Dormant Assets Bill [HL]

Lord Parkinson of Whitley Bay Excerpts

Report stage
Tuesday 16th November 2021 Lords Chamber

[Baroness Barker (LD)]

My Lords, when I initially heard about community wealth funds, I was rather sceptical, and I perhaps remain on the more sceptical end of the spectrum in your Lordships’ House. But during discussions on the Bill, I have become less sceptical about the idea, as the noble Lords, Lord Bassam of Brighton and Lord Hodgson of Astley Abbotts, have talked to me, along with the groups mentioned by the right reverend Prelate the Bishop of Ely.

Two things in particular have caused me to think again. The first is the experience of the pandemic and how everybody’s sense of locality and place has changed. I happen to live in south London, and one of the many things that got me through the toughest of times was discovering local parks that I had never come across before. Watching other people having to live their lives in a much more geographically restricted scope has made a new sense of place. I now understand —in a way that I perhaps did not before—that being able to appreciate and develop your community space will be a very important part of people’s physical, economic and mental well-being in future.

The second reason why I have changed my mind is this. The noble Baroness gave a long list of community initiatives that have flowed out over the past 30 years, many of them from the National Lottery, the new deal for communities and so on. Pretty much all of them were the release of resources into a community, with varying degrees of restriction on how they could be spent—but they were resources to be spent in poor communities.

This is about something different. It is about an investment fund that has to generate wealth within those communities. To do that, the people who will be managing it locally will have to learn and display economic development skills themselves. That is a different proposal from the ones before. The noble Baroness is right that, as we move through a huge period of economic change—green development and the green economy—if we get away from the old idea of development solely in buildings and talk about investment in economic skills and new jobs, managed in a much more local way, that has the potential to be different.

The noble Lord, Lord Hodgson of Astley Abbotts, was absolutely right: we had to grab a passing Bill and shove something on to it. But the very purpose of this Bill is to take assets that are lying dormant and put them into communities where people are financially excluded, do not have business skills or need some help with the generation of wealth and well-being. This is about doing that with people in their community, not yet another building. So I have changed my mind and think this is something different, and therefore I now think it is worthy of support.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I thank the noble Lord, Lord Bassam of Brighton, the noble Baroness, Lady Kramer, the right reverend Prelate the Bishop of Newcastle, and my noble friend Lord Hodgson of Astley Abbotts for tabling this amendment relating to community wealth funds. I am also grateful to the right reverend Prelate the Bishop of Ely, who spoke on behalf of his right reverend friend, who, as he explained, has made her valedictory speech to your Lordships’ House and is therefore unable to speak today. I offer my best wishes to her as she leaves your Lordships’ House for a well-earned retirement and thank her for her contributions, both here in your Lordships’ House and across the diocese; it is one I hold particularly dear, having been baptised in it and having many relatives who live there still. I know that she will be much missed, but we are delighted that, through the apostolic succession, the right reverend prelate the Bishop of Ely was able to speak for her today.

I hope that, during my remarks, I can reassure all noble Lords who have spoken that it is already possible for community wealth funds to be a named cause in an order made under Section 18A, and that I can demonstrate why this amendment, even in its semi-skimmed form—if that is the evolution from the full-fat version to which the noble Lord, Lord Bassam, alluded earlier—is still unnecessary.

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[Baroness Barker (LD)]

My Lords, I will just add two points to the very convincing case made by noble friend Lady Kramer. First, the Minister knows from all our discussions that we on these Benches have concerns about the loose nature of this scheme and the somewhat loose definition of its purposes. Therefore, it remains a concern that it is a not insignificant pot of money that can be very easily diverted. Part of what we are trying to do this afternoon, in a number of different ways, is to bring this scheme under a much tighter definition and close loopholes.

Secondly, we listened very carefully to the noble Baroness, Lady Barran, and the noble Lord himself, when we had discussions. They explained to us, in particular, that the new purposes under the Bill—financial inclusion and the very ambitious programme that Fair4All Finance has of putting loan sharks out of business—might necessitate the sorts of skills that are not commonly found within the social enterprise or charitable sector. It might require there to be companies in forms that are not usually found within the social enterprise sector, either. So I would like the Minister to acknowledge, in dealing with this amendment, that it is specifically that part of the scheme which has caused us to move. We are not talking about private companies entering into the other parts of the Bill, to my mind—unless he can make a case for them to do so.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Baronesses for their amendment and for their vigilance and scrutiny in this area. I am grateful also for their time the other day, when we had a helpful discussion.

Amendment 2 concerns the direction of the English portion of dormant assets funding and seeks to ensure that money cannot be used purely for profit but must have public good at its heart. It is already enshrined in primary legislation that dormant assets funding must be distributed to initiatives with a social or environmental purpose. This is a clear and core function of the scheme and it remains unchanged in the Bill. The Government of course agree that private profit is not the purpose of the dormant assets scheme.

The noble Baronesses’ concerns, as expressed in the amendment and their contributions today, relate to the scheme’s current support for social investment. As I mentioned in the debate on the previous group, dormant assets funding has provided £465 million to Big Society Capital and Access over the last 10 years. During that time, social impact investing in the UK has grown almost eightfold, increasing from £830 million in 2011 to £6.4 billion now, thanks in large part to those two organisations. It is largely by leveraging private capital alongside dormant assets that the market has been able to expand in this way, providing the voluntary, community, and social enterprise sector with access to billions of pounds of investment.

To give an example, dormant assets funding enabled Big Society Capital to invest £6 million in the Fair By Design fund, which aims to eradicate the poverty premium by 2028. Fair By Design invests in several initiatives, including some businesses with considerable impact which provide services in sectors such as energy, insurance, borrowing, transport and food, to support over 340,000 people across the country. Its work has helped those people collectively to save £12 million per year on goods and services for which they were previously paying more than those who were financially better off. The scheme advances important opportunities such as this for collaborating with the private sector and civil society organisations to amplify its impact, within the boundaries of governance structures which ensure that the money is managed appropriately.

I hope I can reassure noble Lords that robust systems are in place to ensure that the money funds projects delivered by organisations that prioritise impact. As a registered charity itself, Access employs strict eligibility criteria for its funding, which ensures that money flows only to those social enterprises and charities that it was created to support. Similarly, £2.5 billion from Big Society Capital and its co-investors is being used to support over 1,500 social enterprises and charities across the country. Both organisations apply layers of due diligence to ensure that the intermediary fund managers with whom they work also have impact embedded in their approaches. Fund managers applying for Big Society Capital funding are required to present a social impact plan during the due diligence process, and Access requires its funds to be held in finance structures that cannot be used commercially.

As these existing structures have operated effectively over the past decade, we do not consider it necessary to place in primary legislation a requirement such as that proposed by Amendment 2, though we understand the concerns the noble Baronesses had and the vigilance which led them to table it. The scheme already ensures that funds go towards organisations with the overall aim of delivering public good, and we will ensure that this continues to be the case.

Ultimately, it remains the Government’s priority to afford people the opportunity to have a say in how funds are distributed in the country, including whether social investment should remain a priority. That is why we have committed to a public consultation to welcome wide-ranging views on how these funds can best have an impact on social and environmental priorities in England. Those are the reasons we cannot accept the amendment, and I hope that the noble Baroness will be satisfied to withdraw it.

[Baroness Kramer (LD)]

My Lords, I am glad to have raised the issue and I will be withdrawing the amendment, but I hope very much that the point that I have made will carry through into the Government’s thinking, because this is a constantly changing field. As the Minister knows, with mission-focused companies there is nothing to say that they cannot pay their directors what they like; they can pay what salaries they like and make what returns they like to their core investors. We very much hope that in the reporting requirements that he will talk about later there will be real clarity around this issue. He can expect to find quite a number of Written Questions asking him to detail those kinds of benchmarks, so that we understand what is actually happening with this dormant assets fund. I beg leave to withdraw the amendment.

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Moved by

[Lord Parkinson of Whitley Bay]

3: Clause 29, page 22, leave out lines 17 to 20 and insert “—
(a) carry out a public consultation about the purposes for which, or the kinds of person to which, the money apportioned under section 17 for meeting English expenditure should be distributed, and(b) consult the Big Lottery Fund about a draft of the order.”Member’s explanatory statement
The amendment would have the effect of adding to 18A(3) of the Dormant Bank and Building Society Accounts Act 2008 (as inserted by Clause 29) a new duty to carry out a public consultation before making a section 18A(1) order, in place of the duty in the current section 18A(3)(b). The consultation would relate to what, or who, should be supported by dormant assets money distributed in England.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, a number of noble Lords tabled and signed amendments in Committee which sought to broaden the range of consultees listed in Clause 29 of the Bill, which I believe remains the primary intention of this group of amendments. We share the view about the importance of considering how dormant assets funding can be used most effectively, and we are keen to get a wide range of views to help shape our position, as I said in previous debates. That is why we have consistently committed to launching a public consultation on the social or environmental focus of the English portion of funding before the first order is laid under Clause 29.

In response to the multiple calls which have been made in your Lordships’ House, we are happy to formalise this commitment in legislation. Amendment 3, in my name, therefore makes a public consultation a requirement before any changes can be made to the focus of the English portion of funds now or in the future. I thank the noble Lord, Lord Bassam of Brighton, for adding his name and the support of Her Majesty’s Opposition to our amendment.

Amendment 3 takes the broadest and most inclusive approach to ensuring that the scheme benefits the most pressing social or environmental priorities in England. The Government plan to launch the first of these consultations after the Bill receives Royal Assent and are happy to commit to this lasting at least 12 weeks. Our amendment requires the Secretary of State to consult the National Lottery Community Fund, as the named distributor of dormant assets funding, about a draft of this order. The order would then be subject to the scrutiny of both Houses through the draft affirmative procedure. I beg to move.

[Lord Bassam of Brighton (Lab)]

My Lords, I am speaking on behalf of my noble friend Lady Merron, who signed Amendment 4 but is unable to participate in today’s debate. I should explain that one of our concerns has been a lack of clarity around future consultation. We have already had some discussion this afternoon about consultation, and, of course, it was raised by a number of colleagues during the Bill’s Second Reading and featured fairly heavily during the debates in Grand Committee.

On the face of it, we do not really understand why Amendment 4, which lists a variety of topics and proposed participants, is not acceptable to the Government, but we are nevertheless grateful to the Minister for tabling Amendment 3. For that reason, I agreed to co-sign it on behalf of our Benches. That amendment ensures that there will have to be a full public consultation, as the noble Lord, Lord Parkinson, has already described, which will have to take place before uses for dormant assets funds are determined in regulations.

I am grateful to my noble friend Lady Lister of Burtersett for tabling Amendment 5, which seeks to ensure that future consultations include consideration of the merits of establishing community wealth funds. This is a good addition, and we hope that the Minister can address this point explicitly in his response—not least, of course, because we have passed and supported the community wealth fund amendment this afternoon.

I am therefore looking for further reassurance from the Minister that the public consultation will be run in accordance with Cabinet Office best practice, including the Secretary of State being proactive when engaging with charities and social enterprises, rather than merely posting a notice online. We are satisfied by the Government’s amendment, but we would like to see them go further. I guess that our amendment is inviting them to flesh out exactly how they see this working in some more detail.

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[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have put my name to Amendment 5 in the name of the noble Baroness, Lady Lister. I was reassured by my noble friend’s introductory speech and the deal that has been hacked out between him and the noble Lord, Lord Bassam of Brighton. The noble Baroness, Lady Kramer, has, in part, shot my fox because I wanted to talk about the usual suspects, which she referred to. That is the danger, although I say to the signatories to Amendment 4 that it looks to me like a pretty good list of usual suspects in that amendment. I was not sure that we were not just going back down the track that we were trying to avoid going down.

My reason for supporting the amendment in the name of the noble Baroness, Lady Lister, was to make sure that we would make a big effort to get down to the smaller organisations, which often had unique insights into the problems of a particular area. From my point of view, I rather doubt whether that goes well into legislation, but it is the sort of area where a good strong ministerial Statement, given on the Floor, would reassure a lot of us that there will be words that we can go back to if the consultation does not reach as far, as deep and as wide as some of us think it should.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I thank noble Lords for their recognition of the action the Government have taken on this, even if it is conditional at the outset. I am grateful to the noble Baronesses, Lady Kramer, Lady Merron and Lady Lister of Burtersett, for the important issues they have raised in tabling Amendment 4. I thank the noble Baroness, Lady Lister, my noble friend Lord Hodgson, and the noble Lord, Lord Blunkett, for Amendment 5.

We have had a good debate, both in Committee and again today, and I welcome the support shown for securing the widest possible input into determining the future spending priorities for England. I share the desire raised by noble Lords to ensure that the public, beneficiaries, both Houses of Parliament, social enterprises and charities can have their say on the future focus of dormant assets funding; although I disagree about the means and submit that Amendment 3 is a better way to achieve this, we all share the same intent.

As my noble friend and predecessor Lady Barran outlined in Committee, it is our position that everybody who is interested, rather than a collection of predetermined or specified stakeholders, should be consulted. That is why we have chosen to take the broadest approach available in Amendment 3, and why we believe that Amendment 4 is not as inclusive.

Dormant assets funding is not government money; it originates from individuals who have lost or forgotten about their asset and is voluntarily transferred into the scheme by responsible industry participants who, despite their best efforts, have not been able to reunite those moneys with their owners. The scheme is a unique example of collaboration between the public, private and civil society sectors, responding to the imperative to put forgotten money to better use, rather than letting it gather dust in inactive accounts. Because of the wide range of organisations and individuals that are potentially affected by the scheme, we want to avoid at all costs making further specifications in this clause which could imply that certain groups are more important than others that it might be equally appropriate to consult.

The government amendment is sufficiently broad and, in line with common practice, parliamentary committees will continue to be able to consider relevant issues as they see fit in the future. That is why we do not think it is appropriate or necessary explicitly to name parliamentary committees as a consultee. However, we are happy to commit on the record to engaging with relevant and interested parliamentary committees for the first consultation.

As noble Lords have highlighted, the social and environmental focus of the English portion is a significant and important question. The Government agree that the consultation must be open for a proportionate amount of time to allow for considered and good-quality responses. That is why I am happy to place on the record our commitment that the first consultation under this section will last for at least 12 weeks. I am grateful to the noble Baroness, Lady Lister, and others for their appreciation of that.

I also reassure noble Lords that our intention is to consult widely, taking care to welcome local community voices into the discussion to ensure that we capture as many views as we can, as the noble Baroness, Lady Kramer, my noble friend Lord Hodgson and others rightly pressed.

The Government will continue to consider the most appropriate length of future consultations, in line with Cabinet Office guidance. I hope that our previous conduct in this area has proven we take that seriously and are committed to ensuring fair and open consultations on the dormant assets scheme. The 2020 consultation on its expansion, for example, was extended from 12 to 21 weeks, as requested by voices in the industry in response to the Covid-19 pandemic, to ensure that everybody had the time to contribute meaningfully. I am pleased to say that that was very successful: we received 89 responses, representing over 500 organisations and individuals, which informed the development of this legislation. Given the range of interested parties involved and the complexity of the policy area, we will always ensure that a proportionate length of time is provided for consultation. In order to preserve the integrity and protect the impact of the scheme, we also do not anticipate changing the causes regularly.

The consultation would seek views on what social or environmental causes should be supported with dormant assets funding in England. However, we do not think it is appropriate to specify the scope and content of the consultation in primary legislation, including the extent to which the scheme is meeting some of its underlying policy objectives or what additional assets or operational changes would improve its performance. We believe it would be most appropriate and effective to consider those as part of Amendment 7. We therefore do not support combining aspects of this equally important work with the duty to consult, particularly as the latter relates only to England.

Our commitment to an open, fair and inclusive consultation is also the reason why we cannot accept Amendment 5, from the noble Baroness, Lady Lister, which seeks to require the Government to consult on community wealth funds every time an order on English expenditure is considered. I am conscious that we went into a more detailed discussion of the community wealth fund model in our debate on Amendment 1. Even if I did not convince your Lordships’ House not to support that amendment, I hope I convinced noble Lords that the Government are by no means against the proposals for community wealth funds but maintain that putting them in the Bill, and in the case of this amendment legislating for them to be consulted on every time an order was considered, would be inappropriate.

[Baroness Lister of Burtersett (Lab)]

I am conscious that the Minister has said “every time” every time. Could he give the commitment on the record that the noble Lord, Lord Hodgson, was looking for: that the first time—that is, in the first consultation—the Government will give serious consideration to including a reference to community wealth funds and an explanation of what they are?

[Lord Parkinson of Whitley Bay (Con)]

The noble Baroness has anticipated my next remarks: I was going to reiterate the commitment given by my noble friend Lady Barran in Committee that the Government will consider including community wealth funds in the first consultation launched under Clause 29. I have already noted that the Government are considering the community wealth fund model as part of the wider development of the levelling-up White Paper. As the work on that is ongoing, now is not the right time to commit to any particular source of funding to be associated with the proposals, but we will continue to look into this matter. As I committed earlier today, the Government will ensure that the consultation provides the opportunity for people to respond with their view, including advocates of community wealth funds and those who think that is their preferred course of action.

For these reasons, the Government feel that our amendments to bolster the consultation requirements and to introduce a separate review and reporting requirement better accomplish our joint aspiration to secure the scheme’s success. I believe that Amendment 3, which I am pleased to say has cross-party support, strengthens the Bill and addresses the House’s desire that any consultation on the use of future dormant assets funding in England must not be restricted to a limited number of perspectives.

In the light of that, I hope the noble Baronesses, Lady Kramer and Lady Lister, will be content with what we have proposed in our amendments and the assurances that I have given today and so may be minded not to press their amendments. With thanks again to the noble Lord, Lord Bassam, for putting his name to it, I commend Amendment 3 to the House.

Amendment 3 agreed.

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[Baroness Barker (LD)]

My Lords, I wish to add two points to those made by my noble friend Lady Kramer. It is right that in the next government amendment there is reference to a report and the additionality principle being included in that report. The reason why we drafted this amendment in the way we did was the requirement for the Secretary of State to certify the matter. One of the criticisms that was initially made of this Bill by the Delegated Powers Committee was the number of Henry VIII powers being assumed by the Minister.

The second reason is that the next government amendment refers to:

“Periodic review and report to Parliament”.


It does not say what those periods should be. Therefore, we are trying to deal with exactly the sort of scenario outlined by my noble friend Lady Kramer, where the Government suddenly dip into this back pocket of money and start to use it. That is the reason why it is there and why we think it is so important.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Baronesses, Lady Kramer and Lady Barker, for tabling Amendment 6 on the additionality principle. I also thank the noble Baronesses for their time in the productive discussion that we had on this issue. I hope that during the course of my remarks I can reassure them and other noble Lords that the intentions of this amendment are sufficiently covered both in the 2008 Act and through the Government’s Amendment 7, to which the noble Baroness, Lady Barker, just alluded.

The principle of additionality has successfully under- pinned the scheme since its inception and will continue to be a core principle of its distribution across the UK. In line with the proposed wording in Amendment 6, the 2008 Act already describes additionality as the

“principle that dormant account money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by … a Government department”

or devolved Administration. Therefore, the principle as defined by this amendment is already enshrined in legislation.

