Digital Economy Bill (Tenth sitting)

Louise Haigh Excerpts

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

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

[Louise Haigh (Sheffield, Heeley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter. There is little need to dwell on this chapter of the Bill because of the safeguards that, as we have heard, are already in place and are well tried and tested. I was greatly encouraged that the Royal Statistical Society said in our evidence session that there needs to be a clear and well understood framework for the sharing of such information, as proposed in this part of the Bill. As we have said at length, we support that.

Most importantly for this debate, the Office for National Statistics operates transparently and publishes guidance on what data it uses and when, and on the public value that is derived from the data and information supplied to it for the purposes of producing official statistics and statistical research. The ONS’s information charter sets out how it carries out its responsibility for handling personal information, and the ONS’s respondent charters for business surveys and household and individual surveys set out the standards that respondents can expect.

The code of practice for official statistics has statutory underpinning in the Statistics and Registration Service Act 2007. Statisticians are obliged to adhere to its ethical requirements, including its principles of integrity, confidentiality and the use of administrative sources for statistical purposes. The Royal Statistical Society said that consideration could usefully be given to whether a new framework for the national statistician to access identifiable data held across the Government and beyond should require a supplementary code of conduct, to extend further public confidence. I would be grateful to the Minister if he confirmed whether he has responded to that and what steps he intends to take on that point.

Finally, the national statistician recently established the national statistician’s data ethics advisory committee, which provides ethical consideration of proposals to access, share and use data. The majority of the committee are independent and lay members from outside the Government, and it operates transparently with all papers and minutes published. It provides independent scrutiny of data shares and reports to the national statistician, who then reports to the UK Statistics Authority board. That model could easily be transposed to better protect data across the Government, as described in other chapters in the Bill.

We are happy to support the measures given the excellent and long-standing safeguards that are already in place, and we hope that, in time, the codes and other requirements in other parts of the Bill follow suit.

[The Parliamentary Secretary, Cabinet Office (Chris Skidmore)]

The clause will create a clear, permissive power for public authorities to disclose information that they hold for the purpose of research in the public interest. It will ensure that any personal information is processed before it is disclosed and that a person’s identity is not specified in the information, so that a person’s identity cannot be deduced from that information. It will establish a set of conditions to ensure that any processing of personal information is undertaken in a way that protects the privacy of individuals.

To maintain a truly innovative and competitive economy and to ensure that decisions taken on a range of economic and social issues are informed by the best possible evidence base, it is essential that we maximise the use of rich and varied sources of administrative information that is held across public data.

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[Chris Skidmore]

I shall come in a moment to the UK Statistics Authority’s position on the use of national statistics; it would benefit enormously from these measures. The potential benefits from increased access to information extend far beyond the research community. It is generally accepted that increased research and development leads to improved productivity and therefore increased economic growth. Information is increasingly a key raw material.

The research community has for some time been prevented from making better use of information held by the public sector, due to a complex legal landscape that has evolved over time. As a result, public authorities are often uncertain about their powers to share information, leading to delays, in some cases lasting years. In the meantime, projects become obsolete or are abandoned.

The Administrative Data Taskforce warned in its 2012 report that the UK was lagging behind other countries in its approach to this issue. It called for a generic legal power to allow public authorities to provide information for research purposes. As well as providing that power, which will remove the uncertainty that has frustrated the research community, the clause will provide a set of conditions that must be complied with if personal information is to be shared.

The conditions can be summarised as the sharing and use only of information that has been de-identified to industry standards to remove information that would identify, or is reasonably likely to identify, an individual, and the requirements that those who process information that identifies a person take reasonable steps to minimise accidental disclosure and prevent deliberate disclosure of such information, that all those who process personal information or receive or use processed personal information are subject to an accreditation process overseen by the UKSA, whether they are researchers, technicians or those who provide secure environments for linking and accessing data, that research for the purposes of which the information is disclosed is accredited and that all those involved in the exercise of the power adhere to a code of practice that is produced and maintained by the UKSA.

The UKSA is the designated accredited body with a duty to maintain and publish registers of all those accredited for any purpose under the power. That includes all those who may be involved in preparing personal information for disclosure to researchers and the research project itself. The results or outcomes of the research project must be publicly available, to demonstrate that the research is for the public good. The UKSA has a duty to maintain and publish the criteria for accreditation, and all activity under the power will be subject to a code of practice issued by the UKSA. I hope that answers the hon. Gentleman’s concerns.

Turning to the willingness for this to happen, the clause represents an important step forward for research in the UK. It will allow greater opportunities to produce high-quality research, which, in the words of the Economic and Social Research Council, can place

“the UK at the forefront of the international scientific landscape.”

It will allow greater opportunities to improve our understanding of our economy and society.

I would like to put on record the comments of Sir Andrew Dilnot, the chair of the UKSA:

“The Digital Economy Bill, currently before the House of Commons Public Bill Committee, represents a unique opportunity to deliver the transformation of UK statistics. The existing legal framework governing access to data for official statistics is complex and time-consuming. The proposals in the Bill, by making use of data already held across Government and beyond, would deliver better access to administrative data and for the purposes of statistics and research, delivering significant efficiencies and savings for individuals, households and businesses. Decision-makers need accurate and timely data to make informed decisions, in particular about the allocation of public resource. This Bill will deliver better statistics and statistical research that help Britain make better decisions.”

Question put and agreed to.

Clause 56, as amended, accordingly ordered to stand part of the Bill.

Clause 57

Provisions supplementary to section 56

Amendments made: 150, in clause 57, page 53, line 24, at end insert—

‘( ) In its application to a public authority with functions relating to the provision of health services or adult social care, section 56 does not authorise the disclosure of information held by the authority in connection with such functions.”

This amendment and amendments 168 to 170 ensure that Chapter 5 of Part 5 applies to a public authority with functions relating to the provision of health services or adult social care and other functions, but that in such a case the powers to disclose in the Chapter only apply to information held in connection with the other functions.

Amendment 151, in clause 57, page 53, line 28, leave out “56” and insert “56(1)”.—(Chris Skidmore.)

See the explanatory statement for amendment 142.

Clause 57, as amended, ordered to stand part of the Bill.

Clause 58

Bar on further disclosure of personal information

Amendments made: 152, in clause 58, page 53, line 38, leave out “56(9)” and insert “56(3B)”.

See the explanatory statement for amendment 142.

Amendment 153, in clause 58, page 54, line 2, at end insert “(including section56(3B))”.

See the explanatory statement for amendment 142.

Amendment 154, in clause 58, page 54, line 6, at end insert—

“(da) which is made for the prevention or detection of crime or the prevention of anti-social behaviour,”.

This amendment and amendment 157 create a further exception to the bar on the further disclosure of information which is disclosed under clause 56 (so that it can be processed for disclosure under that section), allowing disclosure for the prevention or detection of crime or the prevention of anti-social behaviour.

Amendment 155, in clause 58, page 54, line 7, leave out

“(whether or not in the United Kingdom)”.

This amendment removes the provision stating that a criminal investigation for the purposes of clause 58(3) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to a criminal investigation covers an investigation overseas in any event.

Amendment 156, in clause 58, page 54, line 10, leave out

“and whether or not in the United Kingdom”.

This amendment removes the provision stating that legal proceedings for the purposes of clause 58(3) may be within or outside the United Kingdom. This is for consistency and on the basis that a reference to legal proceedings covers proceedings overseas in any event.

Amendment 157, in clause 58, page 54, line 11, at end insert—

‘( ) In subsection (3)(da) “anti-social behaviour” has the same meaning as in Part 1 of the Anti-social Behaviour, Crime and Policing Act 2014 (see section 2 of that Act).”

See the explanatory statement for amendment 154.

Amendment 158, in clause 58, page 54, line 21, leave out subsections (5) and (6) insert—

‘( ) A person commits an offence if—

(a) the person discloses personal information in contravention of subsection (2), and

(b) at the time that the person makes the disclosure, the person knows that the disclosure contravenes that subsection or is reckless as to whether the disclosure does so.

This amendment applies to the disclosure of personal information in contravention of subsection (2) of clause 58. It has the effect that it is an offence to do so only if the person knows that the disclosure contravenes that subsection or is reckless as to whether it does so.

Amendment 159, in clause 58, page 54, line 39, leave out “56(9)” and insert “56(3B)”. —(Chris Skidmore.)

See the explanatory statement for amendment 142.

Clause 58, as amended, ordered to stand part of the Bill.

