House of Lords
Wednesday 22 February 2017
Prayers—read by the Lord Bishop of Southwark.
National Health Service: Nurses
My Lords, this Government have undertaken work to increase the number of trained nurses. We now have a record number of nurses working in the NHS. By increasing the number of training places for both new nurses and nurses returning to practice, we continue to support the growth of our nursing workforce in the health and care sectors.
I thank the Minister for his reply but I cannot share his wing-and-a-prayer approach to the drastic shortage of nurses we face. Bearing in mind that the NHS alone is short of 24,000 nurses, and the 23% reduction in nursing applications as of this autumn, does the Minister not agree that they should reinstate the bursary scheme at university for nurses, or at least promise nurses who qualify and spend a number of years working in the health service that they will have their tuition fees reimbursed?
I am sorry that the noble Lord takes such a negative view of the changes we are making. There are actually 6,500 more full-time equivalent nurses and health visitors than there were in 2010. There has been a 15% increase in the number of training places and of course, through our reforms which he just mentioned, we are taking the cap off the amount of training places that can be offered.
My Lords, can the Minister tell us how the apprenticeship scheme is going, because a lot of damage was done when Tony Blair said that you had to have five A-levels to become a nurse? We hope that this apprenticeship scheme will counteract that.
I am grateful to my noble friend for mentioning the nursing degree apprenticeship, which was announced at the end of last year. The first nurses should be in place from September of this year. Once established, this apprenticeship route could allow up to 1,000 additional nurses to join the NHS every year.
The noble Baroness is quite right to raise the issue of retaining nurses and bringing them back into the profession. That is why, last year, to aid retention, there was an average 3% increase in pay for nurses. Health Education England has also introduced a return to practice campaign, which has brought 900 nurses back to the front line in the last three years.
My Lords, we hear constantly that better integration between health and social care is the way to solve the problems that both services are currently experiencing. What progress is being made with training nurses who can work across both health and community services?
The noble Baroness makes a very good point. In fact, the workforce figures out today, which show the increases I have described, also show an increase in the number of nurses with general qualifications who are capable of working across multiple specialties and different sectors.
My Lords, mindful of the fact that we have taken the decision to leave the European Union and realising that many of our nurses come from overseas, and more recently from Europe, surely the time to start increasing nursing numbers is now, to make sure that we deal with any shortfall that may come after 2020.
My noble friend makes an excellent point. Currently, around 7% of nurses are EU nationals. There has not been a drop-off in the number of EU nationals joining the NHS workforce since the referendum; nevertheless, it is clearly sensible to reduce our reliance on overseas nurses each year. We are doing that through additional training places and through retention and return to work schemes.
I thank the noble Baroness for making that point. The issue of retirement ages has come up previously in Questions, and I had a look at the profiling of nursing. It similar to the profiling of other healthcare professions and other public sector professions, so there is a weighting towards older age groups, but it is not an acute problem particular to nursing. The noble Baroness is quite right that there have been reductions in the number of district nurses, but there have also been increases in other kinds of nurses, particularly health visitors offering community services. There is some overlap in the kind of services they provide.
The Minister tried to answer my question in terms of percentages, but it would be nice to have the absolute number of members of the nursing profession currently in the NHS who are citizens of other EU countries. What measures are the Government taking to reassure these nurses that their contribution is strongly valued and that we want them to remain doing the excellent job they are now doing for the health of this country?
In answer to the noble Lord’s first question, I think the figure is 22,227 EU nationals, so I hope that satisfies him on that point. Of course, they do a fantastic job, as do all NHS and care staff, and they deserve the highest praise. The noble Lord will also know that we are keen to reassure them of their status as part of the EU negotiations, but, of necessity, that has to be a reciprocal arrangement.
I thank my noble friend for that question. We should be looking at attrition rates in training and in the profession itself, and I would certainly be happy to work with him on that. I know he is particularly anxious about the turnover of nurses within certain training settings.
Girl Effect: DfID Funding
My Lords, the International Development Secretary decided to end the partnership with Girl Effect following a review of the programme. Empowering women and girls around the world remains a priority, but she judged that there are more effective ways to invest UK aid and to deliver even better results for the world’s poorest as well as value for taxpayers’ money.
My Lords, I thank the Minister for his reply. Popular culture is used to tackle difficult issues because it works. For example, many in your Lordships’ House will be familiar with “The Archers”. The storyline of domestic abuse endured by Helen Archer resulted in a 20% increase in calls to the domestic abuse helpline. The very popular Ethiopian girl group Yegna—dubbed the Ethiopian Spice Girls by the Daily Mail—reaches 8.5 million people and helps transform the lives of some of the hardest-to-reach and most disadvantaged girls in the world. Why, when faced by attacks from the Daily Mail, did the Secretary of State withdraw funding from this multi-A-rated DfID project?
The decision was taken, as I mentioned earlier, because it was deemed that there were other things which it would be more effective to spend the money on. There is another programme operating in Ethiopia, End Child Marriage, which focuses more on the rural areas that the Girl Effect programme was not reaching, and was deemed to have more effect because it actually worked directly with the communities concerned. Although we will not continue to fund it, because we will be sending the money elsewhere, we hope that Girl Effect will continue. We acknowledge that it did some good work.
The review which took place was begun before that. We undertake reviews of how taxpayers’ money is being spent to ensure that we get full value for money. That is very important, because if we did not do that, announcements such as that made by the Secretary of State this morning of £200 million in urgent humanitarian aid which will save millions of lives in Somalia and South Sudan would not be possible.
My Lords, I am sure the noble Lord appreciates that the Daily Mail story was a part of a general narrative to undermine the good effect that development can have. It is not just about humanitarian aid but about changing culture and making a secure world. Will he respond to the question I asked before? Will he ask the Prime Minister to put a full page article in the Daily Mail explaining why development creates a more secure and safer world?
In many ways, I am sympathetic to what the noble Lord says. The Secretary of State wrote an op-ed piece this morning about giving that £200 million of British taxpayers’ money to those people in desperate need in South Sudan and Somalia, and it is very difficult to see where that is picked up. It is pointless criticising the media. We have the media we have because we are the people we are, and the truth is that the misspending, or ineffective spending, of potentially £4.5 million in Ethiopia is deemed more important by them than the £10 billion that we spend very wisely in saving lives around the world.
That is of course a very important part of SDG 5, which is specifically on gender balance, and the sustainable development goals do not just apply to other countries but to us as well. That is why we have been undertaking a review, across government, to see how the sustainable development goals are going to be impacted in this country, which is being done jointly with the Cabinet Office. We will be publishing Agenda 2030 very shortly to set out our plans in that area, and we will monitor them through the Office for National Statistics.
My Lords, £200 million for famine in Africa is a welcome start. Will the Minister confirm that it is a start? Will he look at finding further money within our development programme? Will he talk to all the NGOs and get them mobilised? Will he, above all, get in touch with our partners in the European Union and make sure that they bilaterally and collectively get together? This is a major tragedy of famine in Somalia, in South Sudan, in Nigeria and elsewhere. Unless we get some concerted worldwide action, hundreds of thousands—millions—of people will die needlessly. Will he give that the top priority that is absolutely necessary?
I will certainly do that. I absolutely agree with the noble Lord that this is a priority. So far this century, in the first 17 years, one certified famine has actually occurred. We now have one certified today in South Sudan, affecting some 6 million people; we have credible evidence that there will be three further—in Yemen, north-east Nigeria, and Somalia. That is why the help is urgently needed, because as the noble Lord rightly said, we cannot do this alone. We need the international community to come together to tackle this issue and that is exactly the plea which the Prime Minister and the Secretary of State made today.
To return to the initial question, are the Government aware that in many third-world countries, the divide between rural and urban is a false divide? The effectiveness of laws depends on urban women who fight for the rights of all women. Therefore to make a decision that something is not helping rural areas is a false decision.
That is absolutely right—Ethiopia bears that example out. It has a very good law that says that the minimum marriage age is 18, but in many rural areas more than 50% of girls under the age of 14 are being married. We recognise that. Economic development, education and good healthcare and family planning are all part of this. We are helping on all of those fronts.
My Lords, research shows that girls in many developing countries consistently get passed over for, or denied access to, the services they need. Often it is negative, entrenched social norms about a girl’s value that prevent girls accessing services such as immunisations and education. Does the Minister agree with me that cultural programmes like Yegna which aim to empower women and create new social norms are vital to ensure that no woman is left behind?
I strongly agree with the first part of the noble Baroness’s remarks. She is absolutely right. The only way that poverty will be eradicated is with economic growth and economic development. No country can have economic development if it leaves half its people behind. That is why you need education, family planning and economic development. We have been working on all of these. The Secretary of State was in Ethiopia last month, launching a new economic strategy which has women and girls at the very heart of it.
My Lords, the evaluation of the 2013 benefit cap showed that more households are looking for and finding work. Capped households were 41% more likely to enter work than similar uncapped households. The evaluation found that very few capped households moved house, and those who moved generally only moved short distances. Statistics show that people moving into work is the largest single factor in the benefit cap no longer applying.
I thank the Minister for that reply but wonder if he has seen the recent report from the IFS which, in relation to the new cap, identifies that a larger number of smaller properties, both in and out of London, will now be affected; and its assessment that, on the basis of the earlier cap, there is little evidence that it helps move people into work or to smaller accommodation—indeed, I think fewer than 5% of those affected by the cap previously actually went into work. Is the Minister also aware of the report of the Chartered Institute of Housing? It forecasts that the new benefit cap will cut the benefit income of some 116,000 households, including 320,000 children, by up to £115 a week. Is it not time for the Government to come clean and recognise that this is not about changing behaviours, it is all about saving money at the expense of some of the poorest in our society?
My Lords, I totally reject what the noble Lord had to say. As he knows perfectly well, because he will have seen it, our evaluation that appeared in 2014 showed just what I said in my original Answer—they were some 41% more likely to go back into work than similar uncapped households. It also showed that 38% of those capped said they were doing more to find work, one-third were submitting more applications and one-fifth went on to make more interviews. That is why my right honourable friend made the announcement in last year’s Budget of further changes to the benefit cap. In due course we will look for a further evaluation, which I look forward to showing to the noble Lord when it comes through.
My Lords, according to the Government’s own impact assessment nearly a quarter of a million children are affected by the reduced benefit cap, more than two and a half times the number of affected adults. This includes many preschool children in lone-parent families at greater risk of poverty. Given that the prime aim here is to encourage more people into work, will the Minister consider exempting single parents with young children, who would not otherwise be expected to work under the current benefit rules and who rely on familiar social networks and services?
My Lords, I accept one part of the right reverend Prelate’s question: it is valuable for all concerned, particularly children, to live in households where all those who are likely to earn are in full-time employment. It is work that is the benefit to children. I can assure the right reverend Prelate that the number of children living in workless households is now at a record low. We have seen falls there; the number is down by more than 80,000 in the past year and well over half a million since 2010. We need to wait to see the evaluation of our further changes to the benefit cap before we make any further promises of the sort that the right reverend Prelate is seeking from me.
My Lords, the Government made it clear during the passage of the Welfare Reform Act 2012 that the aim of the benefit cap was to achieve positive effects through changed attitudes to welfare. Beyond the employment statistics that we have heard today, are there any other signs of a shift away from a culture of welfare dependency towards a culture of work dependency?
My Lords, I am grateful to my noble friend for highlighting that point, something ignored by noble Lords on the other side. Trying to get away from the culture of welfare dependency into a culture of work dependency is exactly what we are trying to do, and it is what we have achieved. That is why I wanted to highlight to the House—I could repeat it to my noble friend but I do not think that that is necessary—just what the 2014 evaluation showed. We will look for an evaluation of those further changes in due course.
