Digital Economy Bill (First sitting)

Kevin Brennan Excerpts

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

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

Q What flexibility would you like to see within the legislation for either the Government or perhaps Ofcom to be able to deem the level of the USO in the manner that Baroness Harding described as technology increases?

David Dyson: I have a couple of points. Covering some of the previous questions, it is impossible to predict what will be the right speed in five years’ time. There are two elements to delivering that. One is effective competition. On the second, I agree with Baroness Harding that in those harder-to-reach less economic areas, the separation of Openreach is the only way that you will get assurance that those customers will get the right speed.

Fundamentally, Ofcom needs to have more powers to make the right decisions that effectively create the right competitive environment in the UK—an environment where it is not constantly worried about being litigated. At that point, you have a stronger regulator that will make the right decisions for the right reasons and a lot of these discussions will take care of themselves.

Baroness Harding: You can see from my nodding head that I agree with David. A lot of the provisions in the Bill are very good, pro-consumer, and I would encourage the Committee to look very favourably towards them. David has just alluded to one of them, which is to make sure that you have a stronger regulator that can get decisions taken faster without using up nearly 50% of the Competition Appeal Tribunal’s time.

Sean Williams: On the specific question about flexibility, as long as it is stable enough for network investors to deploy a certain investment in order to get to the target and then recover some of their investment money, it can be flexible after that. If it is too flexible, you never quite know what you are supposed to be investing in, so I think it needs to be definitive for a period and then it can move on progressively as society and the economy moves on.

I agree with Baroness Harding on the subject of reliability. Reliability is a very important metric, but SMEs are not typically the most demanding broadband customers. A big household streaming lots of HD videos is a very demanding broadband supplier. SMEs and large households have different kinds of requirements and we need to work with Ofcom to establish exactly what those standards should be.

It is true that some of the problems happen within the home or within the business premises. It is important to make sure that all the retailers—TalkTalk and all the others—are able to support their customers in the business or home. Making sure those networks and wi-fi work well is also very important, to answer Mr Perry’s earlier remarks.

[Kevin Brennan (Cardiff West) (Lab)]

Q Sean, do you recognise the figure that improving wayleave rights under the ECC will reduce costs for providers by 40%? Would you like to tell us whether any surplus from that will be used to invest in local communities or will it be going to your profit margins?

Sean Williams: I do not recognise the particular figure, to be honest, but I would not necessarily dispute it.

[Kevin Brennan]

Q Is it in the right ball park? Is that what you are saying?

Sean Williams: It is 40% of what? I do not know exactly where that figure comes from, to be perfectly honest with you, but what I would say is that on the EE network we have a commitment to get to 99%-plus of premises getting 4G, and 95% of the geographical area of the country, by 2020, getting 4G services. Also, that requires us to roll out new masts and new services, and every cost reduction in that vein will support the agenda of rolling out 4G networks everywhere as far as we can.

[Kevin Brennan]

Q So all that will be reinvested into the—

Sean Williams: I think it is all supportive of delivering more roll-out by all the mobile networks, yes.

[Kevin Brennan]

Q Can I ask you, how will we have competition in next generation access? Will certain areas of the country be limited to 10 megabits in the future?

Sean Williams: As I say, I think we are getting lots of competition already. Virgin is rolling out. Hyperoptic, Gigaclear and others, all the 4G networks, Three, EE, Vodafone, O2 are all rolling out competitive networks, so I think the large majority of the country will have availability of choice of provider.

[Kevin Brennan]

Q Will certain areas be limited, do you think, in reaching the 10 megabits?

Baroness Harding: I think the way that you ensure that there is sufficient competition to drive investment and create choice is by having a very strong regulator that does not believe any of us, actually, when we say “Trust us, we will be okay; we will do it for you.” If you live in any of the rural constituencies in the country, you do not have Virgin as an alternative. There is only one fixed line network provider. There are only two mast joint ventures for mobile networks, so I would argue that the telecoms market is not competitive enough at all and that the best way Government can ensure that all constituents across the country benefit is by having a much stronger regulator that forces competition. I think you should be very worried when you hear large incumbents saying, “Set up a universal service obligation but don’t let it get too far ahead of what we’ve got in our business case.” That is not what business should be doing. Businesses will invest more if they are scared their customers will go elsewhere, not because they have been given a promise by Government.

David Dyson: But also you should be very worried when you hear statements about how BT is planning to take profits from the duct access and reinvest in that, and in cross-subsidising mobile access. That is just fundamentally wrong, and is not supportive of competition.

[Christian Matheson]

rose—

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[The Chair]

I will come back to you.

[Kevin Brennan]

Q I remember one of your predecessors in a predecessor company, Mr Butler, explaining to me why they were digging my street up in the 1990s. They basically said, “We are installing a straw to suck money out of people’s houses”, which I think is the best explanation I ever received of what was involved. On the electronic communications code, how can you assure us that its reform will actually benefit consumers principally and not just allow you to keep more of the money that you suck out of people’s houses?

Daniel Butler: The reforms that are envisaged will transform the economics of roll-out. The figures discussed in the previous session were a 40% reduction in the cost of roll-out. The primary way in which that benefits consumers is that that allows us to build to more premises on a commercial basis.

Virgin Media currently plans to build to 4 million premises by 2020. Wayleaves are a considerable line item on the balance sheet for that investment, and also it takes a lot of time to get agreement, so anything we can do to reduce the cost and improve the efficiency of getting those will have the consumer benefit of allowing us to connect up more premises. I mentioned that Government could be more ambitious in this regard. In effect, the Government’s reforms will deal with the worst abuses of the systems—that is communications providers’ exposure to ransom rents—but Ministers and the Secretary of State increasingly talk about broadband being equivalent to a utility and the reforms do not quite go that far. Water companies have the most advantageous wayleave regimes under their statutes. They do not pay what is called in the valuation jargon “consideration” and, as are result, they pay 60% less—these are Government’s figures—than communications providers.

[Matt Hancock]

I think the explanations coming from the witnesses are excellent. I did not have any other questions.

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[Mark Menzies (Fylde) (Con)]

Q On a slightly different point, I have a question for Which? around data sharing. Clearly, there are mixed views as to whether it is a good or a bad thing. I would like to understand what you think that the benefits would be, particularly to vulnerable groups, of the Government having access to this data?

Pete Moorey: In broad terms, we support the measures in the Bill and we see this from two perspectives. There is the work that we have done in our campaigning, particularly on areas such as energy, where we know that year after year the energy suppliers have said that they would like to be able to better target energy efficiency schemes at the most vulnerable households, and that they have struggled to do that. We think a lot of good steps could be taken as a result of that.

The other side is around the role we play in providing products and services for consumers. We run a number of excellent websites—Which? University, Which? Birth Choice, and Which? Elderly Care—which provide people with all the information they need to enable them to make a choice when they come to that decision. We have been hamstrung on occasion in being able to provide the richness of information that people would want when trying to make that decision where local authority data or other public service data have not been available. Taking steps in this direction would help not only Which? to do that better, but a lot of the other service providers in that space.

[Kevin Brennan]

Q On the point about coverage of broadband and mobile, where would we come in the European champions league of coverage? Will the Bill push us up the league at all, in your opinion?

James Legge: I cannot give you a precise figure. I am afraid I do not know the answer to where we lie in the overall league table of Europe.

[Kevin Brennan]

What do you think?

James Legge: I do not know. Our ambition certainly seems to be less than what the European Union intends to see delivered. I think there is scope for saying 10 is great, but we should be looking at more. We should also make sure that the USO moves up—I think the Bill makes provision for this—because there is no point in leaving it at 10 when we have 300.

[Kevin Brennan]

Q You listed a lot of countries that do better than us when you gave your answer earlier. If the Bill potentially brings some progress, are we running fast enough to keep up with our colleagues on the continent?

Pete Moorey: I think it was me who gave the list of countries. We can come back to you on that with the data we have on 3G and 4G and also on broadband.

[Kevin Brennan]

Q It would be very helpful if you could do that before we meet next week.

Pete Moorey: On the 10 megabit point, clearly for a lot of consumers it will not be enough; for others, it will be a godsend. Ofcom has done a pretty decent piece of work in understanding average consumer use at the moment. It has developed a speed that is probably appropriate to start, but will have to be addressed in time. The really important issue is how it does that and how it involves consumers in the process. There is a real danger that we get into an arbitrary point of view and say, “Well, it should be 15 or 20 megabits” rather than setting the speed with consumers themselves.

[Claire Perry]

Q I want to focus questions directly on Mr Legge. I represent a very rural constituency. We are very anxious about home building. We now have effective neighbourhood plans that rather than mandating giant developments plonked down wherever anybody wants them, require developers—often small developers—to work with communities. The preamble is to ask you whether you think the new law coming in next year to require automatic superfast broadband connection for sites of more than 100 homes is suitable for rural areas, or whether we ought to be going further and effectively making it a utility provision for all home builders.

James Legge: My view is very much that it should be seen as a utility provision. The whole way in which we have looked at the housing problem in rural areas has transformed over the last 10 years from the idea of plonking mini-towns on the edge of existing communities. We have realised that if you try to do that, all you do is create massive local opposition and nothing gets built. What you want is small-scale development that is sensitive and local to the community, provides local housing, and is affordable, often affordable in perpetuity.

The idea that you will only get broadband provision when you build 100 premises on the edge of a village or in a rural area is undesirable, simply on the grounds that where new properties are going in and we are putting in an infrastructure, it seems absurd not to take the opportunity. We would not say we are not going to put in electricity, water or, ideally, gas as well, although we do not have mains gas everywhere, to be fair. I think broadband is too important.

It is also important to realise that the population trend at the moment is a move from towns to rural areas. There is enormous potential. If you take a population of 10,000, there are more start-up businesses in rural areas. I think London and some of the major urban city centres exceed. The countryside is a largely missed opportunity, but all the signs are there that if it gets broadband it is ready to fire and go further; so the figure of 100 is too urban-centric in thinking.

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[Thangam Debbonaire]

Q Is the Telephone Preference Service system now completely pointless? My constituents say to me that they feel completely unprotected by it. Could the Bill do more to strengthen it?

Pete Moorey: It is not pointless. Our research shows that if people sign up to the TPS they usually have a reduction in calls. The problem is that there are too many firms out there that either just abuse the Telephone Preference Service and call people who are on the list, or indeed have consumers’ consent to call them, because, sadly, the customers have incorrectly ticked a box at some point, and thought they were not giving consent when they were giving it. More needs to be done about the data consent issue. I know that the Information Commissioner’s Office is doing more about it.

[Kevin Brennan]

Q So just to be clear, you would welcome amendments to the Bill that would strengthen action, including direct action against directors to avoid the shutting down of shell companies. Is there a case for some kind of aggravated offence where people are on the Telephone Preference Service, or where older people are specifically targeted in such a way?

Pete Moorey: I know there is a local police commissioner who is looking at the issue at the moment—particularly around making scam calls a hate crime. That is an interesting development. There is more that could be looked at in that area. I think a good start in the Bill would be the introduction of director-level accountability.

[Kevin Brennan]

I introduced a ten-minute rule Bill on this in 2003, so it is depressing that it is still a problem.

[Chris Skidmore]

I am sure you are delighted at the progress.

[Kevin Brennan]

It is according to the Government that there has been much progress.

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

Q Mr Moorey, to elaborate on what you said about the provisions in the Bill to reform the appeals process, I think you described the current set-up as having a chilling effect on competition and pro-consumer impacts. It would be great if you would elaborate on what the Bill will do to improve that situation.

Pete Moorey: I think it has. I think the reason why we do not have things like a gain in provider-led switching and automatic compensation in the sector is in part due to the fact that the regulator has not felt able to move ahead with those things without appeal. Indeed, the speed at which the regulator acts is also a result of the appeals mechanism. We see proposals coming from Ofcom, particularly around things like switching, where it seems to go through a process of repeated consultation really out of a fear of being appealed by the companies. So I think it has had a chilling impact, and those are a couple of examples.

As other panel members have said, moving to a system that every other economic regulator in the country uses, which means that you are able to challenge on the process rather than the merits, would therefore be a significant change. I simply do not see the case for the telecoms sector being any different from energy or any other economically regulated sector.

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[Matt Hancock]

Q Do you agree that those areas in addition that you are looking for are essentially administrative rather than legal changes? That is to say, the Government need to move in that direction, I would argue that they are moving in the direction that you set out, but you would not put that in a Bill; you need to make it happen.

Mike Bracken: Yes. Absolutely, Minister. Too often, there was an assumption that those things would need regulatory or Bill backing. My experience was pretty much 100% that that was not the case; these are largely about administrative and operational management of data across Whitehall and across Departments. Clearly, there are some areas, security being an obvious one, where you need more legal oversight, but primarily it is not so much about a Bill.

[Kevin Brennan]

Q First, I agree with what Jeni said about Citymapper; it has changed my life, it is absolutely fantastic—I actually use the bus now. However, either witness, will the Bill in any way help to avoid another care.data type of scandal?

Jeni Tennison: I will go back to what I was saying around transparency and public trust. For me, the important part of any dealing with private, personal data has to be that we drive towards trust by being open about what is being done with those data, by being transparent about how they are being used, what decisions are being made with them, whom they are being shared with and under what circumstances. Those principles of having openness around the handling of personal data are what will drive public trust in their use. We are in a very difficult space here between trying to balance the right to privacy of an individual with the public good we can get from the use of data. It is a fuzzy and difficult one, one we are going to be working through for many years, but having transparency and openness about it enables us to have an informed debate about where we are making that balance.

[Kevin Brennan]

Q Will the Bill make a care.data scandal in the future less likely, more likely or make no difference?

Jeni Tennison: For me, it does not go far enough in the need for transparency around where the sharing is going on, which is what I think would be necessary in order to avoid that.

[Kevin Brennan]

Q Finally, should the Bill be strengthened in some way in order to achieve that, and could that be done by an amendment to it, either of you?

Jeni Tennison: I think it could be strengthened by adding some provisions around openness and transparency, putting that at the heart of what you need to do whenever there is a data-sharing arrangement.

[Claire Perry]

Q I appreciate that point, but does either of you agree that there is a real asymmetry of concern between data which an individual may share with a public body and data which individuals share with a corporate body? One thing I am fascinated by, and it relates to so many provisions in the Bill, is that we knowingly or unknowingly give away rights to all kinds of information with every keystroke we make on the internet. We give huge chunks of personal information to corporate bodies which do not have the definition, as per clause 31, of improving the welfare of the individual, but are simply in it for profit. How would either of you help us to address that? Perhaps the Government—rightly, as an elected organisation—are being scrutinised about this, but my constituents are willy-nilly giving away vast chunks of their data, and in some cases giving away private data to very insecure storage facilities, almost without knowing it. It is frustrating for a Government who are trying to do the right thing to make digital government far more effective—as you did, Mike, during your time—to constantly be facing concerns and criticisms that ought properly to be applied to corporate bodies, but never are.

Mike Bracken: I completely understand your point about asymmetry and I agree with that. I would suggest that in corporate, public and private life it is a fair assumption that many people in the country are waking up to how their data have been used, how they have released that data and, increasingly, the repercussions of that, whether on social media, transactional data with a private company or, indeed, the public sector. There is a general awareness of and unease about some of the practices in all three of those sectors.

Having said that, the Government are held to a different account. Our members—we are a member-based organisation—hold the Co-op to a different account. We are the custodian of their data, and we are owned by our members. Many of the services we provide or help to provide to our members, such as wills, probate and funeral care, are deeply emotive at a certain time of life. These services often depend on Government data being in very good shape about place, location and identity. It is a fair correlation to draw that there should be a symmetry between how an organisation like us should be governed and managed, and the rules that should apply to public sector data. That is not to say that all the data regulations which apply to all corporations and trading organisations need to be exactly the same as those for the Government. That would be a political issue far beyond my position to comment on. The Co-op would look to see that the Government uphold the highest possible standards, so that our members can get the best possible use of that public data.

Jeni Tennison: Perhaps I can add a couple of things. Mike has made the point well that the Government need to act as a model for how to do data sharing well, and how to be open and transparent about handling people’s personal data. The Government are in a position of authority there. However, the other thing to bring up is that we have a mixed economy for the delivery of public services, including the private sector, charities and social enterprises. There should be some scrutiny over the way in which those organisations are handling personal data in the context of delivering those public services.

Digital Economy Bill (Third sitting)

Kevin Brennan Excerpts

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

[Kevin Brennan (Cardiff West) (Lab)]

Q We are about to start line-by-line consideration of the Bill. If you were on the Committee and had a chance to put down an amendment to the Bill, what would it be?

Peter Tutton: In the bit about debt collection, I would like to see some of the principles of the sort Alistair talked about by which Government debt collection should work: helping people to affordable, sustainable repayments; making sure debt problems are not made worse; an emphasis on helping vulnerable households to recover control of their finances—that sense that there is a wider public benefit in dealing with debt. Debt costs over £8 billion a year in on-costs: health, lost productivity and so on.

[Kevin Brennan]

Email that to us later. What is yours, Dr Fishenden?

[Claire Perry]

It is outrageous to outsource your job!

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[The Chair]

Colleagues, we will now hear oral evidence from Ofcom. Welcome and thank you very much for joining us this morning. For this session we have until 12.30 pm. Could the witnesses please introduce themselves for the record?

Lindsey Fussell: I am Lindsey Fussell. I am director of the consumer group at Ofcom.

Tony Close: My name is Tony Close. I am the director of content standards, licensing and enforcement. I look after broadcasting at Ofcom.

[Kevin Brennan]

Q Hello. In relation to the new appeals process, which will bring Ofcom in line with other industry regulators, is Ofcom fully prepared?

Lindsey Fussell: Yes, absolutely. It is a measure that we have been seeking for some time and we are delighted to see it in the Bill. I have a few comments on why. As you say, the standard brings us in line with almost all other public authorities. Ofcom very much welcomes robust challenge to our proposals—it increases public and market confidence in us. We are fully confident that the new standard will enable that, while also enabling us to take forward the really important consumer measures in the Bill, such as auto-compensation and switching, which I know have the support of many people in Parliament as well as the public.

[Kevin Brennan]

Q On switching, the Bill improves powers to collect information. How do you envisage publishing information on telecoms, such as service quality, broadband speed and so on?

Lindsey Fussell: That is, again, a really important part of the Bill. At present, our information powers do not enable us to ask providers to give us information that they have not retained, or to give it in a particular format, so it is very hard for us to publish comparative data, which is what we know that consumers and the public really value. We have already announced in the digital communications review that we will publish our first quality of service report next March, which will contain a great deal of data comparing different providers and the quality of service they give. The powers in the Bill will give us the ability to expand that data over time and give the public more information to enable them to make informed choices.

[Kevin Brennan]

Q On nuisance calls, which is an issue that has been running for a long, long time, over many years there have been increases in fines and various other measures. How much of a real difference do you think the Bill will make? Could it go further in trying to tackle the issue?

Lindsey Fussell: As you say, that is an incredibly difficult issue and one that is evolving over time. In contrast to five years ago, we notice now that the complaints about nuisance calls—as you may know, Ofcom deals particularly with silent and abandoned calls—are increasingly less about large firms and more about much smaller companies. We frequently see numbers that are spoofed or unreliable. It is a different kind of problem that we are now tackling.

The powers in the Bill relate specifically to direct marketing calls, which are within the remit of the Information Commissioner’s Office. We very much welcome the measure to put its guidance on to a statutory footing and to make it easier to enforce against companies that do not comply.

[Thangam Debbonaire]

Q I want to turn to the BBC. How do you think we can ensure that the BBC’s distinctiveness and public service commitments are upheld in this new role?

Tony Close: That is a great question, and a tough one to start with. The first thing to make clear is that it is very much for the BBC and its new unitary board to set out its strategy in the first instance and explain to all of us how it is going to ensure that the BBC’s output is distinctive, creative and engaging. Ofcom clearly has a role holding the BBC to account. What we are not going to do is try to micromanage the BBC. We do not want to be making decisions about individual programmes, such as whether “Eastenders” is or is not distinctive, but of course we have a role looking at the output of the BBC as a whole to make sure it is fulfilling all its public service duties. I am not going to pretend that we have the answer right now. We are doing an enormous amount of preparatory work to be ready for 3 April in order to ensure that we will be able to hold the BBC to account for the distinctiveness of its output as a whole.

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[The Chair]

Kevin Brennan wishes you to send him some emails.

[Kevin Brennan]

Q Yes. May I ask a couple of questions on automatic compensation? How do you envisage that working? Do you have experience of doing this sort of thing? I would like to hear your general comments, and I will then ask a specific question.

Lindsey Fussell: Yes, of course. We are delighted that the Bill clarifies Ofcom’s power to introduce auto-compensation. We think it is an incredibly important step to make sure that consumers get redress when they do not receive the quality of service they are expecting—we know from the consultation we did on the digital communications review that quality of service is the thing that customers feel most strongly about—and we also hope that it will incentivise providers to improve their service quality and enhance the attractiveness of joining them for the public. It goes hand in hand with the proposal we were talking about before on the quality of service report in terms of publishing and making available more comparative service information so consumers have an informed choice.

[Kevin Brennan]

Q On the basis that compensation delayed is compensation denied, would you support the compensation effectively being paid on the next bill that the customer receives rather than their having to wait for a bank transfer at the end of the financial year or something?

Lindsey Fussell: We have already published what we have called a call for input, which has closed, on our first thoughts on auto-compensation. We will be publishing a full consultation on it early next year. We have said already that our instinct is that the compensation should be financial. Clearly, we will need to test that in consultation.

[Kevin Brennan]

Q What is the alternative to financial?

Lindsey Fussell: I imagine you could think of other sorts of services or things that could be offered to consumers to try to put problems right. We are currently actively considering whether we should set maximum periods in which compensation should be paid. I think that goes to your point, and that is certainly something that we will explore in the consultation and our proposals.

[Kevin Brennan]

Q Taking it off the next bill would be a good idea if it were achievable. Finally, given that we are now at the stage of line-by-line consideration of the Bill, is there anything that you would suggest as an amendment to improve it?

Lindsey Fussell: As I have said, we are delighted that many of the measures that we have been pressing for for some years are included in the Bill, and we very much hope that it commands support.

[Kevin Brennan]

So there is nothing you would suggest.

Tony Close: May I add one point? We have been contacted recently by a number of stakeholders who are keen to see improvements in the provision of access services such as subtitles and audio description in the video on demand sector. Action on Hearing Loss has been in touch, and it is keen to see Ofcom given very similar powers to those it already has in relation to linear television to set challenging but proportionate targets for access services in a code for video on demand services. We would welcome such an amendment.

[The Chair]

Claire Perry has the final question.

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[The Chair]

Very helpful. Thank you very much indeed.

[Kevin Brennan]

Q Congratulations on your appointment. Would you support moves to introduce director-led accountability so that directors are held to account on nuisance calls rather than just the companies?

Elizabeth Denham: Yes, I would support extending liability and accountability to directors. Our office has issued fines that totalled about £4 million in the last year, but the problem is that we have been able to collect only a small proportion of those fines because companies go out of business and, as in a game of whack-a-mole, appear somewhere else. It is important for us to be able to hold directors to account for serious contraventions.

[Kevin Brennan]

So an amendment in the Bill to achieve that would be helpful.

Elizabeth Denham indicated assent.

[Kevin Brennan]

Q For the record, the witness nodded in reply to that question.

On age verification, attention has been drawn to the consequences of failing to think through plans, including the possibility that information on passports and driving licences could be misused when collected as part of an age verification system. Could you comment on that and are you aware of any evidence that might mitigate those risks in that part of the Bill?

Elizabeth Denham: I will ask my colleague to respond to that.

Steve Wood: Our concern about an age verification system is that the hard identifiers that could be collected, such as passports, might need to be secured because of the vulnerability of those pieces of data being linked to other pieces of data and used by the organisation that collects them. We hope that any solution would take a “privacy by design” approach, which very much minimises the amount of data that is taken and may use different ID management systems to verify the age of the individual, rather than a lot of data being collected. It is important that data minimisation is at the heart of any solution. It would be a concern for us if a wide range of solutions was put forward to collect those hard identifiers.

[Rishi Sunak]

Q We hear a lot about how technology can benefit people and that the Government need to harness technology to do just that. Indeed, some data sharing is already going on in the delivery of Government services. Can you describe how the measures in the Bill will provide greater legal certainty and clarity in that area because we want to make sure we are doing things in the right way? Your thoughts in that regard would be helpful.

Elizabeth Denham: This Bill is an enabler. It facilitates data sharing for the improvement of Government services. I think the public welcome that and they expect seamless Government services in some cases. The idea that all data must stay in ivory towers or silos does not make sense when building digital delivery services. That said, we all know that trust and transparency are critical to maintaining the public’s trust in data sharing.

The transparency that needs to be clear in the Bill is on two levels. First, at the point of data collection and in ways that are easy for citizens to access, they should understand the purpose of and how their data will be shared, and they should have the ability to challenge that.

Secondly, there needs to be another layer of safeguards and transparency scattered throughout some of the draft codes of practice, but not in the Bill. That is the transparency that comes from privacy impact assessments, from reviews by our office, and from Parliament looking at revised codes of practice. It is really important that we pay attention to both those levels. Civil society is going to pay attention to published privacy impact assessments; but right now there is no consistency across all the codes of practice for those kinds of safeguards. I believe that some improvements are needed to the Bill.