Clause 59

Information disclosed by the Revenue and Customs

Amendment made: 160, in clause 59, page 54, line 43, leave out “56(9)” and insert “56(3B)”.—(Chris Skidmore.)

See the explanatory statement for amendment 142.

Clause 59, as amended, ordered to stand part of the Bill.

Clause 60

Code of practice

Amendments made: 161, in clause 60, page 55, line 19, at end insert—

‘( ) The code of practice must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).”.

This amendment requires a code of practice issued under clause 60 by the relevant Minister and relating to the disclosure of information under clause 56 to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.

Amendment 162, in clause 60, page 55, line 24, leave out “56” and insert “56(1)” —(Chris Skidmore.)

See the explanatory statement for amendment 142.

Clause 60, as amended, ordered to stand part of the Bill.

Clause 61

Accreditation for the purposes of this Chapter

Amendments made: 163, in clause 61, page 56, line 7, leave out “56” and insert

“subsection (1) of section 56”.

See the explanatory statement for amendment 142.

Amendment 164, in clause 61, page 56, line 9, leave out “section” and insert “subsection”.

See the explanatory statement for amendment 142.

Amendment 165, in clause 61, page 56, line 11, leave out “section” and insert “subsection”.

See the explanatory statement for amendment 142.

Amendment 166, in clause 61, page 56, line 23, leave out “56” and insert “56(1)”.

See the explanatory statement for amendment 142.

Amendment 167, in clause 61, page 56, line 38, at end insert—

‘(6A) The Statistics Board—

(a) may from time to time revise conditions or grounds published under this section, and

(b) if it does so, must publish the conditions or grounds as revised.

(6B) Subsection (6) applies in relation to the publication of conditions or grounds under subsection (6A) as it applies in relation to the publication of conditions or grounds under subsection (2).”—(Chris Skidmore.)

This amendment enables the Statistics Board to revise the conditions and grounds it establishes for the accreditation and withdrawal of accreditation of people and research for the purposes of information sharing under Chapter 5 of Part 5 of the Bill.

Clause 61, as amended, ordered to stand part of the Bill.

Clause 62 ordered to stand part of the Bill.

Clause 63

Interpretation of this Chapter

Amendments made: 168, in clause 63, page 57, line 18, leave out subsection (2) and insert—

‘(2) A person is not a public authority for the purposes of this Chapter if the person—

(a) only has functions relating to the provision of health services,

(b) only has functions relating to the provision of adult social care, or

(c) only has functions within paragraph (a) and paragraph (b).

(2A) The following are to be disregarded in determining whether subsection (2) applies to a person—

(a) any power (however expressed) to do things which are incidental to the carrying out of another function of that person;

(b) any function which the person exercises or may exercise on behalf of another person.”.

See the explanatory statement for amendment 150.

Amendment 169, in clause 63, page 57, line 21, leave out “subsection (2)(a)” and insert “this Chapter”.

See the explanatory statement for amendment 150.

Amendment 170, in clause 63, page 57, line 30, leave out “subsection (2)(b)” and insert “this Chapter”.—(Chris Skidmore.)

See the explanatory statement for amendment 150.

Clause 63, as amended, ordered to stand part of the Bill.

Clause 64

Disclosure of non-identifying information by HMRC

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

[Louise Haigh]

Very briefly, I would be grateful to the Minister if he confirmed why a separate, further clause is necessary on disclosure of non-identifying information by HMRC. The safeguards in the rest of the Bill are sufficient.

[Chris Skidmore]

As the holder of some of the most useful datasets in the public sector, HMRC has an interest in sharing data more extensively where it does not compromise taxpayer confidentiality. The clause relates to the current legal constraints for HMRC on the disclosure of non-identifying information, allowing the UK tax authority to share information for purposes in the public interest. It deals with information that does not reveal a person’s identity: either general information that is never related to a taxpayer or information aggregated to such a degree that it does not reveal anything particular to a person.

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[Chris Skidmore]

These are minor and technical amendments to various definitions in proposed new sections 45B and 45C of the Statistics and Registration Service Act 2007. Sections 45B and 45C give the UK Statistics Authority a right of access to information required for its functions held by Crown bodies and public authorities respectively. Under section 45B, if a Crown body declines to provide information requested by the UK Statistics Authority, the authority may decide to lay the related correspondence before the relevant legislature, including the relevant devolved legislature for the devolved Crown bodies. Under section 45C, before issuing a notice to a devolved public authority that is not a Crown body, the UK Statistics Authority must seek consent from the relevant devolved Administrations.

Amendments 173 and 176 amend the definition of the phrase “Wales public authority” in sections 45B and 45C to refer to a new definition of “Wales public authority” being created by the Wales Bill, which is currently going through the House of Lords. They ensure that sections 45B and 45C are updated with a new definition of “Wales public authority” and will operate consistently with other definitions.

Amendments 172 and 175 amend the definition of “Scottish public authority” in sections 45B and 45C to capture public authorities with mixed functions or no reserve functions within the meaning of the Scotland Act 1998. Amendment 172, which amends section 45B, also refers expressly to a public authority that is part of the Scottish Administration, clarifying that these are Crown bodies to be dealt with under section 45B.

Section 45B states that Crown bodies include

“the Bank of England (including…the Prudential Regulation Authority)…the Financial Conduct Authority…and…the Payment Systems Regulator”.

Amendment 171 clarifies that the reference in section 45B to the Bank of England also includes any of its subsidiaries. That means that section 45B can also cover bodies such as the asset purchase facility fund, which the Bank of England set up in 2009. Amendment 171 also means that any subsidiaries that the Bank sets up in future will be treated in the same way under section 45B as the Bank itself.

Amendment 174 reflects the fact that the Prudential Regulation Authority is currently a subsidiary of the Bank of England formed under section 2A of the Financial Services and Markets Act 2000. This position will change when section 12 of the Bank of England and Financial Services Act 2016 comes into force. Section 12 changes how the PRA is formed and gives the Bank of England functions as the PRA. Amendment 174 therefore ensures section 45B applies during the transitional period before section 12 of the 2016 Act comes into force. It treats the wording in brackets in the relevant part of section 45B as not applying until section 12 comes into force. Until then, the PRA, as a subsidiary of the Bank, will be covered by amendment 171.

Amendment 171 agreed to.

Amendments made: 172, in clause 67, page 61, leave out lines 39 to 43 and insert “the public authority—

() is a part of the Scottish Administration, or

() is a Scottish public authority with mixed functions or no reserved functions (within the meaning of the Scotland Act 1998).”

This amendment modifies the requirement for a request for information under new section 45B of the Statistics and Registration Service Act 2007 and any response to be laid before the Scottish Parliament so that it applies to a request to public authority which is a part of the Scottish Administration or a Scottish public authority with mixed or no reserved functions.

Amendment 173, in clause 67, page 61, line 45, leave out from beginning to end of line 3 on page 62 and insert

“the public authority is a Wales public authority as defined by section 157A of the Government of Wales Act 2006.”

This amendment modifies the requirement for a request for information under new section 45B of the Statistics and Registration Service Act 2007 and any response to be laid before the National Assembly for Wales so that it applies to a request to a Wales public authority.

Amendment 174, in clause 67, page 62, line 13, at end insert—

‘( ) Until the coming into force of section 12 of the Bank of England and Financial Services Act 2016 subsection (1)(b) has effect as if the words in brackets were omitted.”

This amendment makes provision about the reference in new section 45B(1)(b) to the Bank of England in the exercise of its functions as the Prudential Regulation Authority in the period before the coming into force of section 12 of the Bank of England and Financial Services Act 2016. Until that section comes into force the Authority will remain a subsidiary of the Bank and so will be covered by the reference in amendment 171.

Amendment 175, in clause 67, page 62, line 41, leave out from “authority” to end of line 3 on page 63 and insert

“which is a Scottish public authority with mixed functions or no reserved functions (within the meaning of the Scotland Act 1998).”

This amendment modifies the requirement to obtain the consent of the Scottish Ministers before giving a notice under new section 45C of the Statistics and Registration Service Act 2007 so that it applies to a notice given to a Scottish public authority with mixed or no reserved functions.

Amendment 176, in clause 67, page 63, line 5, leave out from “authority” to end of line 10 and insert

“which is a Wales public authority as defined by section 157A of the Government of Wales Act 2006.”

This amendment modifies the requirement to obtain the consent of the Welsh Ministers before giving a notice under new section 45C of the Statistics and Registration Service Act 2007 so that it applies to a notice given to a Wales public authority.