My Lords, the Minister’s undertaking to provide another evaluation subsequent to the 2014 evaluation is welcome, but I have to say to him that no one I have met outside the Government believes the assessment that was published in 2014 so he is going to have to work harder in future to secure the policy success that the Government are looking for. In the course of the next evaluation, will he look carefully at the sustainability of the work that clients achieve, the proportion of the case load that is moving into disability benefits and the proportion of the case load applying successfully for discretionary housing payments? The discretionary housing payment spend for the rest of this Parliament will be £1,000 million.
I am sorry the noble Lord does not believe the evaluation that appeared in 2014. A very good evaluation it was, and it produced some very good figures that I do not think the noble Lord himself could question. I have quoted the figures from that evaluation and I will be able to produce further figures in due course when another evaluation appears. However, it is not just about changing the culture, although that is very important; it is also a question, as I am sure the noble Lord will accept, of fairness. We do not think it is right that those in benefit should be receiving incomes higher than those on average earnings.
My Lords, the lower benefit cap is just, of course, one of the many measures that the Government are using to reduce access to welfare benefits, as the Minister indicated in an earlier answer. Another is the repeated assessment of disabled people. Does the Minister believe that it is reasonable to reassess repeatedly people with brain injuries, for example, and life-long disabilities that will prevent them ever getting back to work? Will he assure the House that he will give his personal attention to this matter, with a view to bringing to an end this cruel procedure?
My Lords, private providers are obliged to maintain sufficient staff to ensure that prisoners and staff are safe and secure. We monitor performance against measures specified in the contract. High application volumes are generally received for prison officer and other vacancies in prisons outside London and the south-east, most of which have relatively low levels of staff turnover.
My Lords, there are prisons outside the south-east that have acute staffing difficulties, such as Manchester, Liverpool and Leeds, where the problems have been exacerbated for some years by staff being sent on detached duty to southern jails. Will the Minister assure the House that the Government are addressing that issue? What assessment have the Government made of the impact of the new terms being offered to London and the south on recruitment by private prisons such as Birmingham and Northumberland, where already the low numbers of staff have led to serious, indeed shocking, incidents?
As the noble Lord acknowledged, we have taken steps to improve the rate of recruitment in the south-east, and London in particular, by introducing a range of financial incentives. That is because in these areas there is considerable employment competition. That does not apply to the same extent in the north-east and north-west. Indeed, application rates in that part of the country are considerably higher than they are in the other parts of the country. Accordingly, it is not anticipated that these incentives, directed to particular areas where there are difficulties of recruitment, will have an adverse impact elsewhere.
Will the Minister tell the House about the position of recruitment for the new prison, HM Prison Berwyn in Wrexham, north east Wales, which is not a private prison? Will he say how recruitment is progressing and to what extent that is being met by transfers from within the system and by recruitment from outside the system?
As I understand it, recruitment at the new prison is progressing in a satisfactory way and will be done in a staged manner. We will not, of course, suddenly introduce a large number of prisoners into a new prison at one time. I do not understand that there has been any need to recruit from elsewhere within the prison establishment, but I recognise that there are difficulties across the prison establishment, not only with recruitment but with retention of experienced officers. Of course, we are always looking at ways to innovate and deal with that matter. Indeed, the noble Baroness, Lady Walmsley, mentioned the possibility of golden handcuffs—which might be particularly appropriate in the case of prison officers.
My Lords, we will hear from the Labour Benches and then the Liberal Democrats.
I am not in a position to give details on the scope of core skills, but I undertake to write to the noble Baroness setting them out. I understand that there is an initial training period of five weeks—but, again, I will seek to secure confirmation of that and, if I have to correct it, I will again write to her on that point. I will add that, once prison officers are trained, there is a process of mentoring once they begin full-time engagement as a prison officer.
My Lords, in HMP Northumberland, which is run by Sodexo and was exposed recently by “Panorama”, there was a 40% drop in staff from 2010 to 2013, and numbers have continued to fall since Sodexo took over in 2013. What specific requirements does the department impose on contractors in relation to staffing levels and training in private prisons, and do the Government have any plans to make those requirements more rigorous?
The position with regard to private prisons is, as I indicated before, that private providers are contractually obliged to maintain a sufficient level of staff to ensure safety and security within the prison, but particular numbers and ratios are not specified by the Government in those contracts. Those contracts are of course monitored.
Criminal Finances Bill
The Bill was brought from the Commons, read a first time and ordered to be printed.
Digital Economy Bill
Report (1st Day)
1: Clause 1, page 2, leave out lines 4 and 5 and insert—
“(2B) The universal service order must specify that the target for broadband connections and services to be provided before 2020 must have—(a) speeds of 2 gigabits or more;(b) fibre to the premises (FTTP) as a minimum standard;(c) appropriate measures to ensure that internet speed levels are not affected by high contention ratios;(d) appropriate measures to ensure service providers run low latency networks.(2BA) The universal service order must specify as soon as reasonably practicable that, by 2020, the following will be available in every household in the United Kingdom—(a) download speeds of 30 megabits per second;(b) upload speeds of 6 megabits per second;(c) fast response times;(d) committed information rates of 10 megabits per second;(e) an unlimited usage cap.(2BB) In meeting the obligations set out in subsection (1), internet service providers have a duty to ensure that their networks offer at least the minimum standards specified in subsection (2BA) to every household in areas of low population density, before deploying their networks in urban areas.(2BC) The Secretary of State must ensure that—(a) the premises of small and medium-sized enterprises are prioritised in the roll-out of the universal service broadband obligation;(b) rollout of universal service broadband obligations is delivered on a fair and competitive basis.(2BD) The universal service order shall, in particular, say that mobile network coverage must be provided to the whole of the United Kingdom.”
My Lords, I am pleased to move Amendment 1 in my name and that of my noble friend Lord Stevenson of Balmacara and the noble Lords, Lord Fox and Lord Clement-Jones. I thank Ofcom for its helpful advice and clear and comprehensive responses to our questions, as well as the excellent documents it has published on the matter. I also thank the Minister for his willingness to listen. I hope he appreciates that we have also listened carefully. We have not moved amendments that, while touching on important aspects of broadband policy and its delivery, are not appropriate for the Bill.
These amendments are about making the universal service obligation meet the Government’s objectives and should rightly appear on the face of the Bill. We provide for further definition to be placed as was originally planned in regulations after this Bill, but they provide the correct framework to set them out properly. Placing these limited areas on the Bill ensures that the universal service obligation provides an operable legislative framework and mixes the right amount of direction, constraint and enabling. In short, these amendments set a floor for the USO; they create the means to ensure that progress can be properly monitored and reported, and they provide an aspiration to ensure that the universal service obligation helps to set a direction and does not become a limiting factor.
Amendment 1 makes a series of changes to the Bill. It places the universal service obligation for broadband on the face of the Bill and sets the following conditions: a target for broadband connection speeds of 2 gigabits or more; a minimum standard of 30 megabits download speed; that rollout must be rural and SME-focused; a requirement on the Secretary of State to ensure fair competition; and a universal service obligation for mobile coverage. In proposing the introduction of proposed new subsection (2BA) we ensure an explicit commitment to the initial, universal service obligation download speed of 30 megabits.
The case for this is made most strongly in Ofcom’s technical advice to the Government on the broadband universal service. Its evaluation of three options is carefully written but it essentially puts the Government in a tough spot. It is clear that the only option that meets all the requirements is scenario 3, with download speeds of 30 megabits and upload speeds of 6 megabits, and other aspects which are all in the amendment. But given that it will remain a question of cost it leaves the Government to introduce that constraint. However, here is where the report is most valuable. Detailed work by Ofcom and its consultants suggests that the worst option, scenario 1, will cost £1.1 billion; scenario 2 —which is also 10 megabits, with a couple of frills—will cost £1.6 billion; and scenario 3 will cost £2 billion. Crucially, the costs per household resulting from the economies of scale provided by option 3—the option which provides for 30 megabits download speed and 6 megabits upload speed—move down from scenario 1 and are almost the same as scenario 2. The economic case for an additional £800 million is extraordinarily well justified.
It is also clear that in defining what decent broadband is, the report indicates that 10 megabits will not be sufficient. It argues that this may be sufficient today, but not by the time the USO is proposed to be delivered. Even if it is possible that data usage might not require any more—a point that it says is unlikely, even when the technology gains in compression and transmission techniques—other issues such as contention rates and latency would render 10 megabits unfit for usage in a very short time. The best the report can muster in defence of a 10 megabits download speed is that if it were adopted it would have to be reviewed almost immediately. The case is compelling and it is economically justified—I look forward to the Minister’s agreement on this.
Proposed new subsection (2BB) suggests that the rollout prioritises that the universal service obligation needs to be met in areas of low population density before providers can deploy their networks in urban areas. This ensures that the economic models encompass the entire economics of a rollout rather than cherry picking the most profitable parts, which inherently leads to the outlying parts becoming uneconomic and uncommercial. This also ensures that the government funding is most efficiently employed in meeting the right outcome. During Committee I outlined the well-known German example of how to tender on an outside-in basis in relation to the mobile market, and how companies which said that it was uneconomic here were able to produce and deliver commercial models in Germany. It is not therefore a surprise that this model is used more widely now as a template to modify, and it would improve the universal service obligation for us to do so as well.
Proposed new subsection (2BC) places a duty on the Secretary of State to ensure that the market is sufficiently structured to benefit from all the advantages gained by competition, and to make sure that there is some focus in ensuring that the needs of SMEs are properly addressed. It is clear that while they are demand-led, without some explicit focus, their needs will not be adequately addressed.
Proposed new subsection (2BD) introduces mobile network coverage into the umbrella of the universal service obligation. This reflects the current patterns of consumer and citizen behaviour, and the increasing use of mobiles as the growing means—particularly in younger demographics—of accessing all sorts of digital and other services. Ensuring that social exclusion is properly met requires embracing mobile requirement, and this can be easily met by addressing the 5G tendering through the German process, or even limited forms of roaming.
Proposed new subsection (2B) in our amendment is the one area where we have tried to help provide a degree of direction and ambition to ensure that the architecture of the USO is not constrained but is entirely consistent with the Government’s productivity plan, the industrial strategy and the national infrastructure plan. The argument that the USO is not the place for this is holed beneath the waterline. Without some ambition the USO itself becomes a constraint on all these important challenges.
While the Government have introduced some measures to try to move policy along, and some have been very interesting and innovative, the very introduction of the universal service obligation is an acknowledgement that they have not, and will not, work. Without the elements in this amendment, the Bill will add to that list of tinkering without success. I beg to move.
My Lords, I associate myself with, and support, Amendment 1. The noble Lord, Lord Mendelsohn, covered it comprehensively and I do not want to go over the same territory.
In his opening speech in Committee, the Minister correctly hung his hat on delivering world-class digital connectivity. We can all subscribe to that. There was no doubting the mood of noble Lords in Committee, and certainly no doubting the mood of the country given that we are some distance from being world class in that regard. The objective of this amendment is to help move us along that road. At the time, the Minister associated the Government with the gigabit objective of the noble Lord, Lord Mendelsohn, while firmly ruling it out as a USO objective. The Minister has the notion that we should rely on Ofcom to set the target, that we should rely on a public consultation, and that, eventually, a USO will emerge. In the Minister’s view, this House is not expected to advise Ofcom on where that USO should be set. We disagree with that, because, once the USO is established, it will be trimmed, edited and manipulated. Then, no doubt, the debates will begin among the service deliverers about what exactly the USO means.
We have already seen the length and byzantine nature of the debate that can unfold when Openreach and BT start to discuss matters. We have only to look at the protracted ownership debate that continues unabated. That lengthy discourse will lead only one way; it will trim and pull back from whatever USO Ofcom establishes. For this reason we believe that Ofcom’s hand needs to be firmed up. It needs support and we must strengthen its hand in dealing with what is essentially a monopoly and very experienced public sector supplier. Therefore, this amendment is designed to support Ofcom to take the steps needed on the way to delivering the world-class digital network to which we aspire. That is why we think it should be accepted.