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[Louise Haigh]

Q We have heard your concerns about the draft codes of practice, which I also find very concerning. Of course, we do not know because we have not seen any draft codes of practice. Would you advise Members to vote on Government powers of that nature without seeing such draft codes of practice? Who else should be consulted on such codes before they are made law?

Elizabeth Denham: We have seen some of the draft codes of practice, and we have been making comments, but I think it would be preferable for Parliament to review all the codes of practice so that they can see and discuss the entire framework before the passage of the Bill. The codes are an important part of the framework.

[Kevin Brennan]

Q To follow up on that, do you believe that we ought to see the draft codes of practice prior to consideration of these parts of the Bill in Committee?

Elizabeth Denham: That is my view, yes.

[Louise Haigh]

Q In your first speech as Information Commissioner you made much of the need for businesses to establish trust in relation to data sharing, with which I obviously completely agree. Do you think this Bill could have done more to put safeguards around data sharing in the commercial space?

Elizabeth Denham: Again, I think that trust and transparency go hand in hand. Part 5 is about Government data sharing and sharing with Government providers, so the focus there needs to be on transparency and trust. All Governments are really struggling with this issue, especially in the face of new technologies. How can you make transparency easy and understandable? We have just issued a privacy notice code of practice, which we introduced last Friday. What would help this Bill is if there was a reference to following our privacy notice code of practice, which again is across the public and the private sector and would lend more trust among the public.

[Nigel Huddleston]

Q The UK is one of the most advanced digital economies in the world, yet we heard from witnesses on Tuesday that, in terms of Government data sharing, we are well behind the curve, well behind other countries—that is partly because they are probably more focused on the opportunities. Does this Bill, in your experience, bring us more in line with the best practice you are seeing in other countries?

Elizabeth Denham: I think the approach that the UK is taking in this Bill is a responsible approach. My recommendations are to up the safeguards and improve the transparency. Breaking down the data sharing by type, function and purpose of data is a good way forward. There are some draconian data-sharing regimes in other parts of the world, which are concerning to data protection commissioners. I generally think that the approach here is right, but there could still be some strengthening of the Bill. That would go a long way to assuring more public trust and therefore more buy-in and participation in the digital economy and digital services.

[Kevin Brennan]

Q If the Bill were not amended in the ways you have suggested, where would that leave us in terms of privacy protection and data protection in the international league table?

Elizabeth Denham: We would not be first at the table in terms of privacy safeguards, and I think we have an opportunity for this Bill to be very strong in supporting the digital economy, digital services and data privacy. I very much encourage Parliament to look at the recommendations that we have made. If no amendments are made, yes, we are slipping behind. If you take a look at what Australia has done recently, they have put a provision in law that any re-identification of de-identified data has a sanction and a penalty next to it. I think that is an excellent idea, and it is another recommendation that we have made here. If no amendments are made, we will make this work from our perspective. We will be coming back to Parliament with a report on what is happening on the ground so that citizens can understand it.

[The Chair]

Thank you very much for some very clear evidence, Ms Denham and Mr Wood. We now release you.

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

Digital Economy Bill (Fourth sitting)

Kevin Brennan Excerpts

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

[The Chair]

Colleagues, today we begin line-by-line consideration of the Bill. Before we start, I repeat that Members may, if they wish, remove their jackets during Committee meetings. Will everyone ensure that all electronic devices are turned off or switched to silent mode?

The selection list for today’s sitting is available in the room. It shows how selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or similar issues. The Member who has put their name to the leading amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate, and I will work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments.

Please note that decisions on amendments do not take place in the order in which the amendments are debated, but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection and grouping list, and decisions are taken when we come to the clause that the amendment affects. I hope that explanation is helpful.

We are still waiting for Mr Hancock, but we will continue. I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following debates on relevant amendments. [Interruption.] The Minister has arrived.

Ordered,

That the Order of the Committee of 11 October be amended as follows: in paragraph (1)(c), leave out the words “and 2.00 pm”.—(Matt Hancock.)

[Kevin Brennan (Cardiff West) (Lab)]

We have no objection to the change, although I hope the Minister is a bit more punctual in future and takes more note of what the programme motion says, since we are supposed to start at 9.25 am and he has just arrived at 9.27 am.

[The Chair]

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

Clause 1

Universal service broadband obligations

Digital Economy Bill (Fifth sitting)

Kevin Brennan Excerpts

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

[Matt Hancock]

We have been very accommodating on the timings. Not only did we remove the Tuesday afternoon sitting at the request of the Labour party, but we added another sitting at the end. We cancelled the sitting last Thursday afternoon at the request of the Labour party, despite the fact that we wanted it to happen. In fact, the amount of scrutiny in Committee will be less than we originally proposed, at the request of the Labour party. We will not have any truck with that one.

[Kevin Brennan (Cardiff West) (Lab)]

How many amendments has the Minister tabled?

--- Later in debate ---

[Matt Hancock]

I obviously agree.

[Kevin Brennan]

I note that the Minister has not answered my question, and I am not sure that he even knows how many amendments he has tabled. Of course it is appropriate to table amendments, but it is not appropriate to introduce a Bill that is so unready that the Government have already tabled more than 130 amendments. That is not good practice, and he knows very well that it is not; I do not know why he is contesting that fact. We want to proceed with the business, but we put our point on the record. I hope that he and his officials take note.

[Matt Hancock]

People reading the transcript will notice that we have eaten up another five minutes discussing the process.

[Kevin Brennan]

You were two minutes late when we started.

[Matt Hancock]

No. I want to get on to the scrutiny of the Bill, but I will take on board the Labour party’s point that it does not think amendments are a good idea. I think the whole point of the parliamentary process is to make amendments. With that, I hope that we can get on with the Bill.

[Kevin Brennan]

On a point of order, Mr Stringer. If the Minister thinks that that is the attitude he should adopt in Committee to the Opposition when they are making a legitimate point about how ready the Bill can be for scrutiny if he has to introduce more than 130 amendments, he has got a lot to learn about how this place works. I put it clearly on the record that we think it is vital that amendments to a Bill are discussed, but the purpose of Committee is mainly is to ensure that the Opposition have that opportunity.

--- Later in debate ---

[Claire Perry]

I will speak to amendments 85 and 87. I raised a question with David Austin last week about the regulation of video on demand. He confirmed that the intention of the Bill as it stands is to maintain the regulation of UK video on demand with Ofcom under the Communications Act 2003. That seems totally reasonable to me because Ofcom has done a good job. I think the issue is that the framework only requires age verification for R18 material.

I am not trying to give everyone a lesson—by the way, this is why we are so grateful to the BBFC; it gives very clear definitions of the material—but R18 is effectively hardcore porn. It contains restricted scenes that we would all consider to be pornography. Since 2010, the 18-certificate guidelines permit the depiction of explicit sex in exceptional justifying circumstances, so it is perfectly feasible for children to view 18-rated content that we would all consider to be pornographic. I fully agree with the sentiment behind amendments 85 and 87 to provide a level playing field for all online media, but we must ensure that all R18 and 18 content accessed through video-on-demand services is included in the provisions. However, removing clauses 15(5)(a) and 16(6) would cause a fair amount of confusion, as video-on-demand services would be regulated by Ofcom for the majority of the time but for age verification matters would be regulated by the BBFC and Ofcom, which raises the question of who has precedence and how enforcement would work.

I have therefore tabled new clause 7, which would meet the same objective in a slightly different way by amending the current regulatory framework for video on demand to ensure that children are protected from 18-rated as well as R18-rated on-demand material. The relevant section of the Communications Act 2003, section 368E, was amended by the Audiovisual Media Services Regulations 2014 to specify that R18 material should be subject to age verification to protect children. It is not a big step to require 18-rated pornographic material, which is the subject of much of this part of the Bill, to be included within the scope of that section. That would effectively create a legal level playing field. It would remove the issue of parity and precedence and would give us parity on the fundamental issue of the protection of children.

I agree with much of what the hon. Member for Sheffield, Heeley said. Ofcom’s latest figures on children and the media show that 51% of 12 to 15-year-olds watched on-demand services in 2015. The viewing of paid for on-demand content has gone up and accounts for 20% of viewing time for young people aged 16 to 24. They can view content rated 18 or R18 that would be prohibited for some of them if they were to purchase it in the offline world. With new clause 7, I recommend that the Government should try to ensure parity between the online and offline worlds. This Bill is a brilliant way to ensure that there is parity in the way that pornographic content is accessed.

[Kevin Brennan]

On the point that my hon. Friend the Member for Sheffield, Heeley made about the wording of the clause and how it talks about material that is made available “on a commercial basis”, does the hon. Member for Devizes have any concerns that that might be a definitional problem that could create a loophole?

[Claire Perry]

The hon. Gentleman raises a challenge. The explanatory notes make it clear that the Government intend to capture both commercial and freely provided material, which gets to the root of his concern. If someone is benefiting from the viewing of such material, the Government intend to capture that within the definition. I commend both the Minister and his Department for asking the BBFC to take on the role of regulator, because I have a high level of faith in its ability to do just that.

[Kevin Brennan]

I take the hon. Lady’s point that the Government have said that they would like to capture such material, but my hon. Friend the Member for Sheffield, Heeley said that they might not capture everything. We tabled a probing amendment to take out the words “on a commercial basis” to test that, but it was ruled out of scope because the Bill is about the digital economy. So it has to be material that is made available on a commercial basis only, otherwise it is out of the scope of the Bill.

[Claire Perry]

The hon. Gentleman is splitting hairs. The Government have issued clear guidance that the definition of “commercial” includes free content. There are very few altruistic providers of this material. Free content tends to be provided as a taster for commercial sites.

[Kevin Brennan]

There are lots!

[Claire Perry]

Well, I accept that is true of streaming and on-demand, which is why this provision is important. It would capture material that is rated 18, not just restricted-18, and put it on a level playing field with restricted-18 material. The on-demand video content that the hon. Member for Sheffield, Heeley mentioned would be covered by the changes. I am interested to hear the Minister’s response to my proposed new clause 7, which would support parity of both content and regulator.

Ordered, That the debate be now adjourned.—(Graham Stuart.)

Digital Economy Bill (Sixth sitting)

Kevin Brennan Excerpts

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

[Matt Hancock]

The aim is that even though the regulator may be different in those two cases, the result would be the same. I can give the hon. Lady that assurance. The Bill will do that without having double regulation. As we discussed earlier with regard to a different part of the Bill, having double regulation in the same area can lead to confusion and worse outcomes, rather than clarity and better outcomes.

A service that falls within part 4A of the Communications Act 2003—that is to say, one that is outwith the proposals —must not contain any specially restricted material, unless that material is made available in a manner that secures that persons under the age of 18 will not normally see or hear it. Specially restricted material includes R18 material and other material that might seriously impair the physical, mental or moral development of persons under the age of 18. Our intention is that such other material should include material that the BBFC would describe as 18 sex works. I think that answers precisely the point that the hon. Lady was making.

[Kevin Brennan (Cardiff West) (Lab)]

This is a genuine inquiry: did the Minister consider not having double regulation but awarding regulatory oversight of all this to a single regime, possibly the BBFC, thereby taking it away from Ofcom? If he considered that idea, why did he reject it?

[Matt Hancock]

Partly because the regulation of areas currently covered by Ofcom is considered to be working well, so I did not want to throw that regime up in the air. I did want to deal with the additions and make provisions additional to the existing regime.

[Kevin Brennan]

The Minister’s response prompts the question: if that is the case, why did he not give the responsibility to Ofcom?

[Matt Hancock]

Because I think the BBFC is best at making the very nuanced distinctions between different types of material and their regulation that are required. The way it has landed, with the two regulators sitting side by side, but with the aim that the result of the regulation is the same, is the better way of doing it.

--- Later in debate ---

[Claire Perry]

I welcome the Minister’s previous comments, which gave me some real assurances on the parity of content and regulator. I also reassure him of how popular he will be when the Bill finally passes—the Centre for Gender Equal Media said that, in its most recent survey, 86% of people support a legal requirement on companies to prevent children’s access to pornography. We are moving in the right direction.

Amendment 66 seeks to pick through slightly more carefully who is responsible and is captured by the Bill’s language. There are four internet service providers in the UK through which the majority of broadband internet traffic travels, and they have come a long way. Five years ago, they accepted none of our proposals, be it single click protection for all devices in the home or the implementation of a filtering system that required selection—we could not select whether or not the filters were on. They have gone from that to the position now whereby, in some cases, we have ISPs that provide their services with the filters already on as default—something that we were told was absolutely unimaginable. With that regime, the level of complaints is very low and the level of satisfaction is very high.

Amendment 67 is consequential on amendment 66 and both seek to clarify the scope of who exactly would be covered under the wording of clause 15(1), which states:

“A person must not make pornographic material available on the internet on a commercial basis to persons in the United Kingdom except in a way that secures that, at any given time, the material is not normally accessible by persons under the age of 18.”

The Government have made it quite clear in the consultation, and the Minister clarified in his previous remarks, that the proposals apply to companies running websites aimed specifically at providing pornographic content for commercial gain, and that they want those who profit from such material being made available online to act in a legal, socially responsible way. It could be argued that ISPs both profit from the material being made available online and also make pornographic material available online, even though they are not the original source of the material. We also heard from the Minister that he is minded to consider social media platforms in that same category. In my view, the regulator must also publish guidance under clause 15(3) about

“circumstances in which the regulator will treat an internet site or other means of accessing the internet as operated or provided on a commercial basis”.

It is my concern that that could also be read as applying to ISPs. The amendments are intended to clarify that. In fact, I can quote from an article from July, which said:

“Internet access providers are likely to feel left in an uncertain position at the moment as, while the Bill does not reference them in this context, the definition of ‘makes pornographic material available’ could be argued as incorporating companies which provide connectivity to servers used for the making available of pornographic material”,

and piping that material into the home.

Paragraph 22 of the explanatory notes makes reference to “commercial providers of pornography”, and that obviously appears to place the onus of this suite of measures firmly on the content providers, but an optimal approach would be to improve the drafting to make the legislative attempt clear. I know we will have further discussions about the role of ISPs, but ISPs have done what we have asked them to do in introducing family friendly filters.

[Kevin Brennan]

I am trying to understand why the hon. Lady believes that ISPs should not have this responsibility.

[Claire Perry]

Because various other aspects of the Bill capture ISPs. My concern is that the Bill focuses on the commercial content providers where they are. The amendment is intended to probe the Government about how they are thinking about ISPs vis-à-vis commercial content providers in the drafting of the clause.

--- Later in debate ---

[Claire Perry]

I thank the hon. Lady for making her intentions clear. I am prepared to withdraw or not push my new clause to a vote on the basis of what the Minister said, but I would love to get his assurances—perhaps he will write to me—to be crystal clear on the fact that he believes the Government do not have to legislate in order to push back on the net neutrality regime.

[Kevin Brennan]

Before the hon. Lady sits down, she did mention the view of Baroness Shields that there should be new legislation. Notwithstanding our remarks about the number of Government amendments, does the hon. Lady believe this Bill could be a useful vehicle to achieve that?

[Claire Perry]

Given the Brexit vote, I would be inclined to accept a letter from the Minister suggesting that we will absolutely resist any attempt to make EU net neutrality apply to what is a very fine, though not perfect, voluntary regime. On that basis, I accept the Minister’s assurances that that is what he intends to do. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clause 16 ordered to stand part of the Bill.

Clause 17

The age-verification regulator: designation and funding

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

--- Later in debate ---

[Calum Kerr]

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

[Kevin Brennan]

I doubt it.

[Calum Kerr]

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

--- Later in debate ---

[Matt Hancock]

It is sometimes said that Parliament skates over matters and does not get under the skin of things, but in the discussion we have just had Committee members displayed a great deal of analysis, experience and wisdom, and our debate on the Bill has been enriched by it. I am very grateful to hon. Members on both sides of the Committee who made very good contributions to help us get this right.

Exactly as the hon. Lady the Member for Sheffield, Heeley said, getting this right involves walking a tightrope between making sure that there is adequate enforcement and appropriate access for those for whom it is legally perfectly reasonable to access adult content. We must get that balance right. With that mind, we have drafted the clauses, particularly clause 22, to allow the regulator to operate with some freedom, because we also need to make sure that, over time, this remains a good system and is not overly prescriptive. It was ironic that in a speech about privacy, the hon. Lady started to speculate about which MPs enjoyed watching porn. I am definitely not going to do that.

The truth is that age verification technology is developing all the time. Online personal identity techniques are developing all the time, and indeed, the British Government are one of the leading lights in developing identity-verification software that also minimises the data needs for that verification and does not rely on especially large state databases to do that, and therefore does it in a relatively libertarian way, if I can put it that way. Providing for verification of identity or of age, because age without named identity is what is really being sought here, but is difficult to achieve, is an incredibly important issue. A huge amount of resource is going into that globally to get it right, and it ties closely to cyber security and the data protection requirements of any data.

The UK Data Protection Act has a broad consensus behind it and follows the simple principle that within an institution data can be shared, but data must not be shared between institutions. The institution that holds the data is responsible for their safekeeping and significant fines may be imposed for their inadvertent loss. The forthcoming General Data Protection Regulation increases those fines. Rather than reinventing data protection law for the purposes of age verification in this one case, it is better to rest on the long-established case law of data protection on which the Information Commissioner is the lead.

We had a very informed debate on the role of search engines. The regulator will be able to consider whether a search engine is an ancillary service provider. Although we do not specify it, I would expect ISPs to be regarded as ancillary service providers, but that will be for the regulator.

On the name of payment providers who are already engaged, rather than enforced engagement, we already have engagement from Visa, MasterCard, UK Cards Association and the Electronic Money Association, and clearly there a lot more organisations that can and should be engaged.

[Kevin Brennan]

It is interesting that the Minister feels able to say that he would expect ISPs to be regarded as an ancillary service provider, but he did not use the same terminology when talking about search engines. To press him on that, would he expect search engines in some cases, or may be in all cases, to be considered as ancillary service providers?

[Matt Hancock]

I do not draw any distinction between the two, but the decision is for the regulator. The legislation provides that they could be, and it depends on the circumstances whether they would be. Of course, obviously, they play different roles.

[Kevin Brennan]

Just to clarify, I think the right hon. Gentleman is saying that in making no distinction, he would be able to apply the word “expect” to search engines as well as to ISPs. That is what I was probing him to find out.

[Matt Hancock]

I am choosing not to use that word because I want to leave it to the regulator, rather than leaving an implication that it should move one way or the other. The regulator should define what is an ASP according to the legislation.

[Kevin Brennan]

The Minister is therefore making a distinction between the two. In one case he clearly has an expectation that it will happen, and in the other case he does not. The Committee will be interested to know why he is making that distinction, which he denies he is making, because it is important to our understanding the reluctance in the Bill to involve search engines in some of these regulations.

[Matt Hancock]

They should be treated the same in that the same provisions in the Bill should be applied to each, but each performs a different role and ISPs are inevitably more closely connected to the provision of content because the content goes through an ISP, whereas a search engine may or may not be the route through which content is found. For implementation, it is clear that that is for the regulator to decide within the provisions set out in the Bill.

--- Later in debate ---

[Louise Haigh]

This is a very curious clause, which renders much of the well-informed—as the Minister said—and useful discussion that we have had today about enforcement, targeting smaller providers and restricting access across the web, completely and utterly redundant. If the clause as I read it goes forward unamended, it will provide the regulator with the ability to target only the largest providers of online pornography, perhaps even limiting its ability to target only them.

As we have discussed at length, this is an incredibly difficult area to police, which I appreciate. It is obviously going to be far easier to tackle the 50 largest providers, not least because I assume many of them are already providing some level of age verification and are probably more at the responsible end of online pornography content providers. I would remind the Committee of the Conservative party’s manifesto, which said:

“we will stop children’s exposure to harmful sexualised content online, by requiring age verification for access to all sites containing pornographic material”.

That does not make any reference to commercial providers or whether the provider has a large or small turnover, is on WordPress, Tumblr, Twitter, Facebook or Snapchat. Today’s debate has very much suggested that the role of the regulator will be to focus on those sites that are operated on a commercial basis. Given the Minister’s reluctance to implement internet service provider blocking, I do not believe that the manifesto commitment will be achieved.

[Kevin Brennan]

My hon. Friend is making a very interesting point. The clause refers to

“a large number of persons”

and

“a large amount of turnover”.

“A large number of persons” might be 1,000; it might be 1 million. Has there been any indication from the Government of what they mean by that?

[Louise Haigh]

As far as I am aware, we have had no indication from the Government at all. It would be very interesting to hear the Minister’s comments on that and on why the clause exists at all.

The Minister has been saying at length that he does not want to be too prescriptive to the regulator, but he is putting into primary legislation that the BBFC will be able to target, first and foremost, the larger providers and those that are more easy to target. I would imagine that a regulator in any regulatory system would go after the bigger and less problematic providers before those that are more difficult to tackle—no reasonable person would expect anything different. I find this confusing: why should the provision be in primary legislation, given the Minister’s overtures about not being too prescriptive and giving sufficient flexibility?

--- Later in debate ---

[Matt Hancock]

The clause gives discretion to the regulator. If the regulator went after the big porn sites first, it would not have the vires to distinguish and go after those who do the most harm earliest. It is important that it has the ability to make the legislation work in practice.

[Kevin Brennan]

That sounds pretty thin. It is almost like saying that the police would be acting in an ultra vires manner if they did not go after murderers ahead of shoplifters in terms of devoting their resources to their duties. Is that really the reason why this provision is in the Bill? If it is, it is a novel innovation by the Minister that is not often seen in legislation setting up a service.

[Matt Hancock]

As I have just mentioned in the discussion on the previous clause, some of the biggest sites on the internet have more than 2 billion visits a year. As the hon. Member for Sheffield, Heeley said, many sites are involved. Allowing discretion for a targeted approach is important. The clause also allows the regulator to

“carry out, commission or support…research…for the purposes of exercising, or considering whether to exercise”

the powers. That is important, too, because we want the regulator to have the power to conduct research to inform its views. Both those things are important parts of the execution of age verification.

Digital Economy Bill (Seventh sitting)

Kevin Brennan Excerpts

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

[Kevin Brennan (Cardiff West) (Lab)]

I beg to move amendment 92, in clause 26, page 26, line 18, leave out

“, or will expose the owner of the copyright to the risk of loss.”

This amendment and amendment 93 is a probing amendment to explore the impact of Clause 26 on account holders.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 93, in clause 26, page 26, line 35, leave out

“, or expose the owner of the rights to the risk of loss.”

See amendment 92.

New clause 3—Power to provide for a code of practice related to copyright infringement—

“(1) The Secretary of State may by regulations make provision for a search engine to be required to adopt a code of practice concerning copyright infringement that complies with criteria specified in the regulations.

(2) The regulations may provide that if a search engine fails to adopt such a code of practice, any code of practice that is approved for the purposes of that search engine by the Secretary of State, or by a person designated by the Secretary of State, has effect as a code of practice adopted by the search engine.

(3) The Secretary of State may by regulations make provision—

(a) for the investigation and determination of disputes about a search engine’s compliance with its code of practice,

(b) for the appointment of a regulator to review and report to the Secretary of State on—

(i) the codes of practice adopted by search engines, and

(ii) compliance with the codes of practice;

(c) for the consequences of a failure by a specified search engine to adopt or comply with a code of practice including financial penalties or other sanctions.

(4) Regulations made under this section—

(a) may make provision that applies only in respect of search engines of a particular description, or only in respect of activities of a particular description;

(b) may make incidental, supplementary or consequential provision;

(c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”

This would amend the Bill to present an opportunity for the Government to fulfil its manifesto commitment to reduce copyright infringement and ensure search engines do not link to the worst-offending sites. There is an absence of a specific provision in the Bill to achieve this.

New clause 33—Pre-loaded IPTV boxes—

“(1) The Copyright, Designs and Patents Act 1988 is amended as follows.

(2) In section 107(1)(d)(ii) after “offers” insert “, advertises”.

(3) After section 107(1)(d)(iv) insert—

(v) installs, maintains or replaces, or

(ii) otherwise promotes by means of commercial communications, or”

(4) In section 107(1)(e) after “article” insert “, device, product or component”.

(5) In section 107(1)(e) after “work” insert “or which is, and which he knows or has reason to believe is, primarily designed, produced, adapted or otherwise used in a manner described in this section whether alone or in conjunction with another article, device, product, component, or service supplied by or with the knowledge of the same person for the purpose of enabling or facilitating the infringement of copyright”.”

This new clause allows the Government to fulfil its commitment in the IPO’s Enforcement Strategy to ensure that UK business and rights holders have the necessary legal means to protect their IP. It brings in language to cover the supply of IPTV boxes clearly being marketed or sold for the purpose of enabling or facilitating copyright infringement, recognising that many devices may not, themselves, infringe copyright, but are supplied in conjunction with information which enables users to infringe copyright.

[Kevin Brennan]

Good morning, Mr Streeter. We now move to part 4 of the Bill. May I say first that it is a pleasure to serve under your chairmanship? I thank you and Mr Stringer for all the work that you have done so far in helping us to get through and scrutinise the Bill.

New clause 33 stands in my name and that of my hon. Friend the Member for Sheffield, Heeley. Although she is not in her place at the moment, I am sure that the rest of the Committee would want to join me in congratulating her on her efforts so far as a first-time Front Bencher. I only hope that I can come close to matching her assiduous scrutiny of—[Hon. Members: “Here she is!”] Right on cue, she makes an entrance so that I can complete my compliments for her efforts so far on our behalf and on behalf of the whole Committee in scrutinising the Bill.

