All 16 Parliamentary debates in the Lords on 7th Feb 2024

Grand Committee

Wednesday 7th February 2024

(4 months, 2 weeks ago)

Grand Committee
Read Full debate Read Hansard Text
Wednesday 7 February 2024

Arrangement of Business

Wednesday 7th February 2024

(4 months, 2 weeks ago)

Grand Committee
Read Full debate Read Hansard Text
Announcement
16:15
Lord Ashton of Hyde Portrait The Deputy Chairman of Committees (Lord Ashton of Hyde) (Con)
- Hansard - - - Excerpts

My Lords, if there is a Division in the Chamber while we are sitting, which we do not expect, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Committee (6th Day)
16:15
Relevant document: 3rd Report from the Delegated Powers and Regulatory Reform Committee. Northern Ireland legislative consent sought.
Schedule 21: Pre-contract information and reminder notices
Amendment 168
Moved by
168: Schedule 21, page 371, line 10, at end insert—
“12 A summary of the charges that the consumer may incur if they use the service during a cooling-off period but then cancel the contract.”Member’s explanatory statement
Alongside another amendment in the name of Lord Lucas, the purpose of this amendment is to focus discussion on how use of a subscription contract during a cooling-off period is charged for if the contract is cancelled within the cooling-off period, and the information that the trader must publish in that regard.
Lord Lucas Portrait Lord Lucas (Con)
- Hansard - - - Excerpts

My Lords, in speaking to this amendment, I will also speak to Amendment 191, and in doing so declare my interest as the proprietor of the Good Schools Guide, an organisation that derives substantial income from subscription contracts, although we do not operate any automatic renewal of them.

The problem I am looking at, which certainly applies to us, is that within the cancellation period for a subscription such as ours, the purchaser can, if they so choose, get all the value they are ever going to get from a subscription. They can just go through the online service and print out everything that might possibly interest them, and then cancel. With other subscription services, the value is received more evenly through the contract, but ours can be focused at a particular time. Under those circumstances, a fair arrangement would be that if a consumer cancels and has received substantial value, they can be charged, on a basis set out beforehand, for the value they have actually had. I beg to move.

Lord Black of Brentwood Portrait Lord Black of Brentwood (Con)
- Hansard - - - Excerpts

My Lords, I will speak to the stand part notices in my name on Clauses 262, 263 and 264. I am grateful to the noble Lord, Lord Clement- Jones, for adding his name to the stand part notices on Clauses 262 and 264. I will also speak to Amendments 221 and 224, in my name. As these and other amendments in the next group have a special relevance to media businesses, I remind noble Lords of my interest, declared at the start of Committee, as deputy chairman of the Telegraph Media Group, which is a member of the News Media Association.

I hope noble Lords will forgive me if I make just a few general remarks about the issue of subscriptions, to set my amendments in this group and the next in context. I applaud the aim of tackling the nuisance of subscription traps. It is imperative to make sure, however, that the day-to-day operations of reputable traders are not adversely impacted by the measures designed to achieve this. This is important for businesses in many industries that benefit from a degree of commercial certainty in their operations as a result of subscriptions. In the creative economy, it is especially so for hard-pressed publishers that are painstakingly building sustainable business models through subscriptions at a time of considerable economic challenge. Concern has been expressed across the creative sector and beyond, as demonstrated by the briefing documents I have received, and other noble Lords may have, from the News Media Association, techUK, the Federation of Small Businesses, the Online Dating and Discovery Association, the Professional Publishers Association, the Motion Picture Association, the Association for UK Interactive Entertainment and the Commercial On-Demand and Broadcasting Association.

All noble Lords will know that the impact of digital has brought about the destruction of the old print-based business model that for generations supported our free press at a national and local level. Publishers have had to reinvent themselves, and subscriptions are a key part of that new commercial reality. In a world of infinitely free content, it is remarkable that many publishers have begun to turn the tide on the notion that news provision, which is very expensive to create, should be free at the point of access. A business like the Telegraph, which I work for, now has over 1 million subscribers across print and digital. That is the key to the future, because the business of high-quality journalism is an expensive one. This Bill must help, not hinder.

We all feel passionately about the democratic importance of a thriving press—the noble Lord, Lord Clement-Jones, spoke about it movingly in Committee last week—but we have to give publishers the freedom to survive and grow. As it stands, the Bill endangers that because of the unintended consequences of the measures within it, which will introduce onerous and unnecessary new requirements on all types of subscriptions. This will drive up costs, stifle innovation and, paradoxically, reduce consumer choice. The Bill is supposed to be about helping consumers, but it does not achieve that. As I have observed in Committee on other areas, we are willing the ends but not the means.

The issue is that the Bill treats all subscriptions as though they were an endemic problem and unwanted by consumers, but that is not the case. By the Government’s analysis, four out of five adults in the UK have at least one subscription, often many more, providing them with convenience, consistency and choice. Only 5% of subscriptions are unwanted. There is a danger that we are creating a sledgehammer to crack a nut and are doing so in a way that significantly undermines all the good done by the rest of the Bill, in ushering payment for content and more equitable terms by the dominant tech platforms. It is about giving with one hand and taking away with the other.

The Government’s own impact assessment suggests that the package of measures will cost businesses £1.2 billion in the first year alone, with SMEs the hardest hit. The Government are supposed to be committed to reducing regulatory burdens on business, using regulation only as a last resort. Here, it seems to be the first resort and it has not been thought through, with no proper consultation.

The problems with subscriptions fall into four areas. This group covers cooling-off periods and the implementation period for the legislation. We will come to reminder notices and cancellation rights in the next group. The amendments that I have tabled tackle the issues brought about by the Bill’s well-intended but overly prescriptive subscription provisions. I hope that the Government will support them and bring forward their own amendments on Report.

I will deal first with cooling-off periods in Clauses 262 to 264. The Bill as it stands retains the 14-day cooling-off period under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, referred to as the CCRs. It starts once a contract is entered into or the consumer has taken physical possession of goods. However, the Bill amplifies the CCRs by introducing the concept of a renewal cooling-off period, which would apply at the point that a consumer transitions from a free trial or discounted introductory offer period to a contract charged at full price and each time a contract renews on to a term of 12 months or more.

While I have no problem with the existing 14-day cooling-off period under the CCRs, the renewal cooling-off period is a deeply harmful expansion of regulation, based on burdensome, EU-derived consumer law. I thought, perhaps mistakenly, that we were supposed to be making the most of the so-called Brexit freedoms rather than, ironically, gold-plating restrictions that have been manufactured in Brussels.

This is particularly true when viewed alongside the other provisions on subscriptions that the Bill introduces. For example, the new and detailed pre-contract information will ensure awareness of the product costs and renewals. Reminder notices will then reinforce awareness of a consumer’s ongoing contract. Furthermore, when transitioning from a free trial or discount period to a full-price-paid contract, or when renewing a subscription, a sufficient opportunity to establish the nature, characteristics and functioning of the product will already have been made available to the customers, which frankly makes these provisions redundant, creating harm and doing no good.

We should seek to retain the concept of a cooling-off period, as a grace period, applicable where a contract has been taken out erroneously—but not apply it at each and every renewal point. Consumers will be very aware that they have a subscription, given that they will be inundated with reminder notifications and will therefore have plenty of notice to cancel a subscription before it renews. Although they will do nothing to tackle the problem of subscription traps, which are at the heart of this Bill, the terms of this Bill will undermine a legitimate commercial strategy of discounted prices and trial periods, from which consumers can exit, in a way that puts unnecessary and burdensome constraints on businesses to grow and acquire new customers. Those discounted offers are important for consumers, especially at the time of a cost-of-living crisis.

Think what this would mean for a digital broadcaster or video-on-demand provider. Each time a customer entered into a subscription contract, they would receive a cooling-off period. This would allow them, for example, to binge on a specific series—as I am sure we have all done—or watch a sports event, and then withdraw immediately and receive a refund. The Bill does not put any limit on how many times a customer can enter into a contract and then exit using the cooling-off period. In effect, therefore, it will make trial periods redundant because it would make little commercial sense to provide customers with a trial period and a cooling-off period.

The point is that CCRs already tackle this issue by allowing consumers to request immediate access to digital content by acknowledging that the 14-day cooling-off period would no longer apply upon the supply of that content. It seems quite wrong to me that this Bill does not expressly retain this principle. I am sure that the Minister will tell us that the Government have said that they will consult on how the new cooling-off period in this Bill will work in practice, including whether a waiver of the rights should apply to certain types of subscription contracts.

Although that is encouraging and I am grateful for it, it still leaves the additional unnecessary cooling-off provisions on the statute book, meaning huge uncertainty for subscription-based businesses. Also, we have yet to see any detail on the scope of the promised consultation on a potential waiver for this provision, which gives little comfort. Far better to remove these provisions entirely—that is the point of these amendments—especially as their aims are already achieved elsewhere, in Part 4 of the Bill, and enshrined in the existing CCRs. This would still protect customers but would allow digital businesses, which are the future of the creative economy, the opportunity to expand and flourish.

I will speak briefly on Amendments 221 and 224 to Clause 334. The changes proposed in this legislation are very significant, even if the amendments in this group and the next are accepted, and will have many implications for British businesses. However, the Bill currently makes no explicit provision setting out how long businesses will have to implement these changes, which will be very onerous for many traders to implement. The Government will introduce a commencement order in due course, but there is obviously a clear benefit to giving the businesses that will be impacted—particularly SMEs, as the Federation of Small Businesses has pointed out—time to implement the changes effectively.

For legislation that brought in changes of a similar scope, such as that implementing the GDPR requirements, businesses were given more than two years to prepare for substantial change. The Government have delayed the implementation of the Health and Care Act’s advertising restrictions for two and a half years, until October 2025, in order to allow the sector to prepare for them. One business I spoke to estimated that it will take at least 10 months of development work to ready its systems for compliance with the Bill as it stands.

Amendments 221 and 224 would introduce a two-year implementation period after the passage of the Bill and a start date broadly in line with similar precedents. This period would allow businesses sufficient time to adapt their practices and systems in order to comply with the new regulations, reducing the burden of immediate changes and facilitating a smoother transition. I look forward to hearing what my noble friend the Minister has to say on these points.

16:30
Lord Vaizey of Didcot Portrait Lord Vaizey of Didcot (Con)
- Hansard - - - Excerpts

I will briefly speak to my noble friend’s amendments. I declare an interest as a broadcaster on Times Radio, which is owned by News UK. The point is clear: the Government’s intentions are perfectly honourable. They seek to protect consumers and give them a simpler way to enter into a subscription contract and to cancel one.

However, as I hope my noble friend has made clear in his excellent and detailed speech, things are never quite that simple. From the 2013 consumer contracts regulations, it is clear that, 10 years ago, the Government recognised the changing nature of the services, particularly digital ones, that consumers are now using. It is also clear that the savvy consumer, dare I put it that way, will potentially be intelligent enough to work out that they could take out a contract with a subscription service —it could be a video service through which they want to watch a particular series, or a content service such as the Times if they want to read a particular article—take advantage of the cooling-off period and not pay for that content.

For service contracts such as these, it is important that Parliament support both sides of the equation. We do not take the contribution that content services make to our economy nearly seriously enough, and we still live in a climate where too many people believe that content should be free. As content providers have struggled with how to cope with delivering digital content, moving from free ad-supported models to subscription models, it is important that the Government take into account the pressures they face and reach a reasonable compromise in order to do so.

I fully support the arguments put forward by my noble friend Lord Black. They have been well rehearsed by a coalition of people, ranging from the video games trade body to the technology trade body, the news trade body, the film trade body, the commercial broadcasters’ trade body and even the online dating app trade body, which has got in on the act as well. They are all perfectly reputable organisations whose case deserves to be heard by the Government. It is my understanding that the Government recognise the problem, and we hope that the Minister will come back on Report, as he was so co-operative in our last Committee, with a genuine solution to this conundrum.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
- Hansard - - - Excerpts

My Lords, this is the starter before the main course on subscription contracts, but it is important none the less. I can reveal to the Committee that our Amendments 169 and 193 are mere probing amendments designed to test whether the Government have confidence in the Bill’s subscription provisions providing sufficient protection for digital platforms that host copyrighted content, mainly on-demand videos. A number of companies have raised this issue with us, arguing that they will be seriously out of pocket if they have fully to reimburse those who have accessed paid-for content during a cooling-off period. It is our feeling, and a view widely shared, that, although the Bill restates a lot of current consumer law on subscriptions, it does not restate many of the obvious and probably necessary exemptions that the noble Lord, Lord Black, clearly identified. We need to cover those.

At present, if I sign up to a streaming service, it is made apparent that, the moment I consume content, my statutory rights change. The Bill appears to restate some principles but not others, and it creates a lack of certainty for both sides. Some of the companies argue that they will have to pay out refunds in cases where they would not under current law. This runs the risk of creating unrealistic expectations for consumers.

The amendments in the name of the noble Lord, Lord Lucas, ask similar questions of the Minister and seek to explore how the subscription contract is paid for if it is used during the cooling-off period and then cancelled. They also seek to understand what information a trader must publish in those circumstances. The noble Lord made a good point about charging.

Turning to the amendments in the name of the noble Lord, Lord Black, he skilfully highlighted for the Committee the problems that will be caused by the way the legislation is phrased. Having heard the noble Lord, I am more on his side than I was at the outset. I am not a regular Daily Telegraph reader, nor a great fan, and this is the second time in a week I have had to plead on its behalf—this is becoming rather strange politically. I am a Guardian person, and I can see the problem replicated across the whole news world. I do not think the onerousness of the burden is justified in this case. It could be an endemic problem.

I want to hear what the Minister has to say because we need some light and dark, some nuanced thinking, about the way subscriptions work. This is not the way to bear down on the subscription trap, which I think we are all keen to deal with. This does not help us at all in that regard.

I was originally going to say of the last two amendments in the name of the noble Lord, Lord Black, which seek to create a two-year implementation period, that I was not particularly convinced, but having heard the argument, I have reversed my view. If we do not have a solution, I suspect those two amendments could be very helpful in trying to resolve some of the problems this is creating. There is merit in those amendments.

We need to approach this issue in more forensic detail. I want to hear what the Minister has to say, because I do not want us to further undermine the news market. We live in a time when there is less ability and facility to report than we are used to. Moving from broadsheets to online content is changing the way in which the news world operates. My son works in the news world, and he understands these things far better than I do. We need solutions, and the way the legislation is currently phrased does not provide us with one that protects the value and importance of news in an open democracy such as ours.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, this has been very interesting debate. There is a common theme—that these clauses are a very blunt instrument. At one end of the spectrum, we have the amendments in the name of the noble Baroness, Lady Jones, which attempt to get to grips with what this is all about and whether these clauses are fit for purpose; and at the other end we have had clear demonstrations that they are not. I am very grateful to the noble Lord, Lord Black, in particular, for his comprehensive and persuasive introduction. I started off fairly convinced of the case—I did not sign all his amendments, but I signed two clause stand part notices—but, like the noble Lord, Lord Bassam, I am now pretty convinced that the clauses are not quite fit for purpose. For the digital economy, we need to be much more wary about how the prescribed cooling- off period works.

I started off thinking that this is an issue that only the subscription and video-on-demand side should be concerned about, but having listened to the noble Lord, Lord Black, I realised that there is a much wider set of interests. The noble Lords, Lord Lucas, Lord Vaizey and Lord Bassam, described a much wider landscape that should be concerned.

I started by considering the disruption to subscription video-on-demand services—the so-called streamers. That is why I signed the notice from the noble Lord, Lord Black, opposing Clause 262 standing part. All the representations I received pointed out that this is really business-critical for UK operators such as Netflix and Disney+. I think the noble Lord, Lord Vaizey, used the expression binge-watch; if you can do that and get a refund, why bother keeping your subscription? We need to make sure that those services are safeguarded.

A number of noble Lords pointed out that Ministers in both the Commons and this place have expressed concern, saying that they understand the issue and are going to consult; but in the meantime, there is a huge amount of uncertainty. We potentially have it in black-letter law that the cooling-off periods are as set out in the Bill. We do not know what kind of consultation will take place, what kind of flexibility might be operated, and so on. In the meantime, we have a perfectly workable set of consumer contract regulations, which the parties would be happy to apply. That was very much the case the noble Lord, Lord Black, rightly made.

Important principles are set out in the CCRs, such as that consumers can request that the supply of digital content begins before the end of the 14-day cancellation period. So it is perfectly possible to have a provision that safeguards both the service provider and the consumer in these circumstances, but that principle is not imported into the Bill. I do not know why. On Monday, I asked the Minister what consultation had taken place. I have used the expression “blunt instrument”, but these are really important new provisions. The noble Lord, Lord Bassam, was absolutely right: they are based on the best of intentions, but they are so blunt that they will be a real problem for some of our digital services.

I hope the Minister will not regard our proposals as “not invented here”, and that the Government will not motor on with these provisions without taking a long, hard look at them. This is one of those circumstances where we would all be a lot happier if we reverted to a regulation-making power, got rid of some of these clauses and had a proper super-affirmative provision in the Bill, for example, enabling a discussion about all these aspects of subscription contracts. We heard about the absolute unhappiness with the impact on charities and gift aid when discussing the previous group; that demonstrates the total bluntness of these provisions. I do not think anybody will be very happy with them —the charities, the streaming businesses, the subscription media services or the dating services. There is a huge amount of unhappiness, which I hope the Minister will respond to.

Lord Offord of Garvel Portrait The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)
- Hansard - - - Excerpts

I thank noble Lords and noble Baronesses for their amendments and their interesting and informed contributions to the debate on this first group of amendments, on subscription contracts.

I will first address the amendments tabled by my noble friend Lord Lucas, which relate to the cooling-off period. Amendments 168 and 191 would create an additional requirement for businesses to inform consumers of the charges they may incur if they use a subscription but later cancel their contract during a cooling-off period. I agree that it is important for consumers to know what charges they could incur when they exercise a right to cancel during a cooling-off period. However, I assure my noble friend that the Bill already makes sufficient provision for this. The full pre-contract information listed in Schedule 21 provides information on the consequences of a consumer exercising their right to cancel during a cooling-off period. This includes information on any refund the consumer may be entitled to and any reason why that refund might be diminished. That information must be given or made available to consumers as close in time as is practicable to a consumer entering into the contract. Therefore, although I appreciate the intent behind my noble friend’s amendments, I hope he is reassured that sufficient provision is already made in the Bill.

16:45
Amendment 192 would alter when the renewal cooling- off period ends. Instead of ending 14 days after the relevant renewal date, the end date would be 14 days after a consumer has acknowledged that their contract is due to renew. The renewal cooling-off period protects consumers who have signed up to a trial period that then rolls over into a higher-cost period. It also applies when contracts renew on to a period of 12 months or longer. Consumers must be informed about this right before they enter the contract via pre-contract information. The Bill also requires traders to send a cooling-off notice. This is designed to inform the consumer in simple terms of their renewal cooling-off cancellation right at the time it can be exercised.
While Amendment 192 would help to ensure that consumers know about this important right, having the renewal cooling-off period end only after a consumer acknowledges that their contract is up for renewal would make it difficult for businesses to plan and automate their operations. For example, what happens if a consumer does not acknowledge that their contract is due for renewal? The implication is that they could retain the right to cancel the contract and secure a refund indefinitely. That cannot be right. We believe that our approach strikes the right balance between ensuring that consumers have the information that they need to exercise their renewal cooling-off rights while also respecting the legitimate interests of businesses.
Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, I am sorry to interrupt the Minister, but it might give the Box a chance to answer the question before the end of his response. Do the current provisions in the Bill contain the principle that I mentioned, which was set out in Regulation 37 of the consumer contracts regulations, where consumers can request that the supply of digital content begins before the end of the 14-day cancellation period, acknowledging that they would then cease to have the right to cancel from that point of supply? If not, why not, as that would be the ultimate protector of these digital services?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

I will come to that once I have some input from behind me. This is obviously a key part of the group.

Amendments 169 and 193, tabled by the noble Baroness, Lady Jones of Whitchurch, address the provision of information in relation to the consumption of digital content during the renewal cooling-off period. I understand that the noble Baroness wishes to ensure that the Bill provides sufficient protection for digital streaming platforms if a consumer has accessed digital content and then cancels their contract during the renewal cooling-off period. The Government will consult on the relevant return and refund rules that apply in this situation and other similar circumstances. This will ensure that rules are fair and practical for businesses and consumers. It will also enable consideration of any specific issues for particular industries or circumstances if needed—for example, digital content, perishable goods or bespoke products.

As part of that consultation, we will include a policy proposal of introducing an explicit waiver from refund rules for digital content, recognising the circumstances that the noble Baroness set out. We aim to consult before the end of the year. This is directly to avoid the scenario that these digital steaming firms fear. It is also important that those rules can be reviewed—

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, I apologise. If the Minister is undertaking this consultation and looking at a provision of that description, can he also describe which power, in the part of the Bill we are dealing with, will give the Secretary of State the ability to do that, as well as the process by which it would be introduced and the timing?

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
- Hansard - - - Excerpts

The noble Lord, Lord Clement-Jones, partly covered the point that I was going to ask about. I want some more detail about how this waiver will operate. That is where the noble Lord and I are coming from. Perhaps the Minister can flesh that out a bit more, because it is important. I am delighted that the notion of a waiver will be consulted on, but the question of how it works will be important, too.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, it could answer the Regulation 37 question.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

The point is that we have to consult on this. The matter has been raised by all sides of the Committee and there are specific reasons for it. The consultation is as it says. Rather than trying to go through this line-by-line at the Dispatch Box, I will try to set it out in writing for everyone, so that we can see exactly what we mean by it. If I have any input in the meantime from behind me, I will share it with noble Lords.

I turn now to the clause stand part notices tabled by my noble friend Lord Black—that Clauses 262, 263 and 264 should not stand part of the Bill—and his consequential Amendment 194. The net effect of these changes would be to reverse the cooling-off period in the Bill to the status quo established by the 2013 consumer contracts regulations. In particular, the cooling-off period for consumers after a free trial or year-long subscription automatically renews, introduced by this Bill, would be removed. The Government’s objective is to protect consumers from the specific harms associated with subscription contracts, while also considering the needs of businesses. We believe that the Bill correctly finds that balance. The Government expect that the protections provided through the Bill will have £400 million- worth of consumer benefit per year.

This measure protects consumers who have signed up to a trial period that then rolls into a higher-cost term. It also applies when contracts automatically renew on to a period of 12 months or longer, which usually, by definition, incurs a substantial financial outlay. Indeed, our consultation showed that many people forget to end their subscriptions before they automatically renew, especially after a trial, so we view this as an important provision that must remain in the Bill.

We understand that some businesses, particularly digital streaming services, are concerned about how the cooling-off periods will work in practice. As I mentioned, noble Lords should be assured that we will publicly consult on the cancellation return and refund rules to make sure that we get this right and—to be clear—to avoid refunds being payable to consumers exploiting the cooling-off period. The Bill allows for the Secretary of State to make the necessary regulations by affirmative procedure. That will be done before the subscription rules come into operation, following the consultation. I hope that this reassures the noble Lords on these points.

I turn now to the final amendments in this group, Amendments 221 and 224, also tabled by my noble friend Lord Black. The amendments would mean that the subscription contract provisions in the Bill come into force two years after the day on which the Act receives Royal Assent. The Government fully understand that businesses need clarity about when the new rules will come into effect and that they need sufficient time to make appropriate preparations. I am pleased to assure noble Lords that the subscription regulations will commence no earlier than October 2025. In the meantime, we will continue to engage with stakeholders to understand the impact of implementing the new rules and to ensure that businesses have enough time to adapt their operations accordingly.

The detail on return and refund rules will be set out in secondary legislation and the Government have committed to consult publicly on those rules. Clause 265 gives the Secretary of State the power by regulations to make further provision in connection with the consumer’s cooling-off right. Those regulations are subject to affirmative procedure, which I hope will assure my noble friend. I am grateful for my noble friend’s amendments and I hope that he feels reassured by my remarks.

Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch (Lab)
- Hansard - - - Excerpts

Did the noble Lord get a response from the Box?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

The Box feels that the point has been covered—but I will write to noble Lords and cover it with them.

Lord Lucas Portrait Lord Lucas (Con)
- Hansard - - - Excerpts

My Lords, I am grateful to my noble friend for his positive reply to my first amendment, where the use of a subscription during the cooling-off period is covered by the powers in the schedule. I was not clear about that on reading it, so it is good to know. As I understand it, nothing in the Bill would prevent a trader from saying to a person, “No, you cancelled a subscription before. I am not going to let you take out a new one.” There is no right of a person continually to enter into subscriptions with the intent to cancel. They can do it once and then they have been rumbled. That is my understanding. If I am wrong, I hope that my noble friend will correct me.

I should also be grateful if he gave me some guidance in relation to Amendment 192 on the meaning of “give” in Clause 264(1), which I do not see defined in any way. When the consumer has to be given a notice, does that imply that the consumer receives it? Email addresses go in and out of use. People change them. There can be blockages of various kinds on them, because some were paid for, or some may be limited by size. One could get into a situation where the trader may think that the person has done something and has sent out the notice but it has never got through, or it can get into someone’s spam trap or, as in this place, it can be blocked by someone else’s spam arrangements of which one would not have cognisance.

My interest in Amendment 192 is whether it would be fairer to do this by making sure that the notice had been received by having some acknowledgement from the subscriber. I cannot see, as an operator of a subscription service, that this is difficult to deal with—one just does not renew until one gets the confirmation, which is a click on the screen. That is not difficult to implement. If we just have “give” as a loose term in the clause, it will allow people to continue saying, “We told you but not in a way in which you are ever likely to notice”—as in The Hitchhiker’s Guide to the Galaxy. We should try to avoid that in the Bill, so I should like to see if it is possible to get something firmer by way of making sure that the consumer knows that they are renewing the contract. That said, I look forward to subsequent conversations with my noble friend and I beg leave to withdraw the amendment.

Amendment 168 withdrawn.
Amendment 169 not moved.
Amendment 170
Moved by
170: Schedule 21, page 373, line 29, leave out paragraphs 29 to 39
Member’s explanatory statement
See explanatory statement to amendment at Clause 256, page 170, line 28 in the name of Lord Black of Brentwood.
Lord Black of Brentwood Portrait Lord Black of Brentwood (Con)
- Hansard - - - Excerpts

My Lords, what a start. I shall also speak to Amendments 175 to 189, and to the stand part notice on Clause 257. I am again grateful to the noble Lord, Lord Clement-Jones, for adding his name to Amendments 170 and 185 to 188. The amendments in this group relate to reminder notices and cancellation rights.

Let me deal first with those amendments that relate to Clause 256. I support the Government’s intent to ensure that businesses send more regular reminders to customers. These can play an important role in ensuring that customers are not trapped in unwanted or forgotten subscriptions and, indeed, ensure that they can get the best deals on offer, which is important for consumers facing cost of living pressures. But such measures need to be proportionate and targeted at the practices of bad actors that cause consumers the greatest level of harm, not at the entire sector.

At present, the Bill requires traders to provide six-monthly reminders to all customers with subscriptions and sets out in painstaking detail what the reminders need to include. This is predicated on what I think is an erroneous assumption that the majority of customers do not know to what they are subscribed and are not actively using those services on a daily or weekly basis. It would also prohibit the trader from bundling in potentially useful information as they see fit, such as how much of a service a consumer has used during the period or the benefits of the subscription being missed by the customer, to assist the customer to make informed decisions. The prescription in the measure seems to be a missed opportunity to do something that would be genuinely useful for both businesses and customers. Indeed, these prescribed communications risk becoming a GDPR-style irritant and therefore ignored.

17:00
These requirements also create new regulatory powers that go further than reminder regimes in other regulated sectors. For example, Ofcom has already designed a framework for reminders for broadband and mobile phone providers, under which they must contact customers every year with information about the current contract. Amendments 175 to 182 would align the Bill with other regulated sectors and require traders to issue reminder notices every 12 months. There is no coherent justification for non-regulated subscription services being given more arduous requirements than regulated ones. Annual reminders would strike the right balance between ensuring that customers do not stay with subscriptions that they do not want and simplifying compliance, while mitigating the not-insignificant cost to businesses.
I welcome the amendment from the Secretary of State in the other place to remove the unworkable requirements on the exact timing of when reminders need to be sent to customers ahead of a specific renewal period. However, I believe that the measures still need to be refined further. Most importantly, it seems that primary legislation is not an appropriate mechanism to make requirements on the content and timing of reminder notices, especially as the whole area of digital subscriptions is a new and rapidly developing market. As drafted, the Bill includes huge detail on what businesses will be required to include in these notices and how they need to look, but limited flexibility to change this to adapt to innovation in services or flexibility for different sectors. We would come to rue such detail, as we always do when we introduce overprescriptive statutory regulation in an evolving market.
Instead, timing and content requirements ought far more sensibly to be made by the Secretary of State through secondary legislation. Amendments 170, 183 and 184 and the stand part notice on Clause 257 seek to take away such unnecessary detail from the Bill and give the Secretary of State the powers to set requirements accordingly. This would allow the Government to set clear expectations on what customers need to be told and when, while providing the flexibility that traders will need to tailor these requirements to the wide range of products and services in scope and adapt to future innovations.
I turn now to the amendments on contract termination. I support the Government’s intentions on cancellation rights. It must be straightforward for customers to exit subscription contracts without disincentives or barriers. We have all heard stories about not being able to do so, or experienced problems ourselves. But the requirements in Clause 258(6) to allow notice to be given “by any means” present a definition so wide that it could include a tweet or Facebook post, for example, or any other communication sitting outside a business’s customer management system. That risks upending practices that businesses have in place and creating a confusing patchwork of tools for consumers to manage their contracts, which will be particularly difficult for SMEs that lack the resources to accommodate this. Frankly, it is a measure totally out of proportion to the problem.
On Report in the other place, the Government stated that the concerns I have outlined about cancellations by other means have been addressed through a minor amendment to Clause 270. They argued that,
“in the event of a dispute about the cancellation of a contract, the onus is on the consumer to prove that the method in which they sent a notification to cancel their subscription contract was sufficiently clear”.—[Official Report, Commons, 20/11/23; col. 106.]
They also said that this addresses key business concerns about the original proposals. That is welcome but does not go far enough. Affected businesses have taken advice that this still means that social media is a valid notification option, leaving it up to the customer to demonstrate whether a cancellation has been dealt with effectively and then the courts to determine whether it has.
Although I am sure my noble friend the Minister will argue that this will act as a deterrent, it does not solve the fundamental problem of how to build this type of process into a cancellation system or take away the significant burden on businesses that this represents. Consumers, too, would be better off having certainty on how to notify rather than having to prove that the communication method they chose to use to cancel was effective. Rather than introducing a provision allowing subscription contracts to be terminated by any means, surely it would be more sensible simply to facilitate and ensure that businesses genuinely honour a number of reasonable means of cancellation. It should be a matter for traders and customers, not the heavy and inflexible hand of statute.
Finally—this is possibly the most damaging thing for businesses and consumers alike—Clause 258(1) in effect removes traders’ ability to offer consumers alternative offers and discounts during the cancellation process by stating that procedures must be established to enable customers to terminate a contract via “a single communication” and without imposing steps that are “not reasonably necessary” to exit. Although noble Lords will again have stories of having found it difficult to exit contracts, such as being put on hold or being sent around a loop of never-ending call centre offices, this is not the customer service experience employed by the majority of traders, who already make it straightforward and simple to leave but, in the cancellation process, simply ask whether a customer might tell them why they want to leave. This feedback moment gives an opportunity to address a problem or offer an alternative, often cheaper, product. Many consumers contact a subscription business knowing that the threat of cancellation will put them in a strong bargaining position. Clause 258 in effect removes that consumer bargaining power, as well as the trader’s ability to retain the customer on good terms.
Amendments 185 to 189 would change the existing requirements in the Bill to allow traders to adopt a more flexible exit route for a customer that is “straightforward” and “timely”, while still ensuring that traders must make it simple for consumers to bring a contract to an end. In effect, it creates a principles-based approach to cancellation, using language derived from the Government’s own policy statement of 2022, which said that cancellations should be done in a
“straightforward, cost-effective and timely way”—
and allows the Government to set clear expectations around practices that they would perceive as unfair in relation to cancellation. This is surely the common-sense, practical and, above all, proportionate way forward. This additional level of flexibility would allow different companies to implement provisions aligned to their business models, reduce the overall costs of the intervention and, at the same time, still ensure that customers can cancel in a clear, straightforward manner.
None of the amendments that I have put forward would in any way dilute the protection for customers that we all want to see but they would protect British businesses, particularly in the vital creative economy, which we all want to see grow and prosper. If the issues that I have raised are not to be remedied here in Committee, I encourage the Government to commit to looking further into this issue as we approach Report. I beg to move.
Viscount Colville of Culross Portrait Viscount Colville of Culross (CB)
- Hansard - - - Excerpts

My Lords, I tabled Amendment 190, and I thank the noble Baroness, Lady Jones of Whitchurch, and the noble Lord, Lord Clement-Jones, for adding their names to it. I also thank Professor Christian Twigg-Flesner from the University of Warwick for his help in creating this amendment.

Clause 259 sets out the obligations of a trader when a consumer is entitled to cancel or bring a subscription contract to an end. They are limited to providing various types of notice and dealing with potential overpayments by the consumer. Many subscription contracts relate to all digital content. These will involve the provision of both personal and non-personal data under the contract. On ending the contract for a digital service, there needs to be clarity about what should happen to all the subscriber’s data.

The whole point of this amendment is that it lays duties on a trader, on the cancellation or end of a subscription contract, to ensure that the consumer gets all their data back, not just that narrowly defined as personal data. At the moment, only personal data is covered under the UK GDPR. This is defined very narrowly in Article 4. “Personal data” is defined as only

“information relating to an identified or identifiable natural person … an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier”.

Under Article 20, which covers the right of portability of data, the user can end a contract, which is tantamount to withdrawing their consent for the continuing processing of personal data. It ensures that the trader cannot use this personal data any more. Article 17 provides the consumer with the right to have the personal data erased after exercising the Article 20 portability right to download their personal data. Personal data, therefore, as narrowly defined, is well protected under the law at the end of a subscription.

However, the consumer might have a lot of other data that is not within the narrow definition of “personal data”. This is non-personal data. There is no provision under UK consumer law that deals with non-personal data following the end of a contract. This would have been covered by the 2019 EU directive on digital content and digital services, in Article 16, but that came into force only on 1 January 2022, long after the UK had left the EU.

Amendment 190 will deal with the absence of protection for non-personal data in English law. It will give the user control over all their data, both personal and non-personal. Proposed new subsection (7) protects all the consumer’s data created under the contract. This covers both personal and non-personal data. Proposed new subsection (8) allows for all this data to be returned to a user within a “reasonable period” after the end of the contract. Proposed new subsection (9) gives a balance to these consumer rights by creating exemptions for the trader to have to return the data, especially if it is part of a bigger dataset that cannot be easily separated out. Proposed new subsection (10) is particularly important, because it prevents the trader continuing to use the consumer’s non-personal data at the end of the contract.

As I have explained, “personal data” is very narrowly defined. This leaves a mass of data created by the consumer during the contract that will need to be protected at the end of the contract. It will be if this amendment is adopted. Surely, the Minister would want the trader to return all the digital data that the consumer created on the platform, and to prevent the trader continuing to exploit it for financial gain.

To give noble Lords an example of the dangers to consumers if this amendment is not adopted, a consumer might want to end their subscription to their account at Flickr, the photo-sharing platform. At the moment, the clause will ensure that all the photos that identify the user will be regarded as personal data and returned to them. However, it might well not cover all the other photos that do not directly identify them. They could be holiday pictures of beaches in Greece, historic buildings or wildlife that they placed on the Flickr platform during their contract.

Once the contract is finished, Flickr can currently keep all the other photographs that the consumer has taken and refuse to return them. Furthermore, it can use them for financial gain. Likewise, a user’s comments placed against somebody else’s photos can be retained on the site by the trader after the end of the contract. On Flickr, the original author’s name is changed to a randomly chosen two-word alternative. However, the comments can be detailed and the consumer might well want to retrieve them, but they currently will not be able to.

17:15
Working out the dividing line between personal and non-personal data is very complicated. I hope the Minister will agree that the solution will be to ensure that all the digital content created by the user during the subscription to the digital service should be retrieved and controlled by the user. As we know, digital companies can be ruthless with the way that they deal with consumers’ content. Only last December, Sony, the owner of Discovery, cancelled all the content bought by subscribers to PlayStation. Suddenly those subscribers found that the content that they had paid for had been deleted from their libraries and there was nothing they could do about it. I ask the Minister to take seriously my concerns over non-personal data not being covered at the termination of a contract. The aim of the Bill is to give protection to consumers of digital services. In this area, they are not protected, and that needs to change.
Baroness Stowell of Beeston Portrait Baroness Stowell of Beeston (Con)
- Hansard - - - Excerpts

I have not been involved in Part 4 of the Bill and the Communications and Digital Select Committee did not include it in the work that we did to study the Bill last year, so I must say from the outset that I am speaking in a personal capacity.

Like other noble Lords who spoke on the previous group, I have received a lot of correspondence from various media and tech firms that rely on subscriptions as part of their business model. I am concerned on their behalf to guard against overly prescriptive measures which could threaten their sustainability, especially in such a competitive arena, which is why I have sought to familiarise myself with the Bill and have listened to what has been put forward. I should also declare that I am a vice-chair of the All-Party Parliamentary Group on Customer Service and take a keen interest in the frustrations people experience at the hands of service providers, especially when they feel that the channels of communication available to them for queries and complaints, or to cancel, are designed for the benefit of businesses, not their fee-paying customers on whom businesses rely for their income and survival.

In his response to the first group, my noble friend the Minister referred as an example to consumers who take out limited-time free or discounted subscriptions online and then get caught in full subscriptions which they cannot cancel unless they telephone a number that they have probably struggled to find online. Then, when they get through, they enter into a battle of wills with a telephone handler who just will not let them go. I have sympathy with that experience, having endured it, but if I do not want to stay, I make sure that I do not continue to subscribe. I also recognise that it is important for consumers to have a place to go to negotiate when they feel that they could get a better deal, as my noble friends Lord Black and Lord Vaizey identified. I will come back to that in a moment.

Having listened and looked at the Bill so far, my conclusion is that, concerned as I am to make sure that we get the right outcomes for consumers, I am not convinced by some of the solutions in the Bill. My noble friend Lord Black’s argument in favour of secondary legislation to address some of these issues has merit, as there appears to be significant and understandable concern from a range of subscription businesses about changes to the cooling-off period. There seem to me to be conflicting shifts in different directions—of both vague and detailed new methods for cancellation at the same time—in the Bill, so I think that more time to get this right could be justified.

I was struggling to follow what my noble friend the Minister said about consultations in response to the last group, but what is proposed does not seem that convincing to me when we are writing things into the Bill before completing the consultations necessary to get it right. What I do not want, as a result of the Bill becoming an Act, is consumers being irritated because of the frequency with which they start receiving computer- generated messages asking if they want to renew a contract or, perhaps worse, because they are no longer able to telephone a firm to threaten to cancel in order to negotiate better terms, if they no longer have that facility because of something else that has been offered to them.

Two basic things seem critical to me. The first is the guaranteed facility that if you subscribe online, you can cancel online. That is one of the most annoying things in what consumers feel at the moment. The second is that phone lines for customer service, whether the issue is a query, a complaint or somebody wanting to cancel something, have numbers that are readily available and that the lines themselves are staffed by people trained and equipped to assist individuals to the customer’s satisfaction—and for their benefit, not the benefit of the firms.

That is what we ought to be trying to achieve through this legislation and, at the moment, I am not convinced that that is where we will end up. I am not a business figure myself, but I know that the best way for any business or public service to succeed is for its customers to get the service they are paying for, to be treated with the respect they deserve and to be satisfied that they have got a fair deal as a result. I just feel that we are losing sight of this.

Perhaps I may finish with one small point about the proposed cooling-off measures. My noble friend Lord Vaizey ran through various examples of when a consumer might take out a subscription and take advantage of that subscription in a cooling-off period, without paying any fee at all. One of the examples he gave was of a consumer taking out a newspaper subscription to read just one article, or a day’s edition, for free. Clearly, that would be wrong. Journalism is expensive and the best of it cannot be done for free, but not everybody who wants to read a newspaper or an article wants to take out a subscription. To many consumers, subscriptions are another bill—and they do not want another bill. I urge all newspaper publishers to put in place, as soon as they can, a mechanism for consumers to buy just one day’s edition or 24 hours of access to the website, without them having to take out a monthly subscription.

Lord Vaizey of Didcot Portrait Lord Vaizey of Didcot (Con)
- Hansard - - - Excerpts

My Lords, I support my noble friend Lord Black on his amendments and will respond to the excellent remarks made by my noble friend Lady Stowell. It is interesting how she ended her remarks, because I read in a free email newsletter this morning that, apparently, a lot of newspapers—led in fact by Will Lewis, who was obviously educated when he was at the Telegraph by my noble friend Lord Black —are looking at a mix of models now. Some people are saying that the freemium model, or free with ads, is dead but also that the subscription model may be dead, and that there will be a mix in how people can, effectively, find a way of paying for what is normally excellent content online from reputable brands. Things are developing, so perhaps my noble friend Lady Stowell is wrong to say that she does not have experience of business; clearly, she has an instinct for it. Anyway, I digress.

I must say that I have thoroughly enjoyed being in this Committee. What has emerged from the six days in Committee is that there are clear areas at which the Committee is asking the Government to look again, but not in a hostile way. This is about an element of detail, an element of getting it right and, funnily enough, an element of both the critique and the Government having exactly the same aims. As my noble friend Lady Stowell pointed out, we want to see a world where the consumer has absolutely clear rights and an easy customer experience in taking out a subscription and in cancelling it. At the same time, we do not want to burden businesses with too much bureaucracy, but to give them a chance to develop the flexibility to grow their business models in what remains a fast-changing environment. So, my noble friend Lord Black’s argument seems clear to me.

There is a paradox in my noble friend’s argument: we are asking the Government not to be prescriptive in one area while asking them to be more prescriptive in another. On the non-prescriptive part of the argument, my noble friend’s point is clear: it seems silly to put in primary legislation exactly how often a subscription business should remind a customer that their contract is coming up for renewal. The essence of customer service is for the business to get right its relationship with the customer, so long as it is under an obligation to remind the customer clearly that their contract is coming up for renewal and they are free not to renew it.

To flip the argument, on the cancellation methods, my noble friend is again right to say that the Bill words far too vaguely the way a consumer can cancel. I previously christened an amendment on appeals against decisions of the regulator the “Whac-A-Mole amendment”; I will now christen this amendment the “carrier pigeon amendment”. It is drafted in such a way that, in theory, I could cancel my subscription to the Times—which I would never do, obviously—by sending a carrier pigeon to News UK at London Bridge and say with a straight face that I had done it authentically.

There is, again, a happy medium. It should be very straightforward to cancel a subscription. Nobody wants the situation my noble friend Lady Stowell described, which does exist: having to find a telephone number—which is hidden—and contact a call centre, and then being given the runaround. I said at Second Reading that I had in fact done exactly that. I took out a subscription to a newspaper to read an article, but I could not cancel it. It was just my luck that I happened to know the chief executive of the newspaper, and I had to ring him and ask him to cancel it for me. That is obviously unacceptable. As a Conservative, I hesitate to suggest the creation of a quango, but there must be some way for a regulator to be aware of complaints and concerns about how an organisation is behaving, and to be able to intervene to make it clear that it is not operating within both the letter and the spirit of the law.

My noble friend’s amendments take account of the business needs of subscription businesses. I understand that people will fall on one side or the other of this argument. It is an interesting point that these businesses would like a way to engage with a departing customer, and they should be able to ask, “Why are you leaving? Can we tempt you to stay?” I spend quite a lot of my time unsubscribing from the endless emails and newsletters I have subscribed to, which tend to be free. Even then, particularly if you use a service such as Mailchimp, you are asked to fill in a little questionnaire on why you have decided to unsubscribe. It is not very onerous, and I understand—even though it is a slightly odd argument —why these businesses would want the opportunity to engage with a departing customer to gather information on what was wrong with their service and how they could improve it, or to provide an improved offer to tempt the customer to stay. Certainly, as we all know from having been lobbied, many of these businesses say that, often, the initial desire to cancel a subscription is based on an irritation with the service, which can be addressed once the customer gets in touch with the provider of the subscription service.

It is important to probe the Minister on both these issues in order to get clarity on the Government’s position, while also looking at some amendments that could genuinely improve the Bill.

17:30
Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch (Lab)
- Hansard - - - Excerpts

My Lords, I thank all noble Lords who have spoken in this debate. We are grappling with some important issues at the heart of Part 4 of the Bill. This group of amendments follows on quite neatly from our earlier debate, and it gives me a chance to put the other side of the problem. I have to say, the noble Lord, Lord Black, seemed to downgrade the scale of the problem we foresee. He also seemed to suggest that most businesses mean well and do well, but there are other things at stake here, such as the issues many consumers experience. I am not talking about the publishing world when I say that.

I have two amendments in this group, Amendments 173 and 174. Both are designed to address the concerns raised by consumer groups, including Which? and Citizens Advice: the problems with automatic contract renewals, such as whether somebody has satisfied the original minimum term of a phone contract, or completed a free trial in signing up to a streaming service. As the noble Baroness, Lady Stowell, said, all too often consumers are not given sufficient notice to bring their contracts to an end without incurring additional charges, or find that they face a time-consuming and confusing cancellation process.

The noble Lord, Lord Black, said that the Government’s proposals are predicated on an erroneous assumption that consumers do not know what subscriptions they have. I take issue with that too. In the last year alone, people in the UK spent £500 million on subscriptions that auto-renewed without them realising, while unused or unwanted subscriptions cost people more than £306 million a year. The fact is that contracts are being renewed and prices increased with minimum notice and without clear opt-outs. Of course, this has more of an impact on marginal groups and those on low incomes.

We welcome the Government’s attempts to address these issues in Chapter 2, obviously, but we do not feel that these measures go far enough. Our Amendment 173 would allow the consumer to opt out of their subscription auto-renewing every six months, while Amendment 174 would allow the consumer to opt out of their subscription after a discounted trial. As has been said, the fact is that many people do not realise that they are entering into a long-term auto-renewing contract with a business or service, and it is often not in the interests of the trader to make that clear when the consumer signs up, or to help the consumer make a conscious decision to continue with the subscription once it is active. We need to ensure that the initial rush of enthusiasm for a purchase does not become a long-term financial burden.

In addition, the consumer may discover after a short time that the subscription does not live up to the hype they were sold when the contract was first signed. Again, we need to ensure that they can extract themselves, and their money, from paying for something they no longer want. Our amendments would achieve this, and I hope that noble Lords will consider supporting them.

I now turn to the amendments in the name of the noble Lord, Lord Black. He made an impassioned speech about the future of the publishing sector, and we have every sympathy with what he had to say. What is clear to me is that we are talking about two different things. I am concerned that the noble Lord is forming some generalised conclusions, when there is no one-size-fits-all answer. Our amendments address the types of subscription that trap consumers—he says he does not agree with that—into paying for something they may no longer want or need. The subscriptions in the publishing world that he described are long-term ones freely given to a magazine or newspaper. They are akin to loyalty or membership subscriptions, which create, if you like, group awareness and consciousness. Of course, the same can be said for charity subscriptions to the National Trust, for example—consumers taking out a subscription for altruistic reasons, a topic we debated when we discussed gift aid on Monday.

We do not want to sabotage those freely given regular payments. However, although we are sympathetic to the general case made by the noble Lord, we do not necessarily agree that the way forward is to remove the provisions from the Bill and give the Secretary of State the power to regulate on this instead. That could mean putting at risk the hard-won protections from subscription traps that are already in the Bill. Similarly, while we are open to further discussion on this point, we are not convinced that a default 12-month period would benefit consumers.

However, I agree with the noble Lord, Lord Black, in his Amendment 185, that the reference to notifying a business that a subscription should cease

“in a single communication”

is oblique and could cause genuine confusion as to whether and how the communication is received. Therefore, we urge the Minister to address this issue and find a new form of words. There are a number of different models to choose from, but the key consideration will be whether and how we design businesses following good digital design processes to make it clear that people can communicate in a clear way.

As we know, too many traders make cancelling a contract more difficult than it should be, whether by forbidding online cancellations, putting customers on hold for extended periods or having multi-step cancellation processes, where a user is steered towards retaining the services. Whether we end up with a prominent button on a website, a dedicated email address or some other system, we must ensure an appropriate balance to make it easier for consumers to cancel a contract. Traders should have an opportunity to retain customers, perhaps through price reductions, but customers should not be placed under undue pressure or have to go through half a dozen steps to extract themselves from a contract. If the Bill were to say more about some basic design principles, some of these issues might be overcome. We would certainly welcome further discussions on this issue.

Finally, I have added my name to Amendment 190, tabled by the noble Viscount, Lord Colville. I will speak on this only briefly. He makes an important point. We will return to this question of who owns our non-personal data and our right to have it returned once businesses no longer need it in much more detail on the data protection Bill. I hope to have a longer debate with him on that basis, but I hope that the Minister can provide some reassurance that the Government are prepared to act on this issue.

In our earlier discussions, we had a huge amount of consensus, but we have gone in opposite directions on this issue. I think that we all want the same thing but are finding different words to deliver it. If we were locked in a room for half a day, we could probably come up with a solution. It might be quicker than writing lots of letters, which the Minister might otherwise have to do. I hope that we can find a way through this. We are not being deliberately awkward, but it is important that we get this right. I look forward to the Minister’s response.

Lord Lucas Portrait Lord Lucas (Con)
- Hansard - - - Excerpts

My Lords, I wanted to wait until the noble Baroness, Lady Jones, had spoken, because I wanted the chance to agree with her amendment, which raises the same question that I was raising in Amendment 192. Why do you have to be locked into these subs? Why can you not be asked to resubscribe, if that is what you want to do? Why can we not give consumers a right to approach things that way and get to know a product before they know that they want it every year?

I echo what my noble friend Lady Stowell of Beeston said on newspapers. I would want to get to know the Daily Telegraph well enough to know that I want to pay for it every day. To be able to buy it once a week would be nice, but that is not an offer at the moment. Allowing consumers to get used to a product benefits business. As the noble Baroness demonstrates in her amendment, it also benefits the consumer. It should not just be a year’s subscription or nothing. We should encourage businesses to provide something in between. We certainly should not make renewal the only option that businesses look for. We should make them earn that renewal by providing a good product for a year so that customers do not want to have to be bothered with renewing it every year. That is a situation that one happily gets into with a number of charities. You know that you want to support them. They provide a good service and you just let it tick over. I do not think that anyone should be entitled to that position. They have to earn it; they have to prove it. To have a system where you do not have to tie yourself in at the beginning is estimable.

That said, I have a great deal of sympathy for what my noble friend Lord Black said. I would prefer to see a lot of this in secondary legislation. I understand that when someone cancels a subscription, the business wants a chance to correspond with them and have an argument, although I find it a huge irritant in my relationship with a business when I suddenly discover that it would do business with me on much better terms but only if I threaten to withdraw. I wish it would value me as a continuing customer and offer me good terms, rather than only benefiting discontented customers.

I think that there is a lot of good in all the amendments in this group. I echo what the noble Baroness, Lady Jones, said about the amendment tabled by the noble Viscount, Lord Colville. I look forward to seeing that in the next Bill. I just draw his attention to the likes of Ancestry.com. Its business is the accumulation of everything that everyone has added to it. You subscribe to it, but all the time you are adding information that is then available to other people. Businesses should be allowed to retain the information that you have added, if that is appropriate. I can quite see that you might want your photographs returned from Flickr, but something like Ancestry or an app about building up information about history, ecology or whatever else it might be properly retains information that individuals have contributed and it ought to be possible for an app to have that in its terms.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, I am glad to follow the noble Lord, Lord Lucas, because having supported a number of amendments in this group I saw harmony rather than discord. The noble Baroness, Lady Stowell, had it absolutely right: the provisions here are both too vague and too detailed. Where the Bill should be detailed, it is vague; where it is vague, it should be—and so on. That is the essence of it.

Between us, we have a pretty good idea—I hope that it does not involve sitting in a locked room thrashing this out—of what good looks like. That is the important thing. The problem is that in this group we are debating the beginning of a contract, the reminder and the termination in one fell swoop, so it is easy to misunderstand exactly what we are talking about. The amendments tabled by the noble Baroness, Lady Jones, are extremely good, because this is all about having information at the beginning of the contract. What you do not want is too much elaboration. As long as you know up front what to expect and the kind of contract that you going to enter into, that seems to me to a sensible way forward. It is about getting the basics right and I do not think that the Government have got the basics right.

Many people think that the process by which the original consumer regulations were put together was perfectly sensible, so I disagree with the noble Baroness about whether secondary legislation would be appropriate after consultation. I think that that would be a perfectly proper way forward, rather than this rather clunky way of doing it with secondary legislation and schedules setting out so much detail. That seems a rather extraordinary way of going forward. It also seems to clash somewhat with the Government’s reluctance in other areas. No doubt the noble Lord, Lord Holmes, will speak in the next group about a lack of regulation in certain quarters—which way is a matter of mutual interest. That seems a bit paradoxical. We have to get the basics right.

The noble Lord, Lord Vaizey, made an interesting speech. He was almost suggesting that there needs to be friction at the end of a contract so that there is an excuse to engage. I am not entirely convinced by that. Luckly, he did not put an amendment down, so I do not have to disagree with that at the end of the day.

The amendments tabled by the noble Lord, Lord Black, are sensible. There is an issue about how many communications a consumer sees, but the important amendment is the one regarding qualification of “by any means”. Clause 258 is pretty extraordinary. What if a trader gets a Twitter message but they are not on Twitter? How are we expected to accept a notice given “by any means”? The qualification suggested by the noble Lord seems entirely sensible.

17:45
Like the noble Baroness, Lady Stowell, I object to situations where you cannot cancel except by ringing, such as with a lot of US services, in particular the AI large language models, where you can get rid of a subscription only by ringing. We need to make sure that that is subject to English law and the practice conforms to how we want to see these things done.
The point made in passing about micropayment was good. I am a big fan of micropayments and I know a number of sites that provide that service. The more we have of that, the better. Of course, it is not subscription, as such, but you subscribe, or at least sign up, to the micropayment services. That is a sensible way forward.
In speaking to his Amendment 190, the noble Viscount, Lord Colville, highlighted an important gap in consumer protection, giving the good example of Flickr. We need to find some way of accommodating that as we go forward. I do not put my photos on Flickr, strangely enough, so I have not come across that, but I can see that it could be a real problem. I suppose that it could also be a real problem with Instagram and a number of other sites. It would be interesting to hear what the Minister thinks about that. Given that the Government have prescribed just about everything else in the Bill, it seems perfectly possible to accommodate that in Schedule 22, or wherever, but no doubt that is for another day.
Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

My Lords, we come to the second group of amendments, on subscription contracts and reminder notices. Again, I thank all noble Lords for their amendments and interventions. I appreciate that there is a lot of interest in this area of the Bill and I look forward to continuing this discussion with noble Lords between now and Report.

I will first address the amendments tabled by my noble friend Lord Black of Brentwood, for which I am most grateful. Amendments 170 and 175 to 184 relate to reminder notices. The requirement to send reminder notices is one of the targeted duties that we are placing on traders to ensure that consumers pay only for subscription contracts that they want or need. Of course, we recognise that there is a balance to be struck and we have listened to views from a range of stake- holders to ensure that we get this right. Indeed, the Government made changes to the reminder notice provisions in the other place following further consultation with industry. The Bill reflects the Government’s commitment to delivering proportionate regulation, ensuring that consumers are suitably protected from the harms of subscription traps without overburdening businesses.

I wish to reassure my noble friend that for an average monthly subscription contract, a trader will have to send only one reminder notice within a six-month period. We believe that this strikes the right balance between informing consumers about their subscriptions and not overburdening businesses.

Reducing the frequency of reminder notices, as my noble friend’s amendment seeks to do, would increase the risk that consumers end up paying for unwanted subscriptions for longer periods. To be clear, the Bill already allows for the Secretary of State to make regulations to update or modify these provisions in a number of ways, including the frequency, content and timing of reminder notices. This ensures that the Government can adapt the reminder notice requirements in future if evidence about consumer behaviour or operational practice indicates that adjustments are necessary.

Amendment 189 relates to end-of-contract notices, which a trader must send when a consumer has ended or cancelled their contract. In a similar way to my noble friend’s other amendments, Amendment 189 seeks to remove detail from the Bill. However, as with reminder notices, we think that the requirements for end-of-contract notices strike the right balance between informing consumers and not overburdening businesses.

Amendments 185 to 188, which relate to contract cancellations, were also tabled by my noble friend Lord Black. The Government are committed to the principle that consumers should be able to easily exit their subscriptions if they wish and businesses should not place undue barriers to doing so. Consumers should not, for example, be hindered when trying to leave a subscription contract or when stopping its renewal. Those are the principles behind these provisions.

However, I can assure my noble friend that we are continuing to listen to businesses and other stakeholders. We are absolutely committed to ensuring that this legislation gets the balance right between protecting consumers and supporting businesses. We of course appreciate that any communication to end a contract must be clear to a business. That is why, in the event of a dispute, the onus is on a consumer to prove that their method of ending the contract or cancelling it is sufficiently clear to the business for these purposes.

I hope that this lays to rest any concerns that your Lordships might have that a single tweet into the ether or a message via carrier pigeon, as suggested by my noble friend Lord Vaizey, could be an acceptable means of a consumer leaving a contract. We will also provide clarification through guidance for these kinds of scenarios and engage with stakeholders as we develop it. Furthermore, the Government are clear that nothing in the easy-exiting principle should prevent a trader from requesting voluntary feedback from a consumer who wants to end their subscription or from offering to give the consumer information on other products. However, these must not unduly hinder the consumer from ending their contract.

For the reasons that I have set out, including our commitment to continue to get feedback from all stakeholders on these issues, I hope that my noble friend will feel able not to press his amendments and that noble Lords who spoke to the amendments feel suitably reassured.

Amendments 173 and 174 were tabled by noble Baroness, Lady Jones of Whitchurch. Amendment 173 would impose a requirement on traders to ask their customers to agree, before entering the contract, that their subscription will renew automatically every six months or, if the period between renewal payments is longer than six months, agree each time payment is due. Amendment 174 would apply equivalent requirements but would also accommodate contracts that renew automatically after a free or low-cost trial.

I agree wholeheartedly that consumers must be protected from getting trapped in unwanted subscriptions. However, as I mentioned, the Government’s position is that the Bill currently strikes the right balance of protecting consumers without overburdening businesses and potentially reducing consumer choice. Requiring opt-ins would burden businesses and consumers with emails requiring them to confirm that the subscription can continue. Consumers who forget could inadvertently see their favourite subscriptions lapse.

I turn now to Amendment 190 in the name of the noble Viscount, Lord Colville of Culross, which would ensure that consumers can have their non-personal data returned to them after they cancel their subscription contract and would stop traders continuing to use this data. I thank the noble Baroness, Lady Jones, the noble Lord, Lord Clement-Jones, and my noble friend Lord Lucas for their contributions on this issue. I assure the noble Viscount that, where data can be used to identify a living individual, this information is already protected by the UK GDPR regime; statutory provisions therefore exist for it to be returned to a consumer. This includes data that is directly identifiable to an individual, or indirectly identifiable from that data in combination with other information.

For information that may be considered non-personal or anonymised, the Data Protection and Digital Information Bill will create a test in legislation to help organisations understand whether information is personal or anonymous. This will help bring clarity to businesses as to how to process the type of information the noble Viscount discussed. I am grateful to the noble Viscount for his amendment and hope he feels satisfied with my explanation.

Finally, I turn to the points made by my noble friend Lady Stowell. I assure her that the Government consulted on the principles of the Bill in 2021 and will publicly consult on the details of the return and refund rules. The purpose of consulting on those rules is to take account of a wide range of products, including perishable and bespoke products and services, that have been used during the cooling-off period; that is why we think it appropriate to set out this detail in secondary legislation following the consultation. I am grateful to my noble friend for her remarks and hope she feels satisfied with my explanation.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

Can the Minister reassure me that he will write to say how these provisions were consulted on? There is further work to be done, clearly, but it would be good to know what baseline consultation was carried out for all these extremely new, comprehensive, detailed—and sometimes vague—provisions. That is an important part of the knowledge we need to have going forward.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

I thank the noble Lord and agree that it would be helpful for all of us if this were written down so we could examine it in more detail.

Lord Lucas Portrait Lord Lucas (Con)
- Hansard - - - Excerpts

My Lords, I get the impression from my noble friend that this is not an area of the Bill that the Government want to move on, but I get the impression from the Committee that we would very much like to see some changes. I hope that, between now and Report, there may be some constructive conversations between me, my noble friends and noble Lords opposite to see whether we can make some consolidated suggestions to the Government that we need not argue about, so we can focus the argument on them.

Lord Black of Brentwood Portrait Lord Black of Brentwood (Con)
- Hansard - - - Excerpts

I thank all noble Lords for what have proved to be good and constructive debates on both groups of amendments.

I say to the noble Baroness, Lady Jones, that I think we pretty much have a consensus. There may be some issues at the margins, but we all agree, partly because, as my noble friend Lord Vaizey said, we are not hostile to any of these intentions. We support the intentions, but we recognise that we need to support business while protecting customers. This is important because, in many ways, it goes to the heart of the creative economy and the media ecosystem. The key point that has come across from many of the excellent contributions today is that this is a rapidly evolving environment and, as my noble friend Lady Stowell said, a highly competitive one.

The whole question about digital subs is that they are a new model for the way businesses are operating. For many, that model is becoming business-critical and should therefore not be dealt with, with what the noble Lord, Lord Clement-Jones, rightly said is a blunt instrument. We should therefore not write things into the Bill that we will regret in subsequent days. I agree with a lot of what the noble Baroness, Lady Jones, said: of course there are some bad actors in this space. All we are saying is that we should not be putting into regulations things to deal just with those bad actors that would damage the much wider economy.

I hope that the Government will think again about a lot of these things. I am grateful to my noble friend the Minister for saying that we will continue discussions between now and Report. That is very important, as I think he will have the mood of the Grand Committee: that we will want to return to this area. In the meantime, I beg leave to withdraw the amendment.

18:00
Amendment 170 withdrawn.
Schedule 21 agreed.
Clause 255: Pre-contract information: additional requirements
Amendment 171 had been withdrawn from the Marshalled List.
Amendments 172 and 172A not moved.
Clause 255 agreed.
Amendments 173 and 174 not moved.
Clause 256: Reminder notices
Amendments 175 to 184 not moved.
Clause 256 agreed.
Clause 257 agreed.
Clause 258: Arrangements for consumers to exercise right to end contract
Amendments 185 to 188 not moved.
Clause 258 agreed.
Clause 259: Duties of trader on cancellation or end of subscription contract
Amendments 189 and 190 not moved.
Clause 259 agreed.
Clauses 260 and 261 agreed.
Clause 262: Right to cancel during cooling-off periods
Amendment 191 not moved.
Clause 262 agreed.
Clause 263: Meaning of “initial cooling-off period” and “renewal cooling-off period”
Amendment 192 not moved.
Clause 263 agreed.
Clause 264: Cooling-off notice
Amendment 193 not moved.
Clause 264 agreed.
Clauses 265 to 276 agreed.
Clause 277: Other consequential amendments
Amendment 194 not moved.
Clause 277 agreed.
Clauses 278 to 282 agreed.
Schedule 22 agreed.
Clauses 283 and 284 agreed.
Clause 285: Trust arrangements
Amendment 195
Moved by
195: Clause 285, page 190, line 2, leave out “or” and insert “and”
Member's explanatory statement
This amendment ensures that both limbs of the test of whether a trustee is independent of the trader in relation to a trust need to be satisfied.
Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

My Lords, I am delighted to speak to this group of amendments, and I thank my noble friend Lord Holmes, the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones, for their amendments. I will first briefly address the government amendments, and the other amendments in my closing remarks.

Amendment 195 is a minor and technical amendment which aims to clarify independence requirements for trustees overseeing funds in a consumer savings scheme, strengthening safeguards against potential conflicts of interest. Trustees must have no association with the trader or interests in the trader’s assets, ensuring that funds are controlled for the benefit of savers and independently of the trader.

This measure is essential to safeguard consumer funds against insolvency and ensure that they are used for their intended purpose. I hope that noble Lords will accept this amendment. I look forward to addressing in closing any questions or points that they may have about the amendments in this group. I beg to move.

Lord Holmes of Richmond Portrait Lord Holmes of Richmond (Con)
- Hansard - - - Excerpts

My Lords, it is a pleasure to follow my noble friend, if not for the fact that it seems we are going backwards and forwards at the same time, which is always a good state be in. As this is the first time I have spoken on day six in Committee, I restate my technology interests, as set out in the register, as adviser to Boston Ltd.

My two amendments in this group are concerned with artificial intelligence. It is a truism, self-evident and barely in need of stating, that artificial intelligence is already impacting many aspects of our lives—as citizens, as consumers, as businesses and as a country—so it would seem timely to review all the relevant legislation to assess its competence to deal with the challenges, opportunities and risks that AI presents for us in all those roles and capacities. I shall say more on that next month.

Today, within the scope of this Bill, Amendment 199 suggests that all legislation concerned with consumer protection be reviewed to assess its competence to deal with the challenges, opportunities and risks inherent in artificial intelligence. It is clear that a number of the concepts and provisions within consumer protection legislation and regulation will be applicable and competent to deal with AI, but there is a huge gulf between what is currently set out in statute and what we require when it comes to making the best of what we could call this future now. I shall give just one example: if we consider how algorithms are set up simultaneously to push voraciously certain content while holding back other content, it is very difficult to see how consumer protection legislation is set up to deal with that challenge. That is but one specific example.

Amendment 200 goes to the question of consumer protection and the need to label all products and services where AI has been used or is built into that product or service so that the customer can know that and determine whether she or he wishes to avail herself or himself of that product or service. In no sense would this amendment require great burdens to be placed on business in bureaucracy, administration or cost. In many ways, this is yet another example of “set AI to solve an AI problem”, with human in the loop and human oversight always present.

I suggest that these two amendments, taken together, would enable the Bill to speak positively and in a timely manner on the opportunities, risks and threats to all of us, and to try to get the optimal deployment of AI in this context when it comes to consumer protection. I look forward to the Minister’s response.

Lord Lucas Portrait Lord Lucas (Con)
- Hansard - - - Excerpts

My Lords, we move from a very new problem to a very old problem. My Amendment 215B asks that the Government restore to us the protection we used to have from double-glazing salesmen. There used to be a cooling-off period. That got swept away by EU regulations. Now that we have Brexit, we have the opportunity to give consumers back the protection that they once had. At the moment, double-glazing can claim to be made to the consumer’s specification but, actually, it is not. It is a standard product, and you just tweak it a bit. There is plenty of room when you are providing double glazing, fitted kitchens or anything like that to allow consumers proper time to step back and ask themselves whether they want to go in for such an expense and whether it is something they really want to do. We ought to restore that to consumers, there being no good reason not to.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, I will speak first to Amendment 215C and then come to Amendment 202. I am very much indebted to the Fair Standards Alliance for raising the issue of standard-essential patents. I thought I knew a fair bit about intellectual property and the digital world, but I was in a state of relative ignorance when the world of standard-essential patents came to me. I have had quite an extensive briefing from the Fair Standards Alliance, which has revealed the importance of standard-essential patents, particularly in the context of competition and licensing.

These patents are necessary to implement an industry standard, such as for wifi or 5G. As the market is locked into a standard, to prevent abuse of the market power, SEP owners are required to license their SEPs on fair terms. Unfortunately, there is widespread abuse of this monopoly power by SEP holders that often, I am told, do not abide by their voluntary commitments and instead seek to abuse their market dominance to force product manufacturers to sign up to unfair terms. SEP holders are regularly seeking and securing excessive licence fees from technological innovators by leveraging the threat of injunctions, which forces firms in the UK either to accept high licence fees or to exit the market. This is to the detriment of those businesses and to the wider UK economy.

Most prospective licensees cannot afford the cost of litigation or exclusion from the UK market. The recent High Court decisions in InterDigital v Lenovo and Optis v Apple demonstrate how SEP owners exploit SMEs and make excessive royalty demands that only large, well-resourced litigants can afford to challenge. Apparently, the costs of the recent SEP licensing trial in the InterDigital case were over £31 million. That is pretty breathtaking, even to one with my background as a commercial lawyer.

The costs can be ruinous to many businesses. This tactic not only threatens innovation by UK businesses but represents a strategic risk for UK priorities, such as 5G infrastructure, diversification and smart energy network security, by limiting the competing players. The availability of injunctions for SEPs gives foreign SEP holders the ability to prevent others in the UK entering, succeeding and innovating in those markets.

The Government have been considering SEP reform— I noticed the Minister nodding vigorously, earlier—for several years and have received evidence showing the abuse that businesses in the UK face. The Intellectual Property Office’s SME survey suggests that UK businesses face excessive licence fees for SEPs. SMEs are concerned by the threat of market exclusion by court-ordered injunctions and a lack of transparency about the cost of and need for the SEPs being offered.

British companies are predominantly SEP licensees. The majority of SEPs are held by companies from China, the EU and the US, with no major SEP licensors based in the UK. This means that, when SEP holders hold up innovative UK manufacturers during licence negotiations and extract excessive licensing fees, they are taking value that would otherwise be available to fund further innovative developments in the UK and are increasing costs to UK consumers.

The UK’s innovative SMEs are especially affected across all sectors, as they cannot afford expensive legal battles against large, international SEP holders. As I said, the costs were over £31 million in the InterDigital case. The problem is widespread and the Government themselves have already accepted that SEPs are an issue; for instance, in their 5G Supply Chain Diversification Strategy of 2020 and in DSIT’s wireless infrastructure strategy last year. Recent High Court decisions have independently confirmed that position. A court determined that licence rates have been significantly lower than those demanded by the SEP holders. Our judges have concluded that SEP holders are able to exert significant unfair pressure to get the deal they want.

18:15
Product innovators in the UK, including UK SMEs, are a vital part of a vibrant technology economy and should be protected from unfair licensing practices, in line with the actual intention of the SEP’s frameworks. This amendment is designed to set out a timetable for the Government to publish the IPO’s report on its review of the existing SEP licensing framework in the UK; to set out a subsequent timetable for the CMA to respond, setting out what actions it might take to address the SEP holders’ anti-competitive conduct identified in the review, including the abuse of market power by owners of SEPs against business in the UK; and to establish a requirement for a ministerial Statement in Parliament, ensuring that the CMA’s proposals are taken forward.
There is clearly a high degree of frustration among the many members of the Fair Standards Alliance, the App Association and elsewhere. As we know, the IPO has been reviewing the situation in the UK regarding SEP licensing since 2021—I have in my hands the executive summary and next steps, which were published in July 2023. Now is the time to expedite reforms and ensure that the framework is promoting competition and innovation. I very much hope that the Minister can give us the assurance that all the SMEs in the industry are looking for.
This is also clearly the AI group of amendments during Committee. I thank the noble Lord, Lord Holmes, for giving us a sneak preview of the content of his Private Member’s Bill, which we all look forward to debating on 22 March—that was a commercial for noble Lords. I very much support the very cunning insertion in this group of his AI amendments. We have the Minister for IP and AI in the Room with us, but these amendments are another illustration of the flaws in the Government’s response to the AI White Paper. We have seen a much more robust approach in the House of Lords report on large language models, which we have all read with some admiration, particularly regarding copyright and intellectual property protection. We are all putting our speeches together for 22 March, which we all look forward to with great interest.
My Amendment 202 on AI labelling is a much narrower, more focused amendment about protecting the music industry. UK Music has been very helpful in putting this together and espousing the cause on behalf of those producing products that would enable consumers to make an informed choice about the goods and services that they acquire. According to a recent, wide-ranging, international survey on attitudes to AI, around three-quarters of consumers stress the importance of acquiring human-created works. That is pretty interesting—and I suspect that that public mood will get stronger as time goes on.
It is important that labelling protects consumers from misleading representations of what is or is not AI-generated. Labelling would allow human creators to be properly recognised for their intellectual contributions and help protect them from unauthorised exploitation. It presupposes obligations to maintain records of the creative content ingested in the training process, as was strongly raised in the Communications and Digital Committee report.
In the context of music, labelling could simply be a requirement within the metadata to identify that music is AI-generated. Essentially, this would amend the Consumer Rights Act 2015. Using that as the parent Act underscores that there is a strong consumer protection dimension to labelling requirements for AI-generated music. Consumers should know whether music is AI or human-created before making an informed decision about whether they wish to engage with it. I commend that amendment and very much hope that the Minister will respond positively.
Lord Lucas Portrait Lord Lucas (Con)
- Hansard - - - Excerpts

My Lords, to pick up the noble Lord, Lord Clement-Jones, on his two amendments, I can absolutely see where he is coming from on standard-essential patents. This reflects quite a long-term failure by successive Governments to support British participation in standards setting. If one looks at the history of the telecommunications industry from when I was young, when the British were dominant, to where they are now, which is nowhere, one of the great failures and one reason why things have not located or started in the UK has been that we have not committed sufficiently high-powered, consistent energy into standards setting. We have never quite been abreast of what is happening next or been the place where people want to locate a business. It is enormously important and I made a point on this in the Automated Vehicles Bill. It applies to a lot of technical areas and we must get behind standards setting.

In relation to Amendment 202 of the noble Lord, Lord Clement-Jones, how does one know how much is AI-generated? It is rather like asking how much of a Reynolds painting is by Reynolds. Did he just touch in the eyebrow and leave the rest to his servants? Does an AI grammar checker count as AI-generated content? If the AI has made suggestions of things that one might look at, is that AI-generated? I imagine that a lot of journalists now use AI to help fill out the column inches after a hard day’s doing something else. As the noble Lord knows, given his connections with academia, this is becoming common on both sides—the teachers and the taught—so what does finding a way in which to define “AI-generated” mean? Is it AI-supported or no involvement at all? Is it not using any of the tools at hand? This is a difficult concept to go at. Surely, at the end of the day, what matters with a piece of music is how good it is, not where it came from.

Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch (Lab)
- Hansard - - - Excerpts

My Lords, I thank all noble Lords who have spoken. This truly is a miscellaneous group of amendments and I will add to the miscellany of all this, because my Amendment 215A addresses the ambiguity that arises from the current laws on marketing infant formula.

Perhaps I may briefly explain the background as to why this is before us today. The Infant Formula and Follow-on Formula (England) Regulations 2007 were designed to prevent supermarkets promoting infant formula over breastfeeding. They arose because, prior to that, aggressive marketing and advertising techniques had been used by the milk formula industry to mislead parents over the best way in which to feed their babies. The current rules state that infant formula should not be advertised or promoted in a shop. They also say that no coupons, special sales offers, discounts or gifts should be offered to mothers or their families.

Meanwhile, noble Lords will be aware that the cost of infant formula has risen recently and is a huge extra burden on families, who are particularly suffering in the cost of living crisis. It is estimated that the cost increased by 22% in the past year alone. But because of the current regulations, supermarkets still cannot accept vouchers, even those provided by food banks and local authorities to purchase that infant formula. There have therefore been calls for the marketing rules to be reviewed to allow, for example, retailers to accept loyalty points, grocery vouchers and store gift cards, as well as free vouchers, for infant formula.

Our amendment addresses the current ambiguity in the regulations and calls for a review to clarify the marketing rules and their impact on the pricing and affordability of infant formula. This Bill is seen as the best mechanism to get this review under way. I should stress that our aims are to clarify the law and to tackle the unfair pricing currently taking place. However, we want to ensure that parents remain protected from the aggressive advertising that has misled them in the past. I hope that noble Lords and the Minister will see the sense of this amendment.

On a completely different issue, I listened carefully to the noble Lord, Lord Lucas, about double- glazing. I agree that he made an important point. I did not know that there were still double-glazing salesmen, but he raised them so I am sure there must be. I agree with him that, if they still exist, they should be regulated.

I turn to a completely different issue again. I am grateful to the noble Lords, Lord Holmes and Lord Clement-Jones, for their amendments on AI. We look forward to debating the Private Member’s Bill of the noble Lord, Lord Holmes, on AI regulation in the coming weeks. These Benches take this issue hugely seriously. We recognise that AI has the potential to deliver life-changing benefits for working people, from early cancer diagnosis to relieving traffic congestion, but these benefits must be set firmly in new standards and new regulation to keep people safe and their data protected. The EU and the US are speeding ahead on this while the UK is dragging its heels, so we believe that new regulations on the control of AI are essential.

I listened carefully to the noble Lords. I do not disagree with what they are trying to achieve but I query whether this is the right place to pursue these amendments. The data protection Bill will come before the House shortly; that will give us a much greater opportunity to address the impact of AI on the lives of consumers and citizens. I hope that we will have a really detailed exploration of the protections needed in that Bill at that time. However, having listened to the noble Lord, Lord Clement-Jones, on music labelling just now, I realise that I cannot just pass this issue on to the data protection Bill in the way I wanted to, because he made an important point about the consumer issues arising. Again, I have some sympathy with the noble Lord, Lord Lucas, who challenged this and asked, “How can we know? What percentage of music is AI?”

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

I entirely agree that it is a question to be asked. Of course, there is the general principle of transparency. If you look at the amendment, you will see that it talks about content “whether assisted or generated” by AI. It could be partly or wholly generated by AI but, in transparency terms, just the knowledge that at least some of the elements were created by AI is important. The consumer can then take it or leave it, basically. If they like the sound of AI music—believe me, some of it is pretty dreadful—that is fine, but it is an acquired taste.

Lord Lucas Portrait Lord Lucas (Con)
- Hansard - - - Excerpts

Will we have musicians confessing on stage that the electronics under the stage are adjusting the sound of their voice?

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

It all depends on how sober the audience is, I suspect.

Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch (Lab)
- Hansard - - - Excerpts

Gosh—I cannot help feeling that this is the beginning of a much longer conversation. We may not want to have that conversation now, but this is an important issue; I absolutely understand why the noble Lord, Lord Clement-Jones, is raising it. We need to find a way to ensure that consumers are properly informed.

On standard-essential patents, I am grateful to the noble Lord, Lord Clement-Jones, for explaining the background to his amendment. Again, this is an issue with which I was not familiar, but the noble Lord spoke persuasively. I hope that the Minister will agree to follow up on the Intellectual Property Office’s review and provide some reassurance that the issue is in hand.

The Minister will be pleased to hear that we support his Amendment 195. With that, I look forward to hearing his response to the various issues that we raised in this group.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

My Lords, I thank noble Lords for their valuable contributions on the amendments in this group. I will address each one in turn.

I thank my noble friend Lord Holmes of Richmond for his Amendments 199 and 200, relating to consumers and artificial intelligence. I also thank the noble Lord, Lord Clement-Jones, for his remarks on this matter.

18:30
The Government have now published their response to the AI White Paper, which sets out a broad update on their plans for AI regulation. That response, among other things, sets out the Government’s intention to assess the suitability of existing regulatory frameworks for dealing with AI-enabled risks. In doing so, it is right that the Government adopt a comprehensive approach and prioritise the most severe and pressing risks. The Government’s central AI risk function will ensure that our assessment of these risks is kept up to date by convening important actors, such as researchers, civil society, international partners and regulators. At this stage, it would not be right to create legislative obligations for the Government to focus on some regulatory frameworks over others, in a manner unrelated to our assessment of any gaps in existing frameworks or related risks.
Specifically on the matter of informed consent, UK data protection law already gives consumers rights as data subjects, allowing them to object to or restrict the processing of their personal data. I confirm that this applies in the case of AI just as it does to any other products and services that involve processing personal data. For these reasons, I hope that my noble friend will not press his amendments.
I thank the noble Lord, Lord Clement-Jones, for his Amendment 202. I agree with him on the importance of consumers being provided with products that match the description that accompanies them, whether or not the product involves AI. In this regard, we consider that the Consumer Rights Act already makes sufficient provision, as it requires that relevant digital content supplied by a trader must match any description of it given to the consumer. However, Section 36 of the CRA does not require digital content generated by artificial intelligence to be specifically labelled as such.
On AI labelling more generally, the Government recognise the concerns around AI models generating large volumes of content that is indistinguishable from human-generated pictures, music, voice recordings or videos. Enabling users and institutions to determine what media is real is a key part of tackling a wide range of AI risks. Ahead of the AI Safety Summit, the Department for Science, Innovation and Technology published best practices relating to AI identifiers, which can aid the identification of AI-generated content, in our Emerging Processes for Frontier AI Safety document.
However, we should remember that AI labelling and identification technology is still at an early stage. As my noble friend Lord Lucas pointed out, this area requires significant consideration. No specific technology has yet been proven to be both technically and organisationally feasible at scale. As a result, many AI labelling solutions currently available are relatively easy to remove or otherwise technically circumvent. It would not be right to mandate labelling in law until the potential benefits and risks are better understood. In the light of this, DSIT continues to investigate the potential for detecting and labelling AI-generated content. This includes assessing technical evidence on the feasibility of detection and levers the Government may have to ensure that they are deployed in a beneficial way. I hope that, on account of what I have just set out, the noble Lord will not press his amendment.
I thank the noble Baroness, Lady Jones of Whitchurch, for Amendment 215A, which would require the Secretary of State to publish a review of the impact of infant formula sale and promotion legislation. The legislation does not set the price of infant formula. It is there primarily to ensure that parents and carers have access to the highest-quality and safe infant formula to meet the nutritional needs of babies. It sets robust labelling and compositional standards, as well as restrictions on inappropriate marketing and promotion of infant formula so as not to discourage breastfeeding. This is in line with our international commitments to support the World Health Organization’s international code of marketing of breastmilk substitutes.
Through setting robust compositional standards, the legislation ensures that all infant formulas, including cheaper options, provide all the nutrients a healthy baby needs. The CMA is already conducting a review of the grocery sector and is looking further into the infant and follow-on formula sector. It will examine whether ineffective competition in the baby formula market could be leading to parents paying higher prices. It will publish a report in mid-2024. The Government have noted the CMA’s report and are engaging with it on the next stage of its work.
I thank my noble friend Lord Lucas for his Amendment 215B and for his remarks. I understand his concerns. To carve out a broad category of goods in the way suggested is inconsistent with the current treatment for bespoke or personalised goods and may well lead to a lack of clarity about what goods that “relate to home improvements” means, given the broad nature of goods this could cover.
As it stands, the right to cancel and the exclusions from this right are designed to be proportionate in the protection provided to consumers, while also reflecting the costs and difficulty traders face when having to resell returned goods following cancellation. That is precisely why goods that are unique to the consumer and produced according to the consumer’s wishes and requirements are exempted from the cancellation provisions in the consumer contracts regulations. Where goods relating to home improvements fall within this narrow exception, it is difficult to see any justification for them not doing so.
I also highlight other legislation in place to protect consumers, such as the Consumer Rights Act 2015—the CRA—and the Consumer Protection from Unfair Trading Regulations 2008—the CPRs. I agree with my noble friend on the importance of consumers having robust protections, particularly when making high-value purchases. However, these must be balanced against the needs of and protections provided for businesses, many of which will be small or sole traders. When taken together, the CCRs, as they stand, along with the relevant provisions in the CRA and CPRs, provide for this balance. For these reasons, I hope my noble friend will not move his amendment.
I turn to Amendment 215C from the noble Lord, Lord Clement-Jones. I thank him for proposing the amendment, which would require the Government and the CMA to publish reports on the competition harms associated with standard-essential patents. The Government recognise the growing importance of SEPs to the UK economy. I also thank the noble Lord for noting the concerns around discriminatory licensing practices against smaller businesses.
The IPO has been actively working over the past two years better to understand how the SEPs framework is functioning to support innovation and establish where intervention is needed. Governments around the globe are also considering the effectiveness of their own SEPs frameworks. It is important that government and regulators consider the issues carefully to ensure that the balance between innovation and competition is effectively struck. I confirm that the IPO has presented its recommendations to Ministers, who will provide an update on these issues in due course.
Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

Can the Minister do any better than “in due course”? Perhaps he can say “shortly”.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

In a matter of time. Why do we not get the Box to define “in due course”?

I therefore assure the noble Lord that the Government’s position on what interventions may be appropriate in respect of standard-essential patents, including specifically on injunctions, will be set out more clearly in the very near future. As the Government are already addressing this issue and are due to make their policy position public soon and separately, I hope the noble Lord feels able not to move his amendment.

For the reasons set out, I hope noble Lords will not move their amendments.

Amendment 195 agreed.
Clause 285, as amended, agreed.
Clauses 286 to 288 agreed.
Amendment 196
Moved by
196: After Clause 288, insert the following new Clause—
“Consultation: CMA powers to address issues relating to ticket sales(1) Within the period of three months beginning with the day on which this Act is passed, the Secretary of State must lay before both Houses of Parliament a statement summarising— (a) work already undertaken by the CMA in relation to the sale and resale of event tickets, and,(b) proposals for the granting of new powers or duties for—(i) the CMA,(ii) trading standards officers, or(iii) other relevant regulators or actors in this area.(2) Within the period of six months beginning with the day on which this Act is passed, the Secretary of State must consult on the detail of the proposals mentioned in subsection (1)(b).(3) In preparing and consulting on the proposals, the Secretary of State must consult—(a) ticket sellers and resellers,(b) artists and performers, or their representatives,(c) consumers and representative organisations, and(d) any other persons the Secretary of State deems appropriate.”Member's explanatory statement
This amendment is to probe what steps (if any) the Government is taking to tackle long-standing issues in the event ticket sales and resales markets. The CMA reported on its work in this field in August 2021, making a number of recommendations to Government.
Lord Leong Portrait Lord Leong (Lab)
- Hansard - - - Excerpts

My Lords, I rise to move Amendment 196, which was tabled by my noble friend Lady Jones of Whitchurch and thank the noble Lord, Lord Clement-Jones, for his support.

About 10 years ago, I promised my then seven year- old daughter a birthday treat—to take her and her friends to a live gig by a well-known American pop icon. By the time I got around to buying the show tickets, they were all sold out, and I would have had to pay several hundred pounds over the odds to secure any tickets from the secondary markets. Sadly, I had to tell my daughter and her friends that they could not go. I saw the disappointment in their faces. I could not explain or expect them to understand that they had been bitterly let down because ticket touts were exploiting a market in which regulation is broken. It felt very wrong indeed.

My noble friend Lady Jones’s Amendment 196 requires the Secretary of State to undertake a review of the operation of both the primary or original point of sale and the secondary or resale ticketing markets. The UK’s secondary ticketing market was estimated to be worth £1 billion in 2019. The very premise of this industry centres on bulk-buying tickets to live sporting and cultural events and selling them on to consumers at inflated prices. Price-gouging cruelly excludes those who cannot afford these inflated prices. Many are genuine fans and some, like my daughter, are very young. Moreover, it exploits those who can pay these prices, as some are unable to use the tickets because secondary ticketing often breaches the original purchase terms.

In August 2021, the Competition and Markets Authority set out recommendations for additional legislative safeguards and enforcement powers to stop the bulk-buying of tickets and to end the fraudulent practice of speculative selling, which is where touts list seats that they do not have, bank the proceeds upfront and then hope to secure tickets later to fulfil their orders. It will be extremely obvious to all noble Lords how open to abuse such a practice is. Genuine fans risk losing their money completely and being unable to attend, even when they believe they have a ticket. They could find themselves out of pocket or open to further exploitation if they have made plans to attend an event and the ticket purchased by them in good faith is either not valid or not available.

It took the Government almost two years to respond to the CMA’s consultation. Their much-delayed answer, in May 2023, in essence dismisses this reasonable request saying:

“it is too soon to conclude that the only way forward is further legislation focused on this market”.

The Government are leaving it to the industry to self-regulate. This clearly does not work. Their response is inadequate to both the scale of the problem and the requirements of the industry, an industry in which UK talent leads the world, with accompanying contributions to the public purse.

Several high-profile artists, acting through their management companies, have attempted to introduce additional safeguards to ensure that their legitimate fans purchase tickets in the first place and to identify tickets that are sold on for profit so that they can be cancelled. They have sought legal redress to try to force rogue ticket resellers out of business. Despite these efforts by some in the industry, there is clear evidence that market and regulatory failure is leading to significant and persistent consumer harm.

18:45
Artists are very vocal about the need for change. Sadly, the Government’s response is—forgive the pun—tone deaf. It is out of tune with the public and the industry, who know there is overwhelming evidence of bad practice. The Government are all but ensuring that thousands of fans continue to face rampant rip-offs by touts or resale sites.
We know it is possible to find solutions. Ireland, France and Australia have legislation outlawing the resale of tickets for profit while ensuring that genuine customers who can no longer attend can resell at the price they paid or less. Search engines and free video-sharing websites could help to direct customers towards the numerous ticket exchange platforms that offer face-value resale. They should certainly stop promoting ticket touts.
The live events market makes a significant contribution to our economy and cultural life. As legislators, we have the responsibility to ensure that genuine fans get tickets rather than those who want to turn a profit. The CMA has been clear that further action is needed. Performers want further action. We believe that if the Secretary of State were to commission a consultation it would come to the same conclusion. We believe that the cleanest way to achieve our objective would be to give the CMA the legislation it requires to do the job in this area. Of course we cannot resolve all ticketing issues with this Bill, but we believe that our amendment will get things heading in the right direction. I very much look forward to hearing noble Lords’ views on this debate. I beg to move.
Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

It is a pleasure to follow the noble Lord, Lord Leong, who gave an excellent introduction to Amendment 196, which I signed and very much support. All the amendments in this group are of a piece; we are very much on the same page. This arises from the fact that, despite a series of very long-running investigations—we had the Waterson report, which ran to 225 pages, back in 2016 and the Secondary Ticketing report, which the noble Lord, Lord Leong, mentioned—it is widely recognised that these platforms continue to benefit from large-scale ticket touts, many of whom acquire tickets through unlawful means.

I have not buried my head in the sand. I have had conversations with some of the secondary ticket sellers, but I am unconvinced by the story they tell. I am very grateful to FanFair Alliance, which has campaigned on this issue for many years, and I pay tribute to the noble Lord, Lord Moynihan, and Sharon Hodgson MP, who has been a tower of strength in her all-party group on this subject over many years. It is clear, as FanFair Alliance has uncovered, that there is substantial evidence of speculative listings on secondary websites, where sellers list hundreds and even thousands of tickets they do not possess. You have only to look at one or two headlines, such as:

“Viagogo accused of listing non-existent tickets on behalf of seller linked to firm”.


A 2022 report by ITV detailed how the vast majority of UK festival tickets listed on the same site were fraudulently advertised by just three people. We have some egregious behaviour there. These three sellers are still actively trading on that website.

Meanwhile, in March 2023, reporters for BBC Radio 4’s “You and Yours” highlighted how a new generation of touts are exploiting ticket systems with increasingly sophisticated software and bots. I am sure that the noble Lord, Lord Moynihan, is conscious of all this. It is one of the issues that we have failed to tackle over the years.

As the noble Lord, Lord Leong, mentioned, the CMA published a series of recommendations in August 2021 that aimed to strengthen existing laws around ticket resale in order to protect consumers, including a ban on platforms allowing resellers to sell more tickets for an event than they can legally buy from the primary market and ensuring that platforms are fully responsible for incorrect information about tickets that are listed for sale on their websites. Regrettably, BEIS—actually, in May 2023 it was probably the Department for Business and Trade; it is hard to keep up with these changes in department names—opted to prioritise the

“power of competitive markets to give consumers choice and flexibility”.

That is not the same as consumer protection. As the noble Lord, Lord Leong, said, it is out of tune with public opinion in that respect.

Compounding this decision, it remains a source of immense frustration that Google and YouTube continue to permit ticket touting websites to buy themselves to the top of search results, signposting fans away from official sources of tickets. As a result, FanFair Alliance believes that it is now imperative for the UK to adopt legislation similar to that of many other countries—France, Italy, Belgium, Japan and Australia—outlawing the resale of tickets for profit while ensuring that customers who can no longer attend an event are provided with viable services to resell at the price that they paid or less. We agree.

The prime example of this is on our doorstep. In Ireland, a comprehensive piece of legislation to ban ticket-touting was introduced in 2021. Dublin shows for artists including Taylor Swift, Coldplay and Arctic Monkeys appear to be delisted by US-owned websites such as viagogo and StubHub as a result of this legislation.

A powerful and compelling case is being made for Amendment 196. I hope for this amendment. The third amendment, Amendment 198, ties some of this together. Given the situation that I have outlined and the situation that the Competition and Markets Authority has been in—its recommendations still have not been taken on board—we need a clause that would mandate the Secretary of State to submit an annual report to Parliament on the secondary ticketing market, specifically evaluating the adequacy of consumer protection against exploitative prices and other practices. As well as Amendments 196 and 197, we need to have that information and give the CMA the teeth to do this and report to the Secretary of State, who would then report to Parliament. That would allow Parliament to evaluate the functionality of the market and determine the most effective solutions to address issues related to secondary ticketing.

I very much hope that the Government will agree that they need to make a great deal more progress. Their views were expressed in May 2023, but the abuse continues. We need to do something about it.

Lord Moynihan Portrait Lord Moynihan (Con)
- Hansard - - - Excerpts

My Lords, I will speak to Amendments 196 and 197 in the names of the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Jones, so ably moved by the noble Lord, Lord Leong, whose speech was exemplary in this context, well researched and absolutely right. I declare an interest as co-chair, with Sharon Hodgson MP, of the All-Party Group on Ticket Abuse. I echo what the noble Lord, Lord Clement-Jones, said on the tireless work that Sharon Hodgson has undertaken over the years on this. She shares my deep disappointment that the Government have failed to act on this.

It is such an obvious and sensible legislative move to stamp out the abuse that takes place in the secondary market, which does not benefit any of the sports men and women who entertain us or any of the artists. It simply puts money in the pockets of those modern-day touts who, particularly in this day and age, use bots. I will move on to explain how they do that to our disadvantage and that of the true fans of sport and music.

Those who were in the House when we last had a major competition and consumers Bill will recall that we made significant changes. There was good all-party support at that point to see significant changes to ticket sales in the secondary market in what became the 2015 Act, but nothing has happened since then, and it is high time that we take action. In fact, since then we have seen a tsunami of rip-offs by the modern-day online ticket touts, at the expense of genuine music and sports fans.

The number of professional ticket touts who have migrated from the dirty mac brigade on street corners to the use of computer bots has moved from some hundreds to 3,000 to 3,500 in the UK at the moment. When Sharon Hodgson and I started work on this, the numbers were, as I say, just in three figures. As she said in another place when speaking to the Bill, professional touts

“are attacking everywhere, from stadium gigs to local venues and, increasingly, football games”.

Touting tickets for professional football fixtures is the one area of sport where that is illegal—yet it carries on. She went on:

“Yet according to Home Office figures, the yearly arrests of football ticket touts have been decreasing, dropping from 107 in 2011-12 to only 28 in the 2019-20 season”.—[Official Report, Commons, 20/11/23; col. 122.]


That is despite a rapid rise in the number of touts. There is simply not the resource available to track down these people. Criminalisation in the law is the only way that we are going to tackle this problem.

It is not as if we have not looked at it and said, “This works”. We introduced legislation for the 2012 Olympic and Paralympic Games to ban the use of secondary markets for the sale of tickets. If that was brought before all politicians of all party persuasions and agreed, as an important measure, to make sure that we had a fair ticketing policy at those Games, why is it not appropriate for all sports and arts activities?

These amendments propose the further action that is necessary to restrict secondary ticket sites from listing tickets for sale where the seller has not provided proof that they are able to sell them, which happens quite frequently. There is many an occasion when tickets go on sale before the formal tickets are launched in the market, because the ticket touts are confident that they will be able to get them and then, as preferred buyers, sell them on to the secondary market sites.

These amendments in themselves will be welcome and are very important measures for consumer protection. Think of the family that gets a forged ticket because a preferred buyer cannot get the tickets that he has promised, maybe to viagogo, but who then goes out and has the money to forge those tickets and sell them. The family comes down from the north of England or potentially from abroad and is not let in, because the ticket is fraudulent. The family might eventually get only some of its money back from the credit card company—but after much fighting and difficulty, while trying to rescue something from the sadness and tragedy that are the non-financial aspects of the effects of this secondary market.

These measures would go some way to implementing the recommendations made by the CMA to tighten up the measures focused on restricting abuse in the secondary ticket market—measures that the Government pushed deep into the long grass. The noble Lord, Lord Leong, quoted from the letter of 10 May from the Minister, in response to the CMA. Paragraph after paragraph were just kicking this into the long grass, despite the fact that, as we have heard, Professor Waterson’s independent report was absolutely significant in advising the Government on a whole series of measures to take action against the abuses in this market.

We have the work of Sharon Hodgson, which I have spoken of, and the CMA has called for legislative action in this area. We have heard from UK Music, top sportsmen and music industry leaders—yet it was all too easy to say

“it is too soon to conclude that the only way forward is further legislation focused on this market”.

What will it take? I know that the Minister will be in agreement, because he knows about this economically from his days at Lazard. He knows from his young days, when he was up in Greenock, about the power of sport in that wonderful town—how much people love it and how they hate being fleeced by the secondary market abuses that go on.

19:00
In addressing these issues, I want to focus on one important point that has come up recently in the context of your Lordships’ House: whether it is right, or whether my noble friend the Minister believes that it is right, for a trustee of a charity to be able to profit purely as a result of the benefits accruing to their role. One example is the profiteering by trustees of the Royal Albert Hall in bypassing their own ticket returns scheme, which enables them to hand their tickets back for the face value less 10% for the ticket handling fee. Yet, in the case of the Royal Albert Hall, these charitable trustees, who constitute the majority of the board—the 18 people who are majority seat-holders on the board of trustees—are able to sell their tickets at the inflated prices available on the secondary ticket market, to the disadvantage of the true fan.
Proof of the value of these seats, when ticket sales through the viagogos and StubHubs of this world are taken into account, was clear in the recent offering by Harrods Estates of five seats in the second tier of the Royal Albert Hall for £1.5 million, or £300,000 each. Run the economics, Minister: it is clear that big-time scalping is part of the self-regulated market open to the trustees, whose job it should be to act purely for the public benefit.
As noble Lords will know, in a debate in your Lordships’ House on the Royal Albert Hall Bill, my noble friend Lord Hodgson—a calm, reflective and fair-minded lawyer —stated:
“Within the shell of a registered charity, the trustees are running what appears to be a personally highly profitable operation and, by the way, along the way they have managed to get a £20 million loan from the culture recovery fund”—
taxpayers’ money—
“which is apparently going to be paid back at £1 million a year over 20 years”,—[Official Report, 19/10/23; col. 317.]
or 2%. Surely the Government would wish to stop the practice that is available to, for example, the trustees of the Royal Albert Hall in the opportunity to sell their tickets. They may not have wanted to see Ed Sheeran at the Royal Albert Hall on 19 November last year, but viagogo was offering those £200 tickets for between £5,899 and £6,000. Does my noble friend the Minister believe such trustees are acting in the interest of the public benefit? It is public benefit that makes charities different. How does possible profiteering on the secondary market enable the Royal Albert Hall corporation to promote the arts and sciences and preserve its building for the nation, rather than lining the well-fleeced pockets of any trustees who might avail themselves of StubHub, viagogo and the like? How can this be considered as being in the public interest?
The very least we can do this evening is seek agreement from my noble friend the Minister on the basic principle of trust law: trustees, whatever they are called—board members, council members or whatever, and from whichever organisation—must not place themselves in a position in which their private interests may conflict with the overriding obligation to further the interests of the charity where the resale of tickets into the secondary market is concerned. This is not a specific example; it should be a general principle. A simple one-clause amendment is all that will be needed on Report if my noble friend the Minister cannot accept the amendments that have been tabled.
The world has moved on since 2015. The New York Attorney-General recently stated that 1,000-plus concert tickets were bought by one bot in one minute, with 15,000-plus tickets bought by two bots in a day. There were mark-ups of up to 7,000% on the New York secondary markets, with money taken out of the pockets of genuine fans, making online tickets sales unfair. That is why the noble Baroness, Lady Jones, the noble Lords, Lord Leong and Lord Clement-Jones, and politicians from across the Committee and the Chamber are joining with musicians and sports fans to stop bots buying tickets and to restore fairness to ticketing.
I see one or two frowns among Committee Members at the mention of bots. It might help the Committee if I briefly say that ticket bots, also known as scalper bots, are software designed to help purchase tickets by performing automated tasks. They are normally filled with a whole series of credit card details, which take seconds to complete; they are already inserted in the computer software. As we, the public, very keen to go to a concert, sit and put our names, addresses and details of our credit cards in, we find that the tickets available from the event have been swiped within one minute and are already up for sale at inflated prices on the secondary markets. Only the touts and secondary market managers benefit from that transaction.
As has been pointed out, Canada passed legislation that banned primary and secondary ticket sellers selling tickets that they do not own, and prohibited mass ticket buying, which is what is being sought by the amendments before the Committee. As we have heard, in Ireland the practice of reselling tickets above face value is banned after its sale of tickets Act was brought into force. I quote the Irish Minister when he announced the passing of that legislation:
“I am delighted to announce that the Sale of Tickets (Cultural, Educational, Recreational and Sporting Events) Act 2021 comes into effect … We have heard all too often of the experiences of fans waiting patiently to buy tickets only to miss out and to then see those same tickets for sale on a secondary site for far more than they can afford or would be happy to pay … This is a good day for genuine fans who will now have fairer access to tickets for cultural, entertainment, recreational and sporting events. This new law protects against profiteers seeking to unfairly gain from the resale of tickets who do not contribute in any way to benefit those with the talent and skills that the rest of society wish to appreciate at an affordable price”.
The time has come for us to take similar action.
These probing amendments allow us to consider what should be placed in the Bill on Report. Should my noble friend the Minister find himself unable to support these amendments, I very much hope that, on Report, he will come back to a number of the specific recommendations and requests made by the Competition and Markets Authority and the FanFair Alliance, which has been commented on. This is the Digital Markets, Competition and Consumers Bill; this is an opportunity for the Minister to ensure that it lives up to its name.
Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

My Lords, I thank the noble Baroness, Lady Jones of Whitchurch, for her amendment, which the noble Lord, Lord Leong, spoke to so eloquently. I also thank the noble Lord, Lord Clement-Jones, for his amendment and my noble friend Lord Moynihan for adding his contribution on a subject he speaks about with great passion. I recognise that many noble Lords have a great interest in ticketing an on a personal level, as an avid sports fan, I share a lot of their frustration.

Buying on the secondary market is a matter of consumer choice. So long as consumer rights are complied with, the Government do not wish to prevent consumers having that choice. In recent years, the Government have further strengthened those rights with respect to secondary ticketing. In 2015, we legislated to ensure that consumers received fuller information on tickets they were buying on the secondary market. In 2016, we commissioned an independent study of consumer protection in the secondary ticketing market under an economist, Professor Waterson. He concluded that, providing they were enforced, the measures in the Consumer Rights Act 2015 should be sufficient to protect consumers. He also noted that there was more the primary market could do to help consumers get tickets there.

Since then, enforcement work undertaken by the CMA and trading standards has resulted in better information being provided by platforms, and the successful prosecution and fining of a number of ticket touts. We have also added further clarifications to the CRA and introduced legislation outlawing the use of bots to buy tickets for profit, on which I know my noble friend Lord Moynihan was very influential. I thank him for his work in this area. The current legislative framework is producing successful enforcement action. It will be strengthened further by the provisions in Part 3 of the Bill.

I turn to the amendment in the name of the noble Lord, Lord Clement-Jones, on ticket limits. In the last year, the Government have consulted further with the industry on applying limits on ticket purchases in the primary market to sales in the secondary market, in line with the commitments in the response to the CMA recommendations. However, we continue to believe that this will be difficult in practice. The Government’s approach—

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, I am sorry to interrupt the Minister. How often do the Government turn down very firm recommendations from a regulator that knows the market, such as those made in the secondary ticketing report? It is quite unusual and rather like they are second-guessing the regulator. The Minister said that it is impractical, but is the regulator not in the best position to decide whether that is the case and whether it can be enforced?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

I thank the noble Lord. Yes, the Government absolutely expect the CMA to do its job but in the consultation which comes from that, there are other voices to be heard and other stakeholders to be listened to. As I said, in 2016 we had an independent study on the secondary ticketing market and we went to an economist, Professor Waterson, to give us his opinion on these matters. There is a balance to be struck.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

I am sorry, but Professor Waterson could not have been clearer in his 225 pages—and that was in 2016, so we have had quite a long time to chew over his recommendations.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

I thank the noble Lord. The Government’s approach is definitely always to protect consumers, where necessary, and to ensure that business regulation is proportionate. We do not believe that the evidence to date justifies new and onerous secondary ticketing measures. Indeed, it may drive sellers to try to avoid compliance by selling on social media or platforms beyond the reach of UK enforcers, making buying riskier. Banning resales or resale for profit altogether risks reducing consumer protection. For example, Ireland has banned resales, yet Taylor Swift tickets for Dublin are on offer for similar prices to those at Wembley.

Lord Moynihan Portrait Lord Moynihan (Con)
- Hansard - - - Excerpts

I have listened to my noble friend’s argument, but what does he think the reasons would have been for the Government to ban the secondary ticket market for the Olympic and Paralympic Games?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

My noble friend Lord Moynihan, who was intimately involved in them, will know about the specific case arising there. In general, the feeling in the department is that we wish to protect consumers by keeping this activity within a regulated environment. If we ban it outright, we fear that we will drive the secondary market underground. We see evidence of that in everyday activity, including concerts and football matches. We worry about what happens as sales move out of reach of the local regulators and on to the black market.

I appreciate the points made by my noble friend, who speaks passionately about this topic; I know that he cares deeply about it. On his points about football, for example, I point out that ticket resale is banned in the football market in England and Wales for public order reasons. That does not mean that we should extend it to other markets, for the reasons I have set out. I hope that noble Lords will not press their amendments.

Lord Leong Portrait Lord Leong (Lab)
- Hansard - - - Excerpts

My Lords, first, I thank the noble Lords, Lord Moynihan and Lord Clement-Jones, so much for their very kind words. This is really personal; I took a lot of time to look into this. I thank noble Lords and my friend Sharon Hodgson for their relentless and tireless work here and in the other place. I hope that, with this Bill, we can help to move this issue forward.

The days of ticket touts in dirty macs standing outside venues is gone—well, not quite: they have been replaced by bots. We have to address this. There are still examples of bad behaviour, as the noble Lord, Lord Clement-Jones, mentioned. If we do not do anything about it, the bad behaviour will continue. With the deepest respect, I humbly disagree with the Minister: this is not consumer choice; this is consumer exploitation against consumer protection. How many more consumers need to be fleeced before we do something about this?

19:15
We support the amendments in the name of the noble Lord, Lord Clement-Jones. The Government should submit a report to Parliament to see how bad the situation is. It has taken four pieces of legislation to try to tackle football ticket touts. All the CMA is asking is to be given this legislation, so that it can protect consumers. As the noble Lord, Lord Moynihan, said, secondary markets do not contribute anything to the creative process; they are there to exploit people. It is time for us to support this Bill and these amendments and, at the same time, ensure that genuine fans get their tickets so they can enjoy artists, matches and concerts. Let us not let down any more young children. I beg leave to withdraw the amendment.
Amendment 196 withdrawn.
Amendments 197 to 202 not moved.
Clauses 289 to 293 agreed.
Schedule 23 agreed.
Clause 294 agreed.
Clause 295: Determination of applications for accreditation or variation of accreditation
Amendment 203
Moved by
203: Clause 295, page 199, line 20, leave out “more limited” and insert “different”
Member's explanatory statement
The amendment would ensure that when an application to vary an accreditation is made, the Secretary of State can make variations that differ in any way from what is applied for, and not just variations that are less onerous.
Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

My Lords, I will speak briefly to the government amendments in this group. I look forward to hearing from those who have other amendments in the group, which I will address in my closing remarks.

Amendments 203, 204 and 205 are minor and technical amendments to Clauses 295 and 296. They clarify that the Secretary of State has flexibility to impose suitable limitations and conditions on an ADR provider’s accreditation, including to reassess existing conditions, when an ADR provider applies to alter its accreditation or breaches its accreditation requirements.

Amendments 210 and 211 make consequential amendments to other legislation, including updating statutory provisions which extend limitation periods to facilitate ADR, to ensure that ADR does not result in consumers being timed out from taking court proceedings. I hope that noble Lords will accept these minor amendments, and I look forward to a debate today on ADR. I beg to move.

Lord Etherton Portrait Lord Etherton (CB)
- Hansard - - - Excerpts

My Lords, I draw attention to my Amendment 209 in this group. It would require the Secretary of State, within 12 months of the commencement of Chapter 4 of Part 4, to complete a review of the provision of alternative dispute resolution—ADR—in relation to consumer contract disputes in each relevant sector. It would also require the Secretary of State to publish a report on the steps the Government intend to take to ensure the provision in each sector of accessible and affordable ADR for the resolution of consumer contract disputes.

Chapter 4 of Part 4 addresses the issue of ADR, subject to the government amendments currently being proposed. Essentially, these provisions are concerned with the terms of accreditation of ADR providers. What is lacking is any provision for making ADR schemes more available and accessible for the resolution of disputes, or even any provision for a review of potential ADR arrangements for inexpensive, speedy and efficient disposal of consumer disputes.

The noble Baroness, Lady Jones of Whitchurch, has two amendments in this group that would improve the position. One relates to a money award under ADR that is enforceable in the ordinary courts and the other seeks a review of ADR in the aviation sector. I support both those amendments, but my provision is much wider; it calls for a more general review, by the Government, of appropriate arrangements for ADR across the various economic sectors.

Earlier in Committee, I tabled my amendment on the introduction of class actions for consumer disputes, under Chapter 7 of Part 1. The Minister, the noble Viscount, Lord Camrose, said that the Government opposed anything that would provide complexity of litigation at this stage. ADR is at the other end: it provides a very accessible, simple and straightforward means to resolve consumer disputes that should be relatively inexpensive. Resorting to court proceedings is always expensive and time-consuming. They can also be intimidating for consumers. The current delays in the delivery of civil justice are well known.

It is significant that the Government are well aware of the desirability of ADR in other areas that may, in policy terms, be broadly described as those that concern consumers. In the Renters (Reform) Bill, currently in the other place, there are provisions for landlord redress schemes in the private rental sector. It is likely that all private landlords will be required by regulations to join such schemes, which will, in effect, provide an ombudsman service for tenants in the private rental sector. These schemes will provide a swift, inexpensive and accessible means to resolve disputes and pay compensation to tenants who have suffered from landlords’ wrongful action. Joined-up government policy strongly supports the extension of that kind of redress mechanism to consumer disputes generally.

For those reasons, I suggest that the Bill should provide for a government review of ADR for consumer disputes to make it more readily available as a means of accessible, inclusive, swift and appropriate resolution of consumer disputes that is appropriate for the needs of all consumers, regardless of age, income, educational level and vulnerabilities.

Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch (Lab)
- Hansard - - - Excerpts

My Lords, it gives me great pleasure to speak to this group, partly because, for many years, I was on the board of a very good ombudsman scheme. I suppose I should own up to it being very ably chaired, at the time, by the noble Lord, Lord Clement-Jones. But that was some time ago, so I should not have to declare it as a current conflict of interest.

As a result, I have seen how the best models of ADR can work and provide quick, free, independent consumer redress without having to go anywhere near a court, which was exactly the point made by the noble and learned Lord, Lord Etherton. But, sadly, not all ADR schemes are so responsive, which is why we have tabled Amendments 208A, 209A and 209B, and why I was pleased to add my name to Amendment 209, in the name of the noble and learned Lord, Lord Etherton. He provided a very good introduction and analysis of why a review of ADR provision in the UK needs urgently to be carried out. As he rightly pointed out, this is business-friendly; it actually reduces the cost for consumers and businesses, in many ways, so what is not to like about it?

First, I should say that we welcome the measures in the Bill as far as they go. We need an improved verification system for ADR schemes. I hope that this measure will help root out misleading company schemes that masquerade as ombudsmen but, in truth, are a different branch of the same business; they lack independence and have no real incentive either to resolve consumers’ complaints or to provide appropriate redress. They have been giving ombudsman schemes a bad name. We hope that a review will tackle the more fundamental faults in the current landscape. In some sectors, there are multiple ombudsman schemes; in others, the majority of traders refuse to participate in such schemes.

Even knowledgeable consumers find it difficult to navigate the variety of schemes on offer. The information and signposting are often notoriously poor. Why would a trader notify a consumer that they have the right to go to an ombudsman when that trader may incur the cost or inconvenience of a judgment that goes against them? The bad actors—there are many of them—do not have any incentive to provide this important information. Yet the best ombudsman schemes help to improve overall service standards and breed customer loyalty for the longer term by dealing with complaints efficiently and, as I say, free of cost.

Our Amendment 209B is a case in point. The aviation sector has been plagued by stories of poor service and a lack of refunds. There is no compulsion for airlines to be part of an ombudsman scheme. The aviation ADR scheme, which exists, is not recognised by the Ombudsman Association because it did not meet its criteria for independence, fairness and transparency. It provides consumer redress for easyJet and Ryanair, among others. It once took me about 18 months of doggedness and perseverance to get a refund for a cancelled flight from Ryanair; this is not how ombudsman schemes are meant to work.

Our amendment calls for a detailed, time-limited review of ADR in the aviation sector, consulting consumers and passenger organisations in the sector as well as looking at what further regulatory measures are necessary to bring the aviation sector in line with the standards expected in the best ombudsman schemes elsewhere. I hope that noble Lords and the Minister will feel able to support our amendment, which will help bring well-overdue reform to consumer rights in this sector.

Our Amendment 208A addresses another concern around ADR schemes: how do consumers find out about them in the first place? It is crucial that details of an ADR provider are prominently displayed to consumers who have a complaint. It is not clear why the requirement to display a name and website has been taken out of the regulations; I look forward to the Minister’s explanation for this.

Our Amendment 209A addresses the issue of traders refusing to pay money awards made against them by an ADR provider. It is hugely frustrating for consumers who fight and win a case then to find that they have limited powers to enforce the compensation. This amendment would give them greater powers to have a payment enforced by a court, as would have been the case had the judgment been made in a court in the first place. Again, I hope that noble Lords see the sense of this amendment.

All these amendments complement the proposal of the noble and learned Lord, Lord Etherton, that there should be a review. I hope the Minister confirms that the Government are prepared to carry out this long-overdue ADR review; I therefore look forward to his response.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, I rise to speak briefly in support of all the amendments in this group. I say “briefly” because I have a strong interest to declare as chair of the board of the Trust Alliance Group, which runs the energy and telecoms ombudsman schemes. The noble Baroness, Lady Jones, is entirely right: she was a valued and knowledgeable member of the board of what was then called Ombudsman Services. In everything she says, she speaks with a great deal of experience of the delivery of ombudsman services.

I will be extremely brief because it would not be right for me to extol the virtues of ombudsman services overly. In many ways, they speak for themselves in terms of the alternative dispute resolution process described by the noble and learned Lord, Lord Etherton. However, they are an extremely effective way for consumers to resolve complaints that they have been unable to address directly with the businesses involved.

In this context, I commend a very good House of Commons Library briefing, Consumer Disputes: Alternative Dispute Resolution (ADR), of May 2022. It describes the pros of ADR, but it also fairly describes the cons and what the dispute resolver is able to do. I regret that the ADR directive, which came into force in 2014 or 2015, was not more comprehensively adopted; otherwise, we would not be in this position. The noble and learned Lord, Lord Etherton, is entirely right: it needs extension across a much greater variety of sectors.

19:30
I will simply quote Which? It says that
“we welcome the introduction of these measures to improve ADR … we worry the government are going to miss a golden opportunity to introduce a more effective dispute resolution system, namely through the mandating of a single ombudsman in economic sectors where we are seeing significant consumer detriment combined with a lack of dispute resolution remedies, i.e. Aviation, Home improvements and Motoring sectors. We also believe that the adoption of a single mandatory ADR provider in each sector is more likely to result in high quality and fair services more aligned with consumers’ interests.”
So it welcomes these amendments and, without saying too much on the subject, I do too.
I should have said, in introducing my interest, that the two ombudsmen together resolved disputes amounting to 150,000 cases in 2023.
Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

I thank the noble and learned Lord, Lord Etherton, and the noble Baroness, Lady Jones, for their amendments and the discussion. I also thank the noble Lord, Lord Clement-Jones, for his remarks.

Amendment 208A from the noble Baroness, Lady Jones, seeks to enhance the visibility and specificity of ADR information provided by traders. I understand her concerns, and I am glad to hear that she welcomes the provisions currently in the Bill. The Government believe that, for traders in regulated sectors, specific information requirements should be left to sectoral redress schemes. Many already make such requirements. For traders who voluntarily sign up for ADR, requirements as detailed as those suggested by this amendment would not be in keeping with the spirit of that good practice. For many businesses that voluntarily participate in ADR, doing so is a USP to their consumers.

On the proactive duty suggested by noble Baroness’s amendment, we think it important that traders and consumers have the opportunity to resolve differences through the traders’ complaints process before proceeding to ADR. Once concluded, a trader required to participate in ADR must inform the consumer about that. We consider that Clause 306, as it stands, is proportionate. It is designed to ensure the effective and useful provision of information to consumers. I therefore hope the noble Baroness will not move her amendment.

Amendment 209, tabled by the noble and learned Lord, Lord Etherton, requires the review of ADR in each economic sector within 12 months of commencement of the Bill, followed by the publication of a report. The provisions on ADR information in Clauses 301 to 304 facilitate ongoing monitoring of consumer ADR, including its accessibility and affordability. This includes the monitoring of accredited ADR providers, ensuring that consumers consistently receive fair and effective ADR services. It also facilitates the provision of information by exempt ADR providers and regulators, facilitating the oversight of redress schemes in regulated sectors.

In terms of affordability, Clause 292 ensures accredited ADR providers cannot charge consumers unless their fees are approved by the Secretary of State and are published. Nothing in the Bill prevents future mandates requiring businesses to participate in ADR in specific sectors. Legislation already compels businesses in some sectors to participate in redress schemes. Clause 306 requires traders to draw consumers’ attention to any such scheme when responding to consumer complaints.

I also highlight the July 2023 Ministry of Justice announcement, which demonstrates that ADR continues to be a topic of live government work. The MoJ has introduced integrated mediation for claims valued up to £10,000 in county courts and expects this to come into force later this year. Under this scheme, all such defended small claims would be referred to the small claims mediation service before their claim can progress to a court hearing. For the reasons I have just set out, I hope that the noble and learned Lord will feel comfortable not moving his amendment.

I again thank the noble Baroness, Lady Jones, for her Amendment 209A. This would provide that a money award resulting from an ADR process should be enforceable as if it were payable under a court order. Many forms of ADR are not binding. Here, the amendment might be counterproductive. Non-binding ADR retains a level of flexibility and informality distinct from the rigidity of court proceedings. This flexibility is crucial, as it encourages participation from businesses that might otherwise be hesitant about entering into ADR. If the consumer is dissatisfied with the outcome of this kind of ADR, they can, of course, take the matter to court. By contrast, where settlements are reached through binding ADR, they are already enforceable, and the amendment is not needed.

More generally, I hope that the noble Baroness will be reassured that Chapter 4 of Part 4 of the Bill will enhance the quality of consumer ADR in consumer markets, in particular by making the accreditation of ADR providers mandatory, subject to appropriate exemptions, which should contribute significantly to the reliability and effectiveness of ADR outcomes for both sides. I hope that the noble Baroness agrees that the Bill provides a balanced approach that maintains the effectiveness and attractiveness of ADR. I therefore hope that she will feel satisfied in not moving her amendment.

Amendment 209B, also tabled by the noble Baroness, Lady Jones, seeks to ensure that the Government conduct a review of ADR provisions in the aviation sector. The Department for Transport conducted a consultation in January 2022—the aviation consumer policy reform consultation—which examined existing ADR provisions within the sector. The consultation sought views on whether ADR membership should be mandatory, the effectiveness of ADR compliance and enforcement mechanisms, and the merits of the current system when compared to alternatives such as a single ombudsman.

The DfT’s June 2023 consultation response included commitments to improve complaint resolution for aviation customers. The DfT will work with the industry, the CAA and complaint-handling bodies to consider best practices so that airlines can best manage their own complaints processes, thereby reducing the necessity for ADR intervention for passengers.

The DfT committed to legislate when parliamentary time allows, to mandate ADR for all airlines operating to, from and within the UK, as well as encouraging more voluntary uptake from airlines and airports. The DfT also committed to explore improvements to ADR processes, including better data collection, training and increased transparency in decision-making. There is an ongoing commitment to review the current ADR model to ensure its continued effectiveness within the aviation sector. I hope the noble Baroness, Lady Jones, will feel comfortable not moving her amendment.

Amendment 203 agreed.
Amendment 204
Moved by
204: Clause 295, page 199, line 26, leave out from beginning of line to “the” in line 27 and insert “If the Secretary of State decides to vary the accreditation under subsection (8)(b)(i) or (ii),”
Member’s explanatory statement
The amendment would ensure that the Secretary of State can alter or impose conditions whenever an accreditation is varied, and not just in cases where limitations are imposed or altered.
Amendment 204 agreed.
Clause 295, as amended, agreed.
Clause 296: Revocation or suspension of accreditations etc
Amendment 205
Moved by
205: Clause 296, page 200, line 37, at end insert “, varying any existing condition or removing any existing condition”
Member’s explanatory statement
The amendment would ensure that the Secretary of State has power under clause 296(4)(a) to vary or remove existing conditions, in addition to being able to impose new conditions on an accreditation.
Amendment 205 agreed.
Clause 296, as amended, agreed.
Clauses 297 to 299 agreed.
Schedule 24 agreed.
Clauses 300 and 301 agreed.
Clause 302: ADR information directions
Amendment 206
Moved by
206: Clause 302, page 205, line 24, leave out subsection (7)
Member’s explanatory statement
This amendment would omit subsection (7) of Clause 302, which is superseded by the new Clause in my name on data protection.
Amendment 206 agreed.
Clause 302, as amended, agreed.
Clause 303: Disclosure of ADR information by the Secretary of State
Amendment 207
Moved by
207: Clause 303, page 206, line 3, leave out subsection (4)
Member’s explanatory statement
This amendment would omit subsection (4) of Clause 303, which is superseded by the new Clause in my name on data protection.
Amendment 207 agreed.
Clause 303, as amended, agreed.
Clause 304: Meaning of “ADR information” and other terms in sections 301 to 303
Amendment 208
Moved by
208: Clause 304, page 207, leave out lines 4 and 5
Member’s explanatory statement
This amendment would omit the definition of “data protection legislation” in Clause 304, as my amendment to Clause 328 would define that term for the purposes of the whole Bill.
Amendment 208 agreed.
Clause 304, as amended, agreed.
Clause 305 agreed.
Clause 306: Duty of trader to notify consumer of ADR arrangements etc
Amendment 208A not moved.
Clause 306 agreed.
Amendments 209 to 209B not moved.
Clause 307 agreed.
Schedule 25: Chapter 4 of part 4: consequential amendments etc
Amendments 210 and 211
Moved by
210: Schedule 25, page 381, line 2, at end insert—
“Prescription and Limitation (Scotland) Act 1973
A1 (1) Section 14 of the Prescription and Limitation (Scotland) Act 1973 (computation of prescriptive periods) is amended as follows.(2) In the following places, for “relevant consumer dispute” or “relevant dispute” substitute “consumer contract dispute”—(a) subsection (1D);(b) subsection (1F);(c) subsection (1G) (in each place where it occurs).(3) In subsection (1D)—(a) after “this Act is” (in the opening words) insert “, in a case where ADR is carried out in respect of the dispute,”;(b) in paragraph (a)—(i) for “the non-binding ADR procedure” substitute “the ADR”, and(ii) for “such a procedure” substitute “it”;(c) in each of paragraphs (b) and (c), for “a non-binding ADR procedure” substitute “the ADR”.(4) In the following places, for “the non-binding ADR procedure” substitute “the ADR”—(a) subsection (1E); (b) subsection (1G)(b) and (f);(c) subsection (2) (in the definition of “qualifying request”).(5) In subsections (1F) and (1G), for “a non-binding ADR procedure” substitute “ADR”.(6) In subsection (2)—(a) omit the following definitions—“ADR entity”;“ADR procedure”;“consumer”;“non-binding ADR procedure”;“relevant consumer dispute”;“sales contract”;“service contract”;“trader”;(b) before the definition of “holiday” insert the following definitions—““ADR” has the same meaning as in Chapter 4 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;“ADR entity” means a person who carries out ADR in compliance with section 291(1) of that Act (which prohibits persons from carrying out ADR unless exempt, accredited, or acting under special ADR arrangements, in accordance with Chapter 4 of Part 4 of that Act);“consumer contract dispute” has the same meaning as in Chapter 4 of Part 4 of that Act.”Limitation Act 1980
A2 (1) Section 33B of the Limitation Act 1980 (extension of time limits because of alternative dispute resolution) is amended as follows.(2) In the heading, for “cross border or domestic contractual” substitute “consumer contract”.(3) For subsection (1) substitute—“(1) In this section—“ADR” has the same meaning as in Chapter 4 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;“ADR entity” means a person who carries out ADR in compliance with section 291(1) of that Act (which prohibits persons from carrying out ADR unless exempt, accredited, or acting under special ADR arrangements, in accordance with Chapter 4 of Part 4 of that Act);“consumer contract dispute” has the same meaning as in Chapter 4 of Part 4 of that Act.”(4) In the following places, for “relevant dispute” substitute “consumer contract dispute”—(a) subsection (2)(a) and (b);(b) subsection (5);(c) subsection (6);(d) subsection (7) (in each place where it occurs);(e) subsection (9).(5) In the following places, for “a non-binding ADR procedure” substitute “ADR”—(a) subsection (2)(b);(b) subsection (6);(c) subsection (9).(6) In the following places, for “the non-binding ADR procedure” substitute “the ADR”—(a) subsection (2)(c);(b) subsection (3);(c) subsection (7) (in each place where it occurs); (d) subsection (8);(e) subsection (9).Foreign Limitation Periods Act 1984
A3 (1) Section 1B of the Foreign Limitation Periods Act 1984 (extension of limitation periods because of alternative dispute resolution) is amended as follows.(2) In the heading, for “cross border or domestic contractual” substitute “consumer contract”.(3) For subsection (1) substitute—“(1) In this section—“ADR” has the same meaning as in Chapter 4 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;“ADR entity” means a person who carries out ADR in compliance with section 291(1) of that Act (which prohibits persons from carrying out ADR unless exempt, accredited, or acting under special ADR arrangements, in accordance with Chapter 4 of Part 4 of that Act);“consumer contract dispute” has the same meaning as in Chapter 4 of Part 4 of that Act.”(4) In the following places, for “relevant dispute” substitute “consumer contract dispute”—(a) subsection (2)(a) and (b);(b) subsection (5);(c) subsection (6) (in each place where it occurs);(d) subsection (8).(5) In the following places, for “a non-binding ADR procedure” substitute “ADR”—(a) subsection (2)(b);(b) subsection (5);(c) subsection (8).(6) In the following places, for “the non-binding ADR procedure” substitute “the ADR”—(a) subsection (2)(c);(b) subsection (3);(c) subsection (6) (in each place where it occurs);(d) subsection (7);(e) subsection (8).Limitation (Northern Ireland) Order 1989 (S.I. 1989/1339 (N.I. 11))
A4 (1) Article 51B of the Limitation (Northern Ireland) Order 1989 (extension of time limits: non-binding ADR procedure) is amended as follows.(2) In the heading, for “: Non-binding ADR procedure” substitute “because of alternative dispute resolution in certain consumer contract disputes”.(3) In paragraphs (1)(a) and (3), for “a non-binding ADR procedure” substitute “ADR”.(4) In the following places, for “the non-binding ADR procedure” substitute “the ADR”—(a) paragraph (1)(b) (in each place where it occurs);(b) paragraph (2);(c) paragraph (4) (in each place where it occurs).(5) In paragraph (1)(b)(i), for “that such a procedure” substitute “on which it”.(6) In the following places, for “relevant dispute” substitute “consumer contract dispute”—(a) paragraph (1)(a);(b) paragraph (3);(c) paragraph (4) (in each place where it occurs).(7) For paragraph (5) substitute—“(5) In this Article— “ADR” has the same meaning as in Chapter 4 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;“ADR entity” means a person who carries out ADR in compliance with section 291(1) of that Act (which prohibits persons from carrying out ADR unless exempt, accredited, or acting under special ADR arrangements, in accordance with Chapter 4 of Part 4 of that Act);“consumer contract dispute” has the same meaning as in Chapter 4 of Part 4 of that Act;“qualifying request” is a request by a party that another (A) confirm to all parties that A is continuing with the ADR.””Member’s explanatory statement
This amendment makes consequential amendments in connection with Chapter 4 of Part 4 of the Bill (alternative dispute resolution for consumer contract disputes).
211: Schedule 25, page 381, line 18, at end insert—
“Regulatory Enforcement and Sanctions Act 2008
2A In Schedule 3 to the Regulatory Enforcement and Sanctions Act 2008, at the appropriate place insert—“Digital Markets, Competition and Consumers Act 2024, Chapter 4 of Part 4”.Equality Act 2010
2B (1) Section 140AA of the Equality Act 2010 (extension of time limits because of alternative dispute resolution) is amended as follows.(2) In the heading, for “cross border or domestic contractual” substitute “consumer contract”.(3) For subsection (1) substitute—“(1) In this section—“ADR” has the same meaning as in Chapter 4 of Part 4 of the Digital Markets, Competition and Consumers Act 2024;“ADR entity” means a person who carries out ADR in compliance with section 291(1) of that Act (which prohibits persons from carrying out ADR unless exempt, accredited, or acting under special ADR arrangements, in accordance with Chapter 4 of Part 4 of that Act);“consumer contract dispute” has the same meaning as in Chapter 4 of Part 4 of that Act.”(4) In each of the following places, for “relevant dispute” substitute “consumer contract dispute”—(a) subsection (2)(a) and (b);(b) subsection (5);(c) subsection (6);(d) subsection (7) (in each place where it occurs);(e) subsection (9).(5) In each of the following places, for “a non-binding ADR procedure” substitute “ADR”—(a) subsection (2)(b);(b) subsection (6);(c) subsection (9).(6) In each of the following places, for “the non-binding ADR procedure” substitute “the ADR”—(a) subsection (2)(c);(b) subsection (3);(c) subsection (7) (in each place where it occurs);(d) subsection (8);(e) subsection (9).(7) In subsection (8), for “(6)” substitute “(7)”.”Member’s explanatory statement
This amendment makes consequential amendments in connection with Chapter 4 of Part 4 of the Bill (alternative dispute resolution for consumer contract disputes).
Amendments 210 and 211 agreed.
Schedule 25, as amended, agreed.
Clause 308 agreed.
Amendment 212
Moved by
212: After Clause 308, insert the following new Clause—
“Consumer information: vote reporting(1) The FCA must make rules requiring relevant FCA-regulated persons to—(a) give consumers information on request in a machine-readable form about the exercise by the persons or on their behalf of all voting rights attached to assets in which the consumers have an interest, including in respect of any specified description of scheme or investment vehicle, within 30 days of that request being received;(b) have regard to guidance in respect of the format of the information provided under subsection (1)(a).(2) The FCA may discharge the duty in subsection (1) in respect of—(a) beneficiaries of occupational pension schemes within the meaning of section 1 of the Pension Schemes Act 1993,(b) beneficiaries of the local government pension scheme,(c) clients of personal pension schemes within the meaning of an order under section 22 of Financial Services and Markets Act 2000, and(d) clients of stakeholder pension schemes within the meaning of such an order,by making rules requiring relevant FCA-regulated persons to give the information described in subsection (1)(a) to a relevant intermediary, or make it publicly available.(3) In this section—“relevant FCA-regulated persons” means—(a) persons managing investments within the meaning of an order under section 22 of FSMA 2000, including the activity described in paragraph 6 of Schedule 2 of that Act, and(b) persons effecting or carrying out a contract of insurance within the meaning of an order under section 22 of FSMA 2000;“relevant intermediary” means—(a) in respect of subsection (2)(a), the trustees of the scheme,(b) in respect of subsection (2)(b), an administering authority of the scheme in which the consumers have an interest, and(c) in respect of subsection (2)(c) and (2)(d), the managers of the scheme.”Member’s explanatory statement
This amendment would require the FCA to make rules requiring on-request standardised reporting on company voting by investment managers and life insurers, and to provide guidance to firms on the format of that reporting. The FCA could discharge that duty in respect of the members of pension schemes by passing the information to the trustees, administering authorities and managers of the schemes, or to publish it.
Baroness Wheatcroft Portrait Baroness Wheatcroft (CB)
- Hansard - - - Excerpts

My Lords, I declare my interests as listed in the register, and I apologise that I could not attend Second Reading. I will speak to the single Amendment 212. Among the Bill’s declared purposes is

“to make provision relating to the protection of consumer rights”.

This amendment is concerned with one specific but important consumer right: having visibility as to how one’s money is being used. I believe that every investor, big or small, should have easy access to see how their shares are being voted, and this amendment would be a big step in that direction.

I gratefully acknowledge the support of the noble Baronesses, Lady Sheehan and Lady Altmann, who believe in the principle at stake here. I thank the fintech firm, Tumelo, for its help in drafting the amendment. It has the support of the Association of Member Nominated Trustees, which represents board members of 700 pension schemes, accounting for more than £1 trillion of assets. That is quite some weight.

19:45
When consumers invest, whether as retail investors or as savers in a pension fund, some—often most—of their money goes into equities. Those equities carry voting rights on crucial issues such as whether to approve or reject board members, whether to accept the annual report and accounts, pay arrangements and other shareholder resolutions. These votes are really important. They concern the governance and sustainability of the business. They are about protecting the value of the saver’s investment. However, most savers do not have the right to vote, which usually lies with the fund manager acting on behalf of the pension fund or direct savers. My amendment does not seek to change that; it merely suggests that should savers want to know how their votes have been cast, as they should, it should be easy for them to find out.
This is about the consumer’s right to know. Yet those who cast the votes do not generally make that information easily accessible. This amendment would put a duty on the Financial Conduct Authority to make rules requiring the reporting of votes to consumers. As far as most pension schemes are concerned, that duty would fall away as long as the FCA made rules requiring reporting to pension providers. If the investment managers who handle the money were forced to make the information available in an easily accessible form, I am confident that the pension funds would make the information available to their savers.
This amendment is needed, and digital technology makes it so easy for it to be put into practice by those who look after our money. If the pension fund that manages so much of our cash and our future security had easy access to this information, it could compare fund managers more accurately and make better-informed decisions, perhaps switching the fund managers to those who take a longer-term view. The U.S. Securities and Exchange Commission has prescribed the standardised, comprehensive reporting of votes for many years, but in the UK, almost nobody receives this information.
What do pension schemes and savers get instead? Their statutory right is to an annual data dump by the investment manager of the votes that it cast across all its operations in whatever format the manager chooses. This can exclude votes that the manager deems not significant and can include thousands of votes on companies in which the investor may not have any stake. Since the requirement for this annual data drop is of a “comply or explain” nature only, the fund manager has the option of simply reporting that it was just too difficult to report any votes at all. In an age when the Prime Minister talks of boosting the UK fintech industry’s competitive advantage, this is farcical. UK fund managers operating in the US have to disclose in line with the SEC rules, so the reality is not that they cannot do the same here but that they simply do not want to be bothered.
In September 2021, the Taskforce on Pension Scheme Voting Implementation recommended to the Department for Work and Pensions that if investment managers did not deliver by the end of 2022, the FCA should legislate or issue handbook guidance to deliver mandatory reporting by investment managers at fund level. In November 2022, the FCA eventually got round to establishing its own group to look at vote reporting and eventually, in July 2023, it brought forward recommendations for consultation, to include standardised fund level reporting, but it proposed a wholly voluntary approach. The FCA did not propose a timescale for making comprehensive, standardised, fund-level vote reporting mandatory. It did not propose a timescale to consider whether such reporting should be mandatory. Its consultation document did not even ask whether the reporting ought at any point to be mandatory.
Instead, in June 2023, before the FCA published its consultation, the noble Baroness, Lady Penn, had already told the House that:
“We also acknowledge the argument that the existing voting disclosure framework is not working as well as it could”.
She went on to say that:
“The Government believe that it would be more appropriate to wait for the group’s output before requiring the FCA to produce further rules and regulation. When reviewing the group’s output, the Government will carefully consider whether its recommendations go far enough to address existing issues of transparency, and what further action may be appropriate”.—[Official Report, 6/6/23; col. 1326.]
So we have the then Minister’s acknowledgement that the existing system does not work, and we now have the FCA’s proposals for a wholly voluntary solution to address it.
Investment consultants have almost unanimously requested regulatory support for the template, and they have warned that voluntary usage may result in a very low uptake. Considering that investment managers have long been able voluntarily to issue timely, comprehensive, fund-level voting reports in the UK as they do in the US and they have chosen not to do so, I share the concerns of the Minister and the consultants. Does the FCA’s recommendation of a voluntary approach go far enough?
I have a few questions for the Minister. What further action, promised by the noble Baroness, Lady Penn, may be appropriate as a result? Can he tell the Committee who responded to the FCA’s consultation? What was the division of support for or against votes? What conversations have Ministers and officials had with the FCA about the vote reporting group and with its members about their participation in the vote reporting group? As I mentioned earlier, the U.S. Securities and Exchange Commission made this reporting mandatory years ago, so what conversations have Ministers and officials had with their counterparts in the US about simply replicating that approach here? It works.
The Government’s hands are not tied. Regulators are independent of the Government, but not of the will of Parliament. There are multiple duties in the Financial Services and Markets Act on the FCA to make rules. Furthermore, the Treasury can make recommendations to the FCA.
I will not be pressing my amendment at this stage, but I hope I have convinced the Minister that there is something worth closer examination here. The current situation is unjustifiable and unsustainable. I would be grateful for a meeting with the Minister, although I am happy to be referred onwards to Treasury Ministers, where the power to resolve this impasse really sits. I look forward to his response to the questions that I have asked.
Baroness Sheehan Portrait Baroness Sheehan (LD)
- Hansard - - - Excerpts

My Lords, I thank the noble Baroness, Lady Wheatcroft, for tabling this amendment, to which I have added my name, as I did to a similar amendment that she tabled to the Financial Services and Markets Bill. I apologise to the Committee for not being available to speak at Second Reading.

I put my name to this amendment because votes reporting is an important issue of openness and transparency that underpins good stewardship and good governance, without which the road to net zero and our nature goals becomes that much more chaotic. At this point I should declare my interest as a director of Peers for the Planet.

As things currently stand, at AGMs investment managers vote on behalf of the pension funds they manage on issues that pension savers may have concerns about. Some, if not most, savers would prefer to know what their money is signed up to, and they cannot easily find out what their money is supporting, nor can pension schemes. This is because there is zero meaningful onus on investment managers to report their actions in a full, timely and easily digestible format, and that is important as the noble Baroness, Lady Wheatcroft, highlighted. The outcome is that pension schemes do not have the information to inform their savers, and it is for this reason that the amendment has support from the Association of Member Nominated Trustees, which has £1 trillion of assets under management.

In the US, it is mandatory. There, voting at AGMs is a key tool in ensuring good corporate governance, good long-term investor returns and good economic outcomes more broadly. What assessment have the Government made of America’s way of including people in decisions made in their name about their money? Why is it that in a relatively light-touch regime that is doable, but here it is not? Why is it that UK investment managers can comply with US rules when they operate in the US but find it too burdensome to do it here? The Government say that they see the need for action, but we see no action year after year. This amendment would enable pension schemes and ultimately pension savers more effectively to hold their investment managers to account for action on climate and nature, as well as on other matters.

I fully support the noble Baroness, Lady Wheatcroft, in what she is aiming to do, and I add the support of the noble Baroness, Lady Altmann, who has put her name to the amendment. She asked me to convey her apologies to the Committee for not being present; she is not feeling well enough to have stayed to the current late hour.

I hope that once we hear from the Labour Party we will be able to say that the amendment has cross-party support.

Lord Lucas Portrait Lord Lucas (Con)
- Hansard - - - Excerpts

My Lords, I very much support this amendment. We are a capitalist society, and capitalism relies on a return on capital being provided to the people who provide the capital. In that sense, our capital has become very concentrated in institutional hands. Decisions are taken by a cadre of fund managers, of whom I used to be one—well-paid people who thoroughly approve of people in industries being well paid, particularly senior managers. More and more of the profits of industry are diverted to the people running them and to the people running the investments in them, and the amount getting through to the individual investor becomes limited.

What is the force in any other direction? What is the motivation for people running a company to do more than please their fund managers? They do not have to have the interest of the individual owners at the end of this. In the end, this results in bad decisions being taken on the allocation of capital and on the flow of money within a corporation. These will not be in the interests of paying the pensions of the people whose money is invested in these companies.

20:00
Capitalism will not survive unless we institute a structure that allows the people providing the money to have a real and active interest in what is going on with the money they have invested. Fortunately, as referred to in previous amendments, we are on the verge of an artificial intelligence revolution.
The data asked for in this amendment, and similar data in machine-readable form, will start to provide the ordinary member of a pension fund with real information about how their funds are being invested, and about the decisions being taken on their behalf in voting on company remuneration and other matters. It will provide them a real ability to gather together and say something about it, and to communicate with their pension funds and the people managing them to point out the way in which decisions could be made differently, rather than being totally removed and finding it impossibly tiresome and tiring to interact with the decisions being made.
I view this amendment as an important element in restoring health to capitalism, using artificial intelligence. We need the flow of data. It is a really empowering amendment and I very much recommend it to the Government.
Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, it is a pleasure to follow the noble Lord, Lord Lucas, with all his experience as a fund manager, and particularly to hear what he forecast for the future: the ability of AI to deliver information in a new format that is of much greater interest and use to a consumer. I must admit, I had not really thought about that.

It is also a pleasure to follow my noble friend Lady Sheehan, and in particular to support the noble Baroness, Lady Wheatcroft, on her amendment. We are obviously saving the best for last in contributing to our final group in Committee. As a former company secretary, I well remember the noble Baroness as a financial journalist and an absolute champion of corporate governance. This appears to be an absolutely crucial part of it. In a sense, it is the other side of the coin from what you expect of the corporate; it is what you expect of those who invest in the corporate, in terms of exercising their voting rights. The noble Baroness illustrated the sorry history of the voluntary approach put forward by the FCA. I could loosely describe her amendment as trying to put some lead in the FCA’s pencil, which seems wholly needed.

The noble Baroness asked a number of further questions. A really interesting and important question is: how on earth can the US, with its relatively unregulated systems compared to ours and its culture of not regulating on a federal basis, do it on a compulsory basis when we have not? Particularly from what the noble Lord, Lord Lucas, said, it sounds as though it will be eminently possible to do this, as the technology improves, without overly imposing costs on investment managers. Indeed, it is already being done for those operating in the states. There seems absolutely no reason why the Government should not move forward in the way that the noble Baroness suggests.

Lord Leong Portrait Lord Leong (Lab)
- Hansard - - - Excerpts

My Lords, I thank the noble Baroness, Lady Wheatcroft, for tabling Amendment 212, and I thank all noble Lords who have spoken. I will be brief.

In 2019, the European Union introduced the second shareholder rights directive, which sets out stipulations regarding the utilisation of specific shareholder privileges linked to voting shares during general meetings of companies that are headquartered in a member state and have their shares traded on a regulated market located or functioning within a member state. It was brought into UK law by secondary legislation, amending the occupational pension schemes regulations of 2005, and it has now been assimilated into UK law. As per the Explanatory Notes to the regulations, they encourage investors to be transparent about how they invest and approach their engagement as shareholders. It was a negative statutory instrument, so no debates were tabled.

The amendment of the noble Baroness, Lady Wheatcroft, carries greater weight than the shareholder rights directive. It would mandate the FCA to establish regulations necessitating investment managers and life insurers to furnish standardised reports concerning company voting activities upon request. Furthermore, it would instruct the FCA to offer guidance to firms on the specific format for such reporting.

We agree in principle with the amendment that it is right for shareholders to be more transparent. The noble Baroness, Lady Sheehan, mentioned being transparent about where investments are made, which we need to know if we are to achieve net zero. This was fully supported by the noble Lord, Lord Lucas. Fund managers need to be more transparent about informing where their funds are invested.

I ask the Minister: what impact has there been on investor transparency in the four and a half years that the SRD has been in UK law? I look forward to his response.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

I thank the noble Baroness, Lady Wheatcroft, for Amendment 212, which would require the Financial Conduct Authority to make rules requiring regulated persons to give consumers certain information regarding voting rights attached to assets in which the consumer has an interest. I also thank the noble Baroness, Lady Sheehan, the noble Lords, Lord Clement-Jones and Lord Leong, and my noble friend Lord Lucas for their contributions.

I appreciate the strength of feeling on this issue. I suggest that we speak to the Treasury and write to the noble Baroness on a number of her questions, in particular to draw on the comparisons with the US, with which we are so close on so many things, to understand what its experience is and where we are in comparison.

The Government recognise that transparency is crucial to effective stewardship and corporate governance by pension and other investment funds. We also acknowledge the argument that the existing voting disclosure framework is not working as well as it could. That is why, as the noble Baroness mentioned, the FCA set up the independently chaired vote reporting group in November 2022, following recommendations made by the task force on pension scheme voting implementation to develop a standardised and decision-useful framework for voting disclosure.

It is important to take a proportionate approach in implementing changes to vote reporting. Mandatory voting disclosure would be a significant departure from the FCA’s existing rules on voting disclosure. It is important that we have a globally competitive asset management sector. This means designing and implementing regulatory change in a way that considers regulatory costs as well as benefits. That is why the Government support the FCA’s approach to work closely with industry stakeholders and build consensus.

The group has made significant progress and recently consulted on its proposals for a comprehensive and standardised vote reporting framework. The Government believe that it continues to be more appropriate to wait for the group’s final output before requiring the FCA to produce further rules and regulation. I can assure the noble Baroness, Lady Wheatcroft, that, when reviewing the group’s final proposal, the Government will carefully consider whether its recommendations go far enough to address the existing issues around transparency for consumers that the noble Baroness so eloquently described, as well as what further action may be appropriate. We therefore hope that she will feel comfortable withdrawing her amendment.

Baroness Wheatcroft Portrait Baroness Wheatcroft (CB)
- Hansard - - - Excerpts

I thank the Minister for what I think was an unusually conciliatory reply. I am quite cheered by what he said. I understand that we will wait to see what the FCA comes up with. I cannot say that I am overly optimistic about the FCA being effective with anything other than mandatory reporting—that will require the Government to act—but I look forward to seeing that action before too long. I beg leave to withdraw.

Amendment 212 withdrawn.
Clauses 309 to 323 agreed.
Schedule 26: Provision of investigative assistance to overseas regulators
Amendment 213
Moved by
213: Schedule 26, page 383, line 30, at end insert—
“5A In Schedule 14 to EA 2002 (specified functions), at the appropriate place insert—“Chapter 2 of Part 5 of the Digital Markets, Competition and Consumers Act 2024.”5B In Schedule 15 to EA 2002 (enactments conferring functions), at the appropriate place insert—“Chapter 2 of Part 5 of the Digital Markets, Competition and Consumers Act 2024.””Member's explanatory statement
This amendment ensures that: (a) information that comes to a public authority in connection with the exercise of its functions under Chapter 2 of Part 5 of the Bill is information to which section 237 of the Enterprise Act 2002 applies (which imposes a general restriction on disclosure of certain kinds of information unless permitted under Part 9 of that Act), and (b) that information to which section 237 applies can be disclosed to a public authority for the purposes of enabling that authority to carry out its functions under Chapter 2 of Part 5.
Amendment 213 agreed.
Schedule 26, as amended, agreed.
Clauses 324 and 325 agreed.
Schedule 27 agreed.
Amendment 214
Moved by
214: After Schedule 27, insert the following new Schedule—
“ScheduleMinor and consequential amendmentsPart 1Amendments to Acts of ParliamentCompetition Act 1980 (c. 21)
1 The Competition Act 1980 is amended as follows.2 In section 11B(1) (references under section 11: powers of investigation and penalties), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force and,”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.3 In section 11C(1) (references under section 11: further supplementary provisions), in the words before paragraph (a)— (a) after “shall apply” insert “, as it had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force,”; and(b) for “applies” substitute “applied immediately before that date”.4 In section 11D(7) (interim orders), in paragraph (d), after “penalties)” insert “as it had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force”.Telecommunications Act 1984 (c. 12)
5 In section 101 of the Telecommunications Act 1984 (general restrictions on disclosure of information), in subsection (3)—(a) omit paragraph (v);(b) after paragraph (w) insert—“(x) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Companies Act 1985 (c. 6)
6 In paragraph 17 of Schedule 15D to the Companies Act 1985 (disclosures), after sub-paragraph (m) insert—“(n) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Airports Act 1986 (c. 31)
7 In section 74 of the Airports Act 1986 (restriction on disclosure of information), in subsection (3)—(a) omit paragraph (v);(b) after paragraph (y) insert—“(z) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Gas Act 1986 (c. 44)
8 (1) Section 41EB of the Gas Act 1986 (references under section 41E: application of EA 2002) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In subsection (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After subsection (6) insert— “(7) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Water Act 1989 (c. 15)
9 In section 174 of the Water Act 1989 (general restrictions on disclosure of information), in subsection (3)—(a) omit paragraph (lp);(b) after paragraph (o) insert—“(p) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Electricity Act 1989 (c. 29)
10 (1) Section 56CB of the Electricity Act 1989 (references under section 56C: application of EA 2002) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In subsection (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After subsection (6) insert—“(7) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Water Industry Act 1991 (c. 56)
11 The Water Industry Act 1991 is amended as follows.12 (1) Section 14B (references under section 14: powers of investigation) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”(b) at the end insert “as those provisions had effect immediately before that date”.(4) After subsection (5) insert—“(6) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”13 (1) Section 16B (CMA’s power of veto following report: supplementary) is amended as follows.(2) In subsection (6), in the words before paragraph (a)— (a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (9)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After subsection (10) insert—“(11) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”14 (1) Section 17M (references under section 17K: powers of investigation) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After subsection (5) insert—“(6) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”15 (1) Section 17Q (section 17P: supplementary) is amended as follows.(2) In subsection (6), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (9)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After subsection (10) insert—“(11) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”16 In Part 2 of Schedule 15 (enactments etc in respect of which disclosure may be made)—(a) at the end of the list insert—“The following provisions of the Digital Markets, Competition and Consumers Act 2024—(a) Part 3;(b) Chapter 1 of Part 4;(c) Chapter 2 of Part 5.”(b) omit the entry for subordinate legislation made for the purpose of securing compliance with Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market. Railways Act 1993 (c.43)
17 The Railways Act 1993 is amended as follows.18 (1) Section 13B (references under section 13: application of EA 2002) is amended as follows.(2) In subsection (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In subsection (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After subsection (6) insert—“(7) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”19 (1) Section 15C (sections 15A and 15B: supplementary) is amended as follows.(2) In subsection (2D), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In subsection (2G)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In subsection (2H)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After subsection (4) insert—“(5) In this section “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”20 In section 145 (general restrictions on disclosure of information), in subsection (3)—(a) omit paragraph (qu);(b) after paragraph (v) insert—“(w) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”21 Schedule 4A (review of access charges by the Office of Rail and Road) is amended as follows.22 (1) Paragraph 10A (references under paragraph 9: application of EA 2002) is amended as follows.(2) In sub-paragraph (1), in the words before paragraph (a)— (a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In sub-paragraph (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In sub-paragraph (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After sub-paragraph (6) insert—“(7) In this paragraph “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”23 (1) Paragraph 15 (paragraphs 13 and 14: supplementary) is amended as follows.(2) In sub-paragraph (2D), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In sub-paragraph (2G)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In sub-paragraph (2H)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After sub-paragraph (4) insert—“(5) In this paragraph “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Coal Industry Act 1994 (c. 21)
24 In section 59 of the Coal Industry Act 1994 (information to be kept confidential by the Coal Authority), in subsection (4)—(a) omit paragraph (q);(b) after paragraph (t) insert—“(u) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Greater London Authority Act 1999 (c. 29)
25 In section 235 of the Greater London Authority Act 1999 (restrictions on disclosure of information), in subsection (3)—(a) omit paragraph (ru);(b) after paragraph (v) insert—“(w) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.” Utilities Act 2000 (c. 27)
26 In section 105 of the Utilities Act 2000 (general restrictions on disclosure of information), in subsection (6)—(a) omit paragraph (w);(b) after paragraph (z1) insert—“(z2) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Transport Act 2000 (c. 38)
27 In Schedule 9 to the Transport Act 2000 (air traffic: information), in paragraph 3(3)—(a) after paragraph (rh) insert—“(ri) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”(b) omit paragraph (sa).Communications Act 2003 (c. 21)
28 In section 393 of the Communications Act 2003 (general restrictions on disclosure of information), in subsection (5)—(a) omit paragraph (q);(b) after paragraph (s) insert—“(t) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Wireless Telegraphy Act 2006 (c. 36)
29 In section 111 of the Wireless Telegraphy Act 2006 (general restrictions), in subsection (6)—(a) omit paragraph (o);(b) after paragraph (p) insert—“(q) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Companies Act 2006 (c. 46)
30 In Part 2 of Schedule 2 to the Companies Act 2006 (specified descriptions of disclosures), in section (A) (United Kingdom), in paragraph 25, after paragraph (l) insert—“(m) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Legal Services Act 2007 (c. 29)
31 In section 60(9) of the Legal Services Act 2007 (duties of the CMA), in the words before paragraph (a)—(a) after “apply”, in the first place it occurs, insert “, as they had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force,”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”. Postal Services Act 2011 (c. 5)
32 In section 60(6) of the Postal Services Act 2011 (section 59: supplementary), in paragraph (a), after “CMA),” insert “as they had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force,”.Civil Aviation Act 2012 (c. 19)
33 In Schedule 6 to the Civil Aviation Act 2012 (restrictions on disclosure of information), in paragraph 4—(a) in sub-paragraph (3), in the list of relevant statutory provisions, after the entry for “Water Act 2014” insert—“the following provisions of the Digital Markets, Competition and Consumers Act 2024—(a) Part 3;(b) Chapter 1 of Part 4;(c) Chapter 2 of Part 5.”(b) in sub-paragraph (4), omit paragraph (b).Part 2Amendments to other legislationEnergy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6))
34 The Energy (Northern Ireland) Order 2003 is amended as follows.35 In Article 63 (general restrictions on disclosure of information), in paragraph (6)—(a) omit sub-paragraph (w);(b) after sub-paragraph (x) insert—“(y) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”36 (1) In Schedule 2 (orders altering licensable activities), paragraph 5 (references under paragraph 3: application of EA 2002) is amended as follows.(2) In sub-paragraph (1), in the words before paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In sub-paragraph (4)—(a) after “shall apply” insert “, as it had effect immediately before the relevant date,”;(b) for “applies” substitute “applied immediately before that date”.(4) In sub-paragraph (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(5) After sub-paragraph (6) insert—“(7) In this paragraph “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Water Services etc. (Scotland) Act 2005 (Consequential Provisions and Modifications) Order 2005 (S.I. 2005/3172)
37 The Water Services etc. (Scotland) Act 2005 (Consequential Provisions and Modifications) Order 2005 is amended as follows.38 (1) Article 5 (references: powers of investigation) is amended as follows. (2) In paragraph (1), in the words before sub-paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In paragraph (5)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After paragraph (5) insert—“(6) In this article “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”39 (1) Article 10 (Article 9: supplementary) is amended as follows.(2) In paragraph (3), in the words before sub-paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In paragraph (7)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After paragraph (7) insert—“(8) In this Article “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”Water and Sewerage Services (Northern Ireland) Order 2006 (S.I. 2006/3336 (N.I. 21))
40 The Water and Sewerage Services (Northern Ireland) Order 2006 is amended as follows.41 (1) Article 23 (references under Article 21: powers of investigation) is amended as follows.(2) In paragraph (1), in the words before sub-paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In paragraph (4)—(a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After paragraph (5) insert—“(6) In this Article “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”42 (1) Article 27 (CMA’s power of veto following report: supplementary) is amended as follows.(2) In paragraph (6), in the words before sub-paragraph (a)—(a) after “shall apply,” insert “as they had effect immediately before the relevant date and”;(b) for “apply”, in the second place it occurs, substitute “applied immediately before that date”.(3) In paragraph (9)— (a) for “have”, in the first place it occurs, substitute “, immediately before the relevant date, had”;(b) at the end insert “as those provisions had effect immediately before that date”.(4) After paragraph (10) insert—“(11) In this Article “the relevant date” means the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force.”43 In Article 265 (restrictions on disclosure of information), in paragraph (5)—(a) omit sub-paragraph (s);(b) after paragraph (t) insert—“(u) the following provisions of the Digital Markets, Competition and Consumers Act 2024—(i) Part 3;(ii) Chapter 1 of Part 4;(iii) Chapter 2 of Part 5.”Postal Services (Appeals to the Competition Commission) (Investigations and Extension of Time Limits) Order 2011 (S.I. 2011/2749)
44 In Article 3 of the Postal Services (Appeals to the Competition Commission) (Investigations and Extension of Time Limits) Order 2011 (application of sections 109 to 117 of the 2002 Act), in the words before paragraph (a), after “shall apply,” insert “as they had effect immediately before the date on which section 142 of the Digital Markets, Competition and Consumers Act 2024 came into force and”.Postal Services Act 2011 (Disclosure of Information) Order 2012 (S.I. 2012/1128)
45 In Article 4 of the Postal Services Act 2011 (Disclosure of Information) Order 2012, in the list of prescribed enactments—(a) omit the entry for the Consumer Protection from Unfair Trading Regulations 2008;(b) after the entry relating to the Consumer Rights Act 2015 insert—“the following provisions of the Digital Markets, Competition and Consumers Act 2024—(a) Part 3;(b) Chapter 1 of Part 4;(c) Chapter 2 of Part 5.””Member's explanatory statement
See the explanatory statement for my amendment inserting a new Clause after Clause 330.
Amendment 214 agreed.
Clauses 326 and 327 agreed.
Amendment 215
Moved by
215: After Clause 327, insert the following new Clause—
“Review: tax rates for digital and high street businesses(1) Within the period of 6 months beginning with the day on which this Act is passed, the Secretary of State must undertake a review of the implications for competition of tax rates paid by business which operate—(a) wholly online,(b) wholly through physical premises, and(c) both online and through physical premises.(2) In undertaking the review under subsection (1), the Secretary of State must—(a) identify the number of high street shop closures in each of the last three years, (b) calculate an indicative average tax rate for each of the business categories mentioned in subsection (1),(c) consider the consequences of any differences in the average tax rates mentioned in paragraph (b) on competition, and(d) if there are significant differences between the average tax rates mentioned in paragraph (b), consider the case for reforming different forms of business taxation to reduce such differences.(3) In undertaking the review under subsection (1), the Secretary of State may carry out specific sectoral case studies which consider the particular impacts of differences in tax rates on businesses operating in those sectors.(4) Upon completion of the review, the Secretary of State must lay its findings before Parliament.”Member's explanatory statement
This new Clause, which would require the Secretary of State to carry out a review of the implications for competition of effective tax rates of digital and high street businesses, is designed to probe the Government’s plans for balancing the economic opportunities presented by firms operating in digital markets with the ongoing health of established brick-and-mortar businesses.
Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch (Lab)
- Hansard - - - Excerpts

My Lords, this amendment comes at the end of a long debate but is none the less important. It addresses one of the main factors leading to the long and sad decline of many of Britain’s high streets: the huge disparity in costs for businesses having a physical presence in the high street compared to the cost of equivalent businesses trading online. Bricks-and-mortar businesses are now paying disproportionately more than their online competitors, which is hitting small businesses and our high streets hard.

The result is boarded-up shops that landlords have given up trying to let and an increase in anti-social behaviour as the streets become ghost towns. Yet we know that small businesses are crucial to thriving high streets, providing goods and services that are central to people’s everyday lives. More than that, they provide a community focus for people to socialise, eat and relax, helping to tackle loneliness and increasing a sense of well-being.

It is not just small businesses that have been squeezed out. Well-known chain stores such as Debenhams and Wilko, which provided core high street essentials, have failed to survive on the high street. Instead, their naming rights have been bought out by new businesses operating exclusively online.

Vibrant high streets are not just good for communities; they are vital for boosting local economic growth, creating increased demand and jobs in the retail and service sectors. The fact is that the UK’s business rates system is no longer fit for purpose. As our economy has moved more online, our tax system has failed to keep up, so there is an urgent need to rebalance the costs. High street businesses should not face huge business rate charges while their big online marketplace competitors are let off the hook.

20:15
This is what our amendment begins to address. It calls for an urgent and overdue review of the comparative tax rates paid by online and physical businesses in the light of the high street shop closures over the last few years, and for proposals to be presented to Parliament to reform business taxation to reduce the disparity.
Reform of business rates is just one measure that is necessary to reverse the decline of our high streets. We need new incentives to support small businesses to grow and move into the empty premises. We need to give councils new powers to take over empty shops and reopen them—if necessary, without the consent of the landlord but passing the rent revenue back to the owner. These shops could then be offered to local small businesses for a discounted rent. We need to tackle anti-social behaviour by introducing new town centre police patrols and taking greater action against shoplifters. Most of all, we need to create a climate where high streets become the go-to venues for start-up businesses to meet their customers and get instant feedback so that they can develop and grow.
It is lazy thinking to decide that high streets no longer have a function and that the future is destined to be online retail. This is not what consumers want. They want a mixture of online convenience and retail shop personal service and social interaction. Our amendment would be the first step towards balancing tax burdens and delivering that model. I hope that noble Lords will support it. I beg to move.
Lord Clement-Jones Portrait Lord Clement-Jones (LD)
- Hansard - - - Excerpts

My Lords, I will speak very briefly in support of the amendment in the name of the noble Baroness, Lady Jones.

It is unfortunate that this comes at the end of our debate rather than the beginning, as it is a really important aspect of it. We have been talking about the digital world throughout our six sessions, but it is increasingly apparent that the digital world cannot meet all the emotional needs of society. It is not the perfect substitute for everything that we do in person in the physical world—for our social, shopping and other needs. If we try to make it so, it will have considerable impact on mental health.

We must strive to keep a lively, prosperous physical world in front of us on the high street, as the noble Baroness outlined. Much of this talk about taxation is above my pay grade—you always get wrapped on the knuckles by your spokesperson if you start proposing tax reform or whatever it may be—but there is no doubt that my party certainly supports business rates reforms in a variety of different ways. It also believes that the settlement on the digital taxation side through the OECD agreements has been far too modest in its impact on the major digital players. The imbalance between physical and digital traders has been far too great and has advantaged the digital players far too much. I am in total sympathy with what the noble Baroness said.

Lord Lucas Portrait Lord Lucas (Con)
- Hansard - - - Excerpts

My Lords, I entirely agree with the noble Lord, Lord Clement-Jones, on that last point. It is really important that we keep at the question of how we tax digital businesses. One can no longer rely on the Irish national statistics because they are so distorted by profit shifting, a lot of it from this country—profit going abroad and being taxed at a very low rate in Ireland when it should be taxed here.

I know that this is an international matter, but we absolutely must keep the pressure up. We are getting more and more digital, so we need to have an international tax system where profits are taxed where they arise and not where Governments wish to shift them to. I know that this is hard, but I am unimpressed by the progress that the world has made in this direction. I really hope that the Government will get behind the continued efforts on this. We suffer a great deal from it.

At the other end of the scale, the Government could also do a lot better. I am sure that my noble friends will remember that HMRC made a horrendous mess of VAT in the Channel Islands in the early 2000s. Whole businesses grew up in the Channel Islands on the idea that you could ship records out to them, then they would come back VAT-free to the person in the UK who bought them because the consignment was under a certain value.

HMRC eventually dealt with that, but now there is monstrous and recurring fraud through the likes of Amazon and eBay, involving “Chinese” sellers—there is no reason to think that they are of that nationality in particular, but they are certainly Far Eastern—who HMRC does not pursue. HMRC does not effectively collect the tax that is due. It says, “Oh, it’s too hard. Oh, it’s in lots of little bits. Oh, these people move around with great velocity”. Yes, they do, but by not collecting it, HMRC not only does not get the tax but damages the UK businesses that should be able to compete on a level playing field with those overseas sellers. It is delinquent; it is an issue at the root of HMCR that we have never managed to deal with effectively, but we really must.

It is so important that HMRC realises that it should focus not only on operational efficiency in terms of how much it costs to do things and whether it gets the money back that it is investing in this, or a sufficient multiplier of it, but on whether it is doing its bit for the structure of the UK economy and the ability of businesses to start and flourish here. I pay great credit to Retailers Against VAT Abuse Schemes, which has been active these last 20 years. I hope that it will eventually be successful, but golly, it could do with more help.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- Hansard - - - Excerpts

Once again, I am grateful to the noble Baroness, Lady Jones, for raising this important issue, and for the remarks of the noble Lord, Lord Clement-Jones, and my noble friend Lord Lucas.

The Government are wholeheartedly committed to protecting the country’s high streets and town centres, and supporting them as they adapt to changing consumer demands. Indeed, the Government revalued business rates in 2023, with the retail sector being the biggest beneficiary. We have also provided long-term investment in our high streets and small businesses, including £2.35 billion-worth of town deals, the £830 million future high streets fund and the £4.8 billion levelling up fund. New legislation in the Levelling-up and Regeneration Act 2023 will play an important role in reviving our high streets by introducing high street rental auctions, which will empower places to tackle decline by bringing vacant units back into use, and seek to increase co-operation between landlords and local authorities and make town centre tenancies more accessible and affordable for tenants, especially for SMEs, local businesses and community groups.

The Government also launched the new £2.5 million high street accelerators pilot programme, which will empower and incentivise local people to work in partnership to develop ambitious plans to reinvent the high streets so that they are fit for the future. Accelerators will bring residents, businesses and community organisations together with their local authorities to develop a long-term vision for revitalising high streets. The pilot will run in 10 areas across England until March 2025.

We consulted in 2022 on an online sales tax, and after careful consideration we decided not to introduce it. That decision reflected concerns raised on the risk of creating unfair outcomes and complexities in defining the boundaries between online and in-store retail, including click-and-collect orders. The Government therefore do propose to pursue further changes to business rates or sales tax at this time. I hope that the noble Baroness will feel sufficiently reassured to withdraw her amendment.

Baroness Jones of Whitchurch Portrait Baroness Jones of Whitchurch (Lab)
- Hansard - - - Excerpts

My Lords, I realise that it is late in the day and that I am raising a fundamental issue at a late point. Perhaps it is straying a little beyond the main intent of the Bill; nevertheless, it is a fundamental issue, and it is important that we have aired it. I am grateful to the noble Lord, Lord Clement-Jones; as he said, our high streets are far too important to lose. As both he and the noble Lord, Lord Lucas, said, the digital world cannot meet all the needs of society, and high streets still have a fundamental role to play. We absolutely need to ensure that the community focus in high streets is revitalised. I am grateful that the noble Lord, Lord Lucas, said that we should look at other models of funding and taxation; it was a point well made.

I listened carefully to what the Minister said. It is easy to say that he is wholeheartedly committed to revitalising the high streets; that is great—we all are—and I have no doubt that initiatives such as levelling up and the pilots will have some impact, but none of those addresses the fundamental fact that it is the economic costs for the shops that is at heart here. You can make a high street look lovely, provide better police and tackle anti-social behaviour, but if the shops cannot afford to trade because they are being undercut by their online competitors, they will not stay around. Unless we take more fundamental actions on that basis and face up to what is happening at the moment, sadly, we will face continuing long-term decline.

I hear what the Minister says. I realise that this is a much bigger debate, but I really feel that the Government do not have a grip on this. They have had 14 years to sort it out but there has been a long decline on their watch. I am sorry to end on such a negative note. As I said, I am sure we will have a further chance to debate this, but I really think that our policy on reforming business rates will make a fundamental difference. Nevertheless, I beg move to withdraw my amendment.

Amendment 215 withdrawn.
Amendments 215A to 215C not moved.
Clause 328: Interpretation
Amendment 216
Moved by
216: Clause 328, page 232, line 1, at end insert—
““the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act);”Member’s explanatory statement
This amendment would define “the data protection legislation” for the purposes of the whole Bill.
Amendment 216 agreed.
Clause 328, as amended, agreed.
Amendment 217
Moved by
217: After Clause 328, insert the following new Clause—
“Data protection(1) This section applies to a duty or power to process information that is imposed or conferred by or under any provision of this Act.(2) A duty or power to which this section applies does not require or authorise the processing of information which would contravene the data protection legislation (but the duty or power is to be taken into account in determining whether the processing would contravene that legislation).”Member’s explanatory statement
This amendment would make it clear that provisions in the Bill imposing or conferring duties or powers to process information do not require or authorise the processing of information which would contravene the data protection legislation.
Amendment 217 agreed.
Clause 329 agreed.
Amendment 218
Moved by
218: After Clause 329, insert the following new Clause—
“ConsultationA duty to consult under or by virtue of this Act may be satisfied by consultation that took place wholly or partly before the passing of this Act.”Member’s explanatory statement
This amendment clarifies that consultation required under or by virtue of the Bill may begin before the Bill is passed (so long as it is in compliance with the requirements for consultation as enacted).
Amendment 218 agreed.
Clause 330 agreed.
Amendment 219
Moved by
219: After Clause 330, insert the following new Clause—
“Minor and consequential amendmentsSchedule (Minor and consequential amendments) contains minor and consequential amendments.”Member's explanatory statement
This new Clause introduces a new Schedule that contains minor and consequential amendments relating to the Bill generally (there are other Schedules of consequential amendments relating to particular Parts of the Bill).
Amendment 219 agreed.
Clause 331 agreed.
Clause 332: Regulations
Amendment 219A not moved.
Clause 332 agreed.
Clause 333 agreed.
Clause 334: Commencement
Amendments 220 to 222 not moved.
Amendment 223
Moved by
223: Clause 334, page 235, line 9, after “Part” insert “other than section (Minor and consequential amendments) (and Schedule (Minor and consequential amendments))”
Member’s explanatory statement
This amendment provides that the new Clause and Schedule in my name making minor and consequential amendments come into force in accordance with regulations made by the Secretary of State.
Amendment 223 agreed.
Amendment 224 not moved.
Clause 334, as amended, agreed.
Clause 335 agreed.
Bill reported with amendments.
Committee adjourned at 8.30 pm.

House of Lords

Wednesday 7th February 2024

(4 months, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Wednesday 7 February 2024
15:00
Prayers—read by the Lord Bishop of Bristol.

Death of a Member: Baroness Flather

Wednesday 7th February 2024

(4 months, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text
Announcement
15:07
Lord McFall of Alcluith Portrait The Lord Speaker (Lord McFall of Alcluith)
- Hansard - - - Excerpts

My Lords, I regret to inform the House of the death of the noble Baroness, Lady Flather, on 6 February. On behalf of the House, I extend our condolences to the noble Baroness’s family and friends.

Post Office Appointments: Ministerial Responsibility

Wednesday 7th February 2024

(4 months, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Question
15:07
Asked by
Lord Touhig Portrait Lord Touhig
- View Speech - Hansard - - - Excerpts

To ask His Majesty’s Government what responsibility ministers have for the appointment of the Board and Chief Executive Officer of the Post Office.

Lord Offord of Garvel Portrait The Parliamentary Under-Secretary of State, Department for Business and Trade and Scotland Office (Lord Offord of Garvel) (Con)
- View Speech - Hansard - - - Excerpts

My Lords, I thank the noble Lord for his Question. As set out in the Post Office’s articles of association and shareholder relationship framework document, the Secretary of State for Business and Trade appoints the chair and directors of the Post Office and approves the appointment of the chief executive officer. Strong and effective leadership of the Post Office is a necessity and the Government therefore take their role in making the right appointments very seriously.

Lord Touhig Portrait Lord Touhig (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, I believe that the shortcomings of the Post Office board and senior executives were responsible for this unparalleled injustice. Last week, the Minister said that the Government were looking at tightening the governance of the Post Office. Can I suggest that one way of doing this would be for the Ministers making the appointments to also ensure regular appraisals of those they have appointed? After all, who among us in this Chamber has not gone through an appraisal at some time? If such an appraisal scheme already existed, perhaps sub-postmasters across Britain would not be in despair, feeling that they were—I think of the words of Toby Jones, who played Mr Bates in the TV drama—the “skint little people” who are

“fighting a war against an enemy owned by the British Government”.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- View Speech - Hansard - - - Excerpts

I thank the noble Lord for that. The whole House shares the noble Lord’s sentiments that this is a deeply shameful episode, which went on for over 20 years. It is quite incredible to think back on the scale of the failure here, both of governance and of corporate life. Since the Horizon scandal came to light, the Government have taken quite a lot of steps to strengthen the governance of the Post Office. However, there are a number of ongoing reviews, including one by Simmons & Simmons, to look at exactly how the appraisal system works. Once the Wyn Williams review—a statutory inquiry—has concluded, we will be able to take steps around corporate governance going forward.

Lord Arbuthnot of Edrom Portrait Lord Arbuthnot of Edrom (Con)
- View Speech - Hansard - - - Excerpts

My Lords, in an arm’s-length organisation, to whom in practice is the chief executive accountable? Is it the department’s Permanent Secretary?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- View Speech - Hansard - - - Excerpts

I thank my noble friend for his question and for all his efforts on behalf of the postmasters. We have to realise that this is a limited company owned entirely by the Government, with one share owned by the Secretary of State. It separated from Royal Mail Group when that went private, but the Post Office is actually classified as a public non-financial corporation. Public corporations include, for example, Ordnance Survey, Royal Mint and British International Investment. They are typically owned by the appropriate Secretary of State in that department, the reason being that they are hybrid: the Post Office has commercial activity, it makes revenue through the post offices, but it also receives public money to support the network. As a result, the governance is such that the chief executive reports to the chair, the chair reports to the Secretary of State, and the chief executive also reports to the Permanent Secretary when it comes to public money.

Lord Fox Portrait Lord Fox (LD)
- View Speech - Hansard - - - Excerpts

My Lords, I am not sure that the Minister answered the question from the noble Lord, Lord Arbuthnot. We agreed that the Post Office needs leadership, and last week the Minister said:

“We will appoint an interim chair as soon as possible”.—[Official Report, 30/1/24; col. 1122.]


Perhaps with another week, the Minister can dwell a little more on the process. When will the details of the process be published? How will the job description of this appointment differ from the job description that was used by Business Secretary Kwasi Kwarteng when he appointed Henry Staunton as recently as September 2022? What will change in the job description of the chairman from the last appointment?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- View Speech - Hansard - - - Excerpts

I thank the noble Lord for that question. The corporate answer is that the chief executive reports to the chairman; the job of the chairman is to fire the chief executive on behalf of the shareholder; the shareholder is the Government and, since these matters came to light in 2020, we have had the new shareholder relationship document that outlines all the governance on this. Indeed, the Minister for the Post Office has had monthly meetings, starting with Minister Scully through to the current Minister, Minister Hollinrake, with the chief executive. When the new chair is appointed, that chair will step into the position and continue to run the board on behalf of the Government.

Lord Hain Portrait Lord Hain (Lab)
- Hansard - - - Excerpts

I am sorry, but the Minister has not answered the question from the noble Lord, Lord Arbuthnot.

Baroness Williams of Trafford Portrait Baroness Williams of Trafford (Con)
- Hansard - - - Excerpts

Order. It is the turn of the Cross Benches.

Baroness Butler-Sloss Portrait Baroness Butler-Sloss (CB)
- Hansard - - - Excerpts

My Lords, as a member of one of the departments is a member of the board of the Post Office, at the relevant time—and the board knew quite early on that Horizon was not working properly—why did that representative not tell the Government, or did he do so?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- View Speech - Hansard - - - Excerpts

I thank the noble and learned Baroness: this is the whole purpose of the inquiry. I cannot answer the specific questions, not having been there myself. The inquiry will look into this. What is clear is that there has been a failure of governance. On the face of it, Post Office Ltd is set up with the right checks and balances in place. There have been non-executive directors, there is the government representative on the board, there is a chairman: on the face of it, it should be subject to the governance that we see in private companies. For some reason, there has been a lack of inquiry and of challenge and we need to understand why and find out who is accountable for that.

Lord Hain Portrait Lord Hain (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, is this not a systemic failure of the whole state? The answer to the question from the noble Lord, Lord Arbuthnot, is that the Permanent Secretary is the accounting officer for the Post Office, and the department puts a director on the board of a public corporation. This is not just about the failings of Post Office managers; it is about the failings of the whole state, which sacrificed pillars of the community to suffer one of the gravest injustices committed in recent times.

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- View Speech - Hansard - - - Excerpts

I thank the noble Lord for that: no one can disagree with his sentiments. As I said, the machinery was put in place, but there was a lack of scrutiny, inquiry and challenge from the non-executive directors, from, perhaps, the chair, and from, perhaps, the Ministers. The Permanent Secretary role is a key one because, using the public accounting model, they meet with the DBT on a quarterly basis to have that line of communication as well. There was no shortage of lines of communication here.

Lord Forsyth of Drumlean Portrait Lord Forsyth of Drumlean (Con)
- View Speech - Hansard - - - Excerpts

My Lords, my noble friend has vast experience in private equity and elsewhere in business. Does he not agree that, faced with this kind of disaster, the first thing any private business would do is clear out the entire board, without necessarily attributing any blame, and put in a new team of people who did not have any baggage in order to sort it out. Why do the Government not get on and do that?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- View Speech - Hansard - - - Excerpts

Three new non-executive appointments were made in 2023 and there will be a new senior independent director appointed and a new chair. Two postmaster directors have also been appointed to the board. The current chief executive, who came in in 2019 at the point of the judgment, remains in place. We continue to have faith in him to move this thing forward quickly, with the right amount of oversight. We have confidence in the board as it is reconstituted. But, as has been said, the question is: why did the original failure happen? We need to find that out.

Lord McNicol of West Kilbride Portrait Lord McNicol of West Kilbride (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, the financial cost of the Horizon scandal is going to be in excess of £1 billion, and that does not take into account the personal cost to the postmasters and postmistresses, some of whom are here with us. Fujitsu has offered to pay a voluntary contribution but, more importantly, should the Post Office wish to sue Fujitsu, is it still in time to do that and when did the Post Office agree a standstill?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- View Speech - Hansard - - - Excerpts

I thank the noble Lord for that question. On the specifics, I will write to him on the actual timeline, but the reality is that Fujitsu knows it has a major part to play here. It knows that it is under serious investigation. It has pre-empted that by coming out and saying that it feels a moral responsibility. My colleague, the Minister in the other place, has made it very clear that the cost of this debacle cannot land purely on taxpayers and I am sure there will be a very full investigation and compensation required from Fujitsu.

Lord Stirrup Portrait Lord Stirrup (CB)
- View Speech - Hansard - - - Excerpts

My Lords, further to the question from the noble Lord, Lord Forsyth, when in an earlier Question Time I asked the Minister whether the Post Office brand was not now too toxic for it to continue as currently constituted, the Minister replied that, in his view, the brand image of the Post Office had improved as a consequence of what had happened. Now, while the reputation of the people who run sub- post offices has no doubt been greatly enhanced, to suggest that of the reputation of the organisation which so cruelly and illegally persecuted them cannot possibly be true. So I repeat what I asked then: is it not now time for a wholly new organisation, with new leadership and a new business model incorporating the appropriate ethical principles?

Lord Offord of Garvel Portrait Lord Offord of Garvel (Con)
- View Speech - Hansard - - - Excerpts

I thank the noble and gallant Lord for his question. To clarify my remarks, last time I said that the reputation of the postmasters had been enhanced and most people in the community think of the Post Office as being the postmasters. In the last 12 months, the churn of postmasters—those leaving and those coming in—has gone up. We have a record number of post offices—11,700—in the country; 5,000 of those are in rural areas and one-quarter are the last shop in the village. They form a vital role in the community and, as I said before, the reputation of the postmasters has only been enhanced by this sorry tale.

Ukraine Conflict

Wednesday 7th February 2024

(4 months, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Question
15:18
Asked by
Lord Campbell-Savours Portrait Lord Campbell-Savours
- View Speech - Hansard - - - Excerpts

To ask His Majesty’s Government what steps they are taking to resolve the conflict in Ukraine.

Lord Ahmad of Wimbledon Portrait The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
- View Speech - Hansard - - - Excerpts

My Lords, we support a just and sustainable peace that restores Ukraine’s sovereignty and territorial integrity, underpinned by the UN charter. However, Russia’s actions on the battlefield demonstrate that President Putin has no interest in such an outcome. President Zelensky has clearly demonstrated Ukraine’s commitment to peace in his 10-point peace formula, and together with our partners the United Kingdom is providing Ukraine with the support it needs to both protect and defend its sovereignty.

Lord Campbell-Savours Portrait Lord Campbell-Savours (Lab) [V]
- View Speech - Hansard - - - Excerpts

My Lords, with some defence chiefs calling for national mobilisation, more equipment and intervention in Ukraine, and the Defence Committee arguing that we do not have the resources, despite the highest tax rates in recent history, and having in mind the sensitive national debate now under way in both Washington and Ukraine, where is the voice of reason that believes it is better for all to sit down and talk through resolution of this conflict? I profoundly disagree with those who say that it is not possible and the Russians will never talk. Is it not cheaper for all? It would save lives—300,000 have been lost to date—protect the international economy and preserve the peace that is now threatened worldwide.

Lord Ahmad of Wimbledon Portrait Lord Ahmad of Wimbledon (Con)
- View Speech - Hansard - - - Excerpts

My Lords, no one wants peace more than the Ukrainians. Anyone who has visited Ukraine can see that. President Zelensky wants peace; that is why he has put forward a 10-point programme. The noble Lord shakes his head, but perhaps at some point I will be able to convince him. As we mark this anniversary yet again, let us go back two years. Who invaded whom? Who is the aggressor and the responsible actor that created this war? Russia created the war; Mr Putin can stop it and he should do so now.

Lord Collins of Highbury Portrait Lord Collins of Highbury (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, I am sorry for not following convention but I want to intervene at this stage to make clear that the Official Opposition are fully behind the Government’s position on Ukraine. We support their actions, and the fact that this House is united is an important element in ensuring Ukraine’s victory.

In our debate on Ukraine, the Minister said:

“We will squeeze Russia’s war machine”.—[Official Report, 26/1/24; col. 932.]


That will involve sanctions, so can he update the House on the new agency delivering them? How quickly can we bring it in and strengthen our sanctions against the Russian war machine?

Lord Ahmad of Wimbledon Portrait Lord Ahmad of Wimbledon (Con)
- View Speech - Hansard - - - Excerpts

My Lords, we are at one, as the noble Lord knows and as is required at this time. Only last week I met the prosecutor-general of Ukraine, who underlined the strength and courage he finds in the support from not just this House but the British people.

Together with our international partners, we have unleashed probably the largest and most severe package of sanctions. As the noble Lord knows, I often share some of the insights behind them. Cumulatively, between February 2022 and October 2023, £22.7 billion of Russian assets were reported frozen due to UK financial sanctions regulations. The UK has committed £50 million to support the new deterrence initiative, and the new Office of Trade Sanctions Implementation will strengthen this further. As I have said before, we will continue to report on specific progress made.

Lord Lancaster of Kimbolton Portrait Lord Lancaster of Kimbolton (Con)
- View Speech - Hansard - - - Excerpts

My Lords, the cost of this war will pale into insignificance compared with the cost of reconstructing Ukraine. It is at that point that the coalition in support of Ukraine will be truly tested. Can my noble friend give the UK’s current estimate of the cost of reconstruction and say what leadership we as a nation are showing in pulling together a reconstruction fund? Also, if I may correct the record, no service chief has called for national mobilisation.

Lord Ahmad of Wimbledon Portrait Lord Ahmad of Wimbledon (Con)
- View Speech - Hansard - - - Excerpts

My Lords, I thank my noble friend, who provides a great deal of insight on this. The debate about Ukraine across our country reflects the very freedoms that the Ukrainians are fighting for—the freedom to debate, challenge and provide insight. I thank my noble friend for providing his own insights.

The UK led on this last summer by hosting a conference on reconstruction. Various figures are being put forward, but the challenge is that there can be no effective assessment of the overall reconstruction plan until Russia pulls back from the areas it has occupied. It has caused damage environmentally, not just in the buildings and lives lost. At the Ukraine Recovery Conference last year, the UK announced £250 million of new capital to de-risk investments in projects to support economic recovery. Once that full assessment has been made—tragically, it will run into billions of pounds—we will need to stand up collectively, and the private sector will play a role. At a time when Ukraine is facing these challenges, it is vital that we stand at one and support its energy renewal, reconstruction and war effort. We stand with Ukraine.

Lord Stirrup Portrait Lord Stirrup (CB)
- View Speech - Hansard - - - Excerpts

My Lords, in a recent speech in Sweden, President Macron said that Europe needed to do whatever was necessary to ensure Ukraine’s success, irrespective of what political decisions were made in America. What discussions are His Majesty’s Government having with France, Germany and other European allies to help turn such rhetoric into reality?

Lord Ahmad of Wimbledon Portrait Lord Ahmad of Wimbledon (Con)
- View Speech - Hansard - - - Excerpts

My Lords, we always listen carefully to what President Macron says—France is an important ally in every sense, and we are working closely with France and our European partners. We are aware of the discussions going on across the ocean in the United States but, equally, we need the US to be part of this effort, and the reconstruction effort. The debate we had only the other week illustrated this large component. Not only are we making that case to our European partners but we continue to advocate the case for Ukraine in the United States.

Baroness Smith of Newnham Portrait Baroness Smith of Newnham (LD)
- View Speech - Hansard - - - Excerpts

My Lords, the noble and gallant Lord stole part of my question—I was going to ask about relations with our neighbours and what discussions His Majesty’s Government were having. I will rephrase it and ask the Minister what assessment, beyond France and our closest allies, His Majesty’s Government have made about the solidarity in Europe to support Ukraine. There was a wobble during 2023. Do the Government think that Poland, for example, is now firmly back on the right side and giving as much support as possible?

Lord Ahmad of Wimbledon Portrait Lord Ahmad of Wimbledon (Con)
- View Speech - Hansard - - - Excerpts

My Lords, I am sure the noble Baroness has noticed that there is a change in the Polish leadership. We have also seen, when it comes to issues of the defence of Europe, the importance of our advocacy within NATO. It is very clear in the discussions we are having, particularly through that organisation, that Europe stands together, and stands with Ukraine.

Earl Attlee Portrait Earl Attlee (Con)
- View Speech - Hansard - - - Excerpts

My Lords, will the UK persist with merely doing enough to prevent Ukraine being defeated, rather than any more than that?

Lord Ahmad of Wimbledon Portrait Lord Ahmad of Wimbledon (Con)
- View Speech - Hansard - - - Excerpts

My Lords, my noble friend raises an important point. We need to ensure that Ukraine has what it needs to defend its sovereign territory. Let us go back in time. Since we saw the invasion and annexation of Crimea, the UK’s position has been consistent—indeed, it is a position shared by His Majesty’s loyal Opposition. Loyalty is an important word here—loyalty to each other but also to Ukraine. We will stand steadfast in ensuring that the defensive capability that Ukraine needs is fully supported.

Lord Singh of Wimbledon Portrait Lord Singh of Wimbledon (CB)
- View Speech - Hansard - - - Excerpts

My Lords, according to both Ukrainian and Russian media, former PM Boris Johnson, in a visit to Kyiv in 2022, persuaded President Zelensky to reject a peace deal with Putin that would have led to the withdrawal of Russian troops in return for an undertaking that Ukraine would not join NATO. Does the Minister agree that this was an opportunity missed and has since cost thousands of lives?

Lord Ahmad of Wimbledon Portrait Lord Ahmad of Wimbledon (Con)
- View Speech - Hansard - - - Excerpts

My Lords, I am not going to respond to media speculation. I have had the opportunity, as I am often reminded, to serve under a number of Foreign Secretaries and Prime Ministers—including former Prime Minister Boris Johnson —and, since this war started, it is very clear that the United Kingdom’s position has been consistent. It has been strong and firm, whether led by Boris Johnson or his successors—including our current Prime Minister, who visited Kyiv. The position from the UK is clear: we stand with Ukraine.

Lord Bellingham Portrait Lord Bellingham (Con)
- View Speech - Hansard - - - Excerpts

My Lords, there is a catastrophic food shortage in Sudan, South Sudan, Somalia and other countries in the Sahel. Historically, they have relied on grain exports from Ukraine, and indeed from Russia as well. Since Russia renounced the Black Sea grain initiative in July, those exports from Ukraine have fallen by 34%. Can the Minister give his assessment of the current situation? What more can be done to get more grain exports out of Ukraine to those hard-pressed parts of Africa?

Lord Ahmad of Wimbledon Portrait Lord Ahmad of Wimbledon (Con)
- View Speech - Hansard - - - Excerpts

My Lords, my noble friend raises a very important point. Ukraine supplied to many across Africa—more than 400 million people were the beneficiaries of Ukraine’s grain exports. I can share with my noble friend that Ukraine is now exporting more grain than at any time since the war began. Monthly export figures for January saw in excess of 4.6 million tonnes of grain go through the Black Sea, which is a 32% increase on the peak month of the Black Sea grain initiative. That has become consistent because—although we praise the UN and other parties, such as Turkey, that brokered the deal—since it has been rejected by Russia, we have continued to stand steadfast. We have helped in the Black Sea and, although it is still very much early days, that is why we are beginning to see an increase. Long may that continue.

Buy Now, Pay Later: Regulation

Wednesday 7th February 2024

(4 months, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Question
15:29
Asked by
Lord Davies of Brixton Portrait Lord Davies of Brixton
- View Speech - Hansard - - - Excerpts

To ask His Majesty’s Government, further to the publication of draft legislation on ‘Buy Now Pay Later’ arrangements in early 2023, when they intend to fulfil their 2021 commitment to regulate such arrangements.

Baroness Vere of Norbiton Portrait The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)
- View Speech - Hansard - - - Excerpts

My Lords, the Government’s consultation on proposed draft legislation to bring buy now, pay later into regulation closed in April 2023. In it, the Government reiterated their position that regulation must be proportionate so that borrowers are appropriately protected without unduly inhibiting access to these useful, interest-free products.

Lord Davies of Brixton Portrait Lord Davies of Brixton (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, I have to say that I find the Answer from the Minister deeply disappointing. It is three years since the Woolard Review concluded that more needed to be done to ensure a healthy, sustainable market in unsecured credit, including, in particular, buy now, pay later. Since that time, the use of buy now, pay later has more than trebled, with the citizens advice bureau warning that consumers are left without vital consumer protection and reporting from its own experience a huge rise in the number of people needing services to deal with the problems created by this form of credit. Is that not just evidence that this is no longer a serious Government prepared to undertake tasks to protect ordinary rank and file people?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

I disagree with the noble Lord. Obviously, we have received a large amount of stakeholder feedback to the consultation on the draft regulations. We are considering that feedback and it is very varied. In many cases, when provided affordably and used responsibly, interest-free credit can be incredibly helpful to people trying to balance certain payments from month to month. The average outstanding balance of buy now, pay later is £236. These are relatively small amounts of money that can be shifted from month to month, and it is proving incredibly useful to a number of people.

Earl of Effingham Portrait The Earl of Effingham (Con)
- View Speech - Hansard - - - Excerpts

My Lords, buy now, pay later works for people who can manage their finances, but unfortunately, there are many who struggle with that management. What are the Government doing to make financial education a pillar of the school curriculum?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

I agree with my noble friend that this is at the heart of it. Any credit facility, be it interest-free or not, has to be understood by those who use it. To that end, the national curriculum has included financial education since 2024. In primary schools, children learn about the uses of money. In secondary school, they go on to learn about budgeting and managing risk, which is of course incredibly important in the credit markets. They learn about financial products and services and raising and spending public money. We have put those elements in place.

Baroness Kramer Portrait Baroness Kramer (LD)
- View Speech - Hansard - - - Excerpts

My Lords, a number of the firms that provide buy now, pay later—which are of course unregulated schemes currently—are seeking authorisation from the FCA also to offer regulated credit schemes. As we saw with the mini-bond scandal, this mixing of regulated and unregulated lulled ordinary people into misunderstanding the absence of supervision for unregulated products and led them into serious financial distress. Will the Minister advise the FCA not to authorise any schemes for buy now, pay later firms until buy now, pay later is itself properly regulated?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

While it is fair to say that buy now, pay later itself is not regulated, many elements of getting out to consumers are regulated. The broader consumer protection legislation which exists provides such protections. For example, the FCA has rules and guidance on advertising and financial promotion. Only today, the FCA financial promotions gateway is in force. Buy now, pay later firms must also go through that gateway with all their marketing materials to ensure that they are not misleading, and that is to the benefit of consumers.

Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
- View Speech - Hansard - - - Excerpts

My Lords, a study last year by the Centre for Financial Capability found that a quarter of buy now, pay later users had been hit by late payment fees. That figure rose to 34% for users aged 18 to 34. Those young people are also facing the problems of the weight of student debt: about half of them go to university and, increasingly, they are carrying debt as well for further education. Is this not just one more way of laying a huge weight of debt on our young people?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

I do not believe so, because, as I said, it is not a huge amount of debt. The average balance for younger people aged 25 to 34 is just £185. One experience that I think many users have of buy now, pay later is that they may, once, have a late fee—I know that my children certainly have—and then they learn, and they do not do it again. Those fees are not particularly expensive, but Experian, for example, would say that 99% of agreements were settled on time in January and February. We cannot shut off access to a form of interest-free credit which has saved consumers more than £100 million. It is really important that we get the balance right.

Lord Livermore Portrait Lord Livermore (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, in February 2021, the Government promised to act swifty to regulate buy now, pay later. Three years later, legislation is nowhere in sight. While the Government have delayed, leaving millions of consumers unprotected, Labour has set out plans for regulating the sector. That includes a requirement for clearer information, while ensuring the same protections for consumers as they get when using a credit card. To move things along, will the Government now adopt Labour’s plan, which has received broad support from all major buy now, pay later providers?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

I have to be honest with the noble Lord in saying that I have not read Labour’s plan, but he talked about clarity of information. It is worth pointing out that it is not just the FCA that looks at advertising and financial promotion. We have the Consumer Protection from Unfair Trading Regulations 2008; we have the Consumer Rights Act, and then we have the UK advertising code. In terms of information, it is clear that consumers have a number of recourses, but I return to what I said at the outset: the consultation closed in April 2023; the Government have reiterated our position that regulation must be proportionate. I am quite surprised that the Labour Party thinks that it has a solution that has been backed by all buy now, pay later firms, because it is a very complex area and we need to achieve a balance.

Lord Sikka Portrait Lord Sikka (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, buy now, pay later services may offer interest-free periods, but, as has already been said, they charge high interest rates and fees for late payments, which really push up the price of the product. Without regulation, this industry is likely to go the same way as pawnbrokers, who charge interest of up to 160%. Will the Government impose a ceiling for the fees and interest rates that this industry can charge?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

I am not sure whether the noble Lord has looked at what the late payment fees are for buy now, pay later firms. They are incredibly small, because the business model is very different in that it does not necessarily rely only on such charges; they are paid by the retailers as well. As I said, all sorts of existing and broad consumer protections underpin fair contracts—that would be the Consumer Rights Act. The FCA has already taken action against six buy now, pay later firms, where it felt that the contract terms were either unfair or unclear. The system is working; it is a very complicated area; the Government are looking at the responses to the consultation, and we will publish a response in due course.

Lord Deben Portrait Lord Deben (Con)
- View Speech - Hansard - - - Excerpts

My Lords, does my noble friend accept that, if we do not do this carefully, we will be removing opportunities from a large number of people for whom this is important? Is not the rush to regulate a very dangerous concept in this case?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

I agree with my noble friend.

None Portrait Noble Lords
- Hansard -

Oh!

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- Hansard - - - Excerpts

I do not always. There seems to be a “computer says no” attitude to newfangled things. I absolutely reject that. While noble Lords may or may not use buy now, pay later, I know many young people who do, and they do so very successfully. I would not want to overregulate a product or get it wrong, thereby causing that product to be removed from the market.

Lord Watts Portrait Lord Watts (Lab)
- View Speech - Hansard - - - Excerpts

The Minister says that there needs to be regulation, that the Government have gone out for consultation and that they are now considering it. To ask the same question I ask of Ministers all the time: where is the timeline for that? When will the Government act rather than talk?

Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

We will act by publishing the results of the consultation and our response to it in due course.

None Portrait Noble Lords
- Hansard -

Oh!

Tata Steel: Port Talbot

Wednesday 7th February 2024

(4 months, 2 weeks ago)

Lords Chamber
Read Full debate Read Hansard Text Watch Debate
Question
15:40
Asked by
Lord Harries of Pentregarth Portrait Lord Harries of Pentregarth
- View Speech - Hansard - - - Excerpts

To ask His Majesty’s Government what steps they are taking to safeguard jobs at Tata Steel in Port Talbot, and to encourage alternative forms of employment in the area.

Baroness Swinburne Portrait Baroness Swinburne (Con)
- View Speech - Hansard - - - Excerpts

My Lords, Tata informed the UK Government last year that it intends to close the steelworks and withdraw from the UK, putting 8,000 jobs at risk. The current plan put forward by Tata, which is subject to consultation, will see the Government investing £500 million to secure the future of steelmaking in Port Talbot, protecting 5,000 steel jobs in the UK and thousands more in the supply chain, while putting UK steelmaking on a more green and sustainable footing.

Lord Harries of Pentregarth Portrait Lord Harries of Pentregarth (CB)
- View Speech - Hansard - - - Excerpts

I thank the Minister for her reply. As she will be aware, job losses on this scale—some 2,000 at Port Talbot—will have a totally devastating effect on the community. Lord Tebbit said about the closure of the mines in the 1980s that, however necessary it was, he regretted the destruction of those communities and thought that in retrospect the decisions had been taken too quickly and not enough had been done. We can only hope that the Government do not have similar regrets about what is happening at Tata. First, what pressure are the Government putting on Tata Steel to slow down the phasing out of the blast furnaces? Secondly, would the Government consider setting up a task force, which would work very closely with the Welsh Government, employers’ organisations and members of the local community, to see what alternative forms of employment there might be, given that there are bound to be some job losses?

Baroness Swinburne Portrait Baroness Swinburne (Con)
- View Speech - Hansard - - - Excerpts

I thank the noble and right reverend Lord for that question. It is true we recognise that this is a devastating blow for the community, which is why we have already set up the Tata Steel/Port Talbot Transition Board. It is not called a task force but it will, in effect, act in that way. It is set up to

“protect and grow the economic environment and to support and mitigate the impact on those workers, businesses and communities … directly affected by”

this Tata Steel announcement. The reality is that that board is already up and running. It has support, being not just chaired by the Secretary of State for Wales but having representatives of the Welsh Government on it. It also has on it the local MP and various members from Tata and the local community, and business experts. So it is already set up and has a £100 million fund to do this work, and it will be tasked with making sure that alternative employment is found for all those who need it.

Lord Forsyth of Drumlean Portrait Lord Forsyth of Drumlean (Con)
- View Speech - Hansard - - - Excerpts

My Lords, is it not insanity to spend half a billion pounds of taxpayers’ money on ending the production of virgin steel through blast furnaces in this country, which means that we end up importing steel from China, where the electricity to fire its blast furnaces is made by opening coal-fired power stations? Surely this is the green agenda going too far, and the price that is being paid by that community and the taxpayer is far too high.

Baroness Swinburne Portrait Baroness Swinburne (Con)
- View Speech - Hansard - - - Excerpts

I understand my noble friend’s point. However, Tata informs us that it is losing £1.7 million per day in running these blast furnaces and on the coke they need. With regard to carbon emissions, we are following a green agenda and we have targets that we have set. With the advent of the new electric arc furnace, which will provide a modern, efficient and less carbon-intensive method of producing steel, we will be reducing Tata’s footprint in this country by 85%, 22% of Welsh carbon emissions, and more than 1% of the UK’s emissions as a whole.

Lord Anderson of Swansea Portrait Lord Anderson of Swansea (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, the Minister must know that the economy of the Swansea Bay City Region is heavily dependent, directly and indirectly, on this giant steelworks, which I can see from my home in Swansea. Has it not been clear for some time that there has been a major threat to it? Why did the Government not earlier set up such a fund as they now have, to steer creatively private industry to the area, or relocate government departments, as the previous Labour Government did so well with the DVLA at Morriston?

Baroness Swinburne Portrait Baroness Swinburne (Con)
- View Speech - Hansard - - - Excerpts

I can tell the noble Lord that, more broadly, the UK Government have provided substantial support for the economy of Port Talbot and south Wales, with further projects being developed. This includes the development of the Celtic Freeport in Port Talbot and Milford Haven, backed by up to £26 million of UK government funding, which will focus on low-carbon technologies. It aims to create 16,000 jobs by mid-2030. The Celtic Sea is also the prime location for the floating offshore wind centre that is being planned, which will also bring several thousand jobs. Meanwhile, the Swansea Bay city deal, which covers the Port Talbot area, is in the process of delivering a number of exciting developments across the region.

Lord Fox Portrait Lord Fox (LD)
- View Speech - Hansard - - - Excerpts

One way to meet the justified need mentioned by the noble Lord, Lord Forsyth, to produce more virgin steel rather than from scrap is to use direct reduced iron technology that can be produced through an electric arc furnace. Last month, Tata Steel’s global chief executive told Parliament’s Welsh Affairs Committee that Tata would invest in DRI technology only if it could be guaranteed a good supply of first methane and then hydrogen. That is why he told that committee that Tata is building that plant in Holland and not in the United Kingdom. Can the Minister investigate how much money Holland is giving Tata to build that plant? Perhaps it could drive a harder bargain because with this technology comes more jobs.

Baroness Swinburne Portrait Baroness Swinburne (Con)
- View Speech - Hansard - - - Excerpts

I thank the noble Lord. The Port Talbot transformation project does not prevent further technologies being deployed over time. We are paying careful attention to the international developments, particularly the hydrogen and DRI systems, such as the Tata Steel project in the Netherlands. Ultimately, this technology has not yet reached commercial activity, but when it does reach that maturity, we will look at it closely.

Viscount Waverley Portrait Viscount Waverley (CB)
- View Speech - Hansard - - - Excerpts

My Lords, Tata has multiple interests beyond steel. Are the Government looking at its operation in total and perhaps encouraging a package deal that takes into account all its other interests that impact this country internally?

Baroness Swinburne Portrait Baroness Swinburne (Con)
- View Speech - Hansard - - - Excerpts

I thank the noble Lord. Yes, I understand that Tata is being spoken to as a global entity by various government departments, and it announced last year that it was going to invest very heavily in the gigafactory.

Lord Touhig Portrait Lord Touhig (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, I find myself much in sympathy with the points made by the noble Lord, Lord Forsyth. What part of the package is being invested in upskilling our people? In the last figures I saw, about 80% of people in work in the United States had been back in the classroom upskilling themselves, compared with 56% in Germany and Japan and 30% in the United Kingdom. We have to give our people skills for the jobs that do not exist yet.

Baroness Swinburne Portrait Baroness Swinburne (Con)
- View Speech - Hansard - - - Excerpts

I agree with the noble Lord, and that is why the £100 million has been made available: £80 million of that is from the UK Government, £20 million from Tata, and the majority of it will be spent on upskilling the local population, so that they can fill the advanced manufacturing jobs we are expecting to create in that area.

Lord Howell of Guildford Portrait Lord Howell of Guildford (Con)
- View Speech - Hansard - - - Excerpts

My Lords, electric arc furnaces require huge volumes of electricity to be produced reliably—24 hours a day, seven days a week—and distributed by a reliable transmission system. Are the Minister and her colleagues in the Government satisfied that the necessary investment should be started—there is not much sign of it yet—in expanding the national grid by five times, and in moving from 25 gigawatts of nuclear power, our present low level, up to 50 gigawatts, which is the minimum that will be needed?

Baroness Swinburne Portrait Baroness Swinburne (Con)
- View Speech - Hansard - - - Excerpts

I agree with the noble Lord that we need to upgrade all this infrastructure. However, the holistic view of this particular area in Wales is that we will have, I hope, one of the largest offshore floating wind platforms to facilitate plants such as the Tata arc facility, but also any of the new advanced manufacturing that will take place on that site.

Lord Leong Portrait Lord Leong (Lab)
- View Speech - Hansard - - - Excerpts

My Lords, as the Minister said earlier, and as the noble Lord, Lord Forsyth, mentioned, Tata Steel secured £500 million of taxpayers’ money in state aid, yet it rejected union proposals for a two-phase plan that would protect more than 2,300 jobs over a decade and that would see no compulsory redundancies at Port Talbot. The loss of these jobs will clearly have a very hard impact on the region and the national economy. Have the Government made any assessment of whether this £500 million in state aid passes their value-for-money test?

Baroness Swinburne Portrait Baroness Swinburne (Con)
- View Speech - Hansard - - - Excerpts

I can tell the noble Lord that I believe that the unions have been fully involved in these discussions. The plans have been discussed with the company, but the company informs us that is not viable for it to consider that plan at this point. However, the consultations started only on 2 February. Therefore, it is for the company and the unions, and its employees and staff, to ascertain the possibilities. With respect to what the Government are doing, they are monitoring everything very closely and having long conversations with the companies and the Welsh Government.