Proposed new subsection (2B) in the amendment contains a medium-term objective which the Minister has endorsed. We need to move towards gigabit connectivity. That will drive increased fibre-to-the-premises connection. Proposed new subsection (2BA) sets a difficult yet achievable goal for 2020 which Ofcom itself has modelled, as the noble Lord, Lord Mendelsohn, set out. It is important to have both those objectives because one can be the enemy of the other unless they are both included in the Bill. We cannot second-guess the country’s future need but we can be certain that it will be more than 10 megabits. We must be in a position to assist Ofcom in establishing a USO that can begin to deliver the needs of this country. It is for that reason that we support Amendment 1.
My Lords, I declare an interest immediately, because in both my household and my neighbour’s household we have had immense problems in securing adequate speeds. I referred at earlier stages to some of these difficulties.
I very much support both Amendments. Amendment 1 states that,
“by 2020, the following will be available in every household”,
and the list includes,
“download speeds of 30 megabits per second”.
This is absolutely necessary, because under the present provision, the providers just are not willing to do that. They are willing to rest their case on the fact that it is too expensive to run the necessary connection to a household, not just in far-flung rural areas but in conurbations and villages. I am within half a mile of the main exchange and within 200 metres of a box. However, because of the way they have laid out the connectivity sequence, we cannot get decent speeds. It is irritating that the excuse can be used that it is too expensive to provide a connection.
I assume that if there was a legislative requirement along the lines laid out in the proposed new subsections in Amendments 1 and 2, that would be overcome. If the Government are not willing to accept these amendments, I would be interested to know what response they would give to people who are facing this difficulty. It is not a technical impossibility, just too expensive. I was on the committee which dealt with the privatisation of telephones, with the late John Golding and others—it took a considerable amount of time to go through—and assurances were then given that of course, the responsibilities that had been on public bodies would be continued. I accept that, to a large extent, BT has done that. However, safeguards are needed, particularly in rural areas, and I would be grateful if the Minister said how he will cover that if he cannot accept these amendments.
My Lords, I fully support these amendments, although they use the term “United Kingdom”. I would like the Minister to say what powers the Scottish Parliament in particular and the other devolved Parliaments have in this matter. BT has a monopoly on laying the cables, but it often has to do it down roads and across private land, particularly if no telephone line already exists. Some 90% of the islands that are a part of the United Kingdom are off Scotland’s shores, and BT has to lay cables right the way across the sea—and at the moment, they are telephone cables, not high-fibre cables. What is the responsibility of the Scottish Parliament and the other devolved Parliaments in all this?
My Lords, I too support these amendments. At each stage of the Bill in your Lordships’ House, I felt terribly frustrated by the Government’s lack of ambition. I said in Committee and on Second Reading that the gigabyte should be king. According to something I read a couple of days ago, in 10 years’ time 50 billion devices will be connected to the internet worldwide. This country will account for some 8% to 10% of that—4 billion or 5 billion devices. We have to have the gigabyte capability in this country to deal with such massive growth. The Government’s response to something so crucial to our nation’s development is meagre, and I hope they and the Minister will reconsider.
My Lords, I thank the noble Lord, Lord Mendelsohn, for his attention and for meeting us. I also thank noble Lords from the Lib Dem Benches. We have had interesting discussions and I think that they have been beneficial on both sides. I will apply that to the rest of the day’s proceedings so that we do not waste time being nice to each other for the rest of the day.
Amendments 1 and 2 seek to include a series of additional specifications on the broadband universal service obligation, all of which were discussed in Committee. Noble Lords, during the course of the Bill and already today, have commented on the Government’s lack of ambition. Let me say straightaway that the Government share the ambition for widespread availability of fibre-to-the-premises connections. More extensive fibre connectivity is crucial to the UK’s future digital economic growth—we agree on that. But the UK’s fibre market is still at an early stage of development. The Government want to encourage the market to do more to deliver fibre as widely as possible and we are already taking steps to drive FTTP deployment. In the Autumn Statement we announced more than £1 billion to support digital infrastructure, targeted at supporting the rollout of full-fibre connections and future 5G communications. Where we differ crucially is that we believe that it would not be appropriate for the universal service order to include a target for FTTP connections. Let me be absolutely clear why this would be a mistake.
I remind noble Lords that the regulatory regime for electronic communications is shaped by four European directives, adopted in 2002 and implemented in this country through the Communications Act 2003. Amendments 1 and 2, if they are to achieve what the noble Lord, Lord Mendelsohn, and others are seeking, must be consistent with this legal framework: in particular, the universal service directive. I struggle to see how a target for a 2 gigabits per second USO could possibly be compliant with EU law. First, the purpose of universal service requirements in the EU directive is not to force the development of a nascent market, such as the UK’s fibre market, but to ensure that a baseline of services is made available to all users where market forces do not deliver this. The USO is a safety net to prevent social and economic exclusion, not a statement of ambition: we are setting the minimum, not the maximum. This amendment is upside down, placing a ceiling on ambition rather than acting as a safeguard for those less well served by communications providers.
Secondly, the EU directive requires us to consider cost. Universal fibre to everyone’s door will be expensive as FTTP coverage is currently low. According to Ofcom’s latest Connected Nations report, only approximately 1.7% of UK premises have access to FTTP services. So clearly it would be very expensive to address this in the short term.
The recitals to the universal service directive indicate that any change in the scope of universal service,
“should be subject to the twin test of services that become available to a substantial majority of the population, with a consequent risk of social exclusion for those that cannot afford them”.
I have already explained that fibre to the premises is available to less than 2% of UK premises. This is far from a technology available to a “substantial majority” of the population. Furthermore, under the directive, connections provided under a broadband USO should be capable of supporting,
“data communications, at data rates that are sufficient to permit functional Internet access, taking into account prevailing technologies used by the majority of subscribers and technological feasibility”.
It may perhaps be argued that a sensible level of universal service for today should nevertheless be delivered using only fibre to the premises so as to be future- proof. But again, this suggestion would not be compliant with EU law. The directive requires that universal service be implemented using,
“the most efficient and appropriate approach”,
which is also proportionate and minimises market distortions. To require fibre-to-the-premises connections capable of 2 gigabits per second would clearly not be the most efficient way of delivering for today’s needs and would in fact cost many billions of pounds.
Both Amendments 1 and 2 would require the USO to specify that a superfast broadband connection will be available in every house by 2020. I am afraid that I cannot make such a commitment now, and it would not be right to do so. All the scenarios set out in Ofcom’s report are currently being given careful consideration. Once that work is completed there will be a public consultation on the design of the USO. These amendments would remove the need to consult by setting the USO requirements in stone. I have not been in this House very long but I cannot remember many times when the Opposition asked the Government not to have a consultation when they had already offered to have one.
Whatever appropriate minimum speed is set, the Government are clear that this will need to be increased over time to ensure that it keeps pace with consumers’ evolving needs. Once introduced, it will fall to Ofcom to monitor the broadband USO on an ongoing basis to ensure that it is effective in meeting the needs of customers.
Amendment 1 goes on to require the designated universal service provider to roll out in rural areas of low population density before deploying its network in urban areas. I do not think that would be appropriate. I know that there are rural consumers struggling with slow broadband speeds, as the noble Lord, Lord Wigley, mentioned—as have I in previous debates—but their needs are not dissimilar from those of consumers in urban areas who also have slow broadband. For urban customers on exchange-only lines, for example, the costs and civil engineering challenges can be significant, which is why they have not been included in commercial rollouts. As such, they should be treated the same. The USO is being introduced specifically to target those areas where commercial providers have not provided, and are unlikely to provide, connectivity, be they in rural or urban areas. Do we really think that social exclusion in rural areas is more important than social exclusion in urban areas? Surely we should tackle both.
Amendment 1 also requires SMEs to be prioritised in the rollout of the broadband USO. We agree that SMEs are crucial to the UK’s economy, and many SMEs are benefiting from the continuing rollout of the Government’s superfast broadband programme. Some local authorities have introduced SME voucher schemes and today Herefordshire, Gloucestershire, Shropshire and the Borough of Telford and Wrekin have launched a business broadband voucher scheme with grants of up to £25,000 for the installation of superfast broadband. Businesses with speeds of less than two megabits per second can also apply for a grant under the better broadband subsidy scheme, which will provide a connection of at least 10 megabits per second.
It is in areas not served by commercial or publicly funded programmes that the broadband USO will have an important role—particularly rural areas. The extent to which SME connectivity can be prioritised under the USO will, however, depend on two things: the impact it has on the cost of delivering the USO; and whether SMEs request a connection.
Amendment 1 further requires the rollout of the broadband USO to be delivered on a fair and competitive basis. The requirements of the universal service directive dictate that the process for designating a universal service provider should be fair and open and that no one is excluded. The requirements of the directive are reflected in Section 66 of the Communications Act. We therefore do not believe that this part of the amendment is needed.
Finally, Amendment 1 specifies a USO for mobile. The universal service directive currently provides the regulatory framework for a broadband USO and, whilst it is dependent on the design of a broadband USO, there is scope for the USO connection to be provided using mobile technology such as 4G. But the directive only covers connections at fixed locations; it does not include mobile coverage. The EU Commission has regularly reviewed the scope of the USO and whether it should be extended to include mobile. The conclusion of the last review under the current framework was that the competitive provision of mobile communications had resulted in consumers having widespread, affordable access to these services so that there was no risk of social exclusion, and therefore no need for it to be included in the USO.
In summary, the amendment transgresses the EU directive, creating a law that would collapse on the first legal challenge; it creates an inflexible regulation, placing inappropriate detailed specifications on the face of the Bill; it may well be unachievable; and it implies that deprivation of an essential utility in rural areas is more important than in urban areas.
Many of us are frustrated by the difficulties faced by people with inadequate connectivity. For many, this debate is coloured by their own experience. The Bill is carefully designed to tackle these long-running issues, building a safety net so that no one is left behind.
I will finish by suggesting to noble Lords that if we pass this amendment today, while we may go home satisfied that we have publicly stated our ambition to do better, we may also set back progress. We will delay the implementation of the USO that will bring change, and we will feed frustrations and fuel anger among the final 5%. With that, I hope that noble Lords will not press their amendments.
My Lords, I thank the Minister for this comments at the beginning, although I thought we were nice to each other all the time. I also thank him because I am now slightly encouraged by the strength of our position, due to his retreat towards the idea that it is in some way a contravention of EU law. He has his lawyers, we have ours, and commercial organisations also have lawyers who tend to agree with us that this is an obstacle and that EU directives are against it. This may not be an argument for long, but for now I am encouraged by that being the Minister’s defence.
I thank the noble Lord, Lord Fox, for an excellent speech. I also thank the noble Lord, Lord Mitchell, for his very good point about the number of devices, the consequences of the internet of things and other matters and how they will affect what we are establishing as the USO. I was told a curious fact: there are now more phones in the world than toothbrushes. We are now looking at a world where the importance of providing the right level of capacity is essential.
I thank the Minister for his reply, but I find I am in rather an invidious position. I feel as though I am arguing the Government’s case in the face of determined opposition. The core rationale for the construction of the amendments is based on the Government’s own Broadband Delivery Programme: Delivery Model as published in September 2011, outlining their policy and goals for their operating arm, Broadband Delivery UK. I shall quote one sentence from the report. In relation to what has to be delivered for the customer by 2021, it says:
“Everyone able to access 30Mbps capabilities. 50% to access 100Mbps capability”.
So with one addition—the establishment of a gigabit target, which was not so predictable at that time—the amendments seek no more than the Government’s own targets, which they themselves have given up on. It seems that they are caught by the failures of the market structure and are unable to address those adequately, being somewhat constrained by the pension fund deficit. The amendments are not outlandish; they are a conservative defence of the Government’s goals. They are about making a policy fit for the future, rather than one fit for the past.
