Digital Economy Bill

Lord Maxton Excerpts

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

[Lord Maxton (Lab)]

My Lords, I would like to add one category of cost to that: someone who lives in a remote area some distance away from the main telephone service. The cost of BT or another company installing a line up to that property can be outrageous, to be honest. It can be very considerable and much more than most people can afford to pay. So to the list of those who are disadvantaged and cannot get full access, including, quite rightly, the disabled, must be added those who live in a single property at some distance away from the main service. The costs can be prohibitive.

[Lord Arbuthnot of Edrom]

My Lords, I will address the House on Amendment 5, in the name of the noble Lord, Lord Mendelsohn. We all want to prevent digital exclusion and this is clearly an admirable way of attempting to do so. But the noble Lord suggests that,

“any excess costs … shall not be paid by users of communication service providers”.

So those excess costs need to be paid, presumably by someone other than any of the users of communications service providers. I wonder whether this amendment might be strengthened if it were to set out by whom those excess costs should be paid.

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Beyond that, I would like to see the development of joint masts and would not rule out the possibility, I am afraid, of subsidy. If at the end of the day we are prepared to subsidise the provision of fibre, we should also be prepared to subsidise if necessary in very remote areas the sort of masts that will host 5G, because that will be the way that a lot of people get broadband.

[Lord Maxton]

My Lords, I just want to raise an issue of the future rather than the present. I hope that masts will soon be a thing of the past and we move to satellite provision of telephony in the very near future. I do not know whether that will be the case, but I have certainly heard it will be. Otherwise, I agree with my noble friends that we ought to be moving to having the best provider we can get in any area. I am with EE, and when I am sitting in my motor car driving along with my wife, who is on O2, and my son, who is with Virgin Media, who gets a service on their phone in some areas of the country will depend on the provider.

[Baroness Byford]

My Lords, as someone who is not as well versed as some noble Lords with the technology, it always strikes me as strange that if you go abroad, wherever you are, you seem to be able to get access. What do they do that we do not? Are there lessons that we should be learning? Do they have a different system? How does it actually work? It seems ludicrous that we are going into such nitty-gritty when perhaps, over there, there is something that we are not even opening our minds to.

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[Lord Arbuthnot of Edrom]

My Lords, these are very important amendments. There is a concern that BT has tended to invest just enough in a particular area to make it uneconomic for competitors to come in and provide services there. This may just be a natural complaint by people who have been beaten fair and square in the marketplace, because BT is a very large and effective company which is, in many respects, a national champion. However, if it is a canard, it is a persistent one. I hope the Minister will be able to say something to reassure the Committee, either that it is untrue or that something is going to be done about it.

[Lord Maxton]

My Lords, I too support these amendments, which are on the right lines. My only reservation is that if BT is already the owner of the line into a property—it could be a commercial one—who is responsible if a repair needs to be done: Openreach or BT?

[Lord Fox]

My Lords, we associate ourselves with Amendment 20. I was under the impression that Ofcom was already looking at the process of legal separation, and if this is designed to strengthen its arm and make sure that it happens, then we approve. At Second Reading, I talked about the desirability of full structural separation. We know that the pension deficit has been used as a reason. When that calculation was made, was the full effect of the EE acquisition factored into the pension equation? Now that there have been substantial changes in the make-up of the corporate parent, can a different argument be made on pensions?

In the recesses of my mind I recall something being attempted in York along the lines of Amendment 21. It foundered because there was no separation in the BT/Openreach model and the route to market proved very difficult. Perhaps to be successful Amendment 21 needs Amendment 20, if not full structural separation.

