Digital Economy Bill

Lord Ashton of Hyde Excerpts

Report: 3rd sitting (Hansard): House of Lords
Wednesday 29th March 2017 Lords Chamber

[Lord Wood of Anfield (Lab)]

My Lords, I express the support of these Benches for the amendments of the noble Lord, Lord Best. I also support the intention behind the amendment of the noble Lord, Lord Lester.

It sounds obvious that the process of negotiating a charter and the process of setting a licence fee should be separated so that the licence fee is set at a level to ensure the BBC has the resources to do what the charter asks of it. However, those of us who have had some involvement in the process in the past know that this is not quite how it works. The connection between the two processes is indirect and shrouded in political pressures. As a result, the process of setting the licence fee is far too little about matching the funding of the BBC to its functions in the charter, and far too much about balancing a range of other considerations: the politics around the licence fee rate, interests of other broadcasters, and the temptation to smuggle government policy on to the BBC’s books—midnight raids et cetera. Governments of all varieties—Labour, Conservative, whatever—like to play the game of pumping up the tasks that go into the charter and clamping down on the licence fee needed to fund it. The result of all this is bad not just for the BBC but for all parties concerned. It is a bad deal for the BBC because it faces increasingly intolerable pressures to deliver what is expected of it, and threats to its operational autonomy and independence. It is bad for the Government because of a growing suspicion of unwarranted political interference in the BBC, and it is bad for licence fee payers because the process of allocating funds to charter functions is surrounded in opaqueness and devoid of transparency.

Therefore, we support the amendments of the noble Lord, Lord Best. We think they are based on sound principles—the independence of the process, consultation with the public, transparency of the contents of the deal and requiring the Secretary of State to be accountable for turning his back on or challenging the express will that comes out of consultation. We think this is a way of restoring the functionality and transparency of the licence fee setting process, and ensuring that the BBC can be funded to do what we all expect the foremost public service broadcaster to do.

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, we return to an issue that I know interests a great many noble Lords: the funding of the BBC. I take this opportunity to remind noble Lords of what the Government have already committed to do to increase the transparency of the process whereby the funding of the BBC is decided. The BBC’s new charter regularises, for the first time, the timing of the BBC’s next financial settlement, which will be in five years’ time. The BBC has certainty over its funding for the next five years, having agreed a settlement with the Government whereby the licence fee will rise with inflation each and every year for the next five years.

On the amendment in the name of the noble Lord, Lord Best—in answer to his question, I accept that Amendments 32B and 32C are, if not consequential, linked—I make clear to the House how grateful the Government are for the contribution of the noble Lord and of your Lordships’ Communications Committee, which he chairs, throughout the charter review. Indeed, the Government accepted most of the committee’s recommendations for the new charter, such as making the next charter for a period of 11 years and the scope of the mid-term review.

The charter states that, in determining the funding settlement, the Secretary of State must assess the level of funding required for the effective fulfilment of the BBC’s mission and promotion of its public purposes, consider an assessment of the BBC’s commercial income and activities, and consult the BBC. For its part, the BBC is required to provide information and assistance to the Secretary of State ahead of the next licence fee settlement to inform the Secretary of State’s determination of that settlement. It is therefore explicit that the BBC will be able to make its case and the Government of the day will have to consider that case.

However, the Government also stated in their White Paper, published last May, that they would consider taking independent advice at the next settlement should it be appropriate. While that will be a matter for the Government of the day, the sentiment behind it is right and sensible. In answer to the noble Lord, Lord Maxton, the licence fee itself may well be a question for the next charter renewal—in which I think I can say I will not be involved. Taking independent advice is an important factor, and I take this opportunity to set out what this may include. The Government may, for example, wish to seek independent advice to inform their assessment of the data the BBC will provide. They may commission experts to consider the BBC’s likely commercial income for the coming years; the effect of population growth on licence fee revenue; the impact of sector changes on BBC funding needs; and, in turn, the impact of BBC funding on the wider sector.

The noble Lord, Lord Best, suggests that there should be a BBC licence fee commission. This is a departure from his amendment in Committee, which sought to give Ofcom a similar power, and I appreciate the thought he and other noble Lords have given this. However, at the risk of repeating myself, the licence fee is a tax, and the Government do not seek advice in this way for any other type of taxation. On the question of the licence fee being a tax, I know that not all noble Lords like this designation. However, we rely on the definition provided by the European System of Accounts, which is the system of national accounts used by the European Union. I will spare your Lordships more detail on this, which I could give. I reiterate that taxation is a matter for the elected Government. Only the Government have oversight of the balance of taxes from different sources; rates of tax are set, taking into consideration a range of factors, including wider economic considerations and spending decisions. It would therefore not be possible for an independent body to have oversight of the interaction between this tax rate and other tax burdens that the same group face.

Next, on public consultation on the appropriate level of funding for the BBC, I have already made my reservations clear on this aspect of the noble Lord’s amendments in Committee. Funding a public service is not a straightforward topic for public consultation. The BBC’s funding needs are a complicated and technical issue, as we have seen at every licence fee settlement—

[Lord Maxton]

Can the Minister tell the House what other form of taxation—I accept his definition that the licence fee is a tax—is not covered by the Freedom of Information Act?

[Lord Ashton of Hyde]

I do not quite know what the noble Lord means by taxes being covered by the Freedom of Information Act, but the BBC, as a public authority, is covered by that Act.

[Lord Maxton]

With all respect to the Minister, the BBC is not covered entirely by the Freedom of Information Act. The managerial side of it is covered by the Act but the part that concerns putting out programmes is not.

[Lord Ashton of Hyde]

I take the noble Lord’s word for that because he knows more about it than I do.

