Digital Economy Bill

Lord Clement-Jones Excerpts

1st reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I will need to check this to be absolutely sure, but it will not form part of the legislation. I am talking about the report that is being considered with care at the moment. There will be a public consultation after that report, so we cannot commit to this without fully exploring our thoughts and proposals in response to the report of 16 December. I hope that that is helpful—but it will be subject to regulations as opposed to primary legislation.

[Lord Clement-Jones (LD)]

My Lords, I do not want to prolong this but if it is to be subject to regulation, there must be primary legislation permitting that regulation to be made. Perhaps the Minister could write to us on that subject.

[Baroness Buscombe]

Yes, that is a good idea. We will absolutely make sure that we write to noble Lords on this point.

--- Later in debate ---

[Lord Foster of Bath]

My Lords, we on these Benches have much sympathy for Amendments 15, 16, 18 and 22, although I know that my noble friend Lord Clement-Jones will say a few words in a minute or two about Amendment 15. I will confine my remarks predominantly to Amendment 14. I am conscious that many Members of the House are probably regular users of credit and debit cards. However, we are of course also increasingly regular users of mobile phones. I suggest to noble Lords that most mobile phone contracts are in all but name no different from their credit card contracts: they are a credit agreement, paying retrospectively for services that have been received. Yet with the credit card, of course, a limit is imposed upon you, which is not currently the case with mobile phones.

As mobile phones have developed since they were first introduced 30 years ago, the services that are offered and the billing arrangements are increasingly complex. There are benefits from all of that, but their complexity can lead to difficulty for some people, not least people from low-income families, who are five times more likely to rely on their mobile phone than people from high-income families. Very often their mobile phone is their only connected device, as they do not have a fixed landline or broadband connection. Unfortunately, as the complexity has developed, some of the support systems for customers have not gone alongside them. We know from evidence from Citizens Advice that in 2014-15 it helped no fewer than 27,000 customers who had problems with mobile phone debts, which totalled some £11 million. I was told of the case of Martin, who,

“was in the British Armed Forces and had been deployed overseas. He contacted his mobile network provider before travelling and, based on their advice, believed he had disabled data roaming. He took his phone with him and used Skype to stay in touch with his wife back in the UK, believing he was connected via Wi-Fi and that Skype calls would therefore be free. On arriving back in the UK, Martin found he had been billed £3,700 for data roaming”.

We need some mechanism to help customers from falling into debt unexpectedly. The amendment proposes the voluntary and opt-in cap system.

During the passage of the Bill in another place, a similar amendment was put before the Government on a number of occasions, and they repeatedly said that they did not think such a measure was necessary, because there are a variety of ways in which the consumer can avoid bill shocks. They talked about the range of apps that are available, dedicated phone lines for people to check on their current limits, warning texts that are sent when customers approach their allowances, and a range of different online tools. However, the reality is that none of that saves the large number of people who get into difficulty with their mobile phone bills. Nearly five years ago, Ofcom recognised that this was a problem, producing a report in which it said:

“We will also push for increased availability and use of financial caps … We have already called on”,


mobile service providers,

“to do more to develop and promote ‘opt-in’ systems so that consumers can choose to set limits on their expenditure”.

Indeed, Ofcom went even further five years ago, saying that,

“it might be more appropriate to move to an ‘opt-out’ system of financial caps”.

So, five years ago, Ofcom was alerting us to a real problem—a problem that it was proposing could be addressed by mobile service providers at least being able to offer an opt-in cap to their consumers. It did not proceed with that because the mobile phone operators said it would be far too expensive and too difficult to change their billing systems. But those were exactly the same arguments the mobile phone operators used in 2009 against the imposition of the EU roaming cap, which is in place. They said it was far too difficult and could not be done—that there were technical difficulties and so on. Yet they have done it, and it is perfectly possible for them to do it in this country. The evidence of it being perfectly possible is that two companies, Three and Tesco Mobile, have demonstrated that it can be done. They have done it, they are leading the way, and they have shown that they are providing a better service to customers as a result.

The time has now come for us to require mobile service providers to offer an opt-in cap system to their customers. The customer does not have to take it, but the offer should be there. I hope that, at this stage of the Bill— having rejected it on a number of occasions in another place, and given that Ofcom recommended it some five years ago—the Government might now be minded to accept the amendment, or at least something like it.

[Lord Clement-Jones (LD)]

My Lords, at the beginning of the debate on this group, the noble Lord, Lord Stevenson, said this was rather a disparate group. I agree with him, and on that basis it is entirely logical that I am quite supportive of one amendment, Amendment 15, but entirely unsupportive of another, Amendment 233.

This takes us back to the Consumer Rights Act, which feels but yesterday although, looking back, I see that it was debated at the end of 2014. Amendment 15 is very timely and it is right to probe the Government’s intentions on switching. I have a letter, which the noble Baroness, Lady Neville-Rolfe, wrote to me after we had put down various amendments on the then Consumer Rights Bill, on gaining provider-led switching. She said:

“I think we are in full agreement on the likely benefits of gaining-provider led switching for consumers and for competition in the telecoms industry. This view is reflected in our work on switching, since before the publication of the Consumers, Connectivity and Content strategy paper, when two experts from Ofcom were seconded to DCMS to help develop policy on switching”.


Moving on slightly from there, I thought it was quite encouraging that, in the Government’s May 2016 paper, Switching Principles: Government Response and Action Plan, a number of principles were set out. But I see none of them reflected in the primary legislation. I do not know what the Government’s intentions are in terms of regulations. It is not even clear that gaining provider-led switching will be permissible. Therefore, I ask the Minister whether principles such as these will be enshrined in the secondary legislation:

“Switching should be free to the consumer, unless they are aware of and have consented to fair, reasonable and clear restrictions and charges to do so … The switching process should be led by the organisation with most interest in making the switching process work effectively—the gaining provider … Sites and tools providing comparisons to consumers that receive payments from suppliers should make clear where this affects the presentation of results”.


These are principles that the Government have set out in their own paper, and it is not clear at this stage whether they fully plan to deliver on them. I would appreciate an answer from the Minister on that.

On Amendment 233, I am not sure why the noble Lord, Lord Stevenson—with whom I have sparred on a number of occasions on software issues, and certainly on the then Consumer Rights Bill—believes that we are in a different place and need another bite at this particular cherry. The software industry carefully negotiated a particular break-out from the Consumer Rights Act, for good reasons, because of the way that software is developed. There are beta applications that need to be perfected before the final product is fit for purpose, and there are upgrades and so on, as is perfectly well understood by the industry. So I do not support a call for another look at this. I do not believe the evidence is yet there that we have moved into a new place. It is barely two years since we debated these issues and I do not think technological progress has been so quick that we can afford another look at this without prejudicing our software industry.

[Baroness Buscombe]

My Lords, I thank all those who have spoken in this debate. I begin with Amendment 14 in the names of the noble Lords, Lord Stevenson of Balmacara and Lord Foster of Bath. The amendment seeks to place a mandatory obligation upon mobile phone service providers to agree with the customer a financial cap on their monthly bills at the time of entering into a contract.

Providers offer consumers a range of innovative ways to manage their usage, such as apps that allow consumers to turn financial caps on and off, warning text messages when customers are approaching their existing allowance limits, and dedicated telephone numbers that advise the customer about their usage. The noble Lord, Lord Foster, has already referred to some of these opportunities.

We expect providers to continue to take steps to minimise bill shock and to ensure that their customers are sufficiently equipped to manage their usage. Having said that, if the Government consider that more needs to be done, the forthcoming consumer Green Paper will be an opportunity for us to consider the issue of bill capping in more detail. It is also important to note—and perhaps it has been said before in another place—that Ofcom has guidance on its website to help consumers avoid so-called bill shock. Tips include making sure you have the right deal to suit your usage, switching provider or increasing your usage allowance, monitoring your usage, and how to protect your phone from unauthorised use.

Amendment 15, in the names of the noble Lords, Lord Stevenson and Lord Mendelsohn, seeks to amend the Communications Act 2003 and Ofcom’s power to set conditions to ensure that the interests of the consumer are protected when purchasing a contract relating to a mobile phone, and when switching mobile provider. Changing provider should, of course, be quick and easy for everyone. This is why Clause 2 makes explicit that Ofcom has powers to facilitate easier switching across all the communications sectors, including mobile services. Ofcom has an existing statutory duty to protect consumers of communications services, including consumers of mobile services, under Section 51 of the Communications Act 2003. The combination of this power and duty thus already creates the effect this amendment seeks.

The noble Lord, Lord Clement-Jones, is concerned about whether there is more to be said on this matter. The clause extends Ofcom’s power to set conditions for switching, so it will be for Ofcom to decide what should be required and whether switching is an appropriate requirement to impose on providers.

[Lord Clement-Jones]

My Lords, I am sorry to interrupt the Minister but I find that a somewhat extraordinary statement. The Government are responsible for policy—indeed, they have published a paper on switching principles. The question is: what has Ofcom been asked to implement? Surely the type of switching that will be implemented is not purely up to Ofcom. The Government—the business department, as was—published a paper setting out very clearly the principles on which switching was to be based. We cannot have a situation where a Minister simply says that it is all down to Ofcom and that is the kind of scheme that it will suggest. I find that extraordinary.

[Baroness Buscombe]

My Lords, I am sorry if the noble Lord finds it extraordinary. However, I think that he has made a reasonable request and I will make sure that we write to him in detail, giving a full reply.

Amendments 16 and 18 seek to make additions to Clause 3 to ensure that compensation is paid within a reasonable timescale and that, for mobile phone services, compensation is payable where the provider fails to meet a specified standard or obligation. Also, one of those standards must be satisfactory mobile coverage.

The drafting of the clause already allows for Ofcom to consider timescales for compensation, as well as what service standards are within scope. In the spring of this year Ofcom plans to publish a full consultation setting out how automatic compensation could work. Thus, we do not see the need for these amendments.

Amendment 22 seeks to establish a code of practice on business broadband speeds. In January 2016, Ofcom published a voluntary code of practice on business broadband speeds, and it came into force in September 2016. The code gives businesses clearer, more accurate and transparent information on broadband speeds before they sign up to a contract. Signatories to the code also commit to manage any problems that businesses have with broadband speed effectivity and to allow customers to exit the contract at any point if speeds fall below a minimum guaranteed level. Ofcom will continue to work with the industry to ensure full transparency. With such a code already in existence, we see no need for there to be a power for the Secretary of State to prepare one.

Amendment 233 would amend the Consumer Rights Act 2015. I am grateful for the response of the noble Lord, Lord Clement-Jones, to this amendment, as I have to hand the transcript of the debate on that legislation—it makes quite enjoyable reading—when he referenced the consequences of an amendment which is the same as the one before us tonight. He said that,

“the consequences of this amendment could be quite unforeseen and extremely contrary to the interests of the strong and vibrant software industry that we have in this country”.—[Official Report, 19/11/14; col. 507.]

We entirely agree with the noble Lord that things have not changed that much, and they certainly have not changed in that regard. The rights set out in the Consumer Rights Act were designed to achieve a workable balance to reflect consumers’ reasonable expectations while not imposing unnecessary and potentially damaging requirements on our vibrant, growing and technically innovative digital content suppliers. We believe that this amendment would undermine those rights.

When formulating the Consumer Rights Act, we concluded that providing for a short-term right to reject was not necessary in the context of digital content. Unlike physical goods, digital content can on the whole be fixed rapidly and with little effort on the part of the consumer. Consumers accept that it is the nature of digital content that it may be released with minor errors and incompatibilities which come to light in use and which will be fixed to ensure that the product is satisfactory. A short-term right to reject digital content and impose strict limits on the number of repairs and replacements would not be practical in this context. In the digital environment, a fault in one copy of digital content may be replicated in all copies, or the fault may not be the result of an action by the trader at all. That is why a repair is a more equitable solution in the first instance than a full refund.

Many digital content producers are micro-businesses and start-ups, and we need to maintain an environment in which they can flourish and provide innovative products, while ensuring appropriate protections. Enabling rejection as an immediate remedy could cause the industry to be more conservative in its product offerings, reducing our competitiveness and chilling innovation, to the detriment of both business and consumers.

As we know, the Act has been in force since October 2015 and the Government have received no evidence or representations to the effect that it is not working as intended. With that further explanation, I hope that the noble Lord will agree to withdraw his amendment.

Digital Economy Bill

Lord Clement-Jones Excerpts

2nd reading (Hansard): House of Lords
Tuesday 13th December 2016 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, we are rapidly getting to the point where the egg is hatching and the chicken is emerging. I refer the House to my interests as declared on the register. We have had a superbly wide-ranging debate. I thank the Minister for his introduction, and for the meetings and briefings that he and his team arranged for us, including the material that the noble Lord, Lord Stevenson, spoke about so glowingly.

The digital economy in the UK is of huge importance to our future and the Bill needs to take full account of new developments and the pace of change, which the noble Lord, Lord Puttnam, and the noble Baroness, Lady Kidron, spoke about. All that makes connectivity vital, as the noble Lord, Lord Inglewood, emphasised, and as the noble Baroness, Lady Byford, illustrated so well. We expect a full report from Las Vegas by the noble Lord, Lord Borwick.

Even in the last few years, the rate of change has of course been extraordinary. With drone development, the internet of things, driverless cars, robotics, artificial intelligence, 3D printing, cloud computing and virtual reality it is difficult for legislators to keep up, let alone to determine the skills needed in future. When two of our most digitally savvy Members of the House talk about the hollowing-out of jobs in the future, we have to sit up and take notice. I appreciate that the noble Lord, Lord Holmes, was rather more optimistic but we have to address the issues raised by the fourth industrial revolution, which were so graphically described during the debate.

Despite a fair degree of debate in the Commons, particularly in the Public Bill Committee and on Report, many matters in the Bill are unresolved, as we have heard in today’s debate. There was a very strong measure of agreement on this, given which, on these Benches our welcome to the Bill can only be conditional and dependent on the information and assurances given by Ministers, and the amendments to be made during its passage. For instance, while we welcome action to ensure that superfast broadband will be available within a short time to all UK households—driving the final mile, as discussed by the noble Earl, Lord Lytton—we are not yet convinced that a USO as opposed to vouchers is the way to do it.

Even if were persuaded of the merits of a USO, we are not convinced that setting a modest 10 megabits per second will be adequate for future increases in demand for speeds and capacity. As we have heard throughout the debate, why should there not be a higher rate of 24 megabits per second if nearly 90% of households will have that next year? My noble friend Lord Fox described this as a very unambitious goal, as did the noble Lord, Lord Aberdare, while the noble Lord, Lord Holmes, described the Bill as generally lacking in ambition. I thought that the noble Lord, Lord Mitchell, made the most futuristic speech in the debate; I rather liked his phrase “Gigabits not megabits”, which should be the slogan as we go forward.

We on these Benches also want a requirement for a minimum upload to be included, and to have standards of latency, resilience, reliability, consistency and contention also spelt out. They are every bit as important as speed. We will question the Government further on the review process for the USO. What will the criteria for change be? When will the first review take place and what will the new funding model be? Will there be an open tendering process for the delivery of the universal service obligation? Will Openreach be the main instrument of rollout again? Despite the advocacy of the noble Lord, Lord Young, we are not convinced that Openreach, even as a separate legal entity within BT, is the right instrument, and I know that that view is shared by the noble Baroness, Lady Byford, the noble Lord, Lord Mitchell, and my noble friend Lord Fox. They made a strong case for structural separation. We are definitely not convinced that government investment is sufficient. However, I am reassured by the recent speech of Sharon White at the Institute for Government that full structural separation of Openreach could become a reality if the proposed level of separation is demonstrated to be inadequate.

Again, although we have a high regard for Ofcom and the way it has performed its duties since formation, we want to be extremely careful in Clause 74 that we are not handing it far greater power with less corresponding accountability than its European counterparts under Article 4.1 of the European framework directive or indeed other UK regulators. That was also mentioned by my noble friend Lord Fox, and the noble Lords, Lord Aberdare and Lord Macdonald. We appreciate the consumer arguments put forward by Which? and that opinion is divided, but the Government are going to need to give chapter and verse, real evidence of why we should make such a radical change to the appeals process from a merits approach all the way down to a judicial review test.

Above all, our aim on these Benches is to ensure that in a holistic way we bear down on digital exclusion in the most effective way. Of course we welcome Clause 87, as far as it goes, but it is not sufficient and we need more information about the funding aspect. As my noble friend Lady Janke asked, do the Government accept the arguments for a social tariff for broadband? Many have argued that it should be equivalent to that in other forms of telephony.

On the other hand, when it comes to the new electronic communications code dealing with phone and internet infrastructure, we broadly welcome the new version set out in Schedule 1. We will, however, want the Minister to explain, as my noble friend Lord Foster pointed out, where we have got to on the definition of electronic communications apparatus because of its importance to the various operators. We need to ensure that investment incentives for independent and wholesale infrastructure are maintained, as the noble Lords, Lord Gordon and Lord Aberdare, pointed out, so that there cannot be free piggybacking on the infrastructure investment of others. This is vital if we are to get the infrastructure we need for 5G in the future.

Having campaigned for some years on the subject, we welcome the higher penalties for online piracy and the proposal to allow web-link marking for design rights. I welcome the conversion of the noble Lord, Lord Whitty, to better protection from online piracy. We will however question why the Government are not using the Bill to outlaw the supply of devices designed to infringe copyright, such as IPTV streaming boxes, which are a growing threat to pay-TV services. I thought the noble Baroness, Lady Kidron, made a very interesting point about better protection for user content.

Depending on progress on a voluntary agreement with search engines to ensure that sites infringing copyright are not listed, we will also want to explore the benefit of giving a power to the Secretary of State to require search engines to adopt a code of practice. We welcome the new powers for Ofcom as regards gaining provider-led switching provisions. I argued for these rights to be included as long ago as the Enterprise and Regulatory Reform Act, but should these provisions not be wider and include so-called quad-play bundled services which include pay TV? Similarly as regards Section 73 of the Copyright, Designs and Patents Act 1988, which I have long argued should be repealed, we will want to hear assurances from the Government—these were requested by the noble Viscount, Lord Colville, and the noble Lords, Lord Grade, Lord Macdonald and Lord Gordon—that commercial PBS channels will be able to negotiate retransmission fees as a result and that the repeal will take place without delay. We will also want to know from ITV that any fees will go into new production—children’s programming, for instance, as mentioned by my noble friend Lady Benjamin.

As regards Part 3 of the Bill, some very fine speeches were made, including by the right reverend Prelate the Bishop of Chester. I pay tribute of course to the long campaigning of my noble friend Lady Benjamin and the noble Baroness, Lady Howe, on these issues. My noble friend Lord Storey was also very eloquent on the subject, and I was very taken by the noble Baroness, Lady Kidron, saying that pornography is a really bad way of learning about sex. That will stay with us for some period.

We strongly share the desire of all parties to ensure that children and young people are not able to access pornography online, but we are concerned that the current requirement for a verification process does not explicitly provide for proper protection of people’s personal data. As my right honourable friend Alistair Carmichael said in the Commons:

“My real concerns centre on the holding of the data. As I put it to the Minister when he was at the Dispatch Box, there are no provisions in the Bill to secure the privacy and anonymity of those using these sites. He said that the data will be held in accordance with the Data Protection Act, but as we saw in the Ashley Madison leaks, that was of no great assistance”.—[Official Report, Commons, 28/11/16; col. 1304.]

We believe that the answer is to make sure that the type of verification required for pornography sites is itself specified in the Bill, so that personal data acquired by any verification process have to be held in an anonymised form. I did not agree with everything that the noble Earl, Lord Erroll, said in his contribution today, but I thank him for some of the technical advice he gave to enable us to demonstrate that that anonymity in terms of verification and authentication is perfectly feasible. The Government Digital Service itself has developed Verify, and there is the Certificate Transparency, or CT, system which uses distributed ledger technology to mitigate this problem. Other verification systems are becoming available, such as Yoti and VeriMe, that would meet the objections of many to this clause, which we all concede has the best of intentions.

My noble friends can of course see the merit of site-blocking being available as a last resort—although I hope this would be after Clause 22 has been invoked, and the noble Lord, Lord Morrow, made some very interesting points about the efficacy of that clause. However, it should be a last resort, at the instigation of the age verification regulator, the BBFC, if pornography sites do not provide adequate age verification—which should be anonymised, as I have argued. But it is a different matter altogether, as the current Clause 23 makes it, for the regulator to act as a censor of “prohibited material’' on internet pornography sites in general. This goes well beyond the harm test in the Video Recordings Act 1984 and includes material covered by the CPS guidance on the Obscene Publications Act. To us, that is disproportionate, and has no relevance to access by young people and verification.

We welcome the promised government amendment to confirm that default parental filtering does not fall foul of the EU’s open access regulation, although I thought the noble Baroness, Lady Howe, raised some extremely interesting points on that. It is also of huge importance and central to protecting children in this context—this was raised by the noble Lords, Lord Stevenson and Lord Borwick, and by the right reverend Prelate—that we introduce compulsory, age-related, sex and relationship education in our schools.

Moving on to other parts of the Bill, we welcome the fact that the Bill updates the regulation of the BBC by making Ofcom responsible for the regulation of all BBC activities, although as we have expressed on previous occasions we have great concern about Schedule 1 to the framework agreement. My noble friend Lord Lester was extremely eloquent about the issues involving the independence of the BBC, and quite a number of noble Lords lined up behind him in support, including the noble Viscount, Lord Colville, and the noble Lord, Lord Inglewood. It was interesting that the noble Lord, Lord Grade, did not support that. I felt he was perhaps coming on a little like Anthony Joshua, so we have some quite interesting debates coming in the future.

In Part 5, we welcome increased digital government provision but we have a number of concerns. I will not adumbrate them here but we are particularly concerned about personal healthcare information. We think there are opportunities, and the noble Lord, Lord Rowe-Beddoe, had an interesting description of the need for better statistics, but there is some tension between better statistics and personal data confidentiality and we need to resolve that.

The former Secretary of State, John Whittingdale, aptly described the Bill as a Christmas tree at Second Reading in the Commons. That has been echoed today, although I think by now we have a forest of conifers, which may be the new epithet that we are going to have to use. There are quite a number of additional matters that we will want to see included, such as the listed event amendments. We want to see EPG prominence tackled, along with the whole issue of bots with regard to ticket purchase. I see that Congress has just passed a BOTS Act that will soon be signed by President Obama. We want to see a level playing field on spectrum, the extension of remote e-lending and of course improved transparency of the reporting of royalties to creators in a variety of creative industries.

For some time we have been promised a new communications Bill, a new digital Bill, but I am afraid this is a bit of a disappointment; as the noble Lord, Lord Mitchell, pointed out, it does not really deal with all the challenges of the future. It may deal with the here and now but there is nothing really future-facing in it. For instance, in the report Distributed Ledger Technology: Beyond Block Chain the Government’s own scientific adviser says:

“Government needs to consider how to put in place a regulatory framework for distributed ledger technology”,

but that is absent from the Bill.

I hope my noble friends and I have given the House a comprehensive picture of what my party supports in this Bill but also of where the Bill is deficient. We look forward to the Minister’s reply and to the Committee in the new year.

Digital Economy Bill

Lord Clement-Jones Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Thursday 2nd February 2017 Lords Chamber

[Lord Morrow (DUP)]

My Lords, when I spoke at Second Reading on 13 December, I addressed the enforcement provision in Part 3, and want to do so again today. I warmly welcomed Clause 23, as have other noble Lords, which the Government introduced on Report in another place, and I continue to do so.

Clause 23 is a robust provision and I believe that it would be far more effective than the proposal in Amendment 66, tabled by the noble Lords, Lord Paddick and Lord Clement-Jones, which would replace Clause 23 with one entitled “Court orders”. The truth is, as I shall explain when speaking to amendments in the next group, that there are real problems with the enforcement mechanisms provided by Clauses 21 and 22 of the Bill, especially in relation to websites based outside the United Kingdom. This has always been a special concern, because the vast majority of online pornography accessed from within the UK is accessed from sites based in other jurisdictions.

The failure of Clauses 21 and 22 to provide credible enforcement mechanisms for the age verification requirement in Part 3 was highlighted very effectively in another place by parliamentarians from across the political spectrum. The critical thing about Clause 23 is that it gives the age verification regulator the power to enforce the age verification check provision without delay. The knowledge that, regardless of where in the world the site is based, it can be blocked by the UK age verification regulator will give those sites a strong incentive to introduce robust age verification. Amendment 66, by contrast, would place this in great jeopardy.

I want to raise three major problems with Amendment 66. First, it causes delay in the sense that, if it were to become law, we would then have to wait for the Secretary of State to introduce regulations, without which the age verification regulator would have no power to initiate IP blocking. Secondly, Amendment 66 makes the provision of these regulations, and thus the provision of IP blocking, entirely optional. If the Secretary of State does not get round to producing the regulations, there will be no IP blocking at all. Thirdly, in depending on a court injunction process, this amendment apparently prefers a very much slower, more expensive and more cumbersome mechanism, which websites will know cannot be used very often. This will give them hope that they can carry on without age verification checks because the chances of their being caught will be much less. Of course, the existence of the current Clause 23 powers does not mean that those powers will be used frequently, but the fact that websites will know that they could be deployed quickly and easily will make them much more wary about taking such risks, and will therefore keep children that much safer.

In setting out these objections, I make two other points. First, I understand the argument that there is a copyright precedent for the use of court injunctions, but the idea that we should therefore necessarily follow it is not remotely compelling. There was once a time when injunctions were not used in relation to copyright, but—rather than saying that there is no precedent to act and therefore we should not act—the decision was made that we should act and, in the case of copyright infringement, the use of injunctions was appropriate. Today, though, we are not dealing with copyright infringement; we are dealing with something quite different, which has a concern for child protection at its core. In this context, the mechanism set out by the Government in Clause 23 is more effective and much more appropriate. Secondly, if Amendment 66 is based narrowly on a civil liberties concern, I would have to say that, quite apart from the fact that this concern has to be balanced with a concern for child protection—which, in my view, Amendment 66 does not manage to achieve—it is important not to lose sight of the fact that any decision on the age verification regulation could be judicially reviewed.

When faced with a relatively robust provision of an enforcement mechanism for age verification that would help keep children safe, Amendment 66 with its delays and optional, rather than mandatory, standing cannot but be seen as an attempt to weaken the child protection provisions in the Bill, which I find deeply disturbing. Part 3 of this Bill entered your Lordships’ House as a robust and progressive measure placing us at the cutting edge of child protection online. If we were to replace Clause 23 with Amendment 66, it would leave us much weaker and—in the sense that websites would know that they could risk never being held to account for not having age verification checks—fatally compromised. I believe that this is misjudged, misconceived and mistimed. I very much hope that the Minister will stand by Clause 23 and oppose Amendment 66.

[Lord Clement-Jones (LD)]

My Lords, I am absolutely delighted that we have had the views of the noble Lord, Lord Morrow, about my amendment before I had a chance to speak to it, but maybe that’s life—he has given me the benefit of his views before I have set my own on record. I thought that the noble Baroness, Lady Jones, set out extremely well the frustrations of those of us who, in the words of my noble friend Lord Storey, are very keen to make sure we get the right shape for this part of the Bill. There is absolutely no difference between us, in that we wish to see Part 3 be as effective as possible in preventing access to child pornography. We have been debating for only an hour and it is quite clear that this part of the Bill is worryingly embryonic.

[Lord Maxton (Lab)]

My Lords, just for the sake of clarity, the noble Lord used the term “child pornography”, which is not the purpose of the verification. Verification is to stop children accessing pornography—let us get that absolutely right and on the record.

[Lord Clement-Jones]

I am grateful to the noble Lord, Lord Maxton, for that intervention. He is entirely correct—I misspoke. We are also grateful to the noble Baroness, Lady Jones, for highlighting that the Constitution Committee and the Delegated Powers and Regulatory Reform Committee both pointed out considerable flaws in the way this part of the Bill is constructed.

In particular, I want to speak about the lack of appeal mechanisms. The Delegated Powers and Regulatory Reform Committee said:

“We consider it inappropriate for the important question of appeals to be left to ‘arrangements’ made by the regulator, subject only to the approval of the Secretary of State, without any type of Parliamentary scrutiny”.


The committee was not the only one that made such comments. Interestingly enough, even the UN Special Rapporteur has commented on this:

“Moreover, I express concern at the lack of judicial oversight with respect to the power of the age-verification regulator to shut down websites that do not comply with the age-verification requirement. Any legislation restricting the right to freedom of expression and the right to privacy, as well as any determination on the shut down of websites must be undertaken by a body which is independent of any political, commercial or unwarranted influence in a manner that is neither arbitrary nor discriminatory”.


That is fairly powerful testimony.

There are a number of different ways of achieving an appeals mechanism. The first mechanism, to which the noble Lord, Lord Morrow, takes such considerable exception, is to have a judicial process at the beginning, before any website blocking can take place. The other is to allow an appeal after a website has been blocked. With regard to the appeal afterwards, at the time the amendment was drafted it was thought that the BBFC would be the age verification regulator, and we very much welcomed its involvement. However, it has now become clear—perhaps “clear” is not the adjective I should use; rather, it appears to be emerging—that the BBFC will not be the only regulator involved in Part 3.

When Amendments 69 and 229B were drafted we tried to make the new form of appeal very similar to the kinds of appeal mechanism that the BBFC uses for the purposes of the Video Recordings Act. In fact, most of the rubric in Amendment 229B comes from the part of the BBFC website that demonstrates the system of appeals on certification and so on. That seemed a sensible and reasonable way of proceeding, on the basis that the BBFC would be the age verification regulator for the purposes of Clause 23. One may wish to adopt a different form of appeal if that is not the case.

The second approach, which the noble Lord, Lord Morrow, objects to so strongly, is set out in Amendment 66. That is obviously a mechanism designed to make sure that before the very serious step of website blocking is taken, a certain procedure is gone through, ensuring that it is a last resort, and that there is proper oversight of the way in which the age verification regulator has conducted itself. That, too, seems an entirely reasonable approach.

What we are all looking for is an indication from the Government that they accept the need for this kind of appeal mechanism, whatever it may be, and that we will be able to have a look at it on Report. I should point out that we finish our fourth day in Committee next Wednesday, after which we break up for half term, and then come almost straight back to Report stage. There is very little time for much debate and discussion about these matters. This is one of the real issues, so I hope the Minister will ensure that the discussions start immediately and that, as the noble Baroness, Lady Jones, asked, the Government will respond quickly to the report of the Delegated Powers and Regulatory Reform Committee, and to the Constitution Committee’s report. Otherwise we will all remain in the dark until the Minister decides to enlighten us on 22 February.

Digital Economy Bill

Lord Clement-Jones Excerpts

Committee: 2nd sitting (Hansard - continued): House of Lords
Thursday 2nd February 2017 Lords Chamber

[Baroness Jones of Whitchurch]

My Lords, in moving Amendment 57, I shall speak also to Amendments 59, 60, 61 and 64. These amendments address the issue set out by the Minister this morning, but I make no apology for revisiting this and setting out our position so that it is on the record, although I take the point that he may not be able to answer all the points this afternoon.

Nevertheless, I should like us to have that debate. These amendments would remove the reference in Clause 22 to the regulator defining and imposing new controls on what is prohibited material on the internet. Noble Lords will know that there has been increasing concern about the implications of this wording. It is felt that it would give the regulator extended powers of censorship beyond that originally envisaged in the Bill. When our colleagues in the Commons originally raised concerns about press reports that the Bill could be used in practice to extend internet censorship for adults, the Minister, Matt Hancock, was quite clear. He said:

“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”.—[Official Report, Commons, 28/11/16; col. 1284.]


However, others have since put a different interpretation on the scope of the wording, so there has been ongoing concern about what can best be described as mission creep.

The purpose of Part 3 of the Bill is to provide protection for children from accessing online pornography. We all agree with this intention. However, as the wording stands, it potentially sets new limits on consenting adults accessing pornography that is not harmful to themselves or others. This is material that would not receive a film classification certificate, but neither would it be subject to prosecution. It is not helped by the fact that, by all accounts, the Crown Prosecution Service’s guidelines on this issue are out of date. There is a resulting grey area of pornography that by practice, but not by statute, is not prosecuted. We strongly contend that this is not the place to resolve these wider debates on adult consensual pornography. It is an issue for public debate and for consultation at another time.

In more recent days, Matt Hancock has met with various groups of us and has, I understand, accepted that the wording in the Bill is not as it was intended. He has proposed, albeit informally, that instead a definition of prohibited material should be based on that of extreme pornography, as defined in the Criminal Justice and Immigration Act 2008. We agree that this is a helpful proposal that could well resolve the debate.

We regret, therefore, that the Government were not able to produce an amendment along these lines in time for today’s Committee, which is really where some of these important principles should be resolved, before we get into the more formal, technical detail on Report. These amendments flag up our concerns with the current wording to urge the Government to come forward with detailed proposals before Report and, we hope, to build a consensus to go forward on this issue. Child safety is the issue here, not adult consensual pornography. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, briefly, I strongly support what the noble Baroness, Lady Jones, said. That is why these Benches support the amendments. I took quite a look of comfort from what the Minister said early on in today’s proceedings. As the noble Baroness, Lady Jones, said, there are considerable concerns about the width of “prohibited material” and the very existence of that particular set of conditions inserted at a fairly late stage in the Commons.

Of course, we have talked about the site-blocking provisions but the prohibited material aspects really confuse the issue as they deal with access by adults. It was very useful having the meeting with the Minister and his colleague, Matt Hancock, to talk about these issues. Having discussed the matter, we felt that the proposed new definition of prohibited material, limited to the 2008 Act, was acceptable as that is very tightly defined. Again, I entirely agree with the noble Baroness that it was very disappointing that immediately after that meeting the wording as in this amendment was not made available or put down for the Committee. That would have been enormously helpful in settling people’s concerns about the width of the definition of prohibited material, which goes well beyond the harm test used by the BBFC under the Video Recordings Act.

That is really the essence of it—tying it back. I hope the Minister will shortly explain this in greater detail than he did at the beginning of this session to allay our many fears about something fairly extraneous being introduced into the Bill. I stood corrected earlier by the noble Lord, Lord Maxton, about the exact purpose of Part 3, which is to prevent access by children to online pornography. We must be very clear that that is what we are about, rather than trying to censor the internet on a broader basis.

[Lord Browne of Belmont]

My Lords, on Second Reading, a number of noble Lords raised concerns about censorship and the definition of prohibited material. I found this surprising as we have so often heard the mantra that what is illegal offline is illegal online. Offline, the British Board of Film Classification has operated for a long time on the basis that it will not classify certain types of video work based on the content. This principle is well established and has been in statute since an amendment to the Video Recordings Act 1984 was made in 1994 after the Jamie Bulger murder. That requires the BBFC to have special regard to any harm to potential viewers. A “potential viewer” means,

“any person (including a child or young person) who is likely to view the video work in question if a classification certificate or a classification certificate of a particular description were issued”.

Moreover, it is of course an offence under Section 9 of the Video Recordings Act to supply a video work which the BBFC decided is not suitable for classification. It is also an offence under Schedule 10 to have such a work in possession for the purpose of distribution and supply.

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[The Earl of Erroll]

Absolutely; I know what the noble Lord means. I simply meant that this is not necessarily an ID application—except, maybe, to identify yourself to the site which then gives your attribute to the other website.

I am thoroughly in favour of the amendment, and so is the industry. We hope to publish a standard on this in the not-too-distant future, which may help the regulator determine who is a fit and proper person to carry it out.

There is just one other thing I want to say. Once you have done your age verification and then go on to the website, if you then choose to subscribe, and give it your credit card number and everything else, that is up to you. I hope and trust that the sites—I know that they are pretty careful about this—will encrypt properly and guard the information with their lives, if not yours.

[Lord Clement-Jones]

I do not want to overload the Front-Bench contributions from this side, or to turn this into a mutual admiration society, but I want to say that the noble Earl, Lord Erroll, has played a blinder in educating many of us in this House about the possibilities and the technologies being developed on anonymised age verification. As the Minister probably knows, we had a very useful session with many of those developing new apps for this precise purpose. Yoti was one, VeriMe was another—one could go on. There are different types of age verification, which can be chosen by the consumer. The most recent, which is now virtually available for general use, is Yoti, which the noble Earl mentioned. These methods are now available for use; this is not a question of pie in the sky, or of things not being available for a year or so. That makes the amendment highly practical, and, as my noble friend said, it is absolutely essential for the protection of personal privacy.

[Baroness Benjamin]

My Lords, I support the amendment and congratulate the noble Earl on all the hard work he has done. Six months ago I told him to get on with it, and he certainly has. We had a presentation, and I was so impressed by the progress that has been made in this area. Congratulations, and I thank him very much for all that he and his colleagues are doing to make sure that our children are safe, and that people feel that their data are protected if they go online for age verification.

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[Lord Stevenson of Balmacara]

My Lords, this moves us into Part 4 and intellectual property. We start with rather a narrow but quite important point about the way technology is moving forward in this area and the need to make sure that the statutory basis under which we look at issues relating to broadcasting and television is kept up to speed. I am joined in Amendment 71B by the noble Lords, Lord Clement-Jones and Lord Foster, for which I am very grateful. I am sure they will give more examples of and more detail on the topic that we are discussing in this group, about devices and services that infringe copyright.

These amendments look at digital TV piracy, which is a relatively new phenomenon but has come about because of the growing amount of close-to-live retransmission of broadcasts—and indeed of live broadcasts themselves—and the services that provide on-demand access to films, television series and other audio-visual content, including music. The categories are slightly different, but they are both very damaging to rights holders. Devices normally feature a mixture of both categories of services, and you can buy them readily on the open market and install them yourself, so it is a growing problem for those who control content and wish to make sure that rights holders earn from it.

These amendments suggest changing two sections of the Copyright, Designs and Patents Act. Amendment 79A relates to Section 297A and transmissions, while Amendment 71B relates to Section 107 and on-demand services. I beg to move.

[Lord Clement-Jones]

My Lords, as the noble Lord, Lord Stevenson, has said, we strongly support this amendment and I am grateful to him for having tabled it. I shall go into a little more detail than he was able to do in order to illustrate some aspects that very much concern the creative industries. A substantial and growing threat is posed to the creative industries by a combination of faster broadband speeds and the widespread availability of cheap plug-and-play devices offering access to infringing software. These devices can be simply plugged into TV sets, offering viewers increasingly easy access to pirated digital content. The Government’s IP enforcement strategy recognises this threat.

The creative industries are deeply concerned about the growing scale of digital TV piracy and have noted a significant increase in the levels of illegal streaming, which inevitably undermines business models within these industries and threatens investment in new content creation. Clearly, the challenge needs to be met on multiple levels, including education campaigns, use of technology, increased enforcement activity and, crucially, clearer laws which are simpler to enforce.

There are a variety of ways that users access infringing content. Typically, this involves a device such as a USB stick or small android box which is plugged into a TV set using a standard connection. The device can be “fully loaded”, meaning it has software and add-ons preconfigured, giving access to thousands of streams, or users can purchase boxes with software such as Kodi installed—an open-source software platform—and then source and configure their own illegal add-ons. The Government’s own statistics highlight the significant growth in the use of this technology, and research by the Industry Trust for IP Awareness shows worrying signs that such behaviour is becoming normalised and socially acceptable.

The scale of the problem is very significant. Listings on Amazon give the boxes a legitimacy—the Industry Trust study revealed that 44% of people assume that if they buy a box or stick from a retailer such as Amazon, it must be legal. An Amazon search for “Kodi” just yesterday auto-completed with “Kodi box fully loaded” and “Kodi fully loaded TV box with Sky Sports and Movies”. That “Kodi” search produces 4,554 results. The first listing is highlighted as an Amazon best-seller and is on offer through Amazon Prime, despite the Q&A under it saying rather different things. IPTV boxes, as they are called, are widely available, with more than 14,000 listings across 511 online marketplaces, equating to more than 4 million items in stock globally. There are more than 200,000 videos on YouTube providing a step-by-step guide on how to install and use Kodi add-ons in order to stream free TV.

Given the rapid growth of such devices, it is not unreasonable to suggest that illegal IPTV boxes could become the second largest pay-TV operator in the UK within 18 months. Despite the IP enforcement strategy identifying the problem, there appears to be a reluctance to make the law simpler and more effective. At present, law enforcement has to rely on general provisions, such as aiding and abetting offences under the Fraud Act, or encouraging offences under the Serious Crime Act. This is because the Copyright, Designs and Patents Act does not address today’s or future issues, and the various offences in it do not include what is by far the most prevalent offence today: the supply of devices intended to commit digital piracy. A specific offence is much needed and was proposed in the other place as an amendment to the Bill.

There are examples of law enforcement agencies such as trading standards and PIPCU being unable to pursue strong cases due to the lack of an appropriate offence. As a result, despite the industry dedicating considerable resources over a long period to protecting its intellectual property through existing enforcement mechanisms, there has been insufficient success and what limited progress has been made has taken far too long. Now, a fit-for-purpose enforcement regime is needed which is kept up to date with technological advancements and new risks posed. This requires the creation in the CDPA of a specific offence relating to devices used for IP infringement.

We have been told that over the past year, the Sky security team has identified more than 100 cases involving digital TV piracy, but they have been extremely difficult to pursue through trading standards or, indeed, through PIPCU. The industry has gone to the extent of seeking counsel’s advice on whether anything in existing law adequately covers the offences involved. It is clear that, while there has been a recent successful five-week private prosecution of a complex case involving pan-European organised crime, this is not the most efficient way to deal with a new challenge. The CDPA, originally written in 1988, needs to be updated to reflect new technology and the subsequent risks posed. New legislation would help trading standards to prosecute those preloading and distributing IP devices.

I very much hope that the Minister will take this opportunity to support this important amendment.

[Baroness Kidron]

I too support Amendments 71B and 79A. It is perhaps worth reiterating my interests as a film maker and, therefore, often a rights holder. I share the concerns of broadcasters about the challenges of piracy and the implications for future financing of original content. The noble Lord, Lord Clement-Jones, has done justice to that point.

This is also a generational issue, as 11 to 15 year-olds are the biggest users of these devices, which are plugged directly into television sets. Technical studies of IPTV use recently conducted by the Industry Trust revealed that they often include unauthorised apps, add-ons and advertising, and totally bypass the current systems of parental control, age rating and BBFC guidance. They are not subject to the usual protections that apply to content that we normally view on our television screens. If they can be bought from legitimate retailers and paid for through legitimate payment providers, we can hardly blame people for not really understanding that they are illegal.

Contrary to the Minister’s previous suggestion that I might like to shut down Twitter—far from it. By what other means would I know what the American President was thinking day and night? I am not a huge fan of blocking or censorship.

I beg noble Lords’ patience, as I want to go back to something that we may have gone through. It is about consistency. My argument is all about consistency. I was disappointed by what the Minister said about social media companies, which seem to have picked up very few responsibilities this afternoon.

I wonder whether we have done the maths right. Surely, even a small slice of these huge companies with their billions of daily interactions is comparable with the large sites entirely dedicated to pornography. I have listened very carefully to the debate and wonder whether, if we had been using the word monetise rather than commercial, we might have got a little closer to where we need to go. I hope I will be forgiven for going back to Part 3, but I have risen to speak about consistency.

Given the ambition of Part 3 of the Bill, it seems inappropriate that unregulated content is being delivered to TV screens outside of Ofcom or BBFC oversight. I feel that every child, parent or carer should have access to the technical and regulatory protections while streaming content on their TV screens, should they elect to use them. The current legislative framework is out of date and does not make it sufficiently clear that devices adapted for digital TV piracy should not be sold by legitimate online retailers. As a result, children are watching content in an unregulated context. That should be a factor when considering the merits of these amendments.

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[Baroness Buscombe (Con)]

My Lords, Amendments 71B and 79A seek to expand the existing criminal liability for making or dealing with copyright-infringing articles and the restrictions on unlawful decoders to include the supply of devices and software—such as set-top boxes or IPTV boxes and illicit software apps or extensions—intended to be used for copyright infringement.

An amendment with the same or a similar ambition was first tabled in the other place and then withdrawn. The Government are still of the view, as they were then, that illicit streaming and the infrastructure and devices that enable it pose a very serious threat to legitimate copyright owners and service providers. We share the wish of those behind these amendments to ensure that this harmful activity is properly tackled. I agree with the noble Lord, Lord Clement-Jones, that this poses a real threat to the creative industries.

That does not mean, however, that we should jump immediately to introduce new criminal provisions to copyright law. As previously discussed in debate in another place, the Government believe that this activity is already covered by existing offences. Relevant provisions include those contained in the Fraud Act 2006, the inchoate offences in the Serious Crime Act 2007, and other provisions of the Copyright, Designs and Patents Act 1988.

In December a supplier of IPTV systems that enabled viewers to watch unauthorised content was convicted for conspiracy to defraud and sentenced to four years’ imprisonment. A second supplier received a two-year suspended sentence. This conviction shows that the courts agree that this behaviour is already illegal and must be tackled appropriately. But we recognise that court cases take time and cost money, and that this is a complex area of law where enforcement agencies may not feel well equipped to take on investigations and carry them through to prosecution. That is why we are working on a range of interventions to tackle this behaviour.

Officials at the Intellectual Property Office are working with the Crown Prosecution Service and the police to develop guidance on how the existing offences may be effectively applied, and we will be running a public call for views over the coming few weeks to ask investigators, prosecutors and industry representatives whether they think the existing legislation is providing all the tools that are needed.

IPO officials have also been meeting intermediaries, especially those platforms where these devices are sold, and others whose legitimate businesses facilitate, however unknowingly or unwillingly, this criminal behaviour. We need to work together with a broad coalition to tackle illicit streaming, and everyone in the supply chain has a part to play. This is very much an area where we want to make progress. We believe that we are making progress on a number of fronts. The Minister for Digital and Culture committed in the other place to bring forward legislation if the evidence shows that it is needed—but that case has not been made yet.

With reference to what the noble Lord, Lord Gordon of Strathblane, said, I think it is right to emphasise that the ever-changing nature of how criminals operate means that they will quickly circumvent technology-specific legislation. We have to be careful when we talk about primary legislation. The changing way in which content is consumed means that specific legislation such as that proposed may be rendered obsolete, unprosecutable or both. I hope that with this explanation, the noble Lord will feel able to withdraw the amendment.

[Lord Clement-Jones]

Before the noble Lord, Lord Stevenson, expresses his view of the Minister’s response, may I ask her a few questions? She gave a bit of a “curate’s egg” response, giving with one hand and taking away with the other. At the end of the day it might be considered that a criminal offence is appropriate—but as to the call for evidence, does the Minister have a timetable that she can reveal to the House for this to take place? Will it include the role of intermediaries?

I think that the Minister can understand some of our impatience in this area: legislative opportunities to deal with this kind of infringement are few and far between, and this is a major problem. The percentage of people using this software and these boxes is rising inexorably, and that is having a very bad impact on the business models of many in these industries. We urge urgency on the Government.

[Baroness Buscombe]

I respect what the noble Lord has just asked, but I did say—maybe I was not clear—that we would run a public call for views over the coming few weeks.

[Lord Clement-Jones]

Weeks not months?

[Baroness Buscombe]

Absolutely—weeks. We will ask investigators, prosecutors and industry representatives whether they think the existing legislation provides all the tools needed. IPO officials have also been meeting intermediaries, and I am sure that they would welcome more such meetings to see that we get this right.

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Moved by

[Lord Clement-Jones]

73: Clause 29, page 29, line 32, leave out subsections (3) to (5)

[Lord Clement-Jones]

My Lords, in moving Amendment 73 I wish to speak also to Amendment 235. It has been a longish road towards Clause 29. I seem to remember putting down an amendment similar to this clause on two previous occasions, when we had considerable debate about its merits. I am delighted that Clause 29 has finally, after much debate and discussion within government and outside, seen the light of day. I welcome the Government’s saying that they are seeking to implement repeal soon. However, there is considerable concern that they may attempt to delay effective repeal through transitional arrangements for up to two years. There is a very strong view within the television industry that Section 73 should be repealed as soon as possible in order to provide certainty for PSBs and to ensure that investment by public service broadcasters in UK content is protected.

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[Baroness Buscombe]

My Lords, I thank all noble Lords who have taken part in this important debate on the issue of retransmission fees. A number of noble Lords have tabled amendments urging the Government to get on with the repeal of Section 73 as quickly as possible.

The Government, through the Intellectual Property Office, consulted on the technical aspects of the repeal, including on the question of a transition period. The Government will, hopefully very shortly—and I say that with some strength—be publishing their response to this consultation, and I believe that the noble Lords will find this response enlightening and helpful. I therefore suggest that we return to this issue on Report, where I can fully set out the details of how the repeal will be conducted.

The noble Lord, Lord Stevenson, also tabled an amendment that would require any new fees which may flow to the public service broadcasters to be reinvested in original British content. I believe it is premature to legislate on this issue. We need to see how this new market develops after the repeal of Section 73. The British broadcasting landscape, with its steady flow of high-quality output, is envied around the world. The public service broadcasters are already pulling their weight here and face content requirements set by Ofcom. I do not believe that it would be necessary or desirable to legislate in this area that works so manifestly well for British audiences.

Clause 29 will repeal Section 73 of the Copyright, Designs and Patents Act 1988, which currently provides that copyright in a broadcast of public service broadcasting services—and any work in the broadcast—retransmitted by cable is not infringed where the broadcast is receivable in the area in which it is retransmitted. In effect, cable TV platforms are currently not required to provide copyright fees in relation to the core public service broadcaster channels. Last year, the Government consulted on the repeal of Section 73 and the balance of payments between public service broadcasters and TV platforms. The conclusion reached was that Section 73, as noble Lords have said tonight, is no longer relevant.

Today, a wide variety of platforms ensure that virtually everyone in the UK is able to receive public service broadcasts. Following digital switchover, completed in 2012, digital television services are now available for over 99% of consumers through a combination of digital terrestrial television, satellite and cable platforms. The cable market has now moved from a large number of local providers in the 1980s to one big provider and a few—very small—local platforms, and from 130,000 subscribers to over 4.5 million to date. The Government are satisfied that the objective of ensuring that public service broadcast 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.

Moreover, the repeal of Section 73 will close a loophole used by providers of internet­based live streaming services of broadcast television programmes. These providers are relying on Section 73 to exploit PSB content by retransmitting channels and selling advertising around the service, without any benefit flowing to the PSBs.

I hope that, on that basis, noble Lords will feel able to withdraw their amendments.

[Lord Clement-Jones]

My Lords, I thank the noble Viscount, Lord Colville, and the noble Lord, Lord Black, for their comments and support for these amendments.

The noble Viscount, Lord Colville, talked about underlying rights and, of course, there should not be any anxiety about whether these have been obtained sufficiently for retransmission. Channel 4 tells us that it has a multiyear contractual arrangement in place with Virgin Media for which all the rights are cleared, so there is no impediment. The noble Viscount also made the point that the money involved in retransmission fees is a large amount for public service broadcasters but relatively small for cable operators. That is another factor.

The noble Lord, Lord Black, stressed the point about time being of the essence. I am delighted that the Minister responded to that, because we are in a context where the creation of world-class content to be competitive on the world stage could never be more important. He described further delay of two years as being a lifetime in this industry. That is absolutely true.

In the circumstances, and compared with many ministerial responses, I thought the Minister’s response extremely positive. I do not think I have ever had such a tantalising response about revealing all on Report. That is quite something.

I may be getting this wrong and the Minister can correct me, but I assume there will be some sort of revelation on Report about the timetable. I am perfectly happy to table a probing amendment to get the full benefit of her response on timing, but if she is going to table an amendment that would move things towards the kind of timing we are looking for in this amendment, as a result of the technical consultation finally being determined by the IPO, I will not quarrel with that. I am very happy to suspend judgment, but a nod is as good as a wink in Committee. If the Minister would like to say anything further about what precisely she meant by what she might do on Report, I would be open to suggestion.

[Baroness Buscombe]

My Lords, I will not be tempted at this stage, but I repeat that, when we get to Report, I think noble Lords will find my response enlightening and helpful.

[Lord Clement-Jones]

My Lords, that is even more positive than the first time around. In those circumstances, we will suspend judgment. I beg leave to withdraw the amendment.

Amendment 73 withdrawn.

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Moved by

[Lord Clement-Jones]

74: After Clause 29, insert the following new Clause—
“Remote e-lending
(1) Section 5 of the Public Lending Right Act 1979 (citation, etc.) is amended as follows.(2) In subsection (2)—(a) in the definition of “book”—(i) after “(an “audio book”)” insert “which has been licensed by the publisher on agreed terms for library lending”,(ii) after “(an “e-book”)” insert “which has been licensed by the publisher on agreed terms for library lending”;(b) in the definition of “lent out”, for paragraph (b) substitute—“(b) includes communicating by means of electronic transmission to a place other than library premises”.”

[Lord Clement-Jones]

My Lords, I am very conscious of the time and I will try to be as brief as I can. The amendment is designed to amend the Bill to extend the public lending right to remote e-book lending.

The way we access books is increasingly changing as technology offers new ways to access the written word. Libraries are now lending many e-books: 2.3 million e-book loans were made in 2015 alone and the figure in 2016 was more than 3 million. But authors are not being remunerated for those loans, despite the Government having committed in principle as long ago as March 2013 to extending PLR payments to e-books when a suitable opportunity arose.

The public lending right allows authors to be fairly paid for each loan when their work is lent through public libraries. It 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. The scheme provides authors with a modest payment of around 7p each time one of their books—written or audio—is borrowed from a public library. More than 22,000 writers, illustrators, photographers, translators and editors receive PLR payments each year under the Public Lending Right Act 1979 and subsequent amendments. There is a minimum payment threshold of £1 and a maximum of £6,600. Although this does not replace the royalties authors would receive if their book had been purchased by each borrower, PLR provides a significant and much-valued part of many authors’ incomes, particularly for authors whose books are sold mainly to libraries and for those whose books are no longer in print but are still being read.

While the Digital Economy Act 2010’s extension of PLR to audiobooks was a useful and overdue reform—I remember well when we passed it—the extension to on-site loans of e-books was nugatory, as no such loans are made. By contrast, remote e-book lending has increased significantly and is increasing much faster than physical lending, particularly since reduced opening hours and the regrettable extensive library closures that the Government have taken no action to prevent mean that it is more and more difficult for readers physically to visit a local library.

Writers are keen to see the Government develop the public lending right to reflect modern media. I should stress that even though the precise wording of the amendment is not agreed across the board, its spirit is strongly supported by a range of bodies, including the ALCS, CILIP, the Booksellers Association, the Society of Authors, the Association of Authors’ Agents, the SCL Leading & Managing Public Libraries and the Publishers Association. So it has extensive support in principle.

The amendment would amend the Digital Economy Act to ensure that remuneration is received by writers for remote e-lending at the same rate per loan as for physical books. It is vital that authors receive remuneration for loans of their works, irrespective of format. The principle of remuneration that enables authors to work should not be unfairly obstructed by technical and technological change. I know that Europe is not fashionable in some quarters, but a recent opinion of the Advocate-General relating to a case on rental and lending in respect of copyright works currently before the Court of Justice of the European Union supports this view. He said:

“The lending of electronic books is the modern equivalent of the lending of printed books”.


This removes the Government’s previously expressed concern that such a change may not be compatible with the copyright directive—it clearly is.

The ability to access e-books facilitated by public libraries is a service valued by the public, and remuneration for public lending is a requirement of European law under the rental and lending directive. The current situation where millions of e-book loans receive zero remuneration is unlawful and creates significant prejudice to writers. It also places libraries in a position where works lent regularly may infringe authors’ rights.

The changes needed are achieved simply by taking measures to amend the Digital Economy Act 2010 by removing Section 43(2)(b), which sets remote loans outside the definition of lending under PLR. It would also be necessary to add a sentence to make sure that the commercial market was protected and that e-lending was put on a par with physical lending. The jargon in the trade, used by the Sieghart report which recommended that PLR be extended to remote e-lending, is “frictions”—which basically are the conditions under which digital books can be loaned to one reader at a time, just as with a physical book.

Other conditions are that a digital copy of a book can be loaned only for a limited period and that digital copies of books should be deemed to deteriorate, ensuring their repurchase after a certain number of loans. Those conditions are broadly accepted by the industry, but there was no desire to incorporate them in primary legislation so that they might be taken on board in the commercial arrangements made between publishers, authors and libraries.

The cost of this measure would be negligible, but the principle is extremely important—as was recognised by the Government in 2013. I hope that they will take this on board, because it is long overdue. It would do proper justice to our authors and writers. I beg to move.

[The Earl of Clancarty (CB)]

My Lords, I apologise for not having spoken at Second Reading. I want, however, to speak to Amendment 74, to which I have put my name, and to Amendment 79B.

I very much support Amendment 74, in the name of the noble Lord, Lord Clement-Jones, although I am delighted that there is now a firm agreement between the interested parties—including CILIP, ALCS and the Society of Authors, among others—for an amendment which is almost but not quite the same as Amendment 74. I hope that this tweaked amendment, which clarifies the nature of what is being loaned, or an amendment equally acceptable to all parties, can be brought forward by the Government and accepted on Report.

--- Later in debate ---

[Baroness Buscombe]

My Lords, I thank all noble Lords for this important debate and for this proposed new clause. It seeks to extend the public lending right to include remote lending of e-books and e-audiobooks by public libraries. This would allow authors of these to receive payments from the public lending right fund, as they do for public lending of printed and audiobooks. It would also amend the definitions of e-books and e-audiobooks so that these works could be lent by public libraries only if they have been licensed by publishers on agreed terms for library lending.

The Government support recognising authors for e-lending by libraries. We committed in our manifesto to work with libraries to ensure the public can access e-lending, and to appropriate compensation for authors that enhances the public lending right scheme. As the Minister in another place confirmed, we intend to legislate to extend the public lending right to include remote e-lending. In response to the noble Lord, Lord Maxton, I say that our intention is to include all e-books regardless of technology.

This proposal is supported across the sector, including by libraries, authors, publishers and booksellers. I am therefore pleased our commitment is also supported by noble Lords in this House. Public libraries increasingly provide e-lending to support reading and literacy in response to the needs of their communities. Most library loans remain of printed books, with over 200 million such loans in Great Britain in 2015-16—so not everyone has given up the printed word, as has the noble Lord, Lord Maxton. However, e-lending is growing, with 4 million e-book and 1 million e-audiobook loans in Great Britain in the same period.

In considering how to legislate to extend the public lending right to include e-lending, we are engaging with representatives of authors, libraries, publishers and booksellers to understand their views. A number of these have raised points that need careful thought before the Government table their own clause.

One point made by representatives of authors and publishers is that an amendment to the legislation should include protections for the commercial market. The proposed new clause seeks to do this by specifying that e-books and audiobooks could be lent out from public libraries only if they had been licensed by publishers on agreed terms for library lending. However, others had raised concerns about whether such a provision might impact on public libraries’ ability to acquire and lend e-books.

This is an important issue. Officials have therefore met sector representatives to allow us to consider carefully the views and decide on the appropriate way to proceed with our commitment. I understand that the discussions in recent days have been promising and that the respective parties have been considering whether they can agree a settled view on the issues. We want to continue to work together to support a strong book sector that helps promote opportunities for reading and learning by the public, so we intend to table our own proposals for the necessary legislative changes as soon as possible. We will carefully consider these views in deciding how to proceed. I hope therefore that noble Lords will not press this proposed new clause.

Amendment 79B requests that e-books be exempt from VAT. Issues affecting taxation are a matter for the Chancellor of the Exchequer. It would therefore be inappropriate to include this amendment in this Bill. There are other difficulties, however, in accepting such an amendment. VAT is an EU-wide tax and is applied by member states within agreed structures. While we remain in the EU we are bound by our international obligations. This amendment would cut across those obligations in respect of VAT. EU VAT law, agreed unanimously by member states, currently specifically requires the standard rate to be applied to all electronically supplied services. This includes e-books, which are services, not goods. Because of this, if we accepted the amendment we would be in breach of our obligations. To make the change proposed in this amendment a change of EU law will be necessary, supported by all 28 member states. While a proposal is currently on the table there have been a variety of different reactions from member states and no unanimous agreement. I hope that the noble Lord will therefore not move his amendment.

[Lord Clement-Jones]

My Lords, I thank those who have taken part in the debate. The noble Earl, Lord Clancarty, has throughout been a doughty campaigner for the arts and for authors. I also thank the noble Lord, Lord Arbuthnot, for his contribution, and the noble Lord, Lord Stevenson, in particular for an amendment that we would all support if only it were practical. Who knows? There may be some silver lining to Brexit at the end of the day. I do not think that that is quite substantial enough for many of us but it is certainly a little glimmer. I thank the noble Duke, the Duke of Somerset, as well. Of course we always bow to the superior technological knowledge in these matters of the noble Lord, Lord Maxton. I agree with the Minister: I am still an aficionado of the printed book, and am one of the digital book. There is a place for both in one’s library.

I welcome what the Minister said. In a way she performed a political ju-jitsu on us by thanking us for supporting her government line on this, which I thought was magnificent. I accept that it is in the Conservative manifesto. The Minister in the Commons pledged to come up with a solution to this. All that we have done really is to give the Government a bit of a push today. This wording is not the agreed wording. Agreement was reached, at the final hour—not in time to include in Committee today—between the various parties involved, particularly CILIP. As the noble Earl, Lord Clancarty, said, I am delighted that there has been agreement reached between the parties and the wording about which I have been told will perhaps be the wording to which the Minister will return, having performed her ju-jitsu at Report. Perhaps I have her in an armlock now to come back at Report with a suitable amendment. In the meantime, I beg leave to withdraw the amendment.

Amendment 74 withdrawn.

Digital Economy Bill

Lord Clement-Jones Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Monday 6th February 2017 Lords Chamber

Moved by

[Lord Clement-Jones]

78: After Clause 29, insert the following new Clause—
“Transparency and fairness obligations
(1) Authors, artists and performers (“creators”) shall receive on a regular basis timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights as well as subsequent transferees or licensees, and the information shall include information on modes of exploitation, revenues generated and remuneration due. (2) The obligation in subsection (1) may be met by complying with a code of practice collectively bargained between relevant representative organisations of creators and the representative organisations of those who exploit their works, taking into account the characteristics of each sector for the exploitation of works.(3) Any such code of practice is to provide that each creator is to be entitled to a statement of income generated under such licence or transfer arrangements at regular intervals during each annual accounting period, and provide an explanation as to how the creator’s remuneration has been calculated referencing any contract terms relevant to the calculation.(4) In the event of failure of a transferee or licensee mentioned in subsection (1) to comply with a code of practice, or in the absence of such a code of practice, the creator shall be entitled to apply to the Intellectual Property Enterprise Court for a detailed account of revenues due to the creator generated from the modes of exploitation referred to in subsection (1), and in the event of failure, the Court may award damages in the amount of any shortfall in the total amount due to him.”

[Lord Clement-Jones (LD)]

My Lords, my noble friend Lord Foster of Bath has referred to the draft directive on copyrights on the digital single market. Many authors, writers and artists welcome the provisions to balance the playing field for creators announced in that draft directive and would like to see them incorporated in our domestic law through the Digital Economy Bill. Some of my concerns about the timing of the adoption of the directive mirror exactly those mentioned by my noble Friend, Lord Foster.

The directive proposes in article 14 one particularly important safeguard—namely, transparency: a right to regular, timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights, including details of modes of exploitation, revenues generated and remuneration due. This right will apply even if copyright has been assigned and will allow authors and performers to assess how their work has been used.

Some assignees and licensees are exemplary, but by no means all. Authors and performers under these provisions will have a right to detailed and full statements on the uses of and revenues from their work, unless such reporting is disproportionate. That in itself would be an enormous improvement on the present situation, whereby authors and artists often do not know how widely their work is used and have no way to check whether payments made to them are correct. This problem can become more acute in the digital age, when work can be disseminated in many ways and there is no physical stock which can be counted to ensure that accounting is correct.

As for music, subscription streaming is set to become the most significant revenue stream for the recorded music market in the near future. Streaming requires a fundamentally new licensing model from those who control the recording and song—lyrical and musical—copyrights, which the digital service providers wish to exploit. A complex model was developed, and is now utilised by most subscription services. The evolution of this licensing process for streaming music has resulted in a number of transparency issues for artists and songwriters which have not yet been fully addressed—not least, the presence of non-disclosure agreements between the digital service providers and the record labels, distributors, publishers and collective management organisations, which mean that artists and songwriters are not always allowed to know the revenue share and minimum guarantee arrangements that each digital service provider uses to calculate what the copyrights from which they benefit are due each month. There is also a lack of clarity over how labels and publishers apply contract terms that impact on how creator payments are calculated.

The amendment would work in a similar fashion to the proposals in the draft directive, ensure that creators can audit the royalties they receive from streaming and other services, and assess the relative merits of different services and business partners. Licensees and assignees already have systems in place for recording usage and revenues and reporting to creators. These systems are increasingly detailed in the digital age, and could easily be adapted to take account of any increased requirements. According to a medium-sized book publisher, reporting on 600 titles on the basis of spreadsheets takes 80 man hours per year, and the average time required for compiling and sending a report on a title is eight minutes. Simpler cases can be dealt with in two to three minutes, while the more difficult ones can take 10 to 15. The advantages far outweigh any cost and would help to make creative careers more attractive. Greater transparency would give a powerful message to consumers as they are generally more willing to pay for copyright-protected works if they know that fair remuneration would reach the original creators.

The directive itself is now subject to further consideration and review and may take 12 to 18 months, at best, to adopt, and perhaps even longer, as my noble friend indicated. As the Minister, or the Minister’s noble friend, reminded me recently, the Government have published a call for evidence on the copyright proposals. When will they take a definite view on the proposals, including these transparency provisions? The UK has an unparalleled opportunity to create a fairer playing field for creators by incorporating these provisions into the Digital Economy Bill, irrespective of whether we want to or can sign up to the directive. The question is whether it will. I beg to move.

[The Earl of Clancarty (CB)]

My Lords, I fully support the amendment of the noble Lord, Lord Clement-Jones. I do not have much to add to his thorough analysis of the issue other than to say that the right of artists, authors and performers to know what is being done with their work, and to obtain fair remuneration for the exploitation of it, is incontestable. This amendment would, in an effective manner, enshrine that right.

In one sense, information is money. This amendment will doubtless have hidden benefits in that anything that can be of further help to artists, particularly those who are less well off, to survive and thrive, and, perhaps, to become the high earners of the future, is a worthwhile long-term investment and can only be good for the individuals, the creative industries and the UK economy as a whole.

[Baroness Buscombe]

My Lords, I thank the noble Lord, Lord Clement-Jones, for raising this issue. Our creative industries ultimately depend on the efforts of authors, musicians and other creators, and I agree with the principle that they should be fairly remunerated when their works are used. We want to create an environment where the UK’s creative industries can continue to thrive and retain their world-leading edge. The creative content tax reliefs are one of the Government’s flagship policies, and the film tax relief alone supported over £1 billion of expenditure in the UK in 2015-16. The Government are also investing in skills to create a pipeline of future talent. Since 2013, we have made available up to £20 million match funding to the skills investment fund to help employers address priority skills needs in the screen sector. Over the last 18 months, this has supported more than 500 graduate placements.

The amendment would require those organisations exploiting copyright works via licences to provide the relevant creators with regular information on their use and the revenue they generate, and states that this obligation could be met by complying with a code of practice determined at sector level. It would also provide creators with recourse to court if these requirements are not adhered to. The principle of transparency is an important element of well-functioning markets. I am aware that some creators and their representatives find it difficult to access information on the use of their works owing, for example, to difficulties in negotiating suitable contractual terms. I am, however, happy to confirm to your Lordships’ House that the Government are already engaged in discussions to address this issue. The European Commission has made proposals in this area as part of its current draft directive on copyright, and the UK will actively engage in these debates while we remain a member of the European Union. As such, I hope the noble Lord, Lord Clement-Jones, will understand the Government’s wish to allow this process to develop before considering the case for domestic intervention.

I welcome the noble Lord’s recognition in his amendment of the important role that collectively agreed industry standards can play in this space. Creators and publishers alike have highlighted the role that such standards can play in improving transparency and fairness. Examples in the UK include the Publishers Association’s Code of Practice on Author Contracts, and the fair digital deals declaration operated by the Worldwide Independent Network. I believe that it is worth giving careful consideration to the part that these industry-led initiatives can play, and I hope the debate at EU level will be a chance to explore that. With this explanation, and the assurance that these issues are under active consideration, I hope the noble Lord will withdraw his amendment.

[Lord Clement-Jones]

My Lords, I thank the Minister for an extraordinarily well-crafted response—it seemed to throw bouquets in various directions, but I am not quite sure where the petals will fall at the end of the day. It was splendidly positive at the outset, and I felt a speech on industrial policy for the creative industries might be coming on. I thank the noble Earl, Lord Clancarty, for his very supportive contribution.

The Minister talked about transparency being an important element of a well-functioning market and went on to talk about codes of practice, the Government’s active engagement in discussions of elements of the EU draft directive, and so on, but she never actually agreed that the principle of transparency should be incorporated into UK law. Clearly, if the EU directive is passed within the two-year period after notice of Brexit is given, it may well be incorporated into UK law. However, the Minister did not say, “Yes, and moreover, given the call for evidence, we have heard the evidence on transparency and we fully support that element of the directive”. It was rather a case of saying, “Let’s keep talking and actively engaging”, and so on and so forth. I suspend disbelief slightly given that the Minister supported the principle but I am not sure she went so far as to support its incorporation into law. That is a rather different matter. We may well return to this issue on Report. In the meantime, I thank the Minister and beg leave to withdraw the amendment.

Amendment 78 withdrawn.

Digital Economy Bill

Lord Clement-Jones Excerpts

Committee: 3rd sitting Hansard - continued): House of Lords
Monday 6th February 2017 Lords Chamber

[Baroness Hamwee]

My Lords, I will just pick up the noble Baroness’s last point about who is an official. There are examples, in other legislation, of references to “senior officials” and “designated officials”, which might be somewhere between the junior official she has in mind and the Permanent Secretary, but she is right to draw the issue to the Committee’s attention.

On an earlier group, the noble and learned Lord indicated that he was going to speak at greater length—I assume that may be on this group—on the reason for using the term “personal information” rather than “data”. Perhaps I may use my noble friend’s Amendment 213 to ensure that we get to share more of Government’s thinking. I understand the point about corporations, since in the one case, they come within the group covered, and in the other they do not. But I am still puzzled as to why such efforts have had to be made to deal with personal information and then to add in references to the Data Protection Act, rather than starting from the DPA—with any necessary exclusions—which would have taken us straight to the involvement of the Information Commissioner, the data protection principles and so on.

I wondered during the Statement whether to have a go at some alternative drafting for Report, but thought I had better wait for this discussion. But perhaps part of it boils down to a question on Clause 33(8), which says, in wording replicated elsewhere, that,

“nothing in section 30, 31 or 32 authorises … a disclosure which … contravenes the Data Protection Act”.

To look at it from the other end of that telescope, is there any personal information which is the subject of the Bill that would not fall within the DPA and therefore not be protected by that clause?

[Lord Clement-Jones (LD)]

My Lords, I thought I would intervene to see if it might help the Minister. The code of practice does not make things any clearer. With reference to my noble friend’s very apt point about information versus data, paragraph 4 of the code says:

“The definitions of ‘personal information’ contained in the Bill are intended to ensure that the information shared through these powers is handled carefully”.


That does not sound like a particularly good legal answer to the question. It goes on:

“Though the definition of ‘personal information’ for the purposes of the Bill may differ from the definition of ‘personal data’ in the DPA, all information shared and used under the public service delivery, debt and fraud provisions must be handled in accordance with the framework of rules set out in the DPA”.


Where is that explicitly set out? It would be very helpful if the Minister, in answering, could advert to that as well.

Digital Economy Bill

Lord Clement-Jones Excerpts

Committee: 3rd sitting (Hansard - continued): House of Lords
Monday 6th February 2017 Lords Chamber

Moved by

[Lord Clement-Jones]

113: Clause 39, page 38, line 23, leave out from “that” to end of line 26 and insert—
“(a) the authority or civil registration official to whom it is disclosed (the “recipient”) requires the information to enable the recipient to exercise one or more of the recipient’s functions, and(b) the data subjects whose information is being disclosed have given valid consent under data protection legislation.”

[Lord Clement-Jones (LD)]

My Lords, I wish to speak also to Amendment 116.

This issue is extremely straightforward. My remarks may anticipate some of the points that the noble Baroness, Lady Byford, will make in due course on the clause stand part question, for which we have considerable sympathy. However, we on these Benches and many others outside the House are deeply concerned that Chapter 2 of Part 5 contains no safeguards against bulk copying of civil registration data. We accept the case for a power to disclose civil registration information where an individual has consented. A citizen should, of course, be able to choose to let the registrar inform other bodies of changes. However, new Section 19AA in Clause 39(2) appears to remove any limit to copying registration data in bulk. As regards the draft civil registration code of practice, there appears to be no explicit limit on that sharing of data in bulk, and certainly no requirement for individual consent. Therefore, the essence of this amendment is quite simply to require that there should be express consent of the data subject.

As regards Amendment 116, approximately 1.3 million births and deaths are registered each year under legislation dating back to 1953, which consolidated provisions going back to the start of civil registration in 1837. In 2009, a system was introduced to allow registrars to register births and deaths electronically but it is the hard copy which this generates which is the legal copy that will be used to issue the certificates. Registrars also have to use the electronic system to submit an electronic copy of each event to the superintendent registrar. Primary legislation is required to make the electronic copy the legal copy and to remove the need for paper altogether, although individuals could still order hard-copy certificates should they so choose.

It has been estimated that such a move would save the local registration service and the Home Office around £2.5 million a year, primarily through removing the routine creation of registers containing loose-leaf, watermarked registration documents. Local authorities currently have to pay to store hard copies of all documents, so the change would reduce future storage costs. Provided that sufficient checks are in place, electronic documents are more secure than paper ones, which is particularly important when loose-leaf documents are being moved.

I hope that I have made the case for this amendment, which is very much supported by many in this field, and I hope that the Minister will look favourably on it. I beg to move.

--- Later in debate ---

[Lord Keen of Elie]

It does not extend to Scotland. It is a provision pertaining to England and Wales. I am obliged to the noble Lord for giving me time to find my place in my notes. It is greatly appreciated.

As I said, the proposals in Chapter 2 of Part 5 will ensure that citizens are able to access future government digital services efficiently and securely, while removing the current reliance on paper certificates. I will address the two amendments first before addressing the clause stand part aspect of this debate.

Amendment 113 would add a requirement for a civil registration official to be satisfied that the information is required by a recipient to fulfil one or more of their functions before disclosing data and also seeks to add a requirement that an individual must have given valid consent under data protection legislation prior to any disclosure of their personal data. With respect, this amendment is unnecessary because disclosure of personal data under these clauses will already be subject to the provisions of the Data Protection Act. To require explicit consent in all cases would exceed the requirements of the Data Protection Act and the purpose of this clause. Disclosure will take place without consent only if to do so would be consistent with the Data Protection Act, which governs fair disclosure. Examples of how the powers would be exercised in practice include allowing registration officials to disclose information within and across local authority boundaries in order to safeguard children. Being able to share information will ensure that children are known to the local authorities in which they reside and action can be taken to address any needs of the child or the parent. That is what lies behind this matter.

Amendment 116 seeks to amend the Births and Deaths Registration Act 1953 to introduce an electronic register for the registration of births and deaths. However, the proposed amendment to Section 25 of the 1953 Act as currently drafted does not go far enough. The legislation which provides for the registration of births and deaths is based on legislation in place in 1836—or 1837—and very little has changed to the process of registering births and deaths since then. The Act would need more amendment in order to introduce an electronic register. Moving to an electronic register would remove the requirement for hard-copy registers and the electronic register of births and deaths would be the legal record instead of the paper registers. It is certainly an area of reform that the Government are keen to take forward. However, we need more time. I reassure noble Lords that the Government will look in more detail at what changes need to be made to the Act in order to bring in this change and we will consider legislating in due course. We recognise the benefits that the noble Lord, Lord Clement-Jones, suggested could be achieved once that entire process is completed. In light of those points, I hope that the noble Lord will agree not to press that amendment.

I turn to my noble friend Lady Byford and her opposition to the clause standing part of the Bill. Unless there is a specific statutory gateway, information from the records of births, marriages, civil partnerships and deaths may not be disclosed by registration officials other than in the form of a certified copy of an entry, such as a birth or death certificate, on payment of the statutory fee. As I have indicated, the system is outdated and based on paper processes from the 19th century. This clause introduces new data-sharing powers that allow registration officials to share data from birth, death, marriage and civil partnership records with public authorities for the purposes of fulfilling their functions. However, only the minimum amount of data will be provided to enable the public authority to fulfil the function.

My noble friend asked for examples of the benefits of sharing such registration data. Being able to share data about deaths with local authorities would assist in combating housing tenancy fraud. The National Fraud Authority estimates that housing tenancy fraud costs local authorities £845 million each year. An example of this is when someone continues to live in a property following the death of the tenant even when they have no right to do so. The sharing of birth data within the local authority would assist social services, for example, if they wanted to engage with one of the parents in the interests of a child. Sharing marriage data would help to target those living together if there were a fraudulent claim to be single for the purposes of claiming benefits. Sharing death data within local authorities would help them to recover medical equipment following the death of an individual.

There are many examples where such data sharing would be of assistance. It paves the way for citizens to access government services more conveniently, efficiently and securely, for example, by removing the current reliance on paper certificates to access services. This will provide more flexibility and will modernise how government services are delivered. An example is where registration officials will be able to share data on births that have occurred in one district, but where those concerned live in a neighbouring district with no hospital. This would allow local authorities more accurately to plan the provision of health care, school planning and other local services. Being able to share death data across boundaries will also help to prevent unwanted mail being sent to the family of a deceased person.

Registration officials will be able to share registration data only with the public authorities defined in new Section 19AB of the Registration Service Act 1953. Any data sharing will of course be carried out strictly in accordance with the requirements of the Data Protection Act. The sharing of registration data will be underpinned by a statutory code of practice as required by Section 19C. One of the requirements in the code will be that the Registrar-General must personally approve any request for the sharing of large amounts of data.

Before data are shared, the code of practice requires privacy impact assessments and data-sharing agreements to be drawn up and agreed with public authorities to include such things as how data are to be used, stored and retained. Data will be able to be used only for the purpose they have been provided and retained only for as long as necessary. Data-sharing agreements will forbid the creation of a database or the linking of registration data in any way. Any breach would be reported to the Information Commissioner, who has the power to impose penalties where it is appropriate to do so. I hope that that deals with the fears expressed about the bulk use of such registration data.

[Lord Clement-Jones]

My Lords, I am not sure whether the Minister has dealt with the questions raised by my noble friend.

[Lord Keen of Elie]

I apologise for omitting to respond to the questions asked by the noble Baroness, Lady Hamwee, by reference to the fact sheet. Rather than poring over the provisions of the Bill, I will undertake to write to her pointing out the cross-reference between the terms of the fact sheet and the relevant provisions in the Bill. I will place a copy of that letter in the Library.

[Lord Clement-Jones]

My Lords, I thank the Minister for his response, but I am a little bit baffled. Here we are—and I am talking here particularly with reference to Amendment 116—discussing the Digital Economy Bill. It should be doing what it says on the tin. I put forward, in my name and in the name of my noble friend Lady Scott, who is the inspiration behind the amendment, something that would make sure that it was the electronic copy that was the legal copy. Here is the Minister saying—and I do not think I have ever had a Minister say this to me—that the amendment does not go far enough. That is a very joyous response, but on the other hand he wants more time and “it will all happen in due course”. This is the Digital Economy Bill: what other opportunity are we going to have to ensure that our Registrar-General and so on—the General Register Office and local authorities—are under a legal obligation to hold electronic copies rather than the old, steam-driven paper copies? We have been doing this since 1837 or 1836, as we heard earlier. Is it not about time that we changed our practices, and is it not possible that we have been cooking up an amendment over the last 50 years that might suit the book and be able to appear on Report? That is my response on Amendment 116.

My response on Amendment 113 is a little bit dustier. I have read the code of practice, and I accept the Minister’s assurances; throughout this process he has given a lot of assurances about the impact of the Data Protection Act. There is no doubt about that: either explicit consent or, where no explicit consent is given, it is in accordance with the Data Protection Act and so on. There are some very worthy purposes in terms of data sharing: safeguarding children was an absolutely splendid example for the Minister to produce, and he produced some very good examples to the noble Baroness, Lady Byford, as well. Of course, there are some very good examples, but the code of practice is very opaque in that respect. It really does not get into any of that kind of worthy purpose: it simply talks about disclosing in accordance with the Data Protection Act. I looked through when the Minister was talking to see whether it was the Registrar-General who was the one person who was going to authorise disclosure, and it seemed to me that there were an awful lot more people who were authorised to disclose than simply one person.

There is something defective about these codes of practice. They seem to be far too bland and they do not give the public the reassurance that they should. We have talked about public trust right across the Committee, and the fact is that the reason why so many amendments have come forward from a variety of different sources to this part of the Bill is precisely that lack of trust. I suggest that the Minister and his colleagues look again at whether these codes of practice are doing their job.

That is another reason why, at the end of the day, these codes of practice should be approved by Parliament. That has also been a running theme of the Delegated Powers and Regulatory Reform Committee, which had it absolutely right in every single chapter that it dealt with. These codes of practice should be approved by Parliament. Otherwise, I do not believe that the Government are going to build that public trust in this data sharing, which is absolutely essential. The Minister should look again at that aspect, but in the meantime, having given the Minister a hard time at this time of night, I beg leave to withdraw the amendment.

Amendment 113 withdrawn.

Digital Economy Bill

Lord Clement-Jones Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Lords Chamber

[Baroness Byford (Con)]

My Lords, I would like to support my noble friend in his amendment. Algorithms are basically mathematical. The power of computers is used to record, classify, summarise and project actions that indicate what is happening in the world around about us. Algorithms can be applied in particular to social media, which other noble Lords have referred to, and to normal internet usage and browsing. They reach decisions about public interest, about you and about me.

According to a recent radio programme, algorithms are used to make individual decisions in the fields of employment, housing, health, justice, credit and insurance. I had heard that employers are increasingly studying social media to find out more about job applicants. I had not realised that an algorithm, programmed by an engineer, can, for example, take the decision to bin an application. If that is true, that is absolutely unacceptable. It certainly explains why so many jobseekers do not receive a response of any kind. There is a very real danger that a person could also be refused a mortgage or a better interest rate as the result of an algorithmic decision. Even now some companies use algorithms based on phone numbers to decide whether a caller is high or low value. Highs get to speak to a person: lows are left holding on until they hang up. Algorithm designers refuse to answer any questions, I understand, about the data that are used or their application on grounds of commercial confidentiality. There are real concerns that if we continue to allow such liberties, there will be an increasing risk of discrimination—intentional or accidental—against people of certain races, religions or ages. One example of algorithm use cited in the programme was that of differential pricing by Uber.

The EU intends that by July 2018 citizens will have the right to an explanation of decisions affected by the workings of these algorithms, such as the online rejection of a bank loan. I do not feel that we should wait until then, and although my noble friend’s amendment might not be perfect, I am really grateful that he has tabled it today and that we are having this worthwhile debate.

[Lord Clement-Jones (LD)]

My Lords, I also thank the noble Lord, Lord Lucas, for putting down this amendment. Indeed, this amendment has many good aspects to it, but I will adopt a phrase which the noble and learned Lord, Lord Keen, used the other day, which is, “It doesn’t go nearly far enough”. It really highlights—and I declare an interest as the co-chair of the new All-Party Parliamentary Group on Artificial Intelligence—some of the issues that this Bill simply does not deal with. This does need huge consideration: all the ethics involved not only with artificial intelligence, but with the internet of things and the great many regulatory issues which spring from the new technologies. Algorithms are a part of it, of course they are, but we need further consideration.

I agree with those who have said that perhaps Ofcom is not necessarily the best regulator for this—I do not know—and it may be that we need to construct a purpose-built regulator for the world of artificial intelligence and the internet of things in ethical terms. I am not quite sure that Ofcom has got the necessary tools in terms of the ethics aspect of it.

I am very much in spirit with the noble Lord and I am delighted that he has raised it, but we are at the very beginning of a really important debate on a lot of these areas. The essence of all this is trust. We had a continuous debate through Part 5 about the government sharing of data. This is about the private sector and its use of a lot of our data and the way it sorts them and places them in the search engines. Trust is the overwhelming issue of our age, and we are not there yet. If we are going to reassure people who want to use these new technologies, we really do need to come up with a proper regulatory system. I do not think that this new clause quite provides it.

[The Earl of Erroll]

Before the noble Lord sits down, may I just ask him: is it not dangerous to make perfection the enemy of better? In other words, the amendment may not be perfect, but it is moving in the right direction, and to say, “Do nothing”, because it is not perfect is surely very unwise, given all the other stuff that he has said.

[Lord Clement-Jones]

My Lords, I know that the noble Earl himself is perfect in almost every way, so I would very much hesitate to argue with him. Still, I feel we need something rather broader than this proposal would provide.

[Baroness O’Neill of Bengarve (CB)]

My Lords, I share the view that the noble Lord, Lord Clement-Jones, has expressed, that the amendment probably is not the way to go about this. Algorithms are too ubiquitous, useful and powerful in this case. I do not know what we could do instead, but I note that one of the things we are looking at, together with the problem that the noble Lord, Lord Lucas, has identified, is that the internet service providers and the big media companies are supposedly platforms, not publishers, and they do not have the responsibilities of publishers for that reason. Facebook will say that it merely hosts the material that individuals post. When individuals post material, they ought to think that it reaches an indefinite number of people because the algorithm spreads it through the echo chambers. It is the cyber silos that we are going to have to think about. With the greatest regret, I do not think the amendment would do that, but I very much support the principle of looking into this matter.

--- Later in debate ---

Moved by

[Lord Clement-Jones]

215: Clause 75, page 78, line 11, leave out from “appeal,” to end of line 12 and insert “by reference to the grounds of appeal set out in the notice of appeal and taking due account of the merits of the case.”

[Lord Clement-Jones]

My Lords, I shall speak also to Amendment 216.

It is common ground that anyone affected by Ofcom’s decisions should have the right to appeal if they consider that Ofcom has got something wrong. Ofcom itself makes the point that there needs to be an appropriate balance between properly holding it to account and enabling it to make timely and effective decisions in the interests of citizens and consumers and the wider UK economy. But in the brief for this debate, it goes on to say that,

“the current merits system for appealing Ofcom’s decisions does not achieve that balance. It results in some appellants effectively asking the courts to become the primary decision-maker in place of Ofcom rather than conduct an appeal which focusses on errors which Ofcom is alleged to have made. This is particularly the case in price control appeals, where appellants have consistently used the system as a second attempt to run arguments they have already made to Ofcom during its extensive consultation processes”.

Those propositions are hotly disputed not only by many telecoms and internet service providers but also by others such as the CBI and techUK. Their position was made clear on this matter as far back as September 2013, when the Government published their summary of stakeholder views on the appeals system.

I will take the House through the fundamentals of Ofcom’s case for the change embodied in Clause 75. First, it says:

“Almost every single decision by Ofcom is promptly appealed in the courts”.


Roughly one in eight decisions have been appealed over the past decade, and this has been declining significantly over the past five years. The potential for merits-based appeals is an incentive for high-quality regulation. Here is another claim:

“This has resulted in lengthy delays in putting through quite important measures”.


Almost invariably, Ofcom’s decisions take effect immediately and stay in place while an appeal is heard. In the case of price controls, no Ofcom decision has ever been delayed in its application while an appeal is heard. Here is another proposition:

“This change will bring Ofcom into line with other regulators”.


Virtually every other economic regulator faces scrutiny of its decisions to establish whether it is in error under regimes not limited to judicial review. I could take your Lordships through energy, water, post, the NHS, aviation, rail, but I will not go into great detail unless I need to respond to the Minister at the end of the debate.

The new approach in Clause 75 would therefore not be in line with almost all other comparable public authorities—that is, the economic regulators. The standard of appeal is not much lower in telecoms than in other sectors. All the UK’s major economic regulators have a form of statutory review that is in law or in practice merits review. All EU telecoms national regulatory authorities make decisions that must stand on their merits.

Here is a further proposition: Clause 75,

“should also free up Ofcom resource to deliver better outcomes for citizens and consumers”.

Far from being good for the consumer, Clause 75 would have denied the court’s ability to implement corrections to bad decisions which have resulted in something like £350 million to £400 million of direct consumer benefit over the past decade. Over a number of cases in the past 10 years—again, I can give the Minister references if he needs them—the tribunal’s decision was that Ofcom’s decision had not gone far enough in the consumer’s favour. This would not have been fixed through judicial review.

A further proposition:

“The big incumbents will no longer be able to use the process to hold-up regulatory decisions through aggressive use of the appeals process”.


Opponents of the change in fact represent the vast majority of the investing industries—small and large, ex-incumbent and insurgent. BT was joined by other industry appellants on most of the cases it appealed. Merits-based appeals work pretty well for SMEs, too, and are disproportionately used by them.

Here is another proposition:

“If material error is present it can be addressed in judicial review”.


Judicial review tests generally relate to illegality, procedural impropriety, irrational behaviour—in other words, has the decision-maker taken leave of their senses? To repeat, JR would have denied consumers benefits of something of the order of £400 million in value. Here is another proposition:

“JRs will be fewer in number and take less time”.


Increased uncertainty for this procedure could be likely to result in an increase in appeals. On average, judicial review takes 10 months from start to finish, versus 11 months on average for a merits appeal. Judicial review requires the decision to go back to the regulator, which can add years to the process, while a merits-based appeal provides powers to the appeals body to fix the problem.

Its final proposition is that:

“Ofcom wins 85% of cases”.


That is rather misleading. Ofcom wins just over 60% of appeals and in the rest it is found to have erred in some material respect. Ofcom’s statistics only tell us that in 15% of cases it lost absolutely every point in an appeal. That is the true 85% figure.

For all the above reasons, the vast majority of telecoms communications providers of the UK’s fastest-growing new fibre networks, the UK’s premier business organisation, the UK’s trade association, providers of internet services and the body which represents the UK’s technology sector, strongly oppose the proposed change. They fear the change will mean that regulation will become unpredictable and prone to risk, with no corrections for inconsistency, error, or lack of rigour in approach.

In summary, a move to judicial review will leave wrong decisions standing. Judicial review, as I said earlier, is solely concerned with whether the decision is unlawful in a technical sense—that is, was the correct process followed? The decision itself is not reviewed. Many decisions that have been found in merits appeals to be clearly wrong and that harm the interests of consumers would have been allowed to stand under judicial review. As I have emphasised above, the existing appeal regime protects the interests of consumers. Ofcom can and does make mistakes, and in the vast majority of cases, these mistakes have meant higher prices for consumers. Correcting those mistakes has delivered benefits of hundreds of millions of pounds.

These amendments steer a different and compromise course. We accept that there may have been some gold-plating of the original framework directive, and have tried to meet some of the criticism through these amendments. Amendment 215 is a direct copy of the European framework directive wording, without any gold-plating. As I have said, this is followed by all other national regulatory authorities in the EU. The tribunal must decide the appeal,

“by reference to the grounds of appeal set out in the notice of appeal and taking due account of the merits of the case”.

This version no longer requires the appeal to be decided on the merits but with “due account” of the merits being taken.

Amendment 216 is an alternative, focused on specific grounds used in appeals in other sectors. The tribunal must decide an appeal by reference to the grounds of appeal set out in the notice of appeal only to the extent that it is satisfied that the decision appealed against was wrong on one or more of the grounds set out in proposed new paragraphs (a) to (f). This version has a narrower scope than the current approach but allows for an assessment of whether the substantive decision is correct, not simply whether the correct decision-making process has been followed.

Clause 75 is a serious change to make to the telecoms regulatory regime. I very much hope that, in the face of these arguments, the Government will change their mind. I beg to move.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, I will not disguise the fact that I am not happy with the Minister’s reply. But I would like to thank the noble Lord, Lord Aberdare, for his support and I particularly thank my noble friend Lord Lester, who himself is a master of judicial review. I take very seriously what he has to say on the subject. I also thank the noble Lord, Lord Stevenson, who raised a number of pertinent points. He is obviously a very good client when taken to Chambers. I was hoping that the noble Lord, Lord Faulks, was going to take part in the debate, as then a ruffle or a jabot of QCs would have emerged; I do not know what the collective noun for QCs is.

Quite seriously, I am afraid that the Minister and the Government have bought not just the Ofcom line, but the hook and the sinker as well. We have an interesting conjugation: “I make my case, you lobby”. That seems to be the construction put on Ofcom’s behaviour. So Ofcom’s decisions are entitled to respect and “a margin of appreciation”. We are talking about the appeals process for an immensely powerful regulator. I do not think that that is an appropriate form of words. Of course, decisions are entitled to respect, but the rights of those who are investing in the telecoms industry are entitled to respect as well. This is an argument about the appropriate form of appeal.

I did not touch on whether this new clause is in line with European law. It may be academic because we might be out of the stable, so to speak, before we have to test the proposition as to whether the use of JR in these circumstances conforms to the framework directive. But that is an important matter. Ofcom has clearly been vigorous in its lobbying and certainly vigorous in its lobbying of noble Lords. I am glad to say that many of them have resisted in the circumstances. The Minister went through the nature of the amendments in a perfectly proper fashion, but he did not really make a particularly good case about why they were not appropriate. He did not really address my argument about other regulators. At the outset, I took the Minister through a number of economic regulators, none of which have JR as the fundamental point of appeal, so that requires an answer.

My purpose in tabling the amendment is to make sure that there is an effective challenge to Ofcom. We have swung way too far with Clause 75. We are serving the interests of the regulator far too much. I do not believe that all the propositions that Ofcom has put forward are valid and we need to keep kicking the tyres further on this particular clause until we find a better solution. We may have to make express reference in Clause 75 to the EU framework directive, which might be one way of dealing with this. But I guarantee that we will return to this at a future date. In the meantime, I beg leave to withdraw the amendment.

Amendment 215 withdrawn.

--- Later in debate ---

[Lord Borwick (Con)]

My Lords, I declare my interests in the register, and as a trustee for more than 20 years of the Ewing Foundation for deaf children. It is a great charity which works in schools to help deaf children make the most of their education; partly by helping the teachers to ensure that their hearing aids and cochlear implants are working well and by giving teachers advice on how to get the most out of the equipment and how to help the children.

Many trends are apparent in the field of deafness, not least the rapid rise of cochlear implants, the rise in literacy rates in children and, of course, the rise in late-onset deafness as the population generally ages. The vast majority of deaf people speak and read perfectly, as most are elderly people who learned their language and how to read as children. I thank Action on Hearing Loss and the Bill team in the Department for Culture, Media and Sport for their help in drafting this amendment and their support in its passage. They have helped to clarify my thinking on this important issue.

This is an enabling amendment, permitting the Secretary of State to bring forward statutory instruments to require those who transmit television programmes to provide subtitles, then audio description for viewers with poor eyesight and, lastly, British Sign Language interpretation for people who find that easier. I am told that all terrestrial television programmes now carry subtitles and a growing number of pay-to-view programmes are already having subtitles added. Sky has told me that about 60% of its entire output will carry subtitles by September this year; it should be applauded for voluntarily doing the right thing. Thank you. However, the advance of audio description and sign language does not seem so good. The latter two aids to understanding are far more expensive than subtitling and it is possible that technological advances will play a part in solving the problem of deaf people who can communicate only with other sign language users.

Already, in America, I have seen demonstrations of software that will enable simultaneous translation from American Sign Language to text. If that is available, translation from text to British Sign Language on an iPhone will not be far behind. When the statutory instruments come through, we must bear in mind the speed of technological change and not be too prescriptive in the manner in which subtitles are delivered. We should instead seek a statutory instrument that merely says that subtitles should be available on all programmes. A swift statutory instrument will serve as encouragement to the broadcasters to continue and expand their good work. If we are in a position where the broadcasters and the Government are competing with one another to seek the broadest and quickest implementation of subtitles across channels and services, I would say that that is great.

We should remember that TV companies are simply responding to demand. It is not just the hard of hearing: think of TVs in noisy venues, football fans who want to read the half-time match analysis over the din in the pub, or people watching television in a noisy gym. All will appreciate this change. This sort of measure will also help to solve the biggest problem of sensory deprivation: that of isolation. If subtitles enable a deaf person to be on an equal footing with those in the hearing world, then we and the Government will have done one more thing to put disabled people in a position to thrive in society. I beg to move.

[Lord Clement-Jones]

My Lords, I think that many of us responding to the amendment in the name of the noble Lord, Lord Borwick, find ourselves in something of a cleft stick. He has introduced the subject matter superbly, and in principle the amendment is entirely correct. The noble Lord has a very good track record on physical access for the disabled and this is a continuation of that, in a sense, in a different sphere. He also has the courage to wear a House of Lords tie, so he cannot be all bad. The trouble is that this amendment does have flaws. I am sure that the noble Lord, Lord Grantchester, if he speaks on this, will pick up on them. The Delegated Powers and Regulatory Reform Committee has commented on this.

All of us want the amendment to succeed but it does need a further look. We have all had briefings from the public service broadcasters and the platforms, including Sky, who say that they can live with this in principle but are rather concerned about the fact that there is no parliamentary approval built in. There are a number of flaws; they recommend that the affirmative procedure should be applied to the first regulations; they recommend that the appropriate regulatory authority is specified; and they recommend that the Secretary of State should have a duty, before making the regulations, to consult on-demand service providers and other stakeholders—which, of course, would be the platforms. So I am very much in sympathy in spirit, but I hope that we will have a chance before Report to perfect the amendment so that the campaign of the noble Lord, Lord Borwick, will proceed as intended in due course.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My Lords, I support these two amendments. As the noble Lord knows, they have been the subject of considerable discussion and debate in the past. We all share the objective of allowing family-friendly filters to remain on internet services and mobile networks in the UK. As the noble Lord set out, the arrangements we currently have in the UK were brought into question by the EU net neutrality rules introduced last year, which appeared to ban individual countries from restricting access in this way. Since then, there have been a number of different interpretations of how the EU rules would affect the UK—perhaps complicated by the fact the Ministers themselves were not able to clarify the situation with their usual adeptness. Indeed, it still appears that the EU open access regulations and our commitment to family friendly filters are in some ways in contradiction.

The Minister will know that many of the internet companies have taken the view that the less said about this issue the better. Their argument is that if attention is not drawn to the contradiction, they can carry on with the previous practice—under the wire, so to speak. Of course, for a lot of reasons this is not a very attractive proposition, and we accept that it would make the status of family-friendly filters more vulnerable as time went on.

So, instead we have the amendments tabled by the Minister today. When I asked at a previous meeting with the Minister whether the amendments had been checked out legally, I was assured that this was the case. We have not seen that legal advice and therefore have to take it on trust that what is before us today is legally watertight and does not contravene EU rules.

To some extent we are taking all of this on trust. While it would be easy to demand more evidence, I accept that it would not help the case of those committed to family-friendly filters—I suspect that the more we probe, the more the robustness of the proposals before us could unravel. We support the intent behind these amendments and it is certainly not our intention to bring them into question in any way. I hope that they achieve the outcome to which we are all committed. I hope therefore that noble Lords will support the amendment.

[Lord Clement-Jones]

My Lords, both my noble friend Lady Benjamin and the noble Baroness, Lady Jones, are far more authoritative on this subject than I could possibly be. I just want to add our support from the Front Bench for these two amendments. The noble Baroness made an important point, which is that we very much hope that the amendments are effective in clarifying the situation. There is no absolute guarantee of that but they have a fair wind because of the nature of the voluntary system of family-friendly filters that they underpin. I very much hope we do not do too much “probing”—I think that is the word that the noble Baroness used—as we are just happy that we can continue with the same system as we had before. I also think my noble friend Lady Benjamin asked an important question regarding where the gaps are in terms of the smaller players.

[Lord Ashton of Hyde]

My Lords, I am grateful for the support from all noble Lords on this. I assure the noble Lord, Lord Clement-Jones, that I feel well and truly probed after this Committee stage.

We have a voluntary system that is going well, but I accept that the noble Baroness, Lady Benjamin, has a point in asking about the remaining amounts that are not covered. We might query the numbers that she is talking about. My information is that the latest figures from Ofcom and the industry indicate that around 95% of the UK fixed broadband market offers free network-level or device-level parental filters to their customers. The numbers are important but the principle is there—what are we doing about the providers that are not covered?

The remaining 5% are generally small internet service providers offering business-to-business or niche specialist services to more tech-savvy customers. Some small ISPs have a business model based very transparently on not filtering, for open-rights reasons. However, many of them already provide guidance to customers where appropriate on free device-based or network-level filter tools. Still, we recognise the concern to do everything we can to protect children online, and I am happy to say that after discussions with my officials last week or the week before, the Internet Services Providers’ Association has agreed to take further action to encourage its smaller members to consider online safety and filters. It is updating its code of practice and new member sign-up process to ensure that members consider offering filters to their customers, and issuing a guidance note to members on filters, signposting them to further help and support. So we have addressed that point. It is still on a voluntary basis so far, and we will continue to monitor how that is going.

--- Later in debate ---

[Baroness Buscombe]

My Lords, Amendment 228 introduces a new clause with a regulation-making power that will enable the police and the National Crime Agency to apply to the courts for an order compelling communication providers to take whatever action the order specifies to prevent communication devices being used in connection with drug-dealing offences. Such action may include blocking mobile phone handsets and SIM cards and preventing particular phone numbers from porting between networks, as well as preventing access to wi-fi networks. This is an enabling provision that provides for the Secretary of State to set out in regulations details of how applications are to be made and dealt with in the courts. The amendment broadly mirrors Section 80 of the Serious Crime Act 2015, which provides for a similar power to prevent the use of mobile phones in prison.

The amendment responds to an operational requirement of the police, who require support in tackling the issue of county lines—the police term used to describe gangs in large urban areas who supply drugs, especially class A drugs, to suburban areas and market and coastal towns. To support their market expansion, gangs recruit and exploit children and vulnerable adults through deception, intimidation, violence, debt bondage and/or grooming. They are used to carry drugs and money.

County lines gangs’ criminality relies on the unrelenting recruitment, coercion and systematic exploitation of the most vulnerable including looked-after children, young people reported as missing and children from broken homes. Vulnerable adults are also exploited and can lose control of their home to gangs who use it as a base to distribute drugs, in a practice known as cuckooing.

The phone line is central to this model and to the gangs’ ability to deal drugs out of area in this way. When establishing a new county lines market, gangs will promote a number locally as the number to call to buy drugs. That “deal line” is therefore at the very core of this criminal model. Dealing drugs is a serious criminal offence and the police are committed to securing prosecutions wherever possible. However, as the deal line is held well away from local street-level drug-dealing activity and it will be an anonymous pay-as-you-go line, both those factors make it hard for the police to achieve prosecutions against an individual for the activity on that line.

Each deal line has the potential to interact with hundreds of customers and facilitate thousands of deals 24 hours a day. Disrupting these lines will have a significant impact in disrupting the gang-related drug supply and associated exploitation. There is currently no legal power in place to compel communication providers to disconnect phones used in county lines drug-dealing activity. We must ensure that the police have the powers they need to tackle this issue.

This legislation is part of a wider ongoing multiagency response, including safeguarding partners, to tackle county lines gangs, but this new order is a critical tool that will render this operating model ineffective and unattractive through the disruption of it. Amendments 236 and 241 are consequential. I beg to move.

[Lord Clement-Jones]

My Lords, we are broadly supportive of the amendment. We want to put on record that we have our doubts about the efficacy of the provisions, but obviously if they work then we will be thoroughly delighted. We are slightly doubtful about whether these measures will ultimately be effective, though, and I am sorry that my noble friend Lord Paddick is not here to add his experience to the debate.

Amendment 228 agreed.

Digital Economy Bill

Lord Clement-Jones Excerpts

Committee: 4th sitting (Hansard - continued): House of Lords
Wednesday 8th February 2017 Lords Chamber

This is one further step on a number of issues that I would genuinely ask the Government to look at. We need to strengthen the requirements for ticket sellers on to the platform. Yesterday my noble friend made the good point in closing that we do not want to have numbers on each and every ticket because some are sold in blocks while others might be for a small pantomime in a Bury theatre. The truth is that the Committee is not asking for that. We are asking that where an event organiser has provided a number on the ticket in the first place, the secondary market should be required to put that number on the advertising on its website so that it can be checked. I am grateful to the Minister for highlighting that point and I hope that my response will allow him to think yet further about how we can put in place just a small number of additional measures to strengthen the legislation in order to protect consumers, to absolutely get rid of bots and, from a personal point of view, to pay respect to my lamented and absent noble friend this evening, Rachael Heyhoe Flint.

[Lord Clement-Jones (LD)]

My Lords, it is a pleasure to follow the noble Lords, Lord Stevenson and Lord Moynihan. I shall speak to Amendment 231 and express my support for Amendments 230 and 233B to 233E. Despite the lateness of the hour, I hope that the Minister will not mind my adding my tribute to the late Baroness Heyhoe Flint. She will be greatly missed, and it was moving to hear what the noble Lord, Lord Moynihan, had to say. In a sense it is a complete loss not to have her here today to speak to these amendments because we know that she would have made a passionate case for all of them, so we are here to help move forward this campaign. I am a member of the All-Party Parliamentary Group on Ticket Abuse. Together with other noble Lords, I debated these matters on the Consumer Rights Bill and I feel strongly that we must move on from where we are today. I want to make a few comments in connection with the amendments for that reason.

The market in ticket resale is some £1 billion per annum across music, sports, theatre and comedy, and it is a very lucrative business. There is increasing evidence that it is a market manipulated by touts. We have listened to the egregious examples given by the noble Lord, Lord Moynihan. Fans who want to buy tickets for the events that are most highly in demand are systematically directed towards platforms like viagogo, StubHub, Get Me In and Seatwave, where scalpers and bot users are able to operate anonymously and bulk-sell inventory at hyped-up prices. Another example to add to those already given is the latest in a long line of victims: Ed Sheeran fans attempting to buy tickets last week for his upcoming UK arena shows. I looked at the ticket listings for his concert at the O2 on 2 May and counted almost 1,500 tickets for sale across Get Me In, Seatwave, StubHub and viagogo, all for prices way over face value, with service fees in excess of 20%.

Ed Sheeran has publicly condemned ticket touts and before these shows went on sale he carefully communicated to his audience to buy only from authorised ticket agents. He also appointed a resale agent to enable fans to transfer tickets at face value, yet touts still infiltrated the sale. No wonder people are so angry: they feel the system is rigged. An industry campaign, the FanFair Alliance, is fast gathering support, and I am very grateful to it for helping brief us all for this debate. Fans themselves are petitioning the Government. More than 33,000 have signed a parliamentary petition in the last week, begging politicians to tackle this issue. Of course, we have debated this in Parliament. The Culture, Media and Sport Select Committee held a short inquiry which came to the conclusion late last year that action was needed. The committee chair has described ticket touting as “a national scandal” and a massive racket which is making people in the industry millions, while exploiting genuine fans who just want to pay a fair price to attend live events.

The noble Lords, Lord Moynihan and Lord Stevenson, mentioned the report undertaken for the Government by Professor Michael Waterson, which raised major concerns. He made nine recommendations to the Government, yet here we are eight months later and despite some encouraging words in the other place, particularly about bots, the Government have yet to respond. Legislation, even the inadequate legislation we managed to get the Government to agree to on the Consumer Rights Bill, is still not being enforced. All the secondary ticketing sites that I mentioned still operate without a shred of transparency. How many more members of the public will be ripped off before the Government decide to take action? There is clearly an urgent need for government intervention in this market, to push forward the handful of decisive actions which are all reflected in the range of amendments being tabled today.

We know that the amendment on bots is similar to the one put forward in the House of Commons, and I want to add the name of Sharon Hodgson to that of Nigel Adams, because she has played a major role in the campaign in the other place.

[Lord Moynihan]

I am very grateful to the noble Lord for giving way because it gives me the opportunity of declaring my interest as co-chair with Sharon Hodgson of the all-party group. I echo the view that without her extraordinary energy, a lot of the cross-party support in another place would not have been secured. We should recognise that as an important contribution today.

[Lord Clement-Jones]

I thank the noble Lord for that. I will not go into the detail—it has been very well described by the two noble Lords—but measures to criminalise the use of bots were implemented last year in New York, and have since been extended to many other states. Why should the US have better legislation that we do? At a minimum, we would like to see similar legislation implemented and enforced in the UK.

I should speak very briefly to Amendment 231, because it is in my name and that of the noble Lord, Lord Foster of Bath. This amendment would give artists and event organisers greater control over who is authorised to resell their tickets. It would add to the Consumer Rights Act 2015 a provision requiring online secondary ticketing platforms to resell tickets only for events where they were the authorised resale agent. I realise, of course, that it needs further work—it probably does not quite deliver the purpose for which it was intended—but it does have very considerable support in principle, particularly, interestingly, from the Society of London Theatre and UK Theatre, both of which have written to express their support. It would place further control on the UK secondary ticketing market, putting the power back into the hands of the promoters of events to control their own ticketing by allowing resale only via authorised secondary ticketing websites, in a similar way to how an event organiser currently appoints a primary ticketing agent or agents. This amendment would allow them, if they chose to, to also appoint a secondary ticketing agent or agents to enable ticket resale. This is an important measure that, if we get the drafting right, could have a major impact.

All the measures contained in these amendments are what most sensible people would view as pragmatic steps that should help protect consumers without any real risk of unintended consequences. The only losers will be the touts. Why should audiences in the UK get anything less than the best protection? I hope that the Government will continue to move forward in this area and listen to the arguments being made. Quite apart from responding to the amendments, I very much hope that the Minister can give us some idea of when the Government will respond on Waterson—it is high time that we had a proper answer on those recommendations. I look forward to hearing what the Minister has to say.

--- Later in debate ---

[Lord Ashton of Hyde]

I agree with the noble Lord on that. The fact is that the enforcement activity is under way. We think it would be the wrong time, but I hope later to be not entirely discouraging.

[Lord Clement-Jones]

I am sorry to press the Minister further even at this late hour, but I do not quite understand. Presumably there is a conclusion to the review of the enforcement activity by the CMA, saying whether the enforcement activity is adequate, effective or whatever. Is there a timescale associated with this CMA review?

[Lord Ashton of Hyde]

I am afraid I do not know what the timescale is. Obviously there will be a conclusion, but I do not know at the moment. I will find out and let the noble Lord know if it is possible to know that.

To add to the Act now while the investigation is under way would serve only to undermine it. We must allow the CMA to carry out its investigation without interfering with the law it seeks to enforce. To do so will simply provide further grounds for those being challenged to resist.

I also have some specific grounds on each of the individual amendments, but in view of the hour, if the noble Lord agrees, and in view of what I hope I will say to help him, if I omit those details on the individual ones we can move on. I understand the aim of these amendments—to ensure compliance with the Consumer Rights Act—but this is already under way and we must await the outcome.

On Amendment 230, concerning the use of ticketing bots, the offences set out in the Computer Misuse Act have broad application. Unauthorised use of a computerised ticketing system may give rise to breaches of that Act. We are of the view that it may also constitute an offence under the Fraud Act. Professor Waterson believed that such breaches need to be reported and investigated. He puts the onus on ticket vendors to guard against the harvesting of tickets by persons with no intention of attending the event. He called on the ticketing industry to do more to protect itself and, with government support, the new National Cyber Security Centre is in touch with ticketing organisations on cybersecurity.

Professor Waterson also stressed the importance of having an effective strategy that deters bot usage. For example, paperless options such as mobile phone ticketing, or a bank card doubling up as a ticket, can make it harder to carry out mass ticket purchasing. Notably, this strategy was employed for the sale of tickets to the musical “Hamilton” in London.

The Government understand the spirit in which these amendments are made and the Secretary of State recently held two round tables specifically on the issue of bots. While noting there are a number of industry-led solutions available, we recognise it is hugely frustrating for fans who miss out on tickets sold on the primary market only to see them disappear on the secondary ticketing market at sometimes hugely increased prices. That is why we will continue to reflect on what has been said by all noble Lords regarding the Government’s response to Professor Waterson’s report, which will be published very soon. Furthermore, we will continue to consider the specific issue of bots and whether there is scope for further government intervention in this area. I hope to be able to update your Lordships on this shortly. With that commitment, I hope noble Lords will feel able not to press their amendments.

Digital Economy Bill

Lord Clement-Jones Excerpts

Report: 1st sitting: House of Lords
Wednesday 22nd February 2017 Lords Chamber

Moved by

[Lord Clement-Jones]

5: After Clause 2, insert the following new Clause—
“Bill limits for mobile phone contracts
(1) A telecommunications service provider supplying a contract relating to a handheld mobile telephone must, at the time of entering into such a contract—(a) allow the end-user the opportunity to place a financial cap on the monthly bill under that contract;(b) allow the end-user to switch (at no extra charge) to another provider, which meets the specified standards or obligation as provided for in section 3, or to deem the contract to have been terminated by a consistent breach of the standards or obligation as provided for in section 3;(c) allow the end-user to switch mobile providers according to rules set out by OFCOM in accordance with the following principles— (i) that switching must be free to the consumer, unless the consumer is aware of and has consented to fair and reasonable restrictions and charges to do so;(ii) that the switching process itself must be quick, and on an agreed date;(iii) that consumers must have access to their consumption or transaction data, and this must be in a format that can be easily reused and they must be able to authorise third parties such as comparison sites to access their data to help them to switch;(iv) that sites and tools providing comparisons to consumers that receive payments from suppliers must make clear where the payments affect the presentation of results; and(v) that there must be an effective process for consumers to receive redress if there are any problems with the service.(2) A telecommunications service provider under subsection (1) must not begin to supply a contracted service to an end-user unless the end-user has either—(a) requested the monthly cap be put in place and agreed the amount of that cap, or(b) decided, with the decision recorded on a durable medium, not to put a monthly cap in place.(3) An end-user may, after the start of the contracted service—(a) contact the service provider to require a cap to be put in place and agree the amount of that cap, or(b) require a cap to be removed, with the requirement recorded on a durable medium.(4) The end-user should bear no cost for the supply of any service above the cap if the provider has—(a) failed to impose a cap agreed under subsection (2)(a) or (3)(a); or(b) removed the cap without the end-user’s express consent, provided on a durable medium as required under subsection (2)(b) or (3)(b).”

[Lord Clement-Jones (LD)]

My Lords, Amendment 5 is an enhanced version of Amendments 14 and 15 in Committee, which the noble Lord, Lord Stevenson of Balmacara, introduced, but it includes additional principles that I raised and which were contained in the Government’s 2016 paper Switching Principles: Government’s Response and Action Plan. It deals with two issues very close to the interests of consumers: billing and switching. As the noble Lord, Lord Stevenson, said in Committee, mobile phone billing is,

“one of the most complicated areas of domestic expenditure”.—[Official Report, 31/1/17; col. 1145.]

There may be, in particular, some danger of vulnerable customers getting into difficulty and it should be possible for a consumer to set a cap on expenditure on their mobile phone.

As my noble friend Lord Foster pointed out in Committee, most mobile phone contracts are similar to credit card contracts, in that,

“they are a credit agreement, paying retrospectively for services that have been received. Yet with the credit card, of course, a limit is imposed upon you, which is not currently the case with mobile phones”.

He cited evidence from Citizens Advice that,

“in 2014-15 it helped no fewer than 27,000 customers who had problems with mobile phone debts”.—[Official Report, 31/1/17; col. 1147.]

He reminded us that Ofcom alerted us to this problem five years ago and proposed that it could be addressed by mobile service providers offering an opt-in cap to their consumers. The remainder of the amendment would give explicit power to Ofcom to set the gaining provider-led switching rules, which we all want to see, and sets out the principles which the rules must follow—the very principles which the Government themselves have set out.

We would like to see both these aspects enshrined in primary legislation. In her reply to these amendments in Committee, I am afraid that the Minister—the noble Baroness, Lady Buscombe—was not convincing when she talked of providers offering apps, warning text messages and the like to manage usage, the Government’s expectations for providers to manage bill shock, and of course the guidance issued by Ofcom, which I am sure every consumer reads avidly. That is not enough in this day and age. This is not a draconian requirement. This is a voluntary, opt-in capping system that is being proposed.

As regards switching, the Minister said that Ofcom was being given the necessary powers by Clause 2 and had an existing overarching duty to consumers. This is a much more explicit duty. It also ensures that the Government’s own principles are enshrined in a duty to make rules, which the Minister, however, could not assure me were the ones in contemplation by Ofcom. I hope that the Government will welcome this carefully thought-through amendment as being very much in the interests of consumers when mobile phone usage is, if anything, even more important than broadband. I beg to move.

[Lord Mendelsohn]

My Lords, I support the amendment and thank the noble Lord, Lord Clement-Jones, for an outstanding summary. In relation to caps, it is important to understand the consequences of bills which cause stress to people in particular circumstances, and why this is another part of ensuring that we have the right social impact in such policies. Mobile phones are not luxury products. Actually, low-income households are more reliant on their mobile phones than other households: they are five times more likely to be mobile- only—that is, no landline or broadband—than the highest earning groups. The major cause of mobile phone debt is unexpectedly high bills which are usually caused by consumers using services not included in their standard monthly tariffs—very frequently with no real conception about how the complexity of the tariff has an impact on their bills. These unanticipated bills can make it harder for consumers to budget, especially if they are on a low income. Unexpected bills can exacerbate a consumer’s debt problems. Citizens Advice reports that 70% of its clients who receive mobile phone debt service also receive advice on other debts. The consequences are significant and only these measures outlined in this amendment will in our view have the impact to address this problem. In other ways, complicated information and other consequences will limit the capacity of people to manage their debts.

I must confess that I think ensuring roaming capacity —not a national roaming programme—for those people in the absence of service in order to increase their ability to access mobile services is a terrific idea. I thought it was a very good idea when I first heard it, so I got one, and it is outstanding. I have cracked many of the problems of very poor mobile service, including in that far-fetched place, which never seems to have decent service, called Hampstead. I now have perfect service—it is an absolutely terrific system.

I think that there is a very strong case for this. We are not talking about a national programme, but it certainly addresses a large part of the problem about coverage. There seems to be no particular issue: it gives us good customer experience, it is not particularly difficult to roll out, and that is why it is sensible and worth while for it to be in this Bill. Now that I have another phone, I of course endorse the provisions on switching, but I would make this point about switching and compensation. These strengthen and make explicit the powers of Ofcom to require certain changes in relation to compensation to make sure that companies automatically compensate customers who experience poor levels of service. I think there is a very strong consensus, and that Ofcom will come to the conclusion that it is vital that consumers are financially compensated. An automatic compensation scheme will act as an incentive to telecoms companies to improve their performance.

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The Government’s role is to identify and address barriers to consumer participation in the market, and in this instance we have concluded that the most effective way to facilitate easier switching is to work with Ofcom to strengthen the regulatory landscape for the benefit of the consumer through Clause 2 of the Digital Economy Bill. Ofcom has conducted consultations into mobile and cross-platform switching, and is due to announce next steps for mobile in the spring—which is, of course, not too far away—and for cross- platform switching later in the year. With that further explanation, I hope that the noble Lord will agree to withdraw his amendment.

[Lord Clement-Jones]

My Lords, I thank the Minister for that response. It was very interesting that we had the full range of ministerial responses: the unintended consequences; the burden on the emergency services; the “too prescriptive” argument; “we are working with Ofcom and getting this very carefully right”; and the “we cannot enshrine principles because they might go against the spirit of the principles” argument. I thought that was a very interesting one.

The Bill is designed to deal with frustrated customers, and, of course, there is a risk of duplication, as the Minister says—which is an interesting one—despite the fact that we are being too prescriptive. I am not sure that I sense the total logic behind the Minister’s response. A number of different barriers have been raised, but I cannot really see great merit in the response in that event.

As regards capping, this is a voluntary system. Raising the question as to whether people are going to put a burden on the emergency services seems to me extraordinary. There are people with pay-as-you-go SIM cards who are in the same position. What we are asking for is for people to be put on the same footing, so that there is a limit to which they are subject, but a voluntary one that they ask to be imposed so they can have better control over their own finances. That seems an eminently sensible and not overly prescriptive measure that we would be asking Ofcom to ensure service providers have in place.

As for switching, I remind the Minister that these are the Government’s own principles. I cannot see how it goes against the principles to include them in the Bill. That is tautologous, and certainly not an attractive argument against including switching rights.

Consumers have been waiting for switching ability for mobile phones for a very long time. I have been corresponding with Ministers for a long time on the subject. I am delighted that we are seeing the beginning of movement, but telling us to wait for an Ofcom paper on next steps for mobile that will be the beginning of a brave new world when in fact, we could be amending the Bill to put duties on Ofcom straightaway, is not very attractive. I want to test the opinion of the House.

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[The Earl of Clancarty (CB)]

My Lords, I take this opportunity to congratulate the Government on introducing this amendment, for which authors will be very grateful indeed. Credit should go to the groups and associations that have campaigned for this change, including the Society of Authors and the Authors’ Licensing and Collecting Society, which have both campaigned on this issue for some time.

I have just one issue with the wording of the Government’s amendment. The Society of Authors briefing argues that it would be clearer if the words, “for the purpose of library lending” were added to “lawfully acquired” in line 32. This clarification is in the amendment in the name of the noble Lord, Lord Clement-Jones. The phrase “lawfully acquired” hangs there by itself and although it might be argued that it is implied that the acquisition is for library lending, that is not absolutely clear. It should be stressed that all interested parties were in agreement about this and would be happier if this clarification were made. Will the Minister promise to look at this before Third Reading and see if it can be tweaked?

[Lord Clement-Jones]

My Lords, I add my voice to the thanks offered to the Minister by the noble Earl, Lord Clancarty, for having now included this amendment, albeit there are some questions to be asked. I hope the Minister will be able to tell us why the wording is rather different from that in the amendment we put down in Committee. Those differences need to be accounted for but this is a good way of delivering on a commitment that the Government made. It is really the final fruits of the Sieghart report and will be strongly welcomed by authors and writers across the country. We all value the public lending right, which makes a small but very significant addition to the income of authors.

[Lord Maxton]

My Lords, I too welcome the amendment; it is well worth while, but it is worth making a point I made earlier. Of course, there are now books that are written entirely as e-books and not published at all in printed form; they are published for the Kindle or similar devices. Does this amendment cover these as well? Does it give the author of such books exactly the same rights as the author of a book published in printed form?

Of course, e-books are now lent not just by public libraries. Amazon has its own public service—well, a service anyway; it is not public; you pay for it—whereby it can lend you a book that you can read on your Kindle for a limited time and that is available only as an e-book and not in printed or any other form. Do the same rights extend to authors whose books are lent in this form? Are these the same rights you would get through a public library?

My last point is also one I have asked about before. Public libraries in Scotland, of course, come under the local authorities, and local authorities in Scotland come under the Scottish Parliament. Is this a devolved matter or will it now be covered by the UK as a whole?

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[Lord Clement-Jones]

My Lords, there is equal enthusiasm on these Benches for this amendment. The noble Lord, Lord Stevenson, has, as ever, put his finger on the issue. I plead guilty to the same constitutionally improper thoughts as the noble Lord, Lord Stevenson. I cannot see why the Government should not take the powers that are needed in advance simply because this vehicle happens to be passing through and there may not be another suitable vehicle very soon.

On the balance of probabilities, at the very least it seems to us that these powers are needed. Those who have spoken to us have universally said that a new offence is needed and that the existing powers are not adequate. Certainly the Motion Picture Association, Sky and others made the point that enforcement agencies, such as trading standards and PIPCU, are unable to pursue strong cases due to the lack of an appropriate offence. This is all about creating an appropriate offence.

I very much hope that the Government, whether at this stage or the next stage, will take heed of the points being made and will give themselves this enabling power in order to introduce a more specific regulation at a future date. The Government should also consider a point that was strongly made by those organisations and think about the enforcement aspects as well in the call for evidence. I hope they will consider the issue which I will be raising next week in an Oral Question on PIPCU funding, which is an important aspect of this. If a power is created and there is no proper enforcement mechanism, it is not a particularly useful creation. I hope the Government will take heed of the fact that this is thundering down the track at great speed and could, as both these Benches described in Committee, have an extremely harmful impact on the audio-visual industries in future.

[Baroness Kidron (CB)]

My Lords, I want to reiterate a point I made in Committee about the context in which young people receive this material. Almost 50% of 16 to 17 year-olds are streaming, and along with the streaming comes advertising, pop-ups and adult material. This is a subject that is close to the Government’s heart, as shown by Part 3. This seems a wonderful opportunity to deal with it again in this part. It is not just 16 and 17 year-olds; whole swathes of younger children are getting the habit. As a maker of original IP and as someone who cares very much about the context in which children have their digital diet, this is a very small thing and I support the noble Lords in their amendment.

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Moved by

[Lord Clement-Jones]

21: Clause 30, page 29, line 38, at beginning insert—
“( ) Any creator who has transferred his or her cable retransmission right to a broadcaster shall retain the unwaivable right to receive equitable remuneration for the exercise of the retransmission right.”

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[Lord Clement-Jones]

My Lords, I hope this will be a short debate. I was pleased to see the Government’s response to the technical consultation on transitional arrangements, which in a sense is a quick response to the spirit behind Amendments 21 and 29, which I tabled in Committee. It is another pleasing and welcome indication of the speed with which the Government are responding to some of the arguments being made, such as the call for evidence on IPTV.

An unequivocal statement has been made, which I very much hope the Minister will repeat, to the effect that on the basis of the responses to this consultation, the Government have decided to repeal Section 73 without a transition period. I am assuming that if I get such a pledge from the Government, it will be upheld, and that there is no need to amend the Bill to that effect, but obviously I would very much like those assurances from the Government at this stage.

On the right to equitable remuneration where a creator has transferred his or her cable retransmission rights to a broadcaster, the concern is that if public service broadcasters are going to receive licensing income for carriage of their services on cable networks, those underlying rights holders—such as scriptwriters and directors—should receive an appropriate share of this new revenue. The Government in their new Clause 30 have made clear what happens to performing rights, because they deleted old paragraph 19 of Schedule 2 to the Copyright, Designs and Patent Act 1988. It has not, however, been made absolutely clear what the score is as far as the copyright of creators such as authors is concerned. I do not know whether the IPO has been able to give Ministers guidance on that. However, this is a probing amendment, and I very much hope that the Minister will be able to explain what is contemplated.

The problem is that where creators assigned their rights, that was in the old days. There may be licences in respect of which public service broadcasters attributed a zero value to retransmission rights, but of course, in future, those rights will not necessarily have a zero value. I therefore hope that the Minister can at least give some assurance that this issue is being looked at, and that at least some guidance or encouragement can be given to public service broadcasters to look again, in all equity, at some of their past rights clearances, so that creators will not be disadvantaged in the income they receive from what could be a new income stream for our public service broadcasters. I beg to move.

[Viscount Colville of Culross (CB)]

My Lords, I voice my admiration for the noble Lord, Lord Clement-Jones, and his dogged determination to get Section 73 of the copyright Act repealed, and I am grateful to the Government for including its repeal in the Bill. Their response to the technical consultation seems to mean that it will be repealed immediately, but I too would like the Minister to assure us that it will be.

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[Lord Clement-Jones]

My Lords, I thank the Minister for the first half of her reply. She repeated pretty much what was in the response: no transition is envisaged and repeal is effectively to be commenced without delay, before the Summer Recess—I hope I have paraphrased her correctly. I take that very much on board, and I am delighted that the Minister has been able to confirm it.

I am not quite so delighted by the second half of her reply. She says that underlying rights holders’ rights have been factored into existing agreements, but that is just the problem: zero value has probably been attributed to the retransmission rights held by PSBs. Of course, until the repeal of Section 73 they will have zero value. After its repeal, value will be ascribed to them, but that means those who signed agreements in the past will not necessarily get the benefit, hence the reference in the amendment to equity. That is a rather important concept.

I will read carefully what the Minister has said—no doubt following the wonderful advice she has received from the Intellectual Property Office—and will discuss it with the Society of Authors and others who are very concerned about some of these issues. I might return to the matter at another stage of the Bill to tease out a little more information from the Minister. In the meantime, however, I beg leave to withdraw the amendment.

Amendment 21 withdrawn.

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Moved by

[Lord Clement-Jones]

24: After Clause 30, insert the following new Clause—
“Transparency and fairness obligations
(1) Authors, artists and performers (“creators”) shall receive on a regular basis timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights as well as subsequent transferees or licensees, and the information shall include information on modes of exploitation, revenues generated and remuneration due.(2) The obligation in subsection (1) may be met by complying with a code of practice collectively bargained between relevant representative organisations of creators and the representative organisations of those who exploit their works, taking into account the characteristics of each sector for the exploitation of works.(3) Any such code of practice is to provide that each creator is to be entitled to a statement of income generated under such licence or transfer arrangements at regular intervals during each annual accounting period, and provide an explanation as to how the creator’s remuneration has been calculated referencing any contract terms relevant to the calculation.(4) In the event of failure of a transferee or licensee mentioned in subsection (1) to comply with a code of practice, or in the absence of such a code of practice, the creator shall be entitled to apply to the Intellectual Property Enterprise Court for a detailed account of revenues due to the creator generated from the modes of exploitation referred to in subsection (1), and in the event of failure, the Court may award damages in the amount of any shortfall in the total amount due to him.”

[Lord Clement-Jones]

My Lords, in Committee I explained the importance to authors and other creators of transparency, and the significance of the proposed new EU directive. The noble Baroness, Lady Buscombe, got the point entirely, as ever, and said the amendment would require those organisations exploiting copyright works via licences to provide the relevant creators with regular information on the use and the revenue they generate, and stated that this obligation could be met by complying with a code of practice determined at sector level, which is entirely correct.

I should add for clarity that, if there is a concern by licensees in those circumstances about the leakage of their commercially sensitive information, the way information is channelled can of course be dictated by a code of conduct through appropriate mechanisms, such as the advisers of creators and so forth. That is could be well catered for if there were concerns among those licensees or assignees.

The Minister confirmed that the Government were already engaged in discussions to address this issue. She said that,

“the UK will actively engage in these debates … before considering the case for domestic intervention”.

She also said,

“it is worth giving careful consideration to the part that these industry-led initiatives can play”,—[Official Report, 6/2/17; col. 1481.]

in terms of a code of conduct and so on. As I said at the time, though, she never actually agreed that the principle of transparency should be incorporated into law, whether directly or by transposition. Clearly, if the EU directive is passed within the two-year period after notice of Brexit is given, it may well be incorporated into UK law. The Minister gave encouragement to the principle but did not say that the Government fully supported that element of the directive. Article 14 of the draft directive is very clear in giving creators those kinds of transparency rights.

So I return to the fray on this occasion, and I hope the Minister can warm her words further in the face of this amendment being retabled. I beg to move.

[The Earl of Clancarty (CB)]

My Lords, I support the amendment of the noble Lord, Lord Clement-Jones. He talked about the principle of transparency, and that is the nub of it. I shall just give an example: the history of pop music has, in many ways, been the history of exploitation of artists in a bad way. Much of that exploitation was based, in the past, on keeping artists in the dark. I am sure that today many licensees and transferees—some of which are huge companies—behave very well, but there is a systemic imbalance here, which means that there is potential for abuse. Artists have a fundamental right to information about exploitation of their work, which is, in any case, useful for knowing quite simply what has happened to their work when it is pushed out into the world.

[Baroness Buscombe]

My Lords, I thank all noble Lords who have taken part in this debate on Amendment 24, tabled by the noble Lords, Lord Clement-Jones and Lord Foster. This amendment, which was first tabled in Committee, partly reflects proposals currently under discussion at European level as part of the draft copyright directive, as noble Lords have said this evening. It would require organisations using copyright works via licences to provide creators with regular information on how their work has been used, and the revenue generated by their use. This obligation could be met by complying with a code of practice determined at sector level. The amendment also provides creators with recourse to the intellectual property enterprise court in cases where such a code was not implemented or adhered to.

As we said in Committee, the Government agree that transparent markets can benefit all parties. I particularly understand the potential benefits of transparency in areas such as the creative industries, where individual artists—writers, musicians and performers, as noble Lords have said so eloquently this evening—often deal with large corporations. As noble Lords are aware, the Government are currently in the process of negotiations on the draft copyright directive, and I continue to hold the view that we should allow this process to reach a conclusion before considering the case for domestic intervention. I appreciate that the noble Lords, Lord Clement-Jones and Lord Foster, the noble Earl, Lord Clancarty, and the noble Baroness, Lady Jones, would welcome a firm statement of support for the Commission’s proposals in this area. Unfortunately, however, I am not in a position to give such a statement this evening. However, I can assure noble Lords that the information received in the recent call for views on the directive has been carefully considered, and that the Government will continue to engage constructively in this debate, including in relation to the role of collective bargaining mechanisms and industry-led codes in improving reporting to creators.

I also wish to raise another issue regarding the amendment. The proposals from the European Commission include an ability for member states to adjust or restrict the transparency obligation in certain cases, taking into account, for example, the contribution of an individual creator to an overall work, or the proportionality of the administrative burden. Views on the benefits of these powers are mixed, and are likely to require careful consideration with the creative industries at sector level if the directive comes into force in the UK. However, I believe that it would be imprudent to accept an amendment at this stage that does not appear to provide the Government with similar flexibility. Doing so could risk imposing burdens on publishers, producers and broadcasters that restrict their ability, in effect, to develop new talent. With this explanation and the renewed assurance that the Government really do take the concerns of creators in this area seriously, I hope that the noble Lord will withdraw his amendment.

[Lord Clement-Jones]

My Lords, I congratulate the noble Baroness, Lady Buscombe, on finding a new argument at the end; I thought that was magnificent. Imprudence is something that I would never want to be accused of in these circumstances. I thought that this amendment did not reflect fully what Article 14 contained. The Minister was absolutely right: it was entirely the intention that it would not contain that, because of the difficulty of interpretation. It is possible to do that more easily in continental law, rather than when you transpose it into UK law. I shall be very interested to see what our parliamentary draftsmen make of it, if ever they are faced with the task of transposing Article 14 into UK law.

I like the sound of “engage constructively”. I know that the Minister’s heart is in the right place and I think she said something like, “We really do mean this”, so the sincerity was utterly apparent. In the face of that, how can I do anything but withdraw the amendment? I beg leave to withdraw.

Amendment 24 withdrawn.

Digital Economy Bill

Lord Clement-Jones Excerpts

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

Moved by

[Lord Clement-Jones]

33ZA: Clause 85, page 89, line 4, after “impose” insert “proportionate”

[Lord Clement-Jones (LD)]

My Lords, I apologise on behalf of the noble Lord, Lord Gordon of Strathblane, and my noble friend Lord Foster of Bath. Neither noble Lord can make today’s proceedings, so I have been asked, as their inadequate first reserve, to move this amendment and to speak to the other amendments in this group.

The Minister will no doubt remember that in Committee the noble Lord, Lord Gordon, and I raised certain issues surrounding the amendment moved by the noble Lord, Lord Borwick, which is now incorporated in the Bill as Clause 85. We supported it, and that broadly is the position of the broadcasters. However, they have certain issues surrounding the wording of the clause. I am delighted to see that the Government have taken on board the Delegated Powers and Regulatory Reform Committee’s points and that the government amendments incorporate a number of changes to the clause to reflect what the DPRRC had to say.

The broadcasters wish certain other aspects to be aired today. It is a question of the difference between delivering access services on on-demand services and delivering them on linear. Virtually all programmes are now subtitled on the main linear channels. Our public service broadcasters more than exceed the targets set for access services by Ofcom. Linear broadcasting is a mature market with standardised technologies, and it is relatively straightforward and economic to provide access services, but there is a big contrast with delivering services on demand. On-demand is much more challenging and fragmented, and there is a huge array of different online platforms. Each platform has its own technological underpinning, and there is no common standard for delivering access services. Accordingly, if this clause is interpreted too broadly there is a danger that a one-size-fits-all approach which takes no account of the revenue, size, usage or length of establishment of a service or online platform would result in fewer online services for everyone because of the disproportionate cost of requiring access services to be rolled out across every platform, regardless of how practical or economic that is.

With the current wording, it is possible for the Government to put in place somewhat disproportionate and onerous regulations that could inhibit the development of services for everyone. The broadcasters are calling for an amendment to the wording to reflect the need for proportionate and progressive measures that take account of factors such as revenue, size, usage and length of establishment in setting obligations on content services or online platforms. I hope that the Minister will agree, whether at this stage or at a subsequent stage, to review the wording so that a degree of proportionality is introduced into this clause. I beg to move.

[Lord Borwick (Con)]

My Lords, I thank the noble Lord, Lord Clement-Jones, for his comments on the amendment I moved in Committee. The trouble with his amendment is in the meaning of “proportionate”. There will be quite a lot of consultation between all the parties about what will be required before the regulations are finally drafted, and adding “proportionate” would effectively add an extra layer of consultation in which people argue with each other about exactly what “proportionate” means in these circumstances. It would be much better if the clause was left as it is to make certain that, whatever the rules are, they are clear, having been discussed in the consultation. I must express my thanks to the originator of this clause as it came from a Labour Party proposal in another place, but we all support the right idea here, and I am sure it will help deaf people and blind people understand what is on television. This amendment, although no doubt worthy, is not necessary and will in practice get in the way of getting this change into law.

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[Lord Clement-Jones]

My Lords, I thank the Minister, first, for the introduction to her very welcome amendments. I join the noble Lord, Lord Wood, and my noble friend Lord Addington in welcoming in particular the new ability to adjust the listing requirements, because that builds in, as the noble Lord, Lord Wood, said, the flexibility for the future that is very much needed, and may be needed rather more quickly than many of us anticipate.

I particularly thank the Minister for her very careful reply to the amendments in the name of the noble Lord, Lord Gordon, on proportionality. She gave a very full answer to the amendments, particularly on how Ofcom will consult and in saying that balance will be at the heart of its consultation and that the SI will contain a review clause on burdens on business. I do not think one can say fairer than that and, in the circumstances, I beg leave to withdraw the amendment.

Amendment 33ZA withdrawn.

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[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.

[Lord Clement-Jones]

My Lords, as the noble Lord, Lord Moynihan, has spoken extremely eloquently in support of his amendments, I wish to add very little to what he had to say.

On these Benches we strongly welcome government Amendment 33ZL banning the bulk purchase of tickets, but we believe that it will not solve the problems entirely by itself. There are certain questions about enforcement, which the noble Lord, Lord Moynihan, raised. The Minister used the expression “partnership with law enforcement agencies”. Perhaps when he responds, he could say in a little more detail how that will work. As the Computer Misuse Act has not been effectively enforced by the police to date, the question is: who will enforce it and what budget will they have to enforce it with?

We strongly support Amendment 33ZLZA, proposed by the noble Lord, Lord Moynihan. We believe it is very important to include the booking reference where one exists. It is important as many tickets do not have a seat or row number because they are standing tickets or for unreserved seating. Some venues have 100% standing or unreserved places, while others sometimes have a significant number of standing areas. Other events, such as major golf, horseracing and motor sports events, as well as festivals, may also have unseated areas, and that has consequences. If there is no seat number, that enables secondary ticket websites to declare, “The full seat information is not available” or is “not applicable”, so sellers may be able to avoid identification and undermine the existing provisions, which were pretty hard fought for under Section 90 of the Consumer Rights Act 2015.

The second part of the amendment is also very important. It requires the ticketing website to provide information if there is a resale restriction. This is key information for a potential buyer so that they do not purchase a ticket which is in fact invalid. That was noted by the Competition and Markets Authority when it launched its investigation last December into breaches of consumer law. Even at this late stage, I very much hope that the Minister will accept that amendment.

Digital Economy Bill

Lord Clement-Jones Excerpts

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

Moved by

[Lord Clement-Jones]

33ZN: After Clause 92, in subsection (2), leave out from “charge” to end and insert “for a service provided to the data controller by the Information Commissioner.”

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for that introduction but I must confess to being somewhat baffled by it. I am very happy that he has taken on board some of the Delegated Powers and Regulatory Reform Committee’s recommendations. However, he read out word for word from his letter to us of 22 March why he is not agreeing to table an amendment similar to Amendment 33ZP, which is in my name and that of my noble friend Lady Hamwee, yet in his introduction, he assured us that the actual charges would be no more than full cost recovery. I therefore do not really understand what his objection is to enshrining that in primary legislation. I certainly do not understand the paragraph that begins:

“It is the Government’s view that the limited flexibility given in the Government’s amendments is necessary given rapid developments in the digital economy and to manage the inevitable period of transition”.


Full cost recovery is full cost recovery—I cannot see any ambiguity or any need to be particularly flexible going forward. Just because the language used in the Government’s amendment mirrors the existing Data Protection Act does not mean that we cannot improve on it.

This is a bit of a curate’s egg. Although I am of course pleased that the Minister is responding to two-thirds of the committee’s report, the really important bit—making sure that the ICO does not overcharge— is not catered for. A bit more explanation from the Minister is needed as to why he cannot simply enshrine that in a third amendment at Third Reading.

--- Later in debate ---

[Lord Ashton of Hyde]

It is always a pleasure to meet the noble Lord and I give that undertaking.

[Lord Clement-Jones]

My Lords, I thank the Minister for that undertaking, which would be extremely helpful and sensible in the circumstances. We will have rather a limited amount of business at Third Reading, no doubt in prime time. We might well want to take this issue forward if we have not had satisfactory discussions in the meantime. No doubt, that can take place early next week if Third Reading takes place on Wednesday.

[Lord Ashton of Hyde]

I am very happy to meet. Obviously, I make no commitments as to what will emerge from that meeting.

[Lord Clement-Jones]

My Lords, I would not expect the Minister to make commitments at this stage, just to listen to the arguments that we have already made and will no doubt make again in the meeting. I am very grateful to the Minister. We have Third Reading where we can—

[Lord Stevenson of Balmacara (Lab)]

I am abusing the system. I apologise for interrupting. I am grateful to the noble Lord for giving way. My question is directed at the Minister through the noble Lord, to maintain some semblance of protocol. I think the question my noble friend was trying to ask was, given that the Minister has committed to bringing back an amendment which covers much of the ground that has been discussed today, because there are issues he wishes to solidify, the assumption is that the points that have been raised may be raised again at Third Reading. He is not asking him to concede any additional work. I make it absolutely clear, because of the need for the clerks to be sure about this, that there will be a discussion at Third Reading on the substantive points that have been made so far.

[Lord Ashton of Hyde]

What the noble Lord, Lord Collins, asked me to do was to meet to discuss these issues before Third Reading. I agreed to meet him and the noble Lord, Lord Clement-Jones, if he wants to do that. I said that we were going to bring forward two amendments and we will continue to do that. I think it is the other one, where we have agreed not to do that, that he wants to talk about, but I am happy to talk about all of them. We will bring forward the two amendments at Third Reading. Obviously, I can make no commitment about any extra amendments but I am happy to talk about it.

[Lord Clement-Jones]

I completely understand that but, as the Minister is fully aware, because it is Third Reading, our ability to discuss is limited by the rules. But we could do it by way of an amendment to the Minister’s amendment. That is our assumption, I think, in the circumstances. On that basis, I am happy to withdraw Amendment 33ZN.

Amendment 33ZN (to Amendment 33ZM) withdrawn.

--- Later in debate ---

The purpose of my Amendment 33ZYEB is simply to insert the word “activities” and to remove any ambiguity. Could the Minister take time to seriously reflect on this amendment before Third Reading, because ambiguity is not at all desirable on a matter of this moment and people are genuinely concerned?

[Lord Clement-Jones]

The noble Baroness, Lady Drake, has asked a number of very pertinent questions, but I have one question—probably because I am a bear of small brain in these circumstances. Would the new section apply on full structural separation of Openreach from BT, if that were to arise in future?

[Lord Mendelsohn (Lab)]

My Lords, this group of amendments addresses two crucial issues—first, the Crown guarantee on BT pensions and, secondly, the relationship between Openreach and BT. In relation to the Crown guarantee, I have added my name to Amendments 33ZYEA and 33ZYEB in the name of my noble friend Lady Drake. These Benches support her arguments completely, and I hope that the clear, comprehensive and compelling case that she made will receive a good reception across the whole House. I thank her for her excellent and assiduous work on this matter.

It is clear that these government amendments do not yet have the robustness that assures this House, and I think that my noble friend’s unequalled expertise has come up with an impressive formulation. I look forward to hearing the Minister respond to these issues and would wish to hear some specific reassurances, if he is not minded to accept her amendments. It is important that nothing weakens the covenant on pensions; it is extremely important that the Crown guarantee is carried across and that nothing undermines the responsibilities of the trustees in exercising their duties properly. It is a colossal task. BT has the second-worst-funded pension scheme in the world, according to the MSCI survey of 5,000 company pensions, second only to Du Pont, which is the subject of a merger which will make it better funded, so BT will become the worst-funded pension scheme in the world. In addition to uncertainties about the Crown guarantee, that will put trustees in an impossible position, if these amendments are not addressed as my noble friend suggested. The Government and all those concerned in this discussion should be in a position to confirm—as indeed Matthew Hancock, the Minister responsible, did in a meeting with Members of this House—that the proposed arrangements for the pension scheme should ensure long-term assurance to pension holders whether Openreach is legally or structurally separated.

This brings us to Amendment 33M in my name and that of my noble friend Lord Stevenson of Balmacara, which proposes the structural separation of Openreach. I will make a few very brief points to support this view. This is not a negative statement about BT, which is an excellent British company and one that we hope will continue to grow and thrive. There are many keen to criticise BT’s behaviour in relation to the supply of broadband but this must be properly balanced by the realities of the regulatory framework and policy context it was given to operate in and which has incentivised and guided its approach. It is slightly unfair to create such arrangements and then criticise someone for following them, and many of the criticisms of BT have been unfair and misdirected.

The differences between the benefits of legal and structural separation are important to note. Legal separation, which has been proposed by Ofcom, is where the upstream business is established as a separate legal entity within the wider group but remains under BT’s complete ownership. It includes functional separation with independent governance. There is a clear benefit to a regulator that would lend itself to suggesting this approach. It certainly makes the regulatory task of overseeing this arrangement much more economic. But having one place to look at is a benefit only for the regulator. The alternative is structural separation, where the vertically integrated operation is split with no significant common ownership and “line of business” restrictions to prevent them re-entering each other’s markets. There are some issues that people think are reasons to achieve separation, such as improvements to service levels, broadband speeds and end-customer services, but these are not dependent on separation.

BT has contributed massively to getting us to where we are now, where we have—in relative terms to international peers—availability of superfast average speeds and lowish prices. But the challenge is the future, and this is where investment needs to be higher. Crucially the UK is lagging in fibre to the premises; the majority of the network is either fibre to the cabinet or cable. The future will require us to commit to FTTP. Other solutions such as G.fast will not keep us as a leading nation. Structural separation is the only mechanism that can sufficiently address the investment issues, and this was the matter that Ofcom did not adequately address in its proposal. The legal separation does not address the problem that strategic decisions on investment will still be dependent on BT, even though I hope that it takes note of the Minister’s exhortation for it to do better.

Ofcom’s statement of reasons for its approach says that this will provide improved investment outcomes from new models of investment such as co-investment and risk sharing. But BT has never lacked access to capital, which is why even Ofcom acknowledges that this model will be reviewed in order to ensure that the new structure achieves its objectives. This is not an equivocal “may” or “could”, but an emphatic “must” and “should” be reviewed. I hope that the Minister can confirm that this will be done and a broad timetable for it.

Our concern is that policy is drifting and opportunities to ensure that we maintain a leading position in the new communications technologies are being weighed down by compromise, confusion and a terrible lack of clarity. It is surely better to provide leadership and certainty by choosing the only arrangement that will ensure the necessary level of investment to make our broadband fit for the future.

Digital Economy Bill

Lord Clement-Jones Excerpts

3rd reading (Hansard): House of Lords
Wednesday 5th April 2017 Lords Chamber

[Baroness Howe of Idlicote (CB)]

My Lords, I welcome these tidying-up amendments. I want to take the opportunity provided by this Third Reading debate to congratulate the Government once again on taking action to protect children from pornography on the internet through age verification. I shall be watching the implementation of Part 3 of the Bill closely. I would like also to put on record my thanks to the Minister for meeting with me to discuss adult content filters. I am very grateful also to noble Lords who supported my amendment at an earlier stage, highlighting the need to get a better understanding of the adult-content filtering approaches adopted by smaller ISPs that service homes with children: the noble Lords, Lord Collins of Highbury and Lord McColl of Dulwich, and the noble Baroness, Lady Benjamin.

Turning to the future, I am very much looking forward to the discussions on the Government’s Green Paper on internet safety and to their response to the Communications Committee’s report, Growing up with the Internet. Part 3 of this Bill is not the end of the story on children and internet safety.

Despite many positives, in comparing and contrasting the Bill that entered your Lordships’ House with the Bill as it now leaves, my response is one of sadness. The underlying principle of parity of content has been removed and the Bill is, in this respect, unquestionably weaker as a result.

In the first instance, the Bill entered your Lordships’ House properly applying the same adult content standard online as applied offline. It leaves your Lordships’ House saying that most material that the law does not accommodate for adults offline will be accommodated online behind age verification. Only the most violent pornography—that which is life-threatening or likely to result in severe injury to breast, anus and genitals—will be caught. Injury or severe injury to other parts of the body appear to be fine as long as they are not life-threatening. As the Bill leaves us, the message goes out loud and clear that violence against women—unless it is “grotesque”, to quote what the Minister said on Report—is, in some senses, acceptable.

In the second instance, the Bill entered your Lordships’ House properly applying the standard of zero tolerance to child sex abuse images, including non-photographic and animated child sex abuse images. Today it leaves your Lordship’s House with the relevant powers of the regulator deleted so that it can no longer take enforcement action against animated child sex abuse images that fall under the Coroners and Justice Act 2009. As such, the Bill goes out from us today proclaiming that non-photographic images of child sex abuse, including animated images, are worthy of accommodation as long as they are behind age verification.

As agreed, Third Reading is a time for tidying up. However, Part 3 of the Bill clearly requires further amendment so that the message can go out once again—as it did in the other place—that there is no place for normalising violence against women and no place for accommodating any form of child sex abuse. I hope that the other place will now rise to that challenge.

[Lord Clement-Jones (LD)]

My Lords, I do not wish to detain the House unduly on these amendments. I welcome, in particular, Amendment 9 as it is the fulfilment of a pledge made by the Minister on Report. I am delighted that Section 73 of the Copyright, Designs and Patents Act will be no more as soon as the Bill comes into effect. I am delighted that the Minister has fulfilled his undertaking.

[Baroness Drake (Lab)]

My Lords, I, too, thank the noble Lord, Lord Ashton, for tabling Amendment 12, which gives greater clarity to the BT and Openreach employees covered by the provisions of Clause 119. The Government have also made clear their intention to engage fully with the BT pension scheme trustee and for that I am also grateful. I hope their discussions go well.

--- Later in debate ---

Finally, I hope that it will reassure noble Lords to learn that the clauses will now contain a number of additional safeguards against excessive charging. These include a requirement to consult the ICO and representatives of data controllers before bringing forward regulations to set or amend fees; a requirement for the Secretary of State to review the fees every five years to ensure that they are still relevant and proportionate, and a requirement for the Secretary of State to use the affirmative procedure when making regulations under the new power except in the case of inflation increases, when the negative procedure will apply. I beg to move.

[Lord Clement-Jones]

My Lords, I thank the Minister for his introduction to Amendment 10. This amendment may not be the full loaf, but it certainly is three-quarters of a loaf in terms of an assurance on the two matters which gave us concern, the first of which was the extent to which the charges might exceed the costs incurred by the ICO. The Minister’s assurance is very helpful in terms of the operation of Clause 113, as is his assurance on mission creep, which is something that the noble Lord, Lord Collins, was particularly concerned about. Again, I am grateful to the Minister for his two assurances.

[Lord Collins of Highbury (Lab)]

My Lords, I too am grateful for the assurances that the Minister has given us and I thank the Delegated Powers Committee for its excellent report which drew specific attention to this issue. The committee’s concern was not without evidence and it gave an example in relation to probate—I notice that the noble and learned Lord, Lord Keen, is in his place—so it is an issue that was very much in people’s minds when considering this part of the Bill. However, the assurances given by the Minister are clear and concise. We have protections in terms of parliamentary scrutiny, in particular in relation to the element of function creep where there is a requirement for primary legislation. I welcome and support the amendment.

--- Later in debate ---

[Lord Ashton of Hyde]

My Lords, I should feel awful, but I neglected to mention my noble friend Lady Buscombe and my noble and learned friend Lord Keen, who helped enormously. I had written it down on my notes, but, as usual, I did not pay any attention to them. I want to pay tribute to them and thank them very much.

[Lord Clement-Jones]

My Lords, I am sure that they would have been mentioned fulsomely by other Benches as well. I have not laboured in the vineyard quite as much as the noble Lord, Lord Stevenson. I have not had multiple Bills simultaneously to deal with—and one can only admire that kind of stamina—but, still, the passing of this Bill carries a sense of relief given the variety of subject matter that we have had to deal with during the past few months. The Minister said that it was from Christmas to Easter; these Bills are seasonal in their nature.

We certainly have not achieved everything that we wanted, but I believe that the Bill is leaving this House in much better shape than that in which it arrived. As the noble Lord, Lord Stevenson, implied, it is certainly a very meaty Bill. It is also a disparate Bill, covering a huge range of issues most of which are unified only by the word “digital”. That was quite a challenge for all those who were trying to cover the whole subject matter of the Bill.

I want to thank my own colleagues, particularly my noble friends Lord Paddick, Lord Fox, Lord Foster, Lord Lester, Lord Storey, Lord Addington, Lady Bonham-Carter, Lady Hamwee, Lady Janke, Lady Benjamin and Lady Grender. I thank our adviser team, particularly Elizabeth Plummer, Rosie Shimell and Vinous Ali. I want also to thank the Opposition Front Bench—the indefatigable noble Lord, Lord Stevenson, the noble Baroness, Lady Jones, and the noble Lords, Lord Collins, Lord Wood and Lord Grantchester—for their collaborative approach. Of course, I thank many others on the Cross Benches, including the noble Lord, Lord Best, with his successful amendment, the noble Viscount, Lord Colville, and the noble Baroness, Lady Howe—indefatigable is too small a word for her.

[Lord Stevenson of Balmacara]

Indestructible.

[Lord Clement-Jones]

“Indestructible” is suggested to me by the Opposition Front Bench.

Finally and very sincerely, I thank the noble Lord, Lord Ashton, the noble and learned Lord, Lord Keen, the noble Baroness, Lady Buscombe, and the Bill team. I echo what the noble Lord, Lord Stevenson, had to say about the Bill team for their willingness to engage constructively, explain, amend and give what assurances they could throughout the passage of the Bill. We welcomed considerable movement during that time: changes in definition of “extreme pornographic material”, appeals on site blocking, the incorporation of many of the DPRRC amendments and new Ofcom powers—my noble friend Lady Benjamin is not in her place; she is probably celebrating somewhere the fact that Ofcom has new powers in respect of children’s programmes. There were amendments on remote e-book lending and listed events—the list goes on, which demonstrates that the Government were listening.

Of course, we anticipate ping-pong with great delight. I think that some six amendments to the Bill were passed. I hope that the Government will give consideration to them and not just bat them back to this House. They were all carefully thought through. I hope that we will see some changes as a result of those amendments in this House.

Of course, we did not get everything on our shopping list as the Bill went through. On Ofcom appeals, the noble and learned Lord, Lord Keen, stood fast on Clause 85. I hope that in the future we might find some change on compulsory anonymisation for age verification, and I think that IPTV is something that may come back to haunt us. I hope that the consultation will demonstrate the absolute need for amendments in the future. I am sure that my noble friend Lord Lester will also be returning by popular demand to the question of the statutory underpinning of the BBC charter. In the meantime, I thank the Minister and look forward to the passing of the Bill.

Digital Economy Bill

Lord Clement-Jones Excerpts

Ping Pong (Hansard): House of Lords
Thursday 27th April 2017 Lords Chamber

[Lord Ashton of Hyde]

My Lords, I want again to start by saying that the Government accept and agree with the spirit of Lords Amendment 40, but, as drafted, it poses difficulties and risks unintended consequences. For example, it is not clear who would notify social media providers that content contravened existing legislation. The requirement to inform the police if notified that content contravenes any existing legislation could lead to unmanageable volumes of referrals to law enforcement. This would do little to increase public protection, making the code of practice unworkable.

The other place has offered Amendment 40A, which we believe will achieve a similar outcome by setting out the behaviour expected of social media companies while protecting users. As explained in the other place by my right honourable friend the Minister of State for Digital and Culture, good work is being done by some companies to prevent the use of platforms for illegal purposes, but we agree that more can be done by social media to tackle harmful conduct online, particularly bullying behaviour, which can have serious consequences.

Our intention is that the code will set out guidance on what social media providers should do in relation to conduct that is lawful but that is none the less distressing or upsetting. The intention is that the guidance in the legislation addresses companies proportionately. We believe that this code, together with the internet safety strategy, will result in a properly considered, comprehensive approach to online safety and deliver the long-lasting protections that this amendment seeks to secure. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, I have no doubt that the noble Lord, Lord Stevenson, will want to give a more substantive response since this was fundamentally an opposition amendment, but it was supported strongly on these Benches. I accept that the Minister has tried to incorporate the spirit of the original amendment in this amendment coming from the Commons. He made a number of detailed points about objections to the drafting of the original amendment, but there is one thundering great hole in the amendment as brought forward by him, which is that there is no obligation on providers to comply with the code of practice once it comes into force. It is nakedly a voluntary code rather than any code that is able to be enforced by the Secretary of State. That is the major difference between the amendment that this House passed and that which has now come forward.

The Minister mentioned the internet safety strategy and the work being done on it. Many of us are convinced that when the work on that is done the need for an enforcement power in such a code of conduct will become clear. Will the Minister assure us that enforcement will be considered as part of the internet safety strategy and that, if the overwhelming body of evidence is that such a form of compliance is needed, the Government will come forward with amendments?

[Lord Collins of Highbury (Lab)]

My Lords, I will not delay the House but I want to repeat what the noble Lord, Lord Clement-Jones, has just said because the point about no enforcement and no sanctions is important. I recognise the words of the Minister in terms of reflecting the spirit and intent of our original amendment, and I think that that is what the government Motion now seeks to do. It will give notice to the social networks that failure to comply will result in further government action. Like the noble Lord, Lord Clement-Jones, I hope that the Minister will be able to respond positively, in particular on the internet strategy review.

In conclusion, our examination of these issues has been extremely good in the Lords both in Committee and on Report. We now have a clear policy which gives notice to the social networks that we want to ensure that proper standards are maintained and that action will be taken when evidence of abuse is found. It should not be a matter of days or weeks, which has been the case, before offensive material is taken down. We have seen evidence of the horrendous things that have been put up on social networks in the US and Thailand, so we want to ensure that the networks understand fully the gravity of the situation.

--- Later in debate ---

[Viscount Colville of Culross (CB)]

I regret that the Government decided not to accept Lords Amendment 242. The Minister in the other place said in his speech yesterday that the technology of broadcasting and internet-based on-demand viewing are completely different. I am afraid that that is not right. The two technologies are merging as television sets become multipurpose computers. We are seeing convergence between television and the internet increasing at a massively rapid pace. It is crucial that the prominence regime should keep pace with changing viewing habits.

However, the response from the other place gives me some heart. At least there is to be an Ofcom review of the PSB prominence guidelines in the internet age. I urge the Minister to ensure that Ofcom starts that review as soon as possible and not allow it to put that off until 2020. Every month, we see PSB on demand and digital services become more important for broadcasters. I am sure that your Lordships would like viewers to have easy access to programmes that in the BBC’s case are funded by public money and in Channel Four’s case are publicly owned.

[Lord Clement-Jones]

My Lords, I very much hope that the Minister will take the threat from my noble friend Lord Lester extremely seriously and will rise to the challenges that he put to the Minister on the questions of funding, independence and carrying out the activities of the BBC.

I agree in particular with the noble Lord, Lord Best, in his disappointment with the Minister’s Motion today. As the noble Lord mentioned, my noble friend Lady Bonham-Carter added her name to what we saw as a very important amendment in this House. That was the product of the report of the Communications Select Committee, Reith Not Revolution, which urged a much greater level of transparency and independent oversight in the setting of the licence fee. Of course, the Minister pushed back in Committee, on Report and at Third Reading by talking about the licence fee being a tax. However, it is a rather exceptional one: a hypothecated tax paid by the public to fund the BBC. So it is entirely correct that there should be a different mechanism for the setting of that licence fee. This arises because of the midnight raids—the hijacking—by the Treasury of the licence fee process on at least two occasions recently. One of the worrying phrases that the Minister used was that the Government want a free hand following negotiations with the BBC. That is exactly what the original amendment was designed to prevent.

The nub of the concern is about assurances. The Minister gave assurances and used new language on this. However, we have seen what assurances given by the Government are worth when it comes to snap elections. Assurances can be given by government one minute and broken the next. However carefully we scrutinise the Minister’s wording today, if his Government are in a position in future to negotiate the licence fee, we have no absolute assurance that those words will be followed. I share the deep disappointment that I am sure is felt all around the House.

In many ways, Motion E is even more disappointing. It was perfectly valid for the noble Viscount, Lord Colville, to express some support for the Ofcom review, but given that the Government could say that whether or not to have a BBC licence fee commission is a political decision, this is much more a question of the facts and perception. On at least two occasions we have had Secretaries of State for Culture, Media and Sport—Jeremy Hunt and Maria Miller—saying that the position of the public service broadcasters is very important and EPG position is a very important way of safeguarding it. The Minister has said that a review will be undertaken by Ofcom, but Ofcom already knows that there is a problem. It recommended in its 2015 PSB review that policymakers should reform the rules for on-demand. Why are we asking Ofcom to do the work all over again? That does not seem a particularly constructive way forward, despite appearances.

A number of questions arise from Motion E. Can the Minister confirm that statutory change will be necessary to bring on-demand PSB content and the connected EPGs, where they are found, into the scope of Ofcom’s EPG code? In conversations, the Minister has claimed that it is not possible to have a Henry VIII power that would implement Ofcom’s recommendations for on-demand, so I assume that there is no current statutory power and that therefore we would be talking about primary legislation in that respect, but it would be helpful to have that confirmation.

Will the Minister give us an assurance that the Government will act on those Ofcom recommendations? We would not have tabled amendments on EPGs unless we thought that this was a real and present issue that needed to be tackled. This was not a frivolous amendment, but the Government seem to have a completely different view. The earnest of their intentions on this provision is rather important. The amendment sets a 1 December 2020 statutory deadline for the review and the revision of the EPG code, but does the Minister not agree that actually it would be desirable to commence work rather earlier, given the need for statutory changes beforehand, probably, to bring on-demand content into scope?

Finally, it appears that there is a statutory power to ensure the prominence of PSB children’s channels on EPGs. Does the Minister agree with that? Does he agree that if Ofcom so recommends, that could be brought in at a much earlier date than the on-demand provision? I very much hope that the Minister can answer those questions.

[Lord Stevenson of Balmacara]

My Lords, taken together, these two amendments were traps for the Government and, with predictable certainty, they have fallen into both of them.

The amendment that has just been spoken to by the noble Lord, Lord Clement-Jones, on the need for Ofcom to have powers to make sure there is a proper rule about prominence that applies not only to the linear but to the offline world of iPlayer and others, was a test of whether or not the Government believed in public sector broadcasting, in that if they believed in public sector broadcasting they needed to come forward with proposals that allowed the channels that were funded by the public or in a not-for-profit way to have access on a fair and equal basis to commercial channels. By tabling an amendment that is for just a report, without the requirement that there should be legislation in three primary legislative areas, which I think we agree needs to happen, I think they have failed this test.

However, we welcome where they have got to. I support the idea of a further review. I hope it will bring out the complexity of this issue—the changing technology and the difficulties of assessing this—in a way that will make it easier for the Government to honour their commitment given in the other place and repeated here today that if the report does make it clear that there is a problem in this area and it can be fixed only by legislation, the Government will bring that legislation forward as soon as possible. I give the commitment from this side of the House that, if elected, we will do the same.

--- Later in debate ---

[Lord Moynihan (Con)]

My Lords, I begin by declaring an interest as co-chair of the All-Party Parliamentary Group on Ticket Abuse and paying tribute to my co-chair Sharon Hodgson in another place for the outstanding work she has done on this subject.

In brief, I welcome the Government’s amendment in lieu and the response by the Government to the Waterson review and their acceptance of the recommendations in full, including introducing a criminal offence to stop the use of bots to purchase tickets and the provision of funding to the National Trading Standards Board for enforcement action. Enforcement is weak, and I hope a future Government will work diligently to strengthen enforcement. I also look forward to the outcome of the Competition and Markets Authority’s enforcement investigation into suspected breaches of consumer protection law in the online secondary ticketing market. That is very important because the evidence of the secondary ticketing market consistently flouting the law on a daily basis is clear for all to see on many of the online sites.

I welcome the Minister’s comment that a ticket should have a unique reference number that people can see on the ticket when they purchase it. That will make it easier to identify the reseller. That has all-party support in this House and is an important step forward.

However, I would like further assurance from the Minister. He said that the original amendment I put forward was not necessary in whole because it included the addition of a requirement for the seller to list any terms and conditions associated with the resale of a ticket. The Government have deleted that provision, contending that it is already covered under Section 90(3)(b) of the Consumer Rights Act. It is important to have absolute clarity on this issue. The Government have argued that Section 90(3)(b) of the Consumer Rights Act 2015, which requires online secondary ticketing websites to provide,

“information about any restriction which limits use of the ticket to persons of a particular description”,

effectively means that my amendment was unnecessary and duplicative. Many people understand that Section 90(3)(b) was designed to ensure transparency about any ticket which was for a child or a disabled person or had a restricted view or other similar restrictions and was not about resale terms and conditions, which were not subject to debate in this context when the Consumer Rights Bill was before Parliament.

It may assist the House if I briefly give an example to demonstrate this important point. Metallica have an upcoming UK tour which offers a very strong example of why the scope of the Consumer Rights Act to require secondary ticketing websites to be obligated beyond doubt to provide information about any specific conditions attached to the resale of a ticket is necessary. Metallica are obviously well known to many Members of your Lordships’ House. There are strict conditions in place to mitigate ticket touting. Names are printed on tickets to prevent their resale, the photo ID of the lead booker must be presented to gain entry to the venue, accompanying guests must enter at the same time and tickets are limited to four per credit card. This is all made clear when you buy a ticket, and authorised primary ticket sellers have made that clear on their websites.

Do I understand absolutely categorically and without doubt that the Minister is saying that making those terms and conditions clear is mandatory on secondary ticketing market sites and is fully covered by the existing law? I think that is exactly what he said, but it would be very useful if he could confirm that, not least because it would be of assistance to the CMA in its inquiry and to trading standards because it would support and protect the interests of fans of Metallica and of “Hamilton”, which will face the same challenges when that show comes on this autumn. With that requirement for a final assurance from the Minister, I conclude by thanking noble Lords on all sides of the House for their support on this and thanking the Minister for the hard work he has undertaken to ensure that we have made progress.

[Lord Clement-Jones]

My Lords, I join the noble Lord, Lord Moynihan, in welcoming the government amendment. I want to make only a very brief intervention to congratulate the noble Lord, Lord Moynihan, and Sharon Hodgson on their persistence in achieving what we have achieved so far, which is considerable. A great deal of progress has been made in restricting the activities of secondary ticketing sites. We all look forward to the Competition and Market Authority’s report, which may well suggest further changes to legislation and will certainly give us a very good idea of whether the provisions of the Consumer Rights Act are being properly enforced. That will be extremely illuminating. I hope the Minister will be able to answer the question asked by the noble Lord, Lord Moynihan, about whether it is really duplication or whether we have thrown something out with the Commons amendment.

Let me end by saying that in the Digital Economy Bill we have not, in the words of my noble friend, taken up the floorboards today, but we have certainly given it a decent lick of paint in the process. It is not a very ambitious Bill, and many of us could argue at length about what other aspects it should have covered, but I thank the Minister for his unfailing helpfulness throughout the course of the Bill and I thank the Bill team. I very much welcome not only the movement today, which is perceptible—that is not always the case with wash-up or ping-pong—but some of the movement that was made in the course of the Bill. The noble Lord, Lord Moynihan, talked about the outlawing of mass online purchasing with bots, which is a very significant change, as are the site-blocking appeals, the new Ofcom powers in respect of children’s programmes, which are particularly welcome to my noble friend Lady Benjamin, remote e-book lending and the amendment on listed events. There has been movement in this House as a result of amendments in this House and the discussions we have had. I am grateful, and I look forward to a new digital economy Bill before too long.

[Lord Stevenson of Balmacara]

My Lords, this marks another stage in the campaign led by the noble Lord, Lord Moynihan. It was led until her death by Lady Heyhoe Flint whom we all want to recognise because she played a huge part in this and her memory is still fresh today. Wherever she is playing cricket, I am sure she is scoring a hundred as we speak.

The noble Lord, Lord Clement-Jones, and the Minister mentioned bots. We should not ignore the fact that that will make a huge change to the secondary ticketing market. The solution the Bill team came up with is very creative, and I hope it works as well as they intend it to. A first step has been taken, and this will crack down on the worst excesses of secondary ticketing.

I hope the Minister will answer directly the question asked by the noble Lord, Lord Moynihan, about whether the conditions apply because they are not drafted quite like that in the original legislation.

In its original formulation, Amendment 246 simply inserted the words,

“and any unique ticket number”.

The final version before us states,

“any unique ticket number that may help the buyer to identify the seat or standing area or its location”.

That raises the question of what “may” means. Does it in some sense imply a voluntary obligation? If it does, it would be very unfortunate. Could somebody argue that they did not include the unique ticket number specified because in their view it did not help the buyer identify a seat or a standing area or its location? Or is it a variation on the word “must” so that it is a requirement that a ticket number that could help a buyer identify seats or standing areas or their location must be included? I will be grateful if when the Minister responds he will mention that.