Digital Economy Bill

Lord Maxton Excerpts

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

[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 Maxton Excerpts

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

We would not be doing our job as a revising Chamber if we allowed such an obviously flawed clause through. It is imperative that the Government accept Amendments 58 and 65 in the name of my noble friend Lord Morrow. The age verification regulator must be required to tell financial transaction providers, and indeed ancillary service providers, not to do business with sites without age verification checks, and to follow up to make sure that no financial, or other, transactions have taken place. Meanwhile, the financial transaction providers and ancillary service providers must know that this will take place and that if they fail to act accordingly, the regulator will place sanctions against them. I hope the Committee will support Amendments 58 and 65.

[Lord Maxton (Lab)]

My Lords, I am very reluctant to take part in this debate, because I was not available to speak at Second Reading, which always restrains noble Lords from speaking in Committee. However, I will make three points.

First, I confess openly that I have indulged in sexual activity—I will not say when, as that might be unfair. But I have never fired a gun or a revolver in anger, or taken part in a fight with a knife, or indeed taken part in a fight at all. Yet we are not banning scenes of violence, even on the news, which are seen by children all the time, whereas we are involved in banning scenes of sexual activity. That may be right, but we ought to be looking at other areas of life as well, because they can damage children just as much as sexual activity can.

Secondly, this law as it stands—many noble Lords who have moved or spoken to amendments have admitted this—is almost inoperable. It cannot be enforced—or can be enforced only on rare occasions. That is rather like speeding in your motor car, which is an analogy I have used before. Everybody breaks the law by speeding—or most people do—because they know that they will not get caught. That is rather like this law, as it stands at present. The problem with unenforceable or rarely enforced laws is that they bring the law into disrepute—and that is the danger of this part of the Bill as it stands. We are in danger of bringing in something that is not enforceable and, by doing so, we are bringing the law itself into disrepute.

Lastly, I will give my solution to all of that. The aim of this part of the Bill is not to stop pornography sites but to stop children watching them. There is a simple answer to that—but, unfortunately, it is an answer that the Liberal party do not support and which the Tory Government got rid of when we introduced the voluntary part of it. It is an identity card. If you introduce a mechanism whereby you can get into pornography sites on any device only by using your fingerprint or via eye recognition, or whatever it might be, of course that can stop it. On my iPad I already have a device by which I can save my passwords and which will show them to me when I want to use them. But I can get into it only by using my fingerprint; I cannot do it any other way. I cannot even use my normal four-digit pass code; I can do it only with my fingerprint. Why not do that sort of thing for pornography sites as well? Only adults will be able to get into them; children will be barred by the introduction of an ID card mechanism, so that you can get into it only by that means. Unfortunately I have hospital appointments during the next sitting of Committee, but I hope that on Report I will be able to introduce amendments to that effect.

[The Earl of Erroll (CB)]

My Lords, I have one amendment in this group. I very much support Amendment 65, but there is no point adding anything to what the noble Lord, Lord Morrow, said. He covered it in great detail and for all the right reasons. I will add only for the noble Lord, Lord Paddick, that a lot of the payment service providers—this is the key to it—such as Mastercard, Visa, and so on, are international. If there is a duty on them, they are very good at trying to stick to the law. That would close quite a few holes and make life a bit difficult for sites—so as a deterrent, it would really help.

Sadly, this whole approach to cutting off the ancillary service providers years ago was enough to kill off pirate radio in the 1960s—which I was very sad about. But this time I approve of being able to do it, because I approve of the motive behind it: trying to stop children accessing pornography.

Amendment 68B, in my name, questions what a “large number” of children is. I realise that it is obvious that you have to prioritise, because 80% of the sites are over a certain size and they will definitely come under this. They handle 80% or so of the traffic, or whatever, so I can see that you should check up on them first. But they are also the ones that will comply, because many of them are onside anyway. However, let us say that there are 10% of sites left. That is an awful lot of children, if you do the maths in your head. You knock one nought off the end of however many children there are, but you still leave an awful lot. I therefore do not understand why we are leaving in a “large number” as a constant target. There must come a point when it is worth moving on to the smaller numbers as well. I therefore do not understand the purpose of the clause. It is self-evident that they will have to prioritise. If they do not, they are idiots—and I know perfectly well that the members of the BBFC are not. Therefore I cannot understand the purpose of it.