New clause 3 is in the name of the hon. Member for Selby and Ainsty, but we have added our names to it because we think it a very good one. I hope that we can have a substantial debate about it this morning, because there are some real issues that we need to discuss.

This is quite a chunky clause. Amendments 92 and 93 are probing amendments. We just want to explore with the Minister the meaning of clause 26 and to clarify its implications. I should say at the outset that Opposition Members support the principle that there should not be any distinction between physical and digital copyright infringement, and therefore support the proposal in the clause to equalise the penalties for that kind of infringement.

For the benefit of the Committee, I point out that the penalty for digital copyright infringement will be increased, to equalise it with that for the physical world, from a maximum of two years’ imprisonment to a maximum of 10 years. That makes sense if we are to support the principle of there being no distinction between the two, although in supporting that principle we want to ensure that the penalty is used appropriately. Obviously, we want to hear about that from the Minister in his response.

It could be said that elsewhere in the Bill, because of its unevenness, is the implication that there is some kind of binary between the digital and the non-digital world. That, of course, is not true when we get into the real world. My hon. Friend the Member for Sheffield, Heeley, in her excellent scrutiny of the Bill from the Front Bench, has argued that we should have had a properly thought through digital future Bill, given all the issues in play, and that that would have done away with the false division that tends to exist between the digital economy and the general economy.

Instead, we have a bit of a Christmas tree Bill, on which the Government are hanging various vaguely related issues. That is what is in front of us, so that is what we must scrutinise, but the levelling of the law on copyright infringement is, I think, a partial acknowledgement of the point about the false division between the digital and the non-digital worlds. However, in increasing the penalty as the clause proposes, we must be sure that we do not leave a window cracked open for unscrupulous operators to be able to intimidate and take advantage of consumers, whom I do not believe the Government intend to target in the clause. I do not think that the Minister intends to target consumers, but he will tell us that in his response.

The issue is largely a matter of wording. Whenever we scrutinise legislation, however, we have to make sure that no aspect of the law is left unclear by muddled phrasing, so it would be helpful to the Committee—this is the purpose of our probing amendments—if the Minister explained the distinction made in clause 26 between

“the owner of the copyright”,

in line 18 and

“the owner of the right”

in line 35. What do the Government intend by the distinction?

--- Later in debate ---

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

Now we’re listening, Mr Streeter. Does my hon. Friend know what that represents in terms of sales?

[Kevin Brennan]

I shall stick strictly to the amendment, but I think it is mainly in relation to live performances, rather than through physical or online sales.

The impact of copyright infringement is very difficult to quantify precisely because not every copy of a music track that is illegally shared necessarily represents a lost sale. Nonetheless, the scale of illegal downloading and streaming of music remains significant and it continues to undermine the economic health of the UK’s music industry. The Ofcom Media Tracker survey, average retail prices and academic evidence taken together all suggest that the losses from piracy to the UK recorded music industry are between £150 million and £300 million a year. That is a significant loss of value to the UK economy and legitimate music-related businesses.

--- Later in debate ---

[Christian Matheson]

Do not many of the search engines make their money by prioritising businesses and organisations that have chosen to advertise with them? It is therefore easily within their power to change their algorithms at will to meet the requirements that my hon. Friend suggests.

[Kevin Brennan]

My hon. Friend is absolutely right: it is within search engines’ ability to change the algorithms. I had always thought that the problem might eventually solve itself, because when advertising is placed next to the results of an online search, the companies whose products and services are being advertised appear next to websites that are run in the shadows, often by criminal networks. Surely reputable businesses with statements of corporate social responsibility would not want their advertisements to appear next to a search that turned up an illegal website run by some gangsters somewhere in Russia. However, it turns out that search engines do not solely or even principally make their money from advertising; it is data that are valuable to them. As one of my hon. Friends said earlier, data are the new oil. It is the data acquired on individuals through search engine practices that are so valuable and that enable companies to put product placement in their advertising and search engines to tailor searches to individual consumers online. Embarrassingly, that fact once resulted in a Conservative Member criticising a quote of mine on the Labour party website because the advertising content that appeared next to it was to do with dating a certain type of person. The Member in question subsequently found out that the advert had been placed there not because the Labour party was short of money but because that advert was tailored to his personal search activities. Members should beware when making such criticisms.

My hon. Friend the Member for City of Chester is absolutely right that it is perfectly within search engines’ power to solve this problem. Some efforts have been made by Google, and they worked for a short time, but a search engine search for widely available music by some of the most popular artists in the UK will still return a lot of illegal results. The hon. Member for Selby and Ainsty may wish to cover that point in his remarks, so I will not go into further detail, but BPI research certainly indicates that.

The voluntary approach is not working. We have seen this movie before; we have downloaded it many times, and it always has the same inconclusive ending. New clause 3 would provide it with an ending to match one of the best last lines in the movies, which is “Shut up and deal.” Any offers from Government Members? It is from Billy Wilder’s great film “The Apartment”; Shirley MacLaine says it. The new clause would enable the Government to say to the search engines, “Shut up and deal,” because there is no incentive for search engines to do so at the moment. We are being helpful to the Minister, as is his colleague. We are trying to put a bit of lead in his pencil, and he should welcome this cross-party effort to ensure that progress is made.

One further point: I have a sneaky feeling that the Minister actually agrees with the new clause, although he will not agree with it today, and will want to make this change to the Bill but to do so in the House of Lords. If my prediction is wrong, I will take it back in due course. The only thing that I would say is that it does not do this House’s reputation any good when Governments behave that way. I accept completely that all Governments do it: they know that they want to make a concession on a Bill, but they decide to do it in the House of Lords rather than the Commons. Ultimately, although we hear all the talk about the House of Lords being such a wonderful revising Chamber, the Government should accept once or twice that hon. Members, including those of their own party, come up with amendments that are perfectly sensible and should be incorporated into a Bill. It would help the reputation of this House if the Government were prepared to behave in that manner.

One fundamental aim of the e-commerce directive was to identify clearly which practices fall within and outside safe harbour defences. Part of the legislation— article 16, to be specific—encourages member states and the Commission to draw up a code of conduct at community or national level. However, no such code of conduct has ever been drawn up due to resistance by the search engines. They should not be allowed to avoid parts of legislation at the expense of UK creative industries just because they find it inconvenient. The new clause would end the wasting of Ministers’ time in chairing meetings that go nowhere, the repetitive process of rights holders producing proposals and the practice of search engines consistently refusing to comply to combat piracy, thus ensuring that the digital economy continues to benefit both the UK creative industries and the British public.

New clause 33 is the last amendment in the group. Last month, the Government released their annual intellectual property crime report. Some of the trends are quite startling: they reported 33% more illegal TV programming downloads in March to May 2015 than in the same period in 2013—a rise from 12 million to 16 million. The report highlights as a major concern the proliferation of internet protocol TV, or IPTV as it is known, which offers viewers increasingly easy access to pirated digital content. Technological changes have led to exponential growth in this new form of piracy. Android-based IPTV boxes are being loaded with software linking thousands of streams of infringing entertainment, movie and sport content. The boxes are sold on mainstream marketplaces such as Amazon and eBay, and through Facebook.

The Copyright, Designs and Patents Act 1988 has yet to be updated to reflect the new technology. It offers no effective remedies to copyright owners, who at present can rely only on laws that are not particularly tailored to copyright infringement. The new clause would help prosecute those who pre-load and distribute such devices and make it easier to work with online marketplaces to remove listings by wholesalers of such products.

--- Later in debate ---

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

What a pleasure it is finally to stand to respond to the long interventions and speeches from Labour Members. It is a joy to hear that at least some of them understand and believe in property rights. Conservative Members certainly do.

The discussion has turned into a debate not only on amendments 92 and 93 and new clauses 3 and 33 but essentially on clause stand part. I therefore hope that Committee members will understand if I explain the whole clause in my response.

[Kevin Brennan]

The Minister is seeking to chair the Committee now as well as being the Minister.

[The Chair]

And he is doing it extremely well but it will be my decision.

[Matt Hancock]

It is a team effort.

The amendments are to clause 26, which increases the maximum sentence for online copyright infringement from two to 10 years, which is equal to the sentence for physical copyright infringement. The case for this has been made powerfully by Government and Opposition Members and it is an important change. Whether online or offline or a combination of the two, copyright infringement is IP theft and it is right that the maximum sentence is the same.

This sends a clear message that copyright infringement of either kind will not be tolerated and affirms that creators who produce the content that we all enjoy are valued. Furthermore, enforcement agencies will now have proportionate sanctions to tackle this serious criminality, whether offline or online.

We recognise that the maximum sentence of 10 years, even if only for the most serious cases, must be carefully targeted. Consequently, clause 26 also makes changes to the existing offence of online copyright infringement to make it clearer when that offence is committed and who should be considered liable. The amendments speak to some of those points.

The concept of prejudicial effect in the existing legislation will be replaced with a requirement that the infringer intends to make a monetary gain for themselves or knows or has reason to believe their actions will expose the rights holder to a loss or risk of loss in money. I will come to the debate around definition of that in more detail.

The point of this clarification is to act as a safeguard to ensure that the increased maximum penalty is applied only to serious criminals who deserve it and will not apply to those who share material accidently or without knowledge of the consequences.

Turning to the points made by the hon. Member for Cardiff West, or at least the ones that were pertinent—

[Kevin Brennan]

On a point of order, Mr Streeter. Am I right in saying that as the Chair of the Committee, had I made any points that were not pertinent, you would have ruled me out of order?

[The Chair]

I can certainly confirm that you were in order all the way through your comprehensive speech.

--- Later in debate ---

[Kevin Brennan]

We are getting to the crux of the matter: the words the Minister uses are very important. All joking and jibing aside, which he enjoys, there is a serious reason for laying these matters firmly on the record in Committee—that is our serious purpose here and our constitutional role. He said, “is not expected to be caught by this offence”. I fear that that is not really strong enough in response to my points. We need to understand whether it is possible for individual consumers to be captured by it. If so, the Minister should tell the Committee.

[Matt Hancock]

As I said, it is for the courts to decide about criminal infringement on a case-by-case basis, but I am making clear that that is unlikely and not the expected outcome in the case of a person who accidentally shares a single file without the appropriate licence. The reason I do not go further and make it absolute is to ensure that the court can make a fair judgment on this, rather than be bound. I want to go further, because there is another important point here about the impact of this on activities that are currently lawful. We do not expect things that are currently lawful to be caught by this change. This is a change in the scope of the sentence rather than in the definition of the offence. I want to make that very clear.

On the second point that the hon. Member for Cardiff West made about the legal distinction between “owners of copyright” and “owners of the rights”, “owners of copyright” relates to the offence of communicating to the public, whereas “owners of the rights” relates to the performer’s right of making available. This is a legal distinction: they are two separate offences but there is no substantive difference in the meaning of the two. The reason has to do with the legal drafting of the offence rather than the lay understanding of the meaning of the two.

The hon. Gentleman also raised the issue of trolls. I want to be clear that while we understand that some people may receive threatening letters from so-called trolls, we are not aware of any successful court case by these so-called trolls in this area. We do not endorse such aggressive tactics and we understand that this tactic is not widespread, but we will keep it under review.

Going more broadly into the debate that we have just enjoyed, since 2002, when the maximum custodial sentence for copyright infringement was changed, this has clearly been wrong. I am glad that there is all-party agreement on the change to 10 years, but in addition to increasing the maximum sentence, we have recast the relevant offences to include an additional element to the offences, which must be proved before an offence is made out, namely that the infringer intends to make a monetary gain for themselves or another person, or knows or has reason to believe that their actions will cause loss to the rights holder or a risk of loss in money. Amendments 92 and 93 would remove this additional element, but there are several reasons why it should be retained. We should remember that serious incidents of online copyright infringement or infringement of a performer’s making available right already fall within the scope of criminal law, as I mentioned.

It is right that the courts should be able to apply serious sanctions where they are warranted and apply the equivalent sanction to that available for physical copyright infringement, but it is our view that it is important to include the words, “risk of loss” to capture cases where the loss has not yet materialised. We believe that these same scenarios would fall within the current drafting of the offences, which relies on the prejudicial effect, but we have tightened the notion of prejudicial effect following consultation, to be more precise and targeted in the wording being examined today. I hope that satisfies the understandable request by the hon. Member for Cardiff West for clarity to be put on the record as to the intent of clause 26.

I now wish to turn to new clause 3 on search engines. We had a serious debate on the impact of search engines. We come from a position of being strong believers in the protection of property rights, and we want to ensure that the UK retains one of the best IP regimes in the world. Without content, there is no IP to protect, so I pay tribute to the BPI’s work: to support take-downs and to make the eloquent case for stronger IP protection. I also pay tribute to Get it Right from a Genuine Site, which does important work in making sure that culturally it is unreasonable—and seen as unreasonable—to take IP without paying for it.

I turn to my hon. Friend the Member for Richmond (Yorks) who made an important point on newspaper articles that appear in search engines. We support fair remuneration and we encourage content providers and online platforms to work together on this. This is an issue that has been raised with me directly, and it is pertinent to the debate. We want to encourage investment in new content, and we support returns for investigative journalism and other kinds of journalism, and I hope we come to a resolution on fair remuneration between content providers and online platforms, in the first instance. However, my hon. Friend’s intervention is noted.

In relation to clause 3, as the Committee knows from the discussion, the Minister for Intellectual Property, Baroness Neville-Rolfe, has been working closely with search engines and representatives of the creative industries. We are fulfilling our manifesto commitment to ensure that there is a fair return, and the group is currently considering a voluntary code of practice. I agree with the thrust of the arguments made by my hon. Friend the Member for Selby and Ainsty, who put the case strongly. Our intention is for the voluntary negotiations and the voluntary code of practice to come to a successful fruition, and the people involved in those negotiations will doubtless have heard the argument and understood the strength of feeling on this Committee. Given this ongoing work and the existing remedies for removing or blocking infringement content, I hope that hon. Members will agree that now is not the right time for a broad reserve power.

[Kevin Brennan]

Surely now, when we have a legislative vehicle in front of us that could not have been better designed for this very purpose, is exactly the right time. Committee members would have a right to be annoyed if, in making this broad assertion that now is not the right time, the Minister were subsequently to concede on this point at a later stage in the Bill’s progress, in another place and in an unelected House. Will he tell us truthfully what the Government’s intentions are on this point?

[Matt Hancock]

I care about the substance of getting this Bill through right. There are, of course, important parts of parliamentary process both here and in the other place. Given that the round-table discussions are ongoing, including a meeting next week, now is not the right time for the broad reserve power.

New clause 33 seeks to expand the criminal liability to include the supply of IPTV boxes for criminal infringement. As hon. Members will understand from the tone of my remarks, as a strong believer in property right protection, I understand the concern. The hon. Member for Cardiff West referred to the Copyright, Designs and Patents Act 1988 and the fact that the Minister for Intellectual Property had committed to making sure that we looked at this, and we have done so. This activity is already covered by criminal law under the Fraud Act 2006 and the Serious Crime Act 2015. The City of London police force is investigating cases. It seized over 500 set-top boxes earlier this year and arrested a man for fraud and IP offences.

There is a danger in the digital world of legislating for a specific technology as opposed to legislating for the offence in a technology-neutral way. I strongly prefer the latter. As the law is already in existence in the two Acts that I mentioned, the best thing to do is to prosecute under the existing Acts, rather than try to chase a particular technology, which may well be out of date. Our strategy for tackling IP crime includes a specific commitment to developing an understanding of the challenges posed by IPTV. We now need an approach that tackles the problem, rather than just current IPTV set top-box technology, which will no doubt be superseded in due course by future technologies. The existing criminal offences provide a legislative framework that is broad enough to protect our creative industries. However, I will of course keep this area under review.

I hope Members have been reassured of the work we are doing to make sure we apply the existing criminal law and make sure that intellectual property is protected. I concur with all the remarks made by Committee members about the importance of the creative industries, the importance of supporting content providers and the importance of intellectual property. I hope that with these explanations, the hon. Member for Cardiff West will feel able to withdraw the amendment.

[The Chair]

Before I call Mr Brennan, it may help the Committee to know that it is not my intention to allow a wider debate on clause 26. We have had a good old canter around the course.

[Kevin Brennan]

Thank you, Mr Streeter, for letting us know your decision—not influenced at all, I am sure, by the efforts of the Minister to chair the Committee as well as leading for the Government. I will take into account in my response that you are including clause stand part in this part of our debate.

I made it clear at the outset that amendments 92 and 93 were probing amendments and I am very grateful for Minister’s explanation of the meaning and intention of the wording. As I have made clear, it is not our intention to push the amendments to a Division, but I think we need to cogitate a little further before Report and the latter stages of the Bill and perform a more careful exegesis of what the Minister said when he used the phrase “not expected”.

[Matt Hancock]

I can go yet further on that. The reason this is rightly done on a case-by-case basis is that we are talking about an existing offence. It is important to remember that. We are not making something illegitimate which is currently legitimate; we are adding to what is required to make out an offence. We are not making something that is currently legitimate now illegitimate. That is why it is reasonable to proceed on that basis, with the language that I used.

[Kevin Brennan]

I am grateful for the further clarification and for the Minister engaging in the discussion. We will think further about what he has said. I think it has been a very helpful exploration of the issue. I am not sure that he is right when he receives advice that the trolling issue is not widespread, which was the phrase he used. Obviously we can dig into that a bit further as we progress with scrutinising the Bill, but I welcome the fact that he said he would keep that under review. This is a very real issue and the fact that there may not be many prosecutions around it is often related to the fact that such activity is not necessarily illegal—the point I made in my contribution. Nevertheless, it can bring great distress to vulnerable individuals. We all know that the issue of vulnerable individuals being targeted by unscrupulous individuals, organisations and networks online is growing.

[Matt Hancock]

The challenge, though, is to ensure that reasonable protection of intellectual property is not ruled out by stopping any such speculative activity. There is a genuine policy challenge in how to support the protection of intellectual property. We are not aware of any successful legal cases by the trolls. People should therefore be reassured.

[Kevin Brennan]

Quite the opposite, actually. The fact that there have not been any successful legal cases indicates that people are being very successfully scammed out of money because they are too afraid to resist the trolls who come to them saying, “You have infringed copyright.” The fact that there have not been legal cases should be a cause for concern, not complacency. The Minister might like to give that further consideration.

As we have made clear, our intention with the amendments is absolutely to support the protection of those whose intellectual property has been infringed. That is our aim, but as ever there is a balance to be struck. We want to ensure that the most vulnerable in society are not easily targeted by unscrupulous people using the fact that members of serious criminal networks engaged in copyright infringement can go to prison for 10 years under clause 26 to frighten them. Those vulnerable people may not always completely understand the law around intellectual property when they are online, and they could get a notice that could scare them into parting with some of their money. Such cases are a real problem across society in general, and this is just one area of these activities. We should be aware of the problem and be concerned about it. We should not be complacent.

As I have outlined, it is extremely unlikely that any such cases will come to court, because the people claiming that copyright infringement may have taken place are not interested in taking anyone to court. They are only interested in sending out enough notices to get a small number of people to respond and hand over their cash.

It is the same as when scammers send out millions of text messages and phone calls saying that a relative is stranded in some other country and asking for money to be sent immediately. They may say, “We have a wonderful investment that you should participate in,” or, “You as an elderly person should put your money into something, because then you can provide for your children and grandchildren. It’s a sure thing.” All those sorts of activities have become much more prevalent because of the internet, and this issue around copyright infringement is just one area of that. That is the point we are making.

I urge the Minister to go away with his officials, to think a bit more about this issue and to consider how we might be able to reduce the possibility of it becoming an even bigger problem in the future, with the 10-year sentence being used to frighten people even more than they are already being frightened by these scammers and so-called trolls.

Obviously we will not be voting on new clause 3 at this point, because that always happens at the end of Committee proceedings, as you rightly reminded us, Mr Streeter. The hon. Member for Selby and Ainsty made it clear that it is not his intention to divide the Committee on his new clause when we reach that stage, but I say to the Minister that saying simply that it is not the right time for such a measure is not good enough as a response to the range of serious issues raised by Members of all parties.

[Thangam Debbonaire]

I wish to ask the Minister whether he will give us some idea of the criteria by which he will assess when the right time is. I have no way of knowing for sure when that will be without an understanding of his reasoning and the reasons there might be for changing his mind in future.

[Kevin Brennan]

Obviously I cannot speak for the Minister, but he is free to say something after I have sat down. He is free to intervene now if he wants to clarify that point for my hon. Friend. It would be helpful if he did so, because I think this is exactly the right time for the measure. That is the purpose of new clause 3 and the thinking behind it. The talks have been going nowhere. As I have said, we have seen the movie several times before, and we know how it ends.

[Christian Matheson]

My hon. Friend makes a good point: talks are going nowhere. Would an indication from the Minister that there is an intention to bring the proposals forward into legislation perhaps aid those talks in going somewhere?

[Kevin Brennan]

In a nutshell, that is the reason for new clause 3, and I am sure that was exactly the thinking of the hon. Member for Selby and Ainsty when he tabled it.

It might help if the Minister indicated when he expects the talks to conclude. He says he hopes there will be a positive outcome to them and that this is not the right time for new clause 3. He likes to talk softly; if new clause 3 were incorporated into the Bill, he could carry a big stick while talking softly about this matter. If he is not prepared to amend the Bill, perhaps he could tell the Committee when he believes the talks should conclude, as that would help to focus minds a bit. Perhaps he could put it on record that he is not happy to allow the talks to drift on and on inconclusively, as they have for many years.

We are not satisfied with the Minister’s response on new clause 3, and I repeat that it is my belief that at some point during the progress of the Bill the Government will concede on that point. It would be a terrible shame if they did not concede to the hon. Member for Selby and Ainsty—one of their own elected Members here in the Commons, who has tabled a sensible amendment—but did so in another place, giving the credit, yet again, to the unelected House for being a wonderful House in revising legislation. There is plenty of expertise right here in the Committee and in this House, among elected Members who know about the subject and know that this is the right thing to do. I urge the Minister to change his mind about new clause 3, if not now, perhaps on Report, when we will no doubt return to the issue.

Finally, I hope it is helpful to you, Mr Streeter, to be aware that it is not my intention to divide the Committee on new clause 33. As for the Minister’s response, I think I referred to the shortcomings of the current offence. I did not say we did not think that people could currently be prosecuted, under the Fraud Act 2006 or the Serious Crime Act 2015; in fact, I specifically mentioned those Acts—it might have been while the Minister was searching for something online. I also mentioned why the Acts were inadequate, and the Minister did not respond. First, they require a great deal of expertise in the area on the part of the police, which is not necessarily a resource that is sufficient to meet the growing size of the problem. Secondly, by amending the Copyright, Designs and Patents Act 1988, my new clause would have not just allowed but compelled trading standards to get involved and would have allowed the body to take action.

It would be useful to hear from the Minister why he does not think it a good idea that trading standards should be brought into play in that way, rather than simply relying on a police force that is under pressure and has many things to investigate—an ever-growing problem. Is it the Government’s position that is it wrong that trading standards would be the right body to involve? It would be extremely useful if the Minister felt able to clarify that. He said that he would keep the matter under review. I welcome that, and I hope he will be able to tell us more about the issue at a later stage, but if he told us at this stage why trading standards is not the right body to involve, that would be helpful.

We have had a fairly comprehensive debate. I do not think I need to add much on clause stand part, apart from that the latest data, published by the IPO, demonstrate the need for Government action. The research found that 15% of internet users—6.7 million people—still access copyright-infringing content, so it is absolutely right that the Government should act. I hope that the Minister feels able to add a bit more, in light of what I have said.

[Matt Hancock]

Very briefly, I mentioned that one of the meetings in the negotiations with search engines is next week. We expect the meetings to conclude over the next few weeks, and that is why the timing is appropriate.

[Kevin Brennan]

Perhaps I am speaking against what I said earlier, but if the Government do not give way on that point and the talks conclude unsatisfactorily before Christmas, while the Bill is still before Parliament, will they consider amending the Bill at a later stage?

[Matt Hancock]

I do not want to get into answering conditionals that are dependent on some future action. I have made the case for why now is not the right time and I have given the hon. Gentleman the timeframe over which discussions are taking place.

The hon. Gentleman made the case against new clause 33 very well. These are criminal activities, and it is the police’s role to police them. There are increased resources for the police in this area and I look forward to their taking it on. Our principle is not to legislate for specific offences based on an individual technology when offences already exist that can be used to prosecute the illegal activity.

For instance, many IP TV boxes are sold without any software on them; some have it inbuilt and some do not, and the ones that do not can be used for legitimate and illegitimate purposes. It is far better to have an in principle criminal measure on the statute book and to prosecute with that. Everybody can see the united strength of purpose to ensure that such IP theft does not go unpunished.

--- Later in debate ---

[Matt Hancock]

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

[Kevin Brennan]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 26 ordered to stand part of the Bill.



Clause 27

Registered designs: infringement: marking product with internet link

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

[Kevin Brennan]

I hope that we can dispose of clause 27 more briefly than clause 26; I am sure we will, because it does not contain such controversial matters. By including an internet link in the ways in which a designer can indicate to consumers that their design is registered, clause 27 will remove the excuse that a potential or actual infringer did not know that a design had been registered. Like clause 26, it will do away with the false binary in law between online and offline by offering a digital means of checking design right protection. As I understand it, in addition to or instead of including the design registration number on the product itself or on the product packaging, the designer may include details of or a specific link to a website, with the important caveat that that website must be available at no cost to the visitor and must clearly associate the product with the number of the design. That ought to make it easier for designers to update and communicate design registration and other information about the rights associated with products without constantly having to change their packaging or their products. That will, in turn, make registering design cheaper for the designer.

