Digital Economy Bill (First sitting)

Nigel Huddleston Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 11th October 2016 Public Bill Committees

[Christian Matheson]

Not exactly.

[Nigel Huddleston (Mid Worcestershire) (Con)]

Q Far fewer people switch broadband and phone providers than gas or electricity, for example. Do you support the Government’s published principles of switching, which will make it easier for consumers to switch?

Baroness Harding: Yes, completely. I think it is extremely confusing for consumers, because how you switch depends on which network you are with today, and which one you are going to. It is not a level playing field among competitors, so, for example, someone leaving TalkTalk who takes mobile phone, broadband and TV—a proper quadplay customer—does not have to speak to TalkTalk at all, as they should not. They head off to whomever they want to go to, and the switching process will work its way through. On the other hand, someone leaving Virgin and going to BT, or leaving Sky TV and coming to TalkTalk, has to speak to Virgin or Sky respectively. We and, I think, Three as well have been campaigning for simpler switching for eight years. Finally we have a Bill that is very much on the consumer side, that will make switching easier and competition stronger. I think it is a great thing.

Sean Williams: And BT completely supports the position.

David Dyson: Three has campaigned for more than a decade on this issue. It is a complete joke that it has taken so long, and it fundamentally goes back to the point that Ofcom needs more powers to make decisions that are in the consumer interest. We are the bottom of the class from a global perspective, in terms of switching. I think Papua New Guinea ranks alongside us as the only country that still has donor-led porting. It is a joke. Ofcom tried to legislate on that five years ago, and Vodafone litigated on a technicality and won. Since then it has been kicked into the long grass. It is a major issue, but the more fundamental issue is that Ofcom does not have the power, right now, to make decisions that are fully in the interests of consumers and competition.

[Nigel Huddleston]

Q Baroness Harding, you mentioned that this is a consumer-friendly Bill in various degrees. Mr Dyson and Mr Williams, are there any other elements of the Bill that you see as consumer friendly that would benefit my constituents, for example?

David Dyson: Absolutely. The electronic communications code reform is critical in being able to roll out more coverage, more capacity and better quality from a mobile perspective. That is a really important step. We hear a lot about coverage, capacity and quality. Ofcom recognises that there is a major issue in consistency of access not just for operators across the country, but for different technologies. That will certainly help, but for me the most important element of the Bill is effectively to give Ofcom the powers to create competition in this market.

Fundamentally for us, the most important decision that Ofcom needs to take in mobile in the next five years is going to happen before the Bill comes through in that spectrum. The UK is bottom of the class not only in mobile number portability, but in spectrum distribution in this market. It is the most fundamental input in terms of a level competitive playing field and Ofcom is about to take that decision in the context that it is always worried about being litigated. The facts speak for themselves. We have a terrible position in the UK right now and I am worried that it will not get any better unless Ofcom has more powers.

[Christian Matheson]

Q I am hearing mixed messages about this industry and its ability to achieve a USO. On one hand, we hear that market forces will achieve it and, on the other hand, we hear that Ofcom does not have enough power and that there is a fear of litigation. Should this Bill be giving greater powers to Ofcom? For example, in areas such as Devizes, which Claire Perry talked about, where there are broadband not spots, should Ofcom deem a provider to provide for that area?

Baroness Harding: The key thing in the Bill is to reform the appeals regime. As David Dyson has just alluded to, between 2008 and 2013, which are the most up to date stats I could get last night, Ofcom accounted for just under 50% of all cases in the Competition Appeal Tribunal. Our industry is important, but it is not that important compared with the whole of the rest of competition issues because the standard of appeal is much lower in telecoms than in any other regulated sector. That means there is a very cautious regulator.

BT has managed to raise $45 million from private equity funds to fund its litigation pot. Ofcom spent £10 million in the last two years on litigation. That is awful use of taxpayers’ money. It means you have an industry that is used to appealing every single decision the regulator takes, so the regulator is too cautious. That is why we are saying, “Give them the powers and competition will do the job for you.”

Sean Williams: I am sorry, but I completely disagree with that point. First, it is not true to say that everything gets appealed. BT did not appeal a charge control this very year that took a billion pounds of profitability out of BT—in fact out of Openreach—over a three-year period. We did not appeal the previous charge control, which did a similar thing and we did not appeal the one before either.

Ofcom is an extremely powerful regulator that is accountable to nobody but the Competition Appeal Tribunal. No one in the Government can tell it what to do. It has extremely wide discretion. You will not get better decisions out of Ofcom if you reduce the standard of appeal to judicial appeal standard. Is it reasonable, is it fair, is it just that Ofcom can take £3 billion of shareholders’ equity value away from them on a judicial review standard? It is not. It is thoroughly unjust.

To keep Ofcom accountable, to keep its decisions high quality and to comply with the regulatory scheme, it is of the utmost importance to require an appeal on its merits. It is required across the communications sector across the whole of the European Union. It is not by any means unique. Ofcom makes many very impactful decisions and that is why it gets many of its decisions appealed to the Competition Appeal Tribunal, very often by the small players in the industry. The organisation that is appealing Ofcom’s most recent charge control is CityFibre Holdings, which thinks that Ofcom’s decision to drive down Openreach prices will kill off its business plan, not just Openreach’s. It is not BT that is appealing that decision. It is very important that the one piece of this that really needs to come out is the change to the appeal regime.

It is also true to say that the Supreme Court of the United Kingdom, only about two years ago, was absolutely clear that the scheme provides for an appeal on the merits.

David Dyson: There are two important points on this. First, Three is 100% supportive of the changes in the Bill in this regard. Secondly, it is really important to note that all the Bill proposes to do is raise the standard of appeal that Ofcom has to the same level as regulators in other industries, which does not feel excessive to me.

Sean Williams: Except that Ofcom has many more powers than any other regulator, including a dispute resolution power that is not available to any other sectoral regulator. That is the cause of many of the disputes and appeals that happen.

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[Matt Hancock]

I think the explanations coming from the witnesses are excellent. I did not have any other questions.

[Nigel Huddleston]

Q Are the switching proposals in the Bill, which make it easier for customers to switch and give them more power and information, a step in the right direction?

David Wheeldon: They clarify Ofcom’s existing powers, so to that extent they are a welcome clarification. We have some concerns about the direction of travel that Ofcom is going in, not least because we see and operate in a market where there is already extensive switching and all the customer satisfaction surveys suggest that the vast majority of customers are happy with it.

What we are worried about is that Ofcom might go down a direction that tries to mandate a certain type of switching between networks that do not have any obvious need or reason to engage with each other. It is one thing in telecoms where you have to exchange customer information and data, but in TV, where you do not have any need to speak to a different TV network or operator, the idea of putting in place a new system where we are required to talk to each other could end up being quite burdensome and bureaucratic.

I hope that, as we engage with Ofcom, we avoid doing that. In the end we want to make this as easy as possible for customers, because that is in all our interests. We compete pretty ferociously with each other on a day-to-day basis, so a system that works for customers is in all our interests. The provisions in the Bill that clarify Ofcom’s role are fine.

[Matt Hancock]

Q Could you remind me what proportion of the market Sky has?

David Wheeldon: In the overall broadband market we are below 40%, I believe. In TV, it is 60%—I am not sure quite what the breakdown between us and other pay TV providers is. We compete not just with Virgin and BT and others but increasingly with Netflix and free-to-air. Many of our customers will go to take a free-to-air package from us. So the market is pretty dynamic and I think that at the moment it seems to be working pretty well for customers.