[Lord Inglewood]

The Minister said that the Government did not consult on taxes in the way that has been suggested. I put it to my noble friend that there is not another hypothecated tax like this, so there is no precedent one way or another for this set of circumstances.

[Lord Ashton of Hyde]

The point that I made was that, when setting taxes, the Government have to take account of the overall revenue raising, and this is just one element of revenue raising. I agree that whether it is a hypothecated tax is another question, but the point is that it is a tax and the Government do not consult on taxes.

Perhaps I may continue. I was talking about public consultation. The BBC’s funding needs are complicated and technical, as we have seen with every licence fee settlement, and agreeing the overall package is a finely balanced act. The requirement to ask the BBC for information and seek external advice is a sensible way of ensuring that Ministers’ decisions are well informed.

Despite what the noble Lord, Lord Best, said about consultations, the recent charter review found that, although almost 75% of the public consider the BBC’s programming to be high-quality, just 20% said that they would like to see the licence fee rise even in line with inflation, thereby helping the BBC to maintain those high standards. At the same time, the BBC also needs to become more efficient from reducing layers of management and property costs.

Public consultation needs to be approached with due sensitivity. It is right that decisions that balance the funding needs of the BBC and pressures on family budgets are taken by Ministers, who are accountable for those decisions, and that they are not decisions strongly influenced by an unelected new body. In answer to the noble Lord, Lord Pannick, the Government’s view is that it should therefore remain for the elected Government of the day to decide how to approach reaching an appropriate level of BBC funding in a detailed and extensive negotiation with the BBC. Despite the difficulties associated with the last licence fee settlement, as I have said, it resulted in what the noble Lord, Lord Hall, has said is a strong deal for the BBC, giving it financial stability, and we can see that the licence fee will rise for the next five years.

The noble Lord, Lord Lester, has tabled an amendment to put a duty on the Secretary of State to ensure that the BBC is funded to function effectively and independently as a public service broadcaster. I am pleased to see the noble Lord in the Chamber today—it was unfortunate that he was not able to participate in last week’s debate on his previous amendment. Without repeating myself unduly, I remind noble Lords that the Government remain of the view that the BBC is best governed through a royal charter. A statutory underpinning, however limited initially, would leave the BBC under a constant threat of change from what parliamentarians of the day might see as the “national interest”. Where a change might be genuinely required, the uncertain legislative timetable, party-political debate and pressure could all militate against resolving the issue at hand in an efficient manner.

[Lord Lester of Herne Hill]

The Minister has not answered my question, which was, quite simply, whether this Government—not one in five years’ time—accept that the Secretary of State has a duty, whether under the charter or otherwise, to ensure that the BBC is so funded as to function independently and effectively as a public service broadcaster.

[Lord Ashton of Hyde]

I was aware of the noble Lord’s question and was just about to come to it. The BBC charter already provides that the Secretary of State, in determining the funding settlement, must assess the level of funding required for the effective fulfilment of the mission and public purposes.

[Lord Lester of Herne Hill]

What does that answer mean? The charter does not say what I have just asked the Minister. Is he saying that, in looking at the charter, the Government accept this obligation and that it is embodied in the charter? If so, I welcome that. However, I am not clear whether the Government accept this duty or not. My final question, which no doubt he will come to, is this: please can I come and see the Culture Secretary with him?

[Lord Ashton of Hyde]

I think I can answer that to the noble Lord’s satisfaction. Yes, I will certainly talk to the Secretary of State and ask that the noble Lord can come and see him—with or without me, depending on his choice.

I do not want to dwell on this too much, but when we talk about sufficient funding and what the Secretary of State has a duty to do, of course the Secretary of State has a duty to abide by the royal charter in the same way that the BBC, the new unitary board and Ofcom do. I said:

“The Secretary of State, in determining a funding settlement, must … assess the level of funding required for effective fulfilment of the Mission and promotion of the Public Purposes”—


which is what the charter says. I agree that the Secretary of State must do what the charter says. I hope that answers the noble Lord’s question.

I will go further. The noble Lord’s amendment talks about the independence of the BBC, but Article 3 of the BBC’s charter already states:

“The BBC must be independent in all matters concerning the fulfilment of its Mission and the promotion of the Public Purposes, particularly as regards editorial and creative decisions, the times and manner in which its output and services are supplied, and in the management of its affairs”.


The question of enshrining parts of the BBC’s royal charter in statute should be a matter for the Government of the day to decide ahead of the next charter review. Given noble Lords’ ongoing interest and informed views, I am confident that the Government of the day will be minded to consider this carefully.

In summary, the Government have already increased the transparency of the way in which the BBC’s funding settlements are agreed. We have given the BBC stability by regularising the settlement period, which is now removed from the election cycle. The BBC will be required to provide information to the Secretary of State on its funding needs, and the Government of the day will consider taking independent advice. The licence fee is a tax and the Government do not consult on taxes. The amendments could have unintentional consequences in constraining the ability of the Government—

[Lord Pannick]

I am puzzled by what the Minister has said, because he is saying two incompatible things. He is telling the House that the Government are going to take advice, but on the other hand he is telling the House that, because this is a tax, it is not possible for the Government to take advice.

[Lord Ashton of Hyde]

With respect, I did not say that. I said that the Government would not consult on taxes. Of course the Government can take advice. The Government take advice on taxes every day, whether they have asked for it or not.

[Lord Birt]

The Minister said a moment ago that the Minister—in this case, the Secretary of State—must do as the charter says. I remind him that the charter before last said explicitly that the licence fee may not be used to fund the World Service. After the famous “night raid”, where the BBC was required to fund the World Service from the licence fee, the Secretary of State simply went to the Privy Council and changed the charter. He manifestly did not do what the charter required.

