Commercial Payments Bill [HL]

Lord Lansley Excerpts

Committee stage
Tuesday 21st July 2026 Lords Chamber

[Lord Lansley (Con)]

The Minister is changing the Procurement Act with this Bill. The power to reduce the payment term to below 30 days was in the Procurement Act. It is being renewed here and extended to construction contracts. In the Procurement Act provision, the period was 30 days or later if the invoice had a due date that was later. I think that is being removed. I am not entirely sure why, if public authorities receive an invoice from a supplier that has a due date later than 30 days, they would not be able to extend it beyond 30 days.

[Lord Leong (Lab)]

My Lords, that would be inconsistent with the Bill, because the Bill sticks at 30 days for public authorities. We are trying to tidy this up. Any provisions that provide an extension for more than 30 days for public authorities will not happen. That is why we are sticking to 30 days for public authorities.

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[Lord Lansley (Con)]

Before the noble and learned Lord, Lord Thomas of Cwmgiedd, responds, can I just ask the Minister something? It seems to me that he is accepting the proposition, with which I entirely agree, that the nature of e-invoicing and the use of electronic trade documents will make it possible for the imposition of a limit on payment terms in relation to trade documents in the future. It is possible to do it. But the Minister seems to be saying that there are two parts to this amendment—one about people here selling goods or services abroad and the other about people abroad selling goods and services into the United Kingdom. On the first one, I kind of go with the Minister. I can understand the point he is making: that we do not want to disadvantage our companies in other markets where the payment terms may be different and longer. But for those who are selling into this country, surely the whole point is that they should be operating on the same payment terms. Is there not an argument for the Minister to look at the second limb of what Amendment 19 is proposing?

[Lord Leong (Lab)]

I appreciate what the noble Lord has just said, but it is important that the scope of the Bill is targeted at UK businesses and small businesses. A commercial arrangement between a company based in the UK or a business based elsewhere is probably outside the scope of this Bill in that regard.

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Moved by

[Lord Lansley]

44: Clause 11, page 15, line 19, at end insert—
“(1A) Sections 113B to 113E apply only where B is not a micro, small or medium-sized undertaking according to the regulations made under section 2E(7)(a) (exempted contracts: no restriction on payment terms) of the Commercial Payments and Interest on Late Payment Act 1998.”

[Lord Lansley (Con)]

My Lords, with Clause 11 and this group we move to the question of retention payments. We should not elide the question of late payments and retention payments, as if they were somehow part of the same argument. They are different arguments. Retention payments are not a late payment; they are a payment designed to allow the purchaser of a new building to have an opportunity to assess the quality of the new build and remedy any defects before the point at which a final payment is made. That is in theory. In practice, sometimes retention payments are a device for withholding cash, and they can be quite prejudicial to the contractor and imperil their cash flow. We all know that, for small businesses in particular, cash flow is of the essence. My amendments are intended to probe the circumstances in which retention payments make sense and the extent to which the ban is required. They will test some of those propositions.

Noble Lords will recall that, at Second Reading, I referred to representations that had been made by the National Housing Federation. It had expressed a concern about the ability of registered providers of social housing to assure themselves of the quality of the social housing build that they had contracted for, and it was looking for an exemption for social housing. I am not proposing that in any of these amendments. We should try to tackle this as a broad construction industry issue.

Since Second Reading, I have had two sets of conversations. I am grateful to the Minister and his officials for the opportunity to discuss retention payments. I also had the opportunity to talk with Real Estate:UK, which includes what we think of as the old British Property Federation. It is concerned about a complete ban on retention payments. Where it is coming from is that they are its means of securing quality assurance and defect remediation. This can be, as it says, especially important in high-risk and often high-rise residential buildings, in so far as it has to secure the construction industry’s compliance with building safety regulations. The importance of holding contractors to that is emphasised in its representations.

If retention payments are banned, the practical issue of how payments are then staged but do not fall into the category of retention payments is quite interesting and knotty. I am particularly grateful to, and look forward to hearing from, my noble friend about his Amendment 49. It is important that we do not slip into thinking that the final staged payments are retention payments; they may be a perfectly valid agreement into which contractors—two parties—enter.

I want to focus on my three amendments. They do not seek to frustrate the intentions of the Bill, but I want to probe whether some degree of compromise should be met between the concerns of the industry about the impact of an overall ban and the need to protect businesses and contractors, particularly small housebuilders, that are otherwise threatened by the lack of cash payments. Amendment 44 focuses on the small and medium enterprises—we have discussed those definitions—on the basis that the threat of a lack of cash and cash payments, and the consequences for their cash flow, is an issue for them. The purpose of this amendment is to ensure that they benefit from the ban on retention payments but that the same benefit is not extended to large businesses, which are better able to cope. Where large contractors are concerned, it may also have the additional benefit of holding them to account.

Amendment 45 looks at whether the contractor and the purchaser can agree on a period during which defects are to be remedied. It seems to me that, if we are looking at staged payments, there is a stage at which the contractor hands over a property at the conclusion for it to be transferred to the purchaser. The purchaser should have a period, even if it is only a matter of days, during which they are able to identify whether there are snags, defects or quality failings that are the basis on which the final payment should be made. If we are treating any period during which payment is retained as a retention payment, we run the risk of simply intruding into what ought to be a genuinely contractual relationship between two parties: the party who is agreeing to buy something and the purchaser who is agreeing to pay for it. They need to be able to agree on their terms of payment, on what will be provided and on when it is to be provided, so we need to understand why that period is being precluded and referred to.

Amendment 48 looks at whether the problem is the amount of the retention payment. By and large, it tends to be 5%, but it has in the past sometimes been more. The question is: if we were to limit retention payments to no more than 2% of a contract value, would that remove the problem? Would it enable the purchaser of a building still to secure the remedying of defects but not prejudice the cash flow of the builder?

Those are the three amendments, the purpose of which is, in essence, to say: is there a reason for not going to a full ban but stepping slightly back from that? If the Minister wishes to continue with a full ban, I put to him—I hope he might be able to respond in this debate, and we can look at it perhaps again on Report—the question of whether there is in fact a complementary package that Ministers can bring forward alongside a ban on retentions. If the issue is about quality assurance, the remedying of defects and making sure that people get the building they have paid for, we already have the powers to implement a new homes ombudsman scheme and a code of practice through the terms of Sections 136 to 140 of the Building Safety Act 2022 and Schedule 9 to it. At the moment, all but one major housebuilder has signed up on a voluntary basis to this code of practice, so we know that we are not far from where we need to be. But it is not mandatory and, to take it to the next stage, it would really need to be—and the powers exist, as I say, in the Building Safety Act 2022.

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[Lord Leong (Lab)]

I think the mere incentive of getting the money earlier will ensure that the service and the quality of work will be done to specification. Otherwise, the claim for compensation will come in, so the whole incentive is to get the work done properly in the first place.

[Lord Lansley (Con)]

I am most grateful to noble Lords for this short but really rather—forgive the pun—constructive debate. I think we were trying to probe quite how the Government are thinking about the implementation of a ban on retention payments. The Minister was very clear about what the Government are trying to achieve. If we follow down that path, I hope that, when we come together to consider this on Report, we might in the meantime have looked at the question of stage payments and what the Minister has said about nothing being ruled out where stage payments are concerned, so that there is no inadvertent limitation on the ability to stage payments during the course of a construction contract.

I would like to come back in the intervening period between now and Report to test the Minister, and through him the Ministry of Housing, Communities and Local Government, because they can be getting on with this. It is about not simply pre-market engagement but issuing an invitation to tender and making the regulations necessary to bring the provisions of the Building Safety Act into force, so that we can get on with this. That is part of the package that I think the Minister was alluding to, of trying to ensure that we have means other than retention payments to try to ensure the quality of new build. I hope we can continue to discuss those issues. That said, I beg leave to withdraw Amendment 44.

Amendment 44 withdrawn.

British Industrial Competitiveness Scheme

Lord Lansley Excerpts

Wednesday 22nd April 2026 Lords Chamber

[Baroness Lloyd of Effra (Lab)]

The noble Lord raises the question of the business environment and electricity prices. One of the most important things for businesses around energy prices, business confidence and investment capability is the fiscal situation. Last week, the IMF welcomed the UK’s notable improvement in our public finances, with the economy growing by 0.5% in the three months to February. Taking long-term steps to create a stable economy will enable sound finances, lower prices and enable investment in energy over time, which will bring prices down.

[Lord Lansley (Con)]

My Lords, the alleviation of the high policy costs imposed on energy-intensive and internationally competitive manufacturing in this country is to be welcomed. I will ask a question about the manufacturing sectors that will benefit from the BICS. These are the industrial strategy’s eight sectors and the related foundational technologies, but that leaves out some key manufacturing sectors. The Minister will have heard what was said in the other place about ceramics, and I want to ask about food manufacturing, which is our largest manufacturing industry. It is highly internationally competitive, but exposed to a great deal of international competition. It is often energy-intensive. Given what is happening in the agritech sector, there is considerable potential for growth. I never thought that the industrial strategy’s eight would be designed to leave others behind. I hope that this Minister will give food manufacturing and ceramics the opportunity to make their case as well.