[Baroness Kramer (LD)]

Can I just ask for some clarification? Does not that responsibility apply only to the one distributive entity—to the Big Lottery Fund, or whatever it is called—and very conspicuously not to any other distribution sources or to the Secretary of State?

[Lord Parkinson of Whitley Bay (Con)]

Without having the 2008 Act in front of me as well as the Bill, I am afraid that I may not be able to give the noble Baroness the speedy response that she seeks.

I shall address the point that she also raised—while seeking an answer, if I can give her a definitive answer now—about the £150 million that was released last June. As she noted, the scheme released £150 million of dormant assets funding to support the response to the Covid-19 pandemic and recovery across England. That was distributed by the four spend organisations in line with the 2008 Act. In this instance, it is important to note that the funding was entirely separate from the UK-wide charity support package of £750 million, which was announced in April 2020.

[Baroness Kramer (LD)]

The reference is in Schedule 3 to the 2008 Act—on page 24—under Part 3, headed “Reports and Accounts”, where it says in paragraph 9(3), in relation to the Big Lottery Fund:

“The report shall set out the Fund’s policy and practice in relation to the principle that dormant account money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by”—


and then it lists

“a Government department … the Welsh Ministers … the Scottish Ministers, or … a Northern Ireland department”.

That does not appear to apply to anything other than the Big Lottery Fund. When the 2008 Act went through, the only distribution entity was the Big Lottery Fund. There are now three others, and the new Bill anticipates potentially creating more distributors, whose responsibilities will be directed by the Secretary of State.

I fully accept that, in the original concept and structure of the Act, additionality was a fundamental underlying principle. That does not appear to have carried over into the expansion that is embedded in the new Bill. That is my concern.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Baroness for that, and I hope that what I go on to say will address that point. If there is a change in distributor or an additional distributor is established, there are already powers in the 2008 Act to amend the legislation to ensure that any new or additional distributor must similarly report on their policy and practice in relation to the additionality principle. The noble Baroness is very welcome to intervene again, if I have not addressed her point.

The question to consider is not about the definition of additionality but where the accountability for that principle should lie. We fully support all the points raised in Committee regarding the fundamental importance of ensuring that the principle is adhered to, but we believe that how the 2008 Act positions the additionality principle, plus the new provisions in government Amendment 7, is the right approach to ensuring this and I welcome the opportunity to clarify why.

The Labour Government which brought in the 2008 legislation ensured that the accountability for the additionality principle lies with the named distributor responsible for all the funds across the UK, rather than the Secretary of State. This Government agree that it remains the most appropriate place for its inclusion in primary legislation. As we outlined in Committee, Schedule 3 to the 2008 Act requires the National Lottery Community Fund, the current distributor of dormant assets funding across the UK, to set out in its annual report its policy and practice in relation to the additionality principle. These reports must be laid before Parliament, and this Bill does not change that requirement. In fact, Amendment 7, to which we will come in a moment, seeks to bolster this further by requiring additionality to be included in periodic reports of the scheme’s effectiveness, as the noble Baroness, Lady Barker, noted. Your Lordships’ House will continue to have the opportunity to scrutinise how the National Lottery Community Fund approaches this in practice. This will ensure that funding continues to be directed to causes which fulfil the scheme’s objectives while being additional to central or devolved government funds.

As has been noted, the principle as it stands is critical to the scheme’s success, and our partners in industry have made it clear that their participation is reliant on it. As this is not central government funding, and as the Government have limited control over only the English portion, it is appropriate that the primary accountability for the principle should sit with the UK-wide distributor of the funding and its accounting officer—namely, the National Lottery Community Fund. Indeed, the fund is well versed in making this assessment, as an additionality principle also applies to its other portfolio of funds. To date, there has never been a breach of this principle of which the Government are aware.

We feel there is no evidence that the principle needs to be altered, and we believe the current approach is serving the scheme well. It has been upheld for 10 years, and we do not think it necessary or desirable to significantly change a demonstrably successful approach.

[Baroness Kramer (LD)]

Is the Minister saying he is making a commitment from the Floor that, when additional distributors are added—and this Bill contemplates that —they will be put under the same additionality requirement as the Big Lottery Fund?

[Lord Parkinson of Whitley Bay (Con)]

The commitment is already made in the 2008 Act. If there is a change in distributor, or if an additional distributor is established— and I should stress that there are currently no plans for that—there are already powers in the 2008 Act to amend the legislation to ensure that any new or additional distributor must similarly report on their policy and practice in relation to the additionality principle.

However, we have responded to the noble Baroness’s desire to see the Secretary of State more specifically held accountable to the principle, and we have reinforced its importance even further by including it within Amendment 7, which we will come on to shortly, on reviewing the scheme and reporting to Parliament. The noble Baroness, Lady Barker, said in Committee:

“We must also be able to work out from all the reporting that we do get to see that the principle of additionality is being adhered to.”—[Official Report, 21/6/21; col. GC 9.]

We thoroughly agree, which is why our Amendment 7 will ensure that the report must include any policies and practices of the principle by the Secretary of State as well as the National Lottery Community Fund. This provision responds to requests made by noble Lords that the Secretary of State should be held more expressly accountable for ensuring that and explaining how dormant assets funding is used in ways that are genuinely additional to central Government expenditure. This demonstrates our ongoing commitment to ensuring that the principle continues to be honoured, including the ways in which funding flows to distributing bodies and on to beneficiaries.

That is why we cannot accept the amendment. I hope I have reassured the noble Baronesses that we understand their concerns, and that is why we have brought forward the additionality provision in our review and reporting amendment, Amendment 7. I can see the noble Baroness is rightly consulting the 2008 Act for the references to it. I hope on that basis she will be content with what we have proposed and content to withdraw her amendment.

[Baroness Barker (LD)]

My Lords, I thank the Minister for the attention he has given to this, but I will pick him up on one issue. A power to do something is only a power; it is not an undertaking that the thing will be done. I do not think he has spelled out, as I hoped he would, how exactly the Secretary of State would be reviewing the additionality and demonstrating the additionality. It may be that he is going to come on to that under Amendment 7. But it seems to me that it is only the Secretary of State who can determine whether something is additional or not, because only the Secretary of State can have full knowledge of what the Government’s overall intentions were. I think this is important. I think we have had the example my noble friend talked about, and I would therefore like to test the opinion of the House.

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Moved by

[Lord Parkinson of Whitley Bay]

7: After Clause 29, insert the following new Clause—
“Periodic review and report to Parliament
(1) The Secretary of State must carry out periodic reviews of the following matters—(a) the operation of the dormant assets scheme and the alternative scheme under section 2 of the 2008 Act during the period to which the review relates;(b) the effectiveness of the steps taken during that period (by institutions holding or providing assets within the scope of the dormant assets scheme or the alternative scheme) to reunite assets with their owners;(c) any use made of the powers conferred by section 19 during that period;(d) any use that may be made of those powers after that period.(2) In reviewing the matters described in subsection (1)(a) the Secretary of State must consider—(a) how many institutions have made transfers;(b) how much money has been transferred;(c) the effectiveness of the arrangements made with institutions for meeting repayment claims.(3) The steps referred to in subsection (1)(b) include anything done with a view to tracing, and verifying the identity of, either (or both) of the following, in relation to a particular asset—(a) the person whose right to payment (or right to direct payment) is or would be extinguished by a transfer;(b) where the asset is the proceeds of another asset, the owner or beneficiary of that other asset (before its conversion into proceeds).(4) In subsections (2) and (3)— “transfer” means a transfer of an amount to an authorised reclaim fund as mentioned in section 1(1)(a) or 2(1)(a) of the 2008 Act or section 2(1)(a), 5(1)(a), 8(1)(a), 12(1)(a) or 14(1)(a) above;“repayment claim” means a claim against an authorised reclaim fund relating to a right to payment arising as mentioned in section 1(2)(b) or 2(2)(b) of the 2008 Act or section 2(2)(b), 5(2)(b) or (3)(b), 8(2)(b), 12(2)(b) or 14(2)(b) above. (5) The matters within the scope of a review do not include the regulation by the Financial Conduct Authority of an authorised reclaim fund or any other institution.(6) The Secretary of State must—(a) make arrangements to enable anyone with an interest in any aspect of a review to make representations,(b) consider all representations received, and(c) set out the results and conclusions of the review in a report and lay it before Parliament.(7) The report of a review must also include—(a) information about the uses made by any authorised reclaim fund of its financial resources during such period as the Secretary of State considers appropriate,(b) information about the uses made of dormant assets money for meeting English expenditure during such period as the Secretary of State considers appropriate,(c) the text of any directions given by the Secretary of State under section 22 of the 2008 Act which have effect during the period mentioned in paragraph (b), and(d) information about any policy and practice in relation to the additionality principle of—(i) the body or bodies specified in section 16(1) of the 2008 Act, and(ii) the Secretary of State, in exercising functions under Part 2 of that Act.(8) The report of a review may include information about the uses made of dormant assets money for meeting Welsh expenditure, Scottish expenditure or Northern Ireland expenditure during such period as the Secretary of State considers appropriate.(9) In this section—(a) “the additionality principle” is the principle that dormant assets money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by a government department, the Welsh Ministers, the Scottish Ministers or a Northern Ireland department;(b) “dormant assets money”, “English expenditure”, “Northern Ireland expenditure”, “Scottish expenditure” and “Welsh expenditure” have the same meaning as in Part 2 of the 2008 Act.(10) The first report under this section must be laid no more than 3 years after the day on which this Act is passed.(11) Any subsequent report must be laid no more than 5 years after the day on which the previous report was laid.”Member’s explanatory statement
The amendment would require periodic reviews of the dormant assets scheme and the alternative scheme, with a report to Parliament on the results. A report would include certain additional information, on matters such as the expenditure of the reclaim fund, and the use made of dormant assets money, and the additionality principle, in England. Information about use of dormant asset money in the rest of the UK would be optional. For practical reasons information included about the use of dormant assets money, or the additionality principle in England, is likely to be information publicly available elsewhere.

[Lord Parkinson of Whitley Bay (Con)]

I thank noble Lords for their amendments in this area and for the issues raised in Committee and during meetings with me and my predecessor, my noble friend Lady Barran. We have carefully considered the different concerns raised about the need for the dormant assets scheme to be periodically reviewed and reported on to Parliament. We have both heard the strength of feeling about the importance of transparency, and welcome and echo the enthusiasm for maintaining momentum beyond this phase of expansion.

That is why the Government have brought forward Amendment 7, as many noble Lords invited us to do in Committee, which would require the Secretary of State to review and report on various aspects of the scheme on an ongoing basis. I again thank the noble Lord, Lord Bassam of Brighton, for adding his name to it.

Our amendment mirrors Section 14 of the 2008 Act, which some amendments tabled in Committee also sought to replicate. It goes further, however, responding to noble Lords’ calls for maintaining momentum for further scheme expansion, greater transparency over the use of funds as well as reporting on how the principle of additionality has been met. We heard in the debate on the last amendment about the importance of ensuring that this principle flows through to not only the National Lottery Community Fund but any new or additional distributors, were there to be any. To clarify, the National Lottery Community Fund is the only named distributor, and the four independent organisations receive funding from it rather than being named distributors themselves under the Act.

I would also like to draw noble Lords’ attention to the very deliberate phrasing of subsection (7)(d)(i) of our Amendment 7, which refers to any distributor or distributors named in Section 16(1) of the 2008 Act. We have done that, rather than specify the National Lottery Community Fund, so that in the event that a distributor is changed—which Section 24 of the 2008 Act allows the Secretary of State to do as well as allowing them to make consequential amendments to Schedule 3 to ensure that the principle of additionality similarly applies—this would ensure that it is still covered by our Amendment 7.

Amendment 7 will require the Secretary of State to carry out periodic reviews of specified matters, including the operation of the scheme from transfer to reclaim; the effectiveness of tracing and reunification efforts by scheme participants; and any efforts to expand it to include new dormant assets. The amendment will require the results of the review to be laid in a report before Parliament within three years of the Bill receiving Royal Assent and every five years thereafter. This is in line with Amendment 8 in the name of the noble Lord, Lord Bassam of Brighton.

In Committee, my noble friend Lady Barran explained that a number of mechanisms for reviewing and reporting on various aspects of the scheme already exist. We agree, however, with the helpful suggestion of the noble and learned Lord, Lord Etherton, that it is sensible to bring these together in one place. Therefore, Amendment 7 also requires the report laid before Parliament to include information about the uses of dormant assets money, including the principle of additionality. This will build on reports already published by Reclaim Fund Ltd and work done by the National Lottery Community Fund and, currently, the Oversight Trust, which oversees the four existing distribution organisations, to assess the scheme’s impact.

I hope that this amendment provides reassurance that the Government are committed to ensuring the ongoing success of the scheme and reflects a number of the helpful suggestions that noble Lords have made in our debates on the Bill hitherto. I beg to move.

[Lord Bassam of Brighton (Lab)]

My Lords, I should first say that our amendment, signed by me and the noble Baroness, Lady Bowles, was an attempt to combine different aspects of previous amendments into a single text. The result is, as noble Lords can see, a fairly lengthy shopping list. The thing about shopping lists is that something is always forgotten; something always falls off the end. That makes their operability in legislation perhaps less than perfect.

We envisaged, in construct, that the amendment would cover what had happened during the relevant period and whether the funding was delivering on the scheme’s priorities. So, we are grateful—I am certainly very grateful—to the Minister for his constructive approach to discussions since taking up his post. I believe that Amendment 7 represents a fair compromise. I think the Minister has said the reports will combine information that was already available from other sources —annual reports et cetera—but also require the Secretary of State to go somewhat further, including by giving information on whether and how the additionality principle has been adhered to. We have heard in earlier debates how important that is.

We hoped to gain more from the Government, including more concrete data on the contribution that funds make to people and communities subject to high levels of deprivation and inequality, but I am sure that there will be further consideration of such issues in the other place, and perhaps in our debates here as well, as this legislation kicks in. I am impressed with the approach the Government have taken, and they have certainly listened to our Committee considerations, taking on board the core of what we are after. Nothing is ever perfect, but this goes a long way in the right direction. While I would have preferred our amendment, I was more than happy to sign up to the Government’s, as it represented real progress in the way we considered the Bill.

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That suggests some of the things that concern us and why I would still have preferred Amendment 8, or for more of its content to be reflected in government Amendment 7. I am glad that we have this extensive review, but it is important that we know that it will actually do a proper analysis and not just give facts and figures essentially extracted from the annual report—that it will do a kind of audit, if you like, of how well the processes have worked and whether they are actually delivering, particularly on the criteria and principles that have surrounded the dormant assets scheme right from the start.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I welcome the collaborative and pragmatic approach of the noble Lord and the noble Baroness in relation to government Amendment 7. I am also grateful for the contributions on that and on Amendment 8 on reviewing and reporting, which would require a review of the performance of an authorised reclaim fund and the Big Lottery Fund, now operating as the National Lottery Community Fund, in administering the scheme. Although I recognise the intention to ensure that the scheme’s success is maintained, bringing such details within the scope of a review would only duplicate processes that already exist.

Both the National Lottery Community Fund and Reclaim Fund Ltd are arm’s-length bodies, of DCMS and Her Majesty’s Treasury respectively. As they are public bodies, robust mechanisms are already in place for the monitoring of both organisations’ delivery against their objectives. These are more frequent than every five years and enable regular assessment of whether they are running effectively and efficiently. Instead, Amendment 7 will ensure that there are periodic reviews of the operation of the scheme from transfer to reclaim and that relevant information from both organisations’ existing reports is included in the report laid before Parliament. This will enable it to track the journey of dormant assets money from participant to beneficiary. This includes how the principle of additionality has been approached, and we can confirm that it is the intention of this part of Amendment 7 to ensure that the principle has been met and that Parliament receives information about how.

As a scheme that is led by industry and backed by the Government, it is appropriate that the scheme’s primary policy objectives—namely, to reunite customers with their money, to ensure voluntary participation and to guarantee full restitution—are similarly the primary focus of the periodic reviews. However, as part of the journey from participant to beneficiary, the scheme’s impact on social and environmental initiatives will, of course, be an important aspect to report on. There have been calls to assess the impact of the scheme here as well as at previous stages of our debates on the Bill. It is absolutely crucial that the funds have a positive impact on social and environmental initiatives. However, Amendment 8 seeks to assess the scheme against more narrow criteria than social and environmental causes. In line with the scheme’s impact to date, it specifically focuses on the benefit to people and communities subject to high levels of deprivation or inequality, and the impact on developing the capacity of social enterprises and charities.

I understand that the overarching purpose of this is to ensure that the scheme has maximum impact on the communities that need it most. However, the Government are clear that the nature of this impact should be subject to a future consultation. That is why we tabled Amendment 3, which would require this to be realised through a public consultation. The Bill must therefore be sufficiently broad to accommodate the outcome of this and future consultations, and to ensure that it is captured by the requirement to report on the scheme’s impact. It may be, for instance, that the public wish to see more of the funds being targeted at environmental initiatives, which would not be satisfactorily covered by the more narrow definition of the scheme’s objectives in Amendment 8.

Amendment 8 also seeks to review the extent to which administrative, investment policy or other changes to the scheme would improve its performance. Government Amendment 7 will ensure that the relevant information from organisations in the ecosystem are presented in the report. In particular, subsection (7)(a) provides that it must include

“information about the uses made by any authorised reclaim fund of its financial resources”.

The amendment should not encroach on the governance arrangements and regulations in place for managing and maintaining an authorised reclaim fund by both Her Majesty’s Treasury and the Financial Conduct Authority.

Finally, Amendment 8 would also require the Secretary of State to consider the views of specific groups when conducting the review. We agree that the review should be informed by a range of views, including those of social enterprises and charities. However, as I said in relation to previous amendments, we believe that prescribing a set list would be too restrictive. The Government’s amendment will instead enable anyone with an interest in the review to make representations and all representations received must be considered by the Secretary of State.

We think that the changes proposed in Amendment 7 strike the balance that noble Lords have called for today and in previous stages. I am again grateful to the noble Lord for his support. I hope that our Amendment 7 demonstrates that we have listened and are committed to transparency and robust reporting. That is why I hope your Lordships’ House will support the amendment and that the noble Lord will be minded not to move Amendment 8.

Amendment 7 agreed.

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[Lord Parkinson of Whitley Bay (Con)]

As the noble Baronesses, Lady Barker and Lady Kramer, have said, Amendment 9 has been tabled with a view to ensuring that the Oversight Trust is appropriately resourced and empowered to monitor the distribution of dormant assets funding. The DCMS and the National Lottery Community Fund have worked closely with a range of partners to ensure that the right levels of accountability and transparency are in place for the organisations that are given the task of distributing dormant assets money in England. We have sought to support their independence while respecting that dormant assets funding is money which comes from the public.