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[Rishi Sunak (Richmond (Yorks)) (Con)]

Q Mr Moorey, to elaborate on what you said about the provisions in the Bill to reform the appeals process, I think you described the current set-up as having a chilling effect on competition and pro-consumer impacts. It would be great if you would elaborate on what the Bill will do to improve that situation.

Pete Moorey: I think it has. I think the reason why we do not have things like a gain in provider-led switching and automatic compensation in the sector is in part due to the fact that the regulator has not felt able to move ahead with those things without appeal. Indeed, the speed at which the regulator acts is also a result of the appeals mechanism. We see proposals coming from Ofcom, particularly around things like switching, where it seems to go through a process of repeated consultation really out of a fear of being appealed by the companies. So I think it has had a chilling impact, and those are a couple of examples.

As other panel members have said, moving to a system that every other economic regulator in the country uses, which means that you are able to challenge on the process rather than the merits, would therefore be a significant change. I simply do not see the case for the telecoms sector being any different from energy or any other economically regulated sector.

[Nigel Huddleston]

Q A great frustration in rural areas in particular is being promised mobile coverage or broadband speed that is not delivered. What in the Bill can ensure that those speeds are delivered and that coverage is acceptable?

Pete Moorey: The automatic compensation element is an important part of that. If you are not receiving the speed or signal required, there could be a case for compensation. Clearly, a big issue that we want to see addressed that is not in the Bill is around the Advertising Standards Authority code and the fact that companies can advertise that you will get a certain speed when actually only 10% of their customers get that. I know that the ASA and its committees are looking at that, but I think that needs to move forward much quicker. That is clearly not something for the Bill, but it is something we would support.

[Nigel Huddleston]

Q What about terminating contracts?

Pete Moorey: Ofcom has taken a lot of steps in recent years to allow people to terminate contracts when they are not getting the speed they want. I think that is an area that needs to be looked at with regard to mobiles as well. Vodafone has introduced a new rule that means that you can get out of a contract within 30 days if you are not getting the signal you expected. Again, I do not think that is necessarily something for the Bill, but it is certainly something the regulator should be looking at.

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[Claire Perry]

Q I appreciate that point, but does either of you agree that there is a real asymmetry of concern between data which an individual may share with a public body and data which individuals share with a corporate body? One thing I am fascinated by, and it relates to so many provisions in the Bill, is that we knowingly or unknowingly give away rights to all kinds of information with every keystroke we make on the internet. We give huge chunks of personal information to corporate bodies which do not have the definition, as per clause 31, of improving the welfare of the individual, but are simply in it for profit. How would either of you help us to address that? Perhaps the Government—rightly, as an elected organisation—are being scrutinised about this, but my constituents are willy-nilly giving away vast chunks of their data, and in some cases giving away private data to very insecure storage facilities, almost without knowing it. It is frustrating for a Government who are trying to do the right thing to make digital government far more effective—as you did, Mike, during your time—to constantly be facing concerns and criticisms that ought properly to be applied to corporate bodies, but never are.

Mike Bracken: I completely understand your point about asymmetry and I agree with that. I would suggest that in corporate, public and private life it is a fair assumption that many people in the country are waking up to how their data have been used, how they have released that data and, increasingly, the repercussions of that, whether on social media, transactional data with a private company or, indeed, the public sector. There is a general awareness of and unease about some of the practices in all three of those sectors.

Having said that, the Government are held to a different account. Our members—we are a member-based organisation—hold the Co-op to a different account. We are the custodian of their data, and we are owned by our members. Many of the services we provide or help to provide to our members, such as wills, probate and funeral care, are deeply emotive at a certain time of life. These services often depend on Government data being in very good shape about place, location and identity. It is a fair correlation to draw that there should be a symmetry between how an organisation like us should be governed and managed, and the rules that should apply to public sector data. That is not to say that all the data regulations which apply to all corporations and trading organisations need to be exactly the same as those for the Government. That would be a political issue far beyond my position to comment on. The Co-op would look to see that the Government uphold the highest possible standards, so that our members can get the best possible use of that public data.

Jeni Tennison: Perhaps I can add a couple of things. Mike has made the point well that the Government need to act as a model for how to do data sharing well, and how to be open and transparent about handling people’s personal data. The Government are in a position of authority there. However, the other thing to bring up is that we have a mixed economy for the delivery of public services, including the private sector, charities and social enterprises. There should be some scrutiny over the way in which those organisations are handling personal data in the context of delivering those public services.

[Nigel Huddleston]

Q Do you believe that there is a lot of work to do in terms of clarity, in order to allay some of the fears about which data are being used here? I have had emails from constituents, and there is a perception that Excel spreadsheets will be floating around universities with personal financial data and personal health records. It is nothing like that, is it? It is aggregated and anonymised. What can we do, what can Government do and what can you do to help clarify the opportunity, move the debate on to those opportunities and allay some of those fears about data protection?

Jeni Tennison: I completely agree that there needs to be greater clarity about which data are being shared with whom, and why and how. You say that we are talking here about the transfer of aggregate and anonymised data, but that is not necessarily the case for some of the pieces of data sharing that are in the Bill. Some of it is the sharing of individual-level data, but it is not clear whether those are bulk Excel spreadsheets or through APIs. Those are the kinds of details that actually make a difference to how anybody might think about this trade-off between privacy and the public good.

Mike Bracken: Perhaps another way of thinking about that would be to question whether there needs to be sharing at all. As Jeni said, the sharing of data in Government has many different forms. Hopefully, many of those are secure and anonymised. I have doubts about our overall data-sharing operations, simply because Government is so distributed and there are so much data. Adding more sharing, without a clear landscape under which that is happening, seems to add more risk of privacy violation and more risk to security. Perhaps a way to think about it is access rather than sharing. Many Government Departments, and many organisations, are able to provide individual data points at point of request to people who they trust. You can query a dataset using an application programming interface rather than sharing an entire dataset with Departments. I suspect it is that willingness to share very large sets of data in different ways for the convenience of Government Departments and agencies that is the root cause of the unease around the data sharing part of the Bill.

[Nigel Huddleston]

Q Forgive me, but is that not the point? I said let us focus on the opportunities but already we have gone on to the negatives and the concerns. It is often commented that by sharing health records we could cure cancer in 10 years. If I asked my constituents if they would share their health information with a university, 99 out of 100 people would say yes. We have to be more ambitious on the communication of the opportunities as well, have we not?

Mike Bracken: The opportunities are great and we are very supportive of that, but I suspect you did not ask each individual constituent if we should share everybody’s health data. That is the point. When we ask for data sharing it is down to an individual’s point of view. The Government use bulk data too often when what is actually required is only a small amount of data by another Government Department. There are different mechanisms that can do that more safely.

[Chris Skidmore]

Q The research power for data sharing, as presented, has been welcomed by many academics and civil society groups as a means of unlocking data for research for public benefit. Looking particularly at that data sharing with non-public bodies, do you recognise the benefits of that power? In terms of your point about communicating the value of the Bill, we have the research power and other things. Looking at vulnerable groups, such as troubled families, we have other powers that are there for public benefit. How do you feel we should express that public benefit?

Jeni Tennison: The benefits of each of the individual pieces of the Bill are different kinds of benefits to different kinds of people. I think they need to be separated out in some ways and not be muddled up together. That is one of the challenges with the Bill.

Digital Economy Bill (Second sitting)

Nigel Huddleston Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 11th October 2016 Public Bill Committees

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I do not have any direct interests, but for full transparency I draw the Committee’s attention to my share ownership in Teclan Ltd, which is in the Register of Members’ Financial Interests.