[Lord Ashton of Hyde]

I do not completely follow the noble Lord. If the charter was changed, presumably the Secretary of State did follow the charter.

[Lord Birt]

I am sorry if was not clear. The charter clearly said that the licence fee may not be used to fund the World Service. The Government then required that it should—and retrospectively changed the charter in the Privy Council.

[Lord Ashton of Hyde]

I agree that a retrospective change in legislation of the charter is never a happy process—but, in a purely technical sense, if the charter was changed then it was being followed. But I take the noble Lord’s point about that—and we will move on.

I have summarised the way that the funding deal has been changed to increase stability for the BBC. In light of all my remarks, I hope that noble Lords will allow the BBC to get on with its job under the agreed royal charter and therefore that the noble Lord will withdraw his amendment.

[Lord Best]

My Lords, I am grateful to the 10 noble Lords who spoke in support of my amendment. The only moderating voice was from the noble Lord, Lord Maxton—but even that, I think, was with approval as well. I will not reiterate the arguments that everybody brought forward. I thank the Minister for his response and accept that most of the recommendations from your Lordships’ Select Committee on Communications were adopted by the Government, which we were pleased about, including the 11-year period for the charter. But there is only a five-year period for the funding of the BBC, and, although there is certainty for five years, this is not entirely new. We had certainty over the freeze in the BBC licence fee for seven years prior to that.

The Minister stressed that the Government will “consider taking advice” and “may consult experts” on the various aspects of this. I had hoped that the Minister might pull the rabbit out of the hat and that we might have something more to show for the debate tonight than we have. I understand that the Government do not consult on taxes—although, as the noble Lord, Lord Inglewood, said, this is a particularly obscure kind of tax. It is 100% hypothecated and we do not have many of those. The Minister mentioned that it was a complicated issue. That is why an expert commission could be so useful. Public consultation might well produce an answer that there would be reluctance to increase the licence fee, but there would be better understanding if these matters were all out in the open and transparent before the public came to that view.

Although I am grateful to the Minister for explaining the position as is, it is not the position that these amendments would establish in the Bill and I would like to test the opinion of the House.

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Moved by

[Lord Ashton of Hyde]

33ZD: Clause 85, page 89, leave out lines 15 to 19 and insert—
“(3) The steps set out in subsections (4) to (6) must be taken before regulations are made under this section.(4) The Secretary of State must ask the appropriate regulatory authority to consult such persons as appear to the authority likely to be affected by regulations under this section, including—(a) providers of on-demand programme services, and(b) representatives of people with disabilities affecting their sight or hearing or both.(5) The appropriate regulatory authority must inform the Secretary of State of—(a) the outcome of the consultation, and(b) any other matters that they think should be taken into account by the Secretary of State for the purposes of the regulations.(6) Where OFCOM are not the appropriate regulatory authority, the Secretary of State must consult OFCOM.(7) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

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Moved by

[Lord Ashton of Hyde]

33ZF: Clause 85, page 90, line 42, at end insert—
“( ) In section 402(2)(a) (procedure for statutory instruments) after “411” insert “or regulations under section 368BC”.”

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[Lord Wigley (PC)]

I shall not repeat the comments that I made in Committee on this matter. I thank the noble Lord, Lord Wood, for introducing the amendment, which I certainly support. Two areas have been touched on already. The first is very close to my heart—the position of S4C in Wales and the Gaelic channel in Scotland. It is enough of a fight to try to ensure that there is language promotion and continuation without the struggles of going through reams of channels before reaching them. I accept entirely that some channels, such as Virgin, give the viewer an option to create their own priorities, but many viewers will either not have the drive or sometimes even the ability to use that facility in the way that it should be used. It may interest noble Lords to know that more people watch the Welsh language news on S4C than watch “Newsnight” in Wales. The language is thriving, but it needs to be equally accessible to the prime channels that are available on a UK basis.

My second point is on children. As a grandfather with five young grandchildren, I was amazed at the speed with which they could navigate their way to where the channels they wanted were located. But in doing so, they went through a whole plethora of other channels, which I was very glad that they skipped over quickly. We need to be able to help parents who need to safeguard their children from matters that they are too young to watch. For both those reasons, I very much support the amendment.

[Lord Ashton of Hyde]

My Lords, public service broadcasting prominence on the EPG is an issue that has come up at every stage of the Bill in this House, and Amendment 33ZG does so for this stage. The Government recognise the high-quality programming of our PSBs and their importance for maintaining the thriving and healthy UK broadcasting sector. We also recognise the strength of a mixed broadcasting ecology that features commercial broadcasters as well as commercial and non-commercial PSBs. We are showing our support for them in two ways that we have already debated: first, in the government amendment on listed events and, secondly, in our support of the noble Baroness, Lady Benjamin, in respect of children’s television. Thirdly, although this is not in the Bill, we have announced that Channel 4 will not be privatised.

Our clear policy of supporting PSBs is why the Government gave considerable thought to the issue of the EPG prominence regime during the balance of payments consultation, the response to which was published last year, before this Bill reached this House. Our conclusion was that we had not seen compelling evidence of harm to PSBs to date and we decided not to extend the EPG prominence regime for PSBs to their on-demand services. This absolutely remains our view, and is supported by evidence, such as the success and continued growth in the popularity of the BBC iPlayer, which has no prominence at all and saw a record 304.2 million requests for TV programmes in January 2017—double the rate of five years ago. After the iPlayer, what are the most watched on-demand services in the UK? The answer is the ITV Hub and All 4, neither of which are currently subject to prominence requirements.

Additionally, PSB on-demand players already occupy the most prominent positions in the on-demand sections of major TV platforms such as Sky and Virgin. Why is that? Platforms make them prominent because they need to react to viewers’ preferences. It takes, for example, a mere four clicks to get to the iPlayer from Sky Q’s home page. As I stated during the last debate, when PSBs make excellent content, audiences will find it, whether it be catch-up or live content. A good example is children’s PSB channels, of which many noble Lords have spoken. CBeebies and CBBC are the most watched children’s channels by a considerable distance—which shows that there are no problems for audiences in finding these channels. The content is easily accessible on demand within the iPlayer itself.

Micromanagement of how audiences need to be guided through menus and sub-menus cannot be the answer when the technological landscape is shifting quickly. The fact is that platform operators respond to consumer feedback and needs in developing their products; therefore future developments in the EPG will be customer driven, not driven through legislative change. Further, it has been suggested by technology companies that, if this requirement was enforced, it would create a need for bespoke products in the UK. For example, smart TV manufacturers’ user interfaces are developed with a global market in mind, but a separate product would need to be developed for the UK market.

Rather perversely, the amendment goes far beyond the prominence which Parliament has afforded to linear PSB channels, because it would give prominence to the PSBs’ on-demand programme services, which include not only PSB content from commercial PSBs but also content originating from their non-PSB portfolio channels. We do not think that that is justifiable.

I confirm to noble Lords and to viewers who have found the BBC Parliament channel—the noble Viscount, Lord Colville, mentioned this, too—that, if this amendment is not agreed, the existing PSB regime will remain as it is today. People will still be able to switch on their ordinary TVs and find BBC1 and BBC2 at the top. But, if it is agreed by the House, it will remove Ofcom’s discretion to require the prominence it considers appropriate for the linear regime; it will micromanage Ofcom’s guidance; it will extend PSB privileges to non-PSB content; and it will affect worldwide manufacturers, many of whom operate in the UK, putting up prices for UK consumers—all against a background where iPlayer, ITV Hub and All 4 are already the most watched on-demand services. I therefore hope that the noble Lord will withdraw his amendment.

[Lord Wood of Anfield]

I thank all noble Lords for an excellent short debate; I will respond very briefly. I thank the Minister for his response but I am afraid that it has made me even more determined to push this amendment through, because his response seemed to be based on the premise that supporting prominence for traditional linear TV watching is a principle that the Government support more strongly than ever, but that somehow the principle falls into abeyance when viewing habits and technology change; and that, in the new future, there will be no need for further prominence rules because the choice of consumers will somehow magically replace the need for the current PSB protections in the prominence rules for linear TV.

I do not understand why the emphasis on prominence, which has been a cross-party principle for a long time, is suddenly thrown out of the window when on-demand and more sophisticated technologies develop. So I am afraid that I do not find the Minister’s response at all satisfactory—and nor do I think that the threat of losing Ofcom’s existing powers has any empirical basis whatever, by the way. So I would like to test the opinion of the House.

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Moved by

[Lord Ashton of Hyde]

33ZH: After Clause 87, insert the following new Clause—
“Televising events of national interestTelevising events of national interest: power to amend qualifying conditions
In section 98 of the Broadcasting Act 1996 (categories of service), after subsection (5) insert—
“(5A) The Secretary of State may, by regulations made by statutory instrument, amend the percentage figure specified for the time being in subsection (2)(b).(5B) An amendment made by regulations under this section does not affect—(a) the validity of any contract entered into before the regulations came into force, or(b) the exercise of any rights acquired under such a contract.(5C) Regulations under subsection (5A) may make transitional, transitory or saving provision.(5D) A statutory instrument containing regulations under subsection (5A) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

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Moved by

[Lord Ashton of Hyde]

33ZJ: Before Clause 88, insert the following new Clause—
“Strategic priorities and provision of information
(1) After section 2 of the Communications Act 2003 insert—“Strategic priorities2A Statement of strategic priorities(1) The Secretary of State may designate a statement for the purposes of this section if the requirements set out in section 2C (consultation and parliamentary procedure) are satisfied. (2) The statement is a statement prepared by the Secretary of State that sets out strategic priorities of Her Majesty’s Government in the United Kingdom relating to—(a) telecommunications,(b) the management of the radio spectrum, and(c) postal services.(3) The statement may, among other things, set out particular outcomes identified with a view to achieving the strategic priorities.(4) This section does not restrict the Secretary of State’s powers under any other provision of this Act or any other enactment.(5) A statement designated under subsection (1) must be published in such manner as the Secretary of State considers appropriate.(6) A statement designated under subsection (1) may be amended (including by replacing the whole or a part of the statement with new content) by a subsequent statement designated under that subsection, and this section and sections 2B and 2C apply in relation to any such subsequent statement as in relation to the original statement.(7) Except as provided by subsection (8), no amendment may be made under subsection (6) within the period of 5 years beginning with the day on which a statement was most recently designated under subsection (1).(8) An earlier amendment may be made under subsection (6) if—(a) since that day—(i) a Parliamentary general election has taken place, or(ii) there has been a significant change in the policy of Her Majesty’s government affecting any matter mentioned in subsection (2)(a), (b) or (c), or(b) the Secretary of State considers that the statement, or any part of it, conflicts with any of OFCOM’s general duties (within the meaning of section 3).2B Duties of OFCOM in relation to strategic priorities(1) This section applies where a statement has been designated under section 2A(1).(2) OFCOM must have regard to the statement when carrying out—(a) their functions relating to telecommunications,(b) their functions under the enactments relating to the management of the radio spectrum, and(c) their functions relating to postal services.(3) OFCOM must within the period of 40 days beginning with the day on which the statement is designated, or such longer period as the Secretary of State may allow—(a) explain in writing what they propose to do in consequence of the statement, and(b) publish a copy of that explanation in such manner as OFCOM consider appropriate.(4) OFCOM must, as soon as practicable after the end of—(a) the period of 12 months beginning with the day on which the first statement is designated under section 2A(1), and(b) every subsequent period of 12 months,publish a review of what they have done during the period in question in consequence of the statement.2C Consultation and parliamentary procedure(1) This section sets out the requirements that must be satisfied in relation to a statement before the Secretary of State may designate it under section 2A. (2) The Secretary of State must consult the following on a draft of the statement—(a) OFCOM, and(b) such other persons as the Secretary of State considers appropriate.(3) The Secretary of State must allow OFCOM a period of at least 40 days to respond to any consultation under subsection (2)(a).(4) After that period has ended the Secretary of State—(a) must make any changes to the draft that appear to the Secretary of State to be necessary in view of responses to the consultation, and(b) must then lay the draft before Parliament.(5) The Secretary of State must then wait until the end of the 40-day period and may not designate the statement if, within that period, either House of Parliament resolves not to approve it.(6) “The 40-day period” is the period of 40 days beginning with the day on which the draft is laid before Parliament (or, if it is not laid before each House on the same day, the later of the days on which it is laid).(7) When calculating the 40-day period, ignore any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than 4 days.”(2) After section 24 of that Act insert—“24A Provision of information before publication(1) OFCOM must provide the Secretary of State, at least 24 hours before publication, with any information that they propose to publish.(2) If exceptional circumstances make it impracticable to provide the information to the Secretary of State 24 hours before publication it must instead be provided to the Secretary of State as long before publication as is practicable.(3) Subsections (1) and (2) have effect in any particular case subject to any agreement made between the Secretary of State and OFCOM in that case.(4) The Secretary of State may by regulations specify descriptions of information in relation to which the duty under subsection (1) does not apply.(5) Before making regulations under subsection (4), the Secretary of State must consult OFCOM.(6) Information provided to the Secretary of State under this section may not be disclosed by the Secretary of State during the protected period, except to another Minister of the Crown.(7) A Minister of the Crown to whom the information is disclosed under subsection (6) may not disclose the information during the protected period to any other person.(8) A Minister of the Crown may not make any representations to OFCOM during the protected period that specify or describe changes that the Minister considers should be made to information that has been provided under this section when it is published.(9) In this section—“the protected period”, in relation to information provided to the Secretary of State under this section, means the period beginning with the provision of the information and ending when either of the following occurs—(a) OFCOM publish the information;(b) OFCOM inform the Secretary of State that they consent to the disclosure of the information; “Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975.24B Provision of information to assist in formulation of policy(1) OFCOM may provide the Secretary of State with any information that they consider may assist the Secretary of State in the formulation of policy.(2) Information with respect to a particular business that has been obtained in the exercise of a power conferred by—(a) this Act,(b) the 1990 Act,(c) the 1996 Act,(d) the Wireless Telegraphy Act 2006, or(e) Part 3 of the Postal Services Act 2011,is not, so long as the business continues to be carried on, to be provided to the Secretary of State under this section without the consent of the person for the time being carrying on that business.”(3) The duty under subsection (1) of section 24A of that Act does not have effect until the day on which regulations made under subsection (4) of that section first come into force.(4) In section 393(6) of that Act (general restrictions on disclosure of information), after paragraph (a) insert—“(za) prevents the disclosure of information under section 24A or 24B;”.(5) In section 111(7) of the Wireless Telegraphy Act 2006 (general restrictions on disclosure of information), after paragraph (a) insert—“(aa) prevents the disclosure of information under section 24A or 24B of that Act;”.(6) In section 56 of the Postal Services Act 2011 (general restrictions on disclosure of information), after subsection (6) insert—“(6A) Nothing in this section prevents the disclosure of information under section 24A or 24B of the Communications Act 2003.”

[Lord Ashton of Hyde]

My Lords, during the passage of this Bill there has been debate on the state of the UK’s fibre networks, the ability to switch communication provider, the quality of business connectivity and other matters vital to our economic future such as the new broadband universal service obligation. These issues rely on the Government’s ability to formulate and implement policies effectively.

Amendment 33ZJ creates a new power for the Secretary of State to set a strategy and policy statement relating to telecommunications, the management of radio spectrum and postal services to which Ofcom, as the regulator, will have regard when carrying out its statutory duties. Ofcom’s media and broadcasting functions are not included in this power, which recognises the importance of media independence from government. This measure will allow the Government to establish a clear policy direction to ensure greater coherence in an increasingly complex and interlinked environment. These changes also strengthen the already strong existing partnership between Ofcom and the Government. Introducing a strategy and policy statement for Ofcom’s sectors brings it in line with the other regulators, Ofwat and Ofgem, and fulfils the Government’s commitments to better establish the policy framework for regulators, as laid out in the Principles for Economic Regulation 2011.

This new clause also provides for Ofcom to disclose information to the Secretary of State at least 24 hours in advance of publication where appropriate, and improves Ofcom’s general information-sharing powers. The new clause provides restrictions on disclosure to other persons, and representations cannot be made to Ofcom specifying changes to be made to any information provided.

The Government’s ability to create and deliver effective policies is supported by Ofcom’s expertise and research. In the past, even when it would have been beneficial for Ofcom to provide information, and it wanted to, it has been restricted by its existing statutory framework. This new clause supports the partnership between government and regulator by enabling early access to certain publications where that would be appropriate, and improving Ofcom’s ability to share information where it deems it to be supportive of policy development.

This amendment therefore improves the policy-making process while also introducing greater transparency in the working relationship between government and Ofcom by giving clarity to the respective roles and responsibilities. This will ensure that policy decisions are taken by government—accountable to Parliament—and Ofcom, independently of government, undertakes the detailed application of regulation.

Should this amendment be agreed, existing Clause 9, which provides for a statement of strategic priorities relating exclusively to the management of spectrum, will no longer be necessary and the Government will table an amendment at Third Reading to remove it. I beg to move.

[Lord Fox (LD)]

My Lords, as someone who has proposed amendments that go some way in this direction, I welcome this move, which in some part meets what we propose elsewhere. I have one question around the wording:

“OFCOM must have regard to the statement when carrying out”,


its related functions. What exactly does that mean? Is that language replicated exactly for Ofwat and Ofgem? How should that regard be manifested by Ofcom?

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[Lord Ashton of Hyde]

My Lords, I thank both noble Lords for their qualified support; I hope that by the time I have finished, it will be unambiguous. I anticipate that from the noble Lord, Lord Fox, in particular, because of course these were the principles for economic regulation introduced by Vince Cable when he was Secretary of State. I can confirm to both noble Lords that there is nothing sinister here. Of course, when we talk about the fact that Ofcom must have regard to a strategic policy statement when carrying out its duties, it absolutely does not override any of Ofcom’s existing general duties. It will continue to take decisions independently of government.

To allay any fears, there are further safeguards in this. A prior consultation must be run on the content of the SPS, which must include Ofcom and then be subject to parliamentary oversight. The implementation of a strategic policy statement does not change Ofcom’s statutory duties at all—it is just one of a number of things that Ofcom has already taken into account when exercising its duties. I therefore hope that the safeguards and my assurance give some comfort to noble Lords.

Amendment 33ZJ agreed.

--- Later in debate ---

Moved by

[Lord Ashton of Hyde]

33ZL: After Clause 91, insert the following new Clause—
“Offence of breaching limits on ticket salesPower to create offence of breaching limits on internet and other ticket sales
(1) The Secretary of State may make regulations providing that it is an offence for a person in circumstances within subsection (2) to do an act within subsection (3). (2) Circumstances are within this subsection if each of the following applies—(a) tickets for a recreational, sporting or cultural event in the United Kingdom are offered for sale,(b) a purchase may be made wholly or partly by a process that the purchaser completes using an electronic communications network or an electronic communications service, and(c) the offer is subject to conditions that limit the number of tickets a purchaser may buy.(3) An act is within this subsection if it consists in using anything that enables or facilitates completion of any part of a process within subsection (2)(b) with intent to obtain tickets in excess of a limit imposed by conditions within subsection (2)(c).(4) The regulations may apply whether the offer is made, or anything is done to obtain tickets, in or outside the United Kingdom.(5) The regulations—(a) may be limited to particular circumstances within subsection (2), and to particular acts within subsection (3);(b) may provide for an offence to be subject to an exception or defence;(c) may make different provision for different areas.(6) The regulations must provide in England and Wales and Scotland for an offence to be triable only summarily.(7) The regulations may not provide for an offence to be punishable—(a) with imprisonment,(b) in Scotland, with a fine exceeding £50,000, or(c) in Northern Ireland, if tried summarily, with a fine exceeding the statutory maximum.(8) The power to make regulations under this section is exercisable by statutory instrument.(9) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.(10) In this section “electronic communications network” and “electronic communications service” have the meaning given by section 32 of the Communications Act 2003.”

[Lord Ashton of Hyde]

My Lords, I am grateful to the noble Lord, Lord Stevenson, for adding his name to this government amendment.

For many years this House has rightly been concerned about the operation of the secondary ticketing market. In 2015, as well as placing new rules in the Consumer Rights Act, noble Lords acknowledged the complexity of online ticketing by requiring a review of consumer protection measures relating to online secondary ticketing. Professor Michael Waterson conducted that review, which was published last year, and two weeks ago the Government published their response, accepting his recommendations in full. The report was warmly welcomed by both Houses, by industry and by consumer representatives, so we should not rush to lightly dismiss the specific recommendations it makes.

Since the review was published, the Competition and Markets Authority has launched an enforcement investigation into suspected breaches of consumer protection law in the online secondary ticket market. The Government have also encouraged the event ticketing industry to set up a project group to take forward the review’s recommendations, and have facilitated the sector’s participation in the joint industry-government Cyber-security Information Sharing Partnership. In addition, we will ensure that resources are made available to National Trading Standards and Trading Standards Scotland to support the upcoming enforcement work on secondary ticketing. We are also working with industry to raise consumer understanding of the ticketing market.

Government Amendment 33ZL forms a key element of our response to the Waterson review, and is intended to address an issue within the ticketing market about which there is widespread support for further action, including from Professor Waterson. The amendment will provide the power for government to introduce a criminal offence to address the use of bots to purchase tickets for a recreational, sporting or cultural event in excess of the maximum specified. The intended offence will apply only to tickets for events in the UK, although it will cover activity to obtain tickets that occurs outside the UK. We believe that the amendment is needed to clarify the law and put beyond doubt the illegality of this practice and the need to report it.

Further, with the new offence on the statute book, the Government will work with industry to enforce it. An offence is only worth having if criminal acts are reported. We have industry groups in place that are now willing and able to take action in partnership with our law enforcement agencies. I hope that this amendment will find favour with the House, and I beg to move.

[Lord Moynihan (Con)]

My Lords, I will speak to Amendments 33ZLZA, 33ZLZB, and 33ZLZC, which stand in my name.

I immediately thank the Minister for responding to a long-running campaign on the question of bots. I will say nothing further on that except that I am looking forward to the secondary legislation. His and the Government’s decision to bring forward action against bots is important and necessary. These are the modern-day ticket touts which sweep the market by using software when the likes of noble Lords and their families are trying to obtain tickets to go to an event. That is unethical and should be illegal, and I welcome the Government’s action on that. We need to make sure that we have good secondary legislation, and we look forward to it coming before the House.

On Amendment 33ZLZC, I will simply say that the reason I tabled this amendment is that it is important to respond to what the Minister said about the lack of enforcement. One way of dealing with the lack of enforcement in this area is to give event organisers the right to enforce the Act through civil action in the courts. This has the benefit of reducing the resources call on the police and/or trading standards, and it should be welcomed. It has certainly been called for by governing bodies of sport and promoters so that they can take action—because it is not in their interest, either, for people to be turned away because they have bought through the secondary market tickets that are counterfeit or illegal. I am unlikely to press that amendment to a vote, but I will be interested to see what the Minister says in response, because it seems to be a helpful suggestion by the governing bodies of sport to respond to this heinous issue.

The most important amendment that I am speaking to is Amendment 33ZLZA, which is fairly straightforward and common sense. Ed Sheeran’s manager appeared before the DCMS Select Committee last week, in the absence of one of the four major secondary market platforms, viagogo, which just did not show. He made the clear and important point that neither Ed Sheeran nor any of the top artists, nor any of the major sports events, all of which are heavily in demand, want to see their tickets counterfeited and people turned away at the door.

We did work on the Consumer Rights Bill to make sure that you got a ticket number, a row number, and a seat number, and to make sure that there were clear terms of reference on the face of the ticket. That should have been achieved and should be deliverable. We fought for but failed to get the ticket number—at the time we got the seat number, the row number and the block. The tickets for Ed Sheeran at the front do not have a block, a seat number or a row, because they are for the standing areas at the front of the concert. But if you have come down a long way and have brought your family down for this one event, you may be turned away at the door because you have no way of checking as a consumer that a ticket is valid.

The only way you can do it is to make sure that there is a unique reference number, which was originally printed on the ticket but has to be on the secondary market platform. It is not an unreasonable request—it does not say that the Horsham Dramatic Society has to put a unique reference number on the ticket. It simply says that where there originally was one, and where Ed Sheeran’s management team wanted one to protect loyal fans of Ed Sheeran who turn up, they should have the ability either to go online or to phone up and say, “Does this reference number accurately relate to a proper ticket and not a counterfeit ticket?”.

A number of these mass, modern-day touts sweep the market and say, as they do online for Ed Sheeran, “Your seat number is between 1 and 20”, and therefore they think that they have answered the question about the seat number. But the one thing they do not want is the honest supporter of a sporting event or a music fan having the ability to check whether their ticket is valid. This is the one amendment that would achieve that—and there would be no cost or difficulty. As far as the promoter of a sporting or music event is concerned, they are putting the seat number, the row number, the date and the event on the ticket. If there is an original, unique reference number, why not put that on as well to allow the true fan to check that it is not a counterfeit ticket before he spends a lot of money travelling to London with his family, for the sake of argument, to go to the O2?

The Minister said that he was concerned about this on three very simple grounds—but I think that there are answers to all three points. First, we obviously welcome the Waterson report, but Waterson stated, as did my noble friend, that he does not support any further significant changes to legislation at this time. However, by his own definition, these amendments are not significant. They do not ban or impose controls on the price; they merely tidy up gaps in the Consumer Rights Act regime, which Waterson endorses. So I believe it would be reasonable to suggest that the Government do, too, with their proposals for greater enforcement.

Secondly, the CMA review is under way but it is not about what might happen in this House tonight or in another place next week. The review and its inquiries are about the enforcement of existing legislation; they are not about possible changes in the future. If there were problems in the future, no doubt the CMA would consider having a further review. It is interesting that it would, by implication, support the measure this evening because it states:

“We also think that it is essential that those consumers who buy tickets from the secondary market are made aware if there is a risk that they will be turned away at the door”.


So, by implication, the CMA is in any event supportive of this proposal. However, that is not the point; the point is that, under statute and under its terms of reference, it is looking at existing legislation and not at new legislation.

Thirdly, when we debated this issue before, the European Union directive was much quoted as a reason for not being able to move forward—because we would be outside the scope of the European Union directive on consumer rights. I wrote to Brussels—not a usual habit of mine—in the following terms:

“Whether it would be in accordance with the EU Consumer Rights Directive for both primary and secondary market ticket sellers to have to provide a unique reference number on the tickets so that event organisers could track sales of tickets”.


The response was:

“Providing a unique reference number on the tickets is not regulated under the Consumer Rights Directive; therefore the Directive does not prevent this practice. National legislation could be relevant to this regard”.


Therefore, on all three grounds, I believe that common sense should prevail. We should look after the interests of the many people who are being ripped off by modern-day ticket touts and enable those individuals to have the right to enjoy a concert because they love either the music they want to listen to or the sporting event that they want to go to.

--- Later in debate ---

[Lord Stevenson of Balmacara]

My Lords, I have been following the progress of this arrangement between all sides because the noble Lord, Lord Moynihan, and Lady Heyhoe Flint—who is terribly missed—the noble Lord, Lord Clement-Jones, and I have been doing this for about four years now. We are reaching the next stage. I do not think we are at the end of the track yet—there are still things that we would like to do—but we have reached an important stage and I should like to support what we are doing.