The four spend organisations’ operations are regularly reviewed by the Oversight Trust, which, as the noble Baroness said, is an independent organisation that ensures accountability and transparency in each of the spend organisations’ activities. I should flag that the trust’s reviews are not conducted in-house; it commissions external experts to conduct them independently. The Oversight Trust does not intervene in day-to-day operations, which are of course the responsibility of the organisations’ boards; rather, its aim is to ensure that each remains true to its objectives, which involves having oversight of the general operations of the spend organisations, as referred to in subsection (2)(a) of the new clause proposed in the amendment. In particular, the Oversight Trust is required to ensure that the four organisations are well governed and that their strategic plans and budgets are in accordance with their objects; and to review their achievement of social impact and transparency of financial and impact reporting.

Those powers are formalised in legally binding governance contracts between the Oversight Trust and each organisation. These contracts empower the Oversight Trust, for example, to remove directors in the case of significant mismanagement; to approve any changes to remuneration policies; and to be involved in the process of appointing new chairpersons, including ratifying their formal appointment. The contracts set out the key processes to enable the Oversight Trust to fulfil these responsibilities, and the trust may make reasonable requests from each spend organisation, in addition to those set out in the governance arrangements, if necessary, to help it meet its obligations.

The Oversight Trust receives quarterly updates, conducts annual deep dives and publishes quadrennial reviews on each organisation, which is required to co-operate to ensure that it can perform its duties effectively. This includes a commitment to participate with the independent review panel and to provide any information and assistance that may be necessary. We therefore do not believe it would be necessary or appropriate to provide the Oversight Trust with further powers in legislation for it to perform its current mandate effectively.

Access to up to £500,000 per annum from the English portion ensures that it can draw on sufficient resources to fulfil these important objectives. We are confident that this enables the Oversight Trust to meet its objectives, but we continue to keep that under review. Last year the Oversight Trust published its first quadrennial review, which focused on Big Society Capital, with the review of Access following in June this year. The next review, which will be of Fair4All Finance, is due next year.

I am very glad that the noble Baroness has had the opportunity to meet the Oversight Trust. Since Committee, my noble friend Lady Barran has met the trust as well, to press the importance of in-depth quantitative impact data. The trust has been working with the four organisations that it oversees on this issue, including through its annual governance review meetings. The trust provides robust governance, transparency and accountability over the four organisations’ use of dormant assets funding in England. As ever, though, we are mindful of our commitment to consult widely and with an open mind about the best social or environmental uses of this money.

When the Government consider the outcome of this consultation, we will also need to determine the best approach to ensuring continued good governance over the scheme. This could include asking the Oversight Trust to consider expanding its role to oversee any additional bodies if necessary and appropriate. If so, we would review whether the trust would need additional resources to fulfil a broader remit. It is worth noting that the trust would not be involved in decisions around what, if any, new distributing bodies may be chosen in England.

As it is too early to pre-empt the outcome of that assessment and, given that the Oversight Trust is independent and not an arm’s-length body, I hope the noble Baronesses will agree that it would be inappropriate in the Bill to mandate its role in the way that the amendment suggests. However, we have included a requirement to report on the uses of dormant assets funding as part of the Government’s Amendment 7. The National Lottery Community Fund will also remain responsible for ensuring that funds are distributed in line with legislation. We hope that this, alongside our record to date in ensuring that the distribution of funds is appropriately monitored, will provide the noble Baronesses with reassurance that this is an area that we will continue to take very seriously.

[Baroness Kramer (LD)]

While the Minister is on his feet, could he tell me with a straight face whether he thinks that £500,000 a year is sufficient for the wide range of responsibilities that he just described? He might wish to talk to some of his colleagues who work in the world of consultancy.

[Lord Parkinson of Whitley Bay (Con)]

We do; we keep it under review and, if the oversight trust took on a broader role, would review whether it would need additional resources. For the reasons I have set out, we cannot accept Amendment 9, and I hope the noble Baroness will be content to withdraw it.

[Baroness Barker (LD)]

My Lords, I thank the Minister for his full answer. It will come as no surprise to him that we do not intend to seek to put the amendment in the Bill, but the issues we have raised have a great deal of merit.

When we met Sir Stuart Etherington, the chair of the oversight trust, he set out clearly to us, as the Minister just has, exactly what the responsibilities of the trust are and how it goes about discharging them. He said that, although it has a responsibility to look at governance and management arrangements that impact on reporting, and has the power to remove directors and the chair, the oversight trust regards that as being a nuclear option—it would have to be something rather major for it to do that. By the time it got to that stage, there would already have been a significant scandal. That is what we are worried about with this whole scheme, and have been since the very beginning, because there are so many loopholes.

However, I hear what the Minister says about this being kept under review, alongside the periodic review of the whole scheme. With that assurance, I am quite happy to withdraw the amendment.

Telecommunications (Security) Bill

Lord Parkinson of Whitley Bay Excerpts

Consideration of Commons amendments
Monday 15th November 2021 Lords Chamber

Moved by

[Lord Parkinson of Whitley Bay]

That this House do not insist on its Amendment 4, to which the Commons have disagreed for their Reason 4A.

4A: Because the Commons consider it appropriate and sufficient for oversight and scrutiny of decisions made by the Secretary of State for DCMS in relation to telecommunications diversification to be conducted by the departmental select committee.

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[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, noble Lords will recall that this Bill will create one of the toughest telecoms security regimes in the world and ensure the security and resilience of the UK’s telecommunications networks and infrastructure.

Amendment 4, which was tabled by the noble Baroness, Lady Merron, and the noble Lords, Lord Alton of Liverpool and Lord Fox, would insert a new clause into the Bill. The clause would require the Secretary of State to report on the impact of the Government’s diversification strategy on the security of telecommunication networks and services, and would allow for a debate in another place on the report.

I ask that this House do not insist on its amendment for two reasons. Our first objection to this amendment relates to the flexibility necessary for diversification. The reporting requirement, which is based on the risks as we find them today, is restrictive and premature for a market and technology that is evolving and rapidly changing. Policy work is at an early stage, and the criteria for how we measure its success is evolving in line with our policy. It would not be suitable to set out specific reporting criteria in legislation.

The diversification strategy and any reporting on its progress must be flexible so that we can focus on achieving the greatest impact. As we hope diversification to be a short-term problem, enshrining it in legislation—a long-term solution—would be counterintuitive and unnecessary. We are currently focused on diversifying radio access networks, for instance, but that may change in the future.

The Government take diversification seriously. I reassure noble Lords that mechanisms are already in place, through Parliamentary Questions and Select Committees, to thoroughly scrutinise the strategy and its progress now and in the future. This is the appropriate method of scrutiny for an evolving, time-limited strategy.

Secondly, this is principally a national security Bill intended to strengthen the security and resilience of all our telecoms networks. The Government’s 5G telecoms diversification strategy has been developed to support that objective but it is not the sole objective of the strategy. In addition, the strategy is focused on a specific subset of the telecoms supply market, not the security of public networks as a whole.

From debates in your Lordships’ House so far, it is clear that this amendment intends to hold the Government to account on the impact of the diversification strategy on the security of public networks. We will be happy to provide updates on the strategy’s progress through existing channels, and are encouraged by the developments that we have seen since the strategy’s launch. The amendment would extend the Bill beyond its intended national security focus and creates an inflexible reporting requirement on a strategy that, as I say, will evolve as it fulfils this important work. That is why I ask your Lordships’ House not to insist on Amendment 4.

I shall also speak to Motion B, which asks that this House do not insist on its Amendment 5, to which the Commons have disagreed for their Reason 5A. As noble Lords will recall, Amendment 5 was tabled by the noble Lords, Lord Alton of Liverpool, Lord Coaker and Lord Fox, and my noble friend Lord Blencathra. The amendment would require the Secretary of State to review decisions taken by Five Eyes partners to ban telecommunications vendors on security grounds. In particular, it would require the Secretary of State to review the UK’s security arrangements with that vendor and consider whether to issue a designated vendor direction or take similar action in the UK.

As I said on Report, I welcome the intention of the amendment. It demonstrates that noble Lords across the House take the security of this country and its people incredibly seriously. However, while we support the spirit of the amendment, we cannot accept it for four reasons.

First, this amendment is unnecessary as the Bill already allows the Secretary of State to consider the policies of Five Eyes countries. Clause 16 includes a non-exhaustive list of factors that the Secretary of State may take into consideration when issuing designation notices regarding high-risk vendors. That list illustrates the kinds of factors we will be considering proactively and on an ongoing basis as part of our national security work. A decision by a Five Eyes partner or indeed any other international partner to ban a vendor on security grounds could be considered as part of that process. The amendment asks the Government to do something that has been part of the Bill from the outset. We believe that our existing approach is the right way to continually consider the decisions of all our international allies and partners.

Secondly, the amendment is unnecessary because we are already committed to a close and enduring partnership with the Five Eyes countries. We engage with our partners regularly and, where relevant, consider their actions when developing our own policies. The Five Eyes intelligence and security agencies maintain close co-operation, which includes frequent dialogue between the National Cyber Security Centre and its international partners. This dialogue includes the sharing of technical expertise on the security of telecoms networks and managing the risks posed by high-risk vendors. Engaging with our partners in this way is at the very core of our national security work.

In another place, members of the Intelligence and Security Committee agreed that the amendment was not necessary as the existing intelligence relationship with the Five Eyes, and other international parties, is strong. The chairman of the Intelligence and Security Committee, Dr Julian Lewis, said:

“We looked at Lords amendment 5 and we understood the temptation to flag up the importance of the Five Eyes relationship. We agreed ... whenever a serious objection is raised on security grounds by one of the Five Eyes partners, we take that with the utmost seriousness.”—[Official Report, Commons, 8/11/21; col. 119.]


The chairman of the DCMS Select Committee, Julian Knight MP, agreed and said that

“any Government worth their salt would take very seriously the approach of our closest security partners.”—[Official Report, Commons, 8/11/21; col. 117.]

Our third reason is that naming individual countries in legislation would be restrictive to the development of wider international relations and set an unhelpful precedent on national security legislation. The Five Eyes alliance was not created through legislation and it has not required legislation for us to develop and strengthen that relationship in the past. Moreover, we need to consider the policies of a wide range of countries, including those of our European neighbours such as France and Germany, and those of other nations such as Japan, South Korea and India, to name but a few. It is highly unusual to refer to specific countries in legislation in this way, and the amendment would set an unhelpful precedent for future legislation.

Finally, the amendment is impractical because of the many different ways other countries operate their national security decision-making. It may not be immediately clear when a country has taken a decision to ban a vendor, particularly if it relied on sensitive intelligence. It also may not be clear why a country has taken this decision, and it may not always be based on national security grounds. So, while I welcome the intentions behind the amendment, we cannot accept it and that is why I ask that the House does not insist on Amendment 5 either. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, I hope my noble friend Lord Fox has given his apologies to the Minister for being unable to be here due to a Select Committee engagement. However, that does not mean that on these Benches we are any less disappointed—or indignant, as I think my noble friend Lord Fox would put it—about the Government having turned down both amendments, which my noble friend signed. The Minister is developing a fine turn of phrase in turning down amendments that appear perfectly sensible. On Report he talked about sharing the ambition and warmly welcoming the intent and then said that they did not quite fit the Bill and the Government could not accept these amendments. It is rather baffling since both are built very firmly on the Government’s expressed intentions —indeed, ambitions—set out in the integrated review. That was very clear in our debates on Report. It seems that the Government’s motives are much more firmly based on resistance to scrutiny and the idea that, somehow, they would be constrained in their work on diversification by having to report, in the case of Lords Amendment 4. However, the words he used were:

“legislating for a reporting requirement would be limiting and inflexible.”—[Official Report, 19/10/21; col. 86.]

Having reread the debate and heard again what the Minister had to say, I still cannot understand the Government’s rationale for this.

The rejection of Lords Amendment 5 is equally baffling because the Minister talks again about the limitation of the amendment to a particular set of countries. Surely, one of the reasons we are where we are, and the Government had to backtrack on their treatment of high-risk vendors, is precisely that they were not in step with their other Five Eyes allies. Therefore, the Government are not even learning from experience. We are where we are, however, and clearly we are not going to take this further, but I believe that the Government will regret not accepting both amendments.

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[Lord Parkinson of Whitley Bay (Con)]

My Lords, I certainly hear the disappointment and perhaps, as the noble Lord, Lord Clement-Jones, said, even the indignation of his noble friend Lord Fox, in his absence. I am sure that if the noble Lord, Lord Alton of Liverpool, who is not able to be with us today, were here he would have had something to say as well. However, I hope to be able to reassure all noble Lords that the Government certainly have listened to and taken on board the points which have been made. Where we respectfully disagree, I would point to the fact that another place has disagreed as well, but, as I said in my opening remarks, we are very conscious of the spirit of scrutiny in which these amendments have been put forward. Noble Lords have wanted to ensure that the Bill does what the Government intend: to set up a framework to protect the national security of our country. We simply disagree about the practicalities of some of the amendments which remain at this late stage.

It may be helpful to say a little more about the opportunities for parliamentary oversight of the diversification strategy which noble Lords and Members of another place will have been able to take advantage of. Since its publication, Members of another place and noble Lords have had the opportunity to scrutinise and provide feedback on the strategy. The Science and Technology Select Committee in another place held an inquiry earlier this year on 5G Market Diversification and Wider Lessons for Critical and Emerging Technologies. The Government responded to the committee’s report in April, agreeing with its assessment of the scale of the diversification challenge and that there is a need to work swiftly to make early progress and build momentum as we work towards our long-term ambitions. We have not yet committed to a specific way of reporting progress, as policy work is at an early stage and the criteria for how we measure its success is evolving in line with our policy, as I said in my opening remarks.

However, we have made and announced a lot of progress on our diversification strategy already: for example, on our programme of targeted R&D support, including the future RAN open competition, the winners of which will be announced soon. We will continue to update on progress and are planning to launch further policy commitments at the same time as announcing the winners of that competition later this year. I know that noble Lords, if they agree with us and do not insist on their amendments today, will certainly continue to watch this issue vigilantly and find every opportunity to pursue these important issues in your Lordships’ House and through Parliamentary Questions and Select Committees, and it is right that they do.

I end by thanking again the Bill team and all officials who have been involved in the development of this important Bill. I listed them in full last time, so I will not try the patience of the Hansard editors by repeating their names but I will add one final name: Daniel Wilson, who has been of great support to me and my noble friend Lady Barran in working on this issue in private office.

I commend the Bill to your Lordships’ House. It will create one of the toughest telecoms security regimes in the world and ensure the security and resilience of the UK’s telecommunications networks and infrastructure.

Motion A agreed.

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Moved by

[Lord Parkinson of Whitley Bay]

That this House do not insist on its Amendment 5, to which the Commons have disagreed for their Reason 5A.

5A: Because the Commons consider it inappropriate to specify the steps to be taken by the Secretary of State where decisions in relation to telecommunications vendors are taken on national security grounds by other countries.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I have already spoken to Motion B, and I beg to move it formally.

Motion B agreed.

Racism in Cricket

Lord Parkinson of Whitley Bay Excerpts

Wednesday 10th November 2021 Lords Chamber

[Lord Bassam of Brighton (Lab)]

My Lords, I welcome the appointment and early actions of the noble Lord, Lord Patel of Bradford. He surely has shown more leadership in a few short days than we have seen from the entire Yorkshire County Cricket Club over many years.

I would also like to place on the record our sympathy and respect for Azeem Rafiq: sympathy, because nobody should suffer the racist abuse in the workplace that he has suffered; respect, because he blew the whistle and has set in motion a process which we hope will ensure that any form of abuse within cricket at any level can be swiftly identified, properly challenged and appropriately punished. While it is of course for individual sporting bodies to consider and respond to these kinds of incidents, can the Minister confirm whether the Government have plans to review the procedures in place across different sports and, in the light of events at Yorkshire County Cricket Club, governance arrangements, to ensure that they are fit for purpose? Finally, what support are the department considering or planning to offer the noble Lord, Lord Patel, in the difficult task that he has taken on?

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

I am grateful to the noble Lord for his support for the noble Lord, Lord Patel of Bradford, whom I spoke to this morning. Understandably he is rather busy, focusing his attention on the matter at hand, but I reassured him that there is huge support across your Lordships’ House for him and the important job he has in addressing this appalling situation at Yorkshire County Cricket Club.

We are very glad that the noble Lord, Lord Patel, began by apologising to Azeem Rafiq for the appalling behaviour and the unacceptable way in which his case was dealt with. The Government will closely scrutinise the actions that the Yorkshire County Cricket Club and the ECB take in response to these very concerning allegations. We want that investigation to be thorough and transparent but also swift, to ensure that the public’s faith in cricket can be restored—in Yorkshire and beyond. If not, the Government will not hesitate to step in and act.

[Baroness Verma (Con)]

My Lords, I welcome the actions of the noble Lord, Lord Patel, but can my noble friend the Minister look at all sports? It is not just cricket: it is football—it is every sport. If you are a person of colour, the pain that you suffer, as those sitting here of colour will know, stays with you for life. It is important that we start looking at these clubs. They make huge amounts of money. They need to look at their codes of practice and what they are doing, and the leadership must come from the top. It would be useful for us all to know how they will report what they are doing in their clubs across the country to improve the situation and ensure that local communities are better represented within their own movements.

[Lord Parkinson of Whitley Bay (Con)]

My noble friend makes a very important point. Sport, like all areas of society, has a very important role to play in tackling discrimination where we see it. In June of this year, Sport England, UK Sport and the other sports councils published the results of a detailed independent review into tackling racism and racial equality in sport. The findings made it clear that, sadly, racism still exists in sport in the UK and that there are long-standing issues for us all to tackle. Each council is working swiftly to develop its own specific action plan to deliver on these commitments and address the recommendations, but, as she says, working with communities and individuals is a hugely important part of that.

[Lord Addington (LD)]

My Lords, it is quite clear from what has happened that the capacity of those sitting in darkened rooms to talk about themselves to themselves is still very alive in sport, as in other sections of our society. When the Equality and Human Rights Commission gets involved, it shows that something has gone wrong. What are the Government going to do to tell people, even if they will not change—even though it is good to do so—that they must change because society will not tolerate them carrying on like this? Can we have an action plan?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord makes an important point. Something clearly went catastrophically wrong with the culture at board level at Yorkshire County Cricket Club. It is good that the former chairman and two other members of the board have resigned, and that the noble Lord, Lord Patel of Bradford, has come in to drive the culture change that is needed there. It also makes the important point, as he does, about the need for diversity and representation at senior levels in sport, which we are aware of.

[Lord Haselhurst (Con)]

My Lords, I should first point out that I am a member of Yorkshire County Cricket Club, Essex County Cricket Club, Middlesex County Cricket Club and MCC. With our friend, the noble Lord, Lord Patel, now installed in Yorkshire, a committee of inquiry being undertaken in the other place and an investigation being carried out by the England and Wales Cricket Board, do the Government not have some space to consider whether any specific action on their part is required to confront the appalling incidents that have come to light? At the same time, perhaps to get some sense of perspective, we should remind ourselves that cricket has its finer aspects, which hopefully will be on display again in Abu Dhabi this afternoon.

[Lord Parkinson of Whitley Bay (Con)]

My noble friend is right: the vast majority of people who play and enjoy cricket have the right attitude. He is a well-published author on the subject as well as being a member of all the clubs he mentioned. My honourable friend the Sports Minister met the England and Wales Cricket Board at the department on Friday to seek the assurances we wanted to hear about the approach it is taking. We are following that very closely and will not hesitate to take action ourselves if we think it necessary.

