank the Minister for that mildly reassuring answer that the codes of practice are a work in progress. We welcome that, but in the spirit of helping improve them, I hope that he will consider some of the feedback from Big Brother Watch, which I thought gave the Committee excellent advice. Although Big Brother Watch recognises that the draft codes published by the UK Statistics Authority on research and statistics are detailed and comprehensive, it says that the draft codes published by the Cabinet Office and the Home Office are the polar opposite, offering very little detail or clarity.

[Chris Skidmore]

The codes are quite extensive in terms of being able to provide the material information that is there. They have gone through an extensive process. Although we had evidence from certain critical witnesses drawn by Opposition Members, there was also significant support for data-sharing measures and the ability to have flexibility through the codes.

As for considering how to go forward, the codes are now published—the hon. Gentleman can read them for himself—and the ICO is now content with the codes. That is a great position from which the Government intend to move forward. In terms of whether the codes are comprehensive, it is set out that the Government have a duty to consult the ICO and territorial Ministers. That is important, and we are following a process and a journey over which the Bill has been developed for a number of years. We are content that we are on track.

I welcome the intention of amendment 99 that only the minimum and necessary information is shared under the power to achieve the objective. The principles are set out in the Data Protection Act 1998. The public service delivery power will need to operate in compliance with the 1998 Act. The principle of data minimisation is also strongly embedded in the code of practice, to which specified persons who use the power must have regard.

In addition, the public service delivery power is intended to act as a more conventional gateway to allow public authorities to share information without the need for central oversight by Whitehall. It is important to reflect on that. Rather than having the dead hand of Whitehall overlooking a measure that should allow for local flexibility and local freedom, we expect a large number of local authorities to use the power to deliver their troubled families programmes. A central monitoring power could impose significant resourcing burdens, which we felt were unnecessary given the intended positive outcomes for citizens. On that basis, we feel that the amendment is unnecessary.

Amendment 95 intends to modify the definition of “personal information”. The definition in the Bill is consistent with section 39 of the Statistics and Registration Service Act 2007, which relates to the confidentiality of personal information. It has been drafted with that consistency in mind. The amendment proposes a definition that includes a vague group of persons. We believe it unsuitable because of its vagueness, and it risks causing confusion.

Amendment 96 requires that data subjects be allowed to request and correct as necessary personal information relating to them that is disclosed under the public service delivery powers. The amendment is unnecessary because the data subject already has those rights under the Data Protection Act 1998. In addition, the impact of such an amendment on public authorities would be significant. An assessment would need to be made of how many requests could be made to public authorities, and of the resulting resourcing requirements in terms of staff and any supporting technical infrastructure. Work would also need to be carried out to ensure that we can verify the identity of individuals requesting access to data and assess the risk of corrections and modifications to data held being made for the purposes of committing fraud.

I understand the intention of the amendments, and I hope that the hon. Member for Sheffield, Heeley will understand that the Government believe that progress has been made, as well as provision for ensuring that the sharing of data is proportionate. The regard for individuals’ privacy is central to the Bill and is set out in the code of practice, and the Government have put in place measures to work with the ICO and other civil society groups on that. I urge her to withdraw the amendment.

Digital Economy Bill (Ninth sitting)

Calum Kerr Excerpts

Committee Debate: 9th sitting: House of Commons
Thursday 27th October 2016 Public Bill Committees

[Louise Haigh]

The point is vital and it is the point that was made earlier in our proceedings. Unless we get this right at this stage, it will become a scandal that the Government will then have to deal with and it will hold back progress on sharing data, as we saw with the care.data scandal. We do not want to see the Government embroiled in another scandal like that and we hope that they heed our warnings in order to avoid one in the future.

The objective behind the register is that it could be considered an amnesty for all existing data-sharing projects, with the disclosure assisting understanding of the problem and improving public trust. Let us not kid ourselves that the Bill covers the only data sharing that happens across Government. In a recent interview with Computer Weekly, the new director of the Government Digital Service, Kevin Cunnington, said:

“The real work is going on in”

places such as “Leeds and Manchester”—I would disagree with him on that point for a start, because we are not fans of Leeds in Sheffield—

“as well as London. We need to be part of that. The example I use is where DWP now runs a whole set of disability benefits. It would be incredibly helpful if DWP had selected and consensual access to some of”—

those people’s—

“medical data. Right now, NHS Digital and DWP are having that conversation in Leeds and we’re not in the conversation. Why wouldn’t GDS be in a conversation like that? If we’re going to be, we’ve got to be in Leeds—we can’t do that from here.”

We know that that conversation is happening between the DWP and the NHS—despite assurances that sharing of health and social care information is not happening across Government—only because a random official mentioned it in a random interview, so I ask this question again: does the Minister have an audit of data-sharing agreements and arrangements across Government, or is it the case, as I fear it is, that not only do the public not know which data are shared across Government, for what purpose and how they are stored, but Ministers do not know either?

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

The hon. Lady is making an excellent point. What this cuts back to is the underlying theme of transparency. Rather than the Government acting in a paternal way—“We’ll do what is best for the citizens”—they should be transparent and make it clear to citizens why and where data are being used.

[Louise Haigh]

That is exactly the kind of attitude that underpins these elements of the Bill: “Trust us. We’ll sort it out. Give us your data. No problem. We’re going to share them freely and fairly.” The Government may well do. The problem is that the public do not have that trust in them. As I said on Tuesday, this is not a party political point. The previous Labour Government were not up to scratch in handling data either. This is not a party political attack at all. It is a genuine attempt to get these proposals in the best shape possible, to aid Government digitisation and deliver efficient public services.

Just as the Government give taxpayers a summary of how their tax money has been spent so they should give citizens information on how they have used data on them. If there is transparency through a register, there can be an informed conversation about whether a data disclosure will solve the problems that it claims to. There has been data sharing to prevent fraud for decades and a complete absence of audited and accurate results from that work. Arguing that current data sharing has not prevented fraud and so there should be more data sharing equates to doing the same thing over and again and expecting a different result.

The amendment is vital to restore and build on public trust in the Government handling of data. It is not in my nature to call on my constituents to trust this Government, but if they enacted the amendment, I absolutely would. I would be able to tell my constituents in good faith that they were right to trust their data to this or any future Government, because they and the data community could see exactly how and why their data were being used and exert some control over it. If the Government do not heed this lesson now, I am afraid that they will learn the hard way when things go the way of care.data or worse, as they inevitably will.

Digital Economy Bill (Tenth sitting)

Calum Kerr Excerpts

Committee Debate: 10th sitting: House of Commons
Thursday 27th October 2016 Public Bill Committees

[The Parliamentary Secretary, Cabinet Office (Chris Skidmore)]

The clause will create a clear, permissive power for public authorities to disclose information that they hold for the purpose of research in the public interest. It will ensure that any personal information is processed before it is disclosed and that a person’s identity is not specified in the information, so that a person’s identity cannot be deduced from that information. It will establish a set of conditions to ensure that any processing of personal information is undertaken in a way that protects the privacy of individuals.

To maintain a truly innovative and competitive economy and to ensure that decisions taken on a range of economic and social issues are informed by the best possible evidence base, it is essential that we maximise the use of rich and varied sources of administrative information that is held across public data.

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I am not sure whether the Minister is aware, but Scottish universities share all their research on the internet for the public to read, ensuring world-class Scottish research can help the world. Do the Government agree that such rules should apply to all publications resulting from the research and statistics chapters of the Bill?

[Chris Skidmore]

I think that it is up to each university to have a policy on what research should be published and when. There is a particular situation in Scotland, but other universities may decide that their research may be used for purposes that remain confidential. Publication is up to the universities and academic bodies to decide.

[Calum Kerr]

The Minister is absolutely right—perhaps I rushed my question. I was trying to emphasise the point that, when data are shared, will he match that transparency, so that citizens can see what public benefit has been drawn from the use of their data?

[Chris Skidmore]

I shall come in a moment to the UK Statistics Authority’s position on the use of national statistics; it would benefit enormously from these measures. The potential benefits from increased access to information extend far beyond the research community. It is generally accepted that increased research and development leads to improved productivity and therefore increased economic growth. Information is increasingly a key raw material.

The research community has for some time been prevented from making better use of information held by the public sector, due to a complex legal landscape that has evolved over time. As a result, public authorities are often uncertain about their powers to share information, leading to delays, in some cases lasting years. In the meantime, projects become obsolete or are abandoned.

The Administrative Data Taskforce warned in its 2012 report that the UK was lagging behind other countries in its approach to this issue. It called for a generic legal power to allow public authorities to provide information for research purposes. As well as providing that power, which will remove the uncertainty that has frustrated the research community, the clause will provide a set of conditions that must be complied with if personal information is to be shared.

The conditions can be summarised as the sharing and use only of information that has been de-identified to industry standards to remove information that would identify, or is reasonably likely to identify, an individual, and the requirements that those who process information that identifies a person take reasonable steps to minimise accidental disclosure and prevent deliberate disclosure of such information, that all those who process personal information or receive or use processed personal information are subject to an accreditation process overseen by the UKSA, whether they are researchers, technicians or those who provide secure environments for linking and accessing data, that research for the purposes of which the information is disclosed is accredited and that all those involved in the exercise of the power adhere to a code of practice that is produced and maintained by the UKSA.