The issue is all about the rights of the promoters to organise the events that they want to and have control of them, and the rights of consumers who sign up to see these events to do so with the security and certainty that they will be able to see what they have paid for at reasonable prices. The Minister has said that what he has done with the bots amendment is to try to modernise the modern-day ticket touts. I absolutely agree with that. That is why I have signed up to his amendment. There were real difficulties getting this through, which I know because I have talked with the Bill team and the Minister about this. It is really good to see the amendment here today. We will support it and wish it well on its way.

However, the other amendments in this group, which we also support, should not be lost sight of and I hope very much that we will get some movement today. They stem from recommendations 4 and 5 of the Waterson review. They are in keeping with those and try to establish further what the Minister articulated when he introduced the original amendment: as well as having a good partnership with primary ticket sellers and the secondary market, it is really important that the law has a good relationship with consumers and event promoters. Only by providing additional transparency, which was requested in Amendment 33ZLZA—and possibly in the good suggestion that governing bodies get more power in Amendment 33ZLZC—will we begin to take the steps that will clean up this act.

We know from the police reports, from those who are active in this area and from talking to promoters that there is huge criminality and money laundering. There are issues that we really have to investigate. But at the heart of it stand consumers who cannot rely on the market providing them with the right choice and a fair one. This must stop. If the noble Lord wishes to take his amendment to a vote we will support him in the Lobby.

[Lord Ashton of Hyde]

My Lords, I am grateful to all noble Lords and I will try to be quick because I want to move on to the dinner break business. I pay tribute to my noble friend Lord Moynihan for his persistent campaigning on the subject. His work has influenced today’s government amendment, as has the work of other parliamentarians and particularly Nigel Adams MP and Sharon Hodgson MP.

Amendment 33ZLZA would amend the Consumer Rights Act 2015, by inserting a duty to provide the ticket reference or booking number when reselling tickets. This was specifically considered by Professor Waterson in his report. So I start by reminding noble Lords of the reasons that Professor Waterson gave for rejecting the same proposal that we now have before us in Amendment 33ZLZA. I refer to page 170 of his 226-page report. The first was cost. The amendment would require a system for the potential buyer to check a reference number, and in a manner that could be done quickly enough to facilitate internet sales. That requires infrastructure changes in both the primary and secondary market. The primary market would be asked to pay for changes to allow customers to authenticate tickets on the secondary market, for which they receive no additional income. Ultimately, the cost will be added to ticket prices.

Secondly, there is practicality. The secondary ticketing industry would need to establish a standard interface to enable cross-checking. There is strong competition between the platforms and no appropriate industry body to help bring such a system about. In such circumstances, it may be easier and possibly more productive for the secondary platforms simply to chase more exclusive authorised resale deals. Further, there is little evidence of there being the trust between the primary and secondary markets necessary to enable such verification.

Thirdly, my noble friend has mentioned the legal reasons. The EU consumer rights directive, which is the basis of the secondary ticketing information requirements in the Consumer Rights Act, prohibits member states going further in national law than the directive requires. My noble friend mentioned his telephone conversation with the European Commission. There are differences of opinion on the legal interpretation and clearly, at the very least, there may be litigation ahead if we go down this road.

The Government agree with Professor Waterson. We cannot see how Amendment 33ZLZA would actually benefit anyone. Even if those problems were overcome and the primary sellers would offer a consumer confirmation that a reference number was real, how do we know that the real ticket is available for sale? Might it have already been resold? Consumers who buy tickets online, only to be disappointed, will be even angrier having gone to the effort to “verify” yet still being left in the lurch.

Professor Waterson preaches caution in further legislating with good reason. Amendment 33ZLZA is untested and offers false hope. While ticket reference numbers do not offer a solution, we agree with the proposal to require consumers to be informed of the terms of resale. Indeed, we have already legislated to do just that in Section 90(3)(b) of the Consumer Rights Act. Rather than amending the Consumer Rights Act, we believe that the existing law should be tested.

The need for better enforcement was also the overwhelming view of those who gave evidence to the Culture, Media and Sport Select Committee last week, and the Competition and Markets Authority’s enforcement investigation is ongoing. In addition, National Trading Standards and Trading Standards Scotland have been tasked with investigating potential enforcement cases against sellers on secondary ticketing websites that do not comply with the legislation.

I turn to Amendment 33ZLZC. While injunctions are already possible, the amendment would introduce a new element into consumer law by seeking to shift the responsibility for enforcement to the primary ticket seller. This could risk putting an undue onus on event organisers regardless of their capacity to act because public enforcement bodies could use it as grounds to prioritise other areas for enforcement action. The amendment also requires us to trust primary sellers to self-regulate and self-enforce, yet to date the sector has often been too unwilling or unable to take action. There have been notable exceptions, but the strides that we are making, as I set out at the start of the debate, have been achieved by bringing together the parties, including law enforcement agencies, and we need to build on that.

Although Amendment 33ZLZB is similar to the one the Government have tabled on the use of bots, it goes further by attempting to ban the resale of tickets purchased by bots. I acknowledge my noble friend’s kind remarks along with those of the noble Lord, Lord Stevenson, so to save time I will not comment in detail as I understand that my noble friend is content with the government amendment.

In conclusion, the Government recognise that it is hugely frustrating for fans who miss out on tickets sold on the primary market only to see them appear on the secondary ticketing market at increased prices. The Government are acting—working with industry and law enforcement agencies. We need to let these developments grow and allow time to harvest the results of the legislation that we agreed in this House only two years ago. I would respectfully ask my noble friend to withdraw his amendments and noble Lords to support government Amendment 33ZL in their place.

Amendment 33ZL agreed.