Amendment 69A, in the name of the noble Lord, Lord Paddick, has some merit in it. As the noble Baroness, Lady Benjamin, said, there is a lot of non-commercial stuff out there. The purpose of this is to stop children viewing pornography. It does not matter whether it is commercial or not. If you put in something like this, there are clever ways in which people will try to define their sites as non-commercial. In particular, if they can start appealing against this—this is where having a complicated appeals process would become so dangerous—I can see loopholes opening up. So we need to start including non-commercial pornography—and it is okay if it takes a year.

I also support Amendment 237, in the name of the noble Baroness, Lady Benjamin. We need to have a deadline. It is something that all sites can work towards. We should say that, on whatever date, if sites are not compliant—we suggest that it ought to be a bit like a speed limit, where you ought to slow down before you hit the 30 miles per hour limit—we will issue notices to the ISPs to block them. Something might happen, because you have a level playing field, everything happens on the same date, and under the amendment in the name of the noble Baroness, Lady Benjamin, they will have a year to do it in. That is probably enough to get your regulations in place and so on. It is a very good idea.

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[The Earl of Erroll]

My Lords, I want to say a few words because I have been working on the issue of age verification for a long time. I became interested in it when it became apparent a couple of years ago that it was going to come to the top of the agenda. For the last year or so, the Digital Policy Alliance, which I chair, has been working with the British Standards Institution to produce a publicly available specification—PAS 1296—exactly on this issue. Its whole point is to enable anonymised verification of the attribute of your age. People have said that you would have to give the information to the adult content site, the porn site, but you do not necessarily need to.

There are two stages: when the child, or the adult, first arrives at the site; and, if they are allowed into the site, what they then do. At the point when they come to the front page of the site, where they should be asked to prove their age, there should be an option—and this is the point about anonymity—that allows them to bounce off, with a token, to an age verifier. I have on my smartphone, for instance, one from Yoti. I can identify myself to Yoti; it knows about me and can send an encrypted token back to the website, which does not contain any identity information at all—purely the fact that I am over 18. If the regulator later needs to unravel the token because it appears that rules have been breached, it is possible to present the token and start unravelling it—but only with proper powers. The point is that a hacker cannot find out who presented that token. So it is possible now to do what is necessary.

That answers the point made by the noble Lord, Lord Maxton. The problem with an identity card is that it will identify you. If you gave your identity to one of these websites and it happened to be hacked, like Ashley Madison, and if you were a Cabinet Minister—or even like most of us here, actually—your career would probably be in ruins. So I think it is essential that people be permitted anonymity. That is why, I am afraid, I am not in favour of the identity card method. There are other similar ways of doing the same thing—

[Lord Maxton]

I would, maybe, accept the noble Earl’s point in this particular context, but the ID card has, of course, a variety of different uses—particularly if it is a smartcard—rather than just this one.

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[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.

[Lord Maxton]

That does not include material that would not be shown otherwise on either a tablet, a computer or on television. I am wearing the tie of Hamilton Rugby Club, and I can watch the games on YouTube the week after.

[Baroness Buscombe]

My Lords, we are talking about taking on the seriously important issue of all illegal access. That is part of the problem with primary legislation, as it is very often not otiose but an anachronism before it has even begun. So often primary legislation leads to us being behind the curve. In fact, I remember so well sitting where noble Lords opposite are sitting when the then Communications Bill was taken through the House in 2003. I remember asking officials why there was no mention of the internet in 2003 given that a certain person called Mark Zuckerberg was developing Facebook and the new world of social media. I was told privately, “Because it’s too difficult”. We are dealing with complex areas of law but I have history in this regard. I look at the noble Lord, Lord Gordon of Strathblane, who, of course, was sitting on this side of the House in those days. I think he will attest to the fact that we were grappling then with issues which almost immediately turned out to be behind the curve when that enormous piece of legislation was introduced. I hope noble Lords will accept that it is much more important to try to get these issues right than enshrine our hopes of tackling these serious problems in primary legislation in ways that will not work almost immediately.