[Baroness Lloyd of Effra (Lab)]

The noble Lord is right that there are many thriving and growing businesses, industries and sectors in the country. Not all of those are going to be covered by the BICS. In the eligibility consultation that we put out before this confirmation, that was one of the questions that we consulted on. We expanded the scope, from the beginning to the end of the consultation, from what we thought was going to be about 7,000 businesses to 10,000 businesses. The focus of the scheme is on the strategic manufacturing sector supporting frontier industries, as the noble Lord mentioned, and foundational manufacturing industries. We are looking carefully at supply chains—for example, fertiliser availability and cost—as we monitor the impact of the current situation in the Middle East.

Trade Act 2021 (Power to Implement International Trade Agreements) (Extension to Expiry) Regulations 2025

Lord Lansley Excerpts

Monday 10th November 2025 Grand Committee

[The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)]

My Lords, these draft regulations authorise the enactment of Section 2(10)(b) and Section 2(11) of the Trade Act 2021 and extend the power within Section 2(1) for a further period of five years. I was pleased to see the SI pass through the other place, and I look forward to this debate.

The extension is not just a procedural necessity; it is a strategic imperative that will ensure that the United Kingdom remains agile and responsive in its trade relationships with key global partners. It will enable the Government to continue with their ambitious trade programme with minimal disruption and ensure that key trade agreements that bring jobs and growth to all parts of the UK can be implemented in a timely manner.

Before going any further, I will take this opportunity to provide some further context, for which I turn back to Royal Assent of the Trade Act on 29 April 2021. As noble Lords will no doubt remember, this was a landmark piece of legislation that included a power for the UK to domestically implement trade agreements that it signs with economies that had a trade agreement with the EU before exit day. The power enables Government Ministers, the devolved Governments, Scottish and Welsh Ministers or a Northern Ireland department to make regulations via secondary legislation to implement non-tariff provisions for these types of trade agreements.

The original breadth of this power prompted rightful concern from the House, resulting in the Government at the time eventually conceding a number of safeguards. One of these was to include a sunset provision that would cause the power in Section 2(1) to expire at 11 pm on 31 December 2025 unless it was extended for a further period of five years via an affirmative statutory instrument.

Since taking office, this Government have made great strides in negotiating several agreements that require the implementation power of Section 2(1) beyond the expiry date. The power may also be needed for the ongoing management of existing arrangements, an example of which is to facilitate changes to the wholesale rates set out in an annexe to the EEA EFTA-UK free trade agreement.

The importance of being able to implement the finalised outcome from negotiations cannot be stressed more highly. Not only is it essential for businesses that operate and trade under the newly negotiated terms, but it is important that the UK is seen as a reliable trading partner that upholds its commitments. Without Section 2(1), this becomes increasingly difficult. Furthermore, Section 2(1) has been used to domestically implement such agreements and in future may be used for the ongoing maintenance of existing agreements.

Given the various ways in which it is likely to be needed, extending the power of Section 2(1) is the most prudent approach. We have deemed it necessary for a five-year period, not only to maximise cover but to militate against unforeseen issues that might need correcting via domestic legislation during the ongoing management of our negotiated agreements.

In practical terms, we anticipate that the extension of this power may be used to enable the effective implementation of forthcoming trade agreements with key partners such as Switzerland, covering £45 billion-worth of trade, and Turkey, for £28 billion in trade. These deals, when they enter into force, are poised to deliver further significant economic benefits to the United Kingdom by unlocking new markets, supporting jobs and driving growth across the country. This power will allow for the swift implementation of aspects of trade agreements with countries that had a trade agreement with the EU prior to the UK’s exit from the EU.

Before I conclude, I will offer some reassurances around this power. Any agreement implemented with this power and within scope of the Constitutional Reform and Governance Act 2010 would still be required to complete the usual pre-ratification scrutiny, as well as the non-statutory parliamentary scrutiny and transparency commitments that this Government have put in place. Furthermore, all the safeguards put in place in the original Act will continue to be maintained. We will maintain our safeguards of ensuring that the power cannot be used to reduce UK standards in the fields of the protection of human, animal or plant life, or animal welfare, environmental protection, employment and labour, data protection, and the protection of children and vulnerable adults online. Regulations concerning healthcare services must be consistent with maintaining a publicly funded healthcare service. For these reasons, I hope colleagues will be supportive of this measure. I beg to move.

[Lord Lansley (Con)]

My Lords, I thank the Minister for introducing these regulations. This is my opportunity to express a personal welcome to him on his new ministerial responsibilities. I hope he enjoys them. For those of us who are veterans of the Trade Act 2021, such as the noble Lord, Lord Fox, and I—perhaps the noble Baroness, Lady Bennett, also counts in that category—the abstruse nature of the debates that we take part in can always be characterised as having a certain fellow feeling and enjoyment. This debate will doubtless be one of them.

As veterans of the Trade Act 2021 will recall, Section 2(10)(b) confers the power to extend the operation of the Act by a period of up to five years from IP completion date—31 December 2020—and, on more than one occasion, as specified under Section (2)(11). The Act provides for the powers to implement “an international trade agreement” or “a free trade agreement”, but it applies only to agreements to which the European Union and a counterparty were signatories prior to exit day—31 January 2020—so it applies only to those agreements that we referred to at that time as continuity agreements.

Those involved in the original legislation will recall that the regulations were expected to apply principally to procurement agreements and mutual recognition agreements for conformity assessments, as well as similar agreements known as agreements on conformity assessment and the acceptance of industrial products. That was in reference to what my noble friend Lord Grimstone—he of the famous Grimstone rule—enunciated in the passage of that legislation on 29 September 2020. I think it is correct to say that, since the passage of the Procurement Act 2023, further powers are available separately to the Government to include further countries to have access to the government procurement agreement by adding to the list in Schedule 9 to the 2023 Act, so there should be no further need for regulations under the Trade Act 2021 in relation to procurement.

I do not believe the same is true for mutual recognition agreements. One can see that powers in the Act have been used for this purpose. I found three: SI 2021/730, which was the mutual recognition agreement for the USA, Australia, New Zealand, Canada, the Republic of Korea and Japan; SI 2021/1332, which extended the Canadian agreement to construction products; and SI 2022/1400, which applied to Switzerland. Are those powers still needed? I conclude yes, in so far as I can see there are three continuity agreements that include the potential for a mutual recognition agreement or an ACAA, but where such agreements have not been concluded between the European Union and those counterparties. They are the association agreements between the European Union and Ukraine, Moldova and Georgia respectively. Will the Minister say what, if any, ongoing work is being conducted to reach any agreement with any of those three states, or am I correct in thinking that we would implement such an agreement only if or when an MRA or ACAA is concluded between the European Union and one of those states?

I have one further question. Is it the Government’s intention to legislate for a power to implement mutual recognition agreements in free trade agreements in the future? The Trade Act applies to continuity agreements only, and clearly there is a wider question. Will the Minister explain what we might agree with Switzerland or Turkey that is covered by the Trade Act 2021 and regulations under that Act? I am not sure I understand what that would be.

Going outside continuity agreements, the UK-India agreement includes commitments to work on the joint development of technical regulations and can include the acceptance of conformity assessments, but it is not a full mutual recognition agreement. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership states, at Articles 8.5 and 8.6, that each party shall give positive consideration to accepting the results of conformity assessment procedures conducted in the territory of another party and may do so through a mutual recognition agreement; and that, at the request of another party, a party shall enter negotiations for the conclusion of agreements for the mutual recognition of the results of conformity assessment procedures. Among the member states of the CPTPP, Japan, Canada and New Zealand already have mutual recognition agreements in place with us, but other countries may request them. I take this opportunity to ask whether they have done so. On the assumption they have not, were they to do so, would the Government consider implementing legislation for the purpose of bringing mutual recognition agreements into force through statutory instruments, rather than waiting for primary legislation for the purpose?

The conclusion I reach is that these regulations may be needed, if for no other purpose than that the European Union might fast-track agreements with Ukraine and Moldova, although probably not Georgia for the time being. If they are fast-tracked towards EU membership and would be compliant with conformity assessments for industrial products, we may arrive at a situation where we could extend our continuity agreements with them in like fashion. I therefore see the purpose, potentially, for an extension for the next five years.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I join the noble Lord, Lord Lansley, in thanking the Minister for the introduction and repeat his welcome. It is a great pleasure to follow the noble Lord, Lord Lansley, who led us so skilfully and bravely through some truly obtuse bits of the Trade Act in 2021, including questioning his Front Bench very strongly. I will aim not to be obtuse and to be brief. Just the existence of this SI reraises some of the big questions that we discussed in 2021 in the context of what has happened since then.

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[Lord Stockwood (Lab)]

I thank the noble Lord for his follow-up question. This Government are trying to go beyond the statutory requirements.