--- Later in debate ---

[Nigel Adams]

The hon. Gentleman is yet again spot on. It clearly is of its time. The idea was to try to help a nascent cable industry, and the legislation has done that; we have a healthy TV industry across all broadcast platforms, including cable and satellite. That legislation has done its job.

On pay TV platforms, such as Virgin and Sky, up to 50% of some of our most valuable content, such as drama, is viewed via subscription personal video recorder, from which the pay TV platforms derive substantial benefit. That undermines the commercial PSBs’ ability to secure a return from advertising, because much of their advertising is skipped, and materially reduces as critical opportunities to generate secondary revenue—for instance, from on-demand services or box sets—because libraries of valuable drama content can be built up for free on the PVR. I therefore urge the Government to ensure that repeal of section 73 is delivered at the earliest opportunity. That would mean that those who wish to re-transmit or otherwise use PSB services in the future will have to negotiate to do so, which seems only fair. They should be able to negotiate within the must-offer regime in the Communications Act 2003. That would enable those who create the content to make a return on their investment and continue to make the programmes that viewers love, which are the envy of the world.

There has been extensive consultation on the issue so there is no need for further delay. I will therefore be very grateful if my right hon. Friend the Minister can provide more detail on the timeframe for the repeal of section 73 of the 1988 Act, as included in clause 28.

[Kevin Brennan]

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

[Calum Kerr]

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

--- Later in debate ---

[Kevin Brennan]

I am sure the Minister has heard what the hon. Gentleman said and will want to address it in his response. The hon. Gentleman is quite right to point out that Virgin in particular will be affected.

The Government’s reform is well meaning, but they need to explain how it will not put further pressure on the public service broadcasting compact. They need to answer questions about their long-term plans for television distribution and how this part of the Bill affects that. Public service broadcasters exist for a reason, as an intervention in the market and as part of public policy. We need to ensure that they do not accidentally drift out of existence or into insignificance, and we need to know the Government’s intentions.

In their response to the consultation on the repeal of section 73, the Government said that they do not expect or want to see charges from public service broadcasters to cable operators for their main channel content. If that is so, I ask the Minister in a genuine spirit of inquiry whether there is an argument for the Government to make it clear in legislation that they do not want to see such charges, because at least some of the public service broadcasters do not share that view. None of us believes that a dispute between a major public service broadcaster such as ITV and a major TV platform such as Virgin is in the viewer’s interest.

The amendments are intended to explore whether the Government are sure that they are not risking those viewers ultimately having to pay more than they should for what should be a free public service broadcast. What is the Government’s view on the risk that those viewers could lose that service, at least for a period of time, if a major dispute of that kind arose as a result of the repeal?

Digital Economy Bill (Eighth sitting)

Kevin Brennan Excerpts

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

[The Chair]

I call the shadow Minister to continue—[Interruption.]

[Kevin Brennan (Cardiff West) (Lab)]

I thank the Minister for his warm acclamation of support for my continuing. As he will be aware, any huffing and puffing may influence how long I speak, but perhaps not in the way he hopes. It is a great pleasure to see you back chairing our proceedings this afternoon, Mr Streeter, having done so ably this morning without needing to heed any of the unsolicited advice from the Minister on how to chair a Committee. You did an absolutely superb job, and everyone on the Committee thanks you for that.

When stumps were pulled this morning, we were discussing amendment 189. To remind the Committee, that amendment calls on the Secretary of State to

“produce a report on the implication of the repeal of section 73 of the Copyright, Designs and Patent Act 1988, and…undertake a comprehensive consultation on the future of television content distribution and public service broadcasters.”

We feel that the repeal of section 73 has big potential implications, and we need to know what the Government’s strategic thinking amounts to on those issues. I was talking about how things were 30 years ago with public service broadcasters. They were reserved access to valuable spectrum and given prominence on that spectrum. That created a valuable and well-funded monopoly, whether that was advertising revenue for ITV or money from the licence fee for the BBC. We were going to discuss how every aspect of that original deal is undergoing rapid change, and that is why our amendment is important.

Spectrum is more valuable than ever. In 2015, Ofcom acknowledged that if the spectrum that public service broadcasters use was priced commercially, it would be out of reach for PSBs. Then again, other distribution methods are evolving rapidly. It is perfectly possible to imagine a day when spectrum is not used for direct TV broadcast at all, and that day might not be as far in the future as we might think.

We know that the prominence of public service broadcasters is coming under enormous pressure. Recent moves by Sky have made it very hard to find live TV or public service broadcast content at all, and that is potentially a serious assault on the public service broadcasting compact. Prominence enables scale, and scale has been the commercial and policy basis of our public service broadcasters from the start. It makes them economic and makes the notion of public service broadcasters tangible, so that they are not just widely available, but widely watched. We will return to that topic in our consideration of the next group of amendments, but it is relevant to any report that might be produced through the amendment.

Public service broadcasters are no longer the cash cow monopolies that they arguably once were. We have been in a multi-channel world for a long time, but on-demand viewing is accelerating that change even further. Public service broadcasters are not just competing for viewers with commercial channels, but with different offers from such organisations as Netflix, Amazon and YouTube and from other options, such as gaming. Netflix now outspends the BBC on original content development. It is a significant player in the original content market.

To be clear, I am not necessarily echoing what the Prime Minister said in her speech to the Conservative party conference. She seemed to be trying to channel Sam Cooke by saying, “Change is coming”, many times during her speech, but plenty already has changed, and the pace of that change is accelerating. The Government need to face up to this, and that is why we are suggesting that they should hold a proper review of the interconnected issues of distribution, carriage, content creation, prominence and funding before developing and pursuing a clear and fair strategy for television distribution in general, and public service broadcasting distribution specifically. That is what this amendment seeks to achieve. Without that proper vision for how our public sector service broadcasters will operate in a fast-changing, multi-distribution, multi-channel, globalising world, we worry that not only will they not thrive as public service broadcasters, but that ultimately they may not survive. As I said earlier, we should not allow that to happen, and we certainly should not allow it to happen by accident.

The Minister must make it clear that he wants public service broadcasters to survive. I believe that he does, but he also has to make the Government’s strategy clear in the light of this rapidly changing, complex world. It is to be hoped that he can partly do that in response to the amendments, as well as laying out his views on our suggestion of producing a comprehensive report on the subject.

We are also discussing amendment 94, which is a probing amendment that is intended to tease out a timeline for the repeal of section 73. It relates a little to the amendment that the hon. Member for Selby and Ainsty moved earlier in that it has a similar purpose. We just want to find out what the Government’s thinking is. Our amendment differs from his in that it states that the repeal should come into effect two months after Royal Assent, whereas his amendment states that it should come in immediately after Royal Assent. We will not press amendment 94 to a vote, but we want to hear the Minister’s thoughts and plans in relation to it.

[Nigel Adams (Selby and Ainsty) (Con)]

The hon. Gentleman may well cover this in his further remarks, but I would be delighted to hear his view on why there should be a two-month delay after Royal Assent.

[Kevin Brennan]

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

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

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

Subsection (3) states:

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

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

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

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

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

“make transitional, transitory or saving provisions”

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

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

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

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

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

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[Matt Hancock]

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

[Kevin Brennan]

Will the Minister give way?

[Matt Hancock]

No. The Government are committed to repealing section 73 of the Copyright, Designs and Patents Act 1988, following public consultation which ended this year and concluded that section 73 is no longer relevant. Amendments 63, 64 and 94 seek to ensure that the repeal will be brought into force rapidly following Royal Assent and amendment 189 would provide for the Government to produce a report on the implications and a consultation on the future of television content distribution and public service broadcasters. I should say that after today’s Committee session I think that my hon. Friend the Member for Selby and Ainsty will be known as “the IP king”. He has been the most ardent defender of intellectual property and its protection and he made very strong arguments.

On the case for a report and a consultation, Opposition Front Benchers asked the Government to face up to the challenges of new technology and its impact on public sector broadcasting and more broadly, and it is absolutely true that there is a huge impact of technology, both in distribution methods and in software, in terms of how we are watching content. Indeed, I understand that in China more films are watched on a hand-held than on a fixed device, and the trend is in the same direction here. This is clearly a very big issue and I am glad that all members of the Committee are alive to it.

I would say, though, that in response to amendment 189, we did just hold a public consultation precisely on the balance of payments between television platforms and the public sector broadcasters which considered the regulatory framework. It considered these questions and came forward with the proposal to repeal section 73. So I gently say to Opposition Front Benchers that, although I can see the point of the amendment, the report that they seek and the consultation that they are asking for by way of what I accept is a probing amendment is what we delivered through that consultation earlier in the year. The changes that we are seeking to make in legislation are a conclusion of exactly the sort of consultation that they have been looking for. The consultation was published on 5 July. I am glad that its conclusions have cross-party support.

We strongly support public service broadcasting in the UK. We believe that it has a long, vital and sustainable future and we will ensure that it does. I cannot give a clearer commitment to public service broadcasting. Even through these changes in technology, the evidence on viewer habits shows that public service broadcasting remains valued and valuable, and we support it.

I turn to some of the detailed questions. I was asked about the TPS regulatory regime. That was also considered as part of the consultation. We decided that different regulatory regimes are still appropriate, given the differing technical requirements of different TV platforms. There is a big change: an amalgamation of different delivery platforms for broadcasting from the old cable, terrestrial and satellite, and increasingly things are moving to broadband and fibre.

Following our discussion last week, I note that today TalkTalk has announced a full roll-out of full fibre to the whole of York, so there is progress in the full fibre drive that we are looking for in this country. However, there remain different technologies, so we think that it is still appropriate to have different regulatory regimes for them, although clearly the interoperability between them is important. I hope that that explanation addresses the point.

[Kevin Brennan]

Does the Minister have any concerns, or did the review reveal any concerns, about the point that I made about the opaqueness of the kind of deal now done under the TPS regime? That makes it impossible to judge whether it is truly fairer to public service broadcasters.

[Matt Hancock]

I will come to that and answer it alongside the question about the impact of removing section 73 where there are must-offer obligations. In truth, there are a huge number of commercial deals between the public service broadcasters and those that carry the PSB content to a wider distribution network. Whether it is through the TPS regime or the regime that we are discussing, many PSB broadcasters have contractual arrangements for their non-PSB content. That happens perfectly reasonably, whether it is through that regulatory regime or through a non-PSB deal delivered using non-satellite transmission.

We do not expect PSB content to be withdrawn because of the existence of contractual arrangements for PSB content replacing section 73. Indeed, there are contractual arrangements for lots of non-PSB content, so I do not see why those contracts cannot be entered into, but the issue does lead to the question whether there should be a transitional regime to ensure that there is no interregnum.

In the event of a PSB and a platform failing to agree terms for the carriage of a service, it is for Ofcom to consider whether the proposal of the PSB was compliant with the must-offer obligations in its licence. Were Ofcom to conclude that it was not, it would expect the PSB to submit a revised offer to the platform. Until now, Ofcom has not had to intervene, because no disputes have arisen presenting any real risk of refusal to supply by PSBs or to carry by platform operators.

The timing question was raised by my hon. Friend the Member for Selby and Ainsty and by the Opposition. The consultation report included an assessment of the implications of repealing section 73, and there was recognition of the potential impacts on the underlying rights market, meaning that the Government have decided that a further technical consultation should be run by the Intellectual Property Office.

I assure the Committee that the Government have every intention of bringing into force the repeal of section 73 rapidly; we plan to do it before the start of summer recess 2017. Repealing section 73 immediately could impact rights that have previously been exempt from remuneration in relation to the underlying copyright content in cable retransmissions, such as those held by scriptwriters or musicians whose intellectual property forms part of the relevant broadcast content. Our approach is to ensure an orderly transition.

Some respondents to the original consultation said that there could be disputes between the cable platform and the underlying rights holders when trying to agree terms and that a transitional period may be helpful. The Intellectual Property Office is currently running a brief technical consultation, as has been mentioned, to examine the extent of those issues and to assess whether any transitional measures are required.

I do not want to prejudice the outcome of the consultation, but in terms of whether a transitional period would be required, the IPO’s consultation seeks views on options ranging from no transitional period to a transitional period of up to two years following Royal Assent. Even if the full transitional period is decided on as a result of that consultation, and assuming that the Bill receives Royal Assent in spring 2017, we expect the repeal of section 73 to come fully into force by spring 2019 at the latest.

[Kevin Brennan]

The Minister talked about bringing the repeal into force rapidly before the summer recess in 2017, and then issued further caveats and talked about 2019. Will he clarify that for the Committee?

[Matt Hancock]

Yes. We will bring the repeal into force before the start of the summer recess in 2017. There may then be a transitional period, depending on the current IPO consultation, but the maximum transitional period, should there be one, will be two years. I added two years on to the summer recess of 2017 to get to what the Government call spring 2019—it will probably be the warmer end of spring.

--- Later in debate ---

[Matt Hancock]

It is a four-week consultation and it started yesterday, so it has three weeks and six days to run, if my maths are right.

[Kevin Brennan]

I am grateful to the Minister for clarifying that timetable as he envisages it. In addition to that, during the course of my remarks I talked about the possibility of a dispute arising between a public service broadcaster and a platform following the repeal of section 73. What is the Minister’s view on how that sort of dispute could be resolved without consumers being affected?

[Matt Hancock]

That could easily be resolved by a contractual agreement, as the two parties in such cases have in many other examples. For example, Channel 4 has a PSB element and non-PSB channels. The non-PSB channels are not covered by section 73, so the PSB element of Channel 4’s broadcasting will be in a similar position to its non-PSB element in future. Since those contractual arrangements exist between the parties covered by section 73, I see no reason why they cannot pretty quickly put in place similar contractual arrangements, not least because the decision to repeal section 73 was taken some months ago and the companies have had some time to prepare.

The final point raised was about the impact of the repeal on Virgin Media’s broadband roll-out. I see absolutely no link between the two. I am delighted that Virgin Media is looking at a broader, full-fibre roll-out, in the same way that TalkTalk has announced further progress today. Nobody at Virgin Media has raised this link with me, and given that Virgin Media is owned by one of the most well-capitalised companies in the world, I cannot see any crossover between the two—and I think it is disingenuous to suggest there is. With that, I hope hon. Members will withdraw the amendments so we can proceed.

[Kevin Brennan]

As I made clear, it is not our intention to put our amendments to a vote at this stage. The debate was extremely interesting, important and useful, despite the Minister’s seeming resentment of having debates that go into the detail of the Bill and despite his remarks about rising early. He should be careful about making such remarks, given that he was late for the first sitting of the Committee.

There is an important issue at stake here: in our proceedings, the Government get their way because they have a majority, but the Opposition have their say. That is the constitutional principle on which we are all here and it is the role that we play. The Minister’s continual grumpiness about that is not helping his cause. I thought it was a useful debate that has revealed and drawn out more clearly some of the Government’s thinking on the timetabling of the repeal of section 73. We are not going to put our amendments to a vote at this stage, but these are matters we might revisit later.

[Nigel Adams]

I very much enjoyed all the contributions, which were incredibly complete, informed and eloquent.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[The Chair]

With this it will be convenient to discuss the following:

New clause 14—Digital broadcasting and protection of listed sporting events—

‘Within 12 months of this Act coming into force, the Secretary of State shall commission an evaluation of the impact of developments in digital broadcasting on the protection of listed sporting events for public service broadcasters, and shall lay the report of the evaluation before each House of Parliament.’

New clause 17—PSB prominence—

‘(1) The Communications Act 2003 is amended as follows.

(2) At the end of section 310(1) add “that satisfy the qualification criteria to be set by OFCOM in the code.”

(3) In section 310(2) leave out “OFCOM consider appropriate” and insert “required by OFCOM”.

(4) In section 310(4)(a) after “programmes” insert “, including on-demand programme services,”.

(5) In section 310(5)(a) after “service” insert “, including on-demand programme service,”.

(6) In section 310(8)(a) after “services” insert “, including on-demand programme services,”.

(7) In section 310(8)(b) after “services” insert “, including on-demand programme services.’

This new clause would modernise the PSB prominence regime – as recommended by Ofcom in its 2015 PSB Review. Provisions in the Communications Act 2003 currently only apply to traditional public service TV channels on traditional TV channel menus (‘EPGs’). This proposal would extend the law to on-demand services such as catch-up TV and to the connected TV on-demand menus where such services are found.

[Kevin Brennan]

We are dealing with this group in a slightly novel way. I will discuss new clauses 14 and 17 and then move on to my clause stand part remarks.

New clause 14 calls on the Government to produce a report exploring the options available for future-proofing the at-risk listed events regime, which helps ensure that sporting events such as the Olympic games remain universally and freely available. The listed events regime has been enormously successful and is popular with the public, but it is undoubtedly currently at risk and could become obsolete unless the Government take action to make sure that that does not occur.

I ask the Minister to consider revising the qualifying criteria to deliver a listed events regime fit for the digital era, which we are discussing in this Bill. Since the 1980s, successive Governments have sought to ensure that TV coverage of certain major sports events remains available to everybody, irrespective of their ability to pay. The UK has an A list, which is designed to preserve live coverage of certain major events on free-to-air television—for example, the Olympic games, the football World Cup, the Grand National and the rugby World Cup final. There is also a B list that does the same for TV highlights—for example, the Six Nations rugby tournament and the Commonwealth games.

The listed events regime helps ensure that events such as the Olympics, the recent European football championships—in which Wales reached the semi-final—and Wimbledon all reach the widest possible audience, delivering enjoyment to millions, inspiring the next generation to get active, creating role models and helping make sport aspirational. In total, 45 million people in the UK watched Rio 2016 and the Euros this summer and more than 10 million people watched Laura Trott and Jason Kenny on BBC television both secure gold medals on the same day at Rio 2016.

The listed events regime strikes a balance between ensuring the public can gain free access to major events and the understandable desire of pay TV operators and sports federations to try and maximise their commercial revenues. Importantly, the regime does not prevent pay TV from acquiring TV rights to listed events; it simply ensures that qualifying services can acquire the free-to-air rights on fair and reasonable terms.

Under the current rules, the benefits of the listed events regime are restricted by statute to channels that are first, free, and secondly, received by at least 95% of the UK population. Those criteria are becoming increasingly outdated as the number of homes giving up their TVs for other media devices begins to rise; the 95% criterion will probably not be met by any TV channel at some stage in the course of this Parliament. It would be interesting to know whether the Minister recognises that that is the case and whether Ministers are thinking about it.

As a result, regulators would have no clear legal basis for discriminating between channels, which would likely lead to listed events being ultimately far less widely available and watched. That shows quite clearly that the qualifying criteria need updating, and there are options for doing that. We are trying to explore those options with our new clause in Committee this afternoon—performing our proper constitutional role, much to the resentment of the Minister.

The BBC prefers the option in which the 95% reception criterion could be updated and replaced with a measure testing whether the channel is widely watched. That would require a qualifying service to have reached at least 90% of the public in the last calendar year. That would ensure that the public continued to have access to these sporting events on channels that are easy for audiences to find and that we know they actually watch in large numbers; that is obviously the intention of the current regime. That measure would be a proxy for factors including free-to-air continuous availability, popularity and audience awareness. The proposed test would be consistent with the spirit of the regime and aligned with wider public benefits such as offering moments of national celebration and inspiring physical activity, as well as being simple to implement and more stable than the current reception test.

Furthermore, such a test would be open to any service that was free at the point of use, committed to maximising access and not tied to any one distribution platform, so it would be more able to incorporate broadband streaming, for example, as counting towards the reach of a service as and when the infrastructure allowed. That would prevent the regime from being manipulated by organisations whose purpose was to maximise the attractiveness and availability of pay TV services by providing nominally free coverage on channels that may meet an availability threshold but of which there is very low awareness.

There are alternatives. It has been suggested that the qualifying criteria might be interpreted differently—I am talking about adding broadband availability towards the 95%. However, some feel that that may involve major risks. The combined coverage of the UK’s commercial digital terrestrial TV multiplex and broadband may well allow services distributed via those means to qualify, yet their geographic coverage would exclude large rural areas. That would particularly be an issue—I say this as a Member representing a constituency in Wales; I am sure that the hon. Member for Berwickshire, Roxburgh and Selkirk, who speaks on behalf of the Scottish National party, will be aware of this—in the nations, where there is often greater difficulty with coverage in large rural areas, but it also applies to parts of rural England and, indeed, Northern Ireland.

Furthermore, broadband will not be able consistently to deliver a guaranteed quality of live streaming to mass audiences for some time to come. The BBC, in particular, feels that including broadband in the criteria implementation would be hard to measure and to implement.

The report proposed in our new clause would be an opportunity to fully explore concerns and the different options available for modernising the listed events regime. As I said, those events are very much valued by, and seem very much to be of benefit to, the public. Four in five people say that listed events are important to society. One in four said that the BBC’s 2012 Olympic coverage inspired them to take part in sport. Wide exposure of free-to-air sport can inspire, create role models and make sport aspirational. Indeed, it can bring the country, and the nations within the UK, together. Public service broadcasters likewise understand the importance of listed events and are committed to making sport freely available to all. Even though public service broadcasters are responsible for only 5% of sports output in the UK, they are responsible for 60% of sports viewing. That is something we would not wish to lose as a country, almost by accident, because of the technological changes that we have been discussing.

The UK has a mixed ecology that balances the public’s free access to major events with the potential for pay TV operators and sports federations to generate commercial revenues. The threat to listed events may radically tilt that balance. Rather than risk the abolition of listed events by the back door, Parliament and the Government should urgently consider revising the qualifying criteria to deliver a regime fit for the digital era. With this amendment, the Digital Economy Bill could be the vehicle to ensure that this happens. I shall be extremely interested in what the Minister has to say about this, and in the Government’s view of this important and much cherished feature of our sports broadcasting ecology. The Minister can feel free to dilate at length when he responds.

New clause 17 stands in my name and that of my hon. Friend the Member for Sheffield, Heeley. It proposes modernising the public service broadcasting prominence regime, as recommended by Ofcom, by extending the law to on-demand services and the menus, where they are found. Since PSB prominence was legislated for in the Communications Act 2003, many gaps have emerged. The Act was designed in a markedly different TV landscape, even 13 years ago. It was four years before the introduction of the BBC iPlayer, for example. It was eight years before the digital TV switchover took place, and seven years before the introduction of the iPad. It created public service broadcasting prominence principles for broadcast TV sets, but not for connected TV sets, public service broadcaster channels, or PSB catch-up services, such as BBC iPlayer.

The regime has not kept up well, even with the multichannel world. For example, as I am sure hon. Members with young children will be aware, CBeebies and CBBC are behind 12 US cartoon network channels in the channel listings of the UK’s leading pay platform, Sky. As someone who was brought up on public service children’s television broadcasting—God knows what I would have been like if I had not been—and as a parent, I think that that is a shame, and that the Government should have a view on it.

[Graham Jones (Hyndburn) (Lab)]

“Play Away”!

[Kevin Brennan]

I am not going to respond; I shall focus on my remarks. My hon. Friend may wish to regale us later with his favourite children’s TV programmes or public service broadcasters.

PSBs now face a far bigger transition to online delivery of TV programmes, and the regulatory regime lags far behind, so we should not miss any opportunity presented by the Bill to do something about this ever-changing situation. A growing number of existing and future services are being left out of scope, from BBC iPlayer to the now online-only youth service BBC 3, and from the new BBC iPlayer Kids, offering access to the best BBC kids’ content, to the upcoming iPlay, which will be a front door to the best British children’s content from any provider. Equally out of scope in the current regime are growing numbers of major gateways to accessing public service broadcaster content. The number of connected television sets in the UK is expected to nearly triple over the course of this Parliament, from 11 million to 29 million.

--- Later in debate ---

[Calum Kerr]

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

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

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

[Kevin Brennan]

You’re going too far.

[Calum Kerr]

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

--- Later in debate ---

[Matt Hancock]

Terrific! I am delighted to respond. As we know, clause 28 will repeal section 73 of the Copyright, Designs and Patent Act 1988, which currently provides that copyright in a broadcast of public service broadcasting services, and any work in the broadcast, that is retransmitted by cable is not infringed when the broadcast is receivable in the area of the retransmission. In effect, that means that cable TV platforms are not required to provide copyright fees in relation to core public service broadcasting channels. The provision was brought in at the onset of the cable industry in the UK to provide for the industry to compete with terrestrial by providing PSB content. However, that was a long time ago and technology, as everyone has noticed, has moved on a long way.

Last year we consulted on the repeal of section 73, and I am glad that there is cross-party agreement on it. The conclusion that the Government reached, and which has been agreed to by the Committee, is that the section is no longer relevant. There are a wide variety of platforms that ensure that virtually everyone in the UK is able to receive public service broadcasts and, following the completion of the digital switchover in 2012, digital TV services are now available to more than 99% of customers, whether through terrestrial, satellite, cable or fibre platforms. The cable market has moved from a large number of local providers in the 1980s, when section 73 was introduced, to one big one, and it has also gone up massively in scale, from hundreds of thousands to more than 4 million subscribers.

We are satisfied that the objective of ensuring that PSB services are available throughout the UK has been met. Therefore, section 73 is no longer required. Moreover, as my hon. Friend the Member for Selby and Ainsty pointed out earlier, this also closes a loophole, because live streaming services based on the internet are broadcasting TV programmes and relying on section 73 to exploit PSB content by retransmitting channels and selling advertising around the service without any of the benefit flowing to the PSBs. I think we all agree that is wrong, so I am glad there is cross-party support for the change.