The Minister seems to make the case for the future but is not prepared to deal with the consequences by addressing and amending the USO on the face of the Bill. The USO is being established to address the problems of social and economic exclusion, particularly for those in rural areas and those who are vulnerable. The USO’s construction has necessarily been shaped with the imperfections of a market structure that has succeeded in getting us on a journey but is inadequate to address current or future technology. It is consistent with the Government’s desire to propose reasonable rather than wholesale change.
The amendments do not drive market change; they follow it. They would make sure that the current list of proposals did not limit the capacity of the market to constrain predictable and certain changes. They recognise the problem that the UK has with low levels of fibre but would not restrict the market’s capacity to limit competition and distort choice so as to maintain such a low level. At the minimum we would have hoped that the Minister would be forthcoming on the issue of speed.
In view of the certain negative consequences of the Bill as currently drafted, I wish to test the opinion of the House.
Amendment 2 not moved.
3: Clause 1, page 2, line 5, at end insert—
“(2BA) If the universal service order says that broadband connections and services must be provided to any extent, it must require the provision of a social tariff for broadband services which has the aim of preventing digital exclusion.”
My Lords, on this side of the House we are concerned about the whole issue of affordability. With the universal service obligation, we need to recognise that many people who would very much benefit from having access to broadband will not be able to afford it. I am speaking about low-income communities and communities with interests, such as people on pensions, or those who have a need to use broadband more so than others, such as the disabled. It is important that some form of social tariff is introduced. In Committee, the noble Baroness gave a very encouraging response to this amendment. I think she referred then to a report from Ofcom that recommended the introduction of a social tariff. In moving the amendment again, I would like some assurance that this is a concrete proposal rather than an aspiration. I hope the noble Baroness will be able to assure me of that and I beg to move.
I shall speak to Amendment 4. When an amendment along similar lines was debated in Committee, the Minister rightly noted that we were in danger of mixing our drinks with some USO and some non-USO measures clustered together. That is why I accepted the Minister’s advice and have separated the USO and left it in the Ofcom section of the Bill. This amendment covers the non-Ofcom measures. I am sure that as I have taken the Minister’s advice to frame the amendment in this way, he will be persuaded that there is something to be gained from the transparency that these measures will give and will back up his relatively supportive comments about the importance of driving public acceptance and helping people to understand what they can get from broadband by measuring those efforts and reporting them to Parliament. On that basis, I am sure the Minister will be only too willing to include this amendment in the Bill.
My Lords, that was encouragingly short. I thank noble Lords for their amendments. The noble Baroness, Lady Janke, proposed that any broadband USO must require the provision of a social tariff for broadband services. As my noble friend Lady Buscombe noted in the debate in Committee, when Ofcom was commissioned to provide advice to the Government on the design of the broadband USO, we specifically asked it to consider a social tariff to ensure that the USO is affordable for all.
The Government are presently considering Ofcom’s technical analysis, which was published on 16 December, and will publish a consultation on the detailed design of the USO. In relation to a social tariff, Ofcom noted that a social tariff might be appropriate but did not provide any indication of the costs involved and said that more work is needed. I confirm to the noble Baroness that we are sympathetic to the need for a social tariff, but it is absolutely right that further work is done first. I will briefly explain why.
First, we have a highly competitive broadband sector that delivers low prices. Bargain-basement broadband is readily available in the UK, and many people on lower incomes do not use fixed lines for their connectivity needs, preferring to rely on mobile. The ONS reports that more people use mobile phones to access the internet than any other medium.
Secondly, social tariffs work by cross-subsidy. The majority of users who pay the standard rate subsidise the beneficiaries. It would be irresponsible to force these costs on to consumers before we knew how much they are.
Thirdly, if we want a social tariff, do we want to use the USO to deliver it? That would impose the cost on the universal service provider. It might be better, for example, that the social tariff be required from all providers. I would therefore be concerned if we included a specific requirement for this in primary legislation now. However, I hope the noble Baroness will be happy with the assurance that I have given on this. We do not want it to be a source of unnecessary risk at the moment.
I turn to Amendment 4 and the noble Lord’s encouraging words trying to lead me in the direction he wants. I am afraid that at the moment, for a variety of reasons, we do not think that there is a need for such a reporting requirement. In relation to paragraph (a) of his proposed new clause, as I noted in Committee, it will be crucial to monitor progress in implementing the broadband USO. It is an important consumer measure but the reporting requirements should be decided once the design of the USO has been finalised, and not before. That will be done later.
The matters covered in paragraphs (b) and (c), regarding the percentage of premises connected via fibre to the premises, are already reported annually through Ofcom’s Connected Nations report. Paragraph (d) proposes reporting on measures taken to increase take-up of superfast broadband. This would largely repeat current reporting by Ofcom and the DCMS’s annual report.
Paragraph (f) proposes annual reporting on the number of community schemes set up each year and the level of subsidy required to achieve this, but there is no government-led community broadband programme, so we do not think there is any point in this reporting requirement.
On paragraph (g), we agree that it is important to ensure that consumers know their rights, particularly when it comes to switching. The Bill includes a number of provisions aimed at making it easier for consumers to exercise those rights, from making explicit Ofcom’s powers to set switching conditions and to require payment of automatic compensation, through to easier access to the information needed to make better decisions. The Bill’s measures are testament to the Government’s ambition to ensure that consumers are informed and empowered.
Finally, I would add that the Government will be publishing a consumer Green Paper in the spring, which is almost upon us, which will review where markets may not be working for all. With that explanation, I would be grateful if the noble Baroness could withdraw her amendment.
I thank the Minister for his response. In relation to the findings of the Ofcom report, I note that he mentioned that many people in poorer communities use mobile phones. In fact, that is much more expensive, and very many of them end up running up large bills and in debt, so I hope that much more work will be done on this project. One of the reasons I am keen on this is the whole area of smart data. My own city is a smart city, and the ability to use energy, for example, at competitive rates and the ability to engage communities with smart energy plans and awareness of the usage and cost of energy seem to me to hinge on the whole issue of affordability. I know people in my city who would be very pleased to work with the Minister on this, and I can provide him with their names and the work that has already been done. I look forward to hearing the outcome of further work, and I hope the Minister will inform me about it.
On behalf of my noble friend Lord Fox, I would say that, again, accountability and transparency are important issues, as is how effectively and efficiently this work will be rolled out, and I hope that ways of measuring and assessing that will also be provided in the light of previous performance. Having said that, I beg leave to withdraw Amendment 3.
Amendment 3 withdrawn.
Amendment 4 not moved.
5: After Clause 2, insert the following new Clause—
“Bill limits for mobile phone contracts
(1) A telecommunications service provider supplying a contract relating to a handheld mobile telephone must, at the time of entering into such a contract—(a) allow the end-user the opportunity to place a financial cap on the monthly bill under that contract;(b) allow the end-user to switch (at no extra charge) to another provider, which meets the specified standards or obligation as provided for in section 3, or to deem the contract to have been terminated by a consistent breach of the standards or obligation as provided for in section 3;(c) allow the end-user to switch mobile providers according to rules set out by OFCOM in accordance with the following principles— (i) that switching must be free to the consumer, unless the consumer is aware of and has consented to fair and reasonable restrictions and charges to do so;(ii) that the switching process itself must be quick, and on an agreed date;(iii) that consumers must have access to their consumption or transaction data, and this must be in a format that can be easily reused and they must be able to authorise third parties such as comparison sites to access their data to help them to switch;(iv) that sites and tools providing comparisons to consumers that receive payments from suppliers must make clear where the payments affect the presentation of results; and(v) that there must be an effective process for consumers to receive redress if there are any problems with the service.(2) A telecommunications service provider under subsection (1) must not begin to supply a contracted service to an end-user unless the end-user has either—(a) requested the monthly cap be put in place and agreed the amount of that cap, or(b) decided, with the decision recorded on a durable medium, not to put a monthly cap in place.(3) An end-user may, after the start of the contracted service—(a) contact the service provider to require a cap to be put in place and agree the amount of that cap, or(b) require a cap to be removed, with the requirement recorded on a durable medium.(4) The end-user should bear no cost for the supply of any service above the cap if the provider has—(a) failed to impose a cap agreed under subsection (2)(a) or (3)(a); or(b) removed the cap without the end-user’s express consent, provided on a durable medium as required under subsection (2)(b) or (3)(b).”
My Lords, Amendment 5 is an enhanced version of Amendments 14 and 15 in Committee, which the noble Lord, Lord Stevenson of Balmacara, introduced, but it includes additional principles that I raised and which were contained in the Government’s 2016 paper Switching Principles: Government’s Response and Action Plan. It deals with two issues very close to the interests of consumers: billing and switching. As the noble Lord, Lord Stevenson, said in Committee, mobile phone billing is,
“one of the most complicated areas of domestic expenditure”.—[Official Report, 31/1/17; col. 1145.]
There may be, in particular, some danger of vulnerable customers getting into difficulty and it should be possible for a consumer to set a cap on expenditure on their mobile phone.
As my noble friend Lord Foster pointed out in Committee, most mobile phone contracts are similar to credit card contracts, in that,
“they are a credit agreement, paying retrospectively for services that have been received. Yet with the credit card, of course, a limit is imposed upon you, which is not currently the case with mobile phones”.
He cited evidence from Citizens Advice that,
“in 2014-15 it helped no fewer than 27,000 customers who had problems with mobile phone debts”.—[Official Report, 31/1/17; col. 1147.]
He reminded us that Ofcom alerted us to this problem five years ago and proposed that it could be addressed by mobile service providers offering an opt-in cap to their consumers. The remainder of the amendment would give explicit power to Ofcom to set the gaining provider-led switching rules, which we all want to see, and sets out the principles which the rules must follow—the very principles which the Government themselves have set out.
We would like to see both these aspects enshrined in primary legislation. In her reply to these amendments in Committee, I am afraid that the Minister—the noble Baroness, Lady Buscombe—was not convincing when she talked of providers offering apps, warning text messages and the like to manage usage, the Government’s expectations for providers to manage bill shock, and of course the guidance issued by Ofcom, which I am sure every consumer reads avidly. That is not enough in this day and age. This is not a draconian requirement. This is a voluntary, opt-in capping system that is being proposed.
As regards switching, the Minister said that Ofcom was being given the necessary powers by Clause 2 and had an existing overarching duty to consumers. This is a much more explicit duty. It also ensures that the Government’s own principles are enshrined in a duty to make rules, which the Minister, however, could not assure me were the ones in contemplation by Ofcom. I hope that the Government will welcome this carefully thought-through amendment as being very much in the interests of consumers when mobile phone usage is, if anything, even more important than broadband. I beg to move.
My Lords, I support the amendment and thank the noble Lord, Lord Clement-Jones, for an outstanding summary. In relation to caps, it is important to understand the consequences of bills which cause stress to people in particular circumstances, and why this is another part of ensuring that we have the right social impact in such policies. Mobile phones are not luxury products. Actually, low-income households are more reliant on their mobile phones than other households: they are five times more likely to be mobile- only—that is, no landline or broadband—than the highest earning groups. The major cause of mobile phone debt is unexpectedly high bills which are usually caused by consumers using services not included in their standard monthly tariffs—very frequently with no real conception about how the complexity of the tariff has an impact on their bills. These unanticipated bills can make it harder for consumers to budget, especially if they are on a low income. Unexpected bills can exacerbate a consumer’s debt problems. Citizens Advice reports that 70% of its clients who receive mobile phone debt service also receive advice on other debts. The consequences are significant and only these measures outlined in this amendment will in our view have the impact to address this problem. In other ways, complicated information and other consequences will limit the capacity of people to manage their debts.
I must confess that I think ensuring roaming capacity —not a national roaming programme—for those people in the absence of service in order to increase their ability to access mobile services is a terrific idea. I thought it was a very good idea when I first heard it, so I got one, and it is outstanding. I have cracked many of the problems of very poor mobile service, including in that far-fetched place, which never seems to have decent service, called Hampstead. I now have perfect service—it is an absolutely terrific system.