The noble Lord, Lord Fox, asked this question earlier: is CRaG inadequate in the modern context? I will go away and read the report so that I have a further written answer for him, but I come back to the idea that CRaG provides an effective and robust framework for the scrutiny of treaties that require ratification, including free trade agreements. Although it was formally legislated for in 2010 under the previous Labour Government, its origins date back more than 100 years. Under CRaG, the Government must lay relevant treaties before Parliament for 21 sitting days before it can ratify them. Parliament has the power to prevent ratification; in the case of the House of Commons, it can do so indefinitely.

In line with the Government’s commitment to transparency, we have gone well beyond the statutory requirements for CRaG and provided comprehensive information to Parliament to support its scrutiny of our trade policy approach. In addition, no trade agreement can in itself alter our domestic legislation, and any changes to our UK legislation that are required for trade agreements will need to be scrutinised and passed by Parliament in the usual way. However, I take the noble Lord’s comments on board; we will come back with a fuller answer.

On the noble Lord’s other points, which were about protections in trade agreements for human rights, animal welfare and the NHS, as I have said, preserving our world-class standards is a priority. We will not compromise them in our trade policy. Regulations 2, 5 and 7 contain safeguards in the areas mentioned by the noble Lord, Lord Fox; we will ensure that they are upheld. None of our FTAs, which are not covered by this power, has undermined our NHS or domestic standards. Parliament has debated this matter at length in its debates on the Australian FTA, the New Zealand FTA and our ascension to the CPTPP. Both required primary legislation.

The noble Lord, Lord Hunt, asked a question about devolution. DBT Ministers wrote to their counterparts in the devolved Governments on 11 August 2025 to inform them of our intention to lay this SI before Parliament. In keeping with our commitment to transparency, we also shared a draft version of the SI for comment. In addition, we committed to maintaining the safeguards around the Section 21 power, as laid down in the Trade Act 2021.

On the question about the use of this SI’s power, before laying the SI, the Government reviewed whether the circumstances were such that the power in Section 2(1) ought to be extended; this provided an opportunity for the power in Section 2(1) to be reviewed. It was HMG’s conclusion that an extension to the power would be necessary. It is possible that the power in Section 2(1) may be relied on to enable the effective domestic implementation of major forthcoming trade agreements with key partners, such as Switzerland and Turkey, but also for the ongoing maintenance of existing agreements.

[Lord Lansley (Con)]

The Minister has again referenced Switzerland and Turkey. Let us leave Switzerland to one side because there is a pretty comprehensive continuity agreement between the European Union and Switzerland, which we have replicated.

Where Turkey is concerned, I want to stick with the question of mutual recognition agreement on conformity assessments. As I understand it, the European Union’s agreement with Turkey does not include a mutual recognition agreement on conformity assessment, although the negotiations between the United Kingdom and Turkey around an extension of a free trade agreement in future might include such a thing; we do not have to decide whether it would or would not. If such an agreement were entered into with Turkey, that would create an agreement with Turkey beyond the scope of the agreement that constituted the continuity agreement because it would include something that was not in the original continuity agreement with the European Union. My question is, therefore, very simple. The Minister does not have to answer it now; he can take it away and have a think about it. If we were to agree with Turkey something that was not in the European Union-Turkey agreement and, hence, not in the continuity agreement that we signed way back in 2021, could it be implemented under the Trade Act 2021 or would that require additional primary legislation?

[Lord Fox (LD)]

We could extend the same question to the situation with Korea, where my understanding is that the current continuity agreement is being rolled over again prior to the negotiation of a new deal. Were a new Korea deal to be negotiated, the question would be the same as the one put by the noble Lord, Lord Lansley.

Digital Markets, Competition and Consumers Bill

Lord Lansley Excerpts

3rd reading
Tuesday 26th March 2024 Lords Chamber

[Lord Faulks (Non-Afl)]

My Lords, I also pay tribute to the Government, Ministers, officials and lawyers for their speedy response to the amendment put down on Report by the noble Baroness, Lady Stowell, and others. I declare an interest as the chair of the Independent Press Standards Organisation, which regulates 95% of the printed press and its online manifestations.

I shared with many other noble Lords concern about the prospective acquisition of the Daily Telegraph and the Spectator by the United Arab Emirates—or at least the acquisition of a substantial part of those important titles. It seems to me that this amendment will make this sort of acquisition much more difficult, if not impossible, as soon as the Bill becomes law.

I agree with other noble Lords that it is most important in framing the necessary secondary legislation that the driving principle behind the amendment, which is to prevent foreign state ownership of newspapers, is reflected appropriately. There is a risk that too tightly drawn definitions might catch wholly benign investors who might have a very modest and non-active interest in newspaper organisations. Sovereign wealth funds have already been mentioned, and the noble Lord has given assurances in this area. I do not entirely agree with the noble Lord, Lord Forsyth, in his citation of Pepper v Hart and its importance, but none the less we will be much reassured by anything the Minister might say. I also ask him to consider the position of banks which may provide a newspaper organisation’s finance. Banks are often part of a consortium, and one part of a consortium may well be a bank with a connection to a foreign state. It is important that that is not captured.

There has been a deliberate choice by those drafting these amendments to change the language of the Enterprise Act 2002, which speaks of “material influence” to provide in the amendment that a relevant merger situation arises where one party acquires “influence” over another. That is plainly a much lower bar. I imagine that the change is designed to protect against somewhat unconvincing assertions by prospective acquirers of an interest in newspapers that editorial independence is protected by some form of editorial board or other Chinese wall. I welcome the Minister’s clarification on this.

The definition of a newspaper in the amendment is,

“a news publication circulating wholly or mainly in the United Kingdom or in a part of the United Kingdom on any periodic basis”.

That seems to exclude news websites or broadcasters. News websites are increasingly a source of news for consumers, many whom have deserted conventional newspaper models. It may be that more power and influence can in fact be obtained there than in the traditional format. I hope that the Minister can continue to reassure the House that these websites are in the Government’s sights, simply on the basis of consistency. I venture to suggest that the Media Bill might provide an appropriate parent for relevant provisions to bring websites into the same category as newspapers. I welcome clarification on that.

The provisions make it clear that the Secretary of State must—I emphasise the word “must”—

“make an order … reversing or preventing … the foreign state newspaper merger situation”.

There is no discretion here. That makes it all the more important that any exemptions should provide that remote or benign interest in newspapers by various emanations of foreign states will not necessarily fall foul of these provisions.

I would like to make it clear that I am entirely in favour of the thinking which animates this amendment, but it is inevitable that when an amendment is drafted, at considerable pace, at a late stage in the progress of a Bill, there may be gaps or ambiguities. Freedom from state interference is of fundamental importance. Our newspaper industry is not in anything like the healthy state it once was, and its vulnerability is what makes newspapers potentially prey to outside investment from foreign states which seek influence. However, important though it is to keep our newspapers free of such influence, we want them to survive and, indeed, to prosper. I hope that the amendment entirely comprehends that aim.

Finally, I simply ask for clarity—the drafting is impressive, but sometimes the meaning is a little hard to tease out—on how the Minister envisages parliamentary involvement in the case of a contentious merger situation.

[Lord Lansley (Con)]

My Lords, I intervene just briefly. I am very pleased to take the opportunity to follow what the noble Lord, Lord Faulks, was just saying because it touches directly on the points I was going to make.

First, I am very grateful for the conversations I have had with the noble Lord and Minister Lopez in his department. I look forward to further debate about the extension to online news services. It will certainly be my intention to table amendments to the Media Bill to enable us to consider how the media public interest test is to be applied in relation to this wider definition of news providers, since the definitions are clearly now out of date—I can say that, having been part of the Puttnam committee on the 2003 legislation.

My noble friend has done an amazing piece of legislative work. I just have to ask, as I did on Report, why it would not have sufficed to have added a new specified consideration to Section 58 of the Enterprise Act 2002, in effect on the need to prevent the acquisition, control of, or influence over newspapers or newspaper periodicals by any defined foreign power. As my noble friend says, we have 16 pages; frankly, we could have done it in about three lines, but clearly there are differences in terms of the bar that has to be crossed and the requirement on the Secretary of State. As the noble Lord, Lord Faulks, said, the Secretary of State must do these things, as opposed to the discretion under the current merger regime, but it seems to me that, with a new specified consideration, the current merger regime would provide the necessary powers. For example, it was sufficient for the purpose of meeting the capability to deal with a public health emergency in Section 58 as a specified consideration, or to maintain the stability of our financial system, as specified after the financial crisis, in Section 58. I am not at all clear why we have departed from the same approach in this case. There is a risk that we end up with overlapping and very complex provisions relating to one type of merger situation as opposed to other merger situations, but we will come on to discuss that.

On Report, I raised with my noble friend the question of broadcasting. We can return to that in the Media Bill, but, of course, where broadcasters are concerned, we have the benefit of the relationship to the Ofcom standards code, which does not apply in relation to newspapers. I hope we can revisit that when we come to the Media Bill.