[Nigel Huddleston (Mid Worcestershire) (Con)]

Again for full transparency, prior to becoming an MP I worked for Google, in which I have a small share interest at the moment.

[Nigel Adams (Selby and Ainsty) (Con)]

As I stated in the earlier session, I am a director and shareholder of two telecommunications businesses, and I believe my wife is also a director and shareholder.

Examination of Witnesses

David Austin and Alan Wardle gave evidence.

--- Later in debate ---

[Nigel Adams]

Q Mr Austin, what constructive conversations and meetings have you had with ISPs thus far, in terms of the potential for blocking those sites—especially the sites generated abroad?

David Austin: We have not had any conversations yet, because we signed the exchange of letters with the Government only last Thursday and it was made public only today that we are taking on this role. We have relationships with ISPs—particularly the mobile network operators, with which we have been working for a number of years to bring forward child protection on mobile devices.

Our plan is to engage with ISPs, search engines, social media—the range of people we think are ancillary service providers under the Bill—over the next few weeks and months to see what we can achieve together. We will also be talking to the adult industry. As we have been regulating pornography in the offline space and, to an extent, in the online space for a number of years, we have good contacts with the adult industry so we will engage with them.

Many companies in the adult industry are prepared to work with us. Playboy, for instance, works with us on a purely voluntary basis online. There is no law obliging it to work with us, but it wants to ensure that all the pornography it provides is fully legal and compliant with British Board of Film Classification standards, and is provided to adults only. We are already working in this space with a number of players.

[Nigel Huddleston]

Q Obviously, the BBFC is very experienced at classifying films according to certain classifications and categories. I am sure it is no easy task, but it is possible to use an objective set of criteria to define what is pornographic or disturbing, or is it subjective? How do you get that balance?

David Austin: The test of whether something is pornographic is a test that we apply every single day, and have done since the 1980s when we first started regulating that content under the Video Recordings Act 1984. The test is whether the primary purpose of the work is to arouse sexually. If it is, it is pornography. We are familiar with that test and use it all the time.

[Nigel Huddleston]

Q In terms of skills and resources, are you confident you will be able to get the right people in to do the job properly? I am sure that it is quite a disturbing job in some cases.

David Austin: Yes. We already have people who have been viewing pornographic content for a number of years. We may well need to recruit one or two extra people, but we certainly have the expertise and we are pretty confident that we already have the resources. We have time between now and the measures in the Bill coming into force to ensure that we have a fully effective system up and running.

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

Q I just want to put on the record that we are delighted that the BBFC has signed the heads of agreement to regulate this area. I cannot think of a better organisation with the expertise and the experience to make it work. What proportion of viewed material do you think will be readily covered by the proposed mechanism in the Bill that you will be regulating the decision over but not the enforcement of?

David Austin: I am not sure that I understand the question.

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[Louise Haigh]

Q In that period of consultation, was the detail around transparency never discussed?

Dr Whitley: It depends. There has been talk along the lines of there being codes of practice and liaison with the Information Commissioner’s Office, so at a very high level there has obviously been some discussion. But at the very specific level—for example, the civil registration clauses talk both about allowing a yes/no check around whether there is a birth certificate associated with a family, while on the other hand there will be bulk data sharing within Government so that different Departments can know stuff and possibly make things better for society.

One half of that seems to be quite specific, and you can see how it could well be designed as a simple “Does a birth certificate exist for this person?” and the answer is yes or no. The privacy protections around that are reasonably well known and not very much data is being shared. Then the other illustration just says, “we will share these data with other bits of Government” and there is nothing there about what kind of privacy protections might be put in place. There are many different ways in which that can be done, but until we have some specific details, we cannot give you sensible reviews as to whether that is a good or not so good way of doing it.

[Nigel Huddleston]

Q Mr Coates, what role should wireless technologies play in achieving the universal service obligation?

Scott Coates: There is no doubt that for the last 5%, maybe a greater proportion than that, wireless technologies have a significant role to play. Six of the seven trials run by the Department for Culture, Media and Sport earlier this year were of a wireless-based structure. I think there is a role for it. It is also interesting, as you look beyond 10 megabits to the future when universal service means something far more substantial than that, that a new disruptive technology is coming.

Everyone is talking about 5G; it does not really exist at this stage, but we know it is going to be ultra-high bandwidth, ultra-low latency, with the potential to be a disruptive technology and replace fixed line to the home. Some countries around the world that have not had the wave of fixed line technology roll-out will be moving straight to wireless as their domestic broadband service.

[Nigel Huddleston]

Q What kind of timescales were you thinking about for the achievement of 5G?

Scott Coates: With 5G, it is really hot and talked about now, but it is still some way off. Mobile operators will market it strongly and talk about it strongly, but there was something last week from France Telecom admitting it does not know what it is yet, and that is the substance of the matter.

As we come in to the early 2020s, at the beginning of the next decade, we will start to see something. Interestingly, the infrastructure that is going to enable it is starting to go down now, so particularly in urban areas; as the concentration of cell sizes needs to get smaller and smaller, the infrastructure needed to power faster 4G services will ultimately be the infrastructure used to power 5G.

Coming back to the structure of the industry, it is critical that there is a competitive infrastructure market for 5G. As a new technology that is a combination of wireless and fibre, it has the opportunity to have multiple infrastructure parties competing. It also carries the risk of being a monopolised infrastructure.

[Nigel Huddleston]

Q Is this roll-out likely through purely commercial models or do you see a role for some kind of Government support here?

Scott Coates: In terms of using wireless to achieve USO, mobile as a technology has a very clean and efficient way of pushing out coverage to rural parts of the population, and that is through the licences. There is another major round of licensing, with something called 2.3 and 2.4, which is coming soon.

There is also 700 MHz, which is a really powerful frequency for delivering coverage into rural areas and which has already been licensed in many European countries. It is not licensed here yet, but the rules of those licences create an opportunity to get coverage out to the most rural parts of the country. You could do things like in Germany, where they said rural areas have to be covered before urban areas. That is the most efficient way of unlocking coverage from a wireless perspective in rural areas.

[Scott Mann (North Cornwall) (Con)]

Q One of the biggest challenges facing coastal and rural communities like mine is the problems with undulating coastlines and areas of outstanding natural beauty. I am interested in your thoughts on how we can strengthen the Bill to make sure we get out to some of the rural areas left behind in the past.

Scott Coates: I refer you back to the last question. The most efficient way to deal with that is through the licences. There is licensing coming up that will create an opportunity. Unfortunately, it is going to be a few years before the airwaves that deliver that are available for deployment.

There is a lot of activity happening in the sector at the moment. The mobile operators are very busy investing in their networks and we are working hand in hand with them to help them deliver that. I know we are building new towers in coastal areas right now; I do not know if we are building one in your constituency. So it is getting better. Bear in mind that the Government struck a deal with the mobile operators 18 months ago and the operators are busy investing on the back of that. In the last 4G licence, when the 800 MHz got auctioned, one of the licence lots, bought by Telefónica, required it to cover more of the country, so Telefónica is investing on the back of that as well.

--- Later in debate ---

[The Chair]

Two more questions to this set of witnesses.

[Nigel Huddleston]

Q Dr Whitley, are you excited by the potential opportunities of the use of big data by Government?

Dr Whitley: This is not about big data but data-sharing, but there are opportunities there for big data to be used. There are questions about how you manage it and about how you handle it.

One of the other things that I am involved with is a steering group for the Administrative Data Research Network, which is where administrative data can be used by researchers in very strictly controlled environments to answer interesting research questions, generate hypotheses and explore those hypotheses by matching data from various different Government datasets. But that is done in a very locked down, secure environment with no mobile phones and no taking out of data and so on. So there absolutely are opportunities, but doing it right is what I particularly care about.

[Nigel Huddleston]

Q We are one of the most sophisticated digital economies on the planet and we have some of the brightest brains on the planet. Surely we can work this out.

Dr Whitley: Yes. The process has been going on for three years and we still do not have codes of practice. That is the bit that puzzles me. If we have all these brilliant brains can they not put together even a draft code of practice, so that we can know what we are talking about?

For example, in the consultation around fuel poverty, it talked about gathering data and matching up potential houses and individuals who might benefit or be at risk, and it says that they will inform the licensed energy suppliers as to which of their customers should receive assistance. That, to me, sounds like a push: “Here is a big set of customers that may or may not belong to your company. Check through that list to see whether or not any of them are your customers and give them a fuel discount.”

But then a couple of paragraphs further on—this is the consultation relating to the proposals—the Government would simply have an eligibility flag along with customers’ names or addresses for doing that. Even in the consultation, it does not seem that these brilliant minds have been applied as well as they could be.

[Nigel Huddleston]

Q Once we work that out, which I am confident we will, where are the opportunities? Where is the up side? Where is the positive stuff coming out of this? How can Government be better as a result of this? I am always an optimist.

Dr Whitley: Done right, there are fantastic opportunities. Government is digitising. The GDS has got lots of experience about how to manage and handle and do attributes checking, which is what most of this is. There are definitely opportunities and the skills, but somehow something has gone wrong with regard to these proposals.

It is not as if the proposals have been rushed through in the past few minutes. We have been looking at these and asking for more details since July 2013 and we are still here without even a resemblance of a code of practice. Part 5 has six codes of practice that need to be developed and none of them is here. Yes, please, but some detail. I am academic; I want to see the detail.

[Louise Haigh]

Q As you say, it is an enormous shift in terms of data sharing within Government. Clause 29 would allow personal data on citizens to be shared if there is a

“contribution made by them to society”

or wellbeing to be gained. That basically covers anything, doesn’t it? Why have the Government not produced even a draft code of practice at this stage? How can we possibly be expected to vote on this while plainly placing blind faith in the Government?

Dr Whitley: You are basically saying what I was going to say. If you compare the comprehensive replies that Mr Coates has been able to give, talking about very specific details, with the vague “we don’t know anything” comments that I have made, you see that it is a real problem and also an issue for more general scrutiny of technological issues. If you do not have details about the different mobile phone frequencies that you are talking about, you cannot make detailed policy. Yet when it comes to data sharing, there is a sense that it will all work out in the end because we have the right people to do it.

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[Nigel Adams]

Q What do you think is a reasonable limit? Where would you set the limit?

Jim Killock: In terms of taking someone to court, there is no particular limit. If I cause £20 of damage to somebody where I should have paid it, the small claims court should be available and I should be able to either prosecute someone or be prosecuted in a civil court in the normal way. The question of how much is “serious” is, in all likelihood, something we should probably leave to the discretion of judges. It will not be very easy to fix a particular amount, but I think “serious” is usually the word used.

[Nigel Huddleston]

Q As you have already recognised, this part of the Bill has already been subject to a consultation. There were 282 responses to that consultation, with the majority of them being broadly supportive. You have raised quite a few perfectly valid concerns, but do you accept that there is broad public support for the sharing of data when there is a clear social upside?

Jim Killock: I think we are all clear that data sharing should be enabled. The question is how you do that without it being a completely wide open process. The principle is not something that anyone has ever objected to.

Renate Samson: On the consultation that you referred to, you just told me that there were 282 submissions and that most of them were broadly supportive, but the Government response did not indicate who was supportive and who was not, and I have not seen the submissions on the website to be able to see for myself who was broadly supportive and who was not.

Having been part of the open policy making process, I would say that several people in that room had a large number of concerns. They were not concerns to prevent data sharing, but concerns to ensure that data sharing could happen in the safest way possible, and not just in terms of privacy. That way, not only can Government benefit from it and clear processes can be established in Government, but the citizen can understand why their data are being shared and can then be supportive of it and can trust that their data are going to be looked after. It is about the citizen being able to feel as though their personal data, which are now part of the air we breathe in a connected, digital society—we cannot function without our data—are safe and secure. It is about not only data being private, because there are varying degrees of privacy, particularly when you are sharing, but the Government understanding that.

[Nigel Huddleston]

Q I am not sure whether we got a clear answer there. The Commons Library published a briefing, which includes statistics from an Ipsos MORI survey that you have probably seen before. The things that get public support are things such as:

“Creating a DNA database of cancer patients…Using data from electronic travel cards…to improve the scheduling of buses or trains…Using police and crime data to predict and plan for crimes that might take place in future”.

There is a clear public upside for some of the most vulnerable and hurt people in society; are we ever going to reach a point where you are satisfied with the use of data?

Renate Samson: You took evidence this morning from two witnesses whom you asked a very similar question, and I support the answers that they gave. People are happy to share data if they understand why and are asked. I believe that the answer you were given earlier referred to the individual. If you ask me whether I am happy to share my data to cure cancer, I go away and I make the decision about whether or not I am happy to do that. As you have pointed out, the majority of people are probably going to say, “Yes, of course.” Big Brother Watch has no desire to restrict that. We are asking for information that we feel is lacking from part 5 of the Bill. We are asking for information for the individual so that they can give their consent based on proper guidance. That is going to be a key part of data protection law going forward.

This is about the way the questions are being asked. Similar questions have been asked throughout the day. We are not trying to say no. We have never said no. We are just trying to say, “Please present us with as much information as possible, so that we can see how.”

Jim Killock: It is really in the interests of Government to get this right, because in the long term it is a matter of trust. We know that accidents happen. If at least the safeguards are in place and as many accidents are avoided as possible, and if people are not left embarrassed at either data leaks or programmes that turn out to be intrusive or prejudicial against people, then you have won. That really was the purpose of the open policy process: to ensure that the risks were understood so that the Government could legislate on the basis of dealing with the complex risks rather than heading straight into a situation where they got a huge backlash and/or stored up problems for the future.

Renate Samson: May I add something quickly? The first line of Big Brother Watch’s submission says that we support data sharing across Government. I want to be very clear on that.

My second point is about individuals doing well out of this. The Bill, well, the factsheets accompanying the Bill, refer to wellbeing. I direct you all to the Supreme Court’s review of the named persons scheme in Scotland, where it was deemed that wellbeing was not a high enough bar—it did not meet the bar of “vital”, which the Data Protection Act requires. We want to do this properly so that people can benefit, but let us ensure that it is proper—that is not perfect, but the best it can possibly be.

[Matt Hancock]

Q A couple of questions. Would you be happy to share your blood type data to help cure cancer?

Renate Samson: I do not even know what my blood type is. To answer your question, I don’t know. I would have to give it serious consideration, just as I would seriously consider whether I would be prepared to donate organs after I die. It is not something to which I can give you a snap answer.

--- Later in debate ---

[Thangam Debbonaire]

Q Mr Taggart, you mentioned something about its feeling like it is 10 years out of date. I want to bring us bang up to date by chucking in a Brexit question. Is there anything that the three of you could very quickly add to the discussion about what might need to be in the Bill given that we are now in Brexit? Brexit has implications for the digital economy, about which I am sure you know more than me.

Chris Taggart: I will try to be brief. One is to do with policy aspects of what happens. I believe you are hearing from the Information Commissioner later. What happens to data protection in a post-EU UK? From our perspective, the UK has generally taken a slightly different perspective on data protection from the information commissioners in some other countries and is generally taking things like public interest into account and treating paid-for and free information the same, which we welcome. We have some concerns about the general data protection regulations because of that sort of stuff and some of the stuff that is coming from the EU. There are some potential benefits, but there are also some downsides about whether people’s rights will be defended. I think the digital economy becomes much, much more important, and my position here is as an advocate of open data and the potential for open data in driving a thriving digital economy. As a digital entrepreneur, I think we are missing some significant opportunities for that. If you were to sit down today and do a digital economy Bill with the knowledge that in a couple of years we perhaps would not be part of the EU, I think we would be doing something quite different.

Paul Nowak: May I pick up the point about post-Brexit? I think there is growing political consensus that one of the implications of the decision on 23 June is that we need to think seriously about how we invest in our national infrastructure. For the TUC that goes beyond Heathrow, Hinkley, High Speed Rail. It talks to issues around, for example, high-speed broadband. It is about thinking about how this Bill would interface with, for example, announcements that might come in the autumn statement about investment in high-speed broadband. I note that the Chair of the Committee talked about the interface between rail and high-speed broadband, which is something that should be borne in mind. Again, valid points were made on Second Reading about requirements for developers to incorporate high-speed broadband into new housing developments, which is absolutely essential. I reiterate the point I made earlier about seeing this in the context of the wider approach to industrial strategy and how the digital economy can support other parts of the economy that are going to be even more important as we move forward post-Brexit.

Sarah Gold: For me, particularly looking at privacy, security and personal data, it is about the age of some of the language used in the Bill. Even talking about data sharing feels to me like the wrong language. We should be talking about data access. Data sharing suggests duplication of databases, with data being slopped around different Departments, whereas data access suggests accessing minimum data via APIs or by using the canonical Government registers, which is an excellent project that is not mentioned in the Bill but should be.

[Nigel Huddleston]

Q There is a lot in this Bill, everything from BBC regulation to child protection, the universal service obligation and making switching easier. Can each of you say what are the top two or three positive features of the Bill that you believe will be of benefit to your members, clients or, indeed, the general public?

Chris Taggart: Yes. First of all, I agree that what I would like to see is that the Government—

[Nigel Huddleston]

I do not think that was the question. I asked what you like about the Bill that would be of benefit to your clients or customers. It is quite long.

Chris Taggart: To be perfectly honest, we operate in the new economy in places like Canary Wharf. We are a growing company and so on. I do not think there is anything in there that is going to benefit us as a growing, innovative digital company, to be honest.

[Nigel Huddleston]

Q The universal service obligation? Easier switching? None of that?

Chris Taggart: No.

[Nigel Huddleston]

Q You do not think that is a benefit?

Chris Taggart: Not to us. If you are talking about whether there are benefits to the wider world and to the UK as a whole, yes, I do not have an argument, but you asked whether it is of any direct benefit to us and I said no. There are plenty of things I could put into the Bill that would be of benefit and would be very simple to implement and so on, but in terms of measures in the Bill that would be a direct benefit to us and to the thousands of innovative digital companies in the UK that are making a difference to things like open data and financial services and solving real world problems and so on? Maybe it was not the intention for it to do that, and it does not.

[The Chair]

A clear answer.

Paul Nowak: If I could start on a positive and then give you a couple of areas where I think the Bill could be strengthened, the universal service obligation is something we would support. I note the discussion on Second Reading that 10 megabits per second is just a starting point. If you want a digital economy that is fit for the future you need to go well beyond that, but the universal service obligation is welcome. Some of the points in clause 4 are important, in terms of protections for musicians and other creative performers. Useful suggestions were made on Second Reading about how some of those provisions could be strengthened, such as ensuring online providers are accountable for any illegal pirated materials that they host and making sure the Government are prepared to step in if voluntary approaches to those sorts of issues fail. That would be a positive set of issues.

I have concerns about the interface between the Bill and the BBC. I know that the NUJ—which is one of our affiliates—is particularly concerned about the role of Ofcom as a potential regulator of the BBC. I am particularly concerned about the BBC taking on responsibility for TV licences for over-75s, not just in terms of the budgetary implications for the BBC but in terms of the BBC effectively taking responsibility for a key part of our social security system.

There are some positives, and the one I would draw out first and foremost is the universal service obligation. No matter what job someone does or where they live, having access to decent high-speed broadband is increasingly essential.

Sarah Gold: I agree with the overall sentiment of the Bill—that having better access to data and to the right infrastructure can lead to better services and a more open society. One of the details I think is good is the significant consequences for individuals should they be part of data misuse. That is really necessary and I see that as a positive step.

--- Later in debate ---

[Thangam Debbonaire]

Q Is that the sort of data other countries are using in that way?

Hetan Shah: Yes, that is right. Other countries have different set-ups, as it were, but these are the sorts of puzzles they can solve because they can bring those data together in different ways.

[Nigel Huddleston]

Q Mr Shah, you have partly answered my question, so I will turn to Professor Sir Charles Bean first. What kind of Government data would you personally like to get access to; what would you do with it; and how would the public benefit from your having it?

Professor Sir Charles Bean: You do not mean me personally? Presumably you mean the Office for National Statistics and the UK Statistics Authority?

[Nigel Huddleston]

Absolutely.

Professor Sir Charles Bean: First and foremost, I would say the tax data that HMRC holds—value-added tax, income tax and corporation tax. Value-added tax is particularly useful because it tells you something about inputs and outputs of businesses. It is potentially quite good, up-to-date, timely information on activity in the economy. I should say, when I was on the Monetary Policy Committee, we used to get informal briefings each month from the Treasury representative on what they knew about the tax receipts coming in that month, but having more detailed information about what was going on would be potentially very useful. In principle you can envisage building the national income accounts almost entirely on that sort of information if you have access to it, and you can make sure that the income-outcome expenditure sides are all balanced. That, as far as I am concerned, is by far and away the most significant thing.

I think it would be quite useful to bring in another dimension here about why administrative data are useful. There is obviously a lot of interest in regional issues. As it is at the moment, most regional information is collected to align with administrative areas of one sort of another, but those are not always the most natural units to be looking at for studying a phenomenon. If you think of Wales, north Wales is not actually trading with south Wales, it is trading across with Manchester and Liverpool, while south Wales is trading across with Bristol and so forth. If you want to think about the regional economics, you need things that allow you to look at those nexuses, rather than the information you might be given on the Welsh economy. If you have administrative data, with regional, locational identifiers, you can in principle aggregate the information in whatever way is best suited to the particular issue that you want to look at.

In terms of thinking about statistics for the 21st century, we need to be thinking about a framework that is actually quite fluid and flexible, rather than one in which everything is pushed into a set of standard definitions for GDP and stuff like that, and standard regional definitions and so forth. When you have access to the underlying micro information, providing you have appropriate identifiers that you can manipulate and link, you have open to you all sorts of possibilities that we do not currently have.

[Nigel Huddleston]

Q Mr Shah, do you have anything to add to that?

Hetan Shah: I have just a couple of examples. One is systemic financial risk. Post 2008, I think there was a recognition that we had focused too much on the risk for individual financial institutions and not looked at risk at a systems level. There is a possibility of doing that. The Prime Minister has indicated an interest in how the labour market is changing with the rise of zero-hours contracts and so on. Using a mixture of administrative and private sector data would allow us to start to get a handle on how the economy is changing.

[The Chair]

We have two questioners left: Louise Haigh and then Claire Perry.

Digital Economy Bill (Third sitting)

Nigel Huddleston Excerpts

Committee Debate: 3rd sitting: House of Commons
Thursday 13th October 2016 Public Bill Committees

[Rishi Sunak]

Yes, when the Government are delivering public services. You may have something to say about energy, or perhaps other areas.

Alistair Chisholm: Absolutely, yes. The clause in the Bill under which energy companies and the DWP will share data to help people to access support that is there but that they do not always get is an excellent idea. I very much support that measure. People who are vulnerable are sometimes less able to manage those systems, so if you can join them up effectively, that is very helpful.

[Nigel Huddleston (Mid Worcestershire) (Con)]

Q My colleague has already elicited some comments from you, Mr Chisholm, about how you can see the most vulnerable benefiting from the Bill. Can you give some other examples of situations you have come across in which you could see the Bill helping individuals?

Alistair Chisholm: Are you talking about debt?

[Nigel Huddleston]

Debt first. We can perhaps move on to switching and other things.

Alistair Chisholm: On average, our clients have five debts. Having multiple contacts and competing demands for money from different creditors is very distressing. Government debt collecting in particular often goes down a very fixed furrow, once it has started. Having to deal with that is overwhelming, so a more sensible and joined-up approach to how people manage all that will be very valuable for people, as long as their proper rights are respected in the process.

[Nigel Huddleston]

Q What about other aspects of the Bill? In evidence sessions earlier in the week we focused a lot on switching, the universal service obligation and the ability to cancel contracts if you are not getting a good service. My experience is that for the people who come to my surgeries, who are often the same people who go to the CAB, those elements often come into play. Have you seen any other similar elements of the Bill that would be helpful or beneficial?

Alistair Chisholm: Yes. We are big fans of changing the switching process in the mobile phone industry so that it is aligned with how banks and energy companies do it. The poor consumer will not have to do a kind of “Dear John” telephone call to the organisation they are leaving. Instead, the organisation that they are moving to has to help them through that process. I think that that will be helpful for the way the market operates.

Quite often, you get the best deal only when you ring up and have your leaving phone call. In fact, those deals should be available to everybody. If the switching is moved to the lead company, I think that will help ensure competition and more fairness across the mobile phone market. It will just be easier. It will no longer be the consumer’s responsibility to liaise between two firms; they will be helped. We are very much in favour of that.

On the universal service obligation, we know that there are more than 1 million people who cannot access broadband—particularly in rural areas. Some of our clients have to pay thousands of pounds to access services. That is very difficult, and sometimes impossible, for people, so we are very much in favour of broadband becoming the universal service that it needs to be.

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

Q I would like to ask Citizens Advice two questions. The first is about clauses 30 to 35, which relate to the warm home discount. There are already data-matching powers for those in receipt of a guaranteed element of pension credit, but obviously we are expanding that out to try to find anyone who is eligible. What difference will that make to your customers and what outcomes will it have? Can I possibly press you on some examples? You have been talking a lot about process, but it is important to get on the record what the outcomes of this expansion of the data-sharing power will be.

Alistair Chisholm: The warm home discount is money provided by energy companies to reduce the bills of people who are in financial difficulty or are on low incomes. When we talk to those firms about how people access those discounts, they say it is difficult for them to establish whether people are entitled to it, so people who should get the help do not get it. Sharing the data should smooth that.

Peter Tutton: Something like 10% of our clients would be within the old definition of fuel poverty: they spend more than 10% of their income on fuel. We have seen the number of people in gas and electricity arrears rise quite sharply from where it was in about 2010. The link with Government debt is interesting. The people we see with fuel debts are also likely to have things like council tax debts, and they are generally more likely to be people with disabilities. There is a group of vulnerabilities. People are struggling to make ends meet in difficult circumstances. They are on low incomes and under pressure from debts.

There are some questions about the warm home discount itself, and there was a recent consultation. Can it be extended to more companies? Can we look at the people who are eligible for it and extend the eligibility? The bits in this Bill about identifying fuel poverty could be helpful. If you think through the bit about the Government debt collection and put some principles in place to help financially vulnerable people, you start to get a policy package that drills down to the problem. We are quite supportive, if we can get back that sense of supporting vulnerable people and helping people to recover control of their finances. That is the key to all of it.

--- Later in debate ---

[Calum Kerr]

Q The very good document from the Minister and DCMS gives us a bit more information on the USO and talks about upload, download, latency and capacity. One of the other factors is cost. I get frequent complaints from constituents, as I am sure my colleagues do, that they do not receive a service that, as Ronseal would say, “Does what it says on the tin.” To what extent are you going to go to a granular level and look at the service, and also include cost as a key metric, so people are getting what they pay for or paying for what they get?

Lindsey Fussell: I understand. The Government have made public the letter that has been given to Ofcom and have specifically asked us to look at the cost of different technological solutions. That will clearly give a range of factors to weigh up when the Government decide how to implement the USO. Some of the issues you go to about how the USO will be enforced and how we will measure performance against it are implementation issues that we will have to consider once we know what type of USO we are implementing. It might be worth saying that, to the extent that we designate a universal service provider, either in one or in several areas, we would have the ability to enforce if they do not meet the commitments they signed up to and to provide the appropriate remedy.

[Nigel Huddleston]

Q I have a question for each of the witnesses. Starting with Mr Close, under the Bill, Ofcom will be given quite significant new oversight responsibilities over the BBC. Can you confirm what skills and attributes Ofcom currently has in terms of broadcasting, and are you confident, given this substantial increase in responsibilities, that you will have the skills and resources to do this job in the future?

Tony Close: There are two parts to my answer. I will begin with the specific provisions in the Bill and then talk about skills. The Bill removes some constraints that were placed in the Communications Act 2003 on our ability to regulate the BBC. We already regulate the BBC but we are subject to some constraints. At the moment, for example, we cannot consider the competitive impact of a significant change to the BBC’s website. The Bill removes those constraints so we can discharge the full range of functions that the charter and agreement would give Ofcom.

Are we currently sufficiently skilled to regulate the BBC to a high standard? Absolutely. We have been regulating broadcasting and making complex editorial judgments for the past 13 years, covering 2,000 separate television and radio broadcasters. Do we need more people and more skills to ensure that we do a great job from day one? Yes, and we are doing that at the moment by ensuring that we have the right number of people and the right skill mix.

[Nigel Huddleston]

Q Ms Fussell, you will be given powers in the Bill to acquire speed test information at premises level. Will you be using those powers? How will you be sharing that information? How may the customer benefit?

Lindsey Fussell: That is part of the new information powers that we were talking about earlier. We intend to publish that information, but we will obviously be doing so in a way that is fully consistent with data protection laws. We hope that it will be a huge benefit to consumers who, for example, are thinking of moving house or want to know what their existing property can achieve. At the moment, when people are given broadband speeds, they are often given speeds that relate to similar consumers in similar areas. This will enable them to have really specific information and, we hope, empower them to make a choice about which type of provider and service they are looking for.

[The Chair]

Kevin Brennan wishes you to send him some emails.

--- Later in debate ---

[Louise Haigh]

Q In your first speech as Information Commissioner you made much of the need for businesses to establish trust in relation to data sharing, with which I obviously completely agree. Do you think this Bill could have done more to put safeguards around data sharing in the commercial space?

Elizabeth Denham: Again, I think that trust and transparency go hand in hand. Part 5 is about Government data sharing and sharing with Government providers, so the focus there needs to be on transparency and trust. All Governments are really struggling with this issue, especially in the face of new technologies. How can you make transparency easy and understandable? We have just issued a privacy notice code of practice, which we introduced last Friday. What would help this Bill is if there was a reference to following our privacy notice code of practice, which again is across the public and the private sector and would lend more trust among the public.