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[Lord Arbuthnot of Edrom]

My Lords, conscious as I am of the time, I shall simply say that I hope that the Minister will be able to respond positively to this for the very good reasons given by both noble Lords who have just spoken. It is a matter of natural fairness; it reflects the convergence issues which have been spoken about in this Committee already; it reflects the technological tsunami that my noble friend Lord Black has spoken about; and it reflects what the Minister Matt Hancock has said in another place.

[Lord Maxton]

My Lords, I too support this amendment, but—there is a “but” to it—there are of course two types of e-books. There are those physical books which have been transferred over and copied into an e-system, but there are also increasingly a number of authors who write an e-book directly; they do not publish them at all in written form. I am not sure that this amendment takes account of the fact that there are increasingly these two different types of e-books.

Secondly, the fact is that Amazon which, rightly or wrongly, is the major contributor to the e-book revolution—I have a Kindle in my own pocket, which I read, and I have never picked up a book since I bought it—does not take part in the British national library system at all, as far as I am aware, although it does in America. Increasingly, Amazon is setting up its own lending system, where you can borrow an e-book from Amazon for a relatively small sum of money. You can only borrow it for three or four weeks at a time, but you can borrow it directly from Amazon. I have just a quick question to the Minister. Is there any progress in terms of Amazon becoming part of the system? I gather that one of the problems is that it uses a different type of e-book to the one that is used by the public libraries in this country.

[The Duke of Somerset (CB)]

My Lords, I intervene briefly to support this amendment, which seeks to rebalance the need for public access to all types of books against authors’ rights to some modest payment for their work. The PLR gives authors a small income where their books are sold mainly to libraries. The main point is that the PLR was extended to audiobooks in the 2010 Act for on-site loans but the need here is to extend it to remote loans, an area quickly increasing in popularity where items are downloaded to a computer situated away from the library.

We heard that zero remuneration is now illegal after the European Court of Justice ruling last November, so I expect that the Minister will have no difficulty in accepting this simple but important amendment. However, that ruling also drew attention to the difficulty of ensuring that only one copy is downloaded and that after expiration of the lending period no further listening can be enabled. Could the Minister indicate how this might be enforced or will it probably just be ignored?

Digital Economy Bill

Lord Maxton Excerpts

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

[Lord Keen of Elie]

My Lords, the proposals in Chapter 2 of Part 5, which are being addressed here, will ensure that citizens are able to access future—can I have a moment to sort out my own speaking notes?

[Lord Maxton (Lab)]

While the Minister is doing that, can I ask whether this amendment covers Scotland? He is replying as the noble and learned Lord, Lord Keen of Elie. Registration of births, deaths and marriages was not introduced in Scotland until 1855 rather than 1837—I think—so does this amendment cover Scotland?

[Lord Keen of Elie]

I believe it was 1836 in England not 1837.

[Lord Maxton]

It was 1855 in Scotland.

[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.

Digital Economy Bill

Lord Maxton Excerpts

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

[Lord Wigley (PC)]

My Lords, I declare an interest immediately, because in both my household and my neighbour’s household we have had immense problems in securing adequate speeds. I referred at earlier stages to some of these difficulties.

I very much support both Amendments. Amendment 1 states that,

“by 2020, the following will be available in every household”,

and the list includes,

“download speeds of 30 megabits per second”.

This is absolutely necessary, because under the present provision, the providers just are not willing to do that. They are willing to rest their case on the fact that it is too expensive to run the necessary connection to a household, not just in far-flung rural areas but in conurbations and villages. I am within half a mile of the main exchange and within 200 metres of a box. However, because of the way they have laid out the connectivity sequence, we cannot get decent speeds. It is irritating that the excuse can be used that it is too expensive to provide a connection.