Amendment 188, in clause 67, page 65, line 3, at end insert—

‘( ) The statement must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).” —(Chris Skidmore.)

This amendment requires a statement issued under section 45E of the Statistics and Registration Service Act 2007 by the Statistics Board and relating to the exercise of its functions under sections 45B, 45C and 45D of that Act to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.

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

[Louise Haigh]

As the Minister has just outlined, clause 67 differentiates access to information held by Crown bodies and a power to require disclosures by other public authorities. In essence, it enables the statistical authorities to request information from Crown bodies and to demand it from other public authorities. I would be grateful if the Minister confirmed why there is that distinction. He may well be aware that the Royal Statistical Society and the ONS would like the Bill to be amended to include the power to require disclosure from Crown bodies in exactly the same way as from public authorities. What consideration has been given to that? Why are the same requirements not on both types of public authorities?

[Chris Skidmore]

The clause gives certainty and teeth to data supplied to the UK Statistics Authority. Official statistics are not an optional extra. If they are incomplete, decisions made by the Government and Parliament that rely on those statistics could be misinformed, late and lose impact. UKSA must have the data equipment necessary to produce the numbers that decision makers need to make the best decisions in the interests of the country.

Existing legislation provides precedents for requiring businesses and households to provide information for producing aggregate statistics about the economy and society. For instance, the Statistics of Trade Act 1947 requires businesses to report the data required for the production of UK economic statistics. For the past 100 years, the Census Act 1920 has required every household to provide information once every 10 years so that we can understand our population and society. To put that in context, censuses are long established but expensive. The 2011 census cost us almost £500 million. Census data are the statistical spine of decision making, including the allocation of public funds.

Allowing UKSA access to administrative data the Government already hold is more efficient. We should not be asking people in business questions when we already know the answers from other sources. Under the Statistics and Registration Service Act 2007, UKSA must seek legislation every time it needs access to Government datasets where there is no existing data-sharing gateway. That mechanism is limited and only removes barriers that existed before the 2007 Act, and will become increasingly redundant over time.

The clause realises the expectation that, where UKSA needs access to datasets to produce statistics, it should be given that access. Section 45B requires Crown bodies, in particular central Government Departments, to provide data when UKSA asks for them, or, where necessary, have their refusal put before Parliament. Why treat Crown bodies differently from public authorities? That way of working, set out in sections 45B and 45C, ensures consistency between how a Crown body interacts with another on the one hand, and how a Crown body interacts with a non-Crown body on the other.

Sections 45C and 45D allow UKSA to require data from public authorities and large businesses. In practice, UKSA will focus on businesses that hold data likely to support to UKSA’s data needs, reducing the existing burden of surveys on businesses and individuals. UKSA must be sure that the data it relies on will continue to be provided, to ensure the integrity of the statistics it produces and the integrity of decisions based on those statistics.

Section 45F makes it clear that public authorities and businesses must comply with the notice they receive from UKSA under sections 45C or 45D, which draws on existing precedents for enforcement seen for the census and business surveys. Section 45E also requires UKSA to publicly consult on a statement of principles and procedures it will apply when operating these new powers. UKSA will lay that before Parliament and the devolved legislatures.

[Louise Haigh]

Section 45B lays out that UKSA must

“specify the date by which or the period within which the public authority must respond to the request.”

What kind of period are we are talking about? What kind of period does the Minister consider reasonable in which a public authority must respond to a request from UKSA?

[Chris Skidmore]

I will write to the hon. Lady on that particular point with further information. I am more than happy to do that. She correctly noted that timeframes are set out, which highlights the transparency arrangements already set down in the Bill. That has been well thought through, and we are determined to ensure that we work closely with UKSA going forward. UKSA will publicly consult on a new code of practice to support public authorities in consulting it on planned changes to data systems to protect the accuracy and integrity of its statistical outputs. Again, that will be laid before Parliament and the devolved legislatures.

We have spoken previously about codes of practice. Illustrative first drafts of the statement and the code have been made publicly available, including to members of the Committee, and they continue to be developed ahead of a full public consultation in a few months’ time. We are determined to ensure that the research and statistics communities are given the tools to enable them to do their jobs efficiently and effectively going into the 21st century. We want to ensure that the UK is a leader in developing statistics and research.

Question put and agreed to.

Clause 67, as amended, accordingly ordered to stand part of the Bill.

Clause 68 ordered to stand part of the Bill.

Clause 69

OFCOM reports on infrastructure etc

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

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[Louise Haigh]

I welcome the other Minister back to his place, and I look forward to the lengthy correspondence that the Cabinet Office Minister and I will be having. The Minister for Digital and Culture and I also had lengthy correspondence when he was at the Cabinet Office, and I look forward to that continuing.

Will the Minister lay out what the clause seeks to achieve? What reports would Ofcom publish under this power that it currently cannot? Would this extend to requesting and publishing information that was referenced in an earlier debate—right at the beginning on part 1—potentially in relation to existing broadband and communications infrastructure and to where Openreach and other providers are rolling out broadband in order to ensure a more effective market? The Opposition welcome all attempts by regulators and Government to make as much data open as possible, so we very much welcome the powers in the clause.

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

Clause 69 allows Ofcom to prepare and publish reports on underlying data at times it considers appropriate as opposed to at specified times, as is currently the case. The short answer to the hon. Lady’s question is yes. Before the end of the year, Ofcom will publish a “Connected Nations” report, for example, which typically goes into detail about the connectivity of the infrastructure, but there are restrictions at the moment on when these can be published. We think it is better to allow Ofcom to prepare and publish reports at times that it considers appropriate.

Question put and agreed to.

Clause 69 accordingly ordered to stand part of the Bill.

Clauses 70 and 71 ordered to stand part of the Bill.

Clause 72

Provision of information to OFCOM

[Matt Hancock]

I beg to move amendment 177, in clause 72, page 70, line 15, after “135”, insert “of the Communications Act 2003”.

This amendment makes it clear that the Act amended by clause 72 is the Communications Act 2003.

The amendment corrects a minor error to clause 72. We omitted the words

“of the Communications Act 2003”.

I consider this to be a pretty technical amendment.

Amendment 177 agreed to.

Clause 72, as amended, ordered to stand part of the Bill.

Clause 73

Information required from communications providers

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

[Louise Haigh]

I would like to put on the record again that this Bill was clearly not ready for Committee. We have just seen another example of an amendment that was completely uncalled for. In the last part, amendments had to be withdrawn that were incorrect. I hope that the proposals are properly examined in the Lords and that this is not a recurring theme throughout future legislation that this Government introduce. It is very disappointing to see the lack of preparation for this Bill.

[Claire Perry (Devizes) (Con)]

The hon. Lady is doing a marvellous job for her Front-Bench team, but having sat through several Bill Committees, I assure her that this situation is not particularly unusual. What is important is getting the Bill absolutely right and making sure that we use this opportunity to scrutinise it. We should proceed in the spirit of us all wanting the best thing and stop taking pops at the drafting team.

[Louise Haigh]

I am assured by my hon. Friend the Member for Cardiff West that this was not common practice under the last Labour Government, and I am horrified to hear that it has been common practice over the past couple of years.

[Matt Hancock]

Amendment 177, which was agreed on a cross-party basis, corrects what was in fact a printing error. I hope that the hon. Lady will withdraw her rather pernickety point. I am glad that the Committee has had the opportunity to correct the problem.

[Louise Haigh]

It is good to hear that it was the 177th amendment that the Government have had to table to this Bill.

Let us move on to clause 73. The Minister will be pleased to hear that we welcome the clause, which has clearly been drafted with consumers at its heart. The clause provides Ofcom with powers to require information that will enable and empower consumers to switch, thereby creating a much more efficient and open market with fewer barriers to entry.

Ofcom does not currently have powers to require communications providers to provide information on quality of service, such as how they are doing on customer service, complaints, fault repairs or the speed of installation, and it does not have the power to specify how it would want that information to be provided. We welcome these new powers, which will make it much easier for Ofcom to publish this important comparative information that will help consumers.

I would be grateful if the Minister expanded on the points raised in relation to clause 69. He said that BT is about to be forthcoming with information on its existing infrastructure and on the roll-out of broadband. Can he confirm whether that information has been provided? If not, when does he expect it to be provided?

Subsection (5) of proposed new section 137A of the Communications Act 2003 states that the power conferred on Ofcom

“is to be exercised by a demand, contained in a notice served on the communications provider”.