I think that there is a very strong case for this. We are not talking about a national programme, but it certainly addresses a large part of the problem about coverage. There seems to be no particular issue: it gives us good customer experience, it is not particularly difficult to roll out, and that is why it is sensible and worth while for it to be in this Bill. Now that I have another phone, I of course endorse the provisions on switching, but I would make this point about switching and compensation. These strengthen and make explicit the powers of Ofcom to require certain changes in relation to compensation to make sure that companies automatically compensate customers who experience poor levels of service. I think there is a very strong consensus, and that Ofcom will come to the conclusion that it is vital that consumers are financially compensated. An automatic compensation scheme will act as an incentive to telecoms companies to improve their performance.
My Lords, I am sorry that I was unable to satisfy noble Lords at Committee, so let me try again. Amendment 5 raises important issues for many customers, and we really do appreciate consumer concerns. Following previous debates that we have had on these matters, my officials have spoken with mobile network operators to check progress in this area.
Currently, providers offer consumers various ways to manage their usage, including the use of bill caps. So I say to the noble Lord, Lord Clement-Jones, that it is possible already for a consumer to put a cap on his or her expenditure. Tesco Mobile, for example, already provides capped contracts for the benefit of its customers. This includes a safety buffer which can be set to suit preference. Three allows consumers to block calls that go over their monthly allowance and calls that may be not be included as part of their allowance. Vodafone allows a cap to be set up through an app. Additionally, EE, Virgin Media and O2 offer the facility of notifying customers through warning text message alerts when approaching the limit of their allowances.
The Government expect providers to continue to take steps to minimise bill shock and ensure that their customers are adequately equipped to manage their mobile phone usage. We will underline this further in the forthcoming consumer Green Paper, which will be published in April, a Green Paper that my noble friend Lord Ashton has referenced today. This is an issue that needs careful thought, which is why the Government believe it is only right that we do so in a consultative manner. We need to consider and mitigate unintended consequences in that process.
Universal bill caps do not exist for other utility services for good reason—the essential nature of them. Mobile phone services are indeed an essential service for many; I agree with the noble Lord, Lord Mendelsohn, that they are not a luxury. We need to ensure that the outcome from this debate does not risk putting people in vulnerable situations, whether that is leaving them unable to make a vital call when they break down at the side of the road or having to contact a friend or relative in their hour of need.
I know a number of elderly people living on their own who rely wholly and completely on their ability to use their mobile phone if they are afraid or concerned or have a fall. They may have forgotten to pay their bills and so on. Suppose they did not have that opportunity to contact someone in an emergency. They would be put in a difficult and frightening situation. I know there is a feeling that, “Well, the bill cap is there, but people could still contact the emergency services”. However, we already have an enormous burden on our emergency services, and we fear that this would increase that burden. So would this really be in the interests of consumers, as suggested by the noble Lord, Lord Clement-Jones?
I agree with noble Lords that mobile providers need to take responsibility for looking after their customers. The Government have previously negotiated a voluntary agreement with providers that means there is already a £100 liability cap to cover lost and stolen mobile phone handsets, provided that they are reported as lost or stolen within 24 hours. There was good reason not to put that agreement in primary legislation: it would have been too prescriptive and offered no flexibility as technologies progress. That is an issue that we keep returning to: do we want to be prescriptive in the Bill when we are talking about the digital economy, when we know the technology is constantly changing? So we have considerable concerns with putting such a prescriptive amendment into primary legislation.
It is worth highlighting that Ofcom, as regulator, has a duty to protect the interests of the end-user in the telecom markets. It would therefore seem improper to progress the amendment without due consideration to what the role of government and Ofcom would be regarding enforcement. There is no point putting this in the Bill if there is no practical enforcement. This is yet another reason why the Green Paper will allow us to reach a well thought-out solution to address the concerns that noble Lords have rightly raised.
The switching principles that noble Lords have proposed putting on to the statute book are broadly those on which the Government consulted in an October 2015 call for evidence. Following the end of that consultation, the Government published a response in May 2016, including revised principles based on responses received to the call for evidence. The Government’s response also confirmed our commitment to work with Ofcom to ensure that consumers could switch their telecom services, by legislating through the Digital Economy Bill. However, the Bill does not mandate the switching principles, as this would go against the spirit of them as principles and would not take account of the different characteristics of different sectors and consumer needs. We know that it would risk creating a power that could prove to be, again, too prescriptive for the future needs of consumers as technologies continue to develop.
I hope that noble Lords will accept that we all share the common aim of making it easier for consumers to switch providers of services. Ofcom already has powers to require specific switching processes to be put in place, as it has done on the Openreach network. It is disappointing that we do not yet have better switching processes in place. There is no doubt that the reason for the delays is that the industry is dominated by incumbent businesses that fear losing customers and frustrate the process. This Bill, however, is designed specifically to address this problem. We are giving teeth to the regulator in two ways: first, removing any doubt that Ofcom has the powers; and, secondly, reforming the appeals system to restore fairness and to accelerate the implementation of regulatory decisions.
I also point out to noble Lords that the Government are taking action elsewhere in the Bill to address issues raised in the amendment. Clause 3 makes explicit Ofcom’s powers to put in place automatic compensation rules and Clause 79 is intended to increase consumer access to data and information that will facilitate easier and more accurate comparisons. Therefore, the proposed amendment risks duplicating what the Government are pursuing in other clauses of this Bill.
The Government’s role is to identify and address barriers to consumer participation in the market, and in this instance we have concluded that the most effective way to facilitate easier switching is to work with Ofcom to strengthen the regulatory landscape for the benefit of the consumer through Clause 2 of the Digital Economy Bill. Ofcom has conducted consultations into mobile and cross-platform switching, and is due to announce next steps for mobile in the spring—which is, of course, not too far away—and for cross- platform switching later in the year. With that further explanation, I hope that the noble Lord will agree to withdraw his amendment.
My Lords, I thank the Minister for that response. It was very interesting that we had the full range of ministerial responses: the unintended consequences; the burden on the emergency services; the “too prescriptive” argument; “we are working with Ofcom and getting this very carefully right”; and the “we cannot enshrine principles because they might go against the spirit of the principles” argument. I thought that was a very interesting one.
The Bill is designed to deal with frustrated customers, and, of course, there is a risk of duplication, as the Minister says—which is an interesting one—despite the fact that we are being too prescriptive. I am not sure that I sense the total logic behind the Minister’s response. A number of different barriers have been raised, but I cannot really see great merit in the response in that event.
As regards capping, this is a voluntary system. Raising the question as to whether people are going to put a burden on the emergency services seems to me extraordinary. There are people with pay-as-you-go SIM cards who are in the same position. What we are asking for is for people to be put on the same footing, so that there is a limit to which they are subject, but a voluntary one that they ask to be imposed so they can have better control over their own finances. That seems an eminently sensible and not overly prescriptive measure that we would be asking Ofcom to ensure service providers have in place.
As for switching, I remind the Minister that these are the Government’s own principles. I cannot see how it goes against the principles to include them in the Bill. That is tautologous, and certainly not an attractive argument against including switching rights.
Consumers have been waiting for switching ability for mobile phones for a very long time. I have been corresponding with Ministers for a long time on the subject. I am delighted that we are seeing the beginning of movement, but telling us to wait for an Ofcom paper on next steps for mobile that will be the beginning of a brave new world when in fact, we could be amending the Bill to put duties on Ofcom straightaway, is not very attractive. I want to test the opinion of the House.
Schedule 1: The electronic communications code
6: Schedule 1, page 107, line 41, at end insert—
“Code rights and land registration
13A_ Where an enactment requires interests, charges or other obligations affecting land to be registered, the provisions of this code about who is bound by a code right have effect whether or not that right is registered.”
My Lords, the Committee debates afforded the opportunity to cover many areas of the Electronic Communications Code in detail and I and my officials have reflected further on the points raised. The government amendments tabled following this are intended to provide greater clarity and make it easier for the code to be applied in practice.
Amendment 6 concerns land registration. During the debate, the noble Lord, Lord Foster, drew our attention to the relationship between the code rights and land registration rules and questioned whether the revised code provided adequate clarity on this. Having revisited this area of the revised code as a result of this, and taking into account his helpful comments, we have now tabled Amendment 6. This amendment makes it clear that the code rights will bind site providers whether they are registered as part of an agreement—for example, a lease—with the Land Registry or not. This will ensure certainty for operators and landowners and support continuity of service for consumers.
Amendments 8 to 12 are about valuation. The noble Lord, Lord Grantchester, spoke in Committee of his concerns, and the concerns of stakeholders, that paragraph 23 of the revised code was not clear enough. Paragraph 23 sets out the basis on which the consideration for an agreement to confer code rights is to be assessed. I take this opportunity to thank the noble Lord, Lord Grantchester, for taking the time to meet me and discuss these comments further, and for the effort he has made to get to grips with this complex area. I also acknowledge the contributions made by the Royal Institution of Chartered Surveyors and the Central Association of Agricultural Valuers, which have provided invaluable assistance to officials in developing amendments that will address these concerns.
The Government are clear that landowners should be paid appropriately for allowing code operators to use their land. That is why the revised code requires a price to be paid for that use, rather than creating a system where the landowner solely receives compensation. However, the Government are equally clear that the public need for digital communications services is such that landowners, whoever they are, should not be able to extract additional value from the fact that their land is being used specifically for the provision or use of electronic communications networks. Paragraph 23 therefore introduces a “no scheme” basis of valuation which ensures that any such additional value is not taken into account when the value of a code agreement is assessed. The no scheme basis of valuation is central to the aims of these reforms, which are to deliver improved coverage and connectivity for UK consumers by making it easier and cheaper for digital communications providers to roll out their infrastructure. The amendments tabled here do not change the Government’s policy position.
Amendments 8 to 10, to new paragraph 23 in Schedule 1, provide that the market value of an agreement to confer code rights must be assessed on the basis of four clearly expressed assumptions. Their combined effect will ensure that operators do not pay elevated prices for using land to provide infrastructure and deliver electronic communications networks.
Amendments 11 and 12 make corresponding amendments to new paragraph 63 in Schedule 1, which deals with the valuation of Crown tidal land. This group also contains a number of minor technical amendments. Amendment 8 simply updates and corrects a cross-reference. Amendment 13 recognises that there is no property chamber of the First-tier Tribunal in Wales, so that code disputes in Wales can be dealt with only by the Upper Tribunal.
Finally, Amendments 15 and 16 are consequential on the devolution of the management functions of the Crown Estate commissioners to the Scottish Ministers under the Scotland Act 1998, as amended by the Scotland Act 2016. I will reply to the amendment in the name of the noble Lord, Lord Grantchester, after he has spoken to it, and beg to move Amendment 6.
My Lords, I thank the Minister and his team, especially Kellie Hurst, for meeting and looking at the difficulties around the communication code. The meetings were indeed very constructive, focusing on the issue of value. I am grateful to the Minister for his introductions to the amendments today and for his kind words.
In Committee, we wondered how far this code got the balance correct between property rights and the public benefit. We all recognised the public interest in accessing modern communication channels at as low a price as possible. The Government finalised their position, after representations from operators, to a further qualified use of market value, which resulted in a clouded understanding that might not have been helpful but for this clearer use of language now proposed. In references to the new code as being on a no-scheme basis, there had been interpretations that this imported a compulsory purchase compensation basis that gave rise to general misapprehensions about the code by parties with a compulsory purchase experience. The code is now clearer that value is based on agreement as reflected by market value, qualified by the public interest in references to a no scheme basis in that the disregard is of the use of the rights for the electronic communications network.
Amendments 6 and 7 are clarifications to new paragraph 13 in Schedule 1, as prompted by the noble Lord, Lord Foster, and technical corrections are to new paragraph 15.
Amendments 8, 9 and 10 to new paragraph 23 are the pertinent amendments, with further clarifications in Amendments 11 and 12 to new paragraph 63, which now makes clear that the core principle remains that the consideration is to be assessed as the market value of agreement conferring the code rights. It is not compensation for loss. That is then further defined in new paragraph 23(2) in Schedule 1 and interpreted and qualified in proposed new sub-paragraph (3A).