I assume that if there was a legislative requirement along the lines laid out in the proposed new subsections in Amendments 1 and 2, that would be overcome. If the Government are not willing to accept these amendments, I would be interested to know what response they would give to people who are facing this difficulty. It is not a technical impossibility, just too expensive. I was on the committee which dealt with the privatisation of telephones, with the late John Golding and others—it took a considerable amount of time to go through—and assurances were then given that of course, the responsibilities that had been on public bodies would be continued. I accept that, to a large extent, BT has done that. However, safeguards are needed, particularly in rural areas, and I would be grateful if the Minister said how he will cover that if he cannot accept these amendments.

[Lord Maxton (Lab)]

My Lords, I fully support these amendments, although they use the term “United Kingdom”. I would like the Minister to say what powers the Scottish Parliament in particular and the other devolved Parliaments have in this matter. BT has a monopoly on laying the cables, but it often has to do it down roads and across private land, particularly if no telephone line already exists. Some 90% of the islands that are a part of the United Kingdom are off Scotland’s shores, and BT has to lay cables right the way across the sea—and at the moment, they are telephone cables, not high-fibre cables. What is the responsibility of the Scottish Parliament and the other devolved Parliaments in all this?

[Lord Mitchell (Non-Afl)]

My Lords, I too support these amendments. At each stage of the Bill in your Lordships’ House, I felt terribly frustrated by the Government’s lack of ambition. I said in Committee and on Second Reading that the gigabyte should be king. According to something I read a couple of days ago, in 10 years’ time 50 billion devices will be connected to the internet worldwide. This country will account for some 8% to 10% of that—4 billion or 5 billion devices. We have to have the gigabyte capability in this country to deal with such massive growth. The Government’s response to something so crucial to our nation’s development is meagre, and I hope they and the Minister will reconsider.

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[Lord Stevenson of Balmacara (Lab)]

My Lords, we return to an issue which we discussed in Committee. At that time my proposed amendment received support from the noble Lord, Lord Fox, for which I was grateful, and I know that he again supports the amendment today. The reason for returning to this is that I sense that we did not prosecute the amendment to the full extent possible at the time—that may have been our fault, but it was quite late in the evening—and, on reflection, there may be an issue here that needs a little more care and concern from Ministers before we leave it.

To go back over the issue, we are talking about the development of spectrum, which is a valuable national resource that—although there always seems to be more of it—is finite. Therefore, as a national resource, it is important that the Government have a firm grasp on how it should be distributed and the prices that should be paid for it. Currently, it is for Ofcom to introduce the necessary regulatory framework, which it does by considering how and on what basis additional spectrum can be made available and on what basis it can be released to operators who wish to use it. That has taken the form of auctions, which have been of varying types over the years—some have been spectacularly successful and some less so—and have been done under different rules.

The nature of the Government’s engagement with this is through Ofcom, and the amendment in no way aims to make a change to that basic structure. However, there is a question about whether we have reached the point where the Government should pay more attention to the issues concerned in this area than they have in the past. Why is this? It is because we have gone from a situation of having reasonably equitable spectrum holdings to having quite a significant imbalance in spectrum. This is partly because of the growth in one or two of the companies concerned. Some of that has been organic, but one of the main reasons has been the allowing of the merger between BT and EE, which has created a group that has been described as a,

“behemoth in the communications market”.

Therefore, we are not now in a situation where there are four companies competing for customers using broadly the same rates and amounts of spectrum; we are talking about only three companies—and possibly a fourth—and the problem is that two of those are very large indeed compared to the others. For example, BT/EE, the combined behemoth, has the largest proportion of all available spectrum, with 39%, while Vodafone has a significant but smaller 27%, Three has just 14% and O2 has only 13% of available mobile spectrum. In responding to this amendment, could the Minister reflect on whether this situation represents an optimum position for the market and, if it does not, whether the powers that he has are appropriate for how it goes forward?

However, it gets more complicated. There are, as one might expect, different sizes of companies and the individual spectrum bands are also of different value. It is therefore important not to look only at the overall figures but to be concerned with how the bandwidths that have the highest capacity—and therefore the best ability to offer innovative services to consumers—are going to be dealt with.

We have the prospect of a further auction this autumn, for which Ofcom is currently consulting on what will be the rules for auctioning off a total of 190 megahertz of high-capacity spectrum in the 2.3 gigahertz and the 3.4 gigahertz bands, which are particularly suited to higher-speed mobile broadband services—a topic that we have just been discussing. Clearly, for the future of UK plc and for the future of businesses and individuals in this country, how the spectrum is made available, how much of it is made available and on which bandwidths will be a crucial issue that we must get a handle on.

In this amendment we are proposing that more attention should be paid than in the past through a cap of, say, 30% on the individual holdings that any one company may have of the usable mobile phone spectrum. This is a figure which has been broadly discussed, and which Ofcom has been using in some of its discussions and debates around this issue, so it would not represent a very different approach.

However, before we go to the auction for this high-value additional spectrum, which will be crucial for 5G and further services going forward, there must be an evaluation carried out by the Government, not by Ofcom. This should look at: the impact on competition in the mobile telephony market of the current distribution of spectrum; the impact on consumers, who are often neglected, both in financial and coverage terms; the efficiency of the current spectrum usage; and the impact of preventing any one licence holder from owning more than 30% as a broad-brush approach. If this review is to be effective, it must be done quickly and brought to the House. I beg to move.

[Lord Maxton]

My Lords, I shall be brief. I have in my pocket a mobile phone owned by Virgin Media. Virgin Media uses the EE spectrum. As far as I know, there is no financial connection between Virgin Media and EE, but Virgin uses the EE network. Could the Minister explain that to me?

[Lord Fox]

My Lords, I am fortunate to follow the noble Lord, Lord Stevenson, whose comprehensive support of his amendment means that I need say very little, but I will make a couple of points.

We have talked in various debates on the digital economy about how wireless and broadband are converging, but there is one area where we do not want them to converge. The paroxysms that we are putting ourselves through around the broadband issue are because of how broken that market is, and there is a firm danger that we may be sending the wireless market down the same route. As the noble Lord, Lord Stevenson, pointed out, we had an equitable spectrum distribution, but there is a clear and present danger that we will move even further from that equity, with two dominant players and two very small players. The purpose of this amendment is to work in advance of that, so that we will not subsequently be debating the brokenness of the wireless market as we have been, from time immemorial, in respect of the broadband market.

When this amendment was debated in Committee, the Minister’s response was very much about leaving Ofcom to choose. He hazarded that, from the Government’s point of view,

“it also strikes us as unlikely that Ofcom, having determined appropriate rules …, would immediately nullify the results”.—[Official Report, 31/1/16; col. 1196]

In other words, it is up to Ofcom to decide, and it is not going to decide on this issue. That actually makes this amendment more important, not less. Ofcom has clearly recognised that there is a potential issue here, and it has gone tentatively down the route of limiting access to the 2.3 gigahertz spectrum while completely ignoring the 3.4 gigahertz spectrum. I think that the case has been made by the noble Lord, Lord Stevenson, for us to take account of that in the Bill and, for that reason, I support the amendment.

--- Later in debate ---

[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?

[Lord Stevenson of Balmacara]

My Lords, we welcome the Government’s tabling their amendment on this issue, as promised. In Committee, the Minister said she wanted to work with the sector groups involved to support a strong book sector that helps to promote opportunities for the public to read and learn, and she intended to table her own proposals for the necessary legislative changes as soon as possible. We sometimes hear that and then have to wait ages, but this time she has been able to get the Whitehall system to work to her agenda, and I congratulate her on that.

