Digital Markets, Competition and Consumers Bill

Roger Gale Excerpts

Report stage
Monday 20th November 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

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

[Mr Deputy Speaker (Sir Roger Gale)]

With this it will be convenient to discuss the following:

Government new clause 8—Use of damages-based agreements in opt-out collective proceedings.

Government new clause 9—Mergers of energy network enterprises.

Government new clause 10—Power to make a reference after previously deciding not to do so.

Government new clause 11—Taking action in relation to regulated markets.

Government new clause 12—Meaning of “working day” in Parts 3 and 4 of EA 2002.

Government new clause 13—ADR fees regulations.

Government new clause 14—Power to require information about competition in connection with motor fuel.

Government new clause 15—Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel.

Government new clause 16—Procedure and appeals.

Government new clause 17—Statement of policy on penalties.

Government new clause 18—Offences etc.

Government new clause 19—Penalties under section (Penalties for failure to comply with notices under section (Power to require information about competition in connection with motor fuel)) and offences under section (Offences etc).

Government new clause 20—Information sharing.

Government new clause 21—Expiry of this Chapter.

Government new clause 22—Removal of limit on the tenure of a chair of the Competition Appeal Tribunal.

New clause 1—Meaning of “payment account” and related terms—

“(1) ‘Payment account’ means an account held in the name of one or more consumers through which consumers are able to—

(a) place funds;

(b) withdraw cash; and

(c) execute and receive payment transactions to and from third parties, including over any designated payment system.

(2) ‘Payment account’ also includes the following types of account—

(a) savings accounts;

(b) credit card accounts;

(c) current account mortgages; and

(d) e-money accounts.

(3) ‘Designated payment system’ has the same meaning as within the Financial Services (Banking Reform) Act 2013.

(4) ‘Relevant institution’ means—

(a) any bank which has permission under Part 4A of the Financial Services and Markets Act 2000 to carry out the regulated activity of accepting deposits (within the meaning of section 22 of that Act, taken with Schedule 2 and any order under section 22);

(b) any building society within the meaning of section 119 of the Building Societies Act 1986;

(c) any credit institution within the meaning of the Payment Services Regulations 2017;

(d) any authorised payment institution within the meaning of the Payment Service Regulations 2017; and

(e) any small payment institution within the meaning of the Payment Services Regulations 2017.

(5) ‘Discriminate’ means that a relevant institution acts in a way which, were that relevant institution a public authority, would constitute a breach of its obligations under section 6(1) of the Human Rights Act 1998, in so far as those obligations relate to—

(a) Article 8 of the European Convention on Human Rights;

(b) Article 9 of the European Convention on Human Rights;

(c) Article 10 of the European Convention on Human Rights;

(d) Article 11 of the European Convention of Human Rights; and

(e) any of the Articles listed in paragraphs (a) to (d) when read with Article 14 of the European Convention on Human Rights.”

This new clause defines relevant terms for the purposes of NC2.

New clause 2—Rights of consumers in relation to payment accounts—

“(1) A relevant institution must not discriminate against a consumer when deciding—

(a) whether to offer a consumer a payment account;

(b) whether to alter, or vary in any way, the terms of an existing payment account in use by a consumer; or

(c) whether to terminate or otherwise restrict a consumer’s access to their payment account.

(2) A relevant institution, within 30 days of deciding to alter, vary, terminate, or otherwise restrict a consumer’s access to their payment account, or deciding not to offer a consumer a payment account, must provide the consumer with a written statement of reasons explaining their decision.

(3) A written statement of reasons under subsection (2) must clearly specify—

(a) the basis upon which such a decision was taken, including reference to any terms and conditions within the consumer’s contract upon which the relevant institution relies, or reference to any legal obligations placed upon the relevant institution;

(b) all evidence taken into account by the relevant institution in reaching its decision; and

(c) any other matters that had bearing on the relevant institution’s decision.”

This new clause would place a duty on banks, building societies and similar institutions not to discriminate against consumers when offering retail banking services.

New clause 3—Rights of redress—

“Where a relevant institution has acted in breach of its obligations under section [Rights of consumers in relation to payment accounts] (1), the consumer shall have a right to damages in respect of any—

(a) financial loss;

(b) emotional distress; and

(c) physical inconvenience and discomfort.”

This new clause would give consumers a right to redress if discriminated against under NC2.

New clause 4—Enforcement of rights of redress—

“(1) A consumer with a right to damages by virtue of section [Rights of redress](1) may bring a claim in civil proceedings to enforce that right.

(2) The Limitation Act 1980 applies to a claim under this section in England and Wales as if it were an action founded on simple contract.

(3) The Limitation (Northern Ireland) Order 1989 (S.I. 1989/1339 (N.I. 11)) applies to a claim under this section in Northern Ireland as if it were an action founded on simple contract.”

This new clause makes provision for the enforcement of redress under NC3.

New clause 24—Review of Competition Appeal Tribunal—

“(1) The Secretary of State must, as soon the Secretary of State considers reasonable practicable after this Act has been passed, commission a review of all processes involving the Competition Appeal Tribunal.

(2) The Secretary of State must ensure that the review is conducted independently of the Digital Markets Unit and the CMA.

(3) The Secretary of State must lay a report of the review before Parliament.”

This new clause would require the Secretary of State to commission an independent review of the Competition Appeals Tribunal processes.

New clause 25—Duty to treat consumer interests as paramount—

“(1) In applying the provisions of this Act, the CMA and the Courts have an overriding duty to treat consumer interests as paramount.

(2) The duty set out in subsection (1) includes a duty to—

(a) address consumer detriment, including the protection of vulnerable consumers;

(b) expedite investigations that give rise to consumer detriment; and

(c) narrow points of challenge in appeals to CMA decisions that engage consumer detriment.”

This new clause would impose a duty on the CMA and the Courts to treat consumer issues as paramount.

New clause 26—Proceedings before the Tribunal: claim for damages—

“(1) The Competition Act 1998 is amended as follows.

(2) In section 47A, after subsection (2)(b) insert—

“(c) Part 4 of the Digital Markets Act 2023””

This new clause would allow claims for damages in respect of infringements of the provisions of Part 4 of this Bill.

New clause 29—Contract renewal: option to opt in—

“(1) Before a trader enters into a subscription contract with a consumer where section 247(2) applies, the trader must ask the consumer whether they wish to opt-in to an arrangement under which the contract renews automatically at one or more of the following times—

(a) after a period of six months and every six months thereafter, or

(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.

(2) If the consumer does not opt-in to such an arrangement, the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.

(3) If the consumer has not—

(a) opted into an arrangement under subsection (1), or

(b) given notification of the consumer’s intention to renew by the date specified under subsection (2),

the contract will lapse on the renewal date.”

This new clause would allow the consumer to opt-out of their subscription auto-renewing every six months, or if the period between payments is longer than six months, before every payment. If the consumer does not opt-in to auto-renewal, they would be required to notify the trader manually about renewing.

New clause 30—Contract renewal: variable rate contracts—

“(1) Before a trader enters into a subscription contract with a consumer where section 247(3) applies, the trader must ask the consumer whether they wish to opt into an arrangement under which the contract renews automatically on the date the consumer becomes liable for the first charge or the first higher charge.

(2) If the consumer does not opt into an arrangement under subsection (1), the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than five days before the renewal date.

(3) The trader must also ask the consumer whether they wish to opt into an arrangement under which the contract renews automatically—

(a) after a period of either six months from the first charge or higher charge and every six months thereafter, or

(b) if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.

(4) If the consumer does not opt into an arrangement under subsection (3), the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.

(5) If the consumer has not—

(a) opted into an arrangement under subsection (1) or subsection (3), or

(b) given notification of the consumer’s intention to renew by the date specified under (as the case may be) subsection (2) or subsection (4),

the contract will lapse on the next renewal date.”

This new clause would introduce an option for the consumer to opt-out of their subscription auto-renewing after their free or discounted trial. Otherwise, they would have to notify the trader manually about the subscription continuing. It also introduces an option for the consumer to opt-out of their subscription auto-renewing.

New clause 31—Regulatory burdens arising from competition and consumer regulation—

“(1) The CMA must, at least once a year, publish a report setting out its assessment of the economic cost of regulatory burdens that have been created and removed over the previous year through the exercise by public bodies of—

(a) competition and consumer powers; and

(b) the following activities, as far as they relate to competition and consumer matters—

(i) the imposition of conduct requirements;

(ii) dispute resolution and public enforcement activities;

(iii) the monitoring of undertakings, and

(iv) the issuing of regulatory orders.

(2) The Secretary of State must ensure that public bodies provide the CMA with information the CMA considers is necessary for completion of the report.

(3) The Secretary of State must ensure that the net economic cost of regulatory burdens set out in the report is zero or less in every year.

(4) In this section a “regulatory burden” means a burden as defined in section 1(3) of the Legislative and Regulatory Reform Act 2006.”

This new clause places on Ministers a permanent duty to ensure that the net economic cost of burdens from competition and consumer regulation is zero or less each year.

Government amendment 69.

Amendment 207, in clause 141, page 89, line 13, at end insert—

“(c) the collective interests of consumers include avoiding any detriment that might be incurred by consumers if the United Kingdom does not reach a level of net zero carbon emissions by 2030.”

This amendment would mean that part of the test of whether a commercial practice had committed an infringement would be whether the commercial practice had failed to protect consumers from any detrimental effects arising from a failure to achieve net zero by 2030.

Government amendments 70 to 79, 81, 82 and 85.

Amendment 226, in clause 224, page 150, line 27, at end insert—

“(4A) Where a commercial practice has been found to be unfair under paragraph 32 of Schedule 18 of this Act, any body listed as a public designated enforcer in section 144(1) of this Act may require the removal of the relevant online marketing from the internet.”

This amendment allows enforcement bodies to remove the marketing of fake or counterfeit products from the internet.

Amendment 208, page 150, line 29, at end insert—

“(6) An established means used to encourage control of unfair commercial practices must include the following measures—

(a) investigation and determination on a timely basis—

(i) in accordance with a pre-determined process which has been published on the internet,

(ii) by people who are independent of any organisation undertaking commercial practices, and

(iii) with the outcome of any decision published.

(b) the appointment of a board to oversee the investigation and determination process, with the majority of the members of the board independent of any organisation undertaking commercial practices;

(c) provision for the suspension of a commercial practice during an investigation and prior to a determination being made;

(d) provision for guidance to be issued, by the CMA, the relevant weights and measures authority or, if the established means is an organisation, the established means itself, about the lawfulness of a commercial practice;

(e) publication of statistical and other information about the operation of, and compliance with, the established means to enable the CMA or weights and measures authority in question to assess on an annual basis the continuing appropriateness of using the established means.”

This amendment sets out conditions, including in relation to independence and transparency, for the means by which the control of unfair commercial practices will be encouraged.

Government amendments 86 to 93.

Amendment 210, in clause 251, page 166, line 24, leave out “six” and insert “twelve”.

This amendment would provide for traders to have to issue reminder notices to consumers about ongoing subscription contracts only every twelve months, rather than every six.

Amendment 211, page 166, line 36, leave out subsection (5) and insert—

“(5) The Secretary of State may, by regulations, make reasonable provision for the content and timing of reminder notices.”

This amendment, together with Amendments 212 and 213, would remove the detailed provision about the content and timing of reminder notices from the face of the Bill and instead give the Secretary of State the power to make such provision by regulation.

Government amendment 94.

Amendment 212, page 167, line 1, leave out Clause 252.

See explanatory statement to Amendment 211.

Government amendments 95 to 98.

Amendment 214, in clause 253, page 168, line 7, leave out “in a single communication” and insert

“in a manner that is straightforward, timely and does not impose unreasonable cost on a consumer”.

This amendment, together with Amendments 215 to 218, would remove from the Bill the existing detailed provisions for ending a subscription contract, intending that they should be covered by provision made in secondary legislation under the provisions of clause 270(1)(c), and instead set principles for how a contract may be ended.

Amendment 215, page 168, line 10, leave out subsection (2).

See explanatory statement to Amendment 214.

Amendment 216, page 168, line 15, leave out subsection (4).

See explanatory statement to Amendment 214.

Amendment 217, page 168, line 23, leave out subsection (6).

See explanatory statement to Amendment 214.

Amendment 218, in clause 254, page 168, line 37, leave out subsections (3) to (5).

See explanatory statement to Amendment 214.

Government amendments 99 and 100.

Amendment 219, page 170, line 25, leave out clause 257.

This amendment, together with Amendments 220 to 222, would remove the provision for a mandatory cooling-off period for a subscription contract.

Amendment 220, page 171, line 19, leave out clause 258.

See explanatory statement to Amendment 219.

Amendment 221, page 172, line 18, leave out clause 259.

See explanatory statement to Amendment 219.

Government amendments 101 to 103.

Amendment 222, in clause 272, page 180, line 25, leave out subsection (5).

See explanatory statement to Amendment 219.

Government amendments 104, 105, 107, 109, 110, 112 to 147 and 150 to 152.

Amendment 223, in clause 317, page 221, line 35 leave out “subsection (2)” and insert “subsections (2) and (2B)”.

This amendment and Amendment 224 would provide for an implementation period of two years before the provision in the Bill relating to subscription contracts comes into force.

Government amendments 153 and 154.

Amendment 224, page 222, line 6, at end insert—

“(2B) Chapter 2 of Part 4 comes into force two years after the day on which this Act is passed.”

See explanatory statement to Amendment 223.

Government new schedule 1—Mergers of energy network enterprises.

Government amendments 155 to 163.

Amendment 225, in schedule 18, page 343, line 42, at end insert—

“32 At any stage of a purchase process, presenting a price for a product which omits obligatory charges or fees (or an estimate thereof) which are payable by the majority of consumers, which are not revealed to the consumer until later in the purchase process.”

This amendment adds the practice of “drip-pricing”, a pricing technique in which traders advertise only part of a product’s price and reveal other obligatory charges later as the customer goes through the buying process, to the list of unfair commercial practices.

Amendment 227, page 343, line 42, at end insert—

“32 Marketing online products that are either—

(a) counterfeit; or

(b) dangerous.”

This amendment would add marketing counterfeit and dangerous online products to the list of banned practices.

Government amendments 164 to 170.

Amendment 228, in schedule 19, page 350, line 30, at end insert—

“Non-commercial society lotteries

13 (1) A contract under which a lottery ticket or tickets are purchased for one or more non-commercial society lotteries.

(2) In sub-paragraph (1), “non-commercial society” has the meaning given by section 19 of the Gambling Act 2005, and “lottery ticket” has the meaning given by section 253 of that Act.”

This amendment seeks to exclude lottery tickets purchased for non-commercial society lotteries from the scope of the provisions on subscription contracts.

Government amendment 171.

Amendment 213, in schedule 20, page 354, line 19, leave out paragraphs 28 to 38.

See explanatory statement to Amendment 211.

Government amendments 172 to 175.

[Kevin Hollinrake]

May I first echo the remarks about the excellent address by the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Meriden (Saqib Bhatti)? I welcome him to his place—he did a fine job on his first outing in such a complex debate.

I, too, am delighted to bring the Digital Markets, Competition and Consumers Bill to the House on Report. May I express my gratitude to colleagues across the House for their contributions to Second Reading and Committee stages, and for their continued engagement throughout its passage? I thank in particular the hon. Members for Pontypridd (Alex Davies-Jones) and for Feltham and Heston (Seema Malhotra) for their constructive engagement and commitment to seeing the Bill delivered quickly so that its benefits can be realised. I also thank my hon. Friend the Member for Weston-super-Mare (John Penrose) for his excellent engagement—over the weekend in particular—and my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) for his many important and relevant amendments.

The reforms to the competition and consumer regimes contained in parts 2 to 5 of the Bill will grow the economy and deliver better outcomes for consumers and bona fide businesses. Consumers will have more choice and protection, and pay lower prices. Businesses will operate on a fairer and more level playing field. The reforms will do that by enhancing the wider competition regime, strengthening the enforcement of consumer protection law, and putting in place new consumer rights and more transparency.

It is a simple fact that the way in which we buy products and services today very often involves a digital process. The opportunities that follow are vast—more accessibility, flexibility and choice for consumers—but there is also a greater risk of consumer harm, including, for example, consumers being trapped in a subscription contract that they no longer want or purchasing goods that may not be up to scratch because they unknowingly relied on a fake review. We must ensure that consumers and their cash are protected.

Swifter interventions to tackle bad business practices against consumers are expected to deliver a consumer benefit of £9.7 billion over 10 years, as UK consumers benefit from new rights, stronger law enforcement and more competition through merger control. Importantly, the reforms will also grow the economy by boosting competition, better placing the UK to succeed in export markets. It will allow the Competition and Markets Authority to more effectively deter, prevent, and, where necessary, enforce against monopolistic behaviours. That will ensure that the free market can operate effectively.

The Government amendments to parts 2 to 5 of the Bill will provide greater clarity, ensure coherence with related legislation, and make sure the Bill’s measures meet their intended aims. Almost all the amendments are technical in nature. I will address them across four categories: competition, consumer enforcement, consumer rights and cross-cutting provisions.

First, the competition measures in the Bill will give the CMA new powers to enable it to tackle anti-competitive activity swiftly and effectively, meaning that it can focus its work on the areas of greatest potential harm. The competition environment is complex and ever evolving. We must respond carefully but decisively to changes in the judicial and legislative landscape to provide certainty and to avoid any unintended detrimental consequences of wider developments.

New clause 8 amends the Competition Act 1998 so that the absolute bar on damages-based agreements being relied on in opt-out collective actions will not apply to third-party litigation funding agreements, which are the main source of funding for that type of action. That responds to a recent Supreme Court judgment, and effectively restores the previously held understanding of the status of litigation funding agreements under the 1998 Act. Accordingly, it will have retrospective effect.

In response to a recent Competition Appeal Tribunal judgment, we are specifying the circumstances in which a market investigation reference may be made in relation to an area that has already been the subject of a market study but was not referred for further investigation at that time. We are also bringing forward a series of amendments to ensure alignment between this Bill and the Energy Act 2023, which introduced the energy network merger regime, and to make minor corrections to provisions relating to that regime. Separately, we are repealing paragraph 8 of schedule 3 to the 1998 Act to remove a redundant reference to the treaty establishing the European Coal and Steel Community. To ensure that the implementation trials for market remedies introduced by the Bill are as effective as possible, we are introducing new powers for the Secretary of State to extend the scope of implementation trials in the markets regime to include regulatory conditions.

I will now address the new direct consumer enforcement model. That model will enable the CMA to act faster and take on more consumer cases on behalf of the public, resulting in a further estimated direct benefit to consumers of tens, or potentially hundreds, of millions of pounds. The Government have tabled a series of technical amendments to increase certainty in respect of the CMA’s operational duties. They include aligning the definition of “business” in part 3 of the Bill with that in part 4 of chapter 1 to ensure that any breaches of unfair trading prohibitions can be enforced through the regime; and making provision about information-sharing between public authorities so that enforcers can obtain the information that they need to take enforcement action under part 3 of the Bill.

On appeals, we are adding a requirement for the CMA to include information about applicable appeal rights in a final breach-of-directions enforcement notice, as well as empowering the appeal court to send issues back to the CMA for decision on certain notices. We are also empowering the Secretary of State to update through regulations the specified maximum amounts for fixed and daily penalties imposable by a court or the CMA when a business breaches a formal information request.

Moving on to consumer rights—I am sure this will interest many Members across the House—the purpose of the Bill is simple: to empower consumers to get the deal that is right for them, and to increase their confidence in the products they buy and the services they use. The new rights on subscription traps will give consumers more control over their spending. Such traps have been the subject of some debate during the passage of the Bill, and the Government are introducing amendments to remove unintended consequences.

Online Safety Bill

Roger Gale Excerpts

Consideration of Lords amendments
Tuesday 12th September 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Paul Scully)]

I beg to move amendment (a) to Lords amendment 182.

[Mr Deputy Speaker (Sir Roger Gale)]

With this it will be convenient to discuss the following:

Lords amendment 349, and Government amendments (a) and (b).

Lords amendment 391, Government amendment (a), and Government consequential amendment (a).

Lords amendment 17, Government motion to disagree, and Government amendments (a) and (b) in lieu.

Amendment (i) to Government amendment (a) in lieu of Lords amendment 17.

Lords amendment 20, and Government motion to disagree.

Lords amendment 22, and Government motion to disagree.

Lords amendment 81, Government motion to disagree, and Government amendments (a) to (c) in lieu.

Lords amendment 148, Government motion to disagree, and Government amendment (a) in lieu.

Lords amendment 1, and amendments (a) and (b).

Lords amendments 2 to 16, 18, 19, 21, 23 to 80, 82 to 147, 149 to 181 and 183 to 188.

Lords amendment 189, and amendment (a) in lieu.

Lords amendments 190 to 216.

Lords amendment 217, and amendment (a).

Lords amendments 218 to 227.

Lords amendment 228, and amendment (a).

Lords amendments 229 and 230.

Lords amendment 231, and amendment (a).

Lords amendments 232 to 319.

Lords amendment 320, and amendment (a).

Lords amendment 321, and amendment (a).

Lords amendments 322 to 348, 350 to 390 and 392 to 424.

[Paul Scully]

As we know from proceedings in this place, the Online Safety Bill is incredibly important. I am delighted that it is returning to the Commons in great shape, having gone through extensive and thorough scrutiny in the Lords. The Bill is world-leading, and the legislative framework established by it will lead to the creation of a profoundly safer online environment in this country. It will kickstart change where that is sorely needed, and ensure that our children are better protected against pornography and other content that is harmful to them. The Bill will also guard children against perpetrators of abhorrent child sexual exploitation and abuse, and ensure that tech companies take responsibility for tackling such content on their platforms, or be held criminally accountable.

--- Later in debate ---

[Paul Scully]

Indeed, we will not be accepting those amendments, but I will cover more of that later on, after I have listened to the comments that I know my hon. Friend wants to make.

As a result of the amendment, we have also made a small change to clause 98—the emerging category 1 services list—to ensure that it makes operational sense. Prior to Baroness Morgan’s amendment, a service had to meet the functionality threshold for content and 75% of the user number threshold to be on the emerging services list. Under the amended cause, there is now a plausible scenario where a service could meet the category 1 threshold without meeting any condition based on user numbers, so we had to make the change to ensure that the clause worked in that scenario.

We have always been clear that the design of a service, its functionalities and its other features are key drivers of risk that impact on the risk of harm to children. Baroness Kidron’s amendments 17, 20, 22 and 81 seek to treat those aspects as sources of harm in and of themselves. Although we agree with the objective, we are concerned that they do not work within the legislative framework and risk legal confusion and delaying the Bill. We have worked closely with Baroness Kidron and other parliamentarians to identify alternative ways to make the role that design and functionalities play more explicit. I am grateful to colleagues in both Houses for being so generous with their time on this issue. In particular, I thank again my right hon. and learned Friend the Member for Kenilworth and Southam for his tireless work, which was crucial in enabling the creation of an alternative and mutually satisfactory package of amendments. We will disagree to Lords amendments 17, 20, 22 and 81 and replace them with amendments that make it explicit that providers are required to assess the impact that service design, functionalities and other features have on the risk of harm to children.

On Report, my hon. Friend the Member for Crawley (Henry Smith) raised animal abuse on the internet and asked how we might address such harmful content. I am pleased that the changes we have since made to the Bill fully demonstrate the Government’s commitment to tackling criminal activity relating to animal torture online. It is a cause that Baroness Merron has championed passionately. Her amendment in the other place sought to require the Secretary of State to review certain offences and, depending on the review’s outcome, to list them as priority offences in schedule 7. To accelerate measures to tackle such content, the Government will remove clause 63—the review clause—and instead immediately list section 4(1) of the Animal Welfare Act 2006 as a priority offence. Officials at the Department for Environment, Food and Rural Affairs have worked closely with the Royal Society for the Prevention of Cruelty to Animals and are confident that the offence of unnecessary suffering will capture a broad swathe of behaviour. I hope the whole House will recognise our efforts and those of Baroness Merron and support the amendment.

You will be pleased to know, Mr Deputy Speaker, that I will conclude my remarks. I express my gratitude to my esteemed colleagues both here and in the other place for their continued and dedicated engagement with this complicated, complex Bill during the course of its parliamentary passage. I strongly believe that the Bill, in this form, strikes the right balance in providing the strongest possible protections for both adults and children online while protecting freedom of expression. The Government have listened carefully to the views of Members on both sides of the House, stakeholders and members of the public. The amendments we have made during the Bill’s progress through the Lords have further enhanced its robust and world-leading legislative framework. It is groundbreaking and will ensure the safety of generations to come. I ask Members of the House gathered here to support the Government’s position on the issues that I have spoken about today.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Opposition spokesperson.

[Alex Davies-Jones (Pontypridd) (Lab)]

Before I address the amendments at hand, let me first put on record my thanks for the incredible efforts of our colleagues in the other place. The Bill has gone on a huge journey. The Government have repeatedly delayed its passage, and even went to great effort to recommit parts of the Bill to Committee in an attempt to remove important provisions on legal but harmful content. For those reasons alone, it is somewhat of a miracle that we have arrived at this moment, with a Bill that I am glad to say is in a much better place than when we last debated it here. That is thanks to the tireless work of so many individuals, charities and organisations, which have come together to coalesce around important provisions that will have a positive impact on people’s lives online.

Today, we have the real privilege of being joined by Ian Russell, Stuart Stephens, Emilia Stevens, Hollie Dance and Lisa Kenevan, who have all been impacted by losing a child at the hands of online harm. I want to take a moment to give my most heartfelt thanks to them all, and to the other families who have shared their stories, insights and experiences with colleagues and me as the Bill progressed. Today, in our thoughts are Archie, Isaac, Olly, Molly and all the other children who were taken due to online harm. Today, their legacy stands before us. We would not be here without you, so thank you.

We also could not have arrived at this point without the determination of colleagues in the other place, notably Baroness Kidron. Colleagues will know that she has been an extremely passionate, determined and effective voice for children throughout, and the Bill is stronger today thanks to her efforts. More broadly, I hope that today’s debate will be a significant and poignant moment for everyone who has been fighting hard for more protections online for many years.

It is good to see the Minister in his place. This is a complex Bill, and has been the responsibility of many of his colleagues since its introduction to Parliament. That being said, it will come as no surprise that Labour is pleased with some of the significant concessions that the Government have made on the Bill. Many stem from amendments the Opposition sought to make early on in the Bill’s passage. Although his Department’s press release may try to claim a united front, let us be clear: the Bill has sadly fallen victory to Tory infighting from day one. The Conservatives truly cannot decide if they are the party of protecting children or of free speech, when they should be the party of both. Sadly, some colleagues on the Government Benches have tried to stop the Bill in its tracks entirely, but Labour has always supported the need for it. We have worked collaboratively with the Government and have long called for these important changes. It is a welcome relief that the Government have finally listened.

Let me also be clear that the Bill goes some way to regulate the online space in the past and present, but it makes no effort to future-proof or anticipate emerging harms. The Labour party has repeatedly warned the Government of our concerns that, thanks to the Bill’s focus on content rather than social media platforms’ business models, it may not go far enough. With that in mind, I echo calls from across the House. Will the Minister commit to a review of the legislation within five years of enactment, to ensure that it has met their objective of making the UK the safest place in the world to be online?

--- Later in debate ---

[Several hon. Members rose—]

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chair of the Select Committee.

[Dame Caroline Dinenage (Gosport) (Con)]

I welcome the return of the Online Safety Bill from its exhaustive consideration in the other place. As the Minister knows, this vital legislation kicked off several years ago under the leadership of my right hon. and learned Friend the Member for Kenilworth and Southam (Sir Jeremy Wright), with the ambitious aim of making the UK the safest place in the world to go online. While other countries picked at the edges of that, we were the first place in the world to set ourselves such an ambitious task.

The legislation is mammoth in size and globally significant in scope. Its delivery has been long-winded and I am so pleased that we have got to where we are now. As one of the Ministers who carried the baton for this legislation for around 19 months, I understand the balance to be struck between freedom of speech campaigners, charities and the large pressures from the platforms to get this right.

--- Later in debate ---

[Several hon. Members rose—]

[Mr Deputy Speaker (Sir Roger Gale)]

Order. Thirteen Members wish to participate in the debate. The winding-up speeches will need to start shortly before 5 pm, and the Minister has indicated that he has quite a bit to say. I therefore suggest a self-denying ordinance of between seven and eight minutes following the speech from the Scottish National party spokesman. It is up to colleagues, because we have not imposed a mandatory time limit at this stage, but if Members are sensible and not greedy, everyone should get in with no difficulty.

Artificial Intelligence

Roger Gale Excerpts

Thursday 29th June 2023 Commons Chamber

[Matt Warman]

The hon. Member is absolutely right that, when done well, AI allows us to identify discrimination and seek to eliminate it, but when done badly, it cements it into the system in the worst possible way. That is partly why I say that transparency about the use of AI will be absolutely essential, even if we largely do not need new legislation. We need principles. When done right, in time this technology could end up costing us less money and delivering greater rewards, be that in the fields of discrimination or public services and everywhere in between.

There is a second-order point, which is that we need to understand where loopholes that the technology creates are not covered by existing bits of legislation. If we think back to the time we spent in his House debating upskirting, we did not do that because voyeurism was somehow legal; we did it because a loophole had been created by a new technology and a new set of circumstances, and it was right that we sought to close it. We urgently need to understand where those loopholes are now, thanks to artificial intelligence, and we need to understand more about where they will have the greatest effects.

In a similar vein, we need to understand, as I raised at Prime Minister’s questions a few weeks ago, which parts of the economy and regions of the country will be most affected, so that we can focus the immense Government skills programmes on the areas that will be most affected. This is not a predictable industry, such as when we came to the end of the coalmining industry, and we are not able to draw obvious lines on obvious maps. We need to understand the economy and how this impacts on local areas. To take just one example, we know that call centres—those things that keep us waiting for hours on hold—are going to get a lot better thanks to artificial intelligence, but there are parts of the country that are particularly seeing an increase in local call centre employees. This will be a boom for the many people working in them, but it is also a hump that we need to get over, and we need to focus skills investment in certain areas and certain communities.

I do believe that, long term, we should be profoundly optimistic that artificial intelligence will create more jobs than it destroys, just as in every previous industrial revolution, but there will be a hump, and the Government need to help as much as they can in working with businesses to provide such opportunities. We should be optimistic that the agency that allows people to be happier in their work—personal agency—will be enhanced by the use of artificial intelligence, because it will take away some of the less exciting aspects of many jobs, particularly at the lower-paid end of the economy, but not by any means solely. There is no shame in eliminating dull parts of jobs from the economy, and there is no nobility in protecting people from inevitable technological change. History tells us that if we do seek to protect people from that technological change, we will impoverish them in the process.

I want to point to the areas where the Government surely must understand that potentially new offences are to be created beyond the tactical risk I have described. We know that it is already illegal to hack the NHS, for instance. That is a tactical problem, even if it might be somewhat different, so I want to take a novel example. We know that it is illegal to discriminate on the grounds of whether someone is pregnant or likely to get pregnant. Warehouses, many of them run by large businesses, gather a huge amount of data about their employees. They gather temperature data and movement data, and they monitor a huge amount. They gather data that goes far beyond anything we had previously seen just a few years ago, and from that data, companies can infer a huge amount, and they might easily infer from that whether someone is pregnant.

If we do that, which we already do, should we now say that it will be illegal to collect such data because it opens up a potential risk? I do not think we should, and I do not think anyone would seriously say we should, but it is open to a level of discrimination. Should we say that such discrimination is illegal, which is the situation now—companies can gather data but it is what they do with it that matters—or should we say that it actually exposes people to risk and companies to a legal risk, and that it may take us backwards rather than forwards? Unsurprisingly, I think there is a middle ground that is the right option.

Suddenly, however, a question as mundane as collecting data about temperature and movements, ostensibly for employee welfare and to meet existing commitments, turns into a political decision: what information is too much and what analysis is too much? It brings us as politicians to questions that suddenly and much more quickly revert to ethics. There is a risk of huge and potentially dangerous information asymmetry. Some people say that there should be a right to a human review and a right to know what cannot be done. All these are ethical issues that come about because of the advent of artificial intelligence in the way that they have not done so previously. I commend to all Members the brilliant paper by Oxford University’s Professor Adams-Prassl on a blueprint for regulating algorithmic management, and I commend it to the Government as well.

AI raises ethical considerations that we have to address in this place in order to come up with the principles-based regulation that we need, rather than trying to play an endless game of whack-a-mole with a system that is going to go far faster than the minds of legislators around the world. We cannot regulate in every instance; we have to regulate horizontally. As I say, the key theme surely must be transparency. A number of Members of Parliament have confessed—if that is the right word—to using AI to write their speeches, but I hope that no more people have used AI to write their speeches than those who have already confessed. Transparency has been key in this place, and it should be key in financial services and everywhere else. For instance, AI-generated videos could already be forced to use watermarking technology that would make it obvious that they are not the real deal. As we come up to an election, I think that such use of existing technology will be important. We need to identify the gaps—the lacunae—both in legislation and in practice.

Artificial intelligence is here with us today and it will be here for a very long time, at the very least augmenting human intelligence. Our endless creativity is what makes us human, and what makes us to some extent immune from being displaced by technology, but we also need to bear in mind that, ultimately, it is by us that decisions will be made about how far AI can be used and what AI cannot be used for. People see a threat when they read some of the most hyperbolic headlines, but these are primarily not about new crimes; they are about using AI for old crimes, but doing them a heck of a lot better.

I end by saying that the real risk here is not the risk of things being done to us by people using AI. The real risk is if we do not seize every possible opportunity, because seizing every possible opportunity will allow us to fend off the worst of AI and to make the greatest progress. If every student knows that teachers are not using it, far more fake essays will be submitted via ChatGPT. Every lawyer and every teacher should be encouraged to use this technology to the maximum safe extent, not to hope that it simply goes away. We know that judges have already seen lawyers constructing cases using AI and that many of the references in those cases were simply fictional, and the same is true of school essays.

The greatest risk to progress in our public services comes from not using AI: it comes not from malevolent people, but from our thinking that we should not embrace this technology. We should ask not what AI can do to us; we should ask what we can do with AI, and how Government and business can get the skills they need to do that best. There is a risk that we continue to lock in the 95% of AI compute that sits with just seven companies, or that we promote monopolies or the discrimination that the hon. Member for Brent Central (Dawn Butler) mentioned. This is an opportunity to avert that, not reinforce it, and to cement not prejudice but diversity. It means that we have an opportunity to use game-changing technology for the maximum benefit of society, and the maximum number of people in that society. We need to enrich the dialogue between Government, the private sector and the third sector, to get the most out of that.

This is a matter for regulation, and for global regulation, as is so much of the modern regulatory landscape. There will be regional variations, but there should also be global norms and principles. Outside the European Union and United States, Britain has that unique position I described, and the Prime Minister’s summit this autumn will be a key opportunity—I hope all our invites are in the post, or at least in an email. I hope that will be an opportunity not just for the Prime Minister to show genuine global leadership, but also an opportunity to involve academia, parliamentarians and broader society in having that conversation, and allow the Government to seize the opportunity and regain some trust on this technology.

I urge the Minister to crack on, seize the day, and take the view that artificial intelligence will be with us for as long as we are around. It will make a huge difference to our world. Done right, it will make everything better; done badly, we will be far poorer for it.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chair of the AI Committee, Darren Jones.

--- Later in debate ---

[Jo Gideon]

The hon. Lady makes a good point. Clearly, that is the big part of this debate: we have to have transparency, as it is essential. The Government’s current plans, set out in the AI White Paper, do not place any new obligations on public bodies to be transparent about their use of AI; to make sure their AI tools meet accuracy and non-discrimination standards, as she rightly said; or to ensure that there are proper mechanisms in place for challenging or getting redress when AI decisions go wrong. What the White Paper proposes is a “test and learn” approach to regulation, but we must also be proactive. Technology is changing rapidly, while policy lags behind. Once AI is beyond our control, implementing safeguards becomes implausible. We should acknowledge that we cannot afford to wait to see how its use might cause harm and undermine trust in our institutions.

While still encouraging sensible innovation, we should also learn from international experiences. We must encourage transparency and put in place the proper protections to avoid damage. Let us consider the financial sector, where banks traditionally analyse credit ratings and histories when deciding who to lend money to. I have recently been working with groups such as Burnley Savings and Loans, which manually underwrites all loans and assesses the risk of each loan by studying the business models and repayment plans of its customers. Would it be right to use AI to make such decisions? If we enter a world where there is no scope for gut feeling, human empathy and intuition, do we risk impoverishing our society? We need to be careful and consider how we want to use AI, being ethical and thoughtful, and remaining in control, rather than rolling it out wherever possible. We must strike the right balance.

Research indicates that AI and automation are most useful when complemented by human roles. The media can be negative about AI’s impact, leading to a general fear that people will lose their jobs as a result of its growth. However, historically, new technology has also led to new careers that were not initially apparent. It has been suggested that the impact of AI on the workplace could rival that of the industrial revolution. So the Government must equip the workforce of the future through skills forecasting and promoting education in STEM—science, technology, engineering and maths.

Furthermore, we must remain competitive in AI on the global stage, ensuring agility and adaptability, in order to give future generations the best chances. In conjunction with the all-party group on youth affairs, the YMCA has conducted polling on how young people feel about the future and the potential impact of AI on their careers. The results are going to be announced next month. It found that AI could not only lead to a large amount of job displacement, but provide opportunities for those from non-traditional backgrounds. More information on skills and demand will help inform young people to identify their career choices and support industries and businesses in preparing for the impact of AI.

I am pleased that the Department for Education has already launched a consultation on AI education, which is open until the end of August. Following that, we should work hard to ensure that schools and universities can quickly adapt to AI’s challenges. Cross-departmental discussion is important, bringing together AI experts and educators, to ensure that the UK is at the cutting edge of developments with AI and to provide advice to adapt to younger generations.

AI is hugely powerful and possesses immense potential. ChatGPT has recently caught everybody’s attention, and it can create good stories and news articles, like the one I shared. But that technology has been used for years and, right now, we are not keeping up. We need to be quicker at adapting to change, monitoring closely and being alert to potential dangers, and stepping in when and where necessary, to ensure the safe and ethical development of AI for the future of our society and the welfare of future generations.

[Mr Deputy Speaker (Sir Roger Gale)]

Recalling a conversation that we had earlier in the day, I am tempted to call Robin Millar in the style of Winston Churchill.

--- Later in debate ---

[John Nicolson (Ochil and South Perthshire) (SNP)]

I will keep my speech short and snappy, and not repeat anything that any other Member has said—I know that is unfashionable in this place. I begin by congratulating the hon. Member for Boston and Skegness (Matt Warman) on introducing the debate. He was one of the very best Ministers I have ever come across in my role on the Front Bench, and I am sorry to see him on the Back Benches; he is well due promotion, I would say. I am sure that has just damned his prospects for all eternity.

As my party’s culture spokesperson, I am very keenly aware of the arts community’s concerns about AI and its risks to the arts. I have now been twice—like you, Mr Deputy Speaker, I am sure—to “ABBA Voyage”, once in my role on the Culture, Media and Sport Committee and once as a guest of the wonderful Svana, its producer. As I am sure you know, Mr Deputy Speaker, the show uses AI and motion capture technology combined with a set of massive, ultra-high-quality screens to create an utterly magnificent gig. It felt like the entire audience was getting to see ABBA in their prime; indeed, it was perhaps even better than it would have been originally, because we now have ultra-modern sound quality, dazzling light shows and a vast arena in which to enjoy the show. It was history, airbrushed to perfection and made contemporary. It seems to be a success, having sold over 1 million tickets so far and with talk of its touring the world. In fact, it was so good that towards the end, some of the audience started waving at Agnetha and Björn. They had become completely convinced that they were not in fact AI, but real people. There were tears as people looked at Agnetha, which says something about the power of technology to persuade us, does it not?

Soon, I will be going to see Nile Rodgers—that really is a very good gig, as I do not need to tell the other Front Benchers present. Again, I am going to be his guest. He is a legendary guitarist, songwriter and singer; he gave evidence to our Select Committee; and he has sold 500 million albums worldwide. Nile will be incredible —he always is—but he will also be 70 years of age. It will not be a 1970s early funk gig. The audience will include the mature, people in the prime of middle youth such as myself, and also the Glastonbury generation. It is easy to envisage an AI Nile Rodgers, produced by a record company and perhaps touring in competition with the very real Nile Rodgers, competing for ticket sales with the great man himself. Indeed, it is easy to envisage the young recording artists of today signing away their rights to their likenesses and vocals in perpetuity, with long-term consequences.

Many in the arts sphere feel safe from AI, as they suspect that human creativity at the artistic level cannot be replicated. I very much hope that they are right, but once that human creativity has been captured, it can be reproduced eternally, perhaps with higher production levels. It is not, I feel, the sole responsibility of artists, musicians and playwrights to be concerning themselves with radical developments in AI. They have work to do as it is, and surely the job to protect them is ours. We need to get on top of the copyright issues, and we need to protect future performers from having their rights sold away along with their very first contracts. We as parliamentarians must think deeply, listen and research widely. I have heard some heartening—sometimes lengthy —speeches that show there is, cross party, an awareness and a willingness to grasp this, and that is deeply encouraging.

However, the UK Government have much to work on in their White Paper. They have a lot to do when they look at this and listen to the submissions, and they must provide improvements. It allows public institutions and private companies to use new experimental AI on us, and then try to correct the flaws subsequently. It uses us, our communities and our industries as guinea pigs to try out untested code to see whether that makes matters better or worse. I think the risks are many for the arts community, which is concerned deeply about fakery, and there is an argument that the AI White Paper empowers such digital fakery.

In closing, it is absolutely key that we listen to experts in this field, as we should always do to inform our decision making, but in particular to those in the arts and music industry because they will be so deeply affected.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the shadow Minister.