Prior to that, a draft notice will stipulate a reasonable notice period. Can the Minister give us some examples of what he would consider to be a reasonable notice period for a particular dataset? Will that be in negotiation with a provider, or will it be set by Ofcom? What will be the consequence for communications providers that refuse to comply? Finally, how quickly would he like to see Ofcom publish the publishable data after receiving them from a communications provider?

We are happy to support clause 73 stand part.

[Matt Hancock]

Clause 73 paves the way for greater access to information to help consumers make more informed decisions. The hon. Lady has set out exactly why that is needed. The clause will also enable Ofcom to require providers to collect, retain or generate data for these purposes and to ensure that consumers are easily able to access information that is most relevant to their decision. The power will enable Ofcom to require information in machine-readable formats, for example, so that third parties can mash it and provide it in a usable, meaningful and accessible way for the consumer, thereby helping things such as comparison websites, which we strongly support.

On the hon. Lady’s specific questions, the data will form part of Ofcom’s data publication before the end of the year. She asked about a reasonable notice period, which will be for negotiation with providers. It is for Ofcom to decide when it is appropriate to make a publication, and it will endeavour to do so as soon as possible. On the consequences for providers that do not supply the data, these are highly regulated markets in which Ofcom has significant powers, some of which we are enhancing elsewhere in the Bill, so there will be very serious consequences for a provider that does not abide by a requirement from Ofcom to publish. I hope that answers the questions.

Question put and agreed to.

Clause 73 accordingly ordered to stand part of the Bill.

Clause 74

Appeals from decisions of OFCOM and others: standard of review

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

[Louise Haigh]

The clause will reform the appeals process against Ofcom decisions, speeding up the process and ensuring that consumers’ interests are better prioritised. The Communications Act 2003 states clearly that Ofcom’s principal duty is to further the interests of citizens and consumers, but clearly there are issues with how the current appeals process works.

The current process is that Ofcom makes a decision following full consultation with the industry and the public; under the Competition Appeal Tribunal rules, an affected body can then appeal against the decision. Ofcom has six weeks to lodge its defence, and a month later substantive appeals are considered in a court case management conference, at which procedural and substantive points are raised. Third parties can then intervene, after which the appellant can lodge a reply. About a month before the hearing, the parties can lodge skeleton arguments. The hearing then takes place, and judgment is usually reserved. That judgment can take anything from weeks to up to a year. Parties then have about three weeks to decide whether they want to go to the Court of Appeal.

Not only is that process incredibly cumbersome, but it allows for considerable new evidence and new parties to the appeal, of which Ofcom had no knowledge at the consultation phase, to be brought forward mid-process. Under the new system, both the process of gathering evidence, including for the cross-examination of witnesses and experts, and the general treatment of that evidence are designed to be slimmed down. The system will still allow for an appeal, of course—that is only right for the sake of justice—but it will ensure that the appeals process does not unduly benefit those who can afford to litigate. It is alleged that it is currently those with the deepest pockets who bring forward the greatest number of appeals; indeed, most appellants have far deeper pockets than Ofcom has to defend itself with.

I have heard the concerns of some within the industry about the changes, as I am sure the Minister has. Although we are in favour of the Government’s proposals, I would appreciate the Minister’s response to some of those concerns. In a submission to the Committee, a group of the largest communications providers has claimed that the current appeals regime works well for consumers and has delivered consumer benefits to the tune of hundreds of millions of pounds.

[Calum Kerr]

I understand the rationale behind trying to split up the powers that Ofcom has been given and make the process slimmer, but it is quite an achievement to get BT, Sky, Virgin Media, Vodafone and O2 in agreement. I share the hon. Lady’s concern and look forward to the Minister’s response, which I hope will help to allay it.

[Louise Haigh]

I agree, and although I support the Government’s objective, it is of concern that such a wide range of communications providers—the biggest investors in communications infrastructure in the UK—are so vehemently opposed to the changes. This is exactly what the Committee stage of any Bill is designed for: to test out arguments and make sure that the right thing is being done. Will the Minister confirm what impact assessment of the proposals has been made, and what benefit he anticipates the changes will bring to consumers?

The submission that I mentioned claims that if the proposed regime had been in place, the mobile call termination case in 2007 would have led to a £265 million loss to consumers over the two-year period from 2010 to 2012. It states that

“in each of the cases cited, the Tribunal’s decision was that Ofcom’s decision had not gone far enough in consumers’ favour. The quantifiable financial impact of these appeals totalled a net benefit to consumers of around £350-400m.”

It says that the merits review

“enabled these errors to be corrected, the finding of the Government’s 2013 research was that on a JR”—

judicial review—

“standard, each of these decisions would have stood unadjusted.”

No one is saying that Ofcom will get things right 100% of the time—clearly, it will not. The new appeals process is not saying that either, but it will substantially raise the bar for appeals by allowing only regulated bodies to contest how a decision was made. Is the Minister confident that the decisions cited in the evidence from BT and the other providers would still be corrected under the new regime? The providers claim that they would not.

We have heard mixed messages about whether the proposals will bring the communications regulator in line with other utilities regulators. Ofcom told us in evidence that they would do just that, but is it not the case that the price control decisions of both Ofgem and Ofwat are subject to merits review by the Competition and Markets Authority? Will the Minister confirm why that is the case for other industries but not for communications?

On SMEs, techUK is particularly concerned that the higher bar of judicial review will have a disproportionate impact on smaller providers, which brought 17% of appeals between 2010 and 2015. I would be grateful if the Minister assured us that his Department has fully considered the impact these changes will have on SMEs, and particularly on new entrants to the market.

I understand that there will always be winners and losers in any regulatory change. The Minister will no doubt enjoy basking under the adoring gaze of TalkTalk and Three, but he will have to live with the fact that he is in BT’s and Virgin’s bad books for now. What is also clear is that for most people this appeals regime is far from well understood, as the industry claims. In fact, they would find it very difficult to understand why changes that could benefit them are being held up, sometimes for years on end, and why big communications providers are spending millions of pounds on litigation when they should be ploughing that money into helping their customers.

That is no basis on which to continue an appeals regime that leads to excessive litigation and smothers changes that may help—indeed, in some cases, may transform—consumers’ relationships with their communications providers. Clearly, during the exercise of that duty, Ofcom will be required to intervene and make a ruling, which sometimes the industry may not like.

If the broad contention on this side is that Ofcom should be given further powers to ensure that the industry acts in the best interests of consumers, there is little point in allowing an appeals process to continue that is so lengthy that it can render any changes useless. One particularly compelling example given in the evidence session was about the need for far greater switching for consumers. The chief executive of Three remarked that we are at the bottom of the class in terms of switching, and that despite nearly a decade of campaigning little has been done to get rid of provider-led switching. That was because when Ofcom tried to legislate on it, to enable consumers to switch, one of the major mobile providers was able to litigate and push the matter into the long grass, from where it has not emerged until today.

With all that in mind, and pending answers to the questions that I have put to the Minister, we are happy to support the clause.

[Matt Hancock]

That was an excellent assessment of the pros, cons and challenges around the proposed changes to appeals. Much of the analysis and thinking that the hon. Lady has just set out is what we went through in coming to the same conclusion that it is sensible to change the appeals process.

I will set out some of the detail of the changes and then I will answer the specific questions that were put. The clause alters the standard review applied by the Competition Appeal Tribunal when deciding appeals brought under the Competitions Act 2003 against decisions made by Ofcom. This is in order to make the appeals process more efficient. The changes will not apply to appeals against decisions made by Ofcom using powers under the Competition Act 1998 or the Enterprise Act 2002.

Currently, appeals can be brought and decided on the merits of a case, and this exceeds and effectively gold-plates article 4 of the EU framework directive that requires that the merits of a case are taken into account in any appeal. The result of this over-implementation is an unnecessarily intensive and burdensome standard of review that can result, as the hon. Lady set out, in very lengthy and costly appeals litigation, which can hinder timely and effective regulation, and risks Ofcom taking an overly risk-averse approach to regulating the sector properly.

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[Louise Haigh]

I completely accept that we should not have separate regulatory systems for SMEs and larger providers. Will the Minister confirm that the new judicial review process will not unduly hinder SMEs, in contrast to the current “on the merits” appeal process?

[Matt Hancock]

I have looked at that specific point and I am satisfied that the new process does not, because a judicial review can take into account those sorts of concerns but is a more efficient process of appeal.