[Lord Clement-Jones (LD)]

My Lords, I want to revert very briefly, and thank the noble Lord, Lord Offord, for his statement about the status of the Bill in Northern Ireland, before commenting on Amendment 1. I very much hope that those discussions go as quickly as possible in the circumstances. I also welcome the noble Lord, Lord Leong, back to the Opposition Front Benches, and hope that he is in much better form.

I start by congratulating the noble Baroness, Lady Stowell, and the noble Lords, Lord Forsyth, Lord Robertson, and Lord Anderson, on what is really a triumph. I thank the Minister, in particular, the noble Lord, Lord Parkinson, for producing something so comprehensive, and perhaps complicated. As someone who is rather used to replies such as “in due course” or “we’re going to produce guidance”, it just shows what government can do swiftly and decisively when it really gets the bit between its teeth. It means that we are not going to take many more excuses in future.

I very much hope that, as the noble Lords, Lord Faulks and Lord Lansley, said, we will not lose sight of the digital news media agenda as well, because it just demonstrates what is possible through this change to the Enterprise Act. There is a broader agenda, and that needs addressing. I very much hope that, as other noble Lords have said, the secondary legislation really is consistent with the intent demonstrated today, both in what the Minister had to say and in the intent of the proposers of the original amendment. It is very good that the Minister has, in a sense, confirmed that it will impact on the RedBird proposal, if that proposal is still current on the effective date, given the circumstances. I entirely agree with the noble Baroness, Lady Stowell, that this is a matter of principle; it is not about the particular country. However, I do feel strongly about the particular country, so in these circumstances, we are entitled to be pleased that this is going to be the case in terms of this particular transaction.

The noble Baroness raised questions about the threshold, and I very much hope that the Minister can answer them. I thank him, and I think there is general satisfaction across the House. This demonstrates what the Government can do when they get the bit between their teeth.

Comprehensive and Progressive Trans-Pacific Partnership (IAC Report)

Lord Lansley Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Lansley (Con)]

My Lords, I am glad to have the opportunity to express our thanks to the committee, its chair and its former chair for the work in preparing this report. I am glad we have the opportunity to debate it now, in good time in relation to the CRaG process. Noble Lords will recall that, in previous discussions on trade Bills, we secured what we regarded as agreement from the Government that, where any committee makes a report for debate in either Chamber, it should be facilitated before the conclusion of the CRaG process and moving to ratification.

That said, I do not want to understate the degree of scrutiny that has been given to our accession to the CPTPP. When I was a member of the committee some time ago, we looked in detail at the mandate for the negotiations, and we looked at the issues arising from the treaty, because of course we were looking at an existing treaty and could consider what the implications of the provisions of the CPTPP might be, were we to accede to them. The Government responded very positively to some of the points we made at that time, not least on behalf of the witnesses we received. In addition, we have had the opportunity to debate the Bill, in so far as legislation was required. I do not want to understate the scrutiny of this House, which has been nothing other than thorough, demonstrating the importance that should be attached to the continuing work of the International Agreements Committee and the scrutiny we give treaties in this place.

It is really important to recognise that this is an accession, not a negotiation. Occasionally, some of the witnesses’ evidence submissions to the committee and some of the wider CPTPP debate suggested that it was open to us to negotiate an agreement as we are doing with other countries on a bilateral basis to conclude an FTA. This is an accession, and I will come back to that in a moment.

Investor-state dispute settlement is a very good example of this. I remind the House of my registered interest as the UK co-chair of the UK-Japan 21st Century Group. Japan was a very early supporter of our accession to the CPTPP, and we should not underestimate the significance of that in our being able to be the first to join this regional plurilateral grouping. Some expressed the view that we could join the CPTPP but that we do not like investor-state dispute settlement. I am not quite sure why we do not like it; some do not because they think we will be challenged, although we never have been. As outward investment and our reliance on foreign direct investment is unusually important to this country, we should be in favour of giving investors confidence. I am therefore in favour of our agreeing to appropriate ISDS provisions. Had we tried to join the CPTPP while having side letters with everybody, and tried to exempt ourselves from all the effects of ISDS, including with Japan, we would not have been able to accede. Let us not get into arguments that pretend that we could have had a negotiation that we could not have had.

I want to talk about one main element from the latter part of the general themes that the noble Baroness, Lady Hayter, talked about: the strategic context—not the Indo-Pacific tilt but the question of whether the Government should have a trade policy White Paper and a trade strategy document. When we as a committee asked for one over a year ago, we were right to do so, but it is now late in the Parliament to do that. However, anyone who wants to—not least from these Benches—can look at the Government’s activity in trade policy and deduce what we are trying to achieve. I think one would make a very positive deduction, not least from the fact that we wanted to join the CPTPP in the first place. It was very easy for people to say, “What has that to do with us? We’re not a Pacific country and we weren’t involved in the negotiations that led to the CPTPP, so why would we want to join it?” The short answer is because our trade policy is to support a rules-based system that obtains at high standards and is a broad-ranging and flexible, but also progressive, system of agreement for trade.

At the time that it was negotiated, the CPTPP was cutting edge in terms of digital trade and was quite forward in terms of services trade. A number of years have gone by, and there is now scope in the 2024 general review to remedy that. When they started this process, the Government were demonstrating their commitment to trade liberalisation, open trade, a rules-based trading system and not simply to bilateral agreements but to plurilateral agreements that would bring others into a broader world trading system. In the years to come, CPTPP may well demonstrate itself in that way as by no means confined to the Pacific Rim. We are leading the way, and I hope there will be others that follow. Let us not discount completely —happily, sometimes things change, and they do not always change in the wrong direction—that there might be the day when the United States once again thinks about joining a plurilateral, open trading system in ways that it has not done in the recent past. When it does so, the fact that two of its leading strategic allies, the United Kingdom and Japan, are in the CPTPP and were involved in the early stages of negotiating the agreement may give it greater confidence that this would be the proper step for the United States to take, if it really wants to rejoin a rules-based trading system, and greater confidence on how to go about it.

The only other point that I want to make is that I agree with the noble Baroness and the committee report—I think it is in paragraphs 74 to 76—that the CPTPP is not an alternative to the WTO, but in the recent WTO ministerial conference we have seen that plurilateral agreements in that context have made some progress, on things like the regulation of services, investment facilitation and so on. However, the WTO was not able to get agreement on things like food security and fisheries, or, sadly, on dispute settlement. I do not think that we can rely upon the WTO to make the progress that we need. If we are not careful, in the absence of WTO agreements, everything will be done by way of bilateral agreements, which lead one into a more mercantilist system, whereas what we want is an open, plurilateral trading system.

From my point of view, that means that things like the CPTPP and other plurilateral agreements—which are not just regional but may, as we can see, develop in relation to services, investment facilitation or, very importantly, trade in environmental goods—are all ways in which we can promote a wider, positive, open trading system. If we do not do that, protectionism will increase, and in so far as people are not simply protectionist, they will be mercantilist, expecting—as President Trump was wont to do and China is wont to do—that they can negotiate the outcome of trade, rather than create a system which enables the outcome of trade to be the result of markets and competition. That is what we are looking for, and that is why we are looking for an open trading system.

In that context, our accession to the CPTPP is a wholly positive step. I do not think that we should in the slightest diminish it by reference to some of the current statistics about what the prospective economic impact might look like. By the time we have made changes in terms of digital and services trade, and by the time one takes into account the confidence that is given to investors, the beneficial impacts resulting from our membership of the CPTPP will be considerably in excess of what has presently been predicted. I very much support it, but I am also very grateful to and support the committee in the report that it has given us.

UK Tradeshow Programme Closure

Lord Lansley Excerpts

Monday 18th March 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I would say two things to the noble Lord. First, exports are up over the past year by 13%—and tomorrow we have a debate on the CPTPP, which will allow this country to join an £11 trillion trading network, which will result in significant benefits to our businesses immediately and into the future.

[Lord Lansley (Con)]

My Lords, I remind my noble friend that, many years ago, I secured the outsourcing of the export marketing research scheme to the British Chambers of Commerce from the then department; that was very successful for over 20 years, and continues as a scheme under the department. That plus the grant support for introduction into markets provides a significant benefit to small businesses. Can my noble friend say whether he and the department are working very closely with trade associations and chambers of commerce to ensure that they are also delivery vehicles and multipliers for the work that the department is doing?

[Lord Johnson of Lainston (Con)]

I am very grateful to my noble friend for all the work that he has done to help exports and trade in this nation over his many years of service in this House and the other place. I draw attention to the fact that the British Business Bank also provides funding for small businesses to give them the training and skills to export, and UKEF provides billions of pounds to ensure that they have the capital to enable them to export. But my noble friend is absolutely right: we can do more with the chambers of commerce, and we have a specific group structured to enable us to have strong relationships with those organisations. On the ground, particularly in harder-to-reach markets such as China, they play an invaluable role, and I personally do everything I can to co-operate with and encourage them.

Digital Markets, Competition and Consumers Bill

Lord Lansley Excerpts

Report stage
Wednesday 13th March 2024 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, with only one amendment in this group, I have the mixed blessing of having the Minister’s undivided attention. I will be very brief as I want to give way to heavier oncoming traffic, in the form of Amendments 67 and 158. My intention in retabling this amendment on Report is to probe further the Government’s intentions as regards amending the Enterprise Act 2002, in respect of mergers of digital media.

In Committee, I pointed out that the Online Safety Bill—now Act—sets great store by the importance of freedom of expression on digital media and, in the context of competition in the media, we believe that the protection of the public interest needs bringing up to date, alongside the collective consumer interest. This was on the basis that digital media now play a significant role in the national discourse, and public interest considerations could emerge from permutations of takeovers or mergers.

In Committee, I described how Section 58 of the Enterprise Act is limited in scope, and that we should add the need for free expression of opinion and plurality of ownership of media enterprises in user-to-user and search services to the existing public interest considerations that the Secretary of State can take into account. The reply of the Minister—the noble Lord, Lord Offord—was sufficiently encouraging for me to bring the amendment back for further and better particulars. He said:

“The Government are currently reviewing the recommendations on changes to the media public interest test in Ofcom’s 2021 statement on media plurality. Ofcom did not recommend that online intermediaries or video and audio on-demand services should fall within the scope of the media mergers regime, which this amendment would provide for”.


There is always hope. The Minister went on:

“We are considering Ofcom’s recommendations carefully and, as we do that, we will look closely at the wider implications on the industry. The Government have not proposed pursuing substantive changes to the grounds for public interest interventions in mergers in this Bill. The changes recommended in Ofcom’s review can be addressed directly via secondary legislation under the made affirmative procedure, if appropriate”.—[Official Report, 29/1/24; col. GC 291.]


The Minister did not offer any detailed timetable, so this is a brazen attempt to push the Minister further in telling us what the Government really have in mind, even if it is going to be included in secondary legislation. It is quite clear, in general, that changes to the Enterprise Act are needed and should be in contemplation. I very much hope the Minister can go rather further than he did in Committee. Indeed, it may be that there is a vehicle available, in the form of the Media Bill, which could take the position further. I beg to move.

[Lord Lansley (Con)]

My Lords, I intervene very briefly to support the noble Lord, Lord Clement-Jones, in the intentions of his amendment. A number of noble Lords will recall that, about eight years ago, we sought that the Government would use secondary legislation to extend the definition of media enterprises under the Enterprise Act.

The point that the noble Lord, Lord Clement-Jones, is making is in this territory. Clearly, if media enterprises for these purposes were defined more widely, it would capture some of the providers that the noble Lord, Lord Clement-Jones, was talking about. At the moment, media enterprises basically consist of print newspapers or broadcasters—and broadcasters are only those that are licensed under the Broadcasting Acts.

I hope it will be evident to noble Lords that there are now many more news creators and aggregators, and sources of news, that make up the news landscape and are not comprised within the definition of print newspapers or of broadcasters under the Broadcasting Act. So we need to make sure that the specified considerations under Section 58, about free expression, accurate presentation and plurality, are applied in relation to this wider definition of media enterprises.

This was something that Ofcom said to Ministers in pursuance of the consultation about the media public interest test, I think as far back as 2021, or maybe at the end of 2022. So I suppose what I am asking is to share in the urging of the noble Lord, Lord Clement-Jones, that Ministers might take this on, and to give advance notice that—from my point of view—we should address this in the Media Bill quite soon, in order to give them further encouragement for this purpose.

[Lord Bassam of Brighton (Lab)]

My Lords, we are very grateful—we are always very grateful, actually—to the noble Lord, Lord Clement-Jones, for tabling this amendment, which raises a valid concern around the suitability of the current provisions in Section 58 of the Enterprise Act.

We take the view that the world has changed significantly since that legislation was put on the statute book. It was changed as a result of the passage of the National Security and Investment Act, but not in a way that addressed the points that have been properly raised by the noble Lord. Some aspects of this debate featured during the passage of the Online Safety Bill, and I strongly suspect we will revisit this on other occasions in the future, as the noble Lord, Lord Lansley, has invited us to with the Media Bill.

The noble Lord, Lord Clement-Jones, described this as a “brazen attempt” on his part. Well, I hope the Government will be open-minded about looking at whether and how the public interest notice regime could be revised in the future, to take account of different types of media provider. However, because I know that noble Lords would like to progress on to another interesting group on a similar topic, I will hand the Floor to the Minister.

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[Lord Parkinson of Whitley Bay (Con)]

The noble Lords have intervened at a helpful point, because I was about to outline that we want to ensure that the new measures do not have undesired effects on wider foreign business investment in the UK media, or on purely passive investments made by established investment funds.

In the amendment we will bring forward at Third Reading, it will be necessary to take a power to make secondary legislation to set out two points clearly: first, what limited types of established investment funds we mean, which could be split out of the general prohibition on foreign state ownership provided for by this regime; secondly, the very low threshold up to which they may be permitted to invest, which we intend to be considerably lower than the current thresholds for material influence in the Enterprise Act.

As we bring this forward ahead of Third Reading, we would be very happy to discuss the drafting with noble Lords before it is tabled so that we can discuss the detail. We will set that out in the provisions at Third Reading.

[Lord Lansley (Con)]

I am sorry to interrupt my noble friend but, as he knows, I am interested in the question of media enterprises more generally. Is he intending that the amendment to be brought forward will relate only to newspapers, and therefore will not touch upon broadcasters, as they will be excluded? I am not sure I understand why the presentation of news by broadcasters is to be treated differently from the presentation of news by newspapers.

Digital Markets, Competition and Consumers Bill

Lord Lansley Excerpts

Report stage
Monday 11th March 2024 Lords Chamber

Both Secretaries of State who are currently involved in this legislation, for DSIT and the Department for Business and Trade, are very strong individuals. I am not concerned about them being anything other than resolute in the face of great pressure. However, unfortunately we are legislating for a situation that goes way beyond the current personalities in these different posts. It is important, regardless of who is in the post, that there is a deadline. Therefore, if my noble friend Lord Lansley pushes his Amendment 56 to a Division, I will support him.

[Lord Lansley (Con)]

My Lords, with that lead-in I will say a few words about Amendment 56 and Amendments 13 and 35 in the name of my noble friend Lord Faulks, which were discussed very intensively in Committee. We are all very grateful to my noble friend Lord Offord for the extent of his response to that debate as Minister, but I fear that it gave us information on which to work but not sufficient reassurance to hold back, as my noble friend Lord Faulks has continued to press the argument.

Let me make a point about that. In the course of that debate, as the noble Lord, Lord Faulks, said, the Government’s intention seemed to be that either Article 1, Protocol 1, of the ECHR is engaged in relation to an appeal, using the arguments for the peaceful enjoyment of possessions and therefore, as the noble Lord, Lord Faulks, said, proportionality would be engaged as a consequence of that, or the ECHR is not engaged but it is the Government’s intention, by introducing this provision in the Bill, that the same test would apply. However, I fear that we need to say, as the Minister quite reasonably said in response in Committee, that there are expectations that proportionality would form part of the decision-making process of the Competition and Markets Authority as a responsible regulator. It would be expected, as the Minister said, to apply that principle in the terms on which it was done in the Bank Mellat v Her Majesty’s Treasury (No. 2) case.

The Minister referred to the “four limbs” of Lord Reed and Lord Sumption. I spent a bit of my life which I will not get back now reading some of these judgments, though it was quite interesting. It led me to go a little beyond the cases that were cited by my noble friend to the case of Pham v Secretary of State for the Home Department, where there was a really interesting discussion demonstrating that, although there was some development of the use of proportionality alongside reasonableness in determining administrative law cases, in the decisions that were being handed down there was a clear distinction between that proportionality which is linked to the reasonableness test—that is, that this was something so disproportionate that no reasonable regulator would have made this decision—and what they described as an intense review of the merits of the decision on proportionality.

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[Lord Lansley (Con)]

My Lords, I have four amendments in this group. Amendments 16 and 17 relate to the conduct requirements that the CMA can impose on designated undertakings, and Amendments 20 and 25 relate to countervailing benefits in relation to that conduct. I will come to that in a minute. Let me stick for a moment with Amendments 16 and 17.

Amendment 16 was helpfully introduced, to some extent, by what the noble Lord, Lord Clement-Jones, said about the activities in the run-up to the introduction of the Digital Markets Act in the European Union. There was a deadline of 7 March for that, and considerable attention has been paid to what Apple in particular has done in relation to that. The noble Lord made Apple’s position clear. It is saying, essentially, that we can either stay with our existing system, and it will charge 30% by way of fees for apps on the App Store, or we can go to this alternative which enables us to comply with the DMA, and Apple will offer an alternative but with a 17% fee for apps plus a 3% core technology fee, and, if you go beyond a million downloads, you will get a 50 cents processing charge per download. Those who fear that their app may go viral, with millions of downloads, are potentially facing enormous costs for processing them through the App Store. As far as all the potential users of the Apple App Store are concerned, this potentially restricts their opportunity for competition rather than enabling it.

My first point is to further reinforce that we have come together to design legislation in support of the Government that is more flexible than the Digital Markets Act. The DMA, in effect, puts the obligations into the originating Act. To change them will be considerably more difficult than would be the case for the Competition and Markets Authority in our regime to change the structure and the content of conduct requirements. Potentially, we have really good flexibility.

Amendment 16 is linked to whether the powers to impose conduct requirements enable the CMA to act in relation to the leveraging of market power in digital activities into other activities—the wider system of its business. Amendment 16 is absolutely about whether the conduct requirements that can be imposed under Clause 20 are sufficiently wide to enable the Competition and Markets Authority to structure them to limit activity which restricts competition in the way that these efforts are being pursued in relation to the Digital Markets Act. To that extent, Amendment 16 asks the Minister, if he would be kind enough to respond in this light, whether, if a designated undertaking were to behave in that sort of way, the CMA would have the power under the conduct requirements to respond and act, and to do so rapidly, to frustrate that kind of anti-competitive result.

Amendment 17 is slightly different, in that we discussed it in Committee. One of the European Union Digital Markets Act obligations is termed expressly to prevent others seeking to stop someone making a complaint to any public authority about non-compliance with the relevant obligations. I looked to see whether our conduct requirements, specified in Clause 20, cover a similar circumstance. In discussion in Committee, the Minister directed me to the “fair and reasonable terms” provision, which is very wide ranging but does not cover this, because these are not the terms of a contractual relationship between a designated undertaking and its users or potential users. It may not relate to that at all.

The Minister also directed me to the question of discrimination, but I do not think this is about discrimination between users; it is about preventing someone, who may be a user, a potential user or a potential competitor, from going to a public authority and saying, “This undertaking does not comply with its conduct requirements”. We know—I will not repeat the evidence that I gave in Committee—that there have, unhappily, been circumstances of intimidation of those who would complain to regulators about the conduct of organisations with significant market power. I return to this simply to say to the Minister that I am not yet convinced. Can he convince us that this kind of activity is covered by the conduct requirements? If it is not, will he undertake to ensure that the necessary changes are made to Clause 20, which the legislation would permit?

I will also speak to the amendments about counter-vailing benefits exemptions. Amendments 23 and 24 revert the Bill to its original wording, which would be better than where we are now. I have looked at Clause 29 from my point of view and I cannot find a good reason for it, so I thought it better to leave it out. If there is a conduct investigation and there are countervailing benefits, they should be presented to the CMA when it makes representations to a conduct investigation. Why would they be left to any other time or specified separately in the legislation?

I thought it better to amend Clause 27 such that, when making representations, the designated undertaking may give details of the benefits associated with its conduct to form part of that investigation. At that point, it should come forward if it is prepared to make commitments that the CMA could accept, without necessarily making a finding, to close that investigation.

All this should take place in Clause 27 on representations, because that is where the sequence lies. I do not understand why Clause 29 has been added at what appears to be a later stage in the sequence of the legislation. As it is a separate clause, it appears as though the benefits can be presented at an entirely separate point.

As I have also discussed with the Minister, there is an analogy with the exempt anti-competitive agreements under the Competition Act 1998. I was on the stand when that Bill was in Committee and this is a very different kettle of fish. The 1998 Act set out broad descriptions of agreements that would be deemed anti-competitive and therefore void, except if undertakings came to the Competition and Markets Authority; then the burden is on it to demonstrate that they have, in effect, countervailing benefits, such as to innovation, the consumer and the like, without an adverse effect on competition.

That is ex post regulation. That is agreements and obligations that are broad-ranging and apply across industry. Here, we are talking about conduct requirements that are optimised and designed in relation to that undertaking in the first place. This is ex ante regulation. You cannot compare ex post provisions in the Competition Act with ex ante regulation under this legislation. They are not the same kind of thing.

Therefore, again, I come back to the argument: let us not have exemptions. The use of “exemption” seems wholly inappropriate. We have here a very straightforward process. Conduct requirements require, in themselves, under Clause 24, for there to be a consultation. The undertaking should tell the CMA what the benefits associated with its conduct are at that stage.

There is a forward-looking process; the conduct requirement is supposed to look forward five years, but none the less, circumstances change. The CMA can review a conduct requirement, and the designated undertaking should come to the CMA if circumstances change and there are countervailing benefits and ask for the conduct requirement to be reviewed. Even if, under all these circumstances, a conduct investigation notice is issued, the undertaking should come forward and express what the benefits are at that point. Under none of these circumstances is there a requirement for the use of “exemption” or for an additional clause that offers countervailing benefits as such.

I dare say I will not press this, because there is probably more to be said for Amendment 23 and going back to the original wording, but it afforded me the opportunity, I hope, to explain why I think the whole proposition in Clause 29 seems misplaced.

[Baroness Kidron (CB)]

My Lords, I find myself in a slightly awkward position because my name is listed in support of Amendments 23 and 24, but I find the argument of the noble Lord, Lord Lansley, incontrovertible, and maybe he should press his amendment.

On the wording, I want to put on the record the view of Which?:

“This is a legal loophole for big tech to challenge conduct requirements through lengthy, tactical, legal challenges. It would tie up CMA (i.e., taxpayer) resources and frustrate the intent of the legislation. Whilst we agree with the intent of this provision, which is to encourage innovation that will benefit consumers, it is critical that these provisions do not inadvertently give designated firms a get out of jail free card from DMU decisions”


by presenting opaque consumer benefits.

I put that on the record because it is so measured in comparison with many of the emails and representations I have had, and still is absolutely categoric that this is a get out of jail card. Like the noble Lord, Lord Lansley, I do not understand why the regulator duty to be

“proportionate, accountable, consistent, transparent and targeted”,

within the context of coming to the conduct requirements and taking up any countervailing benefits at that point, is not adequate. So I will support the noble Baroness, Lady Jones, and, indeed, the noble Lord, Lord Lansley, should he change his mind in the next few minutes.

I also add my support to Amendment 60, tabled by the noble Lord, Lord Fox. I am an enthusiastic supporter of international standards. They provide for soft law and, having worked with the IEEE on a number of standards over the last few years, I see how brilliantly they work to bring disparate people together and provide practical steps for those tasked with implementation. I declare an interest in relation to the IEEE, which gives some funding to 5Rights Foundation, of which I am chair.

The point I leave with the House is that, toward the end of 2022, I had two conversations with companies that will certainly be SMS about why they were now recruiting for employees to work on standards full-time. I believe the CMA should be in the standards-writing game.

--- Later in debate ---

I turn next to Amendments 23 and 24 from the noble Baroness, Lady Jones of Whitchurch, which would revert the wording of the countervailing benefits exemption to the text as introduced in the Commons. I stress that the current wording maintains the same high threshold. However, I will not repeat the arguments, given the extensive debate we shared on this in Committee.

[Lord Lansley (Con)]

I am very grateful to my noble friend. Could he say therefore whether a designated undertaking that feels it can demonstrate countervailing benefits must have presented those to the CMA before the CMA concludes its findings under Clause 30—or can it do so afterwards?

[Viscount Camrose (Con)]

It can make a representation to the effect of countervailing benefits as part of a breach investigation, which can of course happen at any time during the life of a conduct requirement. We would expect it to make those representations at the start of or during the initial investigation. When these representations are made as part of a breach requirement, the Bill sets out the high standards required in order to accept that argument.

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[Lord Lansley (Con)]

Sorry, may I just press my noble friend? Can he therefore say that the presentation of a countervailing benefits exemption after the CMA has made findings under Clause 30 would be void?

[Viscount Camrose (Con)]

A representation to the effect that there are countervailing benefits would take place as part of a breach investigation. Of course, once the investigation is complete, there is no further opportunity to do so. Have I answered the question?

[Lord Lansley (Con)]

Yes.

[Viscount Camrose (Con)]

To address the concerns of the noble Lord, Lord Leong, that the current wording deviates from legal precedent, I note that, since this is a new regime, existing exemptions in different competition regimes would not be directly applicable. It is highly likely that the application of the exemption will be tested, no matter the wording.

Finally, Amendment 34, tabled by my noble friend Lord Black of Brentwood, would allow the final offer mechanism to be used after the breach of a conduct requirement, rather than after a breach of an enforcement order. This novel tool has been designed as a backstop to normal enforcement processes. It is a last resort to incentivise sincere negotiations concerning fair and reasonable payment terms between the SMS firm and third parties. I wholeheartedly agree with my noble friend that these incentives must be both compelling and credible. It is clearly preferable for parties to reach a privately agreed settlement rather than one chosen by the regulator. That is why we must ensure due consideration of less interventionist options before turning to the final offer mechanism.

However, if SMS firms try to frustrate the process or drag it out to the detriment of third parties, I agree that the DMU should be able to accelerate stages before the final offer mechanism is invoked. That is why we have ensured that the DMU will be able to set urgent deadlines for compliance with enforcement orders, supported by significant penalties where appropriate, in cases of non-compliance.

I can robustly reassure my noble friend that the CMA can, via conduct requirements and enforcement orders as well as the final offer mechanism, gather and share key information with third parties.

Finally, to his comment on the forced withdrawal of content, the Bill is able where appropriate to tackle this issue. A conduct requirement could, for example, prevent an SMS firm withdrawing a service in a discriminatory way or treating users more favourably if they purchase the SMS firm’s other products.

The Government have worked hard to strike a balanced approach to intervention. This includes ensuring that firms cannot undermine regulation, and prioritising benefits to consumers at the heart of the regime. I believe the tools, as drafted, achieve these goals, so I hope that noble Lords will not press their amendments.

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Moved by

[Lord Lansley]

56: Clause 114, page 71, line 17, at end insert—
“(5) When the CMA seek the approval of the Secretary of State for guidance, the Secretary of State must within 40 days either—(a) approve the guidance; or(b) refer the proposed guidance back to the CMA with a statement of reasons why the guidance should not be published in that form.”

[Lord Lansley (Con)]

My Lords, in the debate on the first group, on Amendment 56 there was a strong view that when the Competition and Markets Authority presents guidance to the Secretary of State, the Secretary of State should either approve it or refer it back with a statement of reasons within a reasonable time, specified as 40 days, and not, as the Bill presently says, that the Secretary of State can choose not to approve it without any time limit. I am afraid, and I say it with regret to my noble friend, that we did not hear persuasive reasons to the contrary. I seek the opinion of the House on Amendment 56.

Post Office Horizon: Compensation and Legislation

Lord Lansley Excerpts

Tuesday 27th February 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful to the noble Lord for allowing me to carry on in my position, at least until the end of this Statement. I am glad he has such halcyon memories of the railways when he was a younger man; I am not quite sure when that was.

We need to be aware of something which has struck me in the discussions around this. There is naturally a sense of reflection over the salaries paid to senior executives in an organisation such as the Post Office which is going through such a traumatic time, and the view that we want to punish the current executive leadership. While that is a very natural instinct, we want the best people possible running the Post Office today. It is an intensely complex situation, not just in terms of compensation and the issues around the Horizon scandal but running 11,000-odd Post Offices around the country and all the issues around that. What is important is that we get value for money; if the Post Office was making a great profit, everyone was happy, all the staff were delighted and we were not in this situation, we would be extremely pleased, probably, to pay the chief executive more than he is currently paid.

It is not necessarily about the quantum; the point is the governance around how salaries and bonuses are fixed. There was a question earlier in this House about long-term incentive plans compared with short-term ones. In the financial services sector, where I come from, you are paid your bonuses over three, five and often more years, which is considered to be quite onerous but I think it has resulted in changes in behaviour. It is absolutely right that we should look at these sorts of plans for these highly paid executives in these public corporations.

[Lord Lansley (Con)]

My Lords, I draw the House’s attention to my registered interest as UK chair of the UK-Japan 21st Century Group. Can my noble friend update the House on the prospects of securing a significant contribution to the financial redress from Fujitsu? Of course, Fujitsu is a Japanese company but in this context this is consequential upon its acquisition of ICL during the 1990s.

[Lord Johnson of Lainston (Con)]

I thank my noble friend for raising that point. I think it has been widely publicised that Fujitsu has apologised for its role in this —as one would expect and hope—but has also accepted a moral responsibility. It has also suggested that it will look to see how it will participate in this process and my colleague Mr Hollinrake has been very clear that this overall envelope of compensation to postmasters is not to be borne solely by the Government. Clearly, there is an ongoing inquiry. This is an extremely complicated process to comment on at this stage but the tone of what my noble friend is suggesting chimes completely with the Government’s view.

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill [HL]

Lord Lansley Excerpts

Report stage
Tuesday 16th January 2024 Lords Chamber

Moved by

[Lord Lansley]

1: Clause 3, page 2, line 8, leave out “and (b)” and insert “or
(b) funded by an international organisation of which the United Kingdom is a member to a lesser extent, and”

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[Lord Lansley (Con)]

My Lords, this group and the next group of amendments follow debates that took place in Committee, and I am very grateful for the Minister’s response then and for his subsequent letters that have further amplified the discussion about this. I apologise for delaying the House—not for very long, I hope—simply, in the case of both amendments, not to make any point of principle contradicting what is in the Bill, but to try to ensure that the meaning of the Bill and its intentions are as clear as we can possibly make them.

The first two amendments, Amendments 1 and 2, work together to rewrite that bit of the Bill to state that the exempt contracts would be, in this instance, where they are “wholly or mainly funded” by an international organisation, or

“funded by an international organisation of which the United Kingdom is a member to a lesser extent”—

so that funding is to a lesser extent—and is “required to be” under a procedure adopted by that international organisation. Article 15 of the CPTPP has a requirement that we want to transpose into our legislation. It states that a procurement that is not covered by individual countries’ own procurement rules would be one that is

“funded by an international organisation or foreign or international grants, loans or other assistance to which procurement procedures or conditions of the international organisation or donor apply”.

What we are looking to do in this instance is to reproduce that, so that the exemption for contracts under our Procurement Act matches what is in the CPTPP.

The government view was that the CPTPP just says “funded”, while our general approach is to try to clarify, to a greater extent, that it should say “wholly or mainly funded”—namely, more than 50%—which is consistent with what we do in relation to the rule on the general procurement agreement. However, the point that I have now reached, which I put to my noble friend via these amendments, is that it is not necessarily the case that an organisation such as the World Bank has to be a majority funder in order for its funding—and that of others with which its funding is associated, which might be other providers of grants or loans, or the recipient country in one form or another—to be required to be conducted under its procedures. That being the case, should we reflect the CPTPP rules by saying that either a procurement is “wholly or mainly funded” by the international organisation, or, if it is funded to a lesser extent, that it is required to be subject to its procedures, and that that would give rise to an exemption under our procurement rules?

That is the point of the amendment. I am sure my noble friend will appreciate the rather fine distinctions, but I wonder whether he might agree that, at the very least, we want to be absolutely clear that, if a procurement has to be conducted under the rules of an international organisation, such as the World Bank, it should be exempt from our Procurement Act requirements. I beg to move Amendment 1.

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

My Lords, I begin by declaring my interests, which are very clearly listed on the Lords’ register. I have interests in limited companies and companies that are active in CPTPP countries, but I do not believe there is any conflict.

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I am very comfortable having further conversations outside of this debate and am extremely supportive of the ambitions of my noble friend. However, genuinely, we have worked through this in some detail. I believe that the wording we have will ensure that, as far as possible, procurement contracts will be captured by a procurement regime in the way that we would want them to be, and as noble Lords and this House expect. I therefore ask my noble friend to withdraw Amendment 1 and not move Amendment 2.

[Lord Lansley (Con)]

I am most grateful to my noble friend. He explained very well why the Government want to clarify this in this way. I hope he is right, and it is wholly consistent with CPTPP, although it is not precisely the same wording—it adds additional clarification. My noble friend made typically generous remarks about those of us who have been, as he says, painstakingly working our way through the technicalities of this Bill, and I am grateful for that. Some of our noble friends and colleagues on the International Agreements Committee are elsewhere with their committee this afternoon, but I know that they will read his remarks and want to thank him very much for that.

I take my noble friend’s point that, to the extent that procurements are brought within the scope of our procurement rules, they are in line with the general procurement agreement and best practice. In so far as we can, we want to bring as many of the recipient countries of international organisations’ funding within general procurement agreement rules, so that they are following best practice. We should aim to have more countries following those rules and to operate in ways consistent with how we do things than to leave them outside.

On that basis, I understand and accept my noble friend’s points and beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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Moved by

[Lord Lansley]

3: Clause 4, page 3, line 13, leave out “established by use” and insert “in use prior to that date”

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[Lord Lansley (Con)]

I hope that I will be equally quick on this amendment, as there are points of more substance and principle to be debated later.

We discussed Amendment 3 in Committee. Essentially, it relates to a set of circumstances in which trademarks and GIs—geographical indications—may come into conflict and the circumstances in which the Secretary of State can make a decision that there would be confusion between the two. The point is that the GIs should be compared to existing trademarks and registered trademarks; to circumstances where, on the date which the GI is submitted, there are applications for the registration of trademarks; and, as the legislation refers to, where trademarks are “established by use”.

My problem is that nowhere in trademark legislation do the words “established by use” appear. My noble friend’s letter to me of 10 January said that “established by use” refers to unregistered trademarks. We appear to be putting into statute the concept that where a trademark has been used, it can be established but not registered, and I am not sure that that is helpful. What is more helpful would be to indicate that the Secretary of State should have a discretion to look at a GI that may come into conflict with an unregistered trademark—there are such things—and where confusion would result. My noble friend says that they may just use a trademark once, and the fact that it had been used once at some point in the past may lead to this confusion. As the legislation is drafted, the Secretary of State would actually have the discretion to judge these matters and to say whether confusion would arise. If a trademark has not been used prior to that date in any substantial way, I think the Secretary of State could ignore it and say that the GI has a meaning that people will readily understand.

I have a problem with the term “established by use” and think that “in use prior to that date” is more straight- forward and has the meaning we are looking for; “established by use” runs a risk of establishing that, in law, trademarks can be established by use. That is not something that the trademarks legislation currently admits of. I am not an expert in intellectual property matters, but I have talked to one or two who are, as we do in this place. I think there may be a problem with this, but I stand to be corrected by my noble friend. For the moment, I beg to move Amendment 3.

[Lord Hope of Craighead (CB)]

My Lords, I cannot claim any expertise in trademarks or their registration, but I think there is force in the point made by the noble Lord, Lord Lansley. The expression “established by use” is slightly vague, whereas the words that the noble Lord would substitute—of it being actively “in use prior to that date”—make the point rather better. I support the amendment, for what it is worth, in the interests of clarity.

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[Lord Lansley (Con)]

I am grateful to all who took part in this very short debate, and in particular to the noble and learned Lord, Lord Hope, and the noble and learned Baroness, Lady Butler-Sloss, for their contributions on the legal aspects.

Unfortunately, I have not had an opportunity to look at the reference my noble friend refers to elsewhere in the GI regulations. That was not an aspect of this to which he referred in his letter of 10 January. He referred to the concept of the tort of passing off as a justification for it. My problem was that putting something in a statute that is justified by reference to a common-law definition seems problematic, since one might be assumed to be trying to create a statutory definition. I did not think the definition existed; I may be proved wrong about that.

I am just hopeful that it is not the case that one use of an unregistered trademark before the date of a GI means that it is established by use. It must be defined somewhere else and I hope that that is what my noble friend is suggesting—that “established by use” in relation to a GI is somewhere codified and defined. That would establish a degree of protection, and I hope we do not subsequently encounter circumstances in which the inclusion of this language causes a problem in relation to those who are responsible for distinguishing between registered and unregistered trademarks.

I remember, and my noble friend will recall from the debate we had in Committee, that we set out to secure GI recognition in the UK-Japan economic partnership agreement. We need to get on with it. Equally, in the UK-Australia deal we set out to secure protection for our GI indications. But it was made clear in the Australia deal that we would do so only in so far as, and to the extent that, the European Union secured protection for its GIs, and I am not sure that we have made the progress there that we should have.

These are very important aspects of our potential trade advantage and, if we are going to maximise our trade benefits, we need our geographical indications to be protected and we need to be using them in export markets. I should declare my registered interest as co-chair of the UK-Japan 21^st Century Group. I will be in Japan at the beginning of next month and I will make it my business to ask about what progress we, and they, are making in protecting our GIs in Japan. For the moment, we thank my noble friend—

[Lord Purvis of Tweed (LD)]

Before the noble Lord sits down, I am unaccustomed to supporting the Minister in these areas, as he and the House are aware, but, having glanced at legislation.gov.uk, regulation 2019/787, regarding the relationship between trademarks and geographical indicators, does indeed have the definition of “established by use”. I am not a lawyer, as I very willingly admit, but if the Government have had the good sense to transpose what we had in the EU legislation into domestic legislation, then that might satisfy the noble Lord.

[Lord Lansley (Con)]

I am grateful to the noble Lord, and it may indeed satisfy me as long as we do not abolish it any time soon. With all those helpful comments from noble Lords, I beg leave to withdraw Amendment 3.

Amendment 3 withdrawn.

Amendment 4

Moved by

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[Lord Hamilton of Epsom (Con)]

My Lords, I received the email from the noble Lord, Lord Alton, trying to persuade me to support the amendment, and I must say that I am very reluctant to do so. The fact is that all trade agreements are a compromise. That is one reason why there is no veto in Parliament over a trade agreement—you would start to unpick the whole thing if Parliament objected to some aspect of a trade agreement —and there is no reason why we should want to change that now.

The other point is that the real prize for the CPTPP would be not the membership of China but the membership of the United States. It is clear that neither country wants to join at the moment, for particular reasons, but the agreement is going to last a very long time, and there may well come a moment when things change in China and the threat of China joining might well force the United States to join in order to keep China out. So we do not want to tie any Government’s hands on this in any way. We have to bear in mind that if the United States was to join the CPTPP, it really would become a massive trading bloc, and that prize would be well worth achieving.

[Lord Lansley (Con)]

My Lords, while I have enormous sympathy with the purpose of the amendment moved by the noble Lord, Lord Alton, he has explained perfectly clearly that the CPTPP members would all have to agree not just that China would join the CPTPP but that a negotiation with China would be entered into. The benchmarks against which that would be measured are laid out in an annexe to the CPTPP, and there is a great distance between where China is today and the benchmarks that would have to be met, so I see no immediate process for that.

The terms of the amendment, in creating a different legal process for the accession of one potential applicant economy as compared with any other applicant economy, represent an unwelcome position for us to have taken. It might be construed as unwelcome in other countries as well; it seems to me that it would set a bad precedent. The question that would be put to the Government is what position we should take as to whether a commission should be established to look at an aspirant economy, and the United Kingdom Government could take a position on that. While I join my noble friend in resisting the amendment, it would be helpful if he could say that there was nothing to stop the Government from potentially laying a Statement under CRaG for that purpose and asking the relevant committees to comment on it.

That would not enable Parliament to veto it—indeed, a veto would be unwelcome at that stage because it would be a decision whether or not to enter into a negotiation—but, as in other cases, the Government would be well advised to take full account of what Parliament might say in relation to any such notification and any such report by the International Agreements Committee here and the Business and Trade Committee in the other place. I wonder whether my noble friend might suggest that, if there were such a potential decision to be made by the UK Government, they could go through that process and it would be perfectly reasonable for them to do so.

[Baroness Lawlor (Con)]

My Lords, I am sympathetic to the amendment moved by the noble Lord, Lord Alton. I approach it from a somewhat different angle, on which he himself touched, which is the use of economic tools to gain hegemony geographically. We are talking about the wide area of influence that China already commands, not just in the Indo-Pacific. Already 20% of Chinese goods are destined for CPTPP countries; 50% of them are intermediate products. Of those countries, Malaysia, Vietnam and Mexico have the highest level of imports from China. When we join, that figure will go up because 13% of our imports come from China.

Whatever the outcome of the decision on this amendment, I urge the Government to consider very carefully some arrangement so that there can be collaboration between Parliament and government on the very important business aim of the UK, which is to prevent economic tools being used against UK interests, including those to which the noble Lord, Lord Alton, referred.

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[Lord Johnson of Lainston (Con)]

I am grateful to the noble Baroness for her point. There is no explicit up/down vote built into the CRaG process; we are aware of that. I am talking to a House that has far more experience of the CRaG process than I do, so we know how the process works. There are multiple ways in which a debate can be brought to the Floor of the House. For reassurance, I will go through this point again. The CRaG process requires that a treaty text and an Explanatory Memorandum be laid before Parliament for 21 sitting days before ratification can take place. Under CRaG, either House can resolve against ratification of a relevant treaty within the 21 sitting days of it being laid before Parliament. The House of Commons can continue indefinitely to resolve against ratification, in effect giving the Commons the power to block ratification.

To some extent, this is important, but it may be academic. As I said, the question is whether a new party to CPTPP can be snuck under the wire. We are very clear that this is not possible. The process is automatically triggered. Aside from that, there are also the reports written by the Trade and Agriculture Commission, and there has to be an impact assessment, and there has to be a significant amount of scrutiny and debate, as there is about the CPTPP Bill today. I am very reassured on the principles and mechanics around whether we have in this House the right level of control and security to ensure that we have control over our own destiny in relation to new parties joining a plurilateral treaty, which is of course completely different from the country-to-country FTAs.

[Lord Lansley (Con)]

I am grateful to my noble friend. As a former Leader of the House in the other place and as a member of the International Agreements Committee, I am pretty clear that, under CRaG, the International Agreements Committee here, and potentially the Business and Trade Committee in another place, might make a report to Parliament that could lead to a debate. That debate could be subject to a take-note Motion, but that would be amendable. If it were sought to be amended in the other place to say that a treaty should not be ratified, the Government could not continue to ratify the treaty if such a vote had taken place in the other House to say that it should not. I think that gives the comfort that the noble Baroness, Lady Hayman, is looking for.

[Lord Johnson of Lainston (Con)]

I am very grateful to my noble friend for that comment. He is absolutely right that the Business and Trade Committee and the IAC are able to request a debate, which, as I said, according to the Grimstone principle, we would always seek to facilitate, given parliamentary time.

I should like to come to a conclusion. I ask the noble Lord to withdraw his amendment. I have made extremely clear, I hope, the rigorous standards that CPTPP applies. This is a plurilateral trading group that wants to have the highest standards of trade among them. That is my first key point. The second is that we have a number of safeguards built into our own processes to ensure that, were another country to join CPTPP—it could be any of the countries applying or future countries over the coming years—there will be a proper process, as has been defined in the CRaG process. I would ask the noble Lord, given the complexities and sensitivities that I believe this amendment would present to our ratification process, to withdraw his amendment.