[Lord Mann (Non-Afl)]

My Lords, a year and two weeks ago, Imam Qari Asim, who advises the Government on Islamophobia, and myself, who advises on anti-Semitism, wrote to the ECB offering advice and requesting a meeting. In effect, we have had no response whatsoever. Does the Minister think it a good idea for cricket to take some advice, and should not Kick It Out, which has done such good work in football, be properly resourced to do similar work in cricket?

[Lord Parkinson of Whitley Bay (Con)]

I am sure that the ECB has heard the reminder; it should reply to the noble Lord and take him up on the offer of his insights and expertise. He is also right to point to the work of Kick It Out. Cindy Butts, who the ECB has appointed to chair its Independent Commission for Equity in Cricket, has experience working with Kick It Out in football and will be known to your Lordships as a lay member of the Conduct Committee. We are very glad to see her appointment and the work that she is taking forward.

[Viscount Hailsham (Con)]

My Lords, may I make a more general point? Does my noble friend agree that one should be rather slow to criticise individuals, or to take action that can cause damage to individuals or institutions, unless one is aware of all the relevant facts? Is there not a danger that, out of a spirit of political correctness, people are saying and doing things rather prematurely?

[Lord Parkinson of Whitley Bay (Con)]

I do not entirely agree with my noble friend. He is right to point to the need for evidence. That is why we are very keen to see the full report and are glad that it has been provided to the Select Committee in another place. However, this case, sadly, has been going on for a number of years. It has not been dealt with with the speed and thoroughness it ought to have been, and we are glad that that finally is happening.

[Lord Cashman (Non-Afl)]

My Lords, the noble Baroness, Lady Verma, is absolutely right that racism goes much wider than sport. I am afraid I disagree with the noble Lord; we must call it out wherever we see it, because through silence we acquiesce and we condone. Therefore, will the Minister work with other government departments to ensure that there is a coherent approach, not only to the forms of racism we see day in and day out, but to the other forms of discrimination that debase the very society in which we live?

[Lord Parkinson of Whitley Bay (Con)]

Yes, absolutely. I am mindful of the Question yesterday on inclusion in sport. That is at the centre of the Government’s strategy Sporting Future. It is critical when confronting the disease of racism that all of us speak out and call it out. Sunlight is the best disinfectant, which is why we want to see the report in full so that everybody can play their part in tackling this.

[Lord Scriven (LD)]

My Lords, the issue goes much wider than cricket bodies. Clearly, cricket is funded by big money and sponsors also have a role, not in calling out individuals, but in dealing with institutional racism of an organisation. Would the Minister like to give any advice to sponsors such as NIC Group, which has refused, like other sponsors, to take a stance against institutional racism, by sitting on the fence and not doing what those like Anchor butter did instantly in withdrawing their funds and standing up to racism?

[Lord Parkinson of Whitley Bay (Con)]

It has been very powerful to see the response of sponsors in focusing the minds of people at Yorkshire County Cricket Club on the very concerning allegations that have been made and the way they have been dealt with. I am sure the other sponsors will have heard the noble Lord’s call for action, but I also hope they will be reassured by the work the club is now finally taking.

Sport: Transgender Inclusion

Lord Parkinson of Whitley Bay Excerpts

Tuesday 9th November 2021 Lords Chamber

[Lord Triesman]

To ask Her Majesty’s Government what assessment they have made of the Sports Council Equalities Group’s Guidance for Transgender Inclusion in Domestic Sport, published on 30 September, and in particular the conclusion that “the inclusion of transgender people into female sport cannot be balanced regarding transgender inclusion, fairness and safety in gender-affected sport where there is meaningful competition”.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, the Government are committed to promoting diversity and inclusion, as well as safety and fairness, across all levels of sport. We believe that this guidance is well researched and well considered. It acknowledges the complexity of balancing inclusion, fairness and safety and it provides a decision-making framework to help individual sports decide what is right for their circumstances. It thereby helps to address a gap which has been present for too long in the sports sector.

[Lord Triesman (Lab)]

My Lords, I thank the Minister for that response and I declare my interest as a former chairman of the Football Association. In 2009, we successfully invested £11 million to boost a brilliant sport: women’s football. As with all sports, the aim was to compete in a fair way and to do it with integrity, player safety and inclusion. The Sports Council Equality Group’s report makes it undeniably clear that including male-bodied transgender people in most female sports vitiates these principles and will undermine those sports. Sports administrators admit that their current confused approach is not fit for purpose but they fear an angry response. Will the Minister meet me and other sports administrators to generate advice on securing appropriate transgender involvement while protecting the fairness and safety of female sports—advice which will wholly guarantee women’s genuine sporting competition and integrity?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, if I may, I will start with the very opening words of the foreword from this guidance:

“We want sport to be a place where everyone can be themselves, where everyone can take part and where everyone is treated with kindness, dignity and respect.”


The guidance is based on evidence and research and it took a lot of views and consultation. It is right that sports bodies have their own rules and will work on implementing these in relation to their own sport. It probably will not be for me to meet the noble Lord, but I will certainly take the request back to the Sports Minister and I am sure he will be happy to have that meeting.

[Baroness Noakes (Con)]

My Lords, the latest guidance allows for the possibility of testosterone suppression to permit transgender women to take part in women’s sports, but this is costly and intrusive for them and does not guarantee fairness for women. Does my noble friend agree that for almost all sports, the only rational solution which is safe and fair for all is to have two categories: an open category for everyone and one reserved for natal women only?

[Lord Parkinson of Whitley Bay (Con)]

The guidance looks into the question of testosterone suppression, and many people working or competing in sport do not consider that that has created fairness or safety in their individual sports. The evidence is clear that there are retained advantages in strength, stamina and physique for the average transgender women, with or without testosterone suppression; that has not proved the silver bullet that many hoped it would be. That is why the sports councils are encouraging governing bodies to consider alternative approaches for their sport. In some cases that will be universal participation and in others it will not, but it is right that they do that on a case-by-case basis.

[Lord Cashman (Non-Afl)]

My Lords, I do not refer to the debate around this question but I am deeply concerned about the public debate around trans issues and trans women in particular, and the continuous depiction of them as a threat. Therefore, does the Minister agree that whenever we raise issues with regard to any minority, we should be specific and evidence-based and should never knowingly or unwittingly fuel prejudice, hatred or misrepresentation, especially against minorities such as trans women, who daily face dangerous defamation and misrepresentation?

[Lord Parkinson of Whitley Bay (Con)]

I strongly agree with the noble Lord and I am pleased to say that the sports councils’ work has followed that approach. The intention of their guidance is to encourage sports to think in innovative ways to ensure that nobody is left out. I am mindful that these exchanges will be followed by many people affected on a personal level, so I want everyone to hear very clearly that we want everybody to have every opportunity to enjoy, compete in and excel in sport.

[Lord Hunt of Kings Heath (Lab)]

My Lords, does not that mean that we should ensure that there is a way to have full, open and tolerant debate; and that those organisations that proselytise a “no debate” concept and accuse people who raise legitimate issues of being transphobic should desist? The Minister cannot instruct sports organisations what to do; he can encourage them to have courage to take on board what is in this guidance.

[Lord Parkinson of Whitley Bay (Con)]

Again, I agree with the noble Lord about the importance of tolerant debate, such as we have in your Lordships’ House. As the sports councils say in their guidance:

“We hope to see sports bodies across the UK engaging in the conversation in a respectful way and develop policies in this area which help facilitate access for everyone to participate.”


A number of governing bodies have already said what they will do in the light of it, and we encourage others to look at it as well.

[Lord Addington (LD)]

My Lords, the report seems a fairly reasonable attempt to try to square a circle between the safety and integrity of sport and the right of inclusion. Will the Government assist those governing bodies in making sure that they do not have a policy that excludes people from low-level recreational sport if they are in the trans category? Will they also ensure that it is not used in any way to restrict people in sports where men and women compete on even terms? I refer to the equestrian sports as a starting point.

[Lord Parkinson of Whitley Bay (Con)]

Yes, I agree. The sports councils’ guidance supports that as well, as it aims to help governing bodies determine the right position for their particular sport. As the guidance says,

“what is right for one sport may not be right for another.”

Of course, it looks at low-level and recreational sport as well as competitive sport, and that is a job for the governing bodies then to take forward in relation to their sport.

[Lord Bassam of Brighton (Lab)]

My Lords, for many of us, sport is a unifying force, whether it is taking to the pitch with a diverse group of teammates or supporting a team from the grandstand. As the Sports Council Equality Group noted, the two main views on this matter “couldn’t be reconciled”, requiring

“a reset and fresh thinking.”

Rather than attempting to shut down this exercise, as some might, does the Minister endorse the group’s suggestion that individual sports explore whether more than one version of their sport can be offered in order to meet different aims?

[Lord Parkinson of Whitley Bay (Con)]

Yes, as the guidance says, there can be no one-size-fits-all approach that covers every sport at every level in the country, and that is why it is right that the governing bodies look at what might be appropriate in their particular sport, so that they can balance, as far as they can, inclusion, safety and fairness.

[Lord Farmer (Con)]

My Lords, allegedly, the Ministry of Defence’s inclusive language guide, which quotes verbatim from Stonewall, advises staff to take care using “female”. The aim is to avoid erasing gender-nonconforming people and members of the trans community. As this risks erasing women instead, and cuts across the Defence Secretary’s drive for the military to become more female-friendly, is this an example of a lobbying group obstructing the policy of the elected Government?

[Lord Parkinson of Whitley Bay (Con)]

I will leave colleagues in the Ministry of Defence to answer about their guide, but the sports councils’ guidance does not contain this wording or offer any advice on language. It aims to helps sports consider how to be inclusive without erasing anybody.

[Baroness Wilcox of Newport (Lab)]

I am sure that the Minister would agree that we should do all we can to increase participation in sport, so does he share the aspiration of the five sports councils to see increased transgender participation in sport and support their message to create novel or modified versions of some sports to increase inclusion?

--- Later in debate ---

[Lord Parkinson of Whitley Bay (Con)]

Yes, increasing everybody’s participation in sport is the main aim of the Government’s strategy, Sporting Future, so I certainly support the message from the sports councils to individual governing bodies to think in innovative and creative ways to ensure that no one is left out. As the noble Baroness says, that might involve novel or modified versions of their sport. Creating the right environment is important so that everybody, whoever they are, can take part and get active.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, it is clear that trans women cannot belong in the female sports category because they have a male performative advantage, however they identify, which is inherently unfair. Obviously, trans women should be able to compete fairly in sport. Will the Minister meet Dr Nicola Williams and colleagues from Fair Play for Women, which has some excellent, detailed proposals for including trans people in sport without disadvantaging women, and is courageous enough to open up the debate, not close it down?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, this varies from sport to sport. I took part in your Lordships’ full-bore rifle shooting match against the other place, which I regret to say that we lost. That is a sport on which men and women already compete on an equal basis. Some sports are games of skill, some of stamina and some of strength. That is why it is right that there is a case-by-case approach for each sport. I will take forward the meeting suggestion, as I did for the noble Lord, Lord Triesman.

[Baroness Hoey (Non-Afl)]

My Lords, sport really does have the power to change lives. I saw that when I was Sports Minister. Competition is also hugely important for enjoyment in sport, but it must be fair and it must be seen to be fair. Does the Minister agree that the evidence increasingly suggests that the approach of simply measuring testosterone levels in the blood does not take into account the full breadth of biological differences between those who have gone through male versus female puberty, and that this can lead to unfairness in competitive sport?

[Lord Parkinson of Whitley Bay (Con)]

As I said, the sports councils looked into this and said that

“the research that we currently have shows that testosterone reduction or suppression does not negate all the physiological advantages of having developed testosterone-driven strength, stamina and physique.”

That is why the advice to the individual governing bodies is to look at what is right for their sport and to balance inclusion with fairness and safety, so that people can enjoy sport, whether it is competitive or recreational.

Creative Sector

Lord Parkinson of Whitley Bay Excerpts

Thursday 4th November 2021 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I am delighted that the noble Baroness, Lady Featherstone, was able to secure this debate, which has allowed us to recognise the great value of the creative industries to the United Kingdom. I am particularly glad that she managed to secure it now, for I am one month into my new role and still pinching myself at my good fortune to have been given the opportunity to try to do some good for sectors which I hold so dear, as I know all noble Lords who have spoken in today’s debate do. As my noble friend Lord Vaizey said, this is a fantastic job, and one that comes with a big in-tray. It is also a great responsibility to look after one of our economy’s crown jewels: our creative sector.

The Government have a long and deep commitment to supporting our creative industries. That was shown through the 2018 creative industries sector deal, which invested more than £150 million across the life cycle of creative businesses. It was also shown in last week’s Budget where, even in a challenging economic climate, we announced a further £42 million over the next three years to support our world-leading creative industries across the UK.

I was very grateful to the noble Baroness for her recognition of what the Budget and spending review meant for the creative sector. I make no apology for beginning my remarks by dwelling on that Budget. I think she undersold it when she talked about fig leaves; this is a huge investment of taxpayers’ money, going to a part of our economy which is one of our crown jewels, as I said. In addition to the £42 million I just mentioned, last week we announced temporary increases to the headline rates of tax relief for theatres, museums, orchestras and galleries across the United Kingdom until the end of March 2024, which increases—and in some cases doubles—the relief that organisations can claim as they invest in new productions and exhibitions. It is a fantastic and widely welcomed boost for our world-class creative sector and is worth almost a quarter of a billion pounds. We also announced changes to the film and high-end TV tax reliefs to allow production companies to switch between claiming either film or high-end TV during production, ensuring that relief is not lost if a company decides to change its distribution method. We more than doubled the borrowing limit of the BBC’s commercial arm to £750 million in stepped phases between next year and 2026-27, subject to confirmation on oversight arrangements.

We also recognise that there are wider opportunities to improve the efficiency of creative businesses through improved digital connectivity and mobile coverage through a landmark investment to deliver one of the largest ever upgrades to our digital infrastructure. More broadly, as we said in the Budget, we are providing up to £150 million of additional funding for the national museums, galleries and other DCMS public bodies to help them recover from the pandemic and to level up across the country, providing more spaces for creative people to display their work and for people to come and enjoy and engage with it. Again, all of this demonstrates the Government’s commitment to supporting our creative sector and recognises that it contributes to our economic recovery and delivers on the Government’s key priorities on levelling up and extolling the virtues of global Britain.

While the pandemic has heavily affected some of our creative industries, the Government have provided them with unprecedented levels of support which, again, the noble Baroness and others paid generous tribute to. The Culture Recovery Fund was extended by a further £300 million over the summer, taking it close to £2 billion—the largest ever investment in the arts in this country. It would be remiss of me not to pay tribute to my right honourable friend Oliver Dowden, my honourable friend Caroline Dinenage, my noble friend Lady Barran and others who were a part of that work, as well as my right honourable friend the Chancellor, who is the Member of Parliament for the rural and culturally vibrant market town rightly extolled by the noble Baroness, Lady Harris of Richmond, and who has demonstrated his personal and the Government’s wholehearted support for our creative sectors through the Budget. We have gone further still, announcing last week an £800 million live events reinsurance scheme and an extension to the £500 million film and TV production restart scheme, both of which will enable UK events and productions to thrive and plan with certainty.

I am pleased to say that we have seen activity rebound close to pre-pandemic levels across many parts of the creative industries already, but it is clear that this rebound is not spread equally as some audience-facing sectors, such as live music, are still considerably down on pre-pandemic levels. In the visits and engagements I have been doing with organisations up and down the country, I have heard very clearly their concerns about the ongoing effects of the pandemic and the importance of building confidence among the public to book and enjoy what is on offer.

I was sorry to hear that the noble Baroness, Lady Merron, is not as enthusiastic as the Government are about the new Beatles attraction in Liverpool. To reassure her, this is not just a museum. Indeed, it is designed to inspire future generations, as she hopes it will. It may include a new secondary school and there will be rehearsal space for the Royal Liverpool Philharmonic Orchestra. As the director of culture at Liverpool City Council has rightly said, this will be about more than just the Beatles. The Fab Four are the hook, but Liverpool City Council and the Government are really excited about how this gets kids from some of the poorest areas of Liverpool to create and explore their passion for music. I hope that we will be able to convince the noble Baroness as that comes to fruition.

She and other noble Lords talked about freelancers. We are well aware of the effects of the pandemic and its differential impact on people, based on the roles they perform. The Government recognise the vital contribution that freelancers make to our creative industries. We have provided unprecedented support to self-employed people throughout the pandemic, and up until the end of September, freelancers were able to access financial support through the Self-employment Income Support Scheme, which has so far helped nearly 3 million people. Of course, I am keen to engage with freelancers. We speak to the Creative Industries Council, but I want to speak to freelancers on an individual level to understand how the pandemic affected them and what more support they might need.

A great many noble Lords dwelt on the importance of education. That was a point well made in the excellent maiden speech of my noble friend Lord Spencer of Alresford, whom I warmly welcome to your Lordships’ House. He talked about the importance of creativity and innovation for all sectors. Of course, the transferrable skills that creative industries and endeavours give us, such as communication, teamwork, self-confidence, perseverance, lateral thinking and so much more, are of great benefit and have been to companies like his—ICAP—and so many more.

To that end, following the point he, the noble Lord, Lord Aberdare, and others made on R&D and createch, I again point to the 2018 sector deal, through which the Government worked to recognise the importance of R&D to the creative industries and the opportunities to drive local growth by supporting it in creative clusters across the UK. We invested £39 million in the creative clusters programme through UKRI, which connects clusters of creative businesses and academia to take advantage of the most recent research and innovation, so that they can grow. Those clusters are spread across the country, from Cardiff to Edinburgh and Leeds to Belfast. I am pleased to say to my noble friend Lord Dundee that we confirmed in the spending review that we will support the UK games fund, which is based in Dundee, over the next three years.

On innovation more broadly, which my noble friend Lord Spencer talked about, the sector deal supported the Audiences of the Future work programme, which encouraged creative businesses to use innovative new technologies to reach new audiences. To date, that has provided funding of over £37 million, with investment from the industry, to more than 130 businesses and research organisations. Of course the pandemic has put turbochargers on that and I join the noble Baroness, Lady Merron, and others who paid tribute to the way that people across the sector threw themselves into making sure that people could continue to perform and do what they love and that the public more widely were able to see and enjoy that. We have seen across the sector lots of fantastic ways in which organisations have brought their work to new and wider audiences. When I visited the Hallé Orchestra in Manchester I saw how the Cultural Recovery Fund money helped it to invest in some technology which brought its work to wider—indeed, international—audiences, which will have some benefit after the pandemic as well.