As the Minister said, proposed new sub-paragraph (3A), regarding market value, makes four assumptions that clear up the misapprehensions and misunderstandings brought to us and considered in Committee. Assumption 1 recognises that the code right is within the agreement and that everything under it is relevant, save the intended function for a network. Assumption 2 reflects the Government’s policy that the operator’s freedom to assign the agreement and its qualified freedoms to upgrade or share apparatus are to be disregarded. Following these two disregards, assumption 3 affirms that the code right in question is otherwise to be assessed as it is in the real world and not some hypothetical one. Assumption 4 follows the Law Commission’s report and recent government policy in assuming there is more than one suitable site available as a means to exclude perceptions of ransom value brought forward by operators, even though the definition and interpretation of market value excludes ransom value.
Amendments 11 and 12 translate what I said above to new paragraph 63 in Schedule 1 concerning Crown land, and Amendment 13 is a technical correction of new paragraph 94. We will all be grateful that there has been a lot of proofreading and for Amendments 15 and 16 regarding the transfer of duties to the Scottish Government. We are also very grateful that the Minister listened to the concerns we raised in Committee and, in re-examining the situation, recognised that improvements could be made. We are in agreement with the amendments and, like the Minister, I am grateful to the Royal Institution of Chartered Surveyors and the Central Association of Agricultural Valuers for their technical expertise, which helped to recognise misapprehensions and clarify our drafting. These amendments make a massive improvement.
It could be said that with these improvements there should be fewer disputes and therefore fewer problems concerning the code of practice to be drawn up between operators and site owners. Granted that this may well be the case, and that the Minister said in Committee that the large superstructure of an adjudicator’s office and staffing may be costly, cumbersome and unnecessary, anxieties nevertheless remain. Wide experience in other areas operating under a code of practice is that, where there is a wide disparity between the relative economic strengths of parties involved in an activity, market power tends to lead to abuses against the smaller party with the use of unfair practices and a transfer of business risk. As Ofcom is a regulator with little or no experience or much expertise in this area, Amendment 14 proposes that it appoint an expert independent adjudicator to rule on disputes brought under the code of practice.
It would be an error to assume that the new regime will immediately work without there being a hitch or problem in the operation of the new code. Parties acting under it must recognise that any code of practice has to be abided by and has teeth with which to enforce compliance, and must have confidence that they have recourse should they consider the code to have been breached. I welcome the Minister’s assurance in this respect.
My Lords, I thank the noble Lord, Lord Grantchester, for explaining his amendment, which seeks to introduce a statutory regulation by Ofcom of the code of practice for the Electronic Communications Code and to create a code adjudicator to examine breaches of the code of practice and impose sanctions. The Government understand the need to ensure that the Ofcom code of practice has real impact on industry behaviour. The Electronic Communications Code will modernise the way digital communications are deployed, and it is essential in this new market that the legitimate interests of all parties are respected.
Under paragraph 102 of the revised Electronic Communications Code, Ofcom has a duty to develop and publish a code of practice. The development of this code must be in consultation with key stakeholders, including both industry representatives and landowner interest groups. This ensures that relevant parties have the opportunity to directly influence industry standards of best practice.
We also need to consider in the context of the Electronic Communications Code the role of the courts as the independent arbiter of code disputes. The legal framework underpins consensual agreements. Code rights cannot be exercised unless they are agreed with the site provider or imposed by the courts. This places the court in the position of adjudicator of code disputes. In arriving at their decisions the courts will of course consider the conduct of parties, both generally and in relation to what has been set out in an industry code of practice. So whether a party has complied with the code of practice will ultimately be subject to the scrutiny of the court.
Taken together these factors will ensure that compliance with the code of practice is always taken into account by parties negotiating agreements and by the court where agreement is not reached. An additional layer of adjudication by a person other than the court is not necessary and would be a costly and burdensome duplication.
In the light of those assurances, I hope the noble Lord will not move his amendment. I thank him for his agreement to the government amendments.
Amendment 6 agreed.
Amendments 7 to 13
7: Schedule 1, page 108, line 33, leave out “90(2)(b)” and insert “90(2)(a)”
8: Schedule 1, page 113, line 31, after “is” insert “, subject to sub-paragraph (3A),”
9: Schedule 1, page 113, line 37, leave out “as if the transaction were” and insert “on the basis that the transaction was”
10: Schedule 1, page 113, line 39, leave out from beginning to end of line 7 on page 114 and insert—
“(3A) The market value must be assessed on these assumptions—(a) that the right that the transaction relates to does not relate to the provision or use of an electronic communications network;(b) that paragraphs 15 and 16 (assignment, and upgrading and sharing) do not apply to the right or any apparatus to which it could apply;(c) that the right in all other respects corresponds to the code right;(d) that there is more than one site which the buyer could use for the purpose for which the buyer seeks the right.”
11: Schedule 1, page 140, line 22, after “is” insert “, subject to sub-paragraph (7A),”
12: Schedule 1, page 140, leave out lines 30 to 40 and insert—
“(7A) The market value must be assessed on these assumptions—(a) that the right that the transaction relates to does not relate to the provision or use of an electronic communications network;(b) that the right in all other respects corresponds to the tidal water right;(c) that there is more than one site which the buyer could use for the purpose for which the buyer seeks the right.”
13: Schedule 1, page 157, line 12, leave out “and Wales”
Amendments 7 to 13 agreed.
Amendment 14 not moved.
Amendments 15 and 16
15: Schedule 1, page 160, line 22, after “Commissioners” insert “or the relevant person”
16: Schedule 1, page 160, line 43, at end insert—
“( ) In sub-paragraph (6)(a) “relevant person”, in relation to land to which section 90B(5) of the Scotland Act 1998 applies, means the person having the management of that land.”
Amendments 15 and 16 agreed.
17: After Clause 8, insert the following new Clause—
“OFCOM power to impose caps upon wireless telegraphy licenses
In Schedule 1 to the Wireless Telegraphy Act 2006, for paragraph 3 (information to be provided in connection with applications) substitute—“3 The grounds on which a licence may be refused by OFCOM include—(a) a failure by the applicant to provide information which OFCOM reasonably require in order to satisfy themselves that the applicant is able to comply with terms, provisions or limitations to which the licence may be made subject, or(b) where the applicant owns more than 30% of the total useable mobile phone spectrum in the UK and OFCOM has a reasonable belief that the award of further licences would have a damaging impact upon competition in a given electronic communications market.3A Where an applicant already owns more than 30% of the total usable mobile phone spectrum in the UK, and OFCOM has a reasonable belief that the holding of these licences may have a damaging impact upon competition in a given electronic communications market, OFCOM may request that the holder of the spectrum must divest a proportion of its spectrum holdings until such a competition issue no longer exists.3B Within six months of the day on which the Digital Economy Act 2017 is passed, OFCOM must commission an evaluation of the distribution of radio spectrum suitable for use for the purpose of mobile telephony and present a report to the Secretary of State.3C The evaluation under subsection (3B) must consider—(a) the impact on competition in the mobile telephony market of the current distribution of spectrum;(b) the impact on consumers, both financial and in terms of coverage;(c) the efficiency of current spectrum usage; and(d) the impact of preventing any one licence holder from owning more than 30% of the total spectrum useable for mobile telephony.3D The Secretary of State must lay the report of the review before each House of Parliament by 1 July 2018.””
My Lords, we return to an issue which we discussed in Committee. At that time my proposed amendment received support from the noble Lord, Lord Fox, for which I was grateful, and I know that he again supports the amendment today. The reason for returning to this is that I sense that we did not prosecute the amendment to the full extent possible at the time—that may have been our fault, but it was quite late in the evening—and, on reflection, there may be an issue here that needs a little more care and concern from Ministers before we leave it.
To go back over the issue, we are talking about the development of spectrum, which is a valuable national resource that—although there always seems to be more of it—is finite. Therefore, as a national resource, it is important that the Government have a firm grasp on how it should be distributed and the prices that should be paid for it. Currently, it is for Ofcom to introduce the necessary regulatory framework, which it does by considering how and on what basis additional spectrum can be made available and on what basis it can be released to operators who wish to use it. That has taken the form of auctions, which have been of varying types over the years—some have been spectacularly successful and some less so—and have been done under different rules.
The nature of the Government’s engagement with this is through Ofcom, and the amendment in no way aims to make a change to that basic structure. However, there is a question about whether we have reached the point where the Government should pay more attention to the issues concerned in this area than they have in the past. Why is this? It is because we have gone from a situation of having reasonably equitable spectrum holdings to having quite a significant imbalance in spectrum. This is partly because of the growth in one or two of the companies concerned. Some of that has been organic, but one of the main reasons has been the allowing of the merger between BT and EE, which has created a group that has been described as a,
“behemoth in the communications market”.
Therefore, we are not now in a situation where there are four companies competing for customers using broadly the same rates and amounts of spectrum; we are talking about only three companies—and possibly a fourth—and the problem is that two of those are very large indeed compared to the others. For example, BT/EE, the combined behemoth, has the largest proportion of all available spectrum, with 39%, while Vodafone has a significant but smaller 27%, Three has just 14% and O2 has only 13% of available mobile spectrum. In responding to this amendment, could the Minister reflect on whether this situation represents an optimum position for the market and, if it does not, whether the powers that he has are appropriate for how it goes forward?
However, it gets more complicated. There are, as one might expect, different sizes of companies and the individual spectrum bands are also of different value. It is therefore important not to look only at the overall figures but to be concerned with how the bandwidths that have the highest capacity—and therefore the best ability to offer innovative services to consumers—are going to be dealt with.
We have the prospect of a further auction this autumn, for which Ofcom is currently consulting on what will be the rules for auctioning off a total of 190 megahertz of high-capacity spectrum in the 2.3 gigahertz and the 3.4 gigahertz bands, which are particularly suited to higher-speed mobile broadband services—a topic that we have just been discussing. Clearly, for the future of UK plc and for the future of businesses and individuals in this country, how the spectrum is made available, how much of it is made available and on which bandwidths will be a crucial issue that we must get a handle on.
In this amendment we are proposing that more attention should be paid than in the past through a cap of, say, 30% on the individual holdings that any one company may have of the usable mobile phone spectrum. This is a figure which has been broadly discussed, and which Ofcom has been using in some of its discussions and debates around this issue, so it would not represent a very different approach.
However, before we go to the auction for this high-value additional spectrum, which will be crucial for 5G and further services going forward, there must be an evaluation carried out by the Government, not by Ofcom. This should look at: the impact on competition in the mobile telephony market of the current distribution of spectrum; the impact on consumers, who are often neglected, both in financial and coverage terms; the efficiency of the current spectrum usage; and the impact of preventing any one licence holder from owning more than 30% as a broad-brush approach. If this review is to be effective, it must be done quickly and brought to the House. I beg to move.
My Lords, I shall be brief. I have in my pocket a mobile phone owned by Virgin Media. Virgin Media uses the EE spectrum. As far as I know, there is no financial connection between Virgin Media and EE, but Virgin uses the EE network. Could the Minister explain that to me?
My Lords, I am fortunate to follow the noble Lord, Lord Stevenson, whose comprehensive support of his amendment means that I need say very little, but I will make a couple of points.
We have talked in various debates on the digital economy about how wireless and broadband are converging, but there is one area where we do not want them to converge. The paroxysms that we are putting ourselves through around the broadband issue are because of how broken that market is, and there is a firm danger that we may be sending the wireless market down the same route. As the noble Lord, Lord Stevenson, pointed out, we had an equitable spectrum distribution, but there is a clear and present danger that we will move even further from that equity, with two dominant players and two very small players. The purpose of this amendment is to work in advance of that, so that we will not subsequently be debating the brokenness of the wireless market as we have been, from time immemorial, in respect of the broadband market.
