Digital Economy Bill

Kit Malthouse Excerpts

Tuesday 13th September 2016 Commons Chamber

[Claire Perry]

My hon. Friend makes an important point. During that long process of conversation, legislation and lobbying, we all discovered that it was very hard to get internet service providers, content providers and search engines to think in this way, because they took a different view. Their view was that they would serve up whatever people wanted, everywhere. If things are made illegal, it is a different matter, so it all came down to a question of legality rather than morality. However, I think we have made enormous progress, and I am proud that we can call Britain one of the most family-friendly places in the world to access the internet. All this has been done, by the way, without any materialisation of the doom-and-gloom scenarios of internet shutdown. My hon. Friend the Member for Folkestone and Hythe (Damian Collins), who chairs the Select Committee—he is no longer in the Chamber—spoke of our dynamic digital economy, which is perceived to be a high-growth, high-innovation area; and while all that has been achieved, we have also established some family-friendly guidelines.

Let me now urge the Minister and his officials to pay particular attention to two aspects of the Bill which concern me, and which others have also raised. The first is the definition of content that is captured by the age verification mechanism. I know that the Bill is quite loosely drafted, and I know that the intention is to capture both commercial material and material that is provided free on commercial sites, but there is a real question about peer-to-peer sites and live streaming. As we all know, the internet is not accessed through the mainstream hub sites, and there is now far more peer-to-peer and free content exchange. I should be interested to know how further drafting would address that problem.

It is encouraging that commercial providers of pornography support these proposals. They think it absolutely right for there to be some degree of age verification, because they are not interested in children viewing their material, and they recognise the commercial benefits of the Bill. That is very notable.

The second aspect that I want to raise is the role of the regulator, and what teeth the regulator can have. Concerns have been expressed today about enforcement. In the light of my association with the British Board of Film Classification, it occurs to me that there may be a role for that organisation in a regulatory structure. It is a trusted brand when it comes to regulating content; its definitions are widely accepted, and it is considered to be highly robust. I have met BBFC representatives and talked to them about the possibility, and they have agreed that there could be a role for them. However, the BBFC’s current enforcement is carried out not through its own powers, but through trading standards or the police, so the question of enforcement still needs to be addressed. However, it does concern me that, as we have heard, while the intention is there to have a level of enforcement—a civil enforcement, perhaps, relating to fines—it is difficult to establish a qualifying turnover and indeed bank account details for many of these overseas sites that are generating and posting content. I would be interested to have further details, perhaps in Committee, as to how those sites could be captured and, of course, what happens if nothing happens. What happens if a site flagrantly disregards this, and refuses to put in place a robust verification mechanism? We should explore the possibility of ISPs being asked to block sites that are effectively contravening UK law.

I urge the Minister to look at what happened with the gambling industry. The right hon. Member for Slough—I like to call her my right hon. Friend—and I could not understand why there was such a disparity. Of course, the gambling industry set up very early on robust age verification mechanisms that blocked under-18s from accessing their sites. There is a mechanism in place, and it has been achieved without any howls of privacy invasion.

[Kit Malthouse (North West Hampshire) (Con)]

My hon. Friend is making a powerful point and I fully agree with it, but does she agree that the difference between the gambling and pornography industries is that all gambling sites require the ability to take money from their customers, whereas not all pornography sites do? That is the critical difference, and the reason why this measure may not go quite as far as she and I would like.

[Claire Perry]

My hon. Friend is right, although the intention of many of these commercial sites is indeed finally to extract money from the customer either for a single view or a subscription.

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[Kit Malthouse (North West Hampshire) (Con)]

It is a great pleasure to follow the speech of my hon. Friend the Member for Fylde (Mark Menzies), and a joy to rise and welcome this Bill. I wish to raise four points. The first is to welcome the universal service obligation. My constituents speak of little else in the bosky lanes of North West Hampshire these days. They have doused the flames burning on the effigies of my right hon. Friend the Member for Wantage (Mr Vaizey) and started to hoist portraits of my right hon. Friend the Member for West Suffolk (Matt Hancock) alongside those of the Queen in the village hall in the hope that they may finally be connected to the real world.