Let me respond to some of the questions that were put, looking first at new clause 14. I am a strong believer in the listed events system. Major events such as the Olympic games and the FA cup final draw huge audiences. The listed events regime has worked well. The status of these events, as listed events, boosts them and their broadcast to the nation brings us together. I am delighted that the SNP supports the listed events regime as well. I fear I am going to have to resist the SNP’s suggestion that we should use the listed events regime to ensure that Scotland is always in the World cup finals, in the same way that we cannot legislate for the tide never to come in or the sun never to set, but it is very important and it is close to people’s hearts.

The right to broadcast listed events must be offered to qualifying channels, defined as those that are received without payment by at least 95% of the UK population. Ofcom is responsible for publishing the list of channels that satisfy those criteria. We have no evidence to suggest that recent developments, with more online viewing, will put the BBC or other PSBs at immediate risk of failing to meet these qualifying criteria. I know that concern has been raised, but I have discussed it with the BBC and Ofcom, I have gone into the details, and I am not convinced there is a risk in the near term at all.

[Kevin Brennan]

I did say that, because of the criteria’s increasingly outdated nature, the 95% threshold will probably not be met by any TV channel at some stage during this Parliament. Is the Minister telling the Committee that that is categorically wrong?

[Matt Hancock]

Yes; I disagree with that analysis. Were that to become the problem, then we would need to act, because we support the listed events regime. However, we do not agree with the analysis that the hon. Gentleman has put forward, not only because of the measurement on the existing, most restrictive definition of the 95%, but because the definition of qualifying channels are those that are received without payment. There are many ways to receive a channel without payment, including online, so viewers moving from terrestrial TV to online does not necessarily—and in my view does not—remove them from that 95%.

[Kevin Brennan]

The Minister has made the point, and I thank him for making it categorically: he believes that that will not happen during this Parliament. However, he also said that if it were to happen, the Government would have to act. Is that not the very reason why he should support the new clause? It would give legislative backing to the Government to produce a report to examine what ought to be done in those circumstances.

[Matt Hancock]

No, because I do not think that is going to happen. The hon. Gentleman also raised the question of what we should do if the legislative underpinning of the regime were to collapse. He came up with a specific proposal. I think that the proposal is itself flawed because it was to switch the measure from channels received without payment to those that are viewed, and that changes its nature significantly: from channels that are received, so can be viewed by somebody, to those channels that are viewed, which would be far more restrictive in terms of the channels that could then provide listed events. It is not a surprise to me that it is incumbents who want to make that argument because they are the ones that are watched, as opposed to those that can be watched.

[Kevin Brennan]

The Minister alluded at the end to the fact that we are not making that proposal in our new clause. We were rehearsing that argument during discussion of the new clause. Obviously he does not agree with it, but it is important to put on the record that that particular proposal is not in the new clause. It asks for a report.

--- Later in debate ---

[Matt Hancock]

Again, my happiness is secondary really, but my problem with the proposition being put forward is that trying to define sub-menus and user interfaces in regulation, especially statutory regulation, is incredibly hard. The technological landscape is shifting quickly. It is best left to the Ofcom guidance to answer such questions. We looked into the matter in some detail in the consultation, so I hope that the hon. Gentleman will withdraw his support for the new clause.

[Kevin Brennan]

The Minister is saying that it is up to Ofcom to decide, but is not the point that what we are trying to do here is exactly what Ofcom is proposing?

[Matt Hancock]

No, because it is for Ofcom to issue guidance on linear EPGs. Ofcom is required as a duty to make the system work. Rather than going further down this route, having considered it, we do not want to be over-prescriptive, given the technological changes that are happening. With that, I hope that hon. Members will withdraw their amendment and then vote that clause 28 stand part of the Bill.

[The Chair]

We will, of course, be voting on any new clauses not today but later in our proceedings. Does Mr Brennan have any remarks to make?

[Kevin Brennan]

Yes, briefly. As you say, Mr Streeter, we will come to the new clauses later in the Bill. I do not think that it will necessarily be our intention at this point—we will cogitate further—to push them to a vote, but there are issues here to which we might want to refer on Report. One of my colleagues has pointed out that the Minister did not answer a question about Sky. Rather than making another speech, does he want to intervene during my brief remarks?

[Matt Hancock]

As I said in the discussion of the previous set of amendments, Sky is subject to a different regulatory regime. There are conditional access charges for satellite within that regime, which must be fair, reasonable and non-discriminatory for all channels. We considered that as part of the balance of payments consultation and came to the conclusion that it did not need to be changed, because of the requirement set out in the DPS code.

[Kevin Brennan]

I am grateful to the Minister for saving us time with that helpful intervention.

[Graham Jones]

This is an opportunity to ask my hon. Friend a question. There seems to be some doubt about the relationship between Sky’s retransmission charges and public service broadcasters. Does he know whether Sky pays for public service broadcasters? I understand that Sky pays for ITV commercial channels, but as I understand it, it does not pay anything for public service broadcasting.

[Kevin Brennan]

We discussed this issue, and the nature of that regime, earlier today. My observation was that the situation was extremely opaque, which is why we proposed earlier amendments to the Bill to suggest that the whole area should be reviewed—for that very reason. My hon. Friend makes an extremely pertinent point. It will be worth reading his remarks, and those made earlier today by Government and Opposition Committee members, on that point.

When we discussed new clause 14, which deals with listed sporting events, I worried that there is a degree of complacency in the Government. People will have heard what the Minister said about the issue, and we will be interested to hear what others have to say about his response. We should lay down a marker to say that we do not think that the Government are really listening or hearing what we are saying about this subject, and they are not sufficiently attuned to the dangers to listed sporting events. I know that the Minister is a keen and successful sportsman in his jockeying activities, on which I congratulate him. I am sure that he would want to see—

[Matt Hancock]

Not the Grand National, though.

[Kevin Brennan]

National hunt or flat? I cannot remember.

[Matt Hancock]

Flat.

[Kevin Brennan]

He is a flat racing jockey—and, from what I have seen, a very good one—but he should be concerned about the possible future of events such as the Grand National, which, as he rightly said, bring the country together and are meaningful and important cultural events as well as sporting ones.

On new clause 17 and PSB prominence, again, the Minister says that he has not seen compelling evidence of harm, but I think that we supplied him with plenty of compelling evidence of the potential for harm, which is what the Bill is about. It should be about the digital future, as we have said. I take his point about extreme micromanagement—that is valid—but we are not talking about that; we are talking about setting clear parameters to ensure that public service broadcasting prominence remains across all platforms. Although we are unlikely to press the new clause to a vote later, we reserve the right to return to these issues.

Question put and agreed to.

Clause 28 accordingly ordered to stand part of the Bill.

[The Chair]

We are catapulted into part 5 of the Bill.

Clause 29

Disclosure of information to improve public service delivery

Digital Economy Bill (Ninth sitting)

Kevin Brennan Excerpts

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

[Chris Skidmore]

There are a number of technical issues in these amendments, and we are determined to consult thoroughly with the devolved Administrations and the relevant offices. We will do so in due course. We will return to that later in the Bill.

[Kevin Brennan (Cardiff West) (Lab)]

It is unusual for the Government to introduce amendments and then find technical problems with them. That is obviously what has happened and it is very unfortunate. Given that we were expecting to debate the amendments at this point, can the Minister give us an indication of when he will bring back non-defective amendments—or whether, indeed, he intends to bring any further amendments in this area?

[Chris Skidmore]

When it comes to the point of process that the hon. Gentleman mentions, we intend to return to this further into the Bill. The particular issue that arose with the amendments as currently drafted is that the need for consent needs to apply correctly only to devolved matters. We found that the amendments do not reflect that, which is why we wish to withdraw them today.

--- Later in debate ---

[Kevin Brennan]

It would be helpful if that were to happen during the Commons stage of the Bill, rather than in the Lords, so that this House has an opportunity, at least on Report, to consider this aspect.

[Chris Skidmore]

I note the hon. Gentleman’s concerns and will reflect on them. I cannot give any further information at this moment. We hope to ensure that the amendments, when later drafted, will reflect the Government’s desire to listen carefully to all devolved nations and ensure that this applies across the UK.

Digital Economy Bill (Tenth sitting)

Kevin Brennan Excerpts

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

[Louise Haigh]

I rise to address new clause 38, which is in my name and that of my hon. Friend the Member for Cardiff West. I am sorry to say that this is where any cross-party consensus on the Bill ends. We absolutely do not support clause 76 or any of the amendments to it. Not only the Opposition, but the more than 4 million over-75s in this country who currently make use of this benefit oppose the clause. The benefit was promised to them in last year’s Conservative manifesto, a manifesto that, frankly, many of them will have voted for in good faith. Now, just 16 months into the Parliament, the Government are abandoning that pledge on the pretence that it should now be for the BBC to decide. Well, it will not only be Opposition Members, but millions of over-75s, and indeed future over-75s, who see right through that underhand tactic.

Just to concentrate the Committee’s mind, I did a bit of research at 11 o’clock last night, when I was still in my office writing my speeches for today. Given that more than 89% of over 75-year-olds make use of the free TV licence introduced by the previous Labour Government, in the Minister’s West Suffolk constituency there will be 8,863 over-75s who potentially stand to lose out because of the Government’s tactics—that is one of the highest numbers in the entire country. I do not have good news for the Parliamentary Secretary, Cabinet Office either: 7,121 over-75s in his constituency will be very unhappy with this measure.

An awful lot of disgruntled over-75s will be coming the Ministers’ way in future surgeries. There will be quite a queue at their constituency offices. I would not rule out the pensioners having a copy of the Conservative manifesto in hand, because that manifesto contained a pretty unequivocal promise:

“We will maintain all the current pensioner benefits including Winter Fuel Payments, free bus passes, free prescriptions and TV licences for the next Parliament”.

In fact, the header above that list of pensioner benefits said:

“We will guarantee your financial security”.

Those benefits were all introduced by the previous Labour Government.

[Kevin Brennan (Cardiff West) (Lab)]

Does the manifesto mention anywhere that the Government might transfer their responsibility for any of those benefits to an unelected body?

[Louise Haigh]

No, that is exactly my point. Whether or not the BBC gains responsibility for this provision is moot. The BBC is an unaccountable organisation when it comes to setting welfare policy. This represents the start of a slippery slope. Where does it end once the Government start asking other bodies to make decisions on who gets benefits? This is yet another broken promise—one promise has already been broken in part 3—so we are not doing very well. I am sure the powerful older voter lobby will not take this lying down.

--- Later in debate ---

[Kevin Brennan]

It is interesting that my hon. Friend used the term “negotiations” and the Minister repeated it from a sedentary position. There is a difference between negotiations between equals and being negotiated with by someone holding a loaded gun to one’s head.

[Louise Haigh]

That is absolutely right. The Opposition made clear in the debate on the BBC charter our utter condemnation of the underhand, aggressive, bully-boy way in which the Government “negotiated”. It was not a negotiation. As a former trade union rep, I recognise a negotiation when I see one, and the way the Government handled the previous licence-fee settlement was nothing of the sort. That led us to the position we are currently in. The BBC should never have been given the responsibility for delivering on a Conservative party manifesto pledge. It should have felt able to reject even the suggestion that it take on the cost of free TV licences for the over-75s.

--- Later in debate ---

[Kevin Brennan]

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

[Calum Kerr]

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

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

--- Later in debate ---

[Kevin Brennan]

Is there not a further cynicism to this? The Government did that in the full knowledge that the policy had what the Treasury often calls “future reach”, as the number of over-75s is likely to go up. Even given that the Government are partially compensating the BBC for this, they know full well that the policy will become more expensive.

[Christian Matheson]

That is an extremely good point, and it reads back to the point that I made earlier: when there has to be a review of the cost of the policy, and perhaps a reduction in the availability of free TV licences, Ministers—perhaps they will be shadow Ministers by that time—[Interruption.] We fight on to win. Conservative Members will be able to point to the BBC and say, “It was the BBC what done it”, in order to evade all responsibility. But they will not evade responsibility, because this will not be forgotten, if they get away with doing it. There is a much better alternative: the excellent new clause proposed by my hon. Friend the Member for Sheffield, Heeley.

--- Later in debate ---

[Graham Jones (Hyndburn) (Lab)]

The amendment is important. It defines the Opposition against the Government. We value the BBC, but there is always a criticism, and the Government are reaffirming people’s view that the Government do not really trust the BBC. If they can do anything to undermine the BBC, they will, instead of supporting it. During the passage of the charter, there has been to-ing and fro-ing, and criticism of the BBC, using the stick of distinctiveness and other sticks, such as the five-year break clause.

The Government always say that they are there to stand up for the BBC and give it the freedoms that it wants, but this is not a freedom, of course; it is a shackle. As my hon. Friend the Member for Cardiff West said, the Government are trying to outsource responsibility. They will not do it on bus passes; they will not say, “We’ll make the bus companies make the decision on free bus passes”, but they will make the BBC accountable for the over-75s’ free TV licences. I do not think that the Government can escape that responsibility, or the accusation that they are continually chipping away at the BBC.

Let us talk about the issue in numbers. By 2020, when the BBC has to pay fully, the figure will be £700 million. That is a considerable amount of money for the BBC to find at a time when the Government have chipped away at BBC budgets through a bit of slicing here and another bit of slicing there, and even with a cap on the licence fee.

[Kevin Brennan]

Is it not correct that at that point the people at the BBC will be faced with a decision, which is to do what is in their nature—to make programmes, to produce content and so on—or to continue an aspect of what is, after all, social policy? Will they not always have to look at what their core activity is: programme making and their distinctive role in the broadcasting universe?

[Graham Jones]

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

--- Later in debate ---

[Graham Jones]

We trust that the Government will listen to the public and see that they are on the wrong side of the argument, but perhaps we will find out in a few minutes that they do not recognise that.

[Kevin Brennan]

I do not think the 5,503 people in my constituency who will be affected are fools, but does my hon. Friend agree that any Member who votes for the change must think that the people in their constituency who will be affected by it are fools? To take an example at random, the hon. Member for Devizes has 6,478 constituents who will be affected.

[Graham Jones]

My hon. Friend makes a good point. I have glanced over the figures, and it seems that more people will be affected in the constituencies of Government Members. Perhaps those Members should be mindful of their constituents who will have real concerns about the proposal. They will not be fooled by the idea that the Government are taking a genuine and reasonable approach in giving the BBC responsibility for TV licences for over-75s.

If the Government have to take with one hand—and I do not agree with that—they could at least have made an attempt to give back with the other hand. Other than some minor giveaways to the BBC, they have made no attempt to correct even the fiscal element of the change, never mind the moral, ethical, social and public policy elements. The Government say in their explanatory notes that the BBC cannot expect to get any retransmission fees from Virgin, which is covered by the Bill, or Sky, which is not. There will therefore be no material change in the relationship between platform providers and content providers such as the BBC, which are forced to provide their content on those platforms. The Government could at least have corrected the fiscal element of the change by doing something about that commercial relationship, but instead they decided to take £700 million from the BBC. They already have a track record of slicing BBC funding for pet projects such as local TV or broadband.

The public will not be fooled. Thousands of constituents of Government Members will see the change and wonder why their Member of Parliament has taken this decision. Those in receipt of an over-75 TV licence, or coming up to that point, will think it is a deterioration in public policy. They will think, “This is not in my interests. I don’t agree with it. Why has my Member of Parliament voted against the new clause?” Government Members should think long and hard about the new clause, because I am sure their constituents will not approve of them voting against it.

--- Later in debate ---

[Mark Menzies]

I take compliments wherever they come from and I am certainly happy to take them from the hon. Gentleman. The key question for me is: are we, in one form or another, providing free TV licences for over-75s? Yes, we are. Is the BBC, under the current settlement, out of pocket? No, it is not because the licence fee is being increased and top-slicing is ending. The BBC is committing to continue to invest record sums of money in facilities such as BBC Salford, which has been truly transformational up in the north-west. If money were not an issue in the public sector, I would be saying, “Absolutely, let’s continue to find more money for the BBC to provide TV licences to an even larger group of people.”

[Kevin Brennan]

The hon. Gentleman is making a stout and reasoned defence of the Government’s position and many aspects of the settlement with the BBC. I accept that, but can he say truthfully that he believes that it is the right move to transfer responsibility for this policy from the Government to the BBC?

[Mark Menzies]

I think it was part of the overall negotiation. Look at the package that was agreed, which included the end of top-slicing—a considerable liability that the BBC itself felt was an unfair burden on it under the previous settlement—and responsibility for broader licence fee management. Looking at it like that, I think it is a fair settlement during a difficult financial period.

It is easy to castigate the Government’s move on measures such as this, but look at it against the backdrop I have outlined. There is more money for the BBC and also an agreement from the BBC. This was not objected to or protested against by the BBC management. They are not raising this as an unfair charge, in a way that at times the previous BBC management cited the issue of broadband top-slicing as unfair. The Government noticed that was unfair, acted upon it and removed it.

--- Later in debate ---

[Matt Hancock]

It was going so well and we were having such a rational debate until that sudden outburst. Let me respond to the points that were made. I am proud to support clause 76, which safeguards the TV licence and delivers on our manifesto commitment to maintain free TV licences in this Parliament. Until that speech right at the end, we heard an awful lot of bluster but saw little light, so I will remind the Committee of a few facts.

First, transferring the responsibility for the free TV licences to the BBC as part of the funding settlement was agreed with the BBC and is what it says on the tin: it is part of a funding settlement. The question of who pays is part of the funding of the BBC. In July last year, Tony Hall, the Director General of the BBC, said:

"I think we have a deal here which is a strong deal for the BBC. It gives us financial stability."

I suggest that anybody who votes against clause 76 votes against financial stability of the BBC and is ultimately voting to put the free TV licence at risk. I will be saying to all 8,853 of my constituents who get a free TV licence that we are safeguarding the free TV licence.

In the run-up to the 2015 general election, during which we committed to protecting the TV licence in this Parliament, who was it that wanted to do away with it? Who was it? A certain Mr Ed Balls, who is now more famous for being on the TV than for talking about TV policy. When he was questioned about whether the universal free TV licence should stay, while he was saying that the universal winter fuel payments should not, he said:

“I think you have to be pragmatic”

about the TV licence. It was the Labour party that put the free TV licence at risk and we are proud that we supported it in our manifesto.

The director-general did not stop there. He also said:

“The government’s decision here to put the cost of the over-75s on us has been more than matched by the deal coming back for the BBC.”

Unfortunately for those who seek to cause a fuss about this, their view on funding seems to go against the view of the director-general of the BBC.

[Kevin Brennan]

Will the Minister give way?

[Matt Hancock]

I will give way if the hon. Gentleman can explain why he disagrees with the director-general of the BBC.

[Kevin Brennan]

The Minister does not understand parliamentary procedure. That is not a reason to give way. He should give way to allow me to ask him a question, to avoid my having to make a speech. My question—a straightforward question, which does not require anything but a straightforward answer—is on what principle he thinks that this is the right move.

[Matt Hancock]

On the principle that the BBC is responsible for the funding of the BBC according to the licence fee negotiations agreed with the Government. This is a funding decision, and funding issues are for the BBC.

I have given the Opposition a couple of quotations from the head of the BBC about why he agrees with the policy. Let me give them another quotation:

“The Labour party welcomes the fact that the charter provides the BBC with the funding and security it needs as it prepares to enter its second century of broadcasting.”—[Official Report, 18 October 2016; Vol. 615, c. 699.]

Not my words, but those of the boss of the hon. Member for Sheffield, Heeley, the shadow Secretary of State for Culture, Media and Sport, the hon. Member for West Bromwich East (Mr Watson). Well, I agree with her boss—he was absolutely right.

--- Later in debate ---

[Graham Jones]

I have a couple of points that I would like the Government to consider on clause stand part and why there is a deficiency, not only in the Bill but in all the other regulations, guidance and advice that support it.

My first point is simply that people the length and breadth of this country are sick and fed up of direct marketing. They are sick and fed up of the back of their doors having a mound of unwanted mail that they have to dispose of, which has come from companies that they have no interest in. I have a high number of empty properties—2,500—in my area, and in some cases this goes beyond being a nuisance and an aggravation, and becomes a fire hazard. We have mounds of direct mail behind the door, and it is never-ending and never stops.

People receive not only physical mail but email. Businesses the length and breadth of Britain—I have made the point that this is not a business-friendly Bill and it should be, as it is a Digital Economy Bill—are sick and fed up of their email boxes being stuffed full of unwanted emails, which are costing them a fortune as they have to put someone on them to go through them. It has got to stop. We have to act as a Parliament, and the Government have got to sit up and take notice. How much is this costing British businesses? How much is it aggravating UK citizens?

These companies seem to get away with it. There is a free-for-all at the minute. There is no way anyone can tell me that a mound of mail does not come through my letterbox weekly or there is not a long sequence of unwanted emails in my inbox, and no one can tell me that companies in my constituency and every other constituency do not face huge costs.

[Kevin Brennan]

My hon. Friend is right about that wider point, even though the clause deals particularly with calls. I do not know about him, but I am fed up of receiving calls even in my parliamentary office—I know that other hon. Members have had this—from energy companies, which continually seek to talk to me about energy bills. Does he agree that if the problem is getting to the heart of Parliament, it really is getting out of hand?

[Graham Jones]

My hon. Friend is absolutely right. As busy MPs, the last thing we want is to deal with that. I will come to clause 77, which is about marketing calls—all these things are interlinked. As he says, we get a mound of marketing calls, as do businesses. They are piling up, and they are unwanted.

I appeal to the Government to consider introducing mandatory pro formas in all these fields—marketing calls, but also email, direct mail and conventional snail mail. On a letter, I want to see the name and address of the people who sent it, so that I can tick the box saying “no more mail” and stick it back in that red box. I want to know how they have got my information, too. On digital communications, I want to see a pro forma on the bottom that says, “No more. I don’t want to receive any more. How did you get my details, and which company are you?” I want straightforward pro formas on the bottom of all those things. On marketing calls, I want those who are calling to have to explain explicitly who they are and where they got the data from and ask, “Do you wish to proceed with the call?” That would be very helpful. Having pro formas on all that marketing would empower individuals. This is about taking back control and empowering the UK citizen against some of these things, and simple pro formas would go a long way to helping that.

I ask the Government to consider introducing some amelioration or making some concession on this issue on Report. The British people would be eternally grateful to the Minister. He would become legendary in this place. His career path would be stratospheric. He would have helped so many people on a daily basis that he would be remembered forever as the Minister who resolved the issue of direct marketing calls. He has an opportunity to do that. A pro forma would suffice.

I come to a second issue: the exposés that, sadly, all too frequently appear on our television screens, on Channel 4 or “Panorama”. Every now and again, we hear scandals about marketing companies that act on behalf of charities and raise money through telemarketing. Those scandals often reveal undesirable elements and policies in those companies that go against the grain of what it is to be a British citizen. Those marketing calls must be dealt with, and clause 77 fails to deal with—

--- Later in debate ---

[Matt Hancock]

I am sure the Information Commissioner will have heard the hon. Gentleman’s plea. There is such logic and force behind it that I am sure it will be taken into account.

[Kevin Brennan]

We very much support the concession that the Minister made following the evidence session and the amendments tabled. Does he think that anything more could be done where the origin of these calls is overseas, as with very many of them?

[Matt Hancock]

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

Digital Economy Bill (Eleventh sitting)

Kevin Brennan Excerpts

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

[Matt Hancock]

I stress that I bought my tickets to see Paul Simon completely off my own bat, as a fan. My wife and I are enormously looking forward to going. I am prepared to pay the very high price because it will be such an amazing concert, but it would be far better if I could pay the face value or something close to it. I went online immediately the tickets were released and a huge number had gone already. Secondary ticketing sites were the only way that I could get the tickets. Like my hon. Friend the Member for Selby and Ainsty, I was bent over my laptop pressing the button trying to get the tickets as quickly as possible. I only say that to explain to the Committee that I feel the pain of all those who end up having to pay far more than face value because of automated bots.

The Committee will know that we asked Professor Michael Waterson to review secondary ticketing. His very good independent report makes a number of points relevant to the new clause. The offences set out in the Computer Misuse Act 1990 have broad application and the Waterson review concludes that unauthorised use of a computerised ticketing system to avoid ticket volume constraints may give rise to breaches of that Act. Such breaches need to be reported, investigated and case law then established.

Having said that, I recognise the very clear sense in the debate that there remains a problem to be solved. I reiterate the words of the Secretary of State, who said last week that

“the advice has always been that the Computer Misuse Act applied. I want to look carefully at that and see how best we can get to a robust position on this matter”.

She proposed to convene a meeting of all interested parties. If we can get it scheduled, we will have that meeting within a month; if not, I commit to holding it before Christmas.

[Kevin Brennan (Cardiff West) (Lab)]

It is welcome to have a deadline, but would it not be better if that meeting took place before Report, so that the Commons has an opportunity to consider the points made at it?

--- Later in debate ---

[The Chair]

I have done a quick count. I think there are nine new clauses and two new schedules left. I remind hon. Members that we have an hour and 20 minutes before we have to finish.

New Clause 15

Storage of uploaded works

“(1) The Electronic Commerce (EC Directive) Regulations 2002 is amended as follows.