Noble Lords talked about the importance of education in schools. I speak as a proud graduate of the state comprehensive system. I pay tribute to the work that teachers do in inspiring creativity in so many pupils up and down the country. The Government are committed to ensuring that all children and young people have a broad and balanced curriculum, of which creative education is a key part. Music and art and design are part of the national curriculum and remain compulsory in all maintained schools for five to 14 year-olds, and pupils have an entitlement to study at least one arts subject at key stage 4 in maintained schools. I am aware of the discrepancies between the private and the state sector. I recently saw my old drama teacher from school. I was very lucky to go to a school which had fantastic facilities: a drama studio, a fully equipped auditorium and music rehearsal spaces. After I left and towards the end of her career my teacher moved into the private sector because the facilities that she was able to enjoy and use for the benefit of her pupils were so much better. It is a discrepancy of which the Government are well aware and which we are keen to address.

Noble Lords talked about the arts premium. With the significant impact of the pandemic on children’s learning, our priorities have inevitably had to focus on educational recovery over the next three years. That is why core funding for schools will rise by £4.7 billion by 2024-25, equivalent to a cash increase of £1,500 per pupil. We value the arts not just for their own sake but as part of our recovery from Covid. That is why we also invest around £115 million a year on a diverse portfolio of music and arts education programmes, including Saturday art and design clubs, the National Youth Dance Company and the BFI Film Academy, which are designed to improve access to the arts for all children, regardless of their background, and to develop talent across the country. I am pleased to say that I am to have a meeting with my colleague Robin Walker, the new Minister of State at the Department for Education, where I will certainly be taking up many of the points that were raised by noble Lords in today’s debate, and I will be pinching my noble friend Lady Fleet’s line about red squirrels, which helps focus minds.

Noble Lords talked about the EBacc. I gently note that it was introduced under the coalition Government in which I had the pleasure of working with the noble Baroness and other noble Lords on the Lib Dem Benches. Schools have time beyond the EBacc to teach other subjects. Indeed, the EBacc was designed to be limited in size in order to allow for that. The best schools in the country combine excellence in EBacc subjects with high-quality arts and cultural education. However, the noble Earl, Lord Clancarty, is right to point to the vocational nature of these subjects in schools and in pupils’ future careers. It is important that we recognise that people are able to have a rewarding career in the arts in every sense, not just lucratively, although there are great opportunities, particularly as we emerge from the pandemic, for people to have careers which pay them well. I saw a brilliant example of that last night at the Royal Albert Hall when I went to see the Music for Youth Remix Prom. Nearly 2,000 young people from state schools and orchestras and youth groups up and down the country, from Cornwall to Teesside, went to the Royal Albert Hall and performed with each other in that fantastic space. The grins on their faces said it all, even before they had produced a note. It was wonderful to see.

Music education remains a central part of a broad and balanced curriculum in schools. That is why it is part of the national curriculum. A new national plan for music education will be published early next year following the publication of the model music curriculum earlier this year. It will aim to ensure that every future pupil has the opportunity to sing, learn a musical instrument and make music with others. My noble friend Lady Fleet knows it well because she chairs the expert advisory panel that has been assembled to guide the development of the plan. It is made up of teachers, music education hub leaders, industry representatives and other music education experts, including representatives from the National Youth Orchestra of Great Britain, UK Music and the Arts Council. Of course, this is another area where I am mindful that the responsibility lies with both DCMS and the Department for Education. I know that my noble friend Lady Barran, who was a Minister in your Lordships’ House for DCMS and is now at the DfE, answered Questions on that. I hope that gives noble Lords reassurance that a joined-up approach to government can be seen from this reshuffle.

The noble Lord, Lord Aberdare, and other noble Lords talked about the importance of careers advice. I share the concern that perhaps in the past careers advice in this area has owed rather a lot to Noël Coward’s “Don’t put your daughter on the stage, Mrs Worthington”, but I am pleased to say that the National Careers Service website is working to address that. It includes more than 120 profiles in the creative and media sector, each profile describing what those roles entail, the qualifications needed and the entry routes. In addition, DCMS funded the Creative Careers Programme as part of our sector deal commitment. It saw £2 million of government funding leveraged by a further £8 million of in-kind support from more than 1,000 creative employers. The programme is designed to reduce the aspirational, informational, postcode and reputational barriers to entry into the creative industries. It has so far informed and inspired more than 115,000 young people about job opportunities which are available in the cultural and creative sectors.

Noble Lords also talked about higher education. The noble Baroness, Lady Bonham-Carter, referred to a 50% cut in some arts subjects. It is important to dwell in some detail on that. What was announced in July this year by the Office for Students was a 50% cut to the strategic priorities grant to some subjects in this academic year. The strategic priorities grant, which is annual funding supplied by the Government to supplement higher education providers’ income where tuition fees alone do not meet the high cost of provision, is just one of the additional funding sources which are available to providers alongside tuition fees. The cut which she mentioned represents a small proportion— around 1%—of providers’ overall income. It was designed as a reprioritisation to target taxpayers’ money towards the subjects which are helping the National Health Service during the pandemic and will help it recover from it; that is, science, technology, engineering and the specific needs of the labour market. We know that high-quality provision in a range of subjects, including the arts, is also critical for our workforce, our economy and our society more broadly, which is why the Office for Students also allocated an additional £10 million this academic year to our world-leading specialist providers, including several top institutions such as the Guildhall School of Music and Drama and the Royal Northern College of Music.

The noble Lords, Lord Foster and Lord Bassam, and others talked about apprenticeships as a further route, and the Government are making apprenticeships more flexible so that they can better meet the needs of employers in all sectors. In August, we launched a new £7 million flexi-job apprenticeship fund to support the greater use of apprenticeships, such as in the creative industries, where flexible working practices are commonplace, including short periods of project-based employment.

I am pleased to point to ScreenSkills, which is piloting a flexi-job apprenticeship training model funded by DCMS with the support of Netflix and Warner Bros. That pilot is funding 20 apprentices in production assistant and production accountant roles, and aims to widen participation in the film sector further. Widening participation is another key point which has come up again and again in today’s debate and about which the Government also feel strongly. Noble Lords will have heard in all the utterances from my right honourable friend the Secretary of State since she was appointed the importance of widening participation and access so that people can enjoy and participate in our creative industries. As she has said, a working-class background should never be a barrier to a successful career in the creative industries. We want to increase access to opportunities across the board as part of our plan to level up. That touches on the points rightly raised by the noble Baroness, Lady Prashar, about racial diversity. We want everybody, whatever their background, to be able to play their part.

That is why, this year, DCMS co-funded the Creative Industries Policy and Evidence Centre’s report on Social Mobility in the Creative Economy. It is why we are working with groups such as the All-Party Group on Creative Diversity, which the noble Baroness, Lady Bonham-Carter, mentioned and the creative industries to look at that vital area. We know that there is much to be done, but with the Secretary of State from Merseyside and a Minister from Tyneside, I hope that noble Lords will be reassured that there is a team of Ministers determined to do it.

I touch on the importance of touring, following our departure from the EU. The noble Baroness, Lady Featherstone, said that no thought had been given to this; I think that was a little unfair. The UK took an ambitious approach during the negotiations with the EU which would have ensured that touring artists and their support staff did not need work permits to perform in the European Union. Regrettably, that was rejected by the EU. I point to our recent trade deal with the three EFTA countries—Norway, Iceland and Liechtenstein—which was based on the same offer and accepted, which shows that our proposals were workable and that we are fighting to help musicians and other touring performers tour abroad.

In many areas, the arrangements are much more straightforward than has at times been reported. For instance, 20 member states offered visa and work permit-free routes for musicians and creative performers. That includes most of the biggest touring markets, including France, Germany and the Netherlands. Portable musical instruments carried or in a vehicle can be transported cost-free and should not require ATA carnets, and small splitter vans are not subject to the TCA limits on cabotage and cross-trade.

We are working with the remaining member states which do not allow visa-free and permit-free touring, such as Spain and Portugal, to encourage them to make touring easier. We want all our European friends to be able to enjoy the economic and cultural benefits that UK touring artists bring, as we do from the EU creative performers who can tour easily here. The noble Lord, Lord Berkeley of Knighton, asked about Spain in particular. I can tell him that my honourable friend Wendy Morton, the Foreign Office Minister, had a meeting with her counterparts in Spain on 30 September, and Her Majesty’s ambassador to Spain met the Spanish Minister of Inclusion, Social Security and Migration on 14 October. We continue to engage actively at ministerial and official level, and I will certainly keep the noble Lord posted on it.

I am almost running out of time but I turn to the publishing industry, which the noble Baroness, Lady Miller of Chilthorne Domer, and many others pointed to. I am very mindful, the morning after the Booker prize was awarded, of the importance of books; I send my congratulations to Damon Galgut on his success last night. I am also the Minister with responsibility for libraries, and point to the fantastic work that many of them did to continue to loan books and be a huge support to people, particularly those who were home schooling during parts of the pandemic. DCMS is incredibly proud of the British publishing industry. It is a huge success story, as the noble Baroness said, and a big part of our soft power. Our books are read the world over, turned into TV shows and films, and boost the economy in all sorts of ways. Publishers have shown incredible resilience during the pandemic. Indeed, the value of the UK publishing sector rose by 2% to nearly £6.5 billion, so clearly a lot of people found solace in books during the pandemic.

Now that we are in recovery from the pandemic, we want publishers to bounce back and build back stronger than ever. The focus for Ministers at DCMS is to ensure that the publishing sector is accessible to all. We want more authors from disadvantaged and underrepresented backgrounds, as well as people working in the industry more broadly.

The noble Baroness and others asked about the IP exhaustion regime. The Government recently held a consultation on the UK’s future exhaustion of intellectual property rights regime. The Intellectual Property Office held constructive discussions with stakeholders across multiple sectors, including representatives from the creative industries and design sectors. The Government are assessing the options and will make a decision in due course.

The noble Baroness, Lady McIntosh, the noble Lord, Lord McNally, and others talked about the BBC. I hope that she heard the words of my right honourable friend the Secretary of State during the party conference season that the BBC is a “beacon for the world”. The appointments of both the BBC chairman and a new chairman for Ofcom have followed the Governance Code on Public Appointments.

I am keen to give the noble Baroness, Lady Featherstone, time to respond, so I will draw my remarks to a close there. I promise to write to all noble Lords whose questions I have been unable to cover. She said that she wanted to see a Government who understand values and promote our creative sector. I hope that she has seen from what I have been able to say in the limited time today that we indeed have such a Government and such a Minister, and I am very grateful for all the thoughts that have been raised in today’s debate.

Ofcom: Appointment of Chair

Lord Parkinson of Whitley Bay Excerpts

Tuesday 26th October 2021 Lords Chamber

[Lord Bassam of Brighton]

To ask Her Majesty’s Government what is the timetable for the appointment of the Chair of Ofcom; and when they expect the appointment to be confirmed.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, the campaign to appoint a permanent chairman of Ofcom will be launched imminently. The announcement will include the timetable, details of the advisory assessment panel and the selection criteria. It remains a priority for the Government to find the best candidate for the role. It will be a fair and open competition run in compliance with the Governance Code on Public Appointments and regulated by the Commissioner for Public Appointments.

[Lord Bassam of Brighton (Lab)]

My Lords, the wheels certainly seem to have come off the latest attempt to instal Paul Dacre as Ofcom chair. Reports suggest that the Government are struggling to identify credible individuals with a record in business or public life even to form an interview panel. If the appointment meets rules for public appointments, does the Minister believe that it will be seen as credible or help with the delivery of important things such as the online harms agenda? What can he say to the House to reassure the public that this and other public appointments will meet the tests of fairness and impartiality?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, of course the process will meet those tests. We want to identify the best candidate for this important role. As I say, the recruitment process will be launched imminently. Preparations are under way to ensure that it is successful in providing Ministers with a choice of high-quality candidates drawn from a broad and diverse field and we encourage lots of people to apply on that basis.

[Lord Holmes of Richmond (Con)]

My Lords, I declare my interests as set out in the register. Are the Government considering the adequacy of Ofcom’s current budget in light of the increasing number of critical functions that it is being asked to regulate, not least, as has been mentioned, the absolutely critical online safety arena?

[Lord Parkinson of Whitley Bay (Con)]

This is an important point that we have also discussed in the context of the Telecommunications (Security) Bill, which has its Third Reading in your Lordships’ House later today. The Government have been working closely with Ofcom to prepare for the new regulatory regime. This includes work to ensure that it has the resources to carry out its functions as regulator effectively and, vis-à-vis telecoms security, that includes another £4.6 million this year.

[Viscount Colville of Culross (CB)]

Will the Minister listen to the Conservative chair of the Culture Select Committee in the other place, who demands that the Government make clear in their new advert for the chair of Ofcom that previously unsuccessful candidates such as Paul Dacre cannot reapply?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the very clear rules about public appointments mean that, in reopening the competition, everybody is allowed to apply, including people who had applied for the first round. I will not be drawn on specific people, but we want to ensure that a diverse and high-quality range of candidates apply and are put to Ministers to choose from.

[Lord Dubs (Lab)]

My Lords, will the Minister confirm that whoever has the post must demonstrate a total and absolute commitment to the highest standards of public service broadcasting? Secondly, can he comment on something that I have heard, which is that for some time now Channel 4 has not been able to appoint full members of the board because Ofcom has not been able to go through the process? Could that be speeded up?

[Lord Parkinson of Whitley Bay (Con)]

I am not familiar with the noble Lord’s second point, but I will certainly take it away and look into it as he asks. Yes, this is an important role with responsibilities not just in broadcast but across the communications framework, which is why we want a high-quality range of candidates to apply for Ministers to choose from.

[Baroness Bonham-Carter of Yarnbury (LD)]

My Lords, I welcome the Minister to his role, this being my first opportunity to do so, although he may not welcome my question. In a recent speech, the noble Lord, Lord Puttnam, who will be much missed in this Chamber, said that

“when the Prime Minister actively—and repeatedly—intervenes to manipulate an ideological ally into the chairmanship of Ofcom, every alarm bell should start to ring.”

Given that one of the most important functions of Ofcom is to uphold the broadcasting impartiality regime, does the Minister agree that it would be unacceptable for the new chair to be someone with a long record of extreme political partisanship?

[Lord Parkinson of Whitley Bay (Con)]

I thank the noble Baroness for her welcome and join her in paying tribute to the noble Lord, Lord Puttnam, whose views will, I am sure, continue to be heard, even if not in your Lordships’ House. This is an important role, which needs impartiality and the appointment of which is governed by clear rules on public appointments. The process has been run along those lines so far and it will continue to be.

[Lord Vaizey of Didcot (Con)]

My Lords, I congratulate the Government on the launch of their great comedy drama “Ofcom Succession”. My understanding is that the first process was stopped because the Government had failed to appoint a headhunter to seek out the highest-quality candidates to apply for this important role. Can my noble friend tell me, first, has a headhunter been appointed? Secondly, if so, who is it? Finally, can I have their phone number?

[Lord Parkinson of Whitley Bay (Con)]

I thank my noble friend for his question. Yes, following Cabinet Office approval and a fair and open tender process, an executive search firm has been appointed. It is Saxton Bampfylde and I am sure that its contact details are available on its website.

[Baroness Wheatcroft (CB)]

My Lords, can the Minister confirm that, in seeking the right person for this role, the qualifications will include knowledge of the radio spectrum and the universal mail service, and not former experience as a newspaper editor?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the full criteria will be set out in the advert, which will go out once the new campaign is being run. The noble Baroness’s point about the range of areas in the sector that need to be regulated is a pertinent one.

[The Lord Speaker (Lord McFall of Alcluith)]

Lord McNulty?

[Lord McNally (LD)]

It is McNally—the noble Lord and I have known each other for only 30 years. It has already been pointed out that Ofcom will shortly be given unprecedented responsibilities for regulation, once the Bill on internet harms has passed this House. Noble Lords have already expressed widespread concern about how this appointment is being made. The Minister mentioned that an appointments panel is about to be appointed. Would it not restore public confidence if that panel were genuinely cross-party and independent in its judgments?

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the appointments panel will of course be governed by the public appointments rules. The job description and the names of those on the assessment panel will be available on the public appointments website when the campaign relaunches. The noble Lord is right also to point to the importance of the ongoing preparatory work for Ofcom’s role in online safety.

[The Lord Speaker (Lord McFall of Alcluith)]

Now that I have my glasses on, I offer my sincere apologies to my friend, the noble Lord, Lord McNally. Now I am sure that it is the noble Baroness, Lady Fox of Buckley.

[Baroness Fox of Buckley (Non-Afl)]

Will the Minister note that one specific issue that the new Ofcom chair needs to urgently address is an egregious example of compromised media impartiality due to the powerful lobby group Stonewall, as revealed by the superb BBC Sounds 10-part podcast series “Stephen Nolan Investigates” on the influence of Stonewall’s gender identity on the output of the BBC, skewing impartiality? Perhaps the Minister can comment on the content of episode 9 revealing that Ofcom itself was using its judgments on audience complaints as evidence to Stonewall, as though it was judge and jury, to prove its LGBT credentials. That is not comforting from a neutral regulator.

[Lord Parkinson of Whitley Bay (Con)]

I have not heard that episode but the example that the noble Baroness points to underlines the importance of a free and fair media that scrutinises everyone in power, whether that is those in government or in lobby groups. It also reflects the importance of the BBC broadcasting a range of views in fulfilling that important role.

Telecommunications (Security) Bill

Lord Parkinson of Whitley Bay Excerpts

3rd reading
Tuesday 26th October 2021 Lords Chamber

Moved by

[Lord Parkinson of Whitley Bay]

That the Bill do now pass.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I thank noble Lords from all sides of the House who have contributed to our debates during the passage of this Bill so far. Although that journey is not complete, their work has certainly helped us to interrogate the Bill and improve it. In particular, I would like to use this opportunity to thank my noble friend Lady Barran, who so expertly guided the Bill up to Committee; I was pleased to hear the tributes and thanks to her on Report a few days ago.

Throughout the passage of the Bill, the noble Baroness, Lady Merron, and the noble Lord, Lord Coaker, have helpfully challenged the Government’s approach from the Opposition Front Bench. I thank them for the constructive way they have done so and for their diligent approach, along with the noble Lords, Lord Fox and Lord Clement-Jones, from the Liberal Democrat Benches, who have also applied keen-eyed scrutiny throughout the Bill’s passage so far. Although we have not always agreed on the fine detail, it is clear that we all share the same ambition: to keep our telecoms networks secure.

I also thank my noble friends on these Benches, particularly my noble friends Lady Morgan of Coates, Lord Vaizey of Didcot, Lord Holmes of Richmond, Lord Young of Cookham, Lady Stroud, Lord Balfe and Lord Naseby for their contributions. The scrutiny that has been applied has already resulted in legislation that will allow the UK to protect our telecoms networks for years to come. It would be remiss of me not to extend my thanks also to parliamentary counsel for their usual brilliance in drafting the Bill, and to the House authorities for ensuring that the parliamentary stages could take place so seamlessly, including during the challenging circumstances of recent months.