All of this is remarkably good news, until it is not, which is a little bit like my own internet service where I am offered a particular rate until it is not that rate. That happens to me most of the time, particularly when the kids all get home from school. Will the Minister clarify what 10 megabits per second actually means? Is it a minimum? Is it permanently 10? Will 10 drop to two when everybody gets home and starts playing their games or downloading pornography? It will be interesting for people to know those things. The critical figure for areas such as mine will be the capped cost to BT or to the other providers of putting a service into our homes. If that is too low, there might as well be no universal service obligation; the farm drives and tracks of North West Hampshire will not be troubled by fibre or copper and so on, because the cost cap is too low. I gather that we will not get that figure until the end of the year, and my constituency will have to wait with bated breath. Until then, the promise is nothing more than that. Clarification from the Minister of what is intended would be fantastic.

Secondly, the Minister may have to enter into a tussle with the Housing Minister on the Neighbourhood Planning Bill as to which Bill will contain a provision making it compulsory for broadband to be fitted to all new housing. It is fairly obvious from the contributions of my hon. Friends and other Members this afternoon that there is a strong swell of opinion in the House that that should happen, and that developers will have to swallow it up. Given the assistance that they will be getting from the Government in expanding their businesses across the United Kingdom in the next few years, the least developers can do is fit this now essential utility to the houses that they build. I would recommend that the Minister speak to the Housing Minister, because someone somewhere will table an amendment, and it will get huge support in the House.

Thirdly, I alert the Minister to an amendment that I intend to table on Report. The Whips will not put me on Bill Committees, but I will table an amendment on Report, if it does not emerge beforehand, on the subject of business rates. It is a technical point, but it impacts heavily on competition in the sector. I know the Government are keen to promote competition. At the moment, BT has a fairly good deal from the valuation office on business rates on its network. Business rates are chargeable on a fibre broadband network. BT pays a lump sum, which reduces as it loses market share. If it expands its network, it pays no more—just that lump sum.

However, a new entrant to the market, putting in fibre broadband, will be required to pay business rates on that network. Paradoxically, that rate bill will be higher than the charges that BT would levy on it for renting the line from BT, thereby entrenching the BT monopoly. This differential treatment under the non-domestic rating system cannot be right. I will be tabling an amendment requiring the valuation office to produce a report annually on the impact of the rating system on competition in the sector, because we are asking people to compete to put fibre into the home, particularly across rural networks, and they are doing so with this huge hidden bill, which does not accrue to the major competitor—BT.

Finally, I want to address the issue of pornography and filters on the internet. That is, as many Members have said this afternoon, an enormous issue not only for parents but for society. It is having a massive impact on the way in which boys and girls see one another and the way in which they deal with relationships, and sex. The Government have tried, over the past few years, in coalition and now, to take steps towards dealing with that, but sadly, I am afraid, to little effect. Although the Bill makes a brave attempt, I must tell the Minister that I do not see it having a significant impact on the availability of pornography on the internet, for some of the reasons that other Members have elucidated.

Most of this stuff comes from overseas. Much of it comes from the United States, where it is protected under constitutional rights, apparently. Much of it is free—it requires no online transaction via credit card or otherwise. It will be easily available to anybody who wants to get it who does not have a parent who puts a filter on.

I would very much like to see the Government shift their target away from the providers of websites to the people who could do something to filter the content—the internet service providers. We know the ISPs can identify these sites because they do so already for parental filters. If someone puts a parental filter on, they will identify the site and block it. There is no technical reason why the ISPs could not also identify it and put an age filter on, that would appear every time someone tried to access it, that required a credit card number or required the usual age verification applied by gambling sites. The ISPs could easily put such measures in place.

If the Minister will forgive me, I would point out that the Government are missing the target by going for the sites, which move around the world, between jurisdictions and between countries, whereas the ISPs, who are here and who we could get hold of, could technically achieve what we want for us. This is a very pressing issue indeed and we have talked about it for the 18 months that I have been in the House, and for the previous 10 years when I was watching from outside. The time has come for the Government to do something really bold about this—to move forward in a way that no other country has, by requiring age verification for pornography, at the level of the ISP. Those organisations are the newsagents who stop the magazine. They are the television company that is broadcasting the programme. They are not free of obligation in this menace to our young people and they should start to play their part. I call upon the Government to oblige them to do so.

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[Matt Hancock]

I am grateful for the hon. Gentleman’s supportive comment about how the Government have done on digitisation. We have made a huge amount of progress and are one of the world leaders. Some states find this process easier, partly because of national culture. Estonia bases its Government digital services on a universal identity system that we disagree with here; it has a much more willing approach to having an ID card system than the UK does. Also, by its nature our country is more complicated and much bigger, so things are more complicated here, but we can learn a lot from the brilliant work Estonia is doing. I have personally worked with the Estonian Government to take the lessons and apply them in our own context.