(2) After Regulation 19 (a)(ii) insert—

“(iii) does not play an active role in the storage of information including by optimising the presentation of the uploaded works or promoting them.”.”—(Kevin Brennan.)

This new clause clarifies circumstances when a digital service is deemed an active provider of copyright protected content.

Brought up, and read the First time.

[Kevin Brennan]

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

I hope that the Minister enjoys his concert next week; I am sure he will be feelin’ groovy. I rise to speak to new clause 15, which is a probing new clause to clarify when a digital service is deemed to be an active provider of copyright-protected content. Taking on board what you have said, Mr Stringer, I will truncate my remarks.

The Electronic Commerce (EC Directive) Regulations 2002, which put into law the EU’s e-commerce directive 2000, include certain exemptions from liability for online services, including copyright-protected works. The fundamental concern from the music industry is that the hosting defence provided by regulation 19 of the 2002 regulations acts as a safe harbour and allows some services, including user-uploaded services such as YouTube, to circumvent the normal rules of licensing.

Those services can use copyright-protected content—a song by Paul Simon or Green Day, for example—to build businesses without fairly remunerating rights holders. In recent years, the music industry has argued that the online content market has developed in such a way that there is now a value gap between rights holders, such as artists, record companies and publishers and so on, and the digital services themselves, such as YouTube.

As evidence of that, the recent report by UK Music, “Measuring Music 2016”, highlighted that user-uploaded service YouTube, the most widely used global streaming platform, increased its payments to music rights holders by 11% in 2015, despite consumption on the service growing by 132%. That is the value gap in a nutshell. Further industry analysis indicates that video streams increased by 88% year on year, but generated only a 0.4% increase in revenues. Nine of the top 10 most watched videos on YouTube are official music videos by artists such as Adele, Psy, Taylor Swift and Justin Bieber.

The inequality ensuing from that safe harbour is not only between those who produce music and those who promote it online; the provisions in new clause 15 have benefits for other sectors that seek to achieve a level playing field in online markets, too. The current legal ambiguity and imbalance has created a distortion in the digital market itself, with services such as YouTube benefiting from those exemptions while other services, such as Apple Music and Spotify, do not. The reality is that many people principally use YouTube to play music. It is nonsense to suppose it is not an active provider of copyright-protected content as those other services are.

There was, and continues to be, a justification for exemptions in some areas for passive hosts, but those must reflect the balance between the rights of rights holders and users. The industry is concerned that existing provisions are not sufficiently defined and as a result are open to deliberate manipulation. New clause 15, which stands in my name and that of my hon. Friend the Member for Sheffield, Heeley, aims to clarify the legislative framework, so that creators and rights holders can secure a fair and proper value for the use of their work by online services in a fair and properly functioning market.

Will the Minister clarify some issues? Many of the matters raised by new clause 15 are being considered by European institutions at this very moment. On 14 September, the day after Second Reading, the European Commission published a draft directive on copyright that seeks to address many of these points. That is a welcome development, and the Minister will probably to refer to it in his response. After the recent referendum put us on the path towards Brexit, many issues have been raised in relation to these proposals. It is highly conceivable that we will be Brexiting at the same time as Europe begins to adopt copyright rules for a digital age.

I would like to ask the Minister a few questions. First, will he assure us that the UK Government remain committed to engaging constructively with the European Union on matters relating to the draft copyright directive, and that they will put the interests of the creative industries at the heart of their representations? Secondly, will he support the positive measures in the draft directive that address the value gap between rights holders—particularly the music industry—and digital services?

Thirdly, and more generally, once article 50 is triggered, how do the UK Government intend to implement legislation agreed in Europe before we Brexit? Finally, what commitments is the Minister prepared to make today to reassure UK creators and rights holders that they will not miss out on any positive measures contained in the draft directive as a result of leaving the European Union?

[Nigel Adams]

I rise briefly to speak to the new clause tabled by the hon. Member for Cardiff West. I understand that it seeks to clarify a rule that already exists. As has been mentioned previously, I chair the all-party parliamentary group on music. Earlier in the year, we held a dinner with representatives from the industry and services such as Spotify and Apple Music. The intention of the dinner was better to understand the growing music-streaming market and what measures are needed to help it flourish further for the benefit of creators, fans and those services. I was taken by the agreement across the room about the existence of a value gap between rights holders and some digital services, and the need to ensure fairness in the way music rights are valued and negotiated.

The Government’s response to the EU’s digital platforms consultation, published at the beginning of the year, stated:

“Clarification of terms used in the Directive would, we believe, help to address these concerns.”

I hope the Minister and the Government remain committed to that view and the intention behind the new clause to clarify existing law.

[Matt Hancock]

As we have debated, the Bill sends a clear message about copyright infringement, not least because we are increasing the penalty for online copyright infringement from two to 10 years. Of course, I know about the concern in the music industry and elsewhere that online intermediaries need to do more to share revenues fairly with creators. That is what this new clause seeks to tackle, and I agree with that concern.

The hon. Member for Cardiff West mentioned the interaction of the Bill with EU law. The change proposed by the new clause is already the position in European Court of Justice case law, and we support that position in the UK. That provides some clarification to the existing position.

Let me answer the specific questions. First, we are heavily engaged in the digital single market negotiations and the discussions ongoing in Europe. While we are a member of the EU, we will continue to do that. The issue of the value gap, which the hon. Gentleman mentioned, is important, and the development of ECJ case law in that direction has been helpful.

That brings me to Brexit because, as the e-commerce directive is EU single-market legislation, we will have to consider what the best future system will be as we exit the European Union. We will have to consider how the e-commerce regulations as a whole should work in the future. That will be part of the debate about leaving the European Union. For the time being, ECJ case law supports the intentions in the new clause, and I would be wary about making piecemeal changes to the regime. I acknowledge the need, through the Brexit negotiations and the process of setting domestic law where there is currently European law, to take into account the important considerations that have been raised.

[Kevin Brennan]

The new clause was a probing amendment, and I thank the Minister for his response. It is important to have the Government’s response on the record.

We debate this issue in the context of the UK music industry’s growth: over a four-year period, it has grown by 17%. During that same period, there has been a massive shift from consumers owning music towards the streaming of music. The value of subscription streaming services has jumped from £168 million in 2014 to £251 million in 2015. So there is a model, if you like, in the market, which can produce value for the industry, but it is being undermined by the value gap that is created by the different treatment of these different types of services.

I accept that the Minister has put on the record the Government’s current position and said that there will be a positive engagement with this issue. On that basis, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 16

E-book lending

‘In section 43(2) of the Digital Economy Act 2010, leave out from “limited time” to “and loan.”’

This new clause aims to extend public lending rights to remote offsite e-book lending.—(Kevin Brennan.)

Brought up, and read the First time.

[Kevin Brennan]

I beg to move that the new clause be read a Second time.

This new clause would enable the consideration of public lending right for remote e-lending from libraries. That would be achieved by amending section 43(2) of the Digital Economy Act 2010, which sets remote loans outside the definition of lending under public lending right.

I do not know whether the Minister, like me, is a bit of a dinosaur and prefers his books to come in physical form—I am currently reading Bruce Springsteen’s autobiography, which I recommend, as well as Ed Balls’s book on politics, which is also very good. However, in this Digital Economy Bill we should acknowledge the increasing role of e-books and their impact on the income of authors. The spirit of the Bill is that we should better reflect how technology has changed our economy, so it is important that we go further in some places to acknowledge where technological change has outpaced legislation in relation to the arts.

Our approach here should be informed by the fact that we have the Digital Economy Act 2010. At the time that it was passed, some opportunities were missed. We should keep that in mind as we discuss this Bill and make sure that we do not allow those opportunities to pass by again as the Bill completes its stages in the House of Commons and afterwards in the other place.

The Digital Economy Act 2010 made some progress but it failed to forecast how our relationship with books would change. In particular, the 2010 Act touched on the subject of e-books, but its wording ignored the main way libraries would end up lending e-books: remotely, over an internet connection. Of course, remote lending is a natural continuation of the function of e-books. One of the main benefits of e-books is that they escape physical constraints such as location and storage.

However, under current legislation, authors receive no payment when a public library loans their book remotely, which is different from any other form of book loan. Last year, 2.3 million remote loans were made, but they were not counted at all towards authors’ payments because the 2010 Act allowed only for on-site loans of e-books, of which there was a negligible number—who will go to a library when they can borrow the book remotely? That is the whole point of e-books. There is no reason in principle why the distinction should exist; that is what the philosophy of this Bill is supposed to be. Nevertheless, as a result, the public lending right—a right for authors established in 1979—has not been honoured, due to the failure of the 2010 Act to keep up with technological change.

I hope that we can take the opportunity today to avoid repeating that mistake. The Society of Authors, the Association of Illustrators, and the Authors’ Licensing and Collecting Society all support the new clause. Public lending right is designed to balance the social need for free public access to books against an author’s right to be remunerated for the use of their work. Indeed, public lending right provides a significant and much-valued part of many authors’ incomes, particularly those authors whose books are sold mainly to libraries and those whose books are no longer in print.

The recent opinion of the Advocate General, relating to a case on rental and lending in respect of copyright works that is currently before the Court of Justice of the European Union, asserted that the lending of electronic books is the modern equivalent of the lending of printed books. I am aware that the Government expressed a desire to reflect this technological change in their March 2013 response to the independent review of e-lending in public libraries in England, but for some reason—perhaps the Minister can tell us why—they have neglected to take the opportunity presented by this Bill to put the matter right.

Furthermore, figures from March this year show that 343 libraries in the UK have been shut down in the past six years, with another 111 closures planned for 2016, which will result in the loss of almost 8,000 jobs. So it is particularly nonsensical not to apply PLR to remote e-book lending, given that it is becoming increasingly hard to visit a physical library. PLR is a legal right and a keystone of a society in which authors receive reward for their considerable cultural contribution. While we can all benefit from technological change and new ways of accessing creative works, it is important that the obligation to remunerate authors fairly is acknowledged and honoured.

Having acknowledged this loophole and the difficulties it causes, it is vital that the Bill addresses the issue, so that right-holders are treated equitably. Will the Minister take action on this issue and accept the new clause—and if not, why?

[Matt Hancock]

I wholeheartedly support the hon. Member for Cardiff West in his analysis of the increasing range of digital services at libraries across the country and the importance of those digital services to the communities they serve. I also agree with what he said about the increasing range of e-books and the importance of e-book lending. I am touched by his care for our delivering on the Conservative party manifesto and can tell him that we will deliver on this one too.

Libraries are increasingly providing remote e-book lending, so readers have the opportunity to borrow physical and audio books. Over the last year, 2 million e-book loans were made, which shows how important this is. We have been carefully looking at options for how to implement the manifesto commitment and appropriately compensate authors for remote e-lending, including by extending the PLR to e-books. In doing so, we have engaged with representatives of authors, libraries, agents, publishers and booksellers as well as the Public Lending Right Office. The collaborative input is very valuable and helps to ensure that we achieve an outcome that will be supported by all.

Like the hon. Member for Cardiff West, I am a mixed book reader. I am reading “Down and Out in London and Paris”—a well-thumbed hard copy. I am reading “King Lear” on an e-book, although I would say it is more studying than reading, because it is quite hard work. I bought a Kindle book at the weekend. I fully appreciate all types of books: hard copy and soft, hardback and soft.

The hon. Gentleman will understand how keen we are to implement our manifesto commitment. However, we want to take the time to get it right. Furthermore, we need to ensure that the measure is compatible with the copyright directive while we remain within the European Union. In doing so, we are also paying close attention to a relevant court case, again in the European Court of Justice, where we expect a ruling later this year that will have a bearing on how any clause to bring this into place would be drafted.

For those reasons, we are taking our time to get this right. With that explanation, I hope the hon. Member will withdraw his new clause.

[Kevin Brennan]

I will, but I do not think that there is any real need for the Minister not to commit carrying the measure out in the Bill. It simply extends what is already available. If someone borrowed an e-book by turning up at a library, the author would receive their public lending right, but if they did so remotely through the same library service, the author would not. Clearly that is an unacceptable injustice and anomaly.

The Minister has said that the Government need to take their time. It was March 2013 when they said in their response to the independent review that they intended to reflect that technology change. Three years and eight months later, we have a Bill in Committee in the House of Commons and still the Government say they need to take their time to get it right. This Bill is the right time to get it right. I hope the Minister will reflect further on the raft of amendments to this defective Bill that will be introduced in the House of Lords if we do not put this right in the House of Commons. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 19

Personal data breaches

‘(1) The Data Protection Act 1998 is amended as follows.

(2) After section 24 insert—

“24A Personal data breaches: notification to the Commissioner

(1) In this section, section 24B and section 24C, “personal data breach” means unauthorised or unlawful processing of personal data or accidental loss or destruction of, or damage to, personal data.

(2) Subject to subsections (3), (4)(c) and (4)(d), if a personal data breach occurs, the data controller in respect of the personal data concerned in that breach shall, without undue delay, notify the breach to the Commissioner.

(3) The notification referred to in subsection (2) is not required to the extent that the personal data concerned in the personal data breach are exempt from the seventh data protection principle.

(4) The Secretary of State may by regulations—

(a) prescribe matters which a notification under subsection (2) must contain;

(b) prescribe the period within which, following detection of a personal data breach, a notification under subsection (2) must be given;

(c) provide that subsection (2) shall not apply to certain data controllers;

(d) provide that subsection (2) shall not apply to personal data breaches of a particular description or descriptions.

24B Personal data breaches: notification to the data subject

‘(1) Subject to subsections (2), (3), (4), (6)(b) and (6)(c), if a personal data breach is likely to adversely affect the personal data or privacy of a data subject, the data controller in respect of the personal data concerned in that breach shall also, without undue delay, notify the breach to the data subject concerned, insofar as it is reasonably practicable to do so.

(2) The notification referred to in subsection (1) is not required to the extent that the personal data concerned in the personal data breach are exempt from the seventh data protection principle.

(3) The notification referred to in subsection (1) is not required to the extent that the personal data concerned in the personal data breach are exempt from section 7(1).

(4) The notification referred to in subsection (1) is not required if the data controller has demonstrated, to the satisfaction of the Commissioner—

(a) that the data controller has implemented appropriate measures which render the data unintelligible to any person who is not authorised to access it, and

(b) that those measures were applied to the data concerned in that personal data breach.

(5) If the data controller has not notified the data subject in compliance with subsection (1), the Commissioner may, having considered the likely adverse effects of the personal data breach, require the data controller to do so.

(6) The Secretary of State may by regulations—

(a) prescribe matters which a notification under subsection (1) must contain;

(b) provide that subsection (1) shall not apply to certain data controllers;

(c) provide that subsection (1) shall not apply to personal data breaches of a particular description or descriptions.

24C Personal data breaches: audit

‘(1) Data controllers shall maintain an inventory of personal data breaches comprising—

(a) the facts surrounding the breach,

(b) the effects of that breach, and

(c) remedial action taken

which shall be sufficient to enable the Commissioner to verify compliance with the provisions of sections 24A and 24B. The inventory shall only include information necessary for this purpose.

(2) The Commissioner may audit the compliance of data controllers with the provisions of sections 24A, 24B and 24C(1).

(3) In section 40 (Enforcement notices)—

(a) in subsection (1)—

(i) after “data protection principles,” insert “or section 24A, 24B or 24C”;

(ii) for “principle or principles” substitute “principle, principles, section or sections”;

(b) in subsection 6(a) after “principles” insert “or the section or sections”.

(4) In section 41 (Cancellation of enforcement notice”)—

(a) in subsection (1) after “principles” insert “or the section or sections”;

(b) in subsection (2) after “principles” insert “or the section or sections”.

(5) In section 41A (Assessment notices)—

(a) in subsection (1) after “data protection principles” insert “or section 24A, 24B or 24C”;

(b) in subsection (10)(b) after “data protection principles” insert “or section 24A, 24B or 24C”.

(6) In section 41C (Code of practice about assessment notices)—

(a) in subsection (4)(a) after “principles” insert “and sections 24A, 24B and 24C”;

(b) in subsection (4)(b) after “principles” insert “or sections”.

(7) In section 43 (Information notices)—

(a) in subsection 43(1)—

(i) after “data protection principles” insert “or section 24A, 24B or 24C”;

(ii) after “the principles” insert “or those sections”;

(b) in subsection 43(2)(b) after “principles” insert “or section 24A, 24B or 24C”.

(8) In section 55A (Power of Commissioner to impose monetary penalty)—

(a) after subsection (1) insert—

“(1A) The Commissioner may also serve a data controller with a monetary penalty notice if the Commissioner is satisfied that there has been a serious contravention of section 24A, 24B or 24C by the data controller.”;

(b) in subsection (3A) after “subsection (1)” insert “or (1A)”;

(c) in subsection (4) omit “determined by the Commissioner and”;

(d) in subsection (5)—

(i) after “The amount” insert “specified in a monetary penalty notice served under subsection (1) shall be”;

(ii) after “Commissioner” insert “and”;

(e) after subsection (5) insert—

“(5A) The amount specified in a monetary penalty notice served under subsection (1A) shall be £1,000.

(5B) The Secretary of State may by regulations amend subsection (5A) to change the amount specified therein.”

(9) In section 55B (Monetary penalty notices: procedural rights)—

(a) in subsection (3)(a) omit “and”;

(b) after subsection (3)(a) insert—

(aa) specify the provision of this Act of which the Commissioner is satisfied there has been a serious contravention, and”;

(c) after subsection (3) insert—

“(3A) A data controller may discharge liability for a monetary penalty in respect of a contravention of section 24A, 24B or 24C if he pays to the Commissioner the amount of £800 before the time within which the data controller may make representations to the Commissioner has expired.

(3B) A notice of intent served in respect of a contravention of section 24A, 24B or 24C must include a statement informing the data controller of the opportunity to discharge liability for the monetary penalty.

(3C) The Secretary of State may by regulations amend subsection (3A) to change the amount specified therein, save that the amount specified in subsection (3A) must be less than the amount specified in section 55A(5A).”;

(d) in subsection (5) after “served” insert “under section 55A(1)”;

(e) after subsection (5) insert—

“(5A) A person on whom a monetary penalty notice is served under section 55A(1A) may appeal to the Tribunal against the issue of the monetary penalty notice.”

(10) In section 55C(2)(b) (Guidance about monetary penalty notices) at the end insert “specified in a monetary penalty notice served under section 55A(1)”.

(12) In section 67 (Orders, regulations and rules)—

(a) in subsection (4)—

(i) after “order” insert “or regulations”;

(ii) after “section 22(1),” insert “section 24A(4)(c) or (d), 24B(6)(b) or(c),”;

(b) in subsection (5)—

(i) after subsection (c) insert “(ca) regulations under section 24A(4)(a) or (b) or section 24B(6)(a),”;

(ii) for “(ca) regulations under section 55A(5) or (7) or 55B(3)(b),” substitute “(cb) regulations under section 55A(5), (5B) or (7) or 55B(3)(b) or (3C),”.

(13) In section 71 (Index of defined expressions) after “personal data |section 1(1)” insert “personal data breach |section 24A(1)”.

(14) In paragraph 1 of Schedule 9—

(a) after paragraph 1(1)(a) insert—

“(aa) that a data controller has contravened or is contravening any provision of section 24A, 24B or 24C, or”;

(b) in paragraph 1(1B) after “principles” insert “or section 24A, 24B or 24C”;

(c) in paragraph (3)(d)(ii) after “principles” insert “or section 24A, 24B or 24C”;

(d) in paragraph (3)(f) after “principles” insert “or section 24A, 24B or 24C.””

This new clause seeks to create a general obligation on data controllers to notify the Information Commissioner and data subjects in the event of a breach of personal data security. The proposed obligation is similar to that imposed on electronic communication service providers by the Privacy and Electronic Communications (EC Directive) Regulations 2003.—(Louise Haigh.)

Brought up, and read the First time.

[Louise Haigh]

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

New clause 19 would provide a general obligation on companies to report personal data breaches. This crucial amendment gets to the heart of the regulatory system around cyber-security. Cyber-security is one of the greatest challenges we face as a country. Despite the Government’s multi-million pound strategy and their further welcome announcement today, we do not believe they have faced up to the challenge yet. Some 90% of large UK firms were attacked in 2014. That is an astonishing figure, and yet only 28% of those businesses reported their cyber-attack to the police. As the Minister knows, national crime statistics rose for the first time in 20 years last year, because scams and cybercrime are now included.

Throughout discussion of the Bill, we have made it clear that we feel it does nothing to address the real challenges facing the digital economy. The Bill should have equipped the sector for the digital future—a future as replete with challenges as with opportunities. None of those challenges could be greater than cyber-security. That security says to consumers and individuals that, in this coming century, when data will be the lifeblood and the exchange of personal data the currency, nothing is more critical to ensure that that runs smoothly than their trust.

This multi-billion-pound sector, which now amounts to 11% of our GDP, is utterly reliant on the mutual trust fostered between consumers and producers, which is why the new clause is so critical. It would establish for the first time a duty on all companies to report any breach of cyber-security. The legislation as it stands is simply inadequate. The Data Protection Acts deal extensively with the protection of personal data, but there is no legal obligation on companies to report data breaches. The privacy and electronic communications regulations include an obligation to report data breaches, but that only applies to telecommunications companies and internet service providers and, at that stage, only requires companies to consider information customers.

Clearly, however, it is not only communications providers that hold sensitive data about people that carry the potential to be commodified. Insurance companies have had their data stolen, to be sold to claims management companies; banks are hacked, as J.P. Morgan was in 2014; and TK Maxx suffered the largest retail hack to date with the loss of credit and debit card information. Yet none of those examples had a duty to report to their customers to ensure that further harm was not done with their information.

The net impact of the lack in existing legislation is that the vast majority of attacks go unreported, and people are left in the dark when their personal data have been hacked, leaked, stolen or sold. If we are to talk meaningfully about data ownership, we cannot allow that to continue. We welcome yesterday’s announcement that the Government will be implementing the general data protection regulation. As the Minister knows, the GDPR provides for a general obligation on all companies to report breaches to regulators and customers. Will he make it clear how he expects to fulfil that obligation and whether he is willing to accept the new clause?

Fundamentally, we are keen that the UK’s digital economy is not seen as a soft touch on cybercrime. That is why the new clause would impose a general obligation on data controllers to notify the Information Commissioner and data subjects in the event of breaches of personal data security. We believe that that would be a major step forward, and we look forward to the Minister’s comments.

--- Later in debate ---

[Louise Haigh]

It is completely outrageous to suggest that we are the ones arguing for delay.

[Kevin Brennan]

It’s your tone that is the problem, Minister.

[The Chair]

Order.

Digital Economy Bill

Kevin Brennan Excerpts

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

[Matt Hancock]

Of course I will. I have discussed that precise issue with the National Deaf Children’s Society, and I will continue to work on it.

Government amendments 23 and 24 are detailed technical amendments concerning the installation of electronic communications apparatus on tidal land owned by the Crown.

I hope that, following my explanations and the commitments I have given, Members will withdraw their amendments and new clauses.

[Kevin Brennan (Cardiff West) (Lab)]

I rise to speak to new clauses 10, 32 and 7, which stand in my name and those of my hon. Friends, the Government new clauses, which the Minister has outlined, and new clause 1, tabled by the hon. Member for Devizes (Claire Perry), whom the Minister mentioned. I will also refer to some of the other amendments in the group.

In Committee, Labour Members, and indeed the hon. Lady, made it clear that we could not see how age verification could operate without a backstop power to block sites that failed to comply. In Committee, the Minister resisted that strongly. He said:

“The powers are not a silver bullet; sites that were actively trying to avoid the Bill’s other enforcement measures would also be able to actively avoid these measures. It is questionable how much additional enforcement power they would bring, given those downsides.”

He went on to say:

“I think the Bill has ended up with the correct balance.” —[Official Report, Digital Economy Public Bill Committee, 20 October 2016; c. 209.]

Clearly, the Secretary of State disagreed with him on that. She has now overruled her junior Minister by tabling new clauses 28 and 29 in her name, as we can see on the amendment paper. The new clauses tabled by the Secretary of State, who unfortunately is no longer in her place, represent significant changes at quite a late stage in the passage of the Bill in the Commons, confirming our contention that the Bill as published was not ready to leave home when it was allowed to do so.

[Claire Perry (Devizes) (Con)]

As the hon. Gentleman knows from his ministerial experience, it is the job of junior, middle-ranking Ministers to do all the work and Secretaries of State to take all the credit. In this case, I assure him that the ears of all the Government Front Benchers were open to the changes that he and I wanted to make.

[Kevin Brennan]

I am grateful for that intervention. All I can say is that I have just given the Secretary of State credit for the change, as the hon. Lady suggests I should.

The new clauses introduce significant changes at this late stage in the consideration of the Bill. We support blocking, but concerns have been raised in the press that the new clauses go beyond a backstop power to block sites to under-18s and could be used in practice to extend internet censorship to adults. The Government need to be clear whether that is the intention of the new clauses.

[Matt Hancock]

I have also seen those reports. I think that they misread the Bill. That is neither our intention, nor our understanding of the working of the new clauses.

--- Later in debate ---

[Kevin Brennan]

It is helpful to have that on the record. No doubt, the new clauses will be pored over in a lot more detail after they arrive in the other place. Given our time constraints today, I want to put on the record our concern that we did not have an opportunity in Committee to pore over such proposals; had the Bill been ready, perhaps we would have had. Notwithstanding our support for blocking, we think a lot more scrutiny will be required when there is more time available in the other place to discuss these Government new clauses, on the assumption that the House passes them tonight.