I close by thanking the officials within my department, most of whom have been working on this Bill for well over a year now. Their knowledge, organisation and patience has allowed me, and I hope all noble Lords, to understand and scrutinise with relative ease what is a technical but very important Bill. It is a large Bill team and I make no apology for listing their names; it illustrates the breadth of work that has gone into what is quite a technical Bill. I thank Kathryn Roe, John Peart, Byron Grant, Thea Macdonald, Euan Onslow, Alex Walford, Malcolm Campbell, Dan Tor, Rosemary Buckland, Chris Frampton, Charlotte Carew, Will Jones, Yohance Drayton, and our lawyers, Sean Murray, Martha Hartridge, Simon Gomes, Luke Emmons, Richard Lancaster, May Wong, Harriet Preedy, Julia Clayson, Sean Wilson and Matthew Smith. All of them have supported the passage of this Bill excellently.

As my predecessor said at Second Reading:

“The Bill will … protect our telecoms networks even as technologies grow and evolve, shielding our critical national infrastructure both now and for the future.”—[Official Report, 29/6/21; col. 707.]


I am encouraged that your Lordships’ House agrees that the Bill will achieve this, and I beg to move.

[Baroness Merron (Lab)]

My Lords, this has been my first Bill since I joined your Lordships’ House a little over six months ago. Some would say that I was thrown in at the deep end but in my view, I was simply given the opportunity to swim in rather warm and pleasant parliamentary waters. It has been fascinating and enjoyable and I am very glad that my first Bill has been such an important one for the security of the nation.

The Minister has of course been a constant throughout consideration of this Bill, and we saw his worth recognised as he was promoted from the important role of Whip to the Minister tasked with bringing the Bill home. I thank him for the courteous and professional manner in which he has conducted himself throughout, and I also express my thanks to the former Minister, the noble Baroness, Lady Barran. From these Benches, we also express our gratitude to the Bill team, the clerks, the staff of the House—indeed, all those who have worked front of house as well as behind the scenes to make this Bill possible.

Throughout, it has been my pleasure to work with my noble friend Lord Coaker, who has brought his valuable experience and knowledge to proceedings. We have been blessed to have the highly professional support of Dan Harris, our excellent adviser who has guided and advised us throughout, to whom we express our thanks. Her Majesty’s Opposition strongly believe that our nation’s security is above party politics, and I thank all noble Peers who have worked cross party on this Bill.

New technologies have long transformed how we work, live and, of course, travel. Our experiences during the pandemic have upped the ante on the degree to which we rely on telecommunications networks. At the same time, it has reinforced how intertwined these networks are with issues of national security, including the top priority of any Government: to protect its citizens from risk. This Bill is a necessary step to protect us.

I am very glad to welcome the Government’s acceptance of our arguments that codes of practice, to be issued by the Secretary of State to telecoms providers, must first come before Parliament. However, the Bill raised key questions and concerns, especially given the absence of an effective plan to diversify the supply chain and in respect of our telecom security depending on strengthening our international bonds, in particular through the Five Eyes, involving the UK, the United States, Australia, Canada and New Zealand. I thank the noble Lord, Lord Alton, for his work on that issue.

I hope that the other place will give sympathetic consideration to the changes we have made on both those matters, and that the Minister will recognise that the amendments passed by your Lordships’ House make serious and important improvements to the Bill and have widespread support across the Chamber. My concluding wish for this Bill is that the Government will reflect and feel able to support these improvements to the Bill and the security they provide.

[Lord Alton of Liverpool (CB)]

My Lords, before we pass this Bill, may I add to a comment to what the noble Lord, Lord Fox, and the noble Baroness, Lady Merron, said? I express my thanks as well to everyone who was on the long list that the noble Lord, Lord Parkinson, gave us, but also to his predecessor, the noble Baroness, Lady Barran. As Ministers, I do not think they could have been more helpful and more responsive to the points we made both in Committee and on Report.

My noble friend also mentioned the all-party amendment moved last week by myself and the noble Lord, Lord Blencathra, which we also raised in Committee. It raises the need for reviews to take place when another jurisdiction—specifically, in this case, many of us cited the United States of America—had banned a particular company which was not banned in the United Kingdom but working within the telecommunications sector.

One example the noble Lord, Lord Coaker, and I gave in our debates was Hikvision, which is banned in the United States. It makes the surveillance cameras that are used punitively against the Uighur people in Xinjiang but are also used in our own high streets and public buildings. That amendment called for a review: that when any such company is banned in another Five Eyes jurisdiction, it is to be reviewed in the United Kingdom. It is a very reasonable all-party amendment, but it was opposed by the Government. Before the Minister completes his remarks today, could he tell us what has happened to that amendment and how the Government intend to respond to it?

[Lord Parkinson of Whitley Bay (Con)]

I was remiss in not adding to the long list of names I read out those of the noble Lord, Lord Alton, and my noble friend Lord Blencathra, who signed that cross-party amendment to which the noble Lord just referred. Of course, the amendment goes to the other place, which will look at it, the official record and the debate we had on it. I am sorry I was not able to persuade the noble Lord and my noble friend of it, but I will work with my colleagues in DCMS to make sure that they take into account the views of your Lordships’ House as expressed in the vote. I will not pre-empt the debates that will be had in another place, but I look forward to seeing what it sends us back in continuing that debate.

In the spirit which all noble Lords have mentioned today of wanting to see this important Bill on the statute book swiftly but with the proper scrutiny that both places want to give it, I beg to move.

Gambling Commission: Data

Lord Parkinson of Whitley Bay Excerpts

Wednesday 20th October 2021 Lords Chamber

[Lord Foster of Bath]

To ask Her Majesty’s Government what steps they are taking to ensure that gambling operators provide high quality and accurate data for use by the Gambling Commission.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, operators must already provide accurate data to the Gambling Commission as a condition of their licence. If an operator misrepresents or fails to provide information, this could lead to regulatory action. However, it is clear that data quality standards need to improve. The commission has announced that the industry can expect targeted enforcement action in this area from next year.

[Lord Foster of Bath (LD)]

My Lords, I thank the Minister for his reply and draw attention to my entry in the register. The establishment of the data repository is very welcome. Can the Minister put very clearly on the record that it will be a requirement for gambling companies to provide data to that repository and that this will not be voluntary? Can he further tell us what plans there are to ensure that all legitimate researchers will have access to that data?

[Lord Parkinson of Whitley Bay (Con)]

I am glad we had the opportunity to discuss this last week in the debate initiated by the right reverend Prelate the Bishop of St Albans. The PHE review that we debated highlighted the significant evidence gaps and the importance of research. We are looking at the best ways to facilitate high-quality research as part of our review of the Gambling Act, including how we can make better use of operator data. The commission is taking forward the work on the national data repository, with the aim of collecting operator data for use by researchers.

[Lord Browne of Ladyton (Lab)]

My Lords, I have given notice of my question. Recent research reveals a correlation in one in four gamblers between higher rates of gambling spend as a proportion of income and gambling harm. This challenges the Government’s oft-repeated view that

“the vast majority of people who gamble do not experience harm”.—[Official Report, 7/1/21; col. 281.]

The Minister’s predecessor dismissed this research when I brought it to her attention, because it does not establish a causative link between gambling spend and gambling harm. Surely the correct response is for the Minister to engage with this research and expand upon it to see whether it can prove that link, rather than dismissing it and preferring surveys of high-risk gamblers.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to the noble Lord for the advance notice; it gave me an opportunity to look at his Written Question and the reply from my noble friend. I do not think she was dismissing what he said. This is simply a product of what is still, as I have said, an emerging area in which data and research are being gathered. Dr Naomi Muggleton’s research has been an important contribution to our efforts to understand the widening impacts of gambling harm. Our review is looking at the barriers to conducting high-quality research such as this, which can inform our policy. Following the publication of the PHE review which we debated last week, we are working with the DHSC and others to complete that picture and improve the data and research we have.

[Lord Jones of Cheltenham (LD) [V]]

Given the Minister’s belief in data and research, why are the Government not taking action on research that shows that 60,000 children are gambling addicts? Why is the consultation on loot boxes taking so long, when this is a serious problem today? Will the Minister get a move on, please?

[Lord Parkinson of Whitley Bay (Con)]

The proportion of children gambling is in decline. As the noble Lord will know, we have raised the age limit for playing the National Lottery to 18. We are also delivering on our manifesto commitment to tackle the issue of loot boxes. We called for evidence last year and received over 30,000 responses, which of course we will respond to in the proper way.

[Lord Robathan (Con)]

My Lords, the losses to the gambling public last year were £14.2 billion—also known as the profits made by gambling companies after expenses. In looking at this data, as the Minister has promised to do, will he look at how much has been spent on media and online advertising, because the sole purpose of this advertising is to increase the amount of gambling, often at the expense of some of the most vulnerable in society who can least afford it? Will the Government look at the data and the consequence of it? Will they also look at either further restricting or, indeed, banning some of this appalling advertising?

[Lord Parkinson of Whitley Bay (Con)]

All gambling advertising, wherever it appears, is subject to strict controls on content and placement. As part of the broad review of the Gambling Act, we have called for evidence on the impacts of advertising to make sure that the right controls are in place and, particularly, are effective in the digital age.

[Viscount Colville of Culross (CB)]

I would like to build on the question asked by the noble Lord, Lord Browne. Recent research has shown that a quarter of gamblers are 400% more likely to take out payday loans than the average person. It is a shocking figure. Surely the Minister would agree that giving the Gambling Commission access to anonymised gamblers’ data would help uncover the causal link between the two and enable the commission to step in and prevent further harm to gamblers?

[Lord Parkinson of Whitley Bay (Con)]

I certainly agree with the noble Viscount that the data is crucial to understanding the causes of harm and what we might be able to do to tackle it. That is why the Gambling Commission is taking forward work on the national repository of operator data. It is also working closely with credit reference agencies and others to understand what role financial data can play in preventing gambling harm.

[Baroness Merron (Lab)]

My Lords, the Gambling Commission regularly publishes statistics and research on the regulated gambling sector, helping to form the basis of its responses to challenges such as problem or under-age gambling. It is acknowledged that the pandemic has changed not only the industry but the way in which the information is submitted, collated and reported. Is the Minister concerned that some of the figures relating to the impact of gambling may have been understated in recent releases? When do the Government expect normal service to be resumed?

[Lord Parkinson of Whitley Bay (Con)]

The noble Baroness is absolutely right to point to the impact of the pandemic which, in this area as in so many others, will have definitely had an impact. A lot has changed in the 15 years since the Gambling Act, which is why we are reviewing it in the way that we are. The commission is setting out the next steps that it will take to make sure that operators are submitting high-quality and accurate data to inform that review.

[Baroness McIntosh of Pickering (Con)]

I declare my interest as chair of the Proof of Age Standards Scheme. Will my noble friend welcome and note the willingness of the industry to co-operate in providing this data and to work with the Government and the Gambling Commission? Will he also ensure and give a commitment today that gaming, betting shops and casinos will not be disadvantaged in relation to their online counterparts in the provision of data?

[Lord Parkinson of Whitley Bay (Con)]

I certainly welcome the engagement that we have had, and continue to have, from the industry in this important area. As part of our review, we called for evidence on the changes to the legislation governing casinos and we are looking at those responses. Making sure that we have an equitable approach to online and land-based regulation is an important objective of our review.

[Lord Griffiths of Burry Port (Lab)]

My Lords, through the pandemic the use of data in the National Health Service has made it obvious to all of us what a good database can help us achieve. Surely a database of a similar order in respect of the gambling industry would similarly help us make good progress towards addressing these problems that are frequently, and over many years, mentioned in this House. The single customer view methodology takes people’s data—with the permission of the Information Commissioner, as regards GDPR—and pools it to provide precisely the database that I think we would all welcome. Will the Minister assure us that this is a way forward and that he is committed with his officials to finding a solution?

[Lord Parkinson of Whitley Bay (Con)]

The noble Lord is absolutely right that good data drives good policy, and that is what we want to see in the review. The Gambling Commission is working with operators on how they can share data where they believe a customer is at risk, and the Information Commissioner has confirmed that data protection law can permit this in relation to the work on single customer view, as the noble Lord mentioned. We encourage the industry to trial a solution swiftly.

[Lord Smith of Hindhead (Con)]

My Lords, I refer to my interests as set out in the register. Some reports have estimated that unregulated gambling on the dark web and black market has doubled during the pandemic. Can my noble friend the Minister tell the House whether his department is working or has plans to work with the Gambling Commission to investigate illegal gambling activity taking place and to collect data on the levels of money being spent?

[Lord Parkinson of Whitley Bay (Con)]

The dark web is clearly one area where the changes over the last 15 years can be seen. We called for evidence on the black market as part of our review and we must make sure that the Gambling Commission is set up to respond flexibly to the challenges that the future will bring. The commission has also received an uplift to its licence fees, which came into effect this month, which will strengthen the resources which it has to monitor and tackle illegal gambling.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, the Minister will be aware that gambling can be a great entertainment, particularly in places such as Spanish City in Whitley Bay, but it can also be a very destructive addiction. Does he agree that targeted advertising aimed at vulnerable people, particularly young people and chronic gamblers, is one of the main drivers of addiction, and will the Government make this one of the priorities for reform?

[Lord Parkinson of Whitley Bay (Con)]

I certainly know and remember Spanish City well; I will be back there this weekend. The advertising codes are clear that gambling adverts must never be targeted at children or vulnerable people. The Advertising Standards Authority recently announced changes to the gambling codes to protect vulnerable people, and further details on changes to protect children will follow by the end of the year.

Telecommunications (Security) Bill

Lord Parkinson of Whitley Bay Excerpts

Report stage
Tuesday 19th October 2021 Lords Chamber

[Baroness Merron (Lab)]

My Lords, as we start Report, I welcome the noble Lord, Lord Parkinson, to his new ministerial role. I am sure we all look forward to working with him.

I remind the House that national security must be the first duty of any Government, which is why we welcome the intention behind the Bill. As we have said repeatedly throughout the passage of the Bill, we believe that there are a number of issues with the Bill that need to be addressed, including parliamentary oversight of the new powers, which this group focuses on. As Comms Council UK said, the Bill represents an

“unprecedented shift of power from Parliament to the Minister in relation to how telecoms networks operate”

and that

“the Minister will be able to unilaterally make decisions that impact the technical operation and direction of technology companies, with little or no oversight or accountability.”

With reference to Amendment 1, I shall not repeat the arguments made by the noble Lord, Lord Fox. Suffice it to say that we on these Benches appreciate and wish to stress the importance of parliamentary scrutiny, which we have stressed throughout the passage of the Bill.

I thank the Minister for tabling Amendments 3, 4 and 5. They are very similar to our Front-Bench amendments in Committee and reflect a key recommendation from the Delegated Powers Committee. I thank the former Minister, the noble Baroness, Lady Barran, for her work on these amendments. As noble Lords will remember, the Delegated Powers Committee called the powers in Clause 3 unacceptable and called for the negative procedure for the new telecoms security codes of practice. This important change from the Government ensures adequate parliamentary scrutiny, which is a welcome step forward.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, I thank the noble Lords, Lord Clement-Jones and Lord Fox, for the amendment standing in their names, and I thank the noble Baroness for welcoming me to the Dispatch Box in my new role.

The question underlying this group is whether the new telecoms security framework will have proper scrutiny. Noble Lords have proposed ways to strengthen that scrutiny throughout the passage of the Bill and your Lordships’ Constitution Committee and Delegated Powers and Regulatory Reform Committee have made their own recommendations, and I thank those committees for their work.

In Committee, the noble Lord, Lord Clement-Jones, invited the Government to make a trade-off, a choice, in his words, between

“a loose definition of ‘security compromise’”

and

“a very tight way of agreeing the codes of practice.”—[Official Report, 13/7/21; col. GC 487.]

With that in mind, I turn first to Amendments 3, 4 and 5 in my name—although I should stress, as the noble Baroness, Lady Merron, kindly did, that they also represent the work of my predecessor, my noble friend Lady Barran. We both listened to the arguments put forward in Committee and these amendments represent her views as well as mine.

We have carefully considered the concerns raised and, as the noble Lord, Lord Clement-Jones, invited us to do, we have proposed how to make that trade-off. The government amendments we have brought forward today affect Clause 3. It provides the Secretary of State with the power to issue and revise codes of practice. The code of practice is a fundamental building block of the new telecoms security framework as it will contain specific information on how telecoms providers can meet their legal duties under any regulations made by the Secretary of State.

In its report on the Bill, the DPRRC noted the centrality of codes of practice to the new telecoms security framework. The committee drew attention to the statutory effects of codes of practice and their role in Ofcom’s regulatory oversight, and because of those factors, the committee recommended that the negative procedure should be applied to the issuing of codes of practice. The noble Baroness, Lady Merron, tabled amendments in Committee to implement that recommendation. We are happy to do that. Our amendments today require the Government to lay a draft of any code of practice before Parliament for 40 days. Your Lordships’ House and the other place will then have that period of time to scrutinise a code of practice before it is issued.

We think that these changes strike the balance that noble Lords have called for today and in previous stages. I hope these government amendments demonstrate that we have listened and are committed to appropriate parliamentary scrutiny across all aspects of the framework.

Amendment 1, tabled by the noble Lords, Lord Fox and Lord Clement-Jones, would apply the affirmative procedure to regulations made under new Section 105B in Clause 1. It would require the regulations to be laid in Parliament in draft and subject to a debate and vote in both Houses.

I share the noble Lords’ desire, echoed by the noble Lord, Lord Alton of Liverpool, to ensure that Parliament has a full and effective scrutiny role in this Bill, but I fear we disagree on the best way to achieve it. The only powers in the Bill that are subject to the affirmative procedure are delegated, or Henry VIII, powers that enable the amendment of penalty amounts set out in primary legislation. The Bill currently provides for the negative procedure to be used when laying the statutory instrument containing the regulations.

In the context of these new powers, the use of the negative procedure is appropriate for three reasons. First, Parliament will have had to approve the clauses in the Bill that determine the scope of regulations—Clauses 1 and 2—and the regulations will not amend primary legislation. Secondly, evolving technology and threat landscapes mean that the technical detail in regulations will need to be updated in a timely fashion to protect our networks. Thirdly and finally, as I noted in Committee, the negative procedure is the standard procedure for instruments under Section 402 of the Communications Act. The negative procedure delivers the right balance between a nimble parliamentary procedure and putting appropriate and proportionate measures in place effectively and efficiently to secure our networks.

The two noble Lords will also be aware that the changes they propose in their amendment are not ones that the Delegated Powers and Regulatory Reform Committee made. I accept that they are keen to explore avenues for scrutiny of this framework, but that committee made its recommendation for increasing the scrutiny of this regime, and the Government have brought forward our amendments to accept it. For these reasons, we are not able to accept the noble Lords’ Amendment 1. I hope that they will be content with what we have proposed in our amendment, and may be minded to withdraw theirs.

In conclusion, the Government were asked to make a trade-off. Through the passage of this Bill, we have been invited to provide greater opportunities for Parliament to scrutinise this regime. We have listened to those concerns and we have brought forward an answer. We feel that our amendments maintain our flexibility to adapt to an ever-changing technology environment and give your Lordships’ House and the other place a greater say in its operation, so I invite the noble Lord to withdraw the amendment.

[Lord Fox (LD)]

My Lords, it was remiss of me not to welcome the Minister formally; I have welcomed him personally, but not formally. Also, it was helpful that he was the Whip during the process thus far, and I should also welcome the new Whip to his seat. I thank the noble Lord, Lord Alton, and the noble Baroness, Lady Merron, for their contributions. The fact that this has been a short debate does not mean to say that it is not an important one. The reason it is short is because we have had the same debate so many times on so many different Bills, with not just this department but others. That is why it is an important issue and why, when the Minister says that we should strike a balance, we agree, but we think the balance is in the wrong place. That is why I am unable to withdraw this amendment and I should like to test the will of the House.

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[Baroness Merron (Lab)]

My Lords, I thank the noble Lord, Lord Clement-Jones, for tabling Amendments 2 and 7 again on Report. I will not take up much time discussing them, not least because the Labour Front Bench tabled similar amendments in Committee better to understand what advice the Secretary of State will receive and where it will come from when making regulations under Clause 2. As the noble Lord said, we must ensure that the Secretary of State receives advice from the best experts, not just those who support the Government.

As the former Minister, the noble Baroness, Lady Barran, focused only on the incompatibility of a similar board set up by the Investigatory Powers Act, can the Minister today simply answer this question: without such a board, where will the Secretary of State receive advice, and from whom?

[Lord Parkinson of Whitley Bay (Con)]

I thank the noble Lord, Lord Clement-Jones, for his welcome, and both him and the noble Lord, Lord Fox, for retabling these amendments. We share the noble Lords’ ambition in this area. We also want to ensure that the telecoms security framework is informed by world-leading expertise, and that all those affected by the framework have appropriate mechanisms to shape it. The noble Lords’ amendments seek to establish a technical advisory board to advise the Secretary of State on matters of telecoms security. They also state that the Secretary of State should give due consideration to this new board’s advice, and that of a judicial commissioner, before making regulations or codes of practice.

I agree with the noble Lords on the importance of the Secretary of State having access to expert advice in the exercising of these new powers. I hope I can reassure them that she can already call upon sufficient advice through existing structures, and that I can demonstrate why, as we have explained previously, these amendments are not necessary, while giving the greater detail that the noble Lord asked for.

It is worth emphasising the level of expertise that DCMS itself retains, both on the telecoms sector and on security policy. DCMS is the lead Government department for the telecoms sector and has telecoms experts embedded in it. The department has established security and resilience teams with suitably cleared individuals, including people with substantial experience in national security. More widely, the department has established procedures through which it can draw upon further expertise across government and industry. Inside government, for example, the National Cyber Security Centre undertakes regular risk assessments of current and emerging threats, and those assessments are used to inform government policy. Regulations and the code of practice made through this Bill will be informed by the NCSC’s assessments. The Government also have fora in which they discuss emerging threats and new technological developments with the industry. The NCSC’s information exchange is one example. This is a trusted community of security professionals from across the telecoms sector who come together on a quarterly basis to discuss and share information on security issues and concerns.

The noble Lord’s amendment also calls for the new board and the judicial commissioner to be consulted before the establishment of new regulations and codes of practice. We share the noble Lord’s view on the importance of consultation. That is why the Bill is clear that any code of practice must be consulted on before it is introduced. However, we still differ in our opinions on who should be consulted. The consultation requirement in the Bill will enable those directly affected by the code of practice, as well as those with an interest in it, to comment and raise concerns without the need for a technical advisory board to be established. Of course, if your Lordships’ House supports the government amendments today, the code of practice itself will be subject to scrutiny both in your Lordships’ House and in another place. Furthermore, we published an illustrative draft of the regulations in January for the purpose of early engagement with the industry, and the feedback it has provided has been invaluable in our development of the policy. We continue to engage regularly and closely with public telecoms providers and trade bodies, ensuring that any concerns are effectively communicated to us. I remind noble Lords that the Secretary of State can make these regulations and measures in a code of practice only where she actively considers that the measures are appropriate and proportionate under the wording of new subsections 105D(2) and 105D(4).

To conclude, I thank the noble Lords for bringing their amendment back. As I have said, I share their ambition to create a robust, well-informed and evidence-led framework for telecoms security. We believe that we already undertake extensive engagement with the affected groups and bodies. The Bill sets out consultation requirements but even if it did not, the Government have strong relationships with those in the sector and would continue to seek their input. That is where the advice referred to by the noble Baroness, Lady Merron, would come from, as well as from across government, the NCSC and others I have mentioned. For the reasons I have set out, we are not able to accept this amendment and I hope the noble Lord will therefore withdraw it.

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Moved by

[Lord Parkinson of Whitley Bay]

3: Clause 3, page 5, leave out lines 13 to 16 and insert—
“(2) Before issuing a code of practice under section 105E the Secretary of State must also lay a draft of the code before Parliament.(2A) If, within the 40-day period, either House of Parliament resolves not to approve the draft of the code, the code may not be issued.(2B) If no such resolution is made within that period, the code may be issued.(2C) If the code is issued, the Secretary of State must publish it.”Member’s explanatory statement
This amendment applies a negative resolution procedure to the power to issue a code of practice under section 105E.

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[Baroness Merron (Lab)]

My Lords, I thank the noble Lords, Lord Clement-Jones and Lord Fox, for tabling this amendment and the noble Lord, Lord Clement-Jones, for his remarks. It certainly is key that Ofcom is able to do the job that it has been entrusted to do. On the matter of providers, I would say that their primary duty has to be to ensure that the networks are secure. We should expect no less from them. I will be very interested to hear how the Minister responds to the points that have been made in respect of this amendment.

[Lord Parkinson of Whitley Bay (Con)]

I thank the noble Lords, Lord Clement-Jones and Lord Fox, for tabling this amendment to Clause 13. I know the noble Lord, Lord Clement-Jones, in particular, has taken a keen interest in this area, not just in this Bill but in previous ones as well. I am grateful for the way that he set out the debate again today.

Clause 13 makes provision to ensure that the Competition Appeal Tribunal applies ordinary judicial review principles to appeals against certain security decisions made by Ofcom. Under such principles, those decisions can be successfully challenged only where they are unlawful, irrational or procedurally unfair. In setting the standard of appeal in this legislation, we must find a balance between giving telecoms providers a way to challenge Ofcom’s decisions should they be unfair and ensuring that the regulatory regime is effective and efficient.

Ofcom, as an experienced telecoms regulator, believes that changing the standard of appeal to judicial review principles for certain security decisions has the potential to make the regulatory process quicker and more efficient. The Government agree. We want to avoid either Ofcom or telecoms providers spending months in court.

It was never the intention of Parliament to set the standard of appeal, as it is now, to

“duly take into account the merits of the case”,

as this was dictated by EU law. In 2017 the Government changed the standard of appeal for reviewing decisions by Ofcom from a full merits approach to ordinary judicial review principles via Section 87 of the Digital Economy Act, as the noble Lord, Lord Clement-Jones, will well remember.

However, as EU law continued to apply, the Competition Appeal Tribunal subsequently decided that it had to apply a modified approach to

“duly take into account the merits of the case”.

In essence, this has prevented the provision in the Digital Economy Act, which had been approved by Parliament, taking effect. That rather unhappy outcome would continue to be the case for certain security decisions under the Bill should this clause not stand.

To be clear, Clause 13 applies the judicial review standard only to decisions such as those relating to the issuing of an assessment notice, which should be routine and quickly handled rather than being continuously delayed. It is not being applied to decisions about penalties such as those under Section 105T. Public telecoms providers will still be able to appeal those decisions as they do now, and the tribunal will

“duly take into account the merits of the case”.

Ultimately, we want public telecoms providers to spend their time addressing the security of the network. We do not want them to attempt indefinitely to delay an Ofcom decision by bringing cases against the regulator that do not stack up. We are not breaking new ground by changing to this standard of appeal. Judicial review principles are the normal standard by which most decisions of government and public bodies are legally reviewed.

Parliament has already decided that the standard of appeal for similar decisions under the Network and Information Systems Regulations 2018 should be ordinary judicial review principles. That is consistent with our policy approach in this Bill. Therefore, the Government feel that Clause 13 should stand part of this Bill as it will contribute to the efficiency of the regime and ensure that regulatory decisions are not unduly delayed. It will also ensure legislative consistency. I hope that reassures the noble Lord and that he will be content to withdraw his objection to this clause.

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for his response. I am afraid it does not particularly reassure but there will be many other occasions on which we can raise the nature of judicial review, its continual erosion, the Government’s approach to judicial review and their dislike of being challenged. This is fairly thin territory on which to be debating a very large issue in terms of the future of judicial review. I am sure that my other legal colleagues will be more than able to dispute some of those issues. There are many other fish to fry of even greater importance on this Bill so I will withdraw my amendment.

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[Lord Parkinson of Whitley Bay (Con)]

I thank the noble Baroness and the noble Lords, Lord Alton of Liverpool and Lord Fox, for tabling and signing this amendment relating to telecoms diversification. I hope that, during my remarks, I can convince them and other noble Lords that the Bill is not the right place for this amendment for two reasons: first, diversification extends well beyond the security focus of the Bill; and, secondly, legislating for a reporting requirement would be limiting and inflexible as our diversification work evolves. I will also outline the progress made against the diversification strategy, in both government policy and industry outcomes, to seek to reassure noble Lords that progress is being made in this important area.

The Bill will create one of the toughest telecoms security regimes in the world. It will protect our networks even as technologies evolve, future-proofing our critical national infrastructure. Throughout the passage of the Bill, there has been a great deal of debate about how diversification can help to support more secure and resilient telecoms infrastructure. While our work on diversification is intended to support our security and resilience ambitions, not all diversification is necessarily relevant to security and resilience.

The telecoms diversification work that the Government are undertaking moves the market forward by broadening the supplier base in many ways which fall beyond pure security measures; these include boosting quality, innovation, competition and choice within our critical networks. It is for this reason that we have consistently argued that it would be limiting for our 5G diversification strategy to appear on the face of this Bill. Legislating for a reporting element within the Bill, by the same token, would also be restrictive.

Furthermore, as the market and technology evolve, our desired outcomes and areas of focus will evolve too. For example, in the short term, a successful outcome could be a third major vendor in the mobile market. However, once open radio access networks are ready for deployment at scale in urban areas, our measure of success might be the level of interoperability within our networks.

At the moment, we are focusing efforts on diversifying the radio access network, which is where the most critical security and resilience risks are found. In future, a focus on other elements of telecoms infrastructure, including fixed networks, will be necessary to ensure all risks to the ways in which we communicate are tackled. Committing to reporting on specific criteria would limit us to reporting against the risks as we find them today; it would not afford us the flexibility that diversification requires.

While the Government cannot accept this amendment, I hope to reassure noble Lords that our work on diversification progresses—and at pace. The Government’s plans to diversify the market were set out in the 5G Supply Chain Diversification Strategy, which was published in November last year. We also established a diversification taskforce, chaired by my noble friend Lord Livingston of Parkhead, who of course has a wealth of experience in this field having served as the chief executive for BT Group. The taskforce’s role is to provide expert advice to the Government on this important agenda.

The taskforce set out its recommendations in the spring and many of its members have agreed to continue providing expertise as part of the Telecoms Supply Chain Diversification Advisory Council, which had its first meeting last month. Work is already underway to implement many of the taskforce’s recommendations and good progress has been made on the priorities set out in the strategy. For example, research and development was highlighted as a key area of focus, in order to promote open interface technologies that will establish flexibility in the market and allow a range of new, smaller suppliers to compete in a diverse marketplace.

That is why DCMS was delighted to announce the launch of the future radio access network competition on 2 July. Through this competition, up to £30 million will be invested in open RAN R&D projects across the UK to address barriers to high-performance open deployments. This competition is part of a wider programme of government initiatives to foster an open, disaggregated network ecosystem in the UK. This includes the Smart Radio Access Network Open Network Interoperability Centre—or SONIC Labs—a facility for testing interoperability and integration of open networking solutions, which opened in June. A number of leading telecoms suppliers are already working together through this facility.

The Government also continue to work with mobile operators, suppliers and users on a number of other important enablers for diversification, for example by developing a road map for the long-term use and provision of legacy network services, expected to be announced later this year. Alongside this, the Government have led efforts to engage with some of our closest international partners, through both multilateral and bilateral mechanisms, to build international consensus on this important issue. Through the UK’s G7 presidency, the Government made the first step in discussing the importance of secure and diverse supply chains among like-minded partners, and the foundational role that telecommunications infrastructure such as 5G plays in underpinning wider digital and technology infrastructure.

We have also seen movement in the market towards diversification objectives. The industry has taken steps to adopt open radio access networks, such as the European memorandum of understanding, co-signed by Telefónica and Vodafone. Furthermore, organisations such as Airspan, Mavenir, NEC and Vodafone have now announced UK-based open radio access network facilities. This demonstrates that the industry is working alongside the Government here in the UK to drive forward the change needed in the sector. That was further evidenced in Vodafone’s commitment to deploy 2,500 open radio access network sites using equipment provided by leading suppliers, including Samsung and NEC. This is the largest deployment of its kind anywhere in Europe and an important first step in delivering the goal of more open networks.

These commitments show a genuine and significant change in the diversification of our mobile networks. I hope they also demonstrate why placing strict legislative reporting requirements on this area of work would be premature. We are at a point of rapid exploration and experimentation in this work, and I hope that noble Lords would not want to inhibit that work before it has had time to mature.

The noble Lord, Lord Alton of Liverpool, asked about the committee report. It will not fall to me to respond to that report, as I perhaps would have done in my previous role as a Whip covering the Foreign Office, among other departments. We will, of course, reply to it in full in due course. He also asked about Newport Wafer Fab. As I am sure noble Lords will appreciate, I am not able to comment on the detail of commercial transactions or of any national security assessments on a particular case. We will continue to monitor the situation closely and, as part of this, the Prime Minister has asked the National Security Adviser to review this case. Separately, work is under way to review the wider semiconductor landscape in the United Kingdom. The National Security Adviser’s review is ongoing, drawing on expertise from across government as necessary. We will continue to monitor the situation closely and will not hesitate to take further action if needed. The Government are, of course, committed to the semiconductor sector and the vital role it plays in the UK’s economy.

For the reasons that I have set out, therefore, I am not able to accept this amendment. I hope noble Lords have been reassured by what I said, and that the noble Baroness will withdraw her amendment.

[Baroness Merron (Lab)]

My Lords, I thank the Minister for his reply. I am, of course, disappointed that the Minister cannot see that this amendment seeks to strengthen the Bill. It gives the Government an opportunity to showcase all the things of which the Minister has apprised the House. It is important to look at this proposed new clause. It would require the Secretary of State to report on the impact of the diversification strategy, something of which the Government are proud, and it allows for a parliamentary debate, something I would have hoped the Government would welcome, but this is clearly not the case.

As the noble Lords, Lord Fox and Lord Alton, have indicated, the absence so far of an effective plan to diversify the supply chain is what makes us concerned about security in this country. The Bill is the opportunity to put that right. Therefore, I feel it is only right and proper, in the interests of the security of the country, that we press this matter to a vote and test the opinion of the House.

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[Lord Fox (LD)]

My Lords, veterans of the National Security and Investment Bill—I am not sure there are any—will recognise this amendment: it is exactly the same argument that was put forward then. The response from BEIS was to set up a unit, within BEIS, that the relevant Minister said would have the necessary clearance to review potential national security information. It was quite clear to those in your Lordships’ Chamber at that time that that group of people would not get to see the sort of information that the ISC is cleared to see. We are in the same situation now. The Minister will say that there are people in his department who, if necessary, will be able to see the relevant information. That will not be the case and to some extent, those in the Minister’s department making decisions that refer to national security issues will be flying a little bit blind. If this is not recognised, that is regrettable. This is a really important area of security, and decisions should be made on the best available information, with the best available people reviewing that information. The clue is in the name: this is the Telecommunications (Security) Bill, and it is the Intelligence and Security Committee that is best able to review that information. That is why I support the noble Lord’s Amendment 9.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I thank the noble Lord, Lord Coaker, for his kind words of welcome and for tabling this amendment. The important matter of parliamentary oversight has been raised a number of times in both your Lordships’ House and another place. I welcome the opportunity to clarify further how appropriate oversight of the Bill’s national security powers will be provided for both in this Bill and through existing mechanisms. The noble Lord’s amendment would require the Secretary of State to provide the Intelligence and Security Committee with copies of a directional notice when such documents, or parts of them, are withheld under Section 105Z11(2) or (3) in the interests of national security.

As regards enforcement, this amendment would also require the Secretary of State to provide the committee with copies of notifications of contraventions and confirmation decisions. Further, it would require the provision of reasons for giving urgent enforcement directions when withheld under Section 105Z22(5), as well as the reasons for confirming or modifying such directions when withheld under Section 105Z23(6).

We thoroughly agree with the need for effective scrutiny of the use of the Bill’s national security powers—that is why we have included measures to facilitate parliamentary oversight of the use of those powers. The Bill requires the Secretary of State to lay before Parliament copies of designation notices, designated vendor directions, and variations or revocations of either, unless doing so would be contrary to the interests of national security. We would expect in the vast majority of cases to lay copies of the directions and notices before Parliament. However, on very rare occasions there may be instances where the Secretary of State chooses not to do so because laying the documents would be contrary to the interests of national security. This would only be done in extremis.

We have already demonstrated our commitment to transparency with the publication of the illustrative draft designated vendor direction and designation notice last November. Indeed, it is in the Government’s interest to publish such documents as it sends a clear message to industry of our intent to use the powers in the Bill where necessary. However, while the presumption is to publish the directions and notices, it is right that we have the option to protect the UK if our national security could be put at risk through their publication.

It is worth noting that, under Section 390 of the Communications Act 2003, the Secretary of State is required to prepare and lay before Parliament annual reports on their functions under that Act. Those reports will show when the Bill’s national security powers have been exercised, whether or not copies of directions or notices are laid before Parliament. This will ensure that Parliament will always be made aware of the Secretary of State’s use of the national security powers to issue designated vendor directions and designation notices.

Having thus been made aware, the Intelligence and Security Committee will be able to request relevant information from the vital organisations it already oversees, such as the National Cyber Security Centre. Moreover, the ISC will be able to request such information at any time from the NCSC in relation to its assessment of high-risk vendors. The noble Lord is right to point to the importance of the committee. Given the cross-party support he enjoys, he knows better than most, as a former Security Minister, the important work it undertakes. The ISC will be able to do the work I have just outlined in line with its remit, as set out in the provisions of the Justice and Security Act 2013 and accompanying memorandum of understanding.

At Second Reading, the Noble Lord, Lord West, noted that the ISC had made a request for its memorandum to be formally reviewed. I understand that the chairman of the ISC has written to the Cabinet Office on these matters and that they are under consideration. Discussions and decisions regarding any changes to the ISC’s remit are of course for the Cabinet Office and the ISC to agree. That is the appropriate route for the ISC’s remit to be considered, not this Bill.

As I am sure noble Lords will appreciate, however, the advice of the security services will not be the only factor that the Secretary of State will take into account when deciding what is proportionate to include in a designated vendor direction. As well as the NCSC’s advice, the Secretary of State will consider, among other things, the economic impact, the cost to industry and the impact on connectivity of the requirements in any designated vendor direction. Those go beyond security matters and indeed fall under the work of DCMS; therefore, the Digital, Culture, Media and Sport Committee is best placed to consider those wider impacts. Hence, that is the appropriate body to oversee the Government’s use of the powers to issue designation notices and designated vendor directions, including where those directions and notices are not laid before Parliament. The Government will work with the committee to ensure that it has access to all the information it needs to carry out that oversight.

Those are the reasons why the Government cannot accept the amendment. I hope that the noble Lord will be content to withdraw it on that basis.

[Lord Coaker (Lab)]

I thank the Minister for a generally helpful reply and for his engagement with the amendment itself, my remarks and those of the noble Lord, Lord Fox. It is helpful when a Minister engages with a debate, rather than just reading the words in front of him. The Minister did that, and that is to be welcomed.

The Minister offered reassurance on many of the issues that I raised—and they are issues. The debate has in some ways gone beyond the Bill itself and will help the debate within government about how to resolve the issue of national security and parliamentary scrutiny. Of particular importance was the Minister saying that the memorandum of understanding between the Government and the ISC is being reviewed. That MoU is crucial, and the debate we have had on this Bill and, indeed, this amendment, should inform the Government of the view of many in this House and beyond that the memorandum of understanding needs to be clarified and perhaps reviewed and changed. I ask the Minister to ensure that that review happens in the discussions that take place within government.

With those remarks, I beg leave to withdraw the amendment.

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[Lord Parkinson of Whitley Bay (Con)]

My Lords, I thank the noble Lords, Lord Coaker, Lord Alton of Liverpool and Lord Fox, and my noble friend Lord Blencathra, for tabling these amendments, which relate to our national security strategy and engagement with our Five Eyes partners.

The Government’s first and overriding priority is to protect and promote the interests of the British people through our actions at home and overseas. That is a message central to our integrated review of security, defence, development and foreign policy, and one that Ministers in the other place have repeated during the passage of this Bill. What I have heard very clearly in this short but powerful debate is that, regardless of party or affiliation, noble Lords across the House agree that we must do what we can to protect our national security interests.

That is precisely why we have introduced this Bill. It is why we have published the integrated review and why we have such close working relationships with our allies—not only in the Five Eyes but also among our European neighbours and beyond. So I welcome the spirit in which Amendments 10 and 11 have been put forward. I say that so that noble Lords will know that we share their instincts and ambitions in this crucial area, even though we cannot support these amendments today, as I will explain.

I start by addressing Amendment 10, tabled by the noble Lord, Lord Coaker. This amendment would require the Government to publish a long-term telecoms security and resilience strategy, covering various topics, within six months of the Bill’s Royal Assent. It would require this strategy to be laid before Parliament. This amendment is similar to the one tabled by the noble Lord in Committee, except that here he has made additional reference to reporting on Ofcom resources.

As I have said, the Government take their responsibility to protect the British public very seriously. We welcome and share the noble Lord’s desire to ensure that this country is prepared to overcome future challenges to the security of our telecommunications. However, we have—as the noble Lord noted—already published and are implementing a number of strategies that will ensure that our national security in general, and the security of our telecoms networks and services in particular, are safeguarded.

I mentioned the integrated review. That overarching review sets out our commitment to security and resilience, so that that the British people are protected against threats. This starts at home, by defending our people, territory, critical national infrastructure, democratic institutions and way of life, and by reducing our vulnerability to the threat from other states, terrorism and serious and organised crime.

The noble Lord asked where the hierarchy lies. While the integrated review sets out our overall approach across government, the UK telecoms supply chain review guides our work on security and resilience in the telecoms sector specifically. The Government continue to implement the recommendations of the UK Telecoms Supply Chain Review Report, published in 2019. Alongside that, we continue our crucial work on supply chain resilience via implementation of the 5G Supply Chain Diversification Strategy, published last year, which we have debated during the passage of this Bill.

More broadly, the Government’s approach to telecoms security is informed by other cross-government priorities. In March we announced our intention to develop a comprehensive national cyber strategy as part of the integrated review. The cyber strategy will set out the UK’s approach to deterring our adversaries and ensuring that the technologies of the future are safe and secure. Furthermore, the Government intend to engage more widely with partners on the details of that strategy and publish it later this year, ensuring that our plans are aligned with funding decisions in the forthcoming spending review.

As set out in Committee, the Government are also in the process of developing a national resilience strategy that will provide a single, coherent approach to the way the UK approaches national resilience. That will be published in early 2022 and will provide a foundation on which to build a clear and co-ordinated approach to the whole range of resilience challenges.

Through his proposed Amendment 10 I think the noble Lord is seeking reassurance that the UK is working with our international partners to achieve shared objectives, and I am very happy to set out how we are doing that. The Government engage regularly with partner countries, including those mentioned in the noble Lord’s amendment: NATO and the Five Eyes allies. We are committed to a strong and deep relationship with our allies. We have held detailed and productive talks with partner Governments throughout the development of the Bill and will continue to do so as and when it is passed.

Similarly, the Government recognise that co-operation on international standards is vital to our joint efforts as we look to the future. We are working closely with the industry, the National Cyber Security Centre, Ofcom and a wide range of international partners to increase the UK’s influence and presence at major standards development organisations, such as ETSI and 3GPP.

Through his amendment the noble Lord is also, I think, seeking reassurance about the adequacy of Ofcom’s funding for its security arrangements. As the telecoms regulator, Ofcom will have a vital role to play in the compliance and enforcement arrangements for the new security framework. We are working with Ofcom to ensure that it has the required resources to meet its new responsibilities. Ofcom’s budget for telecoms security this financial year has been increased by £4.6 million to reflect that enhanced security role.

As I have explained, we will continue to ensure that our approach to telecoms security is kept up to date in response to the changes in threats and technology. For those reasons, I do not believe that Amendment 10 is necessary, and I hope that, when we come to it, the noble Lord will be content to withdraw it and to see that we are indeed working with our allies on this important area, as he rightly asked.

Amendment 11, tabled by the noble Lords, Lord Alton, Lord Fox and Lord Coaker, and my noble friend Lord Blencathra, seeks to ensure that we take account of the actions of our Five Eyes partners. It would require the Secretary of State to review decisions taken by Five Eyes partners to ban telecoms vendors on security grounds. In particular, it would require the Secretary of State to review the UK’s security arrangements with that vendor and to consider whether to issue a designated vendor direction or to take similar action in the UK.

We certainly agree that the UK Government should engage with international partners, including our important allies in the Five Eyes alliance. That is what we have been doing throughout the drafting of the Bill and what we will continue to do once it has passed. Our Five Eyes relationship is robust, and the UK is committed to a close and enduring partnership. The Five Eyes intelligence and security agencies maintain very close co-operation, including regular and routine dialogue between the NCSC and its international partners. This dialogue includes the sharing of our respective technical expertise on the security of telecoms networks and the question of managing the risks from high-risk vendors. There are mechanisms already in place for the NCSC to share this and wider information with DCMS.

We also agree with noble Lords that the Government should consider the policies of our Five Eyes partners when developing our own security policies, and we do that. However, although we take the position of our Five Eyes partners into consideration, our international interests are not limited to the Five Eyes. That is why the approach we have taken in the Bill provides the flexibility for the Secretary of State to take into consideration a variety of relevant information, which includes but is not limited to assessments of our international partners’ policies. I reassure noble Lords that the Bill enables the Secretary of State to consider a decision by a Five Eyes partner—or, indeed, by any other international partner—to ban a vendor on security grounds.

Clause 16 of the Bill sets out a non-exhaustive list of factors the Secretary of State might take into account when she is considering issuing a designation notice. This illustrates the kinds of factors that the Government will proactively be considering on an ongoing basis as part of our work. The Government’s approach to national security needs to remain flexible and adaptable to future challenges. Every country’s approach to national security will be different; security measures taken in one particular country might not always be appropriate in another, for example due to differences in the composition of their telecoms networks or services.

The Government’s consideration of specific countries’ policies when developing their own national security policy should not therefore be mandated or set out in such a restrictive way in primary legislation.

--- Later in debate ---

[A noble Lord]

The noble Lord means Third Reading.

[Lord Parkinson of Whitley Bay (Con)]

Yes, we are of course on Report; it has been a while since we were in Committee. Yes, the noble Lord is right: we do not feel that this amendment is necessary. I hope that I am setting out how the Bill provides for the Secretary of State to do what I think noble Lords want to do, not least, as I was just explaining, in Clause 16 and the non-exhaustive list of factors referred to there. Our objection is to setting out the Five Eyes partnership specifically and restrictively when there may be other countries and allies we speak to where she will also rightly want to take that into account. It is important that the Government have the freedom to determine their own national security policies so that they remain flexible and can respond rapidly to changing threats and challenges to our telecoms networks. The Government also need to be able to determine exactly how and when they engage with their Five Eyes partners and consider their actions when developing our policies.

Noble Lords are absolutely right to speak of the importance of the Five Eyes alliance; for more than 60 years it has been doing extremely valuable work for the people of this country and, indeed, for the other partner nations in it. But the Five Eyes alliance was not created through legislation and its importance has not relied on it being set out in statute either. In fact, it would be highly unusual to refer to such an alliance in legislation and we feel that this Bill is not the right place to create such an important national security precedent. That is why we are resisting it.

The noble Lord, Lord Alton, suggested that if we had had such a provision it might have saved some time and effort in the past, in particular with reference to Huawei. The Government have always considered Huawei to pose a relatively high risk to the UK’s telecoms networks compared with other vendors. There has been a risk mitigation strategy in place since Huawei first began to supply equipment to the UK’s public telecoms providers. As he knows, in July last year, following advice from the NCSC, the National Security Council considered the impact of US sanctions in relation to Huawei and considered that further action was needed in relation to Huawei as the new US restrictions made oversight of Huawei products significantly more challenging and potentially impossible. That is an illustration of how the UK already regularly reviews security advice and requirements in response to international considerations and what other Governments are doing.

The noble Lord, Lord Alton, also asked about Hikvision. The UK is aware of reporting that has suggested links between Hikvision and human rights violations in Xinjiang. As he knows, the Government have spoken up at international organisations to condemn the ongoing situation in Xinjiang. In January, my right honourable friend the former Foreign Secretary announced a number of measures to help ensure that UK businesses and the public sector are not complicit in human rights violations or abuses there. Decisions on excluding suppliers would be made on a case-by-case basis by central government contracting authorities when undertaking procurements in line with the relevant regulations.

My noble friend Lord Blencathra raised China more broadly, and indeed the UK wants a mature, positive relationship with China based on mutual respect and trust. There is considerable scope for constructive engagement and co-operation but, as we strive for that positive relationship, we will not sacrifice either our values or our security. China is now a leading member of the world community; its size, economic power and global influence make it a vital partner in tackling the biggest global challenges, but it has always been the case that where we have concerns, we raise them, and where we need to intervene, we will.

In conclusion, I want to return to where I started these remarks. The Government view national security as their number one priority, as any responsible Government would. This debate has highlighted that there is broad agreement on the need for robust, strategic consideration of those issues. So, although I am afraid that we cannot accept the amendments in this group, I warmly welcome the intent behind them. I hope that I have reassured noble Lords sufficiently that we understand their concerns, and that they will be content not to press these amendments.

Gambling-related Harms

Lord Parkinson of Whitley Bay Excerpts

Thursday 14th October 2021 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, it has been a pleasure to listen to the debate this afternoon. I thank the right reverend Prelate the Bishop of St Albans for securing it. One of the first things I did when I joined your Lordships’ House was join the Select Committee on the Social and Economic Impact of the Gambling Industry, along with him, the noble Lord, Lord Foster of Bath, and my noble friends Lord Smith of Hindhead and Lord Mancroft. I am pleased to have the opportunity early on in my new role to debate this issue, which I know continues to interest a great number of people in your Lordships’ House.

Public Health England’s review is a valuable contribution to our understanding of gambling-related harm and the forms it can take. It is also especially timely. It was an important commitment made following the last gambling review in 2018, and I am happy to assure the right reverend Prelate that its findings will be carefully considered in the Government’s ongoing review of the Gambling Act.

The landscape of gambling, as in many areas of life, has changed significantly since 2005, but the objective of the Act to protect children and vulnerable people from being harmed or exploited remains fundamental to the Government’s vision for the sector. Our Gambling Act review will ensure that our regulatory framework is fit for the digital age. Its objectives include making sure that all those who choose to gamble in Great Britain can do so in a safe way.

The Gambling Commission’s work to strengthen protections is continuing alongside the review. As noble Lords noted, gambling is a leisure activity for most, but it is also clear that many people and their families have their lives devastated by gambling-related harm. The Government are clear that gambling harm is a public health issue, as a number of noble Lords rightly noted, and we treat it as such.

Gambling legislation and Gambling Commission regulation are designed to keep gambling safe for the population as a whole. However, we have more specific measures and targeted interventions to give appropriate protection to children and vulnerable adults. The report shows that the problem gambling rate among adults is 0.5% and has remained stable since 2012, but it is essential that those suffering harm receive the help they need. Our National Health Service has committed to opening 15 new treatment clinics for problem gamblers by 2024, and the industry has committed £100 million for treatment over the same period.

A number of noble Lords, including the right reverend Prelate and the noble Lord, Lord Foster, mentioned the costs of gambling harm. PHE reports found that the annual economic burden of harmful gambling is approximately £1.27 billion but, as my noble friend Lord Smith of Hindhead noted, the report makes it clear that the analysis presented estimates the costs associated with, not caused by, gambling. There are complicated interactions between gambling and mental health problems and, as the report makes clear, alcohol use. Nevertheless, the costs associated with gambling harm are stark, so there is clearly important work still to be done.

As the noble Lord, Lord Foster, said, the report identifies gaps in the evidence base. One of the aims of our review is to make sure that we have high-quality evidence to support regulation. We will work with the Department of Health and Social Care and key parties to address the knowledge gaps identified in the evidence review and improve data collection. He asked whether that would include data from companies. The Gambling Commission is taking forward work on a national data repository with the aim of collecting data for use by researchers; I am pleased to say that it will include data directly from gambling operators.

One area where there is an evidence gap, as was noted by the right reverend Prelate and the noble Baroness, Lady Merron, concerns regional disparities. He will not be surprised to know that my eye alighted on the fact that the north-east had the highest prevalence of at-risk gamblers. However, I also saw that the PHE report was clear that, because of the small numbers it studied, it was not possible to determine those levels with any statistical significance, so that is one area where further evidence is needed and further research needs to be undertaken.

A number of noble Lords including the noble Lord, Lord Sikka, and my noble friend Lord Smith mentioned children. I am pleased to say that children’s gambling participation is in decline. In 2011, 23% of 11 to 16 year-olds said that they had gambled in the past seven days, while in 2019 it was 11%. However, we cannot be complacent. This is why, as my noble friend Lord Smith alluded to, we have increased the minimum age limit to buy National Lottery products to 18. We are also considering other potential measures to protect children and young people as part of our review. If the noble Lord, Lord Sikka, would like to tell me about the website he mentioned, I would be glad to look into why he was able to get through and discuss that with him in further detail.

The noble Lord also talked about online protections more generally. Significant progress has been made in recent years to make online gambling safer, including a ban on gambling on credit cards and new rules to reduce the intensity of online slot games. However, we recognise that more can be done to protect those who gamble online. Our review is looking closely at the case for greater protections for online gamblers, including protections on products and for individuals. The Gambling Commission is also working to improve how operators use data to identify customers at risk of harm and intervene.

The noble Lord, Lord Sikka, asked about the tax arrangements of gambling operators. All companies selling gambling to customers in Great Britain pay UK gambling duties wherever they are based; the remote gaming duty is 21% of gross profit.

The noble Baroness, Lady Bennett of Manor Castle, and my noble friend Lord Robathan mentioned advertising. PHE’s evidence review did not find evidence that exposure to advertising and marketing is a risk factor for harmful gambling. However, operators must advertise responsibly. We are committed to tackling aggressive practices.

[Lord Robathan (Con)]

I should have congratulated my noble friend on his new post, by the way. If advertising does not encourage people to gamble, why are companies spending so much money on it?

[Lord Parkinson of Whitley Bay (Con)]

It is a competitive market and, if people choose to use their money in this way, operators are encouraging them to do it with their specific companies; as private enterprises, they are right to do that. But, as I say, operators must advertise responsibly and we are committed to tackling aggressive practices where we see them. We have called for evidence on advertising and sponsorship specifically as part of our review, and we are looking closely at the issue of sports sponsorship as part of it.

More broadly, on marketing and inducements, we have called for evidence on promotions and offers. One of the things I learned about when sitting on your Lordships’ committee was that the number of customers in VIP schemes has fallen by over 70% since the industry started following new rules on how the schemes should be run from September 2020. Gambling Commission and advertising rules already prohibit inducements which encourage customers to gamble more intensely, and operators are not allowed to market directly to those who have self-excluded or customers showing signs of vulnerability, but this is one of the areas we want to look into in the review.

The noble Baroness, Lady Bennett, asked about loot boxes. The Government are delivering on their manifesto commitment to tackle the issue of loot boxes in video games. We ran a call for evidence last year to understand their full impact and received over 30,000 responses. We are reviewing those responses and continuing to engage with the industry to determine the most robust and proportionate solutions, and our response will set out the next steps that we intend to take.

The noble Lord, Lord Foster, and others mentioned problem gambling in the Armed Forces. The Government are vigilant to the emergence of problem gambling among those serving in our Armed Forces, which includes providing welfare support and financial awareness training. The Ministry of Defence also blocks gambling websites on its networks to reduce their accessibility. PHE’s evidence review found no association between exposure to combat situations and problem gambling, and there is a lack of longitudinal evidence to clarify whether trauma is a risk factor for harmful gambling. However, we welcome further evidence in this area as well, and are taking a close interest in the results of a recent important study from Swansea University looking at gambling participation among ex-service personnel.

The right reverend Prelate mentioned the troubling estimate of over 400 gambling-related suicides per year in the PHE studies. Of course, any suicide is a tragedy. It is important to note that the figure in the PHE report is an estimate based on two overseas studies; we do not know how many suicides in the United Kingdom are linked to gambling. The Department of Health and Social Care is working to improve our data collection and address other evidence gaps on this most important of issues. NHS England is also investing £57 million in suicide prevention through the NHS long-term plan. Investment in all areas of England by 2023-24 will support suicide prevention plans locally and establish bereavement support services. We know how serious these impacts can be.

While the gambling review is ongoing, the Government and the Gambling Commission are not waiting for it to end to take action where it is needed to make gambling safer. In the last 18 months, we have: banned gambling on credit cards; tightened restrictions on VIP schemes; raised expectations of online operators during the Covid pandemic, with increased monitoring and intervention throughout; introduced new rules to limit the intensity of online slot games; and launched a consultation on new rules for customer interaction to protect people who gamble online. The Public Health England review is therefore a timely contribution to our ongoing efforts to prevent gambling harm. It will be considered very carefully as part of our thorough review of the Gambling Act, together with all the other evidence we continue to receive. We will publish a White Paper setting out any proposals for reform and our vision for the sector in the digital age in due course.

I give my thanks again to the right reverend Prelate and all noble Lords who have spoken in today’s debate. I know they will continue to contribute to the debate in this important area.