On the point raised by the hon. Member for Berwickshire, Roxburgh and Selkirk, I should say that we have considered using the language of the directive but we do not believe that it materially changes our approach. I said I would get back to the hon. Gentleman; I was a bit quicker than even I expected.

On that basis, I hope that the use of the well-tried and well-tested judicial review will prove a more efficient regulatory basis in future.

[Louise Haigh]

The Minister has not addressed a couple of points: the potential loss to consumers that the industry claims the new system will create and the cases that would not have been brought under the existing system; and the mixed messages we have heard about whether the Bill brings Ofcom into line with other utilities regulators.

[Matt Hancock]

On the first point, I am convinced that this change will act in the benefit of consumers, because we will have a quicker regulatory approach. The big incumbents will not be able to hold up a regulatory decision through aggressive use of the appeals process. Instead, we will have a more efficient appeals process. I am convinced that this will improve the situation for consumers.

Of course, it is possible to pick out individual cases that may have gone the other way or may not have been able to be considered under the new approach. First, it is not possible to know whether that is the case without testing them. Secondly, looking at individual cases out of context does not allow us to step back and look at the effective operation of the system as a whole. I am sure the hon. Lady agrees with that approach.

[Louise Haigh]

But is it not the point that those decisions were made by Ofcom and were incorrect, according to the tribunal? They were not made with consumers’ best interests at heart and they would not have been appealed under the new system because the method by which they arrived at those decisions was correct. Is there any scope in the proposals to allow certain examples, such as those put forward by the industry, to be given a merits-based review, as with price control reviews by Ofgem?

[Matt Hancock]

The cases that the hon. Lady and the industry cited have been assessed, and we believe that judgment under a JR system would have gone the same way as under the old system—but quicker. I hope that deals with that concern. JR is used in a large number of other areas. Of course there are specific other cases in which it is not, but it is a strong basis of appeal that is regularly used in public sector decisions. If material error is present, it can then be addressed by judicial review. I hope I have answered the hon. Lady’s questions.

Question put and agreed to.

Clause 74 accordingly ordered to stand part of the Bill.

Clause 75

Functions of OFCOM in relation to the BBC

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

[Louise Haigh]

We do not wish to oppose Ofcom’s new role in regulating the BBC, for which clause 75 provides—as the Minister knows, we supported the BBC charter agreement last week in the House—but we have some concerns, which are shared by the BBC, about how Ofcom’s new role will work out in practice.

Distinctiveness is an absolutely vital characteristic of the BBC and its services. It is one of the things that justifies its public funding. The BBC should deliver its public purposes and mission, and it should serve all audiences, through distinctive services. Critically, distinctiveness should be judged at the level of services, rather than programmes. That does not mean that the BBC should focus on “market failure” programming or never make a programme that the commercial sector might make. Instead, the test should be that every BBC programme aspires to be the very best in its genre. Overall, the range of programmes in the BBC services should be distinguishable from its commercial competitors. There is a concern that Ofcom could be too prescriptive in the standards it expects of the BBC. For example, it might focus on quotas, such as the number of religious or news hours, rather than a substantive, qualitative assessment, and rather than a standard, such as high-quality journalism.

Evidence shows that BBC services are distinctive and have become more so in recent years. Audiences agree: more than 80% of the people responding to the Government’s charter review consultation said that the BBC serves audiences well, almost three quarters said that BBC services are distinctive and about two thirds said that they think it has a positive impact on the market.

The definition of distinctiveness in the agreement and the framework for measuring it are therefore critically important. The section of the charter agreement that relates to the new powers that will go to Ofcom requires Ofcom to set prescriptive and extensive regulatory requirements, which must be contained in an operating licence for BBC services. Ofcom must have a presumption against removing any of the current requirements on the BBC—there are about 140 quotas in the BBC’s existing service licences—and seek to increase the requirements overall by both increasing existing requirements and adding new ones.

Ofcom has been given detailed guidance about what aspects of distinctiveness it must consider for the BBC’s TV, radio and online services. That follows an old-fashioned approach to content regulation based on prescribing inputs, rather than securing audience outcomes, such as quality and impact. The BBC is concerned that it will introduce a prescriptive and inflexible regulatory framework that could restrict the BBC’s editorial independence and creativity.

Clarity about the definition of distinctiveness would be welcome. It should be applied to services, not individual programmes. The extensive content quotas in clause 2 of the charter should be a response to a failure to be distinctive, not the starting point.

[Christian Matheson]

Does my hon. Friend share my concern that, when the Government came up with the idea of distinctiveness, they themselves were not absolutely clear what it meant? Frankly, we are still at the stage at which the Government might say, “We don’t know what it is, but we might recognise it when we see it.”

[Louise Haigh]

That is a very great concern. There is a serious risk of confusion about how the new regulatory regime is going to work for both Ofcom and the BBC. To be frank, I do not think quotas are appropriate in this respect. I have got nothing against quotas—I was selected on an all-women shortlist, which aim to increase the number of women in the parliamentary Labour party.

[Matt Hancock]

You’d have got through anyway.

[Louise Haigh]

The Minister is absolutely correct that I would have won it on an open shortlist. It is very kind of him to say that.

But quotas in this respect restrict creativity and innovation, which are prerequisites of distinctiveness. Ofcom, as an independent regulator, should have the freedom to determine how best to regulate the BBC to secure policy goals. I would be grateful if the Minister confirmed what consideration has been given to the impact this will have on the quality programming we have come to expect from the BBC.

Finally, there is a concern that Ofcom may prejudice value for money over public interest. It would significantly reassure the BBC and the public, and would provide a greater degree of certainty over how Ofcom will behave in its enhanced regulatory role, if the same principles applied to the BBC charter—that there must be parity between public interest and value for money—were applied to Ofcom as well.

[Matt Hancock]

I am glad we have cross-party support for the clause, as we do for the BBC charter. It is incredibly helpful to the BBC’s role that it knows that the basis on which it operates and is regulated is supported on a cross-party basis.

It is very important—I will read this clearly on to the record—that distinctiveness as set out in the framework agreement is about BBC output and services as a whole, not specific programmes. Ofcom has the capability to make judgments about the overall distinctiveness of BBC output and services as a whole. That is the basis on which we expect it to operate under this legislation.

The hon. Lady asked whether there should be guidance underneath that. As she set out, there is existing guidance, and the public are very happy in large part with the result of that. I reject the idea that we cannot have any detail underneath the basis that distinctiveness should be decided on BBC output and services as a whole. At the moment, as she set out, there is detail, and it works well.

This is essentially an incremental approach. The BBC already faces this guidance and operates successfully. The clause is not prescriptive in that regard. Ofcom needs to operate in a reasonable way and exercise its judgment to ensure that we get the much-loved BBC operating as well as it can, as it has in the past and as it should in the future.

Question put and agreed to.

Clause 75 accordingly ordered to stand part of the Bill.

Clause 76

TV licence fee concessions by reference to age

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[Louise Haigh]

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

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

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

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

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

“We will guarantee your financial security”.

Those benefits were all introduced by the previous Labour Government.

[Kevin Brennan (Cardiff West) (Lab)]

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

[Louise Haigh]

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

[Nigel Huddleston (Mid Worcestershire) (Con)]

Does the hon. Lady accept that this measure was not imposed on the BBC? The deal was negotiated with the BBC in exchange for other things, including opening up revenue opportunities such as by closing the iPlayer loophole.

[Louise Haigh]

It is interesting that the hon. Gentleman makes that point, because I was just about to say that I am sure the Government will argue that the BBC has been rewarded handsomely in the charter renewal process and that the BBC will decide its funding policy for over-75s within that context.

From 2018, the BBC is being asked to shoulder £200 million of the annual cost of free TV licences, and it will assume the full £745 million annual bill from 2020—that amounts to more than a fifth of the entire BBC budget. It is more than enough to fund Radio 4 ten times over, and it is almost enough to fund the entire budget of BBC 1. The BBC has been asked to take control of setting the entitlement for over-75 licences because the Government know that they cannot afford it at its current rate. We accept that the BBC has asked for responsibility for this policy, but that is because the cost of the policy was enforced on it through negotiations. It is outrageous that the BBC is being asked to fund it at all.

[Kevin Brennan]

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

[Louise Haigh]

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

[Nigel Huddleston]

Is the hon. Lady suggesting that the BBC is not capable of effective negotiations? Its senior executives include Labour’s former Secretary of State for Culture, Media and Sport.

[Louise Haigh]

The point is that, as my hon. Friend the Member for Cardiff West said, the BBC was essentially in negotiations with a gun to its head. It was not a free and fair negotiation. The individual to which the hon. Gentleman just referred does not sit on the BBC board, and I do not believe he was involved in the negotiations with the Government.