We have argued repeatedly that the Bill should have prepared the UK for the challenges faced by the digital economy and, crucially, should have featured digital resilience as a key part of the provisions. The opportunities of the digital economy cannot be exploited unless we feel safe and secure online, and that is nowhere more important and clear than with our children.

Children are growing up in the midst of an information revolution that, even a decade ago, was unimaginable, with instant access to an astonishing range of content and information. Today’s children are taking in an astonishing five times more information than the generation that grew up in the not so distant 1990s. So, far from tabloid stories about a distracted generation, those growing up today are in some ways on course to be the most informed generation in history. But of course knowledge is not understanding, and wisdom comes in part from experience.

--- Later in debate ---

[Mrs Miller]

I am attracted to the shadow Minister’s proposal because I, too, feel more needs to be done to educate children in this area, but I am concerned that it is talking about internet pornography in isolation and potentially will not address the problems he is trying to address in his remarks, which go far broader than simply internet pornography.

[Kevin Brennan]

I would certainly welcome the right hon. Lady’s support for a wider amendment and for a wider change in Government policy in this area, because a problem does exist. Our proposals have had to be drawn up to be within the scope of the Digital Economy Bill. In Committee, we were unable to table an amendment that was in scope, so I am incredibly grateful that we have been able to get one in scope and within the confines of the Bill today.

[Rob Marris]

I entirely support my hon. Friend. I suspect that his experience of going round schools—particularly secondary schools—will be similar to mine. Among the things that bedevil teachers are mobile phones, online bullying and sexting, but the teachers—God bless ’em—often do not have the training to deal with those issues. Although they have the best intentions, they sometimes fumble in their attempts to help. Having these measures structured into the curriculum would help just about every secondary schoolteacher, even if they did not have to teach these things.

[Kevin Brennan]

My hon. Friend makes a valuable point. I am a former teacher—from the analogue age, I hasten to add—and I have no doubt that many teachers who started their careers around the same time as I did would fall into that category.

Statutory online education could work in tandem, as I have said, but protecting our children is a major challenge and it cannot happen without education. That is why I was disappointed that the Minister chose not to support our proposal. I believe that it represents the other side of the coin to what the Government are trying to achieve through age verification. We contend that our measures are necessary, and we will therefore divide the House on this matter if we have to.

Our new clause 32 would oblige the age verification regulator to ensure that all age verification providers—the companies that put the tools on websites to ensure compliance—were approved by the regulator. It would also oblige those providers to perform a data protection impact assessment and to make it publicly available, as well as to perform an array of other duties. The new clause is designed to address concerns about the practicality of age verification checks. It would ensure that only minimal data were required, that those data were kept secure and that individuals’ liberty and privacy were protected.

We have not been reassured by the Minister’s comments, either in Committee or today, that the fact that age verification software is improving is enough. We should be able to guarantee the privacy of an individual before the verification tool comes into force. We are not asking anything unreasonable of the regulator or of the age verification providers. The principles of privacy, anonymity and proportionality should underpin the age verification tool, but as far as I am aware, they have not as yet featured in any draft guidance, codes of practice or documents accompanying the Bill.

If anyone thinks I am being partisan, I can tell them that the Information Commissioner agrees with me on this. In its response to the Department’s consultation on age verification for pornography, the Information Commissioner’s Office stated:

“The Commissioner’s concern is that any solution implemented must be compliant with the requirements of the DPA and PECR.”

That refers to the Data Protection Act 1998 and the Privacy and Electronic Communications (EC Directive) Regulations 2003 that sit alongside it.

[Matt Hancock]

rose—

[Kevin Brennan]

I will finish the quote, then I will give way. The Information Commissioner’s response went on:

“The concept of ‘privacy by design’ would seem particularly relevant in the context of age verification—that is, designing a system that appropriately respects individuals’ privacy whilst achieving the stated aim. In practical terms, this would mean only collecting and recording the minimum data required in the circumstances, having assessed what that minimum was. It would also mean ensuring that the purposes for which any data is used are carefully and restrictively defined, and that any activities keep to those restricted purposes. In the context of preventing children from accessing online commercial pornography, there is a clear attribute which needs to be proven in each case—that is, whether an individual’s age is above the required threshold. Any solution considered needs to be focussed on proving the existence or absence of that attribute, to the exclusion of other more detailed information”—

[Interruption.] I will go on for a lot longer if the Minister keeps making gestures at me. The quote concludes:

“Any solution considered needs to be focussed on proving the existence or absence of that attribute, to the exclusion of other more detailed information (such as actual date of birth).”

[Matt Hancock]

I am grateful to the hon. Gentleman for giving way; I just want to clear up this point. When this question was asked while I was on my feet, I responded by saying that the Data Protection Act, as cited by the ICO, is the legal framework for delivering this. The further quotes that the hon. Gentleman read out outline how the Act would operate in this case. In a sense, therefore, those quotes prove the point that the required legislation for ensuring protection of data already exists in the Data Protection Act and other measures.

[Kevin Brennan]

We will see whether the Information Commissioner agrees. She made it clear that she would have

“significant concerns about any method of age verification that requires the collection and retention of documents such as a copy of passports, driving licences or other documents (of those above the age threshold) which are vulnerable to misuse and/or attractive to disreputable third parties.”

The Minister gave no real reason in his intervention about why he does not support new clause 32, which would provide that reassurance.

The risks of creating databases that potentially contain people’s names, locations, credit card details—you name it—alongside their pornographic preferences are clear. Our priority here is the protection of children and that is agreed across the House, but one consequence of the recent hack that was mentioned by the right hon. Member for Orkney and Shetland (Mr Carmichael) was the number of suicides. We should take things seriously and proceed with caution before creating anything that would result in the storing of data that could be leaked, hacked or commercialised that would otherwise be completely private and legitimate. That is the reasoning behind our reasonable, straightforward new clause, which the Minister rejects. It would place a series of duties on the age verification regulator to ensure that adequate privacy standards were applied, that any data obtained or stored were not for commercial use and that security was given due and proper consideration.

New clause 7 would mean that mobile phone service providers give all consumers the opportunity to place a financial cap on their monthly bill and that a mobile phone service cannot be provided until the service provider has put in place a cap of the agreed amount if the consumer has made an express request. Again, the Minister’s arguments, both in Committee and today, were nowhere near sufficient. The new clause would be welcomed by the many who have found that when they receive an email or check their bank balance at the end of the month, their mobile phone bill has come in much higher than expected. Mobile tariffs are complex, particularly on data, and few of us actually understand how much data we need for an average month. Consumers of all kinds can find that they use much more data than they expected.

Citizens Advice provided an example that reveals the problems. One of its clients changed his shift pattern and started using his mobile phone to watch films. He then received a text message saying that he had gone over his monthly allowance. He did not think too much about it until he received a bill for more than £2,000 at the end of the month. Unsurprisingly, his service was subsequently cut off. Research suggests that as many as one in five consumers find it difficult to keep track of how much they spend on data. The average unexpectedly high bill is often double the cost of the original monthly fee.

[Helen Goodman]

Another problem with the unpredictability is that people under some contracts pay for what they receive—what other people send in texts, emails and so on—but that is not under their control.

--- Later in debate ---

[Kevin Brennan]

My hon. Friend is absolutely right. That is why new clause 7 is so helpful. Consumers could prevent that from happening by voluntarily asking for a cap. Citizens Advice received more than 60,000 inquiries about telephone and broadband debt, with its in-debt specialists dealing with nearly 27,000 individual mobile phone debt cases. Consumers support the measure, with more than 77% of them welcoming the idea.

This is not the first time such a proposal has been considered: in 2012, Ofcom considered introducing regulations but could not overcome the objections of providers, who argued it would be too costly. In fact, the lack of regulation is what has proved too costly—too costly for struggling consumers. Two providers now do what is suggested in our new clause. The Government say they want to help the JAMs—those who are just about managing—so if they fail to support the new clause, it will show they are not serious when they say that.

[Ian C. Lucas]

I strongly support this proposal and the new clause. Constituents have contacted me specifically about this point, because the complexity of the tariffs and the lack of knowledge about what makes up the information and the cost is huge for consumers, and this proposal would be a major step forward for them.

[Kevin Brennan]

I welcome my hon. Friend’s intervention in support of our proposal for caps on mobile phone bills, and so that I do not exceed mine at this point, I will hang up, Madam Deputy Speaker.

[Mrs Miller]

It is a pleasure to follow the hon. Member for Cardiff West (Kevin Brennan), and I share his regret that it is not possible to address online abuse in this Bill. I hope that the Minister will show the Government’s determination on this issue, as Ministers have done regularly in response to questions on a number of other measures. I particularly noted his response to my intervention about codes of practices. He is right to say that the industry has been able to move swiftly and effectively to deal with issues relating to terrorism and child abuse, but I think issues relating to online abuse more broadly are just as worthy of their attention. I hope that he is clear about the Government’s priorities in this area, to make sure that the industry really does act.

It is an art form to draw the scope of a Bill, and the Minister should get a grade-A medal for drafting the scope of this Bill extremely tightly to make sure that a number of issues that many of us would have liked to have drawn to the attention of the House are not covered by this Bill. That does not, however, mean that they are any the less important.

I really welcome Government new clauses 28 and 29 on the powers to block access to material where age verification is not sufficiently robust. That shows the Government’s intention. They have done well to reflect the intentions of my hon. Friend the Member for Devizes (Claire Perry) in her new clause 1 and of my hon. Friend the Member for Congleton (Fiona Bruce). It shows action and energy from Government to try to clean up the internet so that it is safer for children to use. My amendments 27 to 34 raise the question of whether the Government could have gone further in that, although I acknowledge that they are very much adhering to the manifesto commitments we made at the general election.

We have heard from the Minister at length, and I listened carefully, particularly to his response to my amendments. With his usual elegance and wit, he attempted to explain how this Bill can be at odds with Government policy but people can be very happy with it—I may be being a little unkind. He often tells us at the Dispatch Box that what is illegal offline is illegal online too, but it is illegal for children under the age of 18 to view adult material—I refer not just to pornography; as he knows, “adult material” is drawn more broadly than pornography alone. It therefore seems a little arbitrary for us to introduce a new law that makes such a distinction. I do not understand why one needs to be made.

--- Later in debate ---

[Kevin Brennan]

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

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

New clause 8—Responsibility for policy and funding of TV licence fee concessions—

“After section 365(5) of the Communications Act 2003 insert—

“(5A) It shall be the responsibility of the Secretary of State to—

(a) specify the conditions under which concessions are entitled, and

(b) provide the BBC with necessary funding to cover the cost of concessions,

and this responsibility shall not be delegated to any other body.”

This new clause seeks to enshrine in statute that it should be the responsibility of the Government to set the entitlement for any concessions and to cover the cost of such concession. This new clause will ensure the entitlement and cost of over-75s TV licences remain with the Government. It would need to be agreed with Clause 76 not standing part of the Bill.

New clause 17—PSB prominence—

“(1) The Communications Act 2003 is amended as follows.

(2) At the end of section 310(1) add “that satisfy the qualification criteria to be set by OFCOM in the code.”

(3) In section 310(2) leave out “OFCOM consider appropriate” and insert “required by OFCOM”.

(4) In section 310(4)(a) after “programmes” insert “, including on-demand programme services,”.

(5) In section 310(5)(a) after “service” insert “, including on-demand programme service,”.

(6) In section 310(8)(a) after “services” insert “, including on-demand programme services,”.

(7) In section 310(8)(b) after “services” insert “, including on-demand programme services.”

This new clause would modernise the PSB prominence regime, as recommended by Ofcom in its 2015 PSB Review. This proposal would extend the provisions in the Communications Act 2003 which currently only apply to traditional public service television channels and menus to on-demand services.

New clause 18—Listed events qualifying criteria—

“(1) The Broadcasting Act 1996 is amended as follows.

(2) Omit section 98(2)(b) and insert—

“(b) that the service has been watched by at least 90 per cent. of citizens in the United Kingdom in the course of the preceding calendar year.”

(3) After section 98(2) insert—

“(2A) The Secretary of State may by Order amend section (2)(b) by substituting a different percentage for any percentage for the time being specified there.

(2B) No Order under subsection (2A) shall be made unless a draft of the Order has been laid before and approved by a resolution of each House of Parliament.””

This new clause seeks to future-proof the listed events regime. This replaces the criterion on the capability of ‘receive’ a channel with an alternative based on its actual usage over the period of a year, lowers the threshold from 95% to 90%, and proposes delegating powers to the SoS to amend the 90% threshold.

New clause 24—Review of sale of counterfeit electrical appliances on the internet—

‘(1) Within six months of this Act coming into force, the Secretary of State shall commission a review of the sale on the internet of counterfeit electrical appliances and shall lay the report of the review before each House of Parliament.

(2) The review under subsection (1) shall consider whether operators of trading websites that allow individual sellers to use those websites to sell electrical items should be obliged to report to the police and trading standards any instances of the selling of counterfeit electrical appliances during the course of their business of trading.”

New clause 33—Report of cost to UK economy of counterfeit electrical goods on the internet—

‘(1) Within six months of this Act coming into force, the Secretary of State shall prepare and publish a report on the cost to the UK economy of counterfeit electrical goods on the internet and shall lay a copy of the report before Parliament.

(2) The report under subsection (1) shall include an assessment of—

(a) the amount of counterfeit electrical goods being imported into the United Kingdom,

(b) the efficacy of the 1994 Plugs and Sockets regulations, and

(c) the amounts of counterfeit electrical good being sold on trading websites on the internet.”

New clause 34—Review of impact of digital platforms on media advertising—

‘(1) Within 12 months of this Act coming into force, Ofcom shall conduct a review of the impact of digital platforms on media advertising and the sustainability of the UK media.

(2) Ofcom shall conduct another review on the matters under subsection (1) within five years of the publication of the first review, and within every five years thereafter.

(3) The Secretary of State must lay a copy of the report of any review in this section before Parliament.”

Government amendments 20 to 22.

New clause 15—Power to provide for a code of practice related to copyright infringement—

“(1) The Secretary of State may by regulations make provision for a search engine to be required to adopt a code of practice concerning copyright infringement that complies with criteria specified in the regulations.

(2) The regulations may provide that if a search engine fails to adopt such a code of practice, any code of practice that is approved for the purposes of that search engine by the Secretary of State, or by a person designated by the Secretary of State, has effect as a code of practice adopted by the search engine.

(3) The Secretary of State may by regulations make provision—

(a) for the investigation and determination of disputes about a search engine’s compliance with its code of practice,

(b) for the appointment of a regulator to review and report to the Secretary of State on—

(i) the codes of practice adopted by search engines, and

(ii) compliance with the codes of practice;

(c) for the consequences of a failure by a specified search engine to adopt or comply with a code of practice including financial penalties or other sanctions.

(4) Regulations made under this section—

(a) may make provision that applies only in respect of search engines of a particular description, or only in respect of activities of a particular description;

(b) may make incidental, supplementary or consequential provision;

(c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”

This new clause would amend the Bill to present an opportunity for the Government to fulfil its manifesto commitment to reduce copyright infringement and ensure search engines do not link to the worst-offending sites. There is an absence of a specific provision in the Bill to achieve this.

New clause 16—E-book lending—

“In section 43(2) of the Digital Economy Act 2010, leave out from “limited time” to “and loan.”

This new clause aims to extend public lending rights to remote offsite e-book lending.

New clause 30—Devices or services that infringe copyright—

“(1) The Copyright, Designs and Patents Act 1988 is amended as follows.

(2) In section 107(1)(d)(ii) after “offers” insert “, advertises”.

(3) After section 107(1)(d)(iv) insert—

(v) installs, maintains or replaces, or

(ii) otherwise promotes by means of commercial communications, or”

(4) In section 107(1)(e) after “article” insert “, device, product or component”.

(5) In section 107(1)(e) after “work” insert “or which is, and which he knows or has reason to believe is, primarily designed, produced, adapted or otherwise used in a manner described in this section whether alone or in conjunction with another article, device, product, component, or service supplied by or with the knowledge of the same person for the purpose of enabling or facilitating the infringement of copyright”.”

This new clause allows the Government to fulfil its commitment in the IPO’s Enforcement Strategy to ensure that UK business and rights holders have the necessary legal means to protect their IP. It brings in language to cover the supply of IPTV boxes clearly being marketed or sold for the purpose of enabling or facilitating copyright infringement, recognising that many devices may not, themselves, infringe copyright, but are supplied in conjunction with information which enables users to infringe copyright.

New clause 31—Offence to use digital ticket purchasing software to purchase excessive number of tickets—

“(1) A person commits an offence if he or she utilises digital ticket purchasing software to purchase tickets over and above the number permitted in the condition of sale.

(2) A person commits an offence if he or she knowingly resells or offers to resell, or allows to be resold or offered for resale on a secondary ticketing facility, a ticket that the person knows, or could reasonably suspect, was obtained using digital ticket purchasing software and was acting in the course of a business.

(3) For the purposes of subsection (2) a person shall be treated as acting in the course of a business if he or she does anything as a result of which he makes a profit or aims to make a profit.

(4) A person guilty of an offence under this section shall be liable on summary conviction to—

(a) imprisonment for a period not exceeding 51 weeks,

(b) a fine not exceeding level 5 on the standard scale, or

(c) both.

(5) In this section—

(a) “digital ticket purchasing software” means any machine, device, computer programme or computer software that, on its own or with human assistance, bypasses security measures or access control systems on a retail ticket purchasing platform that assist in implementing a limit on the number of tickets that can be purchased, to purchase tickets.

(b) “retail ticket purchasing platform” shall mean a retail ticket purchasing website, application, phone system, or other technology platform used to sell tickets.

(6) Subsections (1) and (2) shall apply in respect of anything done whether in the United Kingdom or elsewhere.”

This new clause creates an offence to use digital ticket purchasing software to purchase tickets for an event over and above the number permitted in the condition of sale. It also creates an offence to knowingly resell tickets using such software.

New clause 5—Personal data breaches—

“(1) The Data Protection Act 1998 is amended as follows.

(2) After section 24 insert—

“24A Personal data breaches: notification to the Commissioner

(1) In this section, section 24B and section 24C “personal data breach” means unauthorised or unlawful processing of personal data or accidental loss or destruction of, or damage to, personal data.

(2) Subject to subsections (3), (4)(c) and (4)(d), if a personal data breach occurs, the data controller in respect of the personal data concerned in that breach shall, without undue delay, notify the breach to the Commissioner.

(3) The notification referred to in subsection (2) is not required to the extent that the personal data concerned in the personal data breach are exempt from the seventh data protection principle.

(4) The Secretary of State may by regulations—

(a) prescribe matters which a notification under subsection (2) must contain;

(b) prescribe the period within which, following detection of a personal data breach, a notification under subsection (2) must be given;

(c) provide that subsection (2) shall not apply to certain data controllers;

(d) provide that subsection (2) shall not apply to personal data breaches of a particular description or descriptions.

24B Personal data breaches: notification to the data subject

(1) Subject to subsections (2), (3), (4), (6)(b) and (6)(c), if a personal data breach is likely to adversely affect the personal data or privacy of a data subject, the data controller in respect of the personal data concerned in that breach shall also, without undue delay, notify the breach to the data subject concerned, insofar as it is reasonably practicable to do so.

(2) The notification referred to in subsection (1) is not required to the extent that the personal data concerned in the personal data breach are exempt from the seventh data protection principle.

(3) The notification referred to in subsection (1) is not required to the extent that the personal data concerned in the personal data breach are exempt from section 7(1).

(4) The notification referred to in subsection (1) is not required if the data controller has demonstrated, to the satisfaction of the Commissioner—

(a) that the data controller has implemented appropriate measures which render the data unintelligible to any person who is not authorised to access it; and

(b) that those measures were applied to the data concerned in that personal data breach.

(5) If the data controller has not notified the data subject in compliance with subsection (1), the Commissioner may, having considered the likely adverse effects of the personal data breach, require the data controller to do so.

(6) The Secretary of State may by regulations—

(a) prescribe matters which a notification under subsection (1) must contain;

(b) provide that subsection (1) shall not apply to certain data controllers;

(c) provide that subsection (1) shall not apply to personal data breaches of a particular description or descriptions.

24C Personal data breaches: audit

(1) Data controllers shall maintain an inventory of personal data breaches comprising—

(a) the facts surrounding the breach;

(b) the effects of that breach; and

(c) remedial action taken

which shall be sufficient to enable the Commissioner to verify compliance with the provisions of sections 24A and 24B. The inventory shall only include information necessary for this purpose.

(2) The Commissioner may audit the compliance of data controllers with the provisions of sections 24A, 24B and 24C(1).

(3) In section 40 (Enforcement notices)—

(a) in subsection (1)—

(i) after “data protection principles,” insert “or section 24A, 24B or 24C”;

(ii) for “principle or principles” substitute “principle, principles, section or sections”;

(b) in subsection 6(a) after “principles” insert “or the section or sections”.

(4) In section 41 (Cancellation of enforcement notice”)—

(a) in subsection (1) after “principles” insert “or the section or sections”;

(b) in subsection (2) after “principles” insert “or the section or sections”.

(5) In section 41A (Assessment notices)—

(a) in subsection (1) after “data protection principles” insert “or section 24A, 24B or 24C”;

(b) in subsection (10)(b) after “data protection principles” insert “or section 24A, 24B or 24C”.

(6) In section 41C (Code of practice about assessment notices)—

(a) in subsection (4)(a) after “principles” insert “and sections 24A, 24B and 24C”;

(b) in subsection (4)(b) after “principles” insert “or sections”.

(7) In section 43 (Information notices)—

(a) in subsection 43(1)—

(i) after “data protection principles” insert “or section 24A, 24B or 24C”;

(ii) after “the principles” insert “or those sections”;

(b) in subsection 43(2)(b) after “principles” insert “or section 24A, 24B or 24C”.

(8) In section 55A (Power of Commissioner to impose monetary penalty)—

(a) after subsection (1) insert—

(1A) The Commissioner may also serve a data controller with a monetary penalty notice if the Commissioner is satisfied that there has been a serious contravention of section 24A, 24B or 24C by the data controller.”;

(b) in subsection (3A) after “subsection (1)” insert “or (1A)”;

(c) in subsection (4) omit “determined by the Commissioner and”;

(d) in subsection (5)—

(i) after “The amount” insert “specified in a monetary penalty notice served under subsection (1) shall be”;

(ii) after “Commissioner” insert “and”;

(e) after subsection (5) insert—

(5A) The amount specified in a monetary penalty notice served under subsection (1A) shall be £1,000.

(5B) The Secretary of State may by regulations amend subsection (5A) to change the amount specified therein.”

(9) In section 55B (Monetary penalty notices: procedural rights)—

(a) in subsection (3)(a) omit “and”;

(b) after subsection (3)(a) insert—

“(aa) specify the provision of this Act of which the Commissioner is satisfied there has been a serious contravention, and”;

(c) after subsection (3) insert—

(3A) A data controller may discharge liability for a monetary penalty in respect of a contravention of section 24A, 24B or 24C if he pays to the Commissioner the amount of £800 before the time within which the data controller may make representations to the Commissioner has expired.

(3B) A notice of intent served in respect of a contravention of section 24A, 24B or 24C must include a statement informing the data controller of the opportunity to discharge liability for the monetary penalty.

(3C) The Secretary of State may by regulations amend subsection (3A) to change the amount specified therein, save that the amount specified in subsection (3A) must be less than the amount specified in section 55A(5A).”;

(d) in subsection (5) after “served” insert “under section 55A(1)”;

(e) after subsection (5) insert—

(5A) A person on whom a monetary penalty notice is served under section 55A(1A) may appeal to the Tribunal against the issue of the monetary penalty notice.”

(10) In section 55C(2)(b) (Guidance about monetary penalty notices) at the end insert “specified in a monetary penalty notice served under section 55A(1)”.

(11) In section 67 (Orders, regulations and rules)—

(a) in subsection (4)—

(i) after “order” insert “or regulations”;

(ii) after “section 22(1),” insert “section 24A(4)(c) or (d), 24B(6)(b) or (c),”;

(b) in subsection (5)—

(i) after subsection (c) insert “(ca) regulations under section 24A(4)(a) or (b) or section 24B(6)(a),”;

(ii) for “(ca) regulations under section 55A(5) or (7) or 55B(3)(b),” substitute “(cb) regulations under section 55A(5), (5B) or (7) or 55B(3)(b) or (3C),”.

(12) In section 71 (Index of defined expressions) after

[Kevin Brennan]

We have 12 new clauses and amendments—and one that we withdrew so that the Select Committee could table it—in this group. New clause 6 stands in my name and those of my hon. Friends the Members for Tooting (Dr Allin-Khan) and for Sheffield, Heeley (Louise Haigh). As the Minister has done many times, I pay tribute to the latter, who unfortunately is not here because she is part of a pre-planned parliamentary delegation. She did a tremendous job in Committee and has been praised universally on both sides of the House for her efforts.

On new clause 6, although subtitling is at or near 100% across public service broadcasters, three quarters of the UK’s 90 on-demand providers still offer no subtitling at all, despite the fact that according to Ofcom nearly one in five of the UK population use them. The principle behind the Communications Act 2003 recognised that those with sensory loss should not be denied access to the information services that many of us take for granted, but those with sensory loss cannot keep up with changing technology. In July 2013, the then Minister for the Digital Economy, the right hon. Member for Wantage (Mr Vaizey), acknowledged this, arguing in the Department’s 2013 document, “Connectivity, Content and Consumers”, that if

“progress isn’t being made in three years’ time…we will consider legislation.”

Well, here we are, three years later, with an appropriate legislative vehicle right here in front of us, and the Government are failing to act.

We wonder why. There were strong rumblings that the Government were planning to act, and we were checking the amendment paper every day, anticipating that they would, so it is a bit odd that we, the Opposition, have to bring forward this new clause, which takes on the Government’s concerns, when it is supposed to be the other way around—the Government taking on the concerns of others in the House during consideration of a Bill. The new clause would update the existing regulatory regime and apply it to on-demand providers. It is clearly time the Government acted to reflect the digital world in which we live and allow those with sensory loss to play a full and active part in it. The Government should accept the new clause, and I look forward to the Minister telling us that he will.

[Rob Marris]

Does my hon. Friend find it shocking that just one of the 21 on-demand services offered through Virgin TiVo—we discussed Virgin’s telephony and telecommunications services under new clause 27—is subtitled? That is less than 5%. Is that not a prime example of why we need new clause 6?

[Kevin Brennan]

It is a prime example. I might even have had it in my notes, before I truncated them considerably in order to make some progress. My hon. Friend is absolutely right to point it out.

New clause 8 opposes the way the Government are dealing with the free television licences for over-75s. The continuation of free licences for over-75s was a promise made in the Conservative party’s manifesto, which many over-75s voted for in good faith, but now, just 16 months later, the Government are legislating to do away with that pledge in all but name, on the pretence that it should now be for the BBC to decide who gets a free television licence. I am afraid that the promise in the manifesto was unequivocal. It said:

“We will maintain all the current pensioner benefits including Winter Fuel Payments, free bus passes, free prescriptions and TV licences”.

Notice the list of Labour achievements in that quote, Madam Deputy Speaker! It said “maintain” not “play pass the policy parcel”, which is what the Government are doing. They are legislating to hand over responsibility to a body that cannot afford to maintain the entitlement.

[Kelvin Hopkins (Luton North) (Lab)]

Does my hon. Friend accept that this is a political decision and that it is wrong to compromise the BBC in this way by drawing it into politics?

[Kevin Brennan]

Far be it for me to accuse the Government of taking political decisions—this is the House of Commons after all—but it is nevertheless a broken promise, masquerading as an administrative change. I think that is the point my hon. Friend is making. If he were trying to imply that this were a craven approach, he would be absolutely right about that, too.

I am sure that the Minister will argue that, in fact, the BBC has somehow been rewarded handsomely in the charter renewal process, and that the BBC will decide its funding policy for over-75s set within that context. He will claim support from the BBC for what the Government are doing, because the BBC has said that it is in favour of it. It is the kind of support given when someone has a loaded gun placed against their head and is asked for that support. There is a reason why the BBC has agreed to take over control of setting entitlement for over-75 licences: it knows it cannot afford it at its current rate. The BBC should never have been given the responsibility for delivering on a Conservative party manifesto pledge.

[Kelvin Hopkins]

I apologise for interrupting my hon. Friend’s flow once again, but the BBC was given this short straw at the same time as its future was being renegotiated. The BBC was under duress and surely had to accept this move.

[Kevin Brennan]

Indeed. That was my reason for using the metaphor of holding a loaded gun to the BBC’s head. Opposition Members do not consider that the deal was negotiated in good faith. As my hon. Friend’s point suggests, it amounted to little other than blackmail.

[Sir Edward Leigh (Gainsborough) (Con)]

I apologise for being controversial—the hon. Gentleman will not agree with me—but this is rather like the triple lock. The fact is that many pensioners over the age of 75 are perfectly capable of paying a licence fee, so perhaps we should concentrate resources on people who really cannot afford to pay, rather than piling up more and more benefits to pensioners. I know that is controversial, but it is a point that needs to be made.

[Kevin Brennan]

It is an entirely legitimate point of view, but that is not what is under discussion. We are discussing who should take that decision. We say that the decision should be taken by this House and that the Government should be brave enough to face the electorate and say that they have decided that the policy is not, as the hon. Gentleman suggests, a priority. Instead of that, however, the Government are pretending that they are somehow keeping their pledge while transferring responsibility to an unaccountable body. The hon. Gentleman has been a powerful advocate in his long career on behalf of democracy and this House and against that kind of transfer of responsibility from this House and the duly elected Government to unelected quangos or other bodies. That is why we tabled the new clause, which I hope the hon. Gentleman will support for that reason.

It is a point of principle for us. We cannot accept a policy that takes responsibility for even a small part of our social security system and gives it to an organisation with no direct accountability to the electorate. If the new clause fails, Labour will do everything in its power to make it clear to those millions of over-75s exactly what is going on. It is not the BBC that will be reducing or taking away their entitlement to TV licences; it is the Government who have knowingly engineered the change. If we look at the Red Book for Budget 2016, we see that it is absolutely clear how much money the Government intend to save from this measure: in 2018-19, £185 million; in 2019-20, £425 million; and in 2020-21, £725 million.

Our new clause 17 aims to modernise the public service broadcaster regime, as recommended by Ofcom. Existing law would be extended to include on-demand channels and menus. The broadcasting landscape has changed significantly due to the emergence of new technologies such as the BBC iPlayer, the iPad and digital TV switchover, so although the Communications Act 2003 ensured PSB prominence on broadcast TV, it does not apply to connected TV sets or to catch-up services.

Connected TVs, such as Sky Q box, move the TV guide, where PSBs occupy the most prominent positions, so that it is increasingly hard to find. Seven out of 10 of the public say that they want the BBC channels at the top of the channel listings and that they want BBC iPlayer and the on-demand service there too. Among connected TV users, people are 10 times more likely to prefer to see the TV guide than the platform operators’ recommendations first. This holds true in focus groups, where consumers gave feedback on the obscuring of the TV guide. One said:

“I absolutely love Sky Q, but if there were one thing I would change, it would be where the TV guide is…it’s almost tucked away somewhere on my screen. You expect technological advances to make life easier, but this is making it harder…it’s an extra step.”

Essentially, the public are paying towards PSB content that is becoming increasingly hard to find.

The Minister argued in Committee that Ofcom should adapt the code in line with technological developments, but Ofcom itself has called for a legislative change. The point was made that the TV guide was of declining importance due to the increasing integration of TV and internet services. However, nine out of those who watch live or on-demand use the electronic programme guide to access TV programmes. Our new clause builds on the current system, with a strong duty placed on Ofcom to provide clearer guidelines than at present. The industry should then apply these as appropriate to their platforms. If the Government really believe in public service broadcasting—and they say they do—they should support our new clause 17.

New clause 18 deals with the listed sporting events regime, which ensures that events such as the Olympics are freely and widely available. Unfortunately, that is at risk, so our new clause would help to safeguard listed events into the future. Some 45 million people in the UK watched the Rio 2016 Olympics, while millions watched the Euros—including Wales’s stunning run to the semi-final this summer. Listed events are responsible for 5% of sports output but 60% of sports viewing in this country. The current law specifies that 95% of the population must be reached by a channel for it to acquire listed events rights. Due to the proliferation of alternative media devices, PSBs believe that by the end of this Parliament no TV channel will, in fact, meet that 95% reach criterion.

New clause 18 offers a solution. There is a crucial legal difference between receiving a channel and watching it. Replacing the criterion on the capability to “receive” a channel with the alternative that it “has been watched”, based on its actual uses over the past year, would capture factors such as continuous free-to-air availability, popularity and audience awareness. The new clause would lower the threshold from 95% to 90%, and give the Secretary of State powers to amend it so that the law is flexible enough to reflect consumption trends and change in new and unpredictable ways.

Let me deal now with new clause 15. Over the past few years, there has been a series of round-table discussions with search engines, including Google, Bing and Yahoo, and rights holders including the British Phonographic Industry, the Music Publishers Association and the Alliance for Intellectual Property. The various parties have been trying to negotiate a code of practice to tackle copyright infringement whereby search engines would do more to demote sites that carry pirate content. These discussions are dragging on and, years later, the search engines and rights holders are yet to come to an agreement. Our new clause would provide the Secretary of State with the powers to legislate for a code of practice to be agreed if the next rounds of talks fail to come to a conclusion.

Piracy continues to weaken the UK recorded music industry. For example, academic evidence based on average retail prices and Ofcom’s tracker survey indicate a loss of between £150 million and £300 million a year. Our new clause would give the Secretary of State a backstop power to legislate that a code of practice be agreed. I think the Government should accept that now is the time for action in this sphere.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Does my hon. Friend agree that, given that this issue featured in the Conservative manifesto, it would be fantastic if the Government came forward to support the new clause, so that they could implement a promise they made at the last general election?

[Kevin Brennan]

My hon. Friend anticipates something that I was intending to say, but did not say. She is absolutely correct to point that out. The figures clearly show that this measure is not being implemented, even though the Minister claimed in Committee that it was.

New clause 16 is about public lending right. Hon. Members might be surprised to know that it does not extend to e-books where they are borrowed remotely, which by their very nature, of course, they are. It is ludicrous that 2.3 million remote loans were made in the last year, none of which were counted for public lending right. The method by which a book is borrowed should not determine whether authors and illustrators receive fair payment for their work. That predicament has been significantly worsened by the closure of public libraries that has occurred on the Government’s watch as a result of its failed—as we now know—austerity policies. The new clause would close the loophole, and it is supported by the Society of Authors, the Association of Illustrators, and the Authors’ Licensing and Collecting Society.

--- Later in debate ---

[Nick Smith (Blaenau Gwent) (Lab)]

Does my hon. Friend agree that true fans do not stand a chance nowadays, because touts have evolved from blokes in sheepskin jackets lurking outside stadiums trying to sell spare tickets, to IT crooks who harvest thousands of tickets just seconds after they go on sale?

[Kevin Brennan]

I do agree with that. In Committee, the Minister told us a tear-jerking story about his efforts to buy tickets to a Paul Simon concert at the Royal Albert Hall. We look forward to a review when he rises to speak. At the moment he is chewing, so it is “The Sound of Silence”.

[Luciana Berger]

I look forward to hearing my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) expand on this point in more detail. Is it not time for us finally to do something about ticket-touting, on behalf of all the fans in the country who just want to enjoy music? I have not been a Member of Parliament for all that long, but we have been talking about this issue for the past six years. I see that tickets for tomorrow’s Justin Bieber concert are on sale for more than £1,000. Can we not do something about that, and ensure that everyone in the country can enjoy music?

[Kevin Brennan]

My hon. Friend makes her point passionately. I pay tribute to my hon. Friend the Member for Washington and Sunderland West, and I hope that we can play a part in a good result for her today when the Minister gives way on this point and accepts the cross-party new clause tabled by the Select Committee. My hon. Friend drew attention, in correspondence with us, to an analogy that was sent to her by someone who pointed out that the ticket-tout approach was nothing more or less than a protection racket. The bad guys create a problem, and then go around charging everyone else for solving it. The new clause would acknowledge ticket touting for what it really is: criminal exploitation. I hope that the Government will listen to Members on both sides of the House and do everything in their power to prevent and prosecute such behaviour.

[Rob Marris]

The Bill might not be the vehicle with which to do it, but another thing that needs to be tackled is the absolute scandal of administration fees, or booking fees. When one tries to buy a ticket, one pays 50 quid for the ticket and another 20 quid for the booking; the price should be £70 upfront.

[Kevin Brennan]

I entirely understand my hon. Friend’s point, but I shall stick strictly to the new clauses that we have tabled.

New clause 5 would establish a duty for companies to report any breach of cyber-security and to inform customers when possible. Just 28% of such attacks are reported to the police. We have welcomed the Minister’s announcement that he will implement the general data protection regulation in full, but even the GDPR provides extensive caveats, and it falls a long way short of the comprehensive regulatory system that the United Kingdom needs. Our new clause would impose a general obligation on data controllers to notify the Information Commissioner and data subjects in the event of a breach of personal data security.

New clause 11 provides for a public register of shared data. It would require all disclosures of data between data controllers to be logged in a public register giving, at the very least, a title, a description and a web page so that people can find out more. If there is transparency through a register, there can be an informed conversation about whether a particular data disclosure will solve the problem that it claims to solve. There has been data-sharing to “prevent fraud” for decades, and there has been a complete absence of audited and accurate results from that work. With additional powers come additional responsibilities. The argument that because current data-sharing has not prevented fraud there should be more data-sharing could be described as doing the same thing over and over again and expecting a different result. While part 5 of the Bill will remain a concern—I am sure that our colleagues in the other place will examine it—we believe that the Government should accept new clause 11 and demonstrate that they understand the importance of transparency in data-sharing.

Let me now deal with new clause 12, which concerns a review of data collection. Data are the currency of the digital economy but, in yet another missed opportunity, the Bill does absolutely nothing to address people’s rights over their data, which are increasingly a cause for concern. It is time that the Government acted, because consumer mistrust in the digital economy and in the use of our data is becoming corrosive. That is why we are calling for a royal commission to examine the use of our personal data in the commercial sector, to establish the extent of that practice, and to draw up a series of rights on which consumers and customers can rely in the digital age. The new clause would require the Government to commission an independent review of information and big data, and data administration, which would seek to establish the direction in which the stated policy intent of Government and big business—for individuals to have control over their own data—is heading.

Many providers are in the market for data, and there are many ways beyond our imagination in which our data can be modified. However, it will only take one exposé on “Dispatches” or a Mail on Sunday scandal to force the Government to react, and it is likely to overreact, as all Governments do. The Bill provides an excellent opportunity for the issues to be viewed in the cold light of day rather than in the heat of reaction, and I strongly urge the Ministers to support new clause 12.

New clause 19 is about free school meals. Many families who are eligible currently do not claim them. The new clause would explicitly provide for councils to share benefit data with schools, thus allowing eligible children to be automatically enrolled to receive free school meals rather than having to apply.

[Graham Jones (Hyndburn) (Lab)]

The issue of free school meals was raised in Committee. Does my hon. Friend agree that two-tier authorities consisting of a shire and a district should be able to share data seamlessly and automatically, as unitary authorities do in metropolitan areas?

[Kevin Brennan]

I do agree. My hon. Friend made that point brilliantly in Committee, and I recommend that people read his lengthier remarks if they want to find out more about that issue.

[Frank Field (Birkenhead) (Lab)]

I am grateful for the new clause because it follows a private Member’s Bill that I introduced. Following Liverpool’s example, Wirral carried out automatic registration for free school dinners and the school premium, and that resulted in £750,000 more coming into the area to target those poorest families.

[Kevin Brennan]

My right hon. Friend is correct. I was about to say that I wanted to praise him and, again, my hon. Friend the Member for Washington and Sunderland West for their work on that matter. We hope that the Government will support this sensible new clause.

I turn to amendment 3—our final amendment, you will be glad to know, Madam Deputy Speaker, in the group. In the aftermath of the care.data scandal, it is vital that patients are able to have trust in the confidential nature of the health service and to feel confident in sharing sensitive information with health care professionals. Part 5 of the Bill—clause 29 in particular—appears to permit an unprecedented sharing of confidential information. We are extremely concerned that if the information-sharing powers cover information held by bodies providing healthcare services, patient confidentiality could be undermined.

Amendment 3 would ensure that identifiable information held by healthcare bodies in connection with their functions would be exempt from the information-sharing powers in clause 29, thereby upholding current protections for confidentiality. We believe that the Bill should be amended to ensure that patient confidentiality is protected by clarifying that the Bill does not give power to public authorities to disclose any identifiable healthcare information. That would bring clause 29 into line with clause 56, which addresses information sharing specifically for research purposes. That was amended by the Government in Committee to prevent any erosion of the status quo for sharing healthcare data for research purposes. We believe, as does the British Medical Association, that similar protections should be extended to cover part 5. I look forward to the Minister accepting that amendment, along with all the other measures in the group.

[Sir Peter Bottomley (Worthing West) (Con)]

This may have come up in Committee, and it might come up later on Report: the concern of the National Union of Journalists about journalists not being mentioned on private data being shared. Is that coming up now, or does it come up later?

[Kevin Brennan]

The hon. Gentleman might have missed it, but we have already had Second Reading and Committee stage, and we are now on Report, so that matter is likely to come up in the House of Lords.

[Helen Goodman]

It might come up when we discuss my amendment.

[Kevin Brennan]

Sorry, I forgot that my hon. Friend’s amendment is in this group.

Having spoken on the amendments that we have tabled, rather than anyone else’s, I will sit down.

[Mr Whittingdale]

I will resist the temptation to be drawn by the hon. Member for Cardiff West (Kevin Brennan) into discussing his new clause 8 covering the funding of free television licences. We have already debated the issue at some length. Instead, in the spirit of consensus, I would like to concentrate on some of his other amendments, with which I have greater sympathy.

The first is new clause 15. On Second Reading, we discussed complaints by the creative industries that, when content is sought, the majority of sites produced by search engines such as Google and others are illegal. That has been the subject of discussion among the search companies, the rights owners and the Government for a long time, and progress has been glacial.

Since that discussion on Second Reading, I have had the advantage of talking to Google. I suspect the hon. Gentleman will have had that advantage, too. Google makes the point that if we put into its search engine the name of the artist and the name of the track, the overwhelming majority are legal results. That is progress. There is no doubt that it is better than it used to be. That deals with the problem of people who do not necessarily want to break the law but just find themselves directed to illegal sites, even when they are not looking for them. That is a step forward, but it does not deal with the problem of people who do not want to pay for music. If we put an additional few terms into the search box, such as “MP3 free download”, the position is completely different and the overwhelming majority of results from that search are illegal. That remains a big problem.

--- Later in debate ---

[Matt Hancock]

I rise to answer the points made so far, but I hope there will be time afterwards for others who still want to speak. We have had a broad debate on the amendments relating to copyright, broadcasting, ticketing, data and intellectual property, and I will speak as quickly as I can and take as many interventions as I can. There are a total of 36 proposed new clauses and amendments, and I propose to address each in turn in broadly the same order.

On copyright, new clause 15 proposes that the Government take a power to have a code of conduct on search engines to dictate how they should work to prevent copyright infringement. This new clause was also proposed in Committee, and I would like to update the House on the progress. Since then, the Intellectual Property Minister, Baroness Neville-Rolfe, has chaired a further round-table among search engine and creative industries representatives. As my right hon. Friend the Member for Maldon (Mr Whittingdale) said, that group is now making some progress towards agreeing an outline code of practice, but much more needs to be done. Following the round-table, a revised draft code will be prepared by the IPO for consideration by the group before its next meeting on 10 January. Our position on online platforms is that they must act responsibly and work with rights holders to help enforce IP rights. We are clear on the importance of getting things right and do not rule out legislation, but given the progress being made it is not necessarily the right time for legislative intervention.

We also discussed new clause 30 in Committee, where I set out the range of criminal provisions that apply to the sale and use of devices that infringe copyright. This matter relates to the IPTV devices that my right hon. Friend the Member for Maldon, the former Secretary of State, spoke about so powerfully. Following a number of investigations across the country, there are pending prosecutions relying on a number of offences. I am sympathetic to the intent behind the new clause, but it does not in and of itself offer any greater legislative protection to rights owners than the existing offences that target this type of behaviour. If the existing legal provisions are shown to be deficient when the pending prosecutions have concluded, we will bring forward proposals for legislation.

New clause 16 is another of the helpful proposals from the shadow Front-Bench team to deliver on a Conservative party manifesto commitment—this time on e-book lending. I am grateful for the degree of support that our manifesto has received from all parts of the House during the Bill’s passage.

[Kevin Brennan]

Then why don’t you implement it?

[Matt Hancock]

Just you wait. We of course agree that authors should be recognised for e-lending by ensuring appropriate compensation for them in an enhanced public lending right. I need to correct an omission. I belatedly declare a potential interest which I should have mentioned in Committee—at least, I hope that I can declare an interest, as I have a book that is available for borrowing in this way, although I have no idea whether it has ever been borrowed. As I said in Committee, we have been carefully considering the options for delivering the manifesto commitment. We had to wait for the conclusion of a court case, which ended earlier this month, before setting out the proposals, but I can confirm today that we intend to legislate to extend the public lending right to include the remote lending of e-books. It is important that we get that right and ensure that any changes are compatible with the copyright directive. We will therefore bring forward legislation as soon as possible.

Turning to broadcasting and subtitling for video on demand, new clause 6 was also considered in Committee. As I said then, we are keen to address this shortcoming and want to ensure that the requirements that are placed on on-demand programme service providers are appropriate and proportionate. Since then, we have discussed how best to increase the use of subtitles in video on demand with charities, broadcasters, Ofcom and others and have worked further on the best way to address the concerns that the new clause intends to address. Through working collaboratively with all interested parties, I hope to reach a resolution in the other place that results in an increase in the provision of access services for video on-demand services.

Let me turn to new clause 8, on TV licence fee concessions, a subject we discussed at length in Committee. Government Members are clear that we support the free TV licence for the over-75s, we committed in our manifesto to keeping it and we are glad that it is protected as part of the BBC charter and licence fee settlement, which has been debated extensively in this House and is delivering on our manifesto commitment. The new clause attempts to unpick that settlement and, in so doing, undermine the stability of the BBC. This funding settlement, which the new clause would undermine, was described by the director general of the BBC as a “strong deal” for the BBC and one that “gives us financial stability”.

--- Later in debate ---

[Kevin Brennan]

I thank my hon. Friends who served on the Public Bill Committee and the many individuals and organisations who submitted evidence to aid the scrutiny of the Bill, as well as the Clerks for their patience and advice. I also thank the Secretary of State and the Ministers for their hard work.

The Minister for Digital and Culture has been most assiduous, as we in the Opposition have tried to be also. On Report earlier, he even tried to speak some Welsh. It reminded me a little bit—as he often does—of Winston Churchill, who when he attempted to speak French said as a warning, “Prenez garde, je vais parler français”, or “Take guard, I am going to speak French.” The Minister did not quite give us that warning when he spoke Welsh. He did say he thought what he said meant that he backed the Welsh language; in fact he said that he backed Channel 4 Wales. I think that is what he said, anyway, in Welsh. I congratulate him on his commendable effort in speaking the language of heaven.

The Opposition will not be opposing this Bill on Third Reading as it contains a number of uncontroversial measures which we welcome and support and have no wish to block. However, that is not the same as saying that we think it is a good Bill. Its weaknesses lie as much in what it omits as what it contains. President Lyndon Johnson once said of a Bill that it was like grandma’s nightshirt; it covers everything. This Bill attempts to cover everything, but I am afraid there are quite a few holes in it, because a digital economy Bill would look much better if it properly recognised the importance of the digital economy to the whole country, if it took account of the pace of change in the development and use of new technology, and if it saw its central role in the way that work itself is changing for millions of people in the UK.

Let us imagine what the Bill would be like if it was much more ambitious about delivering ultrafast fibre broadband and mobile network coverage to everyone who needs it. Imagine a digital economy Bill that recognised the need to provide people with digital skills so that they can benefit from new technologies and the jobs of the future, or paid attention to the need for digital resilience and saw fit to mention cyber-security and preventing online abuse. A digital economy Bill that did any of those things would look very different from the Bill before us.

I want to focus on the areas where there is some agreement. On connectivity, we of course support the universal service obligation, but it is too tiny and too slow a step in the right direction. Labour called for this to be introduced back in 2010, and left fully costed plans for it to be achieved by 2012. The 10 megabits that will be guaranteed to households is less than half of what is needed to achieve superfast broadband. If anyone is wondering whether 10 megabits really is inadequate, they should not just take my word for it: the Minister for Digital and Culture said in a speech to the Broadband World Forum just last month that

“while 10 megabits may be enough for today’s needs, it won’t be enough for tomorrow’s.”

Even the Minister admits that his own legislation will be out of date by the time it is implemented.

On age verification, we all share the objective of protecting children from online pornography, and we support the provisions in the Bill that aim to do that, but we remain unclear about how they will work in practice and we hope that more details emerge as the Bill continues its scrutiny in the other place. There are legitimate concerns about privacy and the security of individuals’ personal data, which the Government must do much more to answer. The Bill still lacks any mention of the need for online sex and relationships education for young people, which is at least as important as age verification in protecting children from the risks of early exposure to inappropriate material.

There are some measures related to public service broadcasting which we support and which will help to give greater stability and certainty to the sector, but one way in which the Government could clear up an element of great uncertainty that hangs over our public service broadcasting system is by clarifying their thinking about the future of Channel 4. It is now 14 months since it became known that the Government were considering options including privatisation of Channel 4, and we are still none the wiser as to their thinking. Bringing this matter to a speedy conclusion—I hope by announcing their continued support for Channel 4’s current remit and model—would help to bring stability and certainty not just to that important public service institution, but to the wider creative industries with which its work is intimately bound up.

As this Bill moves to the other place, I hope that the Government will be able to provide reassurance on many of the concerns that have been raised by our colleagues in this House, and to think harder about more of the questions which have so far gone unanswered. It is not too late for the Bill to address questions around people’s rights over their own personal data, on which it is currently silent. It is not too late for the Government to come forward with measures to secure the rights of more than 1 million workers in the digital economy, many of whom are in precarious roles with uncertain rights, hours, contracts and even legal status. It is not too late for the Bill to recognise the needs of the 12 million people in the UK who do not have basic digital skills, which are increasingly necessary to navigate public services, to do business and to get jobs.

If the additional scrutiny to be provided in the other place can do these things and more, then when the Bill comes back to this House it will enjoy more wholehearted support from the Labour Benches than it has so far.