Release of Spectrum Band

Debate between Calum Kerr and Louise Haigh

Tuesday 15th November 2016 Westminster Hall

[Louise Haigh]

Absolutely. I could not agree more. The issues that have been raised today need to be seen alongside that point. The income for the Treasury should not be the first and only priority.

In our view, while Ofcom does a fantastic job of regulating and auctioning the frequencies, such decisions are in reality political. Where and how coverage targets are met matters greatly, and we in this place should be setting tough conditions for the auction. We would like the Government and Ofcom to be much more ambitious, and we would like to see clear licensing commitments to reflect that ambition. Geographical coverage is still poor, as we have heard. The targets set by the Government—to reach 90% of geographical coverage for voice and text by 2020—simply do not go far enough to meet the challenges of a data-driven world. In fact, as the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) mentioned, we are lagging behind many of our international competitors, who have significantly improved coverage through different and imaginative approaches to licence obligations. For example, Denmark has focused on specified postcodes, France has covered an incredible 99.6% of its population, the Netherlands has covered all main roads, waterways and airports, and Cyprus has specified rural areas and high schools as priorities.

With that in mind, I will conclude by asking the Minister a number of questions, in addition to those asked by the hon. Member for Berwickshire, Roxburgh and Selkirk.

[Calum Kerr]

Just before the hon. Lady asks her important questions—I can see the Minister is desperate to hear them—does she agree that there is a false economy here? By seeking money up front for the sale of licences, we inhibit the speeds that exist out there in the country. That holds back productivity, where we have an enormous challenge. If we show a bit more vision and foresight and plan for the longer term, we will get faster speeds and the overall benefit to the country and the public purse will be far greater.

[Louise Haigh]

That is absolutely right. The hon. Gentleman will know that we discussed that point at length in the Digital Economy Public Bill Committee. In fact, we have brought the band back together again—it is nice to be in the Chamber with all the team. He is also right that the Minister is desperate to hear my questions—he always is—so we will crack on.

Does the Minister still expect mobile data on the spectrum to be available by quarter 2 in 2020? Working with Ofcom, what conditions does he specifically expect to set to achieve much improved geographical coverage and coverage along major transport routes? In particular, what consideration has he given to outside-in licensing, as was mentioned earlier? Will he ensure that the prime focus of the auction of an enormously valuable public sector asset is on ensuring public benefit through increased and expanded coverage, rather than on raising revenue or maximising benefits for the mobile network operators? As the hon. Gentleman just mentioned, that will bring incredible benefits to productivity and our economy.

Finally, as regards the European Union, the Ofcom strategy document, which was written before Britain’s decision to leave the European Union, makes explicit reference to the importance of the EU to the 700 MHz clearance programme, in terms of consultation and technical considerations. The European Parliament and the European Council are leading the joint decision on the timing and release of the frequency. The Minister will be aware that the European Commission recently published a draft decision that includes proposals that would require member states to allow the use of the 700 MHz band for electronic communications services under harmonised technical conditions by 30 June 2020, yet the timetable laid out by the Prime Minister indicates that we will have left the European Union right in the middle of that deadline. I would be grateful if the Minister confirmed the steps he and Ofcom are taking to ensure that Brexit does not adversely impact achieving data usage on the spectrum. Finally, what contingency plans are in place?

Digital Economy Bill (Eleventh sitting)

Debate between Calum Kerr and Louise Haigh

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

[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.

Digital Economy Bill (Tenth sitting)

Debate between Calum Kerr and Louise Haigh

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

[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 ---

[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.

--- Later in debate ---

[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 ---

[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.

Digital Economy Bill (Ninth sitting)

Debate between Calum Kerr and Louise Haigh

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 (Eighth sitting)

Debate between Calum Kerr and Louise Haigh

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

[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.

Digital Economy Bill (Sixth sitting)

Debate between Calum Kerr and Louise Haigh

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.

--- Later in debate ---

[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.

Digital Economy Bill (Fifth sitting)

Debate between Calum Kerr and Louise Haigh

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

[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.

Digital Economy Bill (Fourth sitting)

Debate between Calum Kerr and Louise Haigh

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

[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.

--- Later in debate ---

[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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[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.

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[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.

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[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.