The fact that we have reached this point—that the BBC was in essence forced to agree to become an arm of the Department for Work and Pensions—says a lot about the overbearing, menacing way the Government treated an organisation that they should cherish, and the cavalier disregard they have shown to the over-75s to whom they made a promise last year. Call me old fashioned, but I believe that promises should be kept. Behaviour like the Government’s brings disrepute on all Members from all parties. It makes people think that it is exactly what politicians do: we promise things in elections that we have absolutely no intention of delivering. It is a problem for all Members, whether Government or Opposition.

Despite public outcry, the Government have still not ruled out further stick-ups of the type that have got us into the position we are in now. They have refused to establish a transparent process to set the licence fees of the future. The Opposition do not consider it a done deal. With new clause 38, we are seeking to guarantee free TV licences to over-75s. That would give the responsibility for the policy and the funding of TV licences back to the Government, where it belongs. There would be no more wriggling out of a decision that should be laid firmly at the Minister’s door.

If the Conservatives want to rid themselves of the cost of the free TV licence, they should have the courage to say that they are doing it. They should have put it in their manifesto and campaigned on it; they should not have created a non-ministerial branch office of the DWP in the BBC to do their dirty work for them. That is why if our new clause was accepted we would be calling for the scrapping of clause 76 in its entirety.

The new clause is very clear: it should be for the Secretary of State for Work and Pensions to specify the conditions under which people are entitled to concessions, and to provide the BBC with the necessary funding to cover the cost of those concessions. That is how it was set up under the previous Labour Government, and it is under those conditions that it should continue. The responsibility should not be delegated to any body other than the Government themselves. They should not be allowed to get away with delegating the responsibility and effectively forcing the BBC to take the rap.

This is a point of principle for the Opposition. We cannot accept a policy that takes the responsibility for even a tiny part of our social security system and gives it to an organisation with no direct accountability to the electorate. Unaccountable organisations do not have to face the consequences of their decisions, especially given the announcement we have heard today from the chief executive of Her Majesty’s Revenue and Customs. Even HMRC does not want to see private sector involvement in decisions on tax credits. A non-ministerial body has said that the private sector should not be involved in who does or does not receive tax credits, or any other type of benefit. That is exactly the argument we are making.

Private sector organisations are the wrong bodies to be involved in deciding who gets benefits, not only because they are incentivised by profit but because they are unaccountable. They do not have to stand for election based on those decisions, and therefore they should not be allowed to make them. It is the equivalent of outsourcing children’s services to Virgin and, in the process, asking them to pick up the tab for child benefit and requiring them to decide who gets it. Our social security system is far too precious for BBC executives, however noble their intentions or professional their considerations, to decide who is and who is not entitled to a benefit of any description. Labour introduced the free TV licence for the over-75s. It cannot be a BBC executive, unaccountable to the public and unaccountable to all our constituents, who calls time on it.

If the amendment falls, it will be high time that the Government were honest about what they were doing and honest with the voters. If they are not, Labour will do everything in its power to make it clear to those millions of over-75s exactly what is happening: their TV licence entitlement will be reduced or taken away not by the BBC, but by the Government who knowingly and cynically engineered the change.

[Calum Kerr]

What a fantastic presentation of a new clause, which I absolutely agree with.

Having looked into this whole area, I find it staggering. The BBC is faced with the prospect of huge cuts, but I am concerned that it is suddenly being passed the responsibility for setting policy. The Bill shows that the Government like to outsource as much as possible, because they outsourced most of the content to Ofcom in the early stages. However, the proposal relating to free TV licences for the over-75s is an absolute abdication of responsibility. We have all been invited to enough Age Concern events to know how isolated elderly people feel and how important television is for them. This is fundamentally welfare policy.

--- Later in debate ---

[Christian Matheson]

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

[Louise Haigh]

I am appalled by what is, as my hon. Friend is clearly laying out, a naked attempt to evade responsibility. Does he share my concern that this is the beginning of a slippery slope? Where exactly does this end? Once the principle that the Government are attempting to put in the Bill is in legislation, to whom else can they outsource responsibility for their social security policies?

[Christian Matheson]

My hon. Friend makes a good point. I am cautious about straying too far from the point under discussion, but she says that this is the beginning of a slippery slope. It is not, because the Government have form in this area. I look to you, Mr Streeter, for a little bit of latitude here.

There are, for example, massive cuts to local government funding; the Government have taken huge amounts of money away from local authorities, expect them to come up with cuts and reductions in services, and then say, “It is nothing to do with us; blame your local authority.” There is one point on which I would disagree with my hon. Friend the Member for Sheffield, Heeley: this is not the beginning of a slippery slope; it is a continuation of form. The Government have been rumbled, and they know it.

--- Later in debate ---

[Graham Jones]

The hon. Gentleman anticipates what I was moving on to, which is that the policy is also about passing responsibility. The Government want to shape the decision and take the credit where there is an upside, and to dump it on the BBC where there is a downside. That is what this is about—so the BBC is left with it.

Suppose the Government wanted to offer further icing on the cake and have over-70s get the free TV licence. The Government would take the credit for that, but any difficult decisions, such as only over-80s getting the free licence and the 75-year-olds losing out, will of course be the BBC’s fault. We can see exactly what is happening and the duplicity of the argument. The Government are setting the BBC up with a dilemma: it will take the stick for any downsides, but for any upsides the Government will be up there on the podium, all backslapping each other, saying, “Great social policy!”

There is no escaping that, and I do not think that the general public are fooled—they can see. It would make perfect sense for the Minister to accept new clause 38, because the public see what the Government are doing with that shift of responsibility for the over-75s. The public will not be fooled by the shift; they can see precisely what Ministers are trying to achieve. The public, too, will be concerned and asking how it affects them, the ordinary person. Will the BBC, faced with further cuts, have to say, “Well, we’re sorry, it’s only over-80s who will get it”? Decisions and responsibilities are outsourced to the BBC, and the licence fee payer, in particular those coming up to that age, will be wondering, “Hang on, I’m going to get the worst of both worlds—either a Tory Government or the BBC cutting my licence fee.” I do not think that the public will be too happy. They will not not see through this—sorry about the double negative.

[Louise Haigh]

My hon. Friend is right. This predates the Minister’s time in post, so I very much hope that he takes the opportunity to go back on his predecessor’s decision. The Government thought they were being very clever with this move to outsource and put the duty on the BBC, but as my hon. Friend says, everyone will see right through this. Nobody will blame the BBC. The responsibility will lie clearly with the Government, and I hope that they are listening and will act on his points.

[Graham Jones]

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

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The second point is that the BBC, as part of the negotiation process, has been given guaranteed increases in the licence fee. Under the previous settlement, that did not occur. More money from licence fee payers is going into the public sector broadcasts that many Government Members love. The other key point is that we are seeing an end to top-slicing. Under the previous settlement, top-slicing was money that went from licence fee payers to the private sector in order to license BT—one of the biggest beneficiaries—to provide for broadband investment. That was not directly helping broadcasters. Money going from the BBC to private sector broadband providers has now ended.

[Louise Haigh]

It is interesting to hear that the hon. Gentleman thinks that the Government have ended top-slicing. What is his opinion of the contestable fund that should have gone back to the BBC? There was an underspend in the top-slicing he mentioned. We have had no commitment from the Minister, so that will be a one-time-only thing, and we do not know that it will continue after the three-year period.

[The Chair]

Order. I am keen that we focus on the new clause and on clause 76 stand part, and not allow ourselves to get into a wider discussion about the future of the world and the BBC as we know it.

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[Mark Menzies]

If you will forgive me, Mr Streeter, I will not get into the debate of whether Beverley and Holderness or Hyndburn should be the ultimate beneficiaries, because that is ultimately about Lancashire and Yorkshire—a subject I will stay well away from.

I conclude by saying I appreciate the efforts of the Opposition in raising this point, but we have to appreciate that, at the end of this settlement, the BBC will have more resources going into it.

[Louise Haigh]

Will the hon. Gentleman give way?

[Mark Menzies]

I hope the hon. Lady will forgive me; I have given way to her several times. The BBC will have more resources as a result of this. The over-75 licence fee will become the responsibility of the BBC, but the indications from the Government are clear: we are committed to free licences for the over-75s, as we promised in our manifesto.

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[Matt Hancock]

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

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

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

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

[Louise Haigh]

Will the Minister give way?

[Matt Hancock]

Of course I will give way—if the hon. Lady can explain why she disagrees with her boss.

[Louise Haigh]

I made it clear that we support the BBC charter, but my boss—as the Minister calls him—and I also made it clear that we do not support this element of it.

I have two more quotations to put to the Minister. In the Lords debate on the charter two weeks ago, the assessment of the former BBC director-general, John Birt, was that

“the impact…will be—over the span of a decade—to take almost exactly 25% out of the real resources available to the BBC for its core services. A massive reduction in programming is therefore simply unavoidable.”—[Official Report, House of Lords, 12 October 2016; Vol. 774, c. 1950.]

The former chairman of the BBC Trust, Chris Patten, then said:

“I agree with what the noble Lord, Lord Birt, said about the licence fee settlement—not just the finance on the table but the way it was done. It was a scandal to do it like that”.—[Official Report, House of Lords, 12 October 2016; Vol. 774, c. 1954.]

The Opposition absolutely agree.

[Matt Hancock]

That is not related to clause 76. What is related to the clause is the fact that the BBC agrees it has the funding it needs, as I set out and as agreed by the shadow Secretary of State for Culture, Media and Sport.

My next point is about why we are transferring the power and why it would be wrong to adopt new clause 38, which would undermine the BBC’s funding settlement. The reason is that the BBC asked for it. It is incumbent on those who propose new clause 38 and oppose clause 76 to explain why they disagree with the BBC, with this strong settlement and with all those who say that we have provided a good funding settlement for the BBC. Instead of pressing the new clause, I suggest that the hon. Lady should support clause 76, to put the BBC’s funding on a sustainable footing for years to come.

[Louise Haigh]

The hon. Member for Fylde said that he opposed our new clause on two grounds, of which the first was that the BBC provides free TV licences. It does, but we have absolutely no guarantee that it will continue to do so.

The Minister is correct that the BBC asked for this, but as I referred to earlier, the BBC asked for the policy on who should and should not get a free TV licence because the funding was forced on it. It asked for that funding because it wants to reduce the number of people who get free TV licences in the future—it as much as said that to us. We do not want the BBC to have that policy; nor do we want it to have the funding settlement. It is a principle that we fundamentally oppose, so we intend to test the will of the Committee.

[The Chair]

We will come to the new clause later in our proceedings, but right now the question is that clause 76, as amended, stand part of the Bill.

Question put and agreed to.

Clause 76, as amended, ordered to stand part of the Bill.

Clause 77

Direct marketing code

[Louise Haigh]

I beg to move amendment 195, in clause 77, page 75, line 22, leave out “direct marketing” and insert

“any form of marketing, including direct marketing, or customer engagement”.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 196, in clause 77, page 75, line 27, leave out “direct marketing” and insert “marketing and customer engagement”.

Amendment 197, in clause 77, page 75, line 40, leave out subsection (4) and insert—

‘(4) In this section—

“customer engagement” means the interactions initiated between a business and an individual or group of individuals for marketing and other business purposes;

“direct marketing” means the processing and use of personal information for marketing purposes;

“marketing” means the business processes through which goods and services are moved from being concepts to things that customers and potential customers want.”

New clause 34—Power of Information Commissioner to take action on unsolicited communications—

‘(1) The Privacy and Electronic Communications (EC Directive) Regulations 2003 (S.I.2003/2426) are amended as follows.

(2) In Regulation 31(1), between “sections 55A to 55E” and “of the Data Protection Act 1998” insert “and section 61”.

(3) In Schedule 1, after paragraph 8B insert—

8C In subsections (1) and (3) of section 61—

(a) for “an offence under this Act” there shall be substituted “a contravention of the Privacy and Electronic Communications (EC Directive) Regulations 2000”;

(b) for “guilty of that offence” there shall be substituted “liable for that contravention”; and

(c) for “proceeded against and published accordingly” there shall be substituted “served with a notice, proceeded against of punished accordingly”.’

This new clause seeks to allow the Information Commissioner’s Office to take action against company directors for breaches not only of the Data Protection Act 1998, but of the 2003 EU regulations on unsolicited communications.

[Louise Haigh]

Thousands of individuals are plagued by nuisance calls every day. I will turn to that in my remarks on clause stand part, but I shall speak to the amendments and new clause first. We welcome the inclusion in the Bill of a direct marketing code. If it works effectively, it will contain practical guidance and promote good practice in direct marketing activities. It will help to guide the experiences of companies and individuals, but direct marketing, as we know, is fairly narrowly defined and refers to the direct selling of products and services to the public. It is covered under the Data Protection Act 1998 and the privacy and electronic communications regulations. The rules cover not only commercial organisations but not-for-profit organisations such as charities and political parties. The rules for direct marketing are very clear and are becoming —absolutely rightly—increasingly tougher.

There are two types of nuisance call: live marketing calls—unwanted marketing calls from a real person—or automated marketing calls, which are pre-recorded marketing messages that are played when someone answers the phone. They are covered by a raft of legislation and regulation attempting to clamp down on that type of behaviour. Our amendments attempt to broaden the definition of the new direct marketing codes, so the law will cover not only direct consumer marketing but consumer engagement.

Direct marketing uses personal data and demographic insights relating to residence and the habits of people previously to market to people individually and directly. Consumer engagement is much broader and involves the use of personal data to engage with customers for a broad set of business processes, which include, but are not restricted to, direct marketing. TV advertising, for example, is not considered to be direct marketing, but TV advertising campaigns can be designed with information derived from consumer data and used to target broad groups of consumers based on data derived from individuals.

In our view, the direct marketing code, which we very much welcome, and the Information Commissioner’s guidance in this field should cover this broader use of individuals’ data. As we have said throughout, we want data to be used responsibly, and this simple amendment would extend the code to apply to all uses of data in consumer marketing, and not just the kind that is used to directly target people.

[Matt Hancock]

What a welcome return to sense from the Opposition. The amendments tabled to clause 77 relate to the definition of direct marketing, which, as defined in the Data Protection Act, is

“the communication (by whatever means) of any advertising or marketing material which is directed to particular individuals.”

The definition captures any advertising or marketing material, not just commercial marketing, which is a point that the hon. Lady made, as well as all promotional material, including material promoting the aims of not-for-profit organisations. It also covers any messages that include some marketing elements, even if that is not the main purpose of the message.

The privacy and electronic communications regulations put direct marketing by electronic means into the scope of the definition, thus making it applicable to telephone calls, both live and automated, faxes, emails, text messages and other forms of electronic communication. It is essential that the definition of direct marketing in the PECR remains aligned with the definition in the Data Protection Act, so that the Information Commissioner’s Office’s powers of enforcement for nuisance calls to remain effective and enforceable in law.

New clause 34 is intended to amend the PECR, to extend to company directors and other officers liability for breaches when those officers have allowed breaches to occur or when breaches have happened because of something they have failed to do. In that way, the Information Commissioner could impose fines on company officers rather than just on companies as at present. The proposal relates to nuisance calls made by organisations. They are a blight on society, causing significant distress to elderly and vulnerable people in particular.

--- Later in debate ---

[Calum Kerr]

Excellent. I thank the Minister for that and given that comment, rather than outlining the full case for why I think accepting new clause 34 is a good idea, I will embrace the positivity and happily sit down, without pressing my new clause, knowing that the Government will introduce a similar measure.

[Louise Haigh]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

[Graham Jones]

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

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

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

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

--- Later in debate ---

[Louise Haigh]

We very much welcome the new clause and are pleased that, once again, the Government have heeded the Opposition’s advice. We said clearly at the beginning of the process that, in regard to the digital skills that are needed to support and improve the digital economy, the Bill was lacking. I want to put on record the fantastic work already going on across the UK in supporting adults to learn digital skills, not least by organisations such as the Tinder Foundation and community organisations—I will abuse my position now and reference organisations such as the Heeley Development Trust and Heeley City Farm in my constituency, which through community work already skill up adults in digital skills. We very much support the clause and look forward to the Government taking our advice more in the future.

Amendment 183 agreed to.

Clause 83, as amended, ordered to stand part of the Bill.

Clause 84 ordered to stand part of the Bill.

New Clause 26

Qualifications in information technology: payment of tuition fees

‘(1) The Apprenticeships, Skills, Children and Learning Act 2009 is amended as follows.

(2) In section 88(1) (qualifications for persons aged 19 or over: payment of tuition fees), for “1(a) or (b)” substitute “1(a), (b) or (ba)”.