The UKSA is the designated accredited body with a duty to maintain and publish registers of all those accredited for any purpose under the power. That includes all those who may be involved in preparing personal information for disclosure to researchers and the research project itself. The results or outcomes of the research project must be publicly available, to demonstrate that the research is for the public good. The UKSA has a duty to maintain and publish the criteria for accreditation, and all activity under the power will be subject to a code of practice issued by the UKSA. I hope that answers the hon. Gentleman’s concerns.

Turning to the willingness for this to happen, the clause represents an important step forward for research in the UK. It will allow greater opportunities to produce high-quality research, which, in the words of the Economic and Social Research Council, can place

“the UK at the forefront of the international scientific landscape.”

It will allow greater opportunities to improve our understanding of our economy and society.

I would like to put on record the comments of Sir Andrew Dilnot, the chair of the UKSA:

“The Digital Economy Bill, currently before the House of Commons Public Bill Committee, represents a unique opportunity to deliver the transformation of UK statistics. The existing legal framework governing access to data for official statistics is complex and time-consuming. The proposals in the Bill, by making use of data already held across Government and beyond, would deliver better access to administrative data and for the purposes of statistics and research, delivering significant efficiencies and savings for individuals, households and businesses. Decision-makers need accurate and timely data to make informed decisions, in particular about the allocation of public resource. This Bill will deliver better statistics and statistical research that help Britain make better decisions.”

Question put and agreed to.

Clause 56, as amended, accordingly ordered to stand part of the Bill.

Clause 57

Provisions supplementary to section 56

Amendments made: 150, in clause 57, page 53, line 24, at end insert—

‘( ) In its application to a public authority with functions relating to the provision of health services or adult social care, section 56 does not authorise the disclosure of information held by the authority in connection with such functions.”

This amendment and amendments 168 to 170 ensure that Chapter 5 of Part 5 applies to a public authority with functions relating to the provision of health services or adult social care and other functions, but that in such a case the powers to disclose in the Chapter only apply to information held in connection with the other functions.

Amendment 151, in clause 57, page 53, line 28, leave out “56” and insert “56(1)”.—(Chris Skidmore.)

See the explanatory statement for amendment 142.

Clause 57, as amended, ordered to stand part of the Bill.

Clause 58

Bar on further disclosure of personal information

Amendments made: 152, in clause 58, page 53, line 38, leave out “56(9)” and insert “56(3B)”.

See the explanatory statement for amendment 142.

Amendment 153, in clause 58, page 54, line 2, at end insert “(including section56(3B))”.

See the explanatory statement for amendment 142.

Amendment 154, in clause 58, page 54, line 6, at end insert—

“(da) which is made for the prevention or detection of crime or the prevention of anti-social behaviour,”.

This amendment and amendment 157 create a further exception to the bar on the further disclosure of information which is disclosed under clause 56 (so that it can be processed for disclosure under that section), allowing disclosure for the prevention or detection of crime or the prevention of anti-social behaviour.

Amendment 155, in clause 58, page 54, line 7, leave out

“(whether or not in the United Kingdom)”.

This amendment removes the provision stating that a criminal investigation for the purposes of clause 58(3) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.

Amendment 156, in clause 58, page 54, line 10, leave out

“and whether or not in the United Kingdom”.

This amendment removes the provision stating that legal proceedings for the purposes of clause 58(3) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.

Amendment 157, in clause 58, page 54, line 11, at end insert—

‘( ) In subsection (3)(da) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”

See the explanatory statement for amendment 154.

Amendment 158, in clause 58, page 54, line 21, leave out subsections (5) and (6) insert—

‘( ) A person commits an offence if—

(a) the person discloses personal information in contravention of subsection (2), and

(b) at the time that the person makes the disclosure, the person knows that the disclosure contravenes that subsection or is reckless as to whether the disclosure does so.

This amendment applies to the disclosure of personal information in contravention of subsection (2) of clause 58. It has the effect that it is an offence to do so only if the person knows that the disclosure contravenes that subsection or is reckless as to whether it does so.

Amendment 159, in clause 58, page 54, line 39, leave out “56(9)” and insert “56(3B)”. —(Chris Skidmore.)

See the explanatory statement for amendment 142.

Clause 58, as amended, ordered to stand part of the Bill.

Clause 59

Information disclosed by the Revenue and Customs

Amendment made: 160, in clause 59, page 54, line 43, leave out “56(9)” and insert “56(3B)”.—(Chris Skidmore.)

See the explanatory statement for amendment 142.

Clause 59, as amended, ordered to stand part of the Bill.

Clause 60

Code of practice

Amendments made: 161, in clause 60, page 55, line 19, at end insert—

‘( ) The code of practice must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).”.

This amendment requires a code of practice issued under clause 60 by the relevant Minister and relating to the disclosure of information under clause 56 to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.

Amendment 162, in clause 60, page 55, line 24, leave out “56” and insert “56(1)” —(Chris Skidmore.)

See the explanatory statement for amendment 142.

Clause 60, as amended, ordered to stand part of the Bill.

Clause 61

Accreditation for the purposes of this Chapter

Amendments made: 163, in clause 61, page 56, line 7, leave out “56” and insert

“subsection (1) of section 56”.

See the explanatory statement for amendment 142.

Amendment 164, in clause 61, page 56, line 9, leave out “section” and insert “subsection”.

See the explanatory statement for amendment 142.

Amendment 165, in clause 61, page 56, line 11, leave out “section” and insert “subsection”.

See the explanatory statement for amendment 142.

Amendment 166, in clause 61, page 56, line 23, leave out “56” and insert “56(1)”.

See the explanatory statement for amendment 142.

Amendment 167, in clause 61, page 56, line 38, at end insert—

‘(6A) The Statistics Board—

(a) may from time to time revise conditions or grounds published under this section, and

(b) if it does so, must publish the conditions or grounds as revised.

(6B) Subsection (6) applies in relation to the publication of conditions or grounds under subsection (6A) as it applies in relation to the publication of conditions or grounds under subsection (2).”—(Chris Skidmore.)

This amendment enables the Statistics Board to revise the conditions and grounds it establishes for the accreditation and withdrawal of accreditation of people and research for the purposes of information sharing under Chapter 5 of Part 5 of the Bill.

Clause 61, as amended, ordered to stand part of the Bill.

Clause 62 ordered to stand part of the Bill.

Clause 63

Interpretation of this Chapter

Amendments made: 168, in clause 63, page 57, line 18, leave out subsection (2) and insert—

‘(2) A person is not a public authority for the purposes of this Chapter if the person—

(a) only has functions relating to the provision of health services,

(b) only has functions relating to the provision of adult social care, or

(c) only has functions within paragraph (a) and paragraph (b).

(2A) The following are to be disregarded in determining whether subsection (2) applies to a person—

(a) any power (however expressed) to do things which are incidental to the carrying out of another function of that person;

(b) any function which the person exercises or may exercise on behalf of another person.”.

See the explanatory statement for amendment 150.

Amendment 169, in clause 63, page 57, line 21, leave out “subsection (2)(a)” and insert “this Chapter”.

See the explanatory statement for amendment 150.

Amendment 170, in clause 63, page 57, line 30, leave out “subsection (2)(b)” and insert “this Chapter”.—(Chris Skidmore.)

See the explanatory statement for amendment 150.

Clause 63, as amended, ordered to stand part of the Bill.

Clause 64

Disclosure of non-identifying information by HMRC

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Louise Haigh]

The clause will reform the appeals process against Ofcom decisions, speeding up the process and ensuring that consumers’ interests are better prioritised. The Communications Act 2003 states clearly that Ofcom’s principal duty is to further the interests of citizens and consumers, but clearly there are issues with how the current appeals process works.

The current process is that Ofcom makes a decision following full consultation with the industry and the public; under the Competition Appeal Tribunal rules, an affected body can then appeal against the decision. Ofcom has six weeks to lodge its defence, and a month later substantive appeals are considered in a court case management conference, at which procedural and substantive points are raised. Third parties can then intervene, after which the appellant can lodge a reply. About a month before the hearing, the parties can lodge skeleton arguments. The hearing then takes place, and judgment is usually reserved. That judgment can take anything from weeks to up to a year. Parties then have about three weeks to decide whether they want to go to the Court of Appeal.

Not only is that process incredibly cumbersome, but it allows for considerable new evidence and new parties to the appeal, of which Ofcom had no knowledge at the consultation phase, to be brought forward mid-process. Under the new system, both the process of gathering evidence, including for the cross-examination of witnesses and experts, and the general treatment of that evidence are designed to be slimmed down. The system will still allow for an appeal, of course—that is only right for the sake of justice—but it will ensure that the appeals process does not unduly benefit those who can afford to litigate. It is alleged that it is currently those with the deepest pockets who bring forward the greatest number of appeals; indeed, most appellants have far deeper pockets than Ofcom has to defend itself with.

I have heard the concerns of some within the industry about the changes, as I am sure the Minister has. Although we are in favour of the Government’s proposals, I would appreciate the Minister’s response to some of those concerns. In a submission to the Committee, a group of the largest communications providers has claimed that the current appeals regime works well for consumers and has delivered consumer benefits to the tune of hundreds of millions of pounds.

[Calum Kerr]

I understand the rationale behind trying to split up the powers that Ofcom has been given and make the process slimmer, but it is quite an achievement to get BT, Sky, Virgin Media, Vodafone and O2 in agreement. I share the hon. Lady’s concern and look forward to the Minister’s response, which I hope will help to allay it.

[Louise Haigh]

I agree, and although I support the Government’s objective, it is of concern that such a wide range of communications providers—the biggest investors in communications infrastructure in the UK—are so vehemently opposed to the changes. This is exactly what the Committee stage of any Bill is designed for: to test out arguments and make sure that the right thing is being done. Will the Minister confirm what impact assessment of the proposals has been made, and what benefit he anticipates the changes will bring to consumers?

The submission that I mentioned claims that if the proposed regime had been in place, the mobile call termination case in 2007 would have led to a £265 million loss to consumers over the two-year period from 2010 to 2012. It states that

“in each of the cases cited, the Tribunal’s decision was that Ofcom’s decision had not gone far enough in consumers’ favour. The quantifiable financial impact of these appeals totalled a net benefit to consumers of around £350-400m.”

It says that the merits review

“enabled these errors to be corrected, the finding of the Government’s 2013 research was that on a JR”—

judicial review—

“standard, each of these decisions would have stood unadjusted.”

No one is saying that Ofcom will get things right 100% of the time—clearly, it will not. The new appeals process is not saying that either, but it will substantially raise the bar for appeals by allowing only regulated bodies to contest how a decision was made. Is the Minister confident that the decisions cited in the evidence from BT and the other providers would still be corrected under the new regime? The providers claim that they would not.

We have heard mixed messages about whether the proposals will bring the communications regulator in line with other utilities regulators. Ofcom told us in evidence that they would do just that, but is it not the case that the price control decisions of both Ofgem and Ofwat are subject to merits review by the Competition and Markets Authority? Will the Minister confirm why that is the case for other industries but not for communications?

On SMEs, techUK is particularly concerned that the higher bar of judicial review will have a disproportionate impact on smaller providers, which brought 17% of appeals between 2010 and 2015. I would be grateful if the Minister assured us that his Department has fully considered the impact these changes will have on SMEs, and particularly on new entrants to the market.

I understand that there will always be winners and losers in any regulatory change. The Minister will no doubt enjoy basking under the adoring gaze of TalkTalk and Three, but he will have to live with the fact that he is in BT’s and Virgin’s bad books for now. What is also clear is that for most people this appeals regime is far from well understood, as the industry claims. In fact, they would find it very difficult to understand why changes that could benefit them are being held up, sometimes for years on end, and why big communications providers are spending millions of pounds on litigation when they should be ploughing that money into helping their customers.

That is no basis on which to continue an appeals regime that leads to excessive litigation and smothers changes that may help—indeed, in some cases, may transform—consumers’ relationships with their communications providers. Clearly, during the exercise of that duty, Ofcom will be required to intervene and make a ruling, which sometimes the industry may not like.

If the broad contention on this side is that Ofcom should be given further powers to ensure that the industry acts in the best interests of consumers, there is little point in allowing an appeals process to continue that is so lengthy that it can render any changes useless. One particularly compelling example given in the evidence session was about the need for far greater switching for consumers. The chief executive of Three remarked that we are at the bottom of the class in terms of switching, and that despite nearly a decade of campaigning little has been done to get rid of provider-led switching. That was because when Ofcom tried to legislate on it, to enable consumers to switch, one of the major mobile providers was able to litigate and push the matter into the long grass, from where it has not emerged until today.

With all that in mind, and pending answers to the questions that I have put to the Minister, we are happy to support the clause.

--- Later in debate ---

[Calum Kerr]

The briefing we received recognises the Government’s line on the current approach but disagrees with the contention. It actually puts forward a form of words that it believes, if inserted, would not risk any issue with the relevant European directive. Have the Government considered that? I am happy to forward that form of words if the Minister does not know what I am referring to; it is in the latest briefing.

[Matt Hancock]

Again, I am happy to look at any detailed representation, but we have had significant and extensive discussions about this, including with techUK and others. On the SME point that techUK specifically raised, that was covered in the impact assessment that the hon. Member for Sheffield, Heeley asked about. It was published on 12 May; on page 15 it sets out the concern that, if we had a separate system for SMEs, we would end up with a yet more complicated process, as opposed to a simpler one, which I think would be an overall benefit.

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[Louise Haigh]

The point is that, as my hon. Friend the Member for Cardiff West said, the BBC was essentially in negotiations with a gun to its head. It was not a free and fair negotiation. The individual to which the hon. Gentleman just referred does not sit on the BBC board, and I do not believe he was involved in the negotiations with the Government.

The fact that we have reached this point—that the BBC was in essence forced to agree to become an arm of the Department for Work and Pensions—says a lot about the overbearing, menacing way the Government treated an organisation that they should cherish, and the cavalier disregard they have shown to the over-75s to whom they made a promise last year. Call me old fashioned, but I believe that promises should be kept. Behaviour like the Government’s brings disrepute on all Members from all parties. It makes people think that it is exactly what politicians do: we promise things in elections that we have absolutely no intention of delivering. It is a problem for all Members, whether Government or Opposition.

Despite public outcry, the Government have still not ruled out further stick-ups of the type that have got us into the position we are in now. They have refused to establish a transparent process to set the licence fees of the future. The Opposition do not consider it a done deal. With new clause 38, we are seeking to guarantee free TV licences to over-75s. That would give the responsibility for the policy and the funding of TV licences back to the Government, where it belongs. There would be no more wriggling out of a decision that should be laid firmly at the Minister’s door.

If the Conservatives want to rid themselves of the cost of the free TV licence, they should have the courage to say that they are doing it. They should have put it in their manifesto and campaigned on it; they should not have created a non-ministerial branch office of the DWP in the BBC to do their dirty work for them. That is why if our new clause was accepted we would be calling for the scrapping of clause 76 in its entirety.

The new clause is very clear: it should be for the Secretary of State for Work and Pensions to specify the conditions under which people are entitled to concessions, and to provide the BBC with the necessary funding to cover the cost of those concessions. That is how it was set up under the previous Labour Government, and it is under those conditions that it should continue. The responsibility should not be delegated to any body other than the Government themselves. They should not be allowed to get away with delegating the responsibility and effectively forcing the BBC to take the rap.

This is a point of principle for the Opposition. We cannot accept a policy that takes the responsibility for even a tiny part of our social security system and gives it to an organisation with no direct accountability to the electorate. Unaccountable organisations do not have to face the consequences of their decisions, especially given the announcement we have heard today from the chief executive of Her Majesty’s Revenue and Customs. Even HMRC does not want to see private sector involvement in decisions on tax credits. A non-ministerial body has said that the private sector should not be involved in who does or does not receive tax credits, or any other type of benefit. That is exactly the argument we are making.

Private sector organisations are the wrong bodies to be involved in deciding who gets benefits, not only because they are incentivised by profit but because they are unaccountable. They do not have to stand for election based on those decisions, and therefore they should not be allowed to make them. It is the equivalent of outsourcing children’s services to Virgin and, in the process, asking them to pick up the tab for child benefit and requiring them to decide who gets it. Our social security system is far too precious for BBC executives, however noble their intentions or professional their considerations, to decide who is and who is not entitled to a benefit of any description. Labour introduced the free TV licence for the over-75s. It cannot be a BBC executive, unaccountable to the public and unaccountable to all our constituents, who calls time on it.

If the amendment falls, it will be high time that the Government were honest about what they were doing and honest with the voters. If they are not, Labour will do everything in its power to make it clear to those millions of over-75s exactly what is happening: their TV licence entitlement will be reduced or taken away not by the BBC, but by the Government who knowingly and cynically engineered the change.

[Calum Kerr]

What a fantastic presentation of a new clause, which I absolutely agree with.

Having looked into this whole area, I find it staggering. The BBC is faced with the prospect of huge cuts, but I am concerned that it is suddenly being passed the responsibility for setting policy. The Bill shows that the Government like to outsource as much as possible, because they outsourced most of the content to Ofcom in the early stages. However, the proposal relating to free TV licences for the over-75s is an absolute abdication of responsibility. We have all been invited to enough Age Concern events to know how isolated elderly people feel and how important television is for them. This is fundamentally welfare policy.

[Kevin Brennan]

On the point about isolation, does the hon. Gentleman agree that what the Government are effectively doing is equivalent to devolving concessionary fares to private bus companies and then letting them decide whether older people should have concessionary fares?

[Calum Kerr]

Absolutely. I see we are on a bus theme, which must be because the hon. Member for Hyndburn has returned to his place.

We must consider the risks inherent in this shift. With its budget potentially squeezed in future, the BBC is the one faced with choosing a priority. The BBC will have to decide whether someone should get a free TV licence. Fundamentally, that is welfare policy. I hope the Government are listening and will reconsider. The new clause is well worded and I fully endorse it on behalf of the Scottish National party.

[Christian Matheson]

I support the new clause and congratulate my hon. Friend the Member for Sheffield, Heeley on an outstanding contribution among numerous outstanding contributions during the Committee’s considerations.

The hon. Member for Berwickshire, Roxburgh and Selkirk is absolutely right that the proposal is an outsourcing of responsibility, but there is more to it than that. The Government are not only putting a further financial squeeze on the BBC, but when, as may be inevitable, the allocation of TV licences to the over-75s has to be reviewed, they will apparently have a clean pair of hands. It will be, “Not us, guv—it was the BBC what did it”, when that may well have been the intention all along. It is, again, outsourcing of responsibility and an attempt to evade responsibility, put on the financial squeeze, take a step back and say, “It’s nothing to do with us. It’s that bad BBC. Because that bad BBC is so bad, we shall cut them even more to punish them for how they have treated pensioners.”

My hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly), who does not serve on this Committee, described the events of June and July 2015 when the so-called negotiation took place as a drive-by shooting when we were in the Culture, Media and Sport Committee. Hon. Members have today talked about negotiations with a gun to the head; a drive-by shooting is an appropriate description of what happened.

The BBC board was taken by surprise by the motives of the then Chancellor of the Exchequer, the right hon. Member for Tatton (Mr Osborne), and the then Secretary of State for Culture, Media and Sport. The Select Committee asked the chairwoman of the BBC Trust whether she and her fellow trust members had considered resigning in protest at what was happening; she declined to answer. I am sure that there were discussions.

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[Graham Jones]

Absolutely. My hon. Friend makes the point perfectly. There is no need to add too much to that, other than to say that if we want to talk about the Government’s view of the BBC and this chipping away, which our new clause is designed to prevent, it is the outsourcing of programme making again to 100% programme making that will now be made out in the private sector and not in-house. Again, it is part of the package of making the BBC less viable, so that we arrive at a day when a tough decision might have to be made because the BBC as it exists now has been completely undermined. The policy is not to put it on a firmer footing. This £700 million is a huge part of that chipping away at the BBC.

[Calum Kerr]

In reality, the Government by all means could have had a financial settlement that reflects the same outcome, but the fact is they have passed the policy. Why pass the policy other than to abdicate responsibility?

[Graham Jones]

The hon. Gentleman anticipates what I was moving on to, which is that the policy is also about passing responsibility. The Government want to shape the decision and take the credit where there is an upside, and to dump it on the BBC where there is a downside. That is what this is about—so the BBC is left with it.

Suppose the Government wanted to offer further icing on the cake and have over-70s get the free TV licence. The Government would take the credit for that, but any difficult decisions, such as only over-80s getting the free licence and the 75-year-olds losing out, will of course be the BBC’s fault. We can see exactly what is happening and the duplicity of the argument. The Government are setting the BBC up with a dilemma: it will take the stick for any downsides, but for any upsides the Government will be up there on the podium, all backslapping each other, saying, “Great social policy!”

There is no escaping that, and I do not think that the general public are fooled—they can see. It would make perfect sense for the Minister to accept new clause 38, because the public see what the Government are doing with that shift of responsibility for the over-75s. The public will not be fooled by the shift; they can see precisely what Ministers are trying to achieve. The public, too, will be concerned and asking how it affects them, the ordinary person. Will the BBC, faced with further cuts, have to say, “Well, we’re sorry, it’s only over-80s who will get it”? Decisions and responsibilities are outsourced to the BBC, and the licence fee payer, in particular those coming up to that age, will be wondering, “Hang on, I’m going to get the worst of both worlds—either a Tory Government or the BBC cutting my licence fee.” I do not think that the public will be too happy. They will not not see through this—sorry about the double negative.

--- Later in debate ---

[Matt Hancock]

I hope that I will still agree with new clause 34 then; I think I will, because I am so enthusiastic about it.

[Calum Kerr]

Feel free to carry on, Minister, if you are enjoying yourself.

[Matt Hancock]

I thank the hon. Gentleman.

I hope that, having answered the hon. Lady’s questions in relation to amendments that I think are intended to probe and in anticipation of our coming on to new clause 34, she will be able to withdraw her amendment.

[Calum Kerr]

I am sorry for the miscommunication; it was my fault. Actually, having read the newspapers at the weekend, I think that the Minister may be in agreement on extending the penalties in relation to nuisance callers to company directors; I certainly read a number of quotes about the importance of doing that. What I am unclear about—perhaps he will enlighten me—is whether he intends to accept our new clause or whether he has another vehicle by which he intends to make this change. I would be grateful to him if he intervened, because there is no point in my—

[Matt Hancock]

We agree with moving liability on to individuals rather than on to companies, because sometimes those companies will be closed down, bought up and restarted under a different name very quickly. We propose to do that by tabling a Government amendment.

[Calum Kerr]

I thank the Minister for that intervention. I had thought that I might have done his homework for him already with new clause 34. Perhaps he might consider embracing the cross-party consensual nature that might return after the BBC fun and games—except on tobacco ads, which certainly go too far.

[Matt Hancock]

Before I was stopped by Mr Streeter, I was going to say precisely that—namely that I have just announced that we intend to introduce such measures. We need to consult on the exact details of those measures, which is why I do not propose to accept the new clause, but we intend to put into place something of similar substance.

[Calum Kerr]

Excellent. I thank the Minister for that and given that comment, rather than outlining the full case for why I think accepting new clause 34 is a good idea, I will embrace the positivity and happily sit down, without pressing my new clause, knowing that the Government will introduce a similar measure.

[Louise Haigh]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Matt Hancock]

I propose after consultation to bring in measures to ensure that the liability is on the individual. That will significantly strengthen the hand of the regulator here, alongside the code of practice, but I am open to working with the hon. Gentleman and others to see what else we can do for calls that originate from overseas. I entirely understand the problem. Ultimately, we are trying to stop as much spamming as possible, while allowing people to communicate and use modern means of communication.

[Calum Kerr]

Last week I had a call from a director from Ofcom, who had just returned from south-east Asia, discussing nuisance calls. As the Government go around the world setting up their new trade agreements, perhaps they might consider this one of the clauses they build in around nuisance calls.

[Matt Hancock]

That is an interesting suggestion. Of course, this will apply to overseas companies; it is just that, as we have discussed in other parts of the Bill, that is harder to enforce against.

Finally, there was discussion about charities making nuisance calls. Charities, and agents on their behalf, were covered in the Charities (Protection and Social Investment) Act 2016, which introduced a new regulator specifically for charities in this space. With those explanations, I urge that the clause stand part of the Bill.

Question put and agreed to.

Clause 77 accordingly ordered to stand part of the Bill.

Clauses 78 to 81 ordered to stand part of the Bill.

Clause 82

Commencement

--- Later in debate ---

[Louise Haigh]

We very much welcome the new clause and are pleased that, once again, the Government have heeded the Opposition’s advice. We said clearly at the beginning of the process that, in regard to the digital skills that are needed to support and improve the digital economy, the Bill was lacking. I want to put on record the fantastic work already going on across the UK in supporting adults to learn digital skills, not least by organisations such as the Tinder Foundation and community organisations—I will abuse my position now and reference organisations such as the Heeley Development Trust and Heeley City Farm in my constituency, which through community work already skill up adults in digital skills. We very much support the clause and look forward to the Government taking our advice more in the future.

Amendment 183 agreed to.

Clause 83, as amended, ordered to stand part of the Bill.

Clause 84 ordered to stand part of the Bill.

New Clause 26

Qualifications in information technology: payment of tuition fees

‘(1) The Apprenticeships, Skills, Children and Learning Act 2009 is amended as follows.

(2) In section 88(1) (qualifications for persons aged 19 or over: payment of tuition fees), for “1(a) or (b)” substitute “1(a), (b) or (ba)”.

(3) In paragraph 1 of Schedule 5 (qualifications for persons aged 19 or over), after paragraph (b) insert—

(ba) a specified qualification in making use of information technology;”.

(4) After paragraph 5 of that Schedule insert—

“Power to specify qualification in information technology

5A The level of attainment demonstrated by a specified qualification in making use of information technology must be the level which, in the opinion of the Secretary of State, is the minimum required in that respect by persons aged 19 or over in order to be able to operate effectively in day-to-day life.”’—(Matt Hancock.)

This clause creates an obligation on the Secretary of State to ensure that courses of study for qualifications in information technology are free of charge for persons in England aged 19 or over. The qualifications will be specified in regulations under Schedule 5 to the Apprenticeships, Skills, Children and Learning Act 2009.

Brought up, read the First and Second time, and added to the Bill.

New Clause 27

Digital additional services: seriously harmful extrinsic material

After section 24 of the Broadcasting Act 1996 (digital additional services) insert—

“24A Duty to prevent access to seriously harmful extrinsic material

(1) In carrying out their functions, OFCOM must do all that they consider appropriate to prevent digital additional services from enabling members of the public to access seriously harmful extrinsic material.

(2) “Seriously harmful extrinsic material”, in relation to a digital additional service, means material that—

(a) is not included in the service, and

(b) appears to OFCOM—

(i) to have the potential to cause serious harm, or

(ii) to be likely to encourage or incite the commission of crime or lead to disorder.”’ —(Matt Hancock.)

This new clause would require OFCOM to seek to prevent digital television additional services enabling access to seriously harmful content that does not form part of the service, for instance by linking to content streamed from the internet. OFCOM could do this by imposing licence conditions in relation to such services.

Brought up, read the First and Second time, and added to the Bill.

New Clause 28

Suspension of radio licences for inciting crime or disorder

‘(1) In Chapter 2 of Part 3 of the Broadcasting Act 1990 (sound broadcasting services), for section 111B (power to suspend licence to provide satellite service) substitute—

“111B  Suspension of licences for inciting crime or disorder

(1) OFCOM must serve a notice under subsection (2) on the holder of a licence granted under this Chapter if they are satisfied that—

(a) the licence holder has included in the licensed service one or more programmes containing material likely to encourage or incite the commission of crime or to lead to disorder,

(b) in doing so the licence holder has failed to comply with a condition included in the licence in compliance with section 263 of the Communications Act 2003, and

(c) the failure would justify the revocation of the licence.

(2) A notice under this subsection must—

(a) state that OFCOM are satisfied as mentioned in subsection (1),

(b) specify the respects in which, in their opinion, the licence holder has failed to comply with the condition mentioned there,

(c) state that OFCOM may revoke the licence after the end of the period of 21 days beginning with the day on which the notice is served on the licence holder, and

(d) inform the licence holder of the right to make representations to OFCOM in that period about the matters that appear to OFCOM to provide grounds for revoking the licence.

(3) The effect of a notice under subsection (2) is to suspend the licence from the time when the notice is served on the licence holder until either—

(a) the revocation of the licence takes effect, or

(b) OFCOM decide not to revoke the licence.

(4) If, after considering any representations made to them by the licence holder in the 21 day period mentioned in subsection (2)(c), OFCOM are satisfied that it is necessary in the public interest to revoke the licence, they must serve on the licence holder a notice revoking the licence.

(5) The revocation of a licence by a notice under subsection (4) takes effect from whatever time is specified in the notice.

(6) That time must not be earlier than the end of the period of 28 days beginning with the day on which the notice under subsection (4) is served on the licence holder.

(7) Section 111 does not apply to the revocation of a licence under this section.”

(2) In section 62(10) of the Broadcasting Act 1996 (application of sections 109 and 111 of the 1990 Act to digital sound programme services) for the words from “section 109” to “1990 Act” substitute “sections 109, 111 and 111B of the 1990 Act (enforcement)”.

(3) In section 250(3) of the Communications Act 2003 (application of sections 109 to 111A of the 1990 Act to radio licensable content services) for “111A” substitute “111B”.’—(Matt Hancock.)

This new Clause gives OFCOM power to suspend immediately, and subsequently revoke, the licence of any licensed radio service if material is included that is likely to encourage or incite crime or lead to disorder. It replaces a power applying only to satellite and cable services.

Brought up, read the First and Second time, and added to the Bill.

New Clause 29

Power to apply settlement finality regime to payment institutions

In Part 24 of the Financial Services and Markets Act 2000 (insolvency) after section 379 insert—

‘Settlement Finality

“379A Power to apply settlement finality regime to payment institutions

(1) The Treasury may by regulations made by statutory instrument provide for the application to payment institutions, as participants in payment or securities settlement systems, of provision in subordinate legislation—

(a) modifying the law of insolvency or related law in relation to such systems, or

(b) relating to the securing of rights and obligations.

(2) “Payment institution” means—

(a) an authorised payment institution or small payment institution within the meaning of the Payment Services Regulations 2009 (S.I. 2009/209), or

(b) a person whose head office, registered office or place of residence, as the case may be, is outside the United Kingdom and whose functions correspond to those of an institution within paragraph (a).

(3) “Payment or securities settlement system” means arrangements between a number of participants for or in connection with the clearing or execution of instructions by participants relating to any of the following—

(a) the placing of money at the disposal of a recipient;

(b) the assumption or discharge of a payment obligation;

(c) the transfer of the title to, or an interest in, securities.

(4) “Subordinate legislation” has the same meaning as in the Interpretation Act 1978.

(5) Regulations under this section may—

(a) make consequential, supplemental or transitional provision;

(b) amend subordinate legislation.

(6) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”’—(Matt Hancock.)

The inserted section enables the Treasury to apply a settlement finality regime to payment institutions. The current settlement finality regime for payment systems and securities settlement systems is in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I 1999/2979).

Brought up, read the First and Second time, and added to the Bill.

New Clause 30

Bank of England oversight of payment systems

“Schedule (Bank of England oversight of payment systems) extends Part 5 of the Banking Act 2009 (Bank of England oversight of inter-bank payment systems) to other payment systems; and makes consequential provision.”—(Matt Hancock.)

The new clause introduces new Schedule NS2 which extends the Bank of England’s oversight of payment systems, by removing the current restriction that limits the Bank’s oversight to systems for payments between financial institutions.

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Strategic review of sharing telecommunications infrastructure

‘(1) Within six months of this Act coming into force, the Secretary of State shall commission a strategic review of the sharing of telecommunications infrastructure and shall lay the report of the review before each House of Parliament.

(2) The review under subsection (1) shall consider measures to maximise the sharing of telecommunications infrastructure by telecommunications service providers.’—(Calum Kerr.)

Brought up, and read the First time.

[Calum Kerr]

I beg to move, That the clause be read a Second time.

[The Chair]

With this it will be convenient to discuss new clause 20—Strategic review of mobile network coverage—

‘(1) Within six months of this Act coming into force, the Secretary of State shall commission a strategic review of mobile network coverage and shall lay the report of the review before each House of Parliament.

(2) The review under subsection (1) shall consider measures to ensure universal mobile network coverage for residences and businesses across all telecommunications providers.

(3) The review under subsection (1) shall also consider measures to ensure savings made by telecommunication providers under sections (4), (5) and (6) of this Act are reinvested into expanding network coverage.’

[Calum Kerr]

We seem to have raced through this final section, for which I commend all right hon. and hon. Members. We do not need the gift of foresight to know that the Minister will tell me, “We do not do reviews in this Government. We expect someone else to do them for us.” Let me briefly explain why I support new clause 1, which I will not press to a vote, and I will then touch on new clause 20.

We heard an excellent articulation in the evidence sessions of the value of third-party infrastructure as an effective means of maximising communication roll-out across the country. Today, about a third of the UK’s 27,000 masts are independently operated, and that contrasts with about 60% of masts globally. In EU countries, it is 80%. Independent analysis has shown that independently operated towers across Europe and North America host at least twice as many masts as when those towers are operated by the mobile companies themselves. As we map a new digital future—we are all excited to see what the new Minister does with his digital strategy for the country—we should be conscious of the fact that we will need a lot more masts. We know that he knows that. Technology such as 5G is higher frequency and covers shorter distances. Unless we want our country to resemble the back of a hedgehog, we need to look at effective ways of minimising the number of masts while maximising the coverage we need.

With the approach in the new clause, we are looking to encourage the Government to be consciously competent and to come forward with a model or measures that will enhance the further deployment of shared infrastructure, so that as we deploy 5G and embrace the technology of the future, we minimise the impact on our environment.

New clause 20 is certainly a different take on this area. It is well meaning but not quite right, to be honest. I do not think the idea of a universal service applies in the same way for mobile as it does for wired. It is probably something we will evolve to as the worlds of wired and wireless networks intertwine and overlap going forward. I would be happy to support the new clause, but I would welcome some more discussion.

I hope the Government and the new Minister and team recognise that third-party infrastructure will be central to driving the coverage model in rural and urban areas as we look to put a lot more masts out there to deliver the potential speeds and capability of the technology in the future. If the Minister will not give me a review, perhaps he will at least throw me a bone or two that things are beyond, “Hopefully the Select Committee will do a review.” The Select Committee has only so much bandwidth to do it.

[Matt Hancock]

I can do better than merely asking the Select Committee, although I do think that Select Committees do important reports and should not be denigrated. Ofcom has also been given a statutory duty to provide a report to the Secretary of State every three years on the state of the UK’s communications infrastructure, including the extent to which UK networks share infrastructure. That is precisely what the new clause asks for as a one-off. I assure the hon. Gentleman that the reports will happen regularly. The next three-yearly report is due in 2017, which is the same time that new clause 1 specifies for its review.

Moving on to new clause 20, we recognise the importance of improving mobile coverage. I support the intention behind it, but I do not think a statutory review is necessary at this time. We already have building blocks in place to deliver extensive mobile connectivity, and it is happening. The changes that we have debated today will give Ofcom the ability to provide data to ensure that we know how effective mobile connectivity is. We have legally binding licence obligations to ensure that each mobile operator provides voice coverage to at least 90% of the UK land mass. Taken together, 98% of the UK will have a mobile signal by the end of 2017, according to the agreements.

--- Later in debate ---

[Matt Hancock]

We just changed the rules so that instead of being restricted to producing such reports three times a year, Ofcom can do so whenever it thinks it appropriate. That will provide for Ofcom to be able to do so as much as possible, but I committed earlier today to having a connected nations report before the end of this year. I hope that that provides for what the hon. Lady seeks in new clause 20 and that the hon. Members will not press their new clauses.

[Calum Kerr]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Graham Stuart.)

Digital Economy Bill (Eleventh sitting)

Calum Kerr Excerpts

Committee Debate: 11th sitting: House of Commons
Tuesday 1st November 2016 Public Bill Committees

[Christian Matheson (City of Chester) (Lab)]

I rise briefly to support the new clause and to pay tribute to my good friend and fellow Select Committee member, the hon. Member for Selby and Ainsty, who has form on campaigning in this area. He is known as a music fan, and the new clause is the culmination of a long campaign on behalf of music fans everywhere.

Moreover, I do not believe that the hon. Gentleman will damage the credibility of Green Day, because he has a track record of supporting live music—this is certainly nothing like David Cameron suggesting that he was a Smiths fan and having Johnny Marr tweeting him to back off. While I am on the subject, I remind the Committee that I was at the last concert of The Smiths, which was in Brixton Academy, probably in December 1986 or ’87.

In those days, ticket touts were blokes in long macs shouting, “Any spare tickets?”, which was a problem, but manageable. The hon. Member for Selby and Ainsty has been outlining industrial-scale, mechanical touting, which is way beyond my experience of those days 20, 30 or even 40 years ago. The problem absolutely needs to be addressed and the new clause does so. I am pleased to support it and, if the Minister is planning to accept it in principle, I suggest that he could do worse than recognise the work of the hon. Gentleman, give him the credit for the new clause, along with my hon. Friends on the Front Bench, and the chance he so richly deserves to make a mark.

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

I could not possibly be as glowing about the hon. Member for Selby and Ainsty as the hon. Member for City of Chester has been. There is a love-in across the Benches this morning.

I, too, rise briefly to support the new clause. To paraphrase a well-known quote by Eric Hoffer, the American moral philosopher, every good idea begins as a movement, becomes a business and eventually degenerates into a racket. That is what we have here. Online sales and fan-to-fan ticket sites are fantastic at enabling people to get access to the music events they want to go to, but because of the evolution of technology, software and bots, we now have a distorted market, about which we absolutely need to do something.

I want the hon. Member for Selby and Ainsty to be able to go to see his favourite band, Green Day—as he was mentioning them, it occurred to me that one of their songs, and the name of their 2004 album, seemed appropriate for a gentleman who might yet end up in the White House. I must also add that my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) suggests that MP4 tickets are very easy to get hold of—he is determined that they are stopped from selling below ticket value.

I commend the hon. Member for Selby and Ainsty on his new clause and I am happy to support it.

[Louise Haigh (Sheffield, Heeley) (Lab)]

I rise briefly to support the new clause. My hon. Friend the Member for Cardiff West and I were proud to put our names to it. I commend the hon. Member for Selby and Ainsty for bravely revealing his devotion to Green Day. I stand in solidarity with him—I, too, am a big fan.

This issue has been a problem for too long for fans of musicians of all descriptions. It prices people out of access to their favourite bands and acts and thereby entrenches a class barrier to culture, which cannot be allowed to continue. For as long as there have been ticketed events, there have been people making money out of the fact that demand for live sports or music outstrips supply. As my hon. Friend the Member for City of Chester pointed out, the development of technology has escalated the problem. Punters simply do not stand a chance against digital ticket purchasing software. The new clause would kick away one of the legs that ticket touts rely on.

The current legislation contained in the Consumer Rights Act 2015 is extremely patchy. It can compel ticket resale sites to publish information such as seat number and face value, but it is not enforced sufficiently and tickets are routinely sold at a high mark-up. Unless Parliament gets tough now, resale sites will continue brazenly to flout the law. It is high time that Parliament closed the legal loophole. That is what the industry, musicians and fans are calling for. I take the opportunity to thank my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), who has been calling for this change for some time. We wholeheartedly support new clause 13.

--- Later in debate ---

[Louise Haigh]

The Minister is dead right. We would like some more consultation on the review, not least because nearly all of the Government’s consultees are unhappy with the proposals in the Bill.

I hope that we have thrashed out many of the part 5 issues and that the Government will act and amend the provisions in the other place. If that does not happen, we shall return to the matter on Report. I beg to ask leave with withdraw the motion.

Clause, by leave, withdrawn.

New Clause 32

OFCOM power to enforce structural separation of BT Openreach

‘After section 49C of the Communications Act 2003 insert—

“(49D) OFCOM has the power to enforce the structural separation of BT Openreach, should OFCOM consider this necessary.”’—(Calum Kerr.)

Brought up, and read the First time.

[Calum Kerr]

I beg to move, That the clause be read a Second time.

I will outline the rationale and seek reassurances as to how the Government intend to deal with this matter. We propose that the Bill be amended to ensure that Ofcom has the strongest legal basis to deliver all the options highlighted in its digital communications review. Ofcom is consulting at the moment on how it could introduce legal separation for Openreach within the BT group, but structural separation remains an option.

[Drew Hendry]

Does my hon. Friend agree that the current structure is insufficient to provide an incentive to effectively invest in the network that is required? Ofcom has itself said that the existing ownership allows it to discriminate against competitors.

[Calum Kerr]

I thank my hon. Friend for his comments. At the crux of the debate as to where we go in terms of connectivity is BT, which has a case to answer regarding its investment. Ofcom has a case to answer on being technology agnostic. We have to be bolder and push more ambitiously for fibre. The Minister has told us “fibre means fibre”, so we look forward to seeing progress. Sometimes I think the Government have consumed too much fibre.

It is essential that Ofcom is confident it can enforce separation of Openreach should it conclude it is necessary. It is important to understand the position today. Ofcom considers that it does have the power under the EU framework directive to impose structural separation. The problem with that approach is that Brexit means Brexit. Should Ofcom decide that separation is the right approach, would it take its case to the EU Commission at the time of Brexit? That would be fraught with difficulty, not least as BT might appeal and we would have a long drawn-out process.

It is also worth noting that the telecoms framework under which Ofcom regulates the UK is EU legislation. We need to consider that BT has stated publicly that it believes there is no mechanism for structural separation even within the EU. We are trying to flush out some of the Government’s thinking. The new clause is designed to avoid the potential uncertainty and paralysis should Ofcom want to go down this route. Even if Ofcom does not use this power, having it there will have the added benefit of strengthening its hand in negotiation and enforcement as we all try to improve UK infrastructure.

The SNP’s position is that the digital communications review is following the right lines. Structural separation at this stage is the right approach, but we need to ensure that the final option is available. Given the change in relation to the EU, I would welcome the Government’s comments on how they propose to ensure that is an option.

[Matt Hancock]

We have made it clear that the UK needs a competitive and effective market in telecoms, and I have made it clear that fibre is the future. Fibre means fibre. The amendment seeks to ensure Ofcom has the power to impose structural separation on BT Openreach if Ofcom considers it necessary. There is already a process available to Ofcom to pursue structural separation should it be considered necessary. The Committee knows that Ofcom is currently considering how Openreach should be structured. We have made it clear that Ofcom should take whatever action it considers necessary and that structural separation remains an option.

Of course, in a rapidly moving sector such as communications, circumstances can change. We regularly review whether Ofcom has the right powers. We will need to do that in the context of our exit from the European Union, but at present Ofcom has the appropriate powers that it needs and it will continue to have them. With that explanation, I hope the hon. Gentleman will withdraw the amendment.

[Calum Kerr]

I thank the Minister for his comments, but the position in relation to having the powers is a weak answer. If there were a separation, we would enter into uncertainty without explicit powers. I will not press the motion to a vote, but I encourage the Government, as the picture on the EU evolves, to be clearer, and if they think it necessary to introduce something specific, so that we have a measure available.

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 36

Bill caps for all mobile phone contracts

‘(1) A telecommunications service provider supplying a contract relating to a hand-held mobile telephone must, at the time of entering into such a contract, allow the end-user the opportunity to place a financial cap on the monthly bill under that contract.

(2) A telecommunications service provider under subsection (1) must not begin to supply a contracted service to an end-user unless the end-user has either—

(a) requested the monthly cap be put in place and agreed the amount of that cap, or

(b) decided, on a durable medium, not to put a monthly cap in place.

(3) The end-user should bear no cost for the supply of any service above the cap if the provider has—

(a) failed to impose a cap agreed under subsection (2)(a),

(b) introduce, or amend, a cap following the end-user’s instructions under subsection (2)(b), or

(c) removed the cap without the end-user’s instructions or has removed it without obtaining the consumer’s express consent on a durable medium under subsection (2).’—(Louise Haigh.)

Brought up, and read the First time.

Digital Economy Bill

Calum Kerr Excerpts

3rd reading: House of Commons & Legislative Grand Committee: House of Commons & Programme motion No. 3: House of Commons & Report stage: House of Commons
Monday 28th November 2016 Commons Chamber

[Matt Hancock]

I am looking forward to seeing the data for exactly that reason. In my rural constituency, I can drive for 10 minutes without getting a signal at all—that includes driving past houses—and the same probably applies to many other people. The lived experience is critical to judging whether the figures are broadly correct. I am entirely with my right hon. Friend on that. My job, and our job in the House, is to hold the mobile network operators to account and ensure that they deliver high-quality geographic coverage, whether it is in Rhondda, Welwyn, in Suffolk or, indeed, in Buckinghamshire, Mr Speaker.

[Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)]

Will the Minister give way?

[Matt Hancock]

I will take one more intervention on this subject.

[Calum Kerr]

May I make what I hope is a quick, constructive point? May I urge all Members to encourage their constituents to download the Ofcom android app, which is specifically designed to gather data so that we can be better informed, and to publicise it in their constituencies?

[Matt Hancock]

Quite so. As you may say yourself, Mr Speaker, I am not sure that that is entirely a matter for the Bill, but the hon. Gentleman has made his point.

New clauses 21, 22 and 27, tabled by Plaid Cymru and Scottish National party Members, are not necessary, because they call for what is already the position. New clause 21 is not necessary because it is already a requirement that when emergency services network sites are used to provide coverage for the public, they must be made available to all mobile network operators. New clause 22 is not necessary because Ofcom already has the power to impose structural separation on BT Openreach if it considers that that is required. New clause 27 is not necessary because there is already a universal service obligation in the Bill to take high-speed broadband to all premises. I hope that we can use that as the means to deliver the goals that we no doubt share.

As for new clause 26, the Government take the issue of interference with assistive listening devices very seriously, and we will work with Ofcom to take appropriate action when harmful interference with such devices has been identified. I have met representatives of the National Deaf Children’s Society, and I can tell the House that further testing will begin next month and Ofcom will publish its findings by April 2017. I hope that we are making some progress on that important matter.

--- Later in debate ---

[Calum Kerr]

I stand to speak to new clauses 22 and 27, neither of which I think the Minister referred to—unless I slept through that bit. I hang on his every word normally, so I am sure that was not the case.

Before I do that, I would like to touch on a couple of other new clauses. It is a pleasure to follow the hon. Member for Devizes (Claire Perry). She and her many colleagues in the House have campaigned hard on this issue, and the Government’s move in new clause 28 is welcome. However, I would just quickly recount a story. When I was on the Bill Committee, I phoned home one night. Of course my wife said, “What have you been up to today?” I explained about access to under-age pornography, and she said, “Well, funnily enough, I came home today from work and found Robert”—he is seven years old—“looking at inappropriate content.” My heart sank. She said, “He was watching the third presidential debate,” and I can see where she was coming from. She said to him, “Robert, do you know what you are watching here?” He said, “Yes, I do.” She said, “Well, why are you watching that?” He said, “Because it’s important, and I have a friend at school called Donald.”

That brings me on to the concerns raised by the hon. Member for Cardiff West (Kevin Brennan), which we share. As we proceed down this route, it is important that these powers are a last resort, that they do not stop access to sites they were not intended to affect and that, as a result, we proceed with care. We should take sufficient time to look at the implications, and we should seek to avoid unintended consequences for ISPs and websites, while still developing a robust set of measures that stop young Robert accessing the content we really want him to avoid.

Earlier, we had mention of the importance of the method of verification and of the tool Yoti. I always pronounce it “yachty”, because I like yachty a loty, given that it means that databases are not built of what people are accessing, and individuals are protected. I commend those on the Labour Front Bench for some of their efforts to push these things further.

Let me quickly touch on two issues before going on to my own new clauses. On new clause 7, I am surprised by the Minister’s approach to mobile phone contracts. If he consulted Ofcom, it would tell him that it was highly supportive of measures such as a maximum bill level. It seems eminently sensible that when people sign up for a contract, they are asked, “Would you like to set a maximum amount?” I really cannot fathom why the Government would block that. I fully expect to revisit that sometime soon.

I would also ask the Minister to check some of the wording in terms of the ESN sites, which he said would be available to all providers. That is not my understanding. The ESN is provided by EE, but also by extended area network sites, and those are the sites that will be multi-platform, but they are only part of how the service will be provided, so perhaps the Minister will revisit and consider what he said there.

My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), whose constituency name is as long as mine, is worried he may not get to speak, so I will mention his new clause 20, which is very similar to new clause 25, and provides for a constituent to cancel a contract if they do not have service.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

In some circumstances, a consumer is unable to get what they have paid for. For example, I had consumers in Fort Augustus who had to wait over four months to be reconnected to their mobile signal and were threatened with a £200 cancellation fee. Does my hon. Friend agree that that is flatly unacceptable and they should have an option to get out of these contracts?

[Calum Kerr]

I wholeheartedly agree with that excellent point. This is another common-sense measure that should be taken. I also welcome some of the other comments about linking it to auto-compensation so that it should be a case of either cancelling a contract or potentially—

[Drew Hendry]

I wonder whether my hon. Friend is surprised, as I am, although perhaps I should not be, that the Minister has refused to accept this, given that last year his predecessor said to me:

“The suggestion you make—that mobile customers ought to be able to leave their contracts if the service is unacceptable is a good one. Mobile customers should not be trapped in contracts if they have no effective signal and an unusable service.”

[Calum Kerr]

I thank my hon. Friend for that extra clarification. This is why we entered the Bill Committee in a spirit of naive optimism that our sensible new clauses could yet be accepted.

[Drew Hendry]

How we learned!

[Calum Kerr]

How we learned, indeed.

I now move on to my two new clauses. New clause 22 proposes that there should be an explicit power for structural separation of BT Openreach were that deemed necessary. We in this place know how critically important connectivity is, and I am sure that all right hon. and hon. Members welcomed, as I did, Ofcom’s digital communications review. I support its taking a fairly strong line on the measures that BT should take on access to ducts and poles, and on making a planning tool and other things more readily available, while retaining the option of structural separation. Indeed, the Secretary of State confirmed this on Second Reading. If structural separation is truly to be an option on the table, it is essential that Ofcom is confident that it can enforce it if it concludes that it is necessary.

The current situation is that Ofcom considers that it has the power under the EU framework directive to impose structural separation. Clearly, though, taking such a case to the EU Commission at a time when Brexit means Brexit is fraught with difficulty, especially considering that it is highly likely that BT would appeal any such move. It is also worth noting that BT has stated publicly that it believes there is no mechanism for structural separations of a telecoms company, and has even threatened 10 years of litigation and arguments. This Bill offers a simple way to remove any ambiguity around the issue, and that is what the new clause aims to do.

Unfortunately, owing to the processes of the House, I can press only one new clause in this group to a vote, so I will not press this one, much as I would like to. However, I encourage the Minister to revisit this measure and add it in, even though I still believe that the Ofcom strategy is right and that separation is the correct route only if combined with something else, such as a significant investment plan in Openreach from other providers who are currently making a lot of noise.

New clause 27 is about introducing a broadband voucher scheme as an alternative to the standard USO provision. Let me first say that I welcome, as I am sure we all do, anything that improves connectivity, but I have huge reservations about the approach being taken. I appreciate that, as the Government outlined in supplementary papers during the Bill’s progress, there is a flexible element to their design of the USO in terms of download speed, upload speed, latency and other aspects, but much is undecided. Although I disagree fundamentally with the 10-meg starting point, what really concerns me is the use of a universal service obligation. Pursuing this route pushes the Government into having to follow a very prescriptive process that will lead to a provider, or perhaps of couple of providers, being selected. It looks highly likely, as I think we all know, that it is likely to be BT. Sharon White confirmed before the DCMS Committee that BT is in pole position on this.

[Drew Hendry]

My hon. Friend is making an excellent point. Does he agree that the people who need the service should be able to choose the best option for them, and that in rural areas one size does not fit all?

[Calum Kerr]

I absolutely do agree. I will come on to that point later.

I would contrast the USO measure with last week’s announcements. We have heard the Government say that fibre is the future, but our record in this country on fibre-to-the-home, or fibre-to-the-premises, is pretty woeful. The broadband investment fund announced in a previous Budget had some money put into it, and hundreds of millions of pounds were committed to 5G trials and fibre backbone. All that is welcome, if slightly unambitious, but we have not seen anything specifically for rural areas. We are talking about a fibre and gigabit future in urban areas while telling rural areas that they should settle for 10 megs and a USO. That is not closing the digital divide—it is turning it into a gaping chasm of inequality. A badly implemented USO will not fix the issue but might, through legislation, cement this digital divide.

My new clause aims to address this issue. From the start, as I have looked at potential solutions, the one that I kept coming back to was a voucher alternative. At the Broadband World Forum, a representative from the Independent Networks Cooperative Association said that if we introduce a voucher scheme, we turn a universal service obligation into a universal service opportunity. In our constituencies we have highly motivated groups of people who will, yes, okay, maybe on day one, be happy with 10 megs because if they have been living with 1 meg it will be transformational, but quickly see that they are being left behind and be very unhappy about it. Although the Bill includes provision to revisit this, it does not specify when, and these people will be left further and further behind. The idea of a voucher scheme was endorsed by INCA chairman David Cullen, who said:

“The principle of a Universal Service Obligation is an outdated concept in a sector focused on significant growth and could well translate into a ‘ceiling’…a voucher scheme for premises could be far more effective.”

The Minister did not deal with this new clause in his opening remarks. I urge the Government to embrace the option of a voucher alternative to empower our rural communities, who, as I know from my own community, want to go further. They understand technology. They will put in fibre-to-the-home, providing a much faster solution. This is not a one-size-fits-all—

[Matt Hancock]

I did address this point. I said that the USO contained in the Bill will get high-speed broadband everywhere. Furthermore, a broadband voucher scheme does not require legislation. In fact, we have had one in the past without legislation. This new clause is therefore unnecessary.

[Calum Kerr]

I thank the Minister for that intervention. He makes a point that I forgot to make, which is that there is previous history in this area. Broadband Delivery UK managed a voucher scheme that was phenomenally successful. Perhaps I have become a cynic far too quickly in this place, but if the Government do not put this in the Bill, I do not believe it will happen. I will therefore press the new clause to a vote. We should ensure that as the Government say that fibre—

[Matt Hancock]

As an example of the fact that we can do this through non-legislative means, not only did we have such a scheme in the past, but at the autumn statement last week we announced that we are to consult on a new one. I think that that takes care of the concerns behind the new clause.

[Calum Kerr]

I thank the Minister for that positive news, but it does not take care of those concerns. I am seeking a specific alternative to the USO, so that my communities who want fibre to their home can have this foundational voucher that sets them on a path to something far more ambitious than what the Government propose. The Government say that fibre is the future. Guess what? My constituents want to be part of that future, too.

[Several hon. Members rose—]

--- Later in debate ---

[Damian Collins]

I am grateful to the hon. Gentleman for his comments; he is right.

We are proposing a way to control the bots. The Government are in discussions with the industry, and they might find a better solution to achieve the same end, but I certainly think it is incumbent on us in this place to try to find a solution, not only because this affects the ticketing market but because it rips off the consumer. What kind of people seek to make money selling tickets in this way? We asked that question in the Select Committee and we were told that criminal gangs—some linked to paramilitary organisations in Ireland—were making money as industrial touts selling tickets on the secondary market. It is important that we regulate this industry, not only to protect the consumer but to clamp down on some serious criminal elements who are seeking to make money through this technology. If we can stop that, we will be doing this country a service.

[Calum Kerr]

I shall try to be brief because I am aware that a number of Members want to speak. I commend the hon. Member for Cardiff West (Kevin Brennan) for his excellent run-through of some excellent ideas. If only the Government were more often in listening mode than in broadcast mode. I wholeheartedly agree with the hon. Gentleman’s remarks about new clause 8. It was a political decision to introduce free television licences for the over-75s. We have an ageing population and a rising number of cases of loneliness among the elderly, and this is a welfare policy. Why would the Government outsource a welfare policy to an external body such as the BBC? Their answer was that the BBC wanted it as part of its financial settlement, but that does not make it right. The reality is that this is an abdication of responsibility and an outsourcing of bad news.

[Kelvin Hopkins]

The hon. Gentleman makes a good point. The BBC did not really want the responsibility. Did the BBC not just say that it did so because it wanted a good deal on the charter?

[Calum Kerr]

I wholeheartedly agree. I think people at the BBC were saying, “They’ve got us so worried about what the settlement could be. Let’s just accept the offer that’s on the table for heaven help us what might happen.” There is cross-party support for this new clause.

[Kelvin Hopkins]

Six parties are in support.

[Calum Kerr]

Six-party support; I thank the hon. Gentleman for his clarification. He is well deserving of his TV licence—when he gets old enough. I truly support new clause 8 and also back the other measures relating to the BBC in new clauses 17 and 18. If we believe in public service broadcasting, the way to protect it is to cherish it, to look after it and to ensure its listings appear as technology evolves, not to give it a huge liability and line it up for a potentially deeply unpopular future decision.

Turning to new clause 15, it was interesting to hear and largely concur with the comments of the former Secretary of State, the right hon. Member for Maldon (Mr Whittingdale). I support the idea of pushing for something further on search engines, but I am conscious that there is a dialogue between parties that both have a stake in something. It is interesting that the right hon. Gentleman is now coming around to the idea of some legislative intervention, but we look to the new Front-Bench team for answers to what that might be and when. What movement do they expect to see before they would legislate? The Minister touched on that in Committee, but what would be the trigger for intervention if the industry was not going far enough?

Digital ticketing has been well discussed already. If someone behaves illegally by going into a shop and buying all the produce and then selling it in a way that was not intended, the answer is not necessarily better security; the answer is making it illegal. I get the point of the hon. Member for Weston-super-Mare (John Penrose), but let us make it illegal and drive out this morally unacceptable behaviour. If I may paraphrase the US moral philosopher Eric Holler, as I did in Committee, every great idea begins as a movement, becomes a business and eventually degenerates into a racket. That is what we have here. Fan-to-fan ticket exchanges have led to rampant touting.

Finally, I commend the Labour Front-Bench team for their valiant efforts to rescue part 5 of the Bill through measures such as new clause 5. We had two days of evidence in Committee, during which witnesses were fairly damning of the approach being taken on data sharing or data access. As we have gone along, the Government have tried to give us a little more information and have applied sticking plasters here and there, but nothing has convinced me that they have learned from things such as the Concentrix episode. Somebody tried to buy bulk data and apply it to people receiving tax credits, leading to some of the most vulnerable in our society having their money stopped, being forced into debt or other far more severe consequences.

I remain unconvinced that the Government are heading in the right direction. There is an inherent paternalism. They say, “Don’t you worry. We’ll be fine. Trust us,” and give us a pat on the head, but when it comes to protecting people’s data we should be looking at the Estonian model, which puts the citizen at the centre. We should be open. I should be notified every time my data are shared if it is for my benefit. We should not hide that. Right from the start of the evidence-taking, people were saying that data-sharing is a good thing, but we must earn and retain public trust. I see little evidence that the Government understand that and are willing to do anything other than learn the hard way by making mistakes. I look forward with trepidation to the many debates in this place as various data breaches emerge. I urge the Government to consider removing this whole part of the Bill and to revisit it once they have actually done a proper job.

--- Later in debate ---

[Calum Kerr]

I should like to add to the positive vibes coming from both Front Benchers and join them in thanking the Clerks. I particularly want to thank those in the Public Bill Office, who have been fantastic in dealing with someone who is still relatively new to all this and sometimes does not get things right first time. Officials in the Department for Culture, Media and Sport and in Ofcom have also been particularly constructive and helpful to us as we have found our way.

My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and I entered the Bill Committee with all the optimism of newbies, thinking, “We have such massive logic behind our case that the Government’s going to bite our hands off to get at our new clauses and amendments.” Of course, we learned the hard way that that never happens. Even when they completely agreed with us, there was always a wee excuse for why they had to do things in their own way. I remember that the Minister even spoke to my new clause. The Chair had called him to speak before me, and I sat there thinking, “Oh, this could be one of ours. I fundamentally agree with him.” Then I realised, and thought, “Oh, perhaps we’ll need a consultation on this.”

On Second Reading the former Secretary of State, the right hon. Member for Maldon (Mr Whittingdale), compared the Bill to a Christmas tree. That was quite an interesting analogy, considering where we have ended up. I said at that time that the Digital Economy Bill’s title was something of a misnomer, in that it lacked any strategy, ambition or drive to take advantage of digital opportunities. There was certainly no guiding light or star on the top of this tree. It is also fair to say that some of the things that have been hung on it leave a little to be desired. However, we should acknowledge that many of its elements are very welcome, as my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) did in his own inimitable style. He has probably now set a precedent by speaking in an EVEL debate, which he will rejoice in.

Some of those welcome elements did not get touched on today. I think we all agree that the reform of the electronic communication code is overdue, for example, and the measures on customer compensation and switching are very welcome, as are some of the powers for Ofcom and the review of spectrum. However, other parts of the Bill leave something to be desired, as I have said. They feel more tokenistic than meaningful. I am referring in particular to the universal service obligation.

[Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)]

Does my hon. Friend agree that constituents in all parts of this country want a fibre future and access to ultrafast, not just fast and superfast, broadband?

[Calum Kerr]

I totally agree. The Government have missed an opportunity and I am disappointed that they did not accept my new clause 27, although it might be the foundation for the sudden emergence of a strategy on vouchers. Government Members will have to explain to their constituents why 10 megabits per second is okay for rural areas while urban areas aim for a gigabit connection—100 times faster.

The Bill has good intentions in some areas but, as I articulated earlier, its execution will be flawed. My hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) talked about faulty goods, and I guess these bits are a bit like the parcel under the Christmas tree that looks quite nice, but is deeply flawed when it is opened and will be returned to sender. I would have liked part 5 of the Bill to be returned to sender, but I welcome the Minister’s commitment to continue to iterate and evolve the measures—I thought the amendment paper was going to get bigger than the Bill at one point such was the desire to amend it. I read a tweet from Big Brother Watch that said:

“Good to hear support for GDPR from the minister… can govt now write part 5 so it clearly adheres to it”.

I look forward to continual efforts to ensure that that happens.

In conclusion, among all the sparring and comments—they were light-hearted at times and serious at others—there has been genuine movement on this Bill. We have tried to be constructive in discussions and by setting forward our ideas, and I look forward to continuing in that vein.