There were three areas in the debate that really got the House going. The first was age verification. Incredibly strong speeches were made on that by the right hon. Member for Slough (Fiona Mactaggart), the hon. Members for Rotherham (Sarah Champion) and for Bristol West (Thangam Debbonaire), my right hon. Friend the Member for Basingstoke (Mrs Miller), my hon. Friends the Members for Devizes (Claire Perry), for Congleton (Fiona Bruce) and for Eastbourne (Caroline Ansell), and others. Age verification is an incredibly important step forward. Legislation is in place to deal with the online abuse that many Members also raised—the cyber-stalking and harassment—and, as Members of Parliament, we all understand the challenges that we face on that. We remain committed to improving online safety; it is a challenging area, but we will continue to work to push that forward. The views of the House will be key to that process.

[Kit Malthouse]

Does the Minister accept that the impact of the measures will be limited given that, as a number of Members have pointed out, the vast bulk of the material we are trying to protect children from comes from overseas? The Government’s jurisdiction will therefore be limited and the impact will therefore be limited.

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[Matt Hancock]

There is a fund to ensure that we get fast broadband out to as many people as possible. There is something that every single Member can do to make sure that that fund goes as far as possible. The contracts are structured so that the more people take up broadband, the more the local authority or delivery partner gets back in a clawback. They then spend that money on reaching more premises and more households. I urge everybody to run a broadband take-up campaign in their constituencies, because the more people who sign up for broadband in a Government-supported Broadband Delivery UK area—about 20% of households —the more money comes back to the programme and the more houses can be reached. The clawback means that all of us can have a direct impact on how much broadband is delivered in our local areas.

[Kit Malthouse]

I just want to be clear, because many of my constituents will be listening carefully, on what 10 megabits per second actually means. The Minister, in an intervention, used the word “minimum” when he said that the universal service obligation would be 10 megabits per second. Is he saying that it is the Government’s intention that some broadband speeds should never fall below 10 megabits per second, no matter what their neighbours, or anybody else who is sharing capacity, are doing?

[Matt Hancock]

My hon. Friend raises an important point. I see 10 megabits as the absolute minimum, but the definition of what has been advertised in the past for high-speed broadband is a really important issue. This is not an area of statutory regulation, because we do not have statutory regulation for advertising. The Advertising Standards Authority makes the rules. It is consulting on changing the so-called “up to” definitions in advertising to make sure that there is a tighter definition so that people get what is advertised. I think it is fair to say that, should that change go through—it is a non-statutory area—it would be widely supported across the House.

Fibre to new homes was raised by many Members, so let me give this answer. In January, it will become law that superfast broadband needs to be supplied to new homes. There is a commitment to provide fibre to sites with more than 100 new premises. This is a big step forward. Lots of people asked questions about it; secondary regulations went through; the reason it is not in the Bill is that we think we have made the progress needed to ensure that we deliver in this space.

Likewise, many people asked about agreements on landowners’ rights under the electronic communications code, which I agree is an incredibly important step forward. I pay particular tribute to my right hon. Friends the Members for Maldon and for Wantage for driving this through. The new code will be a baseline that removes a lot of the room for dispute. It will apply only to new contracts, but many if not most contracts and agreements for siting masts will remain on commercial terms. It will not be required to use the new code; the new code will be the baseline from which the negotiations can take place.

Let me touch on the Opposition Front-Bench contributions. I felt that the two Labour contributions were well informed and the agreement on the vision was very positive. I would like to react to a few points. Sadly, I thought there was a rather shrill position on data sharing, and I was slightly disappointed with it. Given that we have had two years of open policy making and a full public consultation, it was a bit of surprise to hear that the Labour Front-Bench team was not involved.

The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) was wrong about the Communications Act 2003 when she said that measures build on Labour’s Act and that it was a pity that no progress has been made since 2003. Actually, this Bill builds on the Telecommunications Act 1984. The hon. Lady was also a bit muddled over the BBC. When she argued for more BBC spending power, I was not sure whether she wanted the licence fee to be put up. I think that making costs for phone masts lower is an important part of rolling out the infrastructure to make sure that we get as much coverage for 5G and 4G as possible. We can take up all these points in Committee.