When this amendment was debated in Committee, the Minister’s response was very much about leaving Ofcom to choose. He hazarded that, from the Government’s point of view,
“it also strikes us as unlikely that Ofcom, having determined appropriate rules …, would immediately nullify the results”.—[Official Report, 31/1/16; col. 1196]
In other words, it is up to Ofcom to decide, and it is not going to decide on this issue. That actually makes this amendment more important, not less. Ofcom has clearly recognised that there is a potential issue here, and it has gone tentatively down the route of limiting access to the 2.3 gigahertz spectrum while completely ignoring the 3.4 gigahertz spectrum. I think that the case has been made by the noble Lord, Lord Stevenson, for us to take account of that in the Bill and, for that reason, I support the amendment.
My Lords, I thank all noble Lords who have spoken on this technical but important subject. The intention behind the amendment is that Ofcom is able to ensure competition in the mobile market. It also proposes that the Government commission and evaluate the current usage and allocation of mobile spectrum.
As has been said, Ofcom already has the power to set appropriate rules for its spectrum licensing, taking due account of competition implications. Ofcom must award licences by processes that are open, objective, transparent and proportionate to what they are intended to achieve and not unduly discriminating against particular persons or a particular description of persons. It is important to remind ourselves that Ofcom has been given the position of regulator of the telecommunications market in the United Kingdom. It already has a duty, when carrying out its radio spectrum functions, to have regard to the desirability of promoting both competition in the provision of electromagnetic communications services and the efficient management of radio spectrum for wireless telegraphy.
Reviewing the state of competition in the mobile market falls clearly within Ofcom’s remit. It considered many of the issues outlined in the proposed new clause in its recent consultation on the forthcoming spectrum auction. This included a proposal to apply a cap of 255 megahertz on the amount of immediately useable spectrum that any one operator can buy. Ofcom believes that the UK mobile market is currently working well for consumers and businesses, with strong competition between mobile network operators. It considers it unlikely that any of the four mobile network operators would cease to be credible as a national supplier of mobile services in the next few years, even if they did not obtain any spectrum in the forthcoming auction. Additionally, more useable mobile spectrum, such as the 700 megahertz band, will be available in the future. The reality is that Ofcom has considered the competition issues in some detail. Not everyone agrees with its conclusions, and Ofcom will take that into account as part of its consideration of the consultation responses. However, it is for Ofcom as the regulator to take a view on these issues, and it has already done so.
The noble Lord, Lord Stevenson, asked whether the current divisions are optimum. Ofcom is obviously more expert than I am, and we think it is for Ofcom to opine on that. As I said, Ofcom proposes to set a cap of 255 megahertz on the immediately useable spectrum. It has explained that, as a result of this proposed cap, BT/EE would not be able to bid for spectrum in the 2.3 gigahertz band. The cap will prevent a worsening of the current extent of asymmetry in immediately useable spectrum. I think that that indicates its views and I am not going to contradict it.
In addition, if the Government felt that it was necessary to direct Ofcom to undertake a competition assessment, they could do so under Section 5 of the Wireless Telegraphy Act, and they did so in 2010 ahead of the 4G auction.
The noble Lord, Lord Maxton, asked how Virgin supply a mobile network through EE. I am informed that the answer is that Virgin sublet part of EE’s spectrum access.
Given that Ofcom is already able to, and does, take into account competition issues, I hope that the noble Lord will agree to withdraw this amendment.
I gather that the right way to respond is to say that I am obliged to the Minister for his response. The issue is really about how fair the market is going to be to the three groups concerned. Obviously, the regulator has got to decide to ensure that there is fairness in relation to the individual companies involved; there has to be respect for the overall pricing and impact that it has. But the missing ingredient is the consumers, and how they will be affected by decisions that are taken. I sometimes wonder whether the regulator has the position of the consumer centrally in its focus when it does so.
I am also minded to reflect on the fact that, with the decision of the House to impose a different form of USO within the Bill, there may be implications for how Ofcom might have to operate in this market, and it may be sensible to give time for that to be reflected on and see how it works out as we move forward a little further.
I notice that the Minister did not answer my question about whether Ministers felt that this was a fair and equable decision, relying instead on advice from Ofcom—but that really was not the point. At the end of the day, there is a tension between what Ministers and government might wish to see and what Ofcom is prepared to agree to in relation to the market, the individual companies and consumers. I note that the Minister was silent on that point.
Finally, in reflecting on the powers that Ofcom currently has to intervene in this area, the Minister was able to point out that Ofcom has the powers to take an interest directly in what is happening in terms of the allocation of spectrum but that the last time it did that was in 2010. Of course, that was a time when it is generally regarded we had a balanced arrangement in relation to the companies.
I think that there is enough in what we are currently doing and decisions that we have previously taken this afternoon for this to be an ongoing discussion. At this stage, I beg leave to withdraw the amendment.
Amendment 17 withdrawn.
Amendment 18 had been withdrawn from the Marshalled List.
19: Before Clause 28, insert the following new Clause—
“Lending of e-books by public libraries
(1) In section 5(2) of the Public Lending Right Act 1979 (interpretation) for the definition of “lent out” substitute—““lent out” means made available to a member of the public for use away from library premises for a limited time (including by being communicated by means of electronic transmission to a place other than library premises) and “loan” and “borrowed” are to be read accordingly;”.(2) Section 40A of the Copyright, Designs and Patents Act 1988 (lending of copies by libraries or archives) is amended as follows.(3) After subsection (1) insert—“(1ZA) Subsection (1) applies to an e-book or an e-audio-book only if— (a) the book has been lawfully acquired by the library, and(b) the lending is in compliance with any purchase or licensing terms to which the book is subject.”(4) In subsection (1A)—(a) for “subsection (1)” substitute “subsections (1) and (1ZA)”;(b) after paragraph (a) insert—“(aa) “e-audio-book” means an audio-book (as defined in paragraph (a)) in a form enabling lending of the book by electronic transmission,”.”
My Lords, Amendment 19 fulfils a manifesto commitment to enhance the public lending right by extending it so that authors of e-books and audiobooks have the right to receive payment from a government fund for the remote lending of these books from public libraries across the UK. The new clause also amends the Copyright, Designs and Patents Act 1988 to enable rights holders to include appropriate terms in respect of e-books and e-audiobooks to reflect the differences between digital and physical books and ensure that e-lending by public libraries mirrors physical lending. This will mean that current protections for authors, publishers and booksellers can be maintained. The Government have been pressed to make this amendment throughout the passage of the Bill in both Houses. I reassure the House that it has always been our intention to deliver on our commitments to authors as soon as possible.
In preparing this amendment, we have had to await the outcome of litigation, and we have discussed the matter in depth with lenders, publishers and authors. I am pleased that the sector supports our approach; it has also reiterated its shared commitment to support a strong book sector, reading and literacy, including by supporting public access to e-books as well as physical books and audiobooks through libraries. I put on record the Government’s thanks to the sector representatives, and I hope that they will continue to work closely with the Government to successfully implement these changes and support the Government’s manifesto commitment to ensure remote access to e-books for public library users. I also thank all noble Lords who have spoken on this issue. I beg to move.
My Lords, I take this opportunity to congratulate the Government on introducing this amendment, for which authors will be very grateful indeed. Credit should go to the groups and associations that have campaigned for this change, including the Society of Authors and the Authors’ Licensing and Collecting Society, which have both campaigned on this issue for some time.
I have just one issue with the wording of the Government’s amendment. The Society of Authors briefing argues that it would be clearer if the words, “for the purpose of library lending” were added to “lawfully acquired” in line 32. This clarification is in the amendment in the name of the noble Lord, Lord Clement-Jones. The phrase “lawfully acquired” hangs there by itself and although it might be argued that it is implied that the acquisition is for library lending, that is not absolutely clear. It should be stressed that all interested parties were in agreement about this and would be happier if this clarification were made. Will the Minister promise to look at this before Third Reading and see if it can be tweaked?
My Lords, I add my voice to the thanks offered to the Minister by the noble Earl, Lord Clancarty, for having now included this amendment, albeit there are some questions to be asked. I hope the Minister will be able to tell us why the wording is rather different from that in the amendment we put down in Committee. Those differences need to be accounted for but this is a good way of delivering on a commitment that the Government made. It is really the final fruits of the Sieghart report and will be strongly welcomed by authors and writers across the country. We all value the public lending right, which makes a small but very significant addition to the income of authors.
My Lords, I too welcome the amendment; it is well worth while, but it is worth making a point I made earlier. Of course, there are now books that are written entirely as e-books and not published at all in printed form; they are published for the Kindle or similar devices. Does this amendment cover these as well? Does it give the author of such books exactly the same rights as the author of a book published in printed form?
Of course, e-books are now lent not just by public libraries. Amazon has its own public service—well, a service anyway; it is not public; you pay for it—whereby it can lend you a book that you can read on your Kindle for a limited time and that is available only as an e-book and not in printed or any other form. Do the same rights extend to authors whose books are lent in this form? Are these the same rights you would get through a public library?
My last point is also one I have asked about before. Public libraries in Scotland, of course, come under the local authorities, and local authorities in Scotland come under the Scottish Parliament. Is this a devolved matter or will it now be covered by the UK as a whole?
My Lords, we welcome the Government’s tabling their amendment on this issue, as promised. In Committee, the Minister said she wanted to work with the sector groups involved to support a strong book sector that helps to promote opportunities for the public to read and learn, and she intended to table her own proposals for the necessary legislative changes as soon as possible. We sometimes hear that and then have to wait ages, but this time she has been able to get the Whitehall system to work to her agenda, and I congratulate her on that.
I thank all noble Lords who have spoken in this short debate. I shall refer to Amendment 23, tabled by the noble Lord, Lord Clement-Jones. When moving this amendment in Committee, the noble Lord explained that interested parties representing the sector had since proposed a different wording from that used in the amendment. The Government have considered the suggested wording from the sector and our amendment seeks to reflect stakeholder views, although we have achieved the intention of enabling terms to be applied by rights holders to e-books and e-audiobooks for lending through an amendment to the Copyright, Designs and Patents Act 1988. Rights holders will therefore be able to make e-books and e-audiobooks available with clear terms about whether these are available for lending and, if so, what conditions on library lending would apply, such as one loan to one user at a time or that the book will be available to lend for a limited overall lifespan.
I am also delighted that the proposed extension of the public lending right to include remote e-lending has cross-party support, as was made clear in Committee. This amendment will maintain protections for rights holders, while enabling authors to rightly receive public lending right payments for the increasing remote lending of their works, as they do for the lending of books from library premises. I hope the noble Lord, Lord Clement-Jones, will therefore not press his amendment but support the Government’s new clause.
In response to the noble Lord, Lord Maxton, I can confirm that, as I think we discussed in Committee, the provision covers all books, including purely online, digital books. It is also UK-wide, so it is not a question of devolved powers. However, it is all to do with public lending rights and lending through public libraries, not with the example he raised regarding Amazon.
Amendment 19 agreed.
Clause 28: Offences: infringing copyright and making available right
20: Clause 28, page 29, line 23, at end insert—
“(7) If it appears to the Secretary of State that the extent of the manufacture of unauthorised decoders or similar equipment for sale or hire imported into the United Kingdom (otherwise than for private and domestic use) or distribution otherwise than in the course of a business has reached a level which is likely to affect prejudicially the owners of copyright works, the Secretary of State may bring forward regulations made by statutory instrument which prohibit such activities.(8) A statutory instrument containing regulations made under subsection (7) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
My Lords, when this matter appeared in Committee during our discussions on the intellectual property section of the Bill, I was supported by the noble Lords, Lord Foster of Bath and Lord Clement-Jones. I am grateful to those noble Lords for agreeing to support this amendment this time.