[Nigel Huddleston]

Q The UK is one of the most advanced digital economies in the world, yet we heard from witnesses on Tuesday that, in terms of Government data sharing, we are well behind the curve, well behind other countries—that is partly because they are probably more focused on the opportunities. Does this Bill, in your experience, bring us more in line with the best practice you are seeing in other countries?

Elizabeth Denham: I think the approach that the UK is taking in this Bill is a responsible approach. My recommendations are to up the safeguards and improve the transparency. Breaking down the data sharing by type, function and purpose of data is a good way forward. There are some draconian data-sharing regimes in other parts of the world, which are concerning to data protection commissioners. I generally think that the approach here is right, but there could still be some strengthening of the Bill. That would go a long way to assuring more public trust and therefore more buy-in and participation in the digital economy and digital services.

[Kevin Brennan]

Q If the Bill were not amended in the ways you have suggested, where would that leave us in terms of privacy protection and data protection in the international league table?

Elizabeth Denham: We would not be first at the table in terms of privacy safeguards, and I think we have an opportunity for this Bill to be very strong in supporting the digital economy, digital services and data privacy. I very much encourage Parliament to look at the recommendations that we have made. If no amendments are made, yes, we are slipping behind. If you take a look at what Australia has done recently, they have put a provision in law that any re-identification of de-identified data has a sanction and a penalty next to it. I think that is an excellent idea, and it is another recommendation that we have made here. If no amendments are made, we will make this work from our perspective. We will be coming back to Parliament with a report on what is happening on the ground so that citizens can understand it.

Digital Economy Bill (Fourth sitting)

Nigel Huddleston Excerpts

Committee Debate: 4th sitting: House of Commons
Tuesday 18th October 2016 Public Bill Committees

[Thangam Debbonaire (Bristol West) (Lab)]

I rise to support the amendments under discussion and thank my hon. Friend the Member for Sheffield, Heeley for an excellent speech and for leading the debate, particularly on amendment 82.

I want to ask this of the Committee. Do we want to be ambitious? For me, this is about ambition. Do we want an economy that has the nuts and bolts, the things we require, to make it fit for the 21st century and the challenges it is already throwing up? Do we want our tech and creative industries, such as those that operate in my constituency of Bristol West, to be able to perform their functions, or do we want them to move away?

[Nigel Huddleston (Mid Worcestershire) (Con)]

I hope the hon. Lady does not mean to talk down the UK digital success story of 12.4% of GDP. I am sure she is aware that that is the largest in the G20 and compares with a European average of just 5.7%. We need to keep the progress going but we already have huge achievements, have we not?

[Thangam Debbonaire]

Yes, of course, I agree but I do not want that to slow down. I am ambitious because of that record and want it to continue, if possible, at an exponential rate of growth. Having such a low level of ambition in the USO will, I think, hold back the success stories that the hon. Gentleman so rightly talks about and that I have in my constituency. The medical and university sectors and researchers throughout industry all say to me that the issue is both upload and download speeds, as well as ensuring that they can compete with their competitors in Europe and beyond. As my hon. Friend the Member for Sheffield, Heeley said, the European ambition is for 100 megabits per second—10 megabits is just a fraction of that.

--- Later in debate ---

[Calum Kerr]

We also support clause 1. I will not repeat the points I made during the debate, but I want to bring a couple to the fore and ask the Minister one specific question, which I hope he will answer. We should not just be looking at closing the divide in the short term; we should be looking at a longer-term fix. We should consider what a minimum speed is today, but we should also be looking to what that might become in the future.

The hon. Member for Sheffield, Heeley pointed out that the EU target is 100 megabits per second by 2025. While we can aim for 10 megabits per second, if we do not set a horizon of where we want the target to go, we risk putting sticking plasters all over the country and getting solutions that will have no lifespan. We will all be back here in a few years’ time, saying, “I wish we’d listened to the hon. Member for Sheffield, Heeley who wanted an annual review.” We would know that this provision had not been delivered.

Let us try to avoid that scenario and ensure that as the USO goes through the process, what Ofcom designs not only looks at where we are today, but where we want to go in the future. When the Minister gives the main event speech tomorrow at the INCA event, which is advocating a strategy for gigabit Britain, he should set forward a truly ambitious vision of what the UK can offer in this space. Perhaps his response will provide me with some reassurance.

As we have looked at amendments, I have tried to ensure that not only have the Scottish Government and other Administrations been consulted, but they are part of the formulation of the USO. Consultation can be tokenistic or it can be fully engaged and evolved. We need to be fully involved in the design of this process, so that where we set an ambition, a target of 30 megabits per second, the USO supports it—for example, through foundational funding through a voucher scheme. Where any one of the regional councils want to do the same and set an ambitious higher target, the USO should support that, rather than offer a solution that forces them into a corner.

Will the Minister reassure me that the USO designed by his Government with Ofcom will support devolved Administrations and regions and provide foundational funding—not just 10 megabits, take it or leave it?

[Nigel Huddleston]

There is obviously a growing consensus and recognition of the importance to all our constituents of the universal service obligation. As always, the devil is in the detail. I understand that some of those details will be provided or revealed in secondary legislation. I do not buy some of the concerns expressed today about a possible lack of scrutiny in the progress of the USO. As a member of the Culture, Media and Sport Committee, alongside other members of this Committee, I am confident that we will continue to do that job robustly and effectively to raise issues and concerns.

I cannot imagine how many times we have heard issues related to broadband and mobile brought up in the Chamber, in Westminster Hall and elsewhere in this place, so we can scrutinise in multiple ways. We also have to be careful that we do not constrain our ambition by thinking of current technology and current speeds. It is important that we go with the flow and update our ambitions accordingly as technology develops.

Digital Economy Bill (Sixth sitting)

Nigel Huddleston Excerpts

Committee Debate: 6th sitting: House of Commons
Thursday 20th October 2016 Public Bill Committees

[Matt Hancock]

There is clarity in the Bill about what is under the jurisdiction of one regulator and what is under the jurisdiction of the other. I will, though, take that away and seek to give an assurance that the two regulators will work together to ensure that that boundary is dealt with adequately. There is flexibility in the Bill to ensure that that can happen. I cannot speak for Ofcom or the BBFC, but it would seem to me to be perfectly reasonable and obvious that the boundary has to work properly. I would not like to over-specify that in the Bill because of the nature of changes in technology. The distinction between broadcast and on-demand services is changing as technology develops, and it is better to leave it structured as it is. I am sure that both regulators will have heard the hon. Gentleman’s important point that the boundary between the two needs to be dealt with appropriately and that they need to talk to each other.

[Nigel Huddleston (Mid Worcestershire) (Con)]

Is the Minister reassured, as I am, by the fact that in the evidence sessions there was enthusiastic support from the BBFC for embracing the role, as well as very clear guidance that it had the competence to do so? We have not necessarily heard that from anybody else. The support and enthusiasm for taking on that role is very telling.

[Matt Hancock]

My hon. Friend has just given the final paragraph of my speech. With those assurances and the broad support from the BBFC and its enthusiasm to tackle the need for age verification in that way, I hope that the hon. Member for Sheffield, Heeley will withdraw the amendment.

--- Later in debate ---

[Claire Perry]

I may have come up with a Daily Mirror headline. My point is that the whole debate about pornographic material has always ended in the cul-de-sac of freedom of speech. That is why we worked with internet service providers, saying, “Let parents choose. Let’s use the BBFC guidelines. They have years of experience defining this stuff based on algorithms.” It is not for the hon. Lady or me to decide what people should not be viewing; we quite properly have an independent agency that says, “This is appropriate; this is not.”

However, the hon. Lady has eloquently raised the point that for too long, we have treated the internet as a separate form of media. We accept in cinemas, whether or not the bus driver is working for them, that if a film is R18, we are pretty negligent if we take our kids to see it, but we are helped to see that. We do not let our kids wander into the cinema and watch the R18 stuff with nobody stopping them along the way, but for too long, that has been the situation with the internet. The hon. Lady has raised a good point about search engines. I can assure her that the world has changed significantly, certainly in the UK, although other jurisdictions may not have been so influenced.

[Nigel Huddleston]

I should probably declare that prior to becoming an MP, I worked at Google. Does my hon. Friend agree that this is where it becomes complex? A search engine, to use another analogy, is a bit like a library. The books are still on the shelves, but the search engine is like the library index: it can be removed and changed, but the content is still there. That is why we need to do much more than just removing things from the search engine: the content is still there, and people can find alternative ways to get to it. We must do much more.

[Claire Perry]

I defer to my hon. Friend’s knowledge. Of course we all agree that certain instances of countries taking things down are utterly abhorrent; I am thinking of information about human rights in China, or about female driving movements in Saudi Arabia. We do not want to be in the business of over-specifying what search engines can deliver. We have not even touched on Tor, the dark web or the US State Department-sponsored attempts to circumvent the public internet and set up some rather difficult places to access, which have increasingly been used for trafficking illegal material.

Digital Economy Bill (Seventh sitting)

Nigel Huddleston Excerpts

Committee Debate: 7th sitting: House of Commons
Tuesday 25th October 2016 Public Bill Committees

[Nigel Adams (Selby and Ainsty) (Con)]

I rise to speak to new clause 3. It is a pleasure to follow the hon. Gentleman, who knows an immense deal about this area, having been a huge recipient of earnings from rights over the past few years. I am not entirely sure whether all that income was derived from him buying presents for his family, but it is great to see that we genuinely do have talented musicians in this place.

The new clause would create a power that allowed the Secretary of State to consider introducing a code of practice between search engines and rights holders on copyright infringement, which we have heard about. This power could be used only in the absence of a voluntary code between the two parties; it would not automatically create new legislation. Instead, as has been said, it acts as a backstop power if all other attempts to get an agreement between the producers of creative content and those who facilitate access to infringing material fail.

According to the latest estimates from the Department for Culture, Media and Sport, the UK creative industries amount to £87.4 billion in gross value added, and have an export value of £19.8 billion. These are incredibly large sums. Industries such as the music sector contribute immensely to those figures. Last year, five of the top 10 biggest selling artists in the world were British. One in six albums sold globally is from a UK artist. Those are staggering figures, and they demonstrate the appetite for UK music content here and abroad. According to “Measuring Music”, a report developed by UK Music, the industry body, the sector grew by 17% over the past four years and is worth £4.1 billion to the UK economy; it generates exports of £2.2 billion.

Although the UK creative industries are much in demand, copyright infringement remains a significant challenge. It not only has negative economic consequences for our businesses and industries by driving consumers to illegal markets, but seriously undermines the respect for, and value placed on, the creativity and effort that go into producing content—music and films in particular. According to the latest Kantar Media copyright infringement tracker, commissioned by the Intellectual Property Office, 78 million music tracks were accessed illegally between March and May 2016. The same research indicated that 20% of internet users participated in some form of illegal music activity online during that short period. These are very worrying figures, and they remind us that despite the growth in access to legal streaming sites, such as Spotify for music and Netflix for films, piracy remains a significant problem that needs to be tackled.

If we are to ensure a prospering commercial market for UK music that benefits rights holders and creators, it is essential that the main method of discovering music and artists directs consumers to legitimate sources. Search engines are one of the key means by which consumers discover music and artists. However, the prevalence of search results linking to infringing content, particularly on the first few pages of a generated search result, as we heard from the hon. Member for Cardiff West, indicates that more needs to be done. Furthermore, search engines incorporate auto-complete functions that can provide access to terms associated with the discovery of illegal content even before an internet user has finished typing their search terms.

For example, I am sure that you, Mr Streeter, are aware of the artist James Arthur, who was at No. 1 with “Say You Won’t Let Go” until he was knocked off the top spot, as I am sure you are aware, by Little Mix, which caused great excitement in the Adams household. When searching on Google, all I need to do is type in “James Arthur say y”, and I am given an option of clicking “James Arthur ‘Say You Won't Let Go’ download”. This takes me to a series of search results, and the only legitimate link allowing me to access that track legally is at the bottom of the page. It is not acceptable that search engines allow such ease of access to infringing content.

Some searches involve wading through several pages of results before getting to the first legal site. That is clearly wrong. The effectiveness of Google making changes to its algorithms—an infringement solution that that particular search engine advocates—remains to be seen. In reply to a written parliamentary question that I tabled on 2 September, the Government admitted on 26 September that it is “not possible to say exactly how” an algorithm change “equates to changes in infringement”. In response to a separate question, they said that it was “not…possible to analyse the…effectiveness” of measures to decrease auto-complete suggestions that provide access to stream ripping and other illegal converter technologies via search results.

In the 12 months up to September 2015, the British Phonographic Industry—the representative body for the recorded music industry, which does much vital work in the pursuit of anti-piracy measures—submitted almost 66.5 million infringing URLs to search engines for removal from search results. The ability of search engines to link to legitimate websites should be straightforward. For example, pro-music.org identifies legal online services. The site identifies that the UK has over 50 legitimate music websites—28 download, 19 subscription and 14 supported through ad services.

Creating a legitimate marketplace increases industry’s capacity for growth and supports overall economic wellbeing. Consumers also stand to benefit from higher-quality search results, clear signposting to legal content, and reduced exposure to malware, viruses, and other types of deceptive advertising. Studies demonstrate that these risks to internet security are sadly prevalent on infringing sites.

Dealing with copyright infringement requires co-operation; the problem can be addressed through positive initiatives. We have seen success in website blocking and, as we have heard from the hon. Member for Cardiff West, from the “Get it Right from a Genuine Site” campaign. UK Music developed an app, aimed at young people, called Music Inc. in partnership with Aardman Animation and the IPO. It raises awareness by simulating the mechanics of the music industry and showing the impact of copyright infringement on business decision making. The app has attracted over 600,000 users since its launch. We have also seen positive results from activities by advertisers and payment providers, and from the work of the police intellectual property crime unit to take advertising and payment services away from illegal sites.

Recognising the challenges, the Government have facilitated a round-table process so that rights holders, industry bodies such as the BPI, and representatives from search engines can discuss the problems of copyright infringement. This process has yet to result in agreement on how infringing content should be tackled. Rights holders are trying to negotiate a voluntary code of practice. We must take this opportunity to ensure that that happens. A code of practice for search engines would result in the reduced prominence of known infringing websites in search results, through demotion and delisting. Search engines already use such practices with regard to a range of illegal activities. The demotion of illegitimate websites would be attractive, in that verified artist websites would benefit in the same way that licensed retail stores do. This is because they will be promoted in the rankings at the expense of infringing sites.

[Nigel Huddleston (Mid Worcestershire) (Con)]

Is my hon. Friend aware that rankings are vital? For some search terms, up to 90% of clicks can come from the top three results. Certainly more than 90% of people do not look past page 1, so being at the top is vital to clicks and activity.

Digital Economy Bill (Tenth sitting)

Nigel Huddleston Excerpts

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

[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.

--- Later in debate ---

[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.