(3) In paragraph 1 of Schedule 5 (qualifications for persons aged 19 or over), after paragraph (b) insert—

(ba) a specified qualification in making use of information technology;”.

(4) After paragraph 5 of that Schedule insert—

“Power to specify qualification in information technology

5A The level of attainment demonstrated by a specified qualification in making use of information technology must be the level which, in the opinion of the Secretary of State, is the minimum required in that respect by persons aged 19 or over in order to be able to operate effectively in day-to-day life.”’—(Matt Hancock.)

This clause creates an obligation on the Secretary of State to ensure that courses of study for qualifications in information technology are free of charge for persons in England aged 19 or over. The qualifications will be specified in regulations under Schedule 5 to the Apprenticeships, Skills, Children and Learning Act 2009.

Brought up, read the First and Second time, and added to the Bill.

New Clause 27

Digital additional services: seriously harmful extrinsic material

After section 24 of the Broadcasting Act 1996 (digital additional services) insert—

“24A Duty to prevent access to seriously harmful extrinsic material

(1) In carrying out their functions, OFCOM must do all that they consider appropriate to prevent digital additional services from enabling members of the public to access seriously harmful extrinsic material.

(2) “Seriously harmful extrinsic material”, in relation to a digital additional service, means material that—

(a) is not included in the service, and

(b) appears to OFCOM—

(i) to have the potential to cause serious harm, or

(ii) to be likely to encourage or incite the commission of crime or lead to disorder.”’ —(Matt Hancock.)

This new clause would require OFCOM to seek to prevent digital television additional services enabling access to seriously harmful content that does not form part of the service, for instance by linking to content streamed from the internet. OFCOM could do this by imposing licence conditions in relation to such services.

Brought up, read the First and Second time, and added to the Bill.

New Clause 28

Suspension of radio licences for inciting crime or disorder

‘(1) In Chapter 2 of Part 3 of the Broadcasting Act 1990 (sound broadcasting services), for section 111B (power to suspend licence to provide satellite service) substitute—

“111B  Suspension of licences for inciting crime or disorder

(1) OFCOM must serve a notice under subsection (2) on the holder of a licence granted under this Chapter if they are satisfied that—

(a) the licence holder has included in the licensed service one or more programmes containing material likely to encourage or incite the commission of crime or to lead to disorder,

(b) in doing so the licence holder has failed to comply with a condition included in the licence in compliance with section 263 of the Communications Act 2003, and

(c) the failure would justify the revocation of the licence.

(2) A notice under this subsection must—

(a) state that OFCOM are satisfied as mentioned in subsection (1),

(b) specify the respects in which, in their opinion, the licence holder has failed to comply with the condition mentioned there,

(c) state that OFCOM may revoke the licence after the end of the period of 21 days beginning with the day on which the notice is served on the licence holder, and

(d) inform the licence holder of the right to make representations to OFCOM in that period about the matters that appear to OFCOM to provide grounds for revoking the licence.

(3) The effect of a notice under subsection (2) is to suspend the licence from the time when the notice is served on the licence holder until either—

(a) the revocation of the licence takes effect, or

(b) OFCOM decide not to revoke the licence.

(4) If, after considering any representations made to them by the licence holder in the 21 day period mentioned in subsection (2)(c), OFCOM are satisfied that it is necessary in the public interest to revoke the licence, they must serve on the licence holder a notice revoking the licence.

(5) The revocation of a licence by a notice under subsection (4) takes effect from whatever time is specified in the notice.

(6) That time must not be earlier than the end of the period of 28 days beginning with the day on which the notice under subsection (4) is served on the licence holder.

(7) Section 111 does not apply to the revocation of a licence under this section.”

(2) In section 62(10) of the Broadcasting Act 1996 (application of sections 109 and 111 of the 1990 Act to digital sound programme services) for the words from “section 109” to “1990 Act” substitute “sections 109, 111 and 111B of the 1990 Act (enforcement)”.

(3) In section 250(3) of the Communications Act 2003 (application of sections 109 to 111A of the 1990 Act to radio licensable content services) for “111A” substitute “111B”.’—(Matt Hancock.)

This new Clause gives OFCOM power to suspend immediately, and subsequently revoke, the licence of any licensed radio service if material is included that is likely to encourage or incite crime or lead to disorder. It replaces a power applying only to satellite and cable services.

Brought up, read the First and Second time, and added to the Bill.

New Clause 29

Power to apply settlement finality regime to payment institutions

In Part 24 of the Financial Services and Markets Act 2000 (insolvency) after section 379 insert—

‘Settlement Finality

“379A Power to apply settlement finality regime to payment institutions

(1) The Treasury may by regulations made by statutory instrument provide for the application to payment institutions, as participants in payment or securities settlement systems, of provision in subordinate legislation—

(a) modifying the law of insolvency or related law in relation to such systems, or

(b) relating to the securing of rights and obligations.

(2) “Payment institution” means—

(a) an authorised payment institution or small payment institution within the meaning of the Payment Services Regulations 2009 (S.I. 2009/209), or

(b) a person whose head office, registered office or place of residence, as the case may be, is outside the United Kingdom and whose functions correspond to those of an institution within paragraph (a).

(3) “Payment or securities settlement system” means arrangements between a number of participants for or in connection with the clearing or execution of instructions by participants relating to any of the following—

(a) the placing of money at the disposal of a recipient;

(b) the assumption or discharge of a payment obligation;

(c) the transfer of the title to, or an interest in, securities.

(4) “Subordinate legislation” has the same meaning as in the Interpretation Act 1978.

(5) Regulations under this section may—

(a) make consequential, supplemental or transitional provision;

(b) amend subordinate legislation.

(6) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”’—(Matt Hancock.)

The inserted section enables the Treasury to apply a settlement finality regime to payment institutions. The current settlement finality regime for payment systems and securities settlement systems is in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I 1999/2979).

Brought up, read the First and Second time, and added to the Bill.

New Clause 30

Bank of England oversight of payment systems

“Schedule (Bank of England oversight of payment systems) extends Part 5 of the Banking Act 2009 (Bank of England oversight of inter-bank payment systems) to other payment systems; and makes consequential provision.”—(Matt Hancock.)

The new clause introduces new Schedule NS2 which extends the Bank of England’s oversight of payment systems, by removing the current restriction that limits the Bank’s oversight to systems for payments between financial institutions.

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Strategic review of sharing telecommunications infrastructure

‘(1) Within six months of this Act coming into force, the Secretary of State shall commission a strategic review of the sharing of telecommunications infrastructure and shall lay the report of the review before each House of Parliament.

(2) The review under subsection (1) shall consider measures to maximise the sharing of telecommunications infrastructure by telecommunications service providers.’—(Calum Kerr.)

Brought up, and read the First time.

[Calum Kerr]

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

--- Later in debate ---

[Matt Hancock]

I can do better than merely asking the Select Committee, although I do think that Select Committees do important reports and should not be denigrated. Ofcom has also been given a statutory duty to provide a report to the Secretary of State every three years on the state of the UK’s communications infrastructure, including the extent to which UK networks share infrastructure. That is precisely what the new clause asks for as a one-off. I assure the hon. Gentleman that the reports will happen regularly. The next three-yearly report is due in 2017, which is the same time that new clause 1 specifies for its review.

Moving on to new clause 20, we recognise the importance of improving mobile coverage. I support the intention behind it, but I do not think a statutory review is necessary at this time. We already have building blocks in place to deliver extensive mobile connectivity, and it is happening. The changes that we have debated today will give Ofcom the ability to provide data to ensure that we know how effective mobile connectivity is. We have legally binding licence obligations to ensure that each mobile operator provides voice coverage to at least 90% of the UK land mass. Taken together, 98% of the UK will have a mobile signal by the end of 2017, according to the agreements.

[Louise Haigh]

Does the Minister envisage, then, that Ofcom will gather data to produce reports on the extent of mobile coverage against the Government targets set with mobile network operators?

[Matt Hancock]

I do expect that. I can confirm my expectation that that is what Ofcom will do.

[Louise Haigh]

How often does the Minister expect Ofcom to produce those reports?

[Matt Hancock]

We just changed the rules so that instead of being restricted to producing such reports three times a year, Ofcom can do so whenever it thinks it appropriate. That will provide for Ofcom to be able to do so as much as possible, but I committed earlier today to having a connected nations report before the end of this year. I hope that that provides for what the hon. Lady seeks in new clause 20 and that the hon. Members will not press their new clauses.