We had quite a good debate on a concern that is relatively new in the sense that we have not seen much evidence of it before. For those who were not involved, the problem involves a small device, such as a USB stick, that is plugged into a TV set using a standard connection. The problem is that the device can be loaded so that it has software and add-ons which are preconfigured to give access to thousands of streams; or that users can purchase boxes of software giving them access to material that would otherwise not be available to them because of copyright. Of course, they do not pay for that material. There will clearly be a threat to rights owners from the impact on their earnings streams if these unauthorised decoders or similar equipment become widely used. The scale of the problem—which the noble Lord, Lord Clement-Jones, illustrated in his speech—is beginning to cause concern for those who have rights that are being abused in this way.
In responding to the debate on this amendment, the Minister said that the matter had registered on the Government’s agenda and that,
“illicit streaming and the infrastructure and devices that enable it pose a very serious threat to legitimate copyright owners”.
She said that the Government,
“share the wish of those behind these amendments to ensure that this harmful activity is properly tackled”.
However, she also said—quite rightly, I suppose—that we should not,
“jump immediately to introduce new criminal provisions”,
but take time to make sure that the legislation in place is not sufficient and, if it is not, discover what would be the right way forward. She also said that there would be action relatively quickly and that:
“Officials at the Intellectual Property Office are working with the Crown Prosecution Service”,
to develop new guidance, and that they would run,
“a public call for views over the coming … weeks to ask investigators, prosecutors and industry representatives whether they think the existing legislation is providing all the tools that are needed”.—[Official Report, 2/2/17; cols. 1387-88.]
This was action on a scale almost unprecedented in government. I gather that the invitation has already gone out to the bodies I have just referred to, that people are responding and that some action is therefore gathering pace. The problem, I suspect, will be that although the Bill is progressing slowly, it is still on a relatively quick pace and we may reach the conclusion of our proceedings on it before all that discussion and debate has concluded.
It seemed to us that, rather than the very specific offences listed in the original amendment we tabled in Committee, including the particularities of the types of equipment and possible penalties that might apply to them, it might be sensible to equip the Government with powers to bring forward appropriate action if it appeared, after the conclusion of discussions and debates, that it was necessary.
It is unusual for opposition parties to offer Henry VIII powers to Ministers, and I shall probably be struck down as I leave the Chamber this evening for having done so, but on this occasion there is clearly an injustice being perpetrated by manufacturers and distributors of this equipment. It is clearly already affecting rights holders—there are figures to show that that is the case. I suspect that the IPO’s conclusion will be that action is required. If there are not sufficient remedies within the existing statutory framework, clearly the Government will have to seek an opportunity to create them. As we move into the penumbra of Brexit, it seems unlikely that there will be Bills floating around that we can hijack for this purpose, so it seems eminently sensible for the Government to take the power that is offered in Amendment 20. I beg to move.
My Lords, there is equal enthusiasm on these Benches for this amendment. The noble Lord, Lord Stevenson, has, as ever, put his finger on the issue. I plead guilty to the same constitutionally improper thoughts as the noble Lord, Lord Stevenson. I cannot see why the Government should not take the powers that are needed in advance simply because this vehicle happens to be passing through and there may not be another suitable vehicle very soon.
On the balance of probabilities, at the very least it seems to us that these powers are needed. Those who have spoken to us have universally said that a new offence is needed and that the existing powers are not adequate. Certainly the Motion Picture Association, Sky and others made the point that enforcement agencies, such as trading standards and PIPCU, are unable to pursue strong cases due to the lack of an appropriate offence. This is all about creating an appropriate offence.
I very much hope that the Government, whether at this stage or the next stage, will take heed of the points being made and will give themselves this enabling power in order to introduce a more specific regulation at a future date. The Government should also consider a point that was strongly made by those organisations and think about the enforcement aspects as well in the call for evidence. I hope they will consider the issue which I will be raising next week in an Oral Question on PIPCU funding, which is an important aspect of this. If a power is created and there is no proper enforcement mechanism, it is not a particularly useful creation. I hope the Government will take heed of the fact that this is thundering down the track at great speed and could, as both these Benches described in Committee, have an extremely harmful impact on the audio-visual industries in future.
My Lords, I want to reiterate a point I made in Committee about the context in which young people receive this material. Almost 50% of 16 to 17 year-olds are streaming, and along with the streaming comes advertising, pop-ups and adult material. This is a subject that is close to the Government’s heart, as shown by Part 3. This seems a wonderful opportunity to deal with it again in this part. It is not just 16 and 17 year-olds; whole swathes of younger children are getting the habit. As a maker of original IP and as someone who cares very much about the context in which children have their digital diet, this is a very small thing and I support the noble Lords in their amendment.
My Lords, I understand that the extent of what is happening is such that it is a genuine mischief. It is important that the Government are in a position to deal with it because of the damage that is taking place.
From my perspective, it does not really matter how it is done, provided that it is done, and that “when ‘tis done, ‘tis done quickly”. That is the way we will deal with this. Whatever response the Government may have to the particular amendment being put forward, I hope that they will be able to assure us that they are in a position to deal with the problem and intend to do so, rather than letting it drift on.
I thank all noble Lords who have taken part in this important debate on an issue that we take extremely seriously. It is very much on the Government’s agenda, and I am happy to confirm that again.
Amendment 20 seeks to provide the Secretary of State with a regulation-making power in order to prohibit the manufacture, sale or hire of unauthorised decoders. We have discussed previously in the House the pressing threat to subscription broadcast services caused by illicit set-top boxes, especially those which provide IPTV functionality. These IPTV boxes can in certain cases be considered unauthorised decoders, although that may vary depending on how they are set up to function.
As noble Lords will be aware, to better understand this area and what new legislation might be needed, the Government have committed to conducting a call for views on IPTV boxes, which I referred to in Committee. When we were last discussing this topic, I promised that the call for views would be published within a few weeks, and I am very pleased to announce that we have secured a publication slot for the document for 23 February—tomorrow. The purpose of the call for views is to help the Government understand where further action is needed to address the problem. If there is evidence to support changes to legislation, then we have promised to bring forward proposals in due course.
This information-gathering exercise will enable us to properly respond to the most pressing current threat caused by IPTV boxes. If there are other issues specific to unauthorised decoders that fall outside of the scope of this work, I would very much welcome details. We can then consider whether we need a further exercise to look at those distinct areas. The call for views runs for six weeks, until 5 April 2017, at which time the Government will assess the responses and determine the best course of action. The Government fully understand the harm done by illegal set-top boxes and IPTV, which is why it is crucial that we have a robust evidence base for effectively tackling this problem.
With regard to the manufacture of the hardware devices specifically, as your Lordships may expect, this usually happens outside the UK. That is why the IPO is working with partners across the world, including the Government’s IP attaché in China, to explore what can be done in source and transit countries.
Having said all that, I very much take on board what noble Lords have said this evening, including the noble Lords, Lord Clement-Jones and Lord Stevenson. The noble Baroness, Lady Kidron, of course has talked, quite rightly, several times in your Lordships’ House now, about young people and their digital habit, which starts frighteningly young. This is something we have to confront, and we sense the urgency with which we have to deal with this very real problem. Although I cannot make any commitment tonight, I hope that noble Lords will allow me to take this back and see if we can think of something more that we might be able to do. On that basis, I would be grateful if the noble Lord would withdraw the amendment.
I thank the Minister for her comments. I am sorry she is not minded to use the opportunity afforded by the fact that the Bill will go on until the end of March, which seems awfully close to the time by which she was suggesting that responses would be back, to enable us to make some progress on this. The points made by the noble Baroness, Lady Kidron, and the noble Lord, Lord Inglewood, are both right and bear on the same issue. It is clear that something is happening here that we could nip in the bud very quickly if we were able to take the appropriate powers. We are not specifying what those powers have to be, so we are not constraining the Government in how they might wish to take this forward, but quick action might prove more effective in the long run. Shutting this down would save us from the threat of it becoming a pest and a menace across all areas. I think it is worth testing the opinion of the House.
Clause 30: Copyright etc where broadcast retransmitted by cable
21: Clause 30, page 29, line 38, at beginning insert—
“( ) Any creator who has transferred his or her cable retransmission right to a broadcaster shall retain the unwaivable right to receive equitable remuneration for the exercise of the retransmission right.”
My Lords, I hope this will be a short debate. I was pleased to see the Government’s response to the technical consultation on transitional arrangements, which in a sense is a quick response to the spirit behind Amendments 21 and 29, which I tabled in Committee. It is another pleasing and welcome indication of the speed with which the Government are responding to some of the arguments being made, such as the call for evidence on IPTV.
An unequivocal statement has been made, which I very much hope the Minister will repeat, to the effect that on the basis of the responses to this consultation, the Government have decided to repeal Section 73 without a transition period. I am assuming that if I get such a pledge from the Government, it will be upheld, and that there is no need to amend the Bill to that effect, but obviously I would very much like those assurances from the Government at this stage.
On the right to equitable remuneration where a creator has transferred his or her cable retransmission rights to a broadcaster, the concern is that if public service broadcasters are going to receive licensing income for carriage of their services on cable networks, those underlying rights holders—such as scriptwriters and directors—should receive an appropriate share of this new revenue. The Government in their new Clause 30 have made clear what happens to performing rights, because they deleted old paragraph 19 of Schedule 2 to the Copyright, Designs and Patent Act 1988. It has not, however, been made absolutely clear what the score is as far as the copyright of creators such as authors is concerned. I do not know whether the IPO has been able to give Ministers guidance on that. However, this is a probing amendment, and I very much hope that the Minister will be able to explain what is contemplated.
The problem is that where creators assigned their rights, that was in the old days. There may be licences in respect of which public service broadcasters attributed a zero value to retransmission rights, but of course, in future, those rights will not necessarily have a zero value. I therefore hope that the Minister can at least give some assurance that this issue is being looked at, and that at least some guidance or encouragement can be given to public service broadcasters to look again, in all equity, at some of their past rights clearances, so that creators will not be disadvantaged in the income they receive from what could be a new income stream for our public service broadcasters. I beg to move.
My Lords, I voice my admiration for the noble Lord, Lord Clement-Jones, and his dogged determination to get Section 73 of the copyright Act repealed, and I am grateful to the Government for including its repeal in the Bill. Their response to the technical consultation seems to mean that it will be repealed immediately, but I too would like the Minister to assure us that it will be.
In Committee, and again here today, noble Lords have expressed their desire to see a swift repeal of Section 73. As I set out in Committee, the Government, through the Intellectual Property Office, have consulted on the technical aspects of the repeal, including on the question of a transition period, and committed to returning to this issue on Report following the publication of the government response to the consultation. The IPO published the Government’s response to the technical consultation on 10 February. In summary, the responses did not see the need for creating a new rights clearance mechanism and were in favour of no or a very short transition period in connection with the repeal of Section 73. The Government agree with that view.
I therefore confirm to the House that Section 73 will be repealed without a transitional period and that no compulsory structure for licensing needs to be introduced. In coming to the decision not to have a transition period, the Government considered that the intention to repeal Section 73 was announced in summer 2015. The industry has therefore had plenty of time to prepare for the repeal. There is also the ongoing and pressing issue of online service providers continuing to rely on the Section 73 exception to permit the streaming of PSB content over the internet without seeking the necessary permissions or paying any licence fees. This can impact not only the copyright owners in the broadcast but the underlying copyright owners in the content carried within the broadcast itself. The Government regarded the resulting financial loss to the affected parties as an important driver for a swift repeal. The repeal will become effective on a date to be appointed by statutory instrument after Royal Assent is received for the Bill. I confirm that the Government will commence repeal without delay before the Summer Recess.
On Amendment 21, the IPO consultation also looked into the position of underlying rights holders in PSB content, such as musicians and scriptwriters, and whether new rights clearance mechanisms needed to be introduced. It concluded that there are already extensive commercial rights agreements in place between underlying rights holders, broadcasters and the platforms, and that these will be capable of factoring in the new rights, which will be reactivated following the repeal of Section 73.
Underlying rights holders already contract, on terms acceptable to them, with broadcasters and platforms in respect of rights that are not currently exