Product Security and Telecommunications Infrastructure Bill

Baroness Stowell of Beeston Excerpts

Report stage
Wednesday 12th October 2022 Lords Chamber

[Lord Blunkett (Lab)]

My Lords, I would have made a very similar speech to the noble Lord. As he has made my speech for me, I will not keep the House any longer, other than to say that when the big guy is versus the small guy it is beholden on us to support the small guy.

[Baroness Stowell of Beeston (Con)]

My Lords, just because it is my first opportunity to do so, I congratulate my noble friend on his new role and welcome the noble Lord, Lord Harlech, to his place on the Front Bench.

I do not contribute to this debate with any enthusiasm because, having made my points at all previous stages of this Bill through your Lordships’ House, it disappoints me that we are here where we are. I will repeat some of my points briefly. Like everybody else, I think it is important to emphasise that I, too, wholly endorse fast and full rollout of high-quality broadband to all parts of the UK.

As has been said already by others, my concern is really on behalf of the site owners. It is important for us to keep in mind, particularly if we have not been following this Bill closely, that when we talk about site owners this is not just about wealthy landowners but a whole range of different smallholdings and community property and that sort of thing. A whole manner of different people are involved. They were told that the reduction in rental income would be reinvested by the mobile network operators in delivering the rollout. It seems that there remains a lack of confidence on their part, because there is insufficient evidence to demonstrate how the new code is working. They are expected to engage in negotiations with commercial entities on trust while fearing their loss is at someone else’s gain. We have heard the extent of this in other groups earlier this evening.

As I have said before, the benefit of rollout relies on the willingness of site holders to participate; when we rely on people to succeed, they deserve to be heard and listened to. When their concerns are about fairness, they cannot be ignored. I am concerned about not causing any delay to rollout, but the arguments and evidence we have heard today is that ignoring the concerns of site owners is doing just that.

In Committee, I said I would support an amendment—it was Amendment 50 in Committee—that simply required the mobile network operators to report annually and transparently to Ofcom on a range of performance measures, including their overall investment into mobile networks alongside a range of other things. This amendment, ably moved by the noble Baroness, Lady Merron, goes much further and includes a review, as we have heard, and the potential for the type of reporting requirement I have just described to be an outcome of it.

In my view, the Government have to move from their current position if they are to bring all site owners on side—and we need them on side to get the rollout. In the absence of any willingness on the Government’s part while the Bill is in Parliament, the case for Parliament imposing this independent review is compelling. That said, I hope my noble friend will have given the points made in this debate full consideration, and I will listen carefully to what he has to say.

[Lord Fox (LD)]

My Lords, I congratulate the noble Baroness, Lady Merron, on her presentation of this amendment. It is an elegant composite of the discussions we had in Committee, and that is why I was very happy to put my name to it. We have heard some compelling speeches and I suggest to the Minister that they have come from 360 degrees in this Chamber, which generally indicates a klaxon for any government Minister. This really is an issue.

Digital Regulation: Communications and Digital Committee Report

Baroness Stowell of Beeston Excerpts

Thursday 21st July 2022 Grand Committee

Moved by

[Baroness Stowell of Beeston]

That the Grand Committee takes note of the Report from the Communications and Digital Committee Digital regulation: joined-up and accountable.

[Baroness Stowell of Beeston (Con)]

My Lords, I am very pleased to introduce this debate on our report, Digital Regulation: Joined-up and Accountable. I will emphasise the principle behind that title quite a bit in the remarks I make today.

Before I get into the substance of my contribution, I note that this is my first debate as chairman of the Communications and Digital Select Committee. I pay tribute to my predecessor, my noble friend Lord Gilbert of Panteg. He is very well respected across the industries and sectors that the committee focuses its work on. He has become a respected figure because he has ensured that we as a committee have focused on matters of importance and that we have done so in a fair and balanced way. The work we have done has had some impact as a result. He is a tough act to follow.

I add to this tribute by paying thanks to Theo Demolder, who supported the committee for three years, initially as our policy analyst and then as our clerk. He finished that role at the beginning of this year. I also thank the policy analyst who then worked with us and remains part of our team, Emily Bailey Page. I would like to welcome our new clerk, Daniel Schlappa. They and the whole committee are greatly assisted, as always, by the wonderful Rita Cohen. I am very grateful to the team.

I am grateful to all noble Lords who sit on the committee and I am particularly grateful to my noble friend Lord Vaizey for being here to speak today. We had to decide whether to accept what I might describe as this “graveyard slot” in the Moses Room on the last day of term during a hot and sunny week, or perhaps wait months for another opportunity to have this debate. The trade-off was few people being available, but I know my colleagues are with me in spirit. I am grateful to the Labour and Lib Dem Front Benches for fielding their A-teams and to my noble friend the Minister for his never-ending zeal and commitment to his brief, whatever the weather or political events outside. I look forward to everybody’s contributions today.

This inquiry and the resulting report were the final pieces of work undertaken by the committee under my noble friend’s chairmanship, as a follow-up to a major inquiry into digital regulation carried out by the committee in 2019. Three years ago, the committee’s central finding was that the digital world requires not merely more regulation but a different approach to regulation. Digital technologies are playing an ever-greater role in our lives and the regulation of those technologies deserves increasing scrutiny.

As I say, that does not necessarily mean more regulation, but we believe that regulators would need new and different powers. Indeed, they would need to adopt a different kind of regulation. It would need to be principles-based, with regulators having to exercise greater flexibility and judgment, which in turn would require greater collaboration between regulators and much greater and co-ordinated parliamentary oversight than ever before.

We published our report Digital Regulation: Joined-up and Accountable in December 2021 as a follow-up to the earlier inquiry. So fundamental was the need for a change of approach in regulation, we thought it was important to find out what progress had been made in the two and a half years since. In December last year, regulators appeared to be on the verge of being granted broad new powers, urgently necessary to keep pace with the fast-changing digital world.

Unfortunately, since then, what was expected has not yet come to pass. The parliamentary progress of the Online Safety Bill has recently been delayed, and the proposals to place the Digital Markets Unit within the CMA on a statutory footing have not been brought forward, despite multiple reviews and consultations over nearly five years pointing to this as the way forward.

In the meantime, other jurisdictions are pulling ahead. The Digital Markets Act and Digital Services Act have been adopted this month by the European Parliament. As a result, the UK risks becoming a rule taker, rather than a rule maker, in this area of digital regulation. To state the obvious, this means that we could lose our influence in setting the agenda. It is hard to understand why the Government have been prepared to let this happen, because designing our own framework was a benefit of us leaving the European Union, and the UK’s proposed approach has been held up as much better—I will come back to this later.

Our report, published seven months ago, at a time when we were on the verge of change, focused on the need for better co-ordination and co-operation between regulators—and that requirement remains a priority. But, as a committee, we were also clear that more co-operation between regulators needed to be accompanied by updates to the legislative framework, because, however well co-ordinated they are, they will be ineffective if they do not have the powers required.

I of course understand that the call for more regulatory power can often trigger alarm. Mission creep and unnecessary red tape would not be supported by any sensible person, which is why our report recognised the legitimate concerns that many will have about regulators being given broad new powers and increased discretion to make judgments in complex areas. Furthermore, this is precisely why our report recommends that increased parliamentary accountability for regulators is an equal necessity. What we cannot escape, and what we are clear about, is that, given the pace of technological change, regulation needs to become more principles-based. But we are equally clear, as I say, that this must be coupled with greater parliamentary oversight.

I turn now to what we reported in December 2021, having reviewed progress against that earlier March 2019 report. In our first report, we asked for regulation to be strengthened and better co-ordinated, to make it capable of responding to the fast pace of change and the impact of that across the economy and society. The Digital Regulation Cooperation Forum or DRCF—even the acronym is a mouthful—was then established in July 2020. This was an early step in the right direction and includes representatives of the CMA, Ofcom, the ICO and, latterly, the FCA.

But there are persistent challenges that are not being dealt with adequately, which we raised in our December 2021 report. For instance, we found that more needed to be done to improve co-ordination and co-operation, particularly to identify new and emerging risks. The DRCF told us that it is difficult to recruit people with the right skills to scan the horizon for new regulatory challenges and that it cannot compete with the salaries that big tech companies can offer to skilled individuals. Yet, although it was struggling to do that, there is a proliferation of horizon-scanning activity in industry, academia, think tanks and advisory bodies. One of our witnesses—Andrew Murray from the LSE—told us that new reports identifying a lot of these challenges were coming out “almost daily”. In fact, as an expert working on this full time, even he could not keep up with it, although it was supposed to be his day job.

So there was no need for the DRCF to attempt to replicate this work, but it needed to do better to take advantage of the work already being done by others. As a result of that, we are pleased to see that it is doing so and joining up more now with SMEs, start-ups and academia via external engagements and symposia. However, we still feel that there is more to be done. In our report, we recommended that full membership of the DRCF be extended to all statutory regulators with an interest in the digital world, and partial membership extended to relevant non-statutory and advisory bodies.

The second challenge we identified in our report is something I have already talked about: a lack of parliamentary accountability for regulators as their work expands. Just as we believe that the work of regulation in the digital world needs to be “cross-sectoral”, if noble Lords will forgive the jargon, so too must be the process of holding regulators to account in Parliament. As I have already said, as the work of regulators expands and involves more discretion and judgment, some parts of the industry are understandably concerned that this will lead to overreach and unaccountability.

The committee believes that if the DRCF were placed on a statutory footing under a non-executive board of directors and led by an independent chair, this would enable Parliament to hold the DRCF directly accountable. We made that recommendation in our report. Unfortunately, it was not supported by the Government, but this accountability is becoming increasingly important as individual regulators increasingly take joint decisions.

As noble Lords will know, no single Select Committee has a remit to focus on digital regulation across government departments and industry sectors. Many Select Committees have remits relating to digital regulation but must balance them alongside other work. Indeed, the Communications and Digital Committee must balance scrutiny of digital regulation alongside work on the media and creative industries. Stakeholders told us that they would welcome formal public scrutiny of the work of the DRCF via a parliamentary committee, both as a counterweight to regulatory reach and to ensure that regulation is effective.

Again, one of our specific recommendations was that a Joint Committee of Parliament be established to provide sustained scrutiny of digital regulation. In fact, it is worth noting that the Joint Committee on the Online Safety Bill—the committee that did the pre-legislative scrutiny—agreed and made a similar recommendation. Unfortunately, the Government did not support that recommendation, either. Maybe my noble friend the Minister can offer us some further thoughts on that, as we are identifying it as still a key issue.

The third key concern was that the DRCF lacks robust mechanisms for resolving conflicts that may arise between regulatory agendas, increasing the risk that powerful tech companies will be able to play regulators off against each other. For example, encryption might be favoured from a privacy standpoint, but child protection advocates may seek to limit it. One of our witnesses, Dr Elena Abrusci, warned that

“the DRCF may suffer from a power imbalance between regulators. Without an independent chair or a procedure to manage trade-offs between contrasting interests, the DRCF could be limited in its actions.”

So without statutory underpinning of the DRCF, which is something we have called for and which the Government do not support, there is a limit to what the DRCF can achieve here.

We also made a recommendation to formalise DRCF co-ordination by introducing statutory measures, including duties for regulators to consult one another and the creation of statutory information-sharing mechanisms. We welcome the Government’s commitment in response to that that there will be statutory duties for the CMA and the ICO to consult other regulators, but what legislation will that appear in and when will it come forward?

Since our report, albeit that there were specific recommendations that the Government did not support, as I identified, they none the less gave overall support to the report, and we welcome that. They agreed with us about the scale of opportunities and challenges posed by digital innovation, as well as the importance of ensuring that our regulatory system keeps pace with developments in digital technologies and markets.

The DRCF itself published its workplan for 2022-23 a few months ago, including plans to build further on the joint statement between the ICO and the CMA from the year before about data protection and competition, and sharing knowledge on algorithmic auditing. We welcome the joint statement from Ofcom and the CMA earlier this month on online safety and competition in digital markets. We also welcome action from individual regulators, such as the CMA’s decision to launch market investigation references into Google and Apple’s dominance in mobile app ecosystems, while it awaits the necessary powers to place the Digital Markets Unit on a statutory footing.

So all of this is welcome, but without the DMU being put on a statutory footing and the new pro-competition regime we will not have a UK equivalent of the news media bargaining code, which has provided enormous benefit to the news industry in Australia. I know that the Government care about the future of journalism. They committed to a news media bargaining code in their response to the consultation on the pro-competition regime for the digital market, but the policy solutions that the media industry is crying out for are sat on the table.

We welcome the initial progress, but there remains a long way to go. We as a committee are concerned that the UK is falling behind in this vital area of digital regulation, particularly in the area of competition. We urge the Government to bring forward legislation to put the DMU on a statutory footing and give it the ex-ante powers it needs to address fundamental imbalances in the market.

As I have commented before in debates, my noble friend has had busy slate of legislation to steward through your Lordships’ House, but, as much as I am concerned for his well-being in undertaking all that work, I am now also concerned about the potential delay to some of this. Will my noble friend give us an update on what is happening to the Online Safety Bill, the latest on the media Bill and, in response to something in the newspaper today, the Government’s latest position on the independent review of the BBC’s future funding? I look forward to all noble Lords’ contributions to this debate, particularly the Minister’s, and I beg to move.

--- Later in debate ---

[Baroness Stowell of Beeston (Con)]

My Lords, I am very grateful to everyone for their powerful contributions. This may have been a small Committee, but it has been perfectly formed.

To repeat something that I said at the beginning, I welcome the important work of the statutory regulators, which are responsible for a lot of important aspects of our national life. It is incumbent on me in particular—as chair of the Communications and Digital Committee, which engages with all of them—to put on record just how much we acknowledge and recognise the important work they do.

I also again welcome the creation of the DRCF. As I said, this is an important step in the right direction and, as noble Lords touched on, its work is already making a difference, which is to be acknowledged. I was taken by my noble friend the Minister’s remarks on the benefits, sometimes, of something not being statutory but agile and flexible. I take that point, but I emphasise that the nature of what we are talking about requires us to keep this under constant review. I remain of the view that there needs to be some statutory underpinning for a body that is able to pull together the work of these various regulatory bodies and deal with the occasional conflicts and issues that might require trade-offs. If it were to be on a statutory footing, that would make its accountability and the parliamentary oversight of it that much more effective.

I also endorse noble Lords’ references to the non-statutory bodies that do important work in this area. I will name a few: the Internet Watch Foundation, the Advertising Standards Authority and the British Board of Film Classification—that is not an exhaustive list. It is important that we recognise their work, the importance of the statutory regulators working hand in hand with them and the requirement for that to continue.

I was encouraged that my noble friend said that the Government remain committed to bringing forward the draft Bill on digital competition. What he said about the potential for a new Joint Committee to scrutinise the implementation of the Online Safety Bill once it is passed by Parliament was interesting. As he alluded to, when that Bill comes to your Lordships’ House, we might want to return to some of the issues we have talked about. If a Joint Committee is to be set up specifically for that, it may make sense to look at its remit.

In closing, I want to repeat something that the noble Lord, Lord Clement-Jones, said: regulation is not the enemy of innovation; it can encourage public trust and therefore the take-up of new technologies. It is important for us to understand that properly. As I said in my opening speech, I acknowledge and appreciate that there is fear about regulation being stifling. What we are calling for and recommending in our report—I am very pleased with my noble friend’s constructive response—is the need for a new approach to regulation in the digital sphere and making sure that our regulators are equipped to serve the public interest as a whole. Just believing that what exists currently will be adequate for a very different kind of world is not right. Things are changing, and we need to make sure that regulation changes too.

To illustrate that point, I turn to of putting the Digital Markets Unit on a statutory footing. One of the real-life impacts of it not having ex-ante powers—at least, not yet—and therefore not having the ability to assign strategic status to the likes of Google or Facebook is that it is very limited in how it can intervene in these markets at the moment. As I say, and wish to stress, intervention by regulators is a very sensitive area for anything to be done. In 2018, the CMA did a study of online advertising which showed that both Google and Facebook were consistently earning profits well above what is required to reward investors with a fair return to the tune of £2 billion. That was in 2018. The real risk of not being able to revisit this sort of thing—which would need to be very sensitively done; it is not something you would want to do without proper oversight—means that customers are potentially being overcharged for products and services that make heavy use of digital advertising, such as consumer electronics, hotels and insurance. In a world where we are talking about a cost of living crisis, that brings into focus that there is sometimes a need for regulators to intervene in the public interest which, at the moment, they would be not well equipped to do. Should it be decided that that is the right thing for them to do, the oversight of that does not exist in the way we might want it to in the future.

This has been a very helpful and rewarding debate. I say again that I am very grateful to all noble Lords for their contributions. I am grateful to the Minister for his update on the legislation and where we are with the Government considering the committee’s recommendations on the future funding of the BBC and their decision to launch an independent inquiry. I look forward to reconvening with him after the summer break when we are all refreshed to crack on with the important work we are responsible for.

Motion agreed.

Product Security and Telecommunications Infrastructure Bill

Baroness Stowell of Beeston Excerpts

Lords Hansard - Part 2 & Committee stage
Wednesday 29th June 2022 Lords Chamber

It is the final group in Committee, so where in all this—as my noble friend Lord Fox and I have been asking each time we debate these issues—are the interests of the consumer, especially the rural consumer? How are they being promoted, especially now that market review is only once every five years? That is why we need these reviews in these amendments. We tried in the last Bill to make the Government justify their strategy. Now it is clear that changes to the ECC are not fit for purpose and we will try again to make the Government come clean on their strategy.

[Baroness Stowell of Beeston (Con)]

My Lords, before I comment on this group, I have it on good authority that tomorrow is my noble friend the Minister’s birthday, so allow me to be the first to wish him a very happy day. I hope that his evening tomorrow is more enjoyable than this evening.

I want to focus my comments on Amendments 45 and 50. Amendment 45 would, as we have already heard, require the economic impact assessment to be carried out. I understand that it was promised by Ministers in 2017, although I know that my noble friend disputes this, or, rather, has a slight variation on what was promised. Amendment 50 would require reporting by the mobile network operators to achieve much-needed transparency.

By the time I went to add my name to Amendment 50, in the name of the noble Lord, Lord Clement-Jones, it was already fully subscribed, but I will happily add my name to it if he brings it back on Report. As my noble friend the Minister may recall from Second Reading, my concern on behalf of site owners is that they were told that a reduction in rental income would be reinvested by the mobile network operators in delivering the rollout. It seems that there remains a lack of confidence on the part of the site owners—we have heard of this already tonight—because they have insufficient evidence to demonstrate how the new code is working. They are expected to engage in negotiations with commercial entities on trust, while fearing that their loss is someone else’s financial gain. Amendment 50 seems the least the Government could agree to when faced with that situation.

I was torn regarding Amendment 45, in the name of the noble Baroness, Lady Merron, on the economic impact assessment, because I am concerned that carrying out a full economic impact assessment could delay rollout. However, I also know that not doing so is fuelling that distrust and sense of unfairness on the part of the site owners. As we have already heard today, the benefit of rollout relies on the willingness of site owners to participate. When we rely on people to succeed, they deserve to be heard and listened to.

My noble friend the Minister said on Second Reading that it is too soon to carry out a full economic impact assessment. I was going to ask whether the Government have any plans to do one at all and, if so, whether he could tell us when, but I was very interested to hear what the noble Baroness, Lady Merron, said about the conversation she had with him before the Bill was introduced. Unfortunately, it was a briefing I was not at. In light of that, if the Government have already done sufficient work to allow them to produce in public an economic impact assessment without delaying anything, that sounds like a sensible way forward. I will be very interested to hear how my noble friend responds to what the noble Baroness, Lady Merron, said.

I clarify that, specifically, I do not support Amendment 48, which the noble Baroness introduced. As I understand it from the Member’s explanatory statement, it seems to enshrine what I might call the Openreach monopoly in multi-dwelling units. It would therefore limit competition in the way that we discussed earlier, even though we were not able to get into a full debate because my noble friend Lord Vaizey was not in the Chamber to move his amendments—noble Lords will know what I am talking about. I look forward to the Minister’s reply.

Product Security and Telecommunications Infrastructure Bill

Baroness Stowell of Beeston Excerpts

Lords Hansard - Part 1 & Committee stage
Wednesday 29th June 2022 Lords Chamber

Moved by

[Baroness Stowell of Beeston]

18: Clause 60, page 45, line 22, at end insert—
“(5) In paragraph 74 (power to fly lines), after sub-paragraph (4) insert—“(5) References in this paragraph to installing lines include carrying out works to install, maintain and keep such lines and other reasonably associated apparatus.””

[Baroness Stowell of Beeston (Con)]

My Lords, if my noble friend Lady Harding is not in the Chamber—I was not expecting to do this—I will move the amendment on her behalf. I look to other noble Lords whose names are on this amendment to introduce it more comprehensively than I can. I just want to get this debate going, because I know that there is broad support across the Chamber for Amendment 18. Noble Lords may remember that I expressed my support on this matter when it was referred to at Second Reading, because it is of benefit to all telecoms operators. With that, I beg to move.

[Baroness Harding of Winscombe (Con)]

My Lords, I apologise. I rise to speak to Amendment 18 in my name, and I thank my noble friend Lord Vaizey, the noble Baroness, Lady Merron, and the noble Lord, Lord Fox, for putting their names to it. I apologise—I am slightly breathless, as the noble Lord, Lord Fox, gave us a little bit of disinformation about today’s Order Paper.

--- Later in debate ---

[Lord Vaizey of Didcot (Con)]

The whole Committee stage debate has already become surreal, and we are only about 20 minutes into it.

If I can take noble Lords back to the tea room, where I was this morning, we were discussing the lack of intervention in debates in the House of Lords, which is apparently seen as a Commons trait and discouraged in your Lordship’s House. In fact, I was told by a very senior chair of a committee—who is in the Chamber—that on no account was one to take an intervention at Committee stage. But I felt that as the noble Lord, Lord Fox, had already transgressed so badly in detaining two eminent Conservative Peers in the tea room, I would simply allow him to continue to flout convention and break the rules. I also felt that my speech was going so badly that, just as I used to do in the other place, giving way at an opportune moment to gather one’s thoughts was sensible.

[Baroness Stowell of Beeston (Con)]

I am very grateful to my noble friend for giving way. I shall make just two points to him and the rest of the Committee. Of course it is permissible—indeed, it is encouraged—for us to engage in interventions during debate, but they should be brief and to the point. I take this opportunity to also remind my noble friend that his amendments have not been moved and we are in danger of debating his amendments, instead of the amendment which another noble friend moved—or indeed, which I moved on her behalf, and she then expanded on my introduction.

[Lord Vaizey of Didcot (Con)]

I take the comments from the chair of my own committee in good heart. Clearly, I am on a learning curve in a very public way.

I simply reiterate that this Bill is about making planning as simple as possible, balancing the interests of landowners and infrastructure providers. The mood of this House is that we support Amendment 18, to allow the upgrade of telegraph poles. We understand that the Government will also support such an amendment if it is appropriately drafted. We look forward to the Minister’s comments on why this is a sensible way forward.

I merely add as an aside that the purpose of the Government’s funding and broadband rollout is to bring broadband to as many premises as possible. We all know from our own experience where the altnets are going. Quite understandably, they want a return on their investment, so they are going to cities and laying fibres in areas where Openreach is already present, where they know that they can get a return. There will be many other areas of the country where, understandably, they will not be able to afford to put in infrastructure. For the Government simply to turn their back on thinking hard about how to upgrade the many multi-dwelling units in different parts of the country simply because it is perceived to be an Openreach problem and not a problem for all telecoms providers is a missed opportunity.

--- Later in debate ---

[Viscount Stansgate (Lab)]

My Lords, I will take advantage of the flexibility of debate outlined by the former Leader of the House to say that, although we are debating the amendment moved by the noble Baroness, Lady Harding, I for one would be interested to know whether the amendments that were to be debated, but for this very unfortunate cup of tea, will be moved on Report. It would help my fuller understanding of how debate on the Bill might progress.

[Baroness Stowell of Beeston (Con)]

I can respond to that, since that question is being put to me. There is nothing procedurally to prevent my noble friend tabling an amendment on Report that would cover the same issues.

[Lord Vaizey of Didcot (Con)]

I will take advantage of the flexibility in the Chamber to say that, notwithstanding the intervention of a cup of tea, my amendment will be moved on Report.

--- Later in debate ---

Amendments 24 and 27 are predicated on a no-network valuation—

[Baroness Stowell of Beeston (Con)]

I am so sorry to interrupt the noble Earl, who is clearly giving us a sense of this important and wide-ranging matter. However, he will know that the Member introducing a group of amendments is asked to stick to 20 minutes maximum—and we are now over 22 minutes.

[The Earl of Lytton (CB)]

My Lords, I have a group of amendments here, all of them covering very technical bits and pieces and, rather than trying to deal with one at a time, disaggregate them and give an individual explanation for each, I felt it would be helpful for the Committee if I put them in context and dealt with in this way. I assure the noble Baroness that I shall be as speedy as I can, but I crave the Committee’s indulgence in that respect, and I should like to continue with what will be my principal contribution on the Bill.

I was talking about the question of fair value and had got to Amendment 24. This amendment would ensure that, where a site agreement is first renewed using part 5 of the code, the courts are unable to impose a rent reduction of more than 40% on the rents that fall under the existing consideration. This would ensure that the Government’s original expectation that rates would fall by no more than a maximum of 40% was delivered by legislation, and would prevent what I described to the Minister as the cliff edge that has occurred in the arrangements. Subsequent renewals under the code would then be made on a no-network valuation. It would also enable consideration of the effects of the policy on rollout and upgrade of sites and whether the objectives were being met.

Amendment 25 would require the Secretary of State to publish guidelines on the level of factors influencing the expected value of the imposed considerations. This would ensure some clarity about the Government’s expected policy. Amendment 26 would phase in the application of a newly fixed rental consideration imposed by the courts. The intention would be for the new consideration to become payable only, if it was a reduction, after 24 months from the date of the court order. Prior to that point, the operator would continue to pay the previous rent. Amendment 27 is similar to Amendment 26. This amendment would create a tiered phase-in period for the application of a new consideration imposed by the court.

The amendments fall under two options. The first tries, as far as possible, to remedy the effects that have occurred under the 2017 code. The second lot gives a sort of halfway house to build in what the Government say they are trying to do but, at the same time, ameliorate the effects with the same long-term result. I apologise for dealing with this at length. I beg to move.

--- Later in debate ---

[Lord Fox (LD)]

My Lords, while we were debating the previous group, the Government seemed to be getting ready to embrace an influx of court cases by going from two judges to 100. The intention of the large number of amendments here is to avoid that eventuality. If the Government Front Bench is not happy with the words, it should be happy with the spirit of driving the alternative dispute resolution process. It would be good to have some acknowledgement from the Government, when we get to their response, that this ADR process will be central to avoiding the sort of things we were talking about in the previous group.

Amendment 39 is intended to force operators to give greater weight to Ofcom’s code of practice, which it is currently obliged to prepare under paragraph 103(1) of the ECC. Amendments 40, 41 and 42 aim to address non-compliance with Ofcom’s code of practice, and Amendment 44 deals with building safety. That could have been separated out into another group. I will speak specifically just to Amendments 42 and 44, because they are in my name.

Amendment 42 requires that Ofcom include in its code of practice guidelines on when operators must pay compensation to those affected by the operator’s failure to adhere to the code of practice. This compensation is limited to 100% of the total value of the contract to which the dispute relates. We do not expect that this would be the standard award and we have intentionally left it to Ofcom to draft guidelines on this issue. In fact, as my noble friend Lord Clement-Jones set out, Amendments 40, 41 and 42 work together with the aim of promoting consensus-based agreements, and to have a market that works effectively and is not stuffed up with disputes—which comes back to my first point.

In a gear change, Amendment 44 focuses on building safety, raised by the noble Earl opposite in the context of a previous group. The amendment would place a duty on network providers to ensure that any work done on communications infrastructure does not compromise building safety. Specifically, we are concerned about the interaction of digital infrastructure installation with the findings of the Hackitt report into building regulations and fire safety, which followed the dreadful Grenfell Tower tragedy.

As the Minister will be aware, in her report on the Grenfell disaster Dame Judith Hackitt recommends that the

“creation, maintenance and handover of relevant information”

should be

“an integral part of the legal responsibilities on Clients, Principal Designers and Principal Contractors undertaking … work on”

high-rise residential blocks. This matters because when a telecoms operator runs internal cabling in blocks, each hole is potentially a breach of a firewall. It seems to us that installation of gigabit-capable cabling is one of the most likely modifications a multi-residence high-rise block could face, and operators need to be obligated to meet safety requirements. If the Bill remains in its current form, digital contractors will have access rights that exceed those of the blue-light services, so where do they sit regarding their obligations to the Building Safety Act and in fulfilling the aims of the Hackitt report?

The purpose of Amendment 44 is to probe where telecoms and broadband contractors sit in the new environment of the Building Safety Act. I understand that, as a consequence of that Act, statutory instruments would be brought forward to compel certain actions from utilities contractors. My understanding is that the Government do not regard digital infrastructure as a pure-play utility function. Therefore, will there be a statutory instrument specifically to target digital infrastructure? In responding to this, the Minister may want to explain what statutory instruments are expected, with reference to which bits of which Act.

[Baroness Stowell of Beeston (Con)]

My Lords, my noble friend the Minister will remember from my remarks at Second Reading that my main concern is about the sense of unfairness that exists between the site owners and the mobile network operators. Because of that, I hope the Government will agree to look at making some changes to the legislation. We will come to the economic impact assessment later this evening. I have some sympathy with the suggestion of a mandatory alternative dispute resolution in the way it is described in Amendment 35. As I say, this is just a general gentle expression of warmth towards that as a way of signalling to people who at the moment feel a sense of some unwillingness on the part of the Government to recognise that there needs to be some change. I look forward to hearing what my noble friend has to say.

Product Security and Telecommunications Infrastructure Bill

Baroness Stowell of Beeston Excerpts

2nd reading
Monday 6th June 2022 Lords Chamber

[Baroness Stowell of Beeston (Con)]

My Lords, it is a pleasure to follow the noble Earl, Lord Devon. I too congratulate my noble friend the Minister on introducing the first of his four Bills in this Session. My noble friend is going to be busy. I also thank the range of organisations which have provided briefing for this Second Reading, whether in written briefing that they have sent us by email or in the various meetings that have been scheduled.

I should start by declaring an interest as chairman of the Communications and Digital Select Committee but also acknowledge the expertise of other speakers in today’s debate. I pay particular tribute to my noble friends Lady Harding of Winscombe and Lord Vaizey of Didcot, both of whom are members of the Select Committee and whose expertise and professional knowledge I rely on a lot.

Like everyone else today, I welcome the Bill. I recognise the importance of full-fibre broadband rollout, both in its benefits to the economy and its importance to levelling up. I want to address just three main points. I support the greater clarification in the Bill so that all providers have the right to access telegraph poles to upgrade the fibre wires run on overhead poles, as so ably described by my noble friend Lady Harding. I recognise the importance of that being clarified in the Bill, because it will be of benefit to all the providers participating in making sure that we have full broadband rollout in the UK.

What I do not support, however, is extending the exclusive rights of Openreach to upgrade its existing network in blocks of flats, or multi-dwelling units. The reason I would not support an amendment brought forward to that end would be because of it embedding an unfair competition. As my noble friend Lady Harding so expertly already explained, it is the arrival of competition that has done most to accelerate the rollout in this country, so we need to keep Openreach on its toes. That would be to the benefit of flat owners and residents, of whom I am one.

The issue which troubles me most is that of resolving the dispute between site providers and mobile network operators over significant falls in rental income and land value. Other noble Lords have already described these falls, which range from 60% at best—I think that is the Government’s estimate—to, at worst, 90%. The noble Earl, Lord Devon, has just described this in some detail.

I am grateful to Speed Up Britain for its briefing and have some sympathy with its argument comparing the value of what we are discussing to that for other utilities, which is the position that the Government have taken in this legislation. However, I also know that the land-value regime for other utilities was established at a time of state ownership and monopolies and that some argue that the regime for utilities is out of date, although I am not suggesting that we revisit that.

I also understand and share the view that the most important gain—and the prize we must all keep our eye on—is faster rollout, especially for these remote communities and those who are currently not served well. However, according to the other lobby group that has already been mentioned today, Protect and Connect, many site owners remain concerned and feel a sense of injustice and unfairness in the way in which they are treated. It seems to me that site owners are being asked to make sacrifices for the benefit of their local communities, but they fear that what is in fact happening is that they are being asked to give up income for the benefit of commercial providers gaining profit. I recognise that both sides are represented by vested interests—my noble friends Lord Vaizey and Lord Hunt referred to land aggregators buying up leases from landowners to gain their own profit. That is why transparency is so important.

As I understand it, the site providers were told that a reduction in their rental income would be reinvested by the mobile network operators in the rollout. Without the economic impact assessment that the Government promised in 2017 and said would happen by June 2022—ie, this month—those site providers who have been most affected are being asked to take on trust that their loss is not another commercial provider’s gain. The noble Lord, Lord Fox, has already outlined the impact of this on bill payers, whose bills are not going down as a result of this, so there are quite a lot of people who want a better understanding of what is going on. I see that the Government rejected a request for such an economic impact assessment during the passage of the Bill in the Commons, and I should be grateful if my noble friend the Minister would explain why. Also, if that is not something that the Government are willing to carry out, what else will they do to provide the confidence that some of these site providers are looking for so that there is not any unnecessary delay to rollout, as has been described is happening because of their sense of events?

As I say, I think that everyone recognises the urgency and importance of rollout, but if this is for the greater good—I believe it is—the Government cannot afford to ignore those who feel that it is happening at unfair expense to them. As I have said on many occasions in your Lordships’ House, levelling up is not just about infrastructure that brings economic equality; it is also about fairness. It seems wrong that a Bill designed to level up is making some of those affected feel that they are losing out. I hope that my noble friend the Minister can do what is necessary to address their legitimate concerns.

Freedom of Speech

Baroness Stowell of Beeston Excerpts

Friday 10th December 2021 Lords Chamber

[Baroness Stowell of Beeston (Con)]

My Lords, it is a great privilege to take part in the most reverend Primate’s annual debate. I think it is the first time I have done so since becoming a Member of your Lordships’ House. In responding to his Motion, I will take a perhaps more practical approach than many others speaking today.

I should start by being absolutely clear that freedom of speech is critical to a healthy society and democracy. Institutions across all sectors must allow all of us to exercise that fundamental right. However, I would be concerned if we felt it necessary to make this a primary purpose for organisations which exist to serve everyone—especially in an age which feels increasingly intolerant and hostile when people disagree. Let me try to explain why.

I start by stating the obvious. Our institutions play a vital role in society. Many are the glue which unites us, so we need them to keep pace with and stay relevant in a modern world. If they have been established for the benefit of everyone more broadly, they need to retain the tacit support of everyone. Those responsible for running these institutions must be respectful of other people’s points of view. To be clear, I mean views which may be different to their personal opinions. That sounds obvious, but too often in practice institutional leaders are not doing it as well or as consistently as they need to. That is often why too many of our very important institutions get embroiled in controversies and why some of them are in jeopardy. Indeed, it is why some people feel that they are contributing to society’s divisions instead of helping us bridge our divides.

For me, our starting point should be demanding that our institutions, which exist to serve everyone, deliver their central purpose in a way that shows they understand and respect the expectations of everyone. In simple terms, that means being open and accountable, taking every legitimate complaint seriously and taking every complainant seriously. These are reasonable expectations in exchange for the support they rely on from taxpayers, customers or consumers, many of whom will have different views or a different perspective on a whole range of things to those who run these institutions. Their difference does not delegitimise them. Indeed, many people whose support institutions rely on will not even have definitive opinions, ready for instant expression, about the root causes of inequality, how best to tell the story of Britain, or even on the exercise and limits of free speech. They just want what they are paying for to meet the standards that they expect and for some of our most important institutions to be an antidote to politics and division, not another front on which to wage a war against political enemies.

I know that those same institutions will say that their dilemma is how to serve everyone in this increasingly complex and fractured world without taking sides, and how to stay relevant and meet the demands of a forever-changing, modern world. The short answer is that there is no easy or quick answer, which is why, understandably, they often find it hard to resist when a new movement or campaign comes along with what seems like a short cut to modernity or easy access to an underserved section of the population that they have a duty to serve. However, any cause that promotes a position as if it is accepted wisdom and what all right-minded people think, when it is a contested matter, needs to be treated with huge caution. When you exist for everyone’s benefit, you cannot jeopardise the support of your old friends in favour of some new ones. You need to think carefully and move slowly.

Our independent institutions, which are so important, need to understand that politics is not just partisan. In fact, they do not get to decide what constitutes “political” in the eyes of the public. Those who object to what they see as the politicisation of institutions are not, as is often alleged, themselves committing a political act. Their concerns need to be taken seriously by the people responsible for those institutions, not just those at the extreme of either side of a political divide or a contentious debate.

It is possible to modernise and bring everyone with you. I am proud to say that the House of Lords demonstrated that when we debated and passed the equal marriage legislation eight years ago. The critical thing we did, which was different to the way in which MPs operated in the House of Commons, was remove the politics and show respect for people who were uncertain about what was proposed. In return for that respect, we were given a hearing to make the case for something new, big and bold. That led to bigger majorities here than in the other place, so we have shown that it is possible to do these things and bring people with us.

I am grateful to the most reverend Primate for securing today’s debate; as I said, it is a real privilege to take part in it. In my view, the best way for our institutions to uphold the principle of free speech is to respect and keep pace with modern public expectations in fulfilling their fundamental purpose and to stay out of all politics.

Charities Bill [HL]

Baroness Stowell of Beeston Excerpts

Thursday 18th November 2021 Other Business

[Baroness Barker (LD)]

My Lords, in the course of deliberations on the Bill, we have focused, rather predictably, on the Law Commission recommendations rejected by the Government. This is the most important of those. We spent a great deal of time on this in the Committee listening to the Minister and the Attorney-General, talking to the Law Commission in great detail about why it came to the conclusions and put forward the proposals that it did and talking to the witnesses.

A compelling witness was Dr Mary Synge, a specialist academic researcher in charity law. She put forward to us the argument that the reasons for keeping the Attorney-General’s veto on the Charity Commission making a reference to the tribunal were quite weak. The noble Lord, Lord Hodgson, referred to some of them, but one that was particularly weak was that the Attorney-General is part of the legal system; that does not seem a good enough reason to indicate how they add to regulation by the Charity Commission.

The Government’s second reason was the need for consistency in the Attorney-General fulfilling her duty to protect charitable interests. Back in 2006, a case was made during the passage of that Charities Bill that we must at all costs avoid duplication by the Attorney-General and the Charity Commission. The amendments put forward today deal quite effectively with that. There are strong reasons to do that. There are strong reasons to allow the Charity Commission not to have to go through the Attorney-General. The Charity Commission is the effective regulator of charities. It has to be clear on the nature of the charity law that it is to apply. If, as in the cases outlined, the effect of the Attorney-General’s refusal is that the Charity Commission is left in doubt about what charity law is, that cannot be right.

Given that the Charity Commission has the overall duty to make sure that the administration of charities is effective and legal, we should not put this block in its way. It is important that we make sure that the Charity Commission has permission to make a reference without reference to government—therefore, completely away from political interference of any kind. These amendments avoid duplication. They do not prevent the Attorney-General fulfilling her duty in any way. They simply allow the Charity Commission to get on with part of its job, which is to clarify charity law in a timely and effective way. I see no reason to object to either of these amendments which seek to do that.

[Baroness Stowell of Beeston (Con)]

This is the first time I have spoken on the Charities Bill since it was first introduced to your Lordships’ House. I must declare a recent, albeit ceased, interest, to which my noble friend Lord Hodgson has already referred: I was chair of the Charity Commission until the end of February this year. I became chair of the Charity Commission at the end of February 2018. One of the first things I did—it was certainly the first letter I wrote —was write to the then Civil Society Minister asking the Government to adopt the Law Commission’s recommendations and to bring forward a Bill. The fact that the Government decided to bring it forward a few weeks after I had left perhaps illustrates just how influential I was when I was chair of the Charity Commission—I hope not, anyway.

I am very pleased to add my name to the amendment that my noble friend Lord Hodgson has tabled. I want to add some comments to those he has made. After I had written the then Civil Society Minister about the importance of the Law Commission’s recommendations, I regularly raised the matter with DCMS. During 2020, I lobbied DCMS Ministers particularly on the merits of the Bill because of its modest deregulatory measures.

The pressures that charities were under last year, and many are still under a lot of pressures now, made the reason to bring this Bill forward even more compelling. Like my noble friend Lord Hodgson, I want to make it clear that I am delighted that the Government have done so, and they have my wholehearted support for the Bill.

However, I do not understand why, in a Bill that is about deregulation and removing unnecessary burdens on charities, the Government have not adopted the Law Commission’s recommendation to relieve an unnecessary bureaucratic burden on the Charity Commission itself. We have heard this morning that the Members of this Special Public Bill Committee have received evidence from a lot of witnesses over the past few months, but none the less I still feel it necessary to say that I sometimes think that, in general, people see the commission as almost a charity itself, run by well-meaning volunteers. The Charity Commission is the regulator of a sector with an annual turnover of £84 billion. The combined property, assets and investments that it regulates add up £250 billion.

To put that turnover in context, it is five times the size of the UK’s television revenues, which are regulated by Ofcom. I know that Ofcom regulates far more than just television, but even if we look at the banking industry, regulated by the FCA, we see that £84 billion of turnover does not pale into insignificance, because the annual income of the UK banking industry is £124 billion, or so it was a couple of years ago. So the charity sector is not a minnow. Whereas the FCA regulates 50,000 financial entities, which are varied, the Charity Commission regulates 170,000 charities—that is only those that are on the register; tens of thousands more are exempt—and they range from, as we have heard, cultural institutions, university colleges, professional bodies and public schools through to small local community groups.

The commission is run and staffed by professionals who understand charity law and ensure that it is applied, but they do more than that. They represent the interests of the public to charities, and not the interest of charities to the public. I am proud to say that the Charity Commission is probably the least technocratic public body that exists. It does not regulate for the sake of it; it is motivated only by ensuring that charity can maximise its benefit to society. That means that it also has to ensure that people can be confident and have trust in charities to operate in the way they say they do.

The Charity Commission’s most recent annual report shows its success in the courts when anyone has sought to appeal against its findings. Operationally, the Charity Commission has been transformed in the past few years. Clearly, it is still on a programme of improvement which will never stop; it is an organisation that is continually seeking to improve. However, if it is to meet public expectations—and people have a right to have expectations of a regulator which exists to represent their interests—many of the improvements that still need to be made rely on it having more powers to take action against wrongdoing more swiftly and in a way that leads to less bureaucracy.

That the Government consider it necessary to retain the arrangement whereby the commission needs the permission of a Minister, albeit the Attorney-General, to refer a matter to the tribunal to get clarity on a point of law beggars belief. I really hope that the Committee will support the amendment that I have put my name to.

I note that the noble and learned Lord, Lord Etherton, has tabled an alternative amendment. When the noble Lord, Lord Ponsonby, comes to respond, can he advise what protection there would be in the approach suggested by the noble and learned Lord—that is, in the 60-day period that is suggested—to avoid a situation where the Attorney-General might say, “You need to think about it a bit more”? Basically, would the clock keep getting reset? As noble Lords have already heard from the noble Lord, Lord Hodgson, in the context of the Royal Albert Hall, the Charity Commission has experienced, certainly for the past few years, a never-ending prevarication in terms of any decision being made by the Attorney-General.

--- Later in debate ---

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I will respond to the question asked of me by the noble Baroness, Lady Stowell. From reading the Member’s explanatory statement, it seems that the objective of the amendment in the name of the noble and learned Lord, Lord Etherton, is to avoid the clock being reset every 60 days. Nevertheless, I will draw the noble Baroness’s question to the noble and learned Lord’s attention so that he can respond to her.

[Baroness Stowell of Beeston (Con)]

I am grateful to the noble Lord. Sorry, my point was this: what would happen if the Attorney-General responded during the 60-day period with an acknowledgement that the clock would not start again at that point? This is not about getting to the end of the 60 days but about continuing to restart the clock during those 60 days.

[Lord Ponsonby of Shulbrede (Lab)]

I thank the noble Baroness for that clarification. I understand her point: she does not want a “never-ending prevarication”, to use her words. I will draw her question to the attention of the noble and learned Lord, Lord Etherton, so that he can respond to her.

--- Later in debate ---

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, in supplemental written evidence, Professor Nicholas Hopkins, the lead Law Commissioner on the Law Commission’s project on technical issues in charity law, pointed to the list of regulated alterations for unincorporated charities under the proposed new Section 280A(7) to the Charities Act 2011, which adds to the list of regulated alterations for companies in Section 198(2) and for CIOs in Section 226(2). CIOs are charitable incorporated organisations. The commission’s decisions under Sections 198 and 226 to give or withhold consent are appealable. The provision of a right of appeal, in respect of the giving or refusal of consent to a decision under new Section 280A(7), would therefore be entirely consistent with the policy of treating unincorporated charities in the same way as companies and charitable incorporated organisations.

Professor Hopkins went on to say, regarding new Section 67A, that a decision of the Charity Commission under the provision is essentially a specific type of new Section 280A resolution. Therefore, if there is provision for an appeal under new Section 280A, it would also be logical to provide an appeal to a decision under new Section 67A. I beg to move.

[Baroness Stowell of Beeston (Con)]

My Lords, I will speak briefly on this amendment. I am assuming I have understood it correctly—do not look at me like that, Lord Ponsonby! If I have, the amendment seeks to introduce a right of appeal to trustees, after they have arrived at a resolution on a decision. Under the proposals from the Law Commission, it requires that they go to the Charity Commission for formal approval or refusal. If I understand it, this amendment perpetuates the appeals process. That is in contrast to the Law Commission’s proposal, which is that, at the point that the approval is sought from the Charity Commission on a decision reached by the trustees, it is final. This introduces an extra level of appeal.

I offer a few thoughts on this because, quite often with smaller charities—we are talking about small amounts of money here—the underlying problem is a dispute between trustees. A lot of the commission’s time can be eaten up by disputes between trustees over quite small matters. The Law Commission was trying to remove that or force trustees, on these modest matters, to arrive at a decision on their own and take responsibility in the way they are required to and not, therefore, to allow an ongoing battle.

My fear is that if this appeal process is brought in, it would lend itself to those trustees who will never ever give up. That is why I caution against the amendment. I understand the intention behind it and it is of course well-intentioned, but it brings with it a burden that it might not have meant to. I counsel against it.

[Lord Parkinson of Whitley Bay (Con)]

I thank the noble and learned Lord, Lord Etherton, for tabling Amendment 7, the noble Lord, Lord Ponsonby, for moving it, and those who raised this issue in the written and oral evidence that the Committee heard. By way of background, new Section 280A will create a new power for unincorporated charities to amend any provision in their governing documents. This brings the amendment powers available for unincorporated charities more in line with those for incorporated charities, supporting the Bill’s policy to create greater consistency for different legal forms of charities. In a similar vein, charitable incorporated organisations and charitable companies both have the right to appeal a decision by the Charity Commission to give or withhold consent to a request to make a regulated alteration to their governing documents.

Covid-19: Charities

Baroness Stowell of Beeston Excerpts

Tuesday 24th March 2020 Lords Chamber

[Baroness Barran]

The noble Lord made important points about local charities, simplification of funding and older volunteers. I am pleased that we announced this morning, through the Department of Health and Social Care, the launch of the GoodSAM app, which I commend to Members of the House. It allows volunteering both from home, by telephone support for others, and in the community if necessary. On simplifying funding, every funder that I have spoken to is looking at ways to simplify and become more agile and responsive. That is happening across the piece. The noble Lord made an important point about scammers; colleagues across Government are working on that.

[Baroness Stowell of Beeston (Non-Afl)]

I refer noble Lords to my entry in the register. I commend the Government for the steps they have already taken in support of charities. I particularly support the charities on the front line and the dedicated volunteers who are doing such important work at this time. The Charity Commission is taking a flexible and pragmatic approach to regulation where relevant and appropriate, and will continue to do so. Will the Minister assure me that, as the commission continues to explore regulatory opportunities to make life easier for those charities doing such important work on the front line, we will be able to seek government support for that aim should we need it?

[Baroness Barran]

I am delighted to give the noble Baroness that reassurance.