Digital Economy Bill

Lord Maxton Excerpts

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

[Baroness Kidron (CB)]

I am also a member of the Communications Committee. My noble friend Lord Best set out our position so well that I shall not repeat it, but I wanted to add one thing. I could not possibly exaggerate the feeling of those who came before us giving evidence that the BBC must not only be independent from the Government of the day but must be seen to be independent. That is really what these amendments are struggling to insist on—that it is truly seen by all parties as independent.

On a secondary point, while we did our review I was struck by the huge number of duties that the BBC was given, many of which were very right-minded, about regions and nations and the types of programming that it must do, as well as about training. Those are all things with a cost, and a subset of the amendments is the suggestion that somebody independent gets to look at the duties of the BBC and set them against the cost of doing those duties. Perhaps we will have more reasonable conversations about what those duties ultimately are when we understand what they cost.

[Lord Maxton (Lab)]

Can I just be marginally controversial? I accept the first amendment, which would establish a BBC licence fee commission, but the time has come when we have to look at the licence fee itself. We should remember that the licence fee was established way back in the days of Lord Reith—an awful man, but that is beside the point—based on the fact that you had one broadcasting unit in your house. The licence fee is for the house, not the individual, yet I stand here today with at least three devices in my pockets which allow me to view or listen to broadcasts by the BBC or, in fact, by any other organisation that cares to broadcast.

The time has really come when we must look at whether or not we have one licence fee for one household, which could include the very poorest single woman or man living alone in their house with one television or one radio to listen to. They pay exactly the same sum of money as another household with five people in it, all of whom have different devices. There are now four of us living in my household and each room has a television in it and a radio, we have radio in the cars, television on iPads and phones, radio on this, television on that—we have too many, maybe. But the same licence fee covers everything. It is the same licence fee for everybody, whatever—and I am not even talking about hotels or boarding houses or whatever else we can include with them. It is interesting to note that the Government themselves, when they looked at the licence fee, changed it to a live or nearly live licence fee. It is nearly live of course because if you watch television on your iPad, it is about 30 seconds behind, so it is not directly live. So this is the first thing that has to be said: it is time that this commission looked at the whole of the licence fee, not just the level of it.

Secondly, and lastly, this is a tax imposed upon everybody and we are entitled to know exactly how that money is spent by the BBC. I notice that an ex-director of the BBC is hoping to get into this debate —we know what his salary is and we know the salaries of every member of staff on the managerial side, but we do not know how much is paid to Mr John Humphrys, for instance, or to anybody else on the news side of it. I think that the BBC ought to be completely covered by the Freedom of Information Act, which is something that the commission could look at.

[Lord Birt (CB)]

My Lords, it is hard to improve on the excellent summary by the noble Lord, Lord Best, of the glaring inadequacies of the last two licence fee settlements—the infamous midnight raids. I would add only one thing: it is important to recognise that in neither instance was the motive of the Government to do down the BBC, rather it was simply unscrupulous pragmatism, switching responsibility to the BBC for paying for services that had previously been funded by government. In both instances, the Government did this because they did not want to take the political hit of taking something away—the ill-considered gift of a previous Government of free licences for the over-75s, might I say—nor did they want to take the financial hit of continuing to fund the services for which they were switching responsibility.

In both instances, the Government were completely oblivious to the consequences for the funding of the BBC and the knock-on consequences for every kind of service. This is government at its worst, frankly. We all understand how it happened, but it was ill considered and Britain deserves better. There needs to be a proper, considered process to set the licence fee which takes, as others have said, every kind of circumstance into account before the licence fee is set. I strongly support this amendment.

--- Later in debate ---

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

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

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

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

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

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

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

[Lord Maxton]

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

[Lord Ashton of Hyde]

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

[Lord Maxton]

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

[Lord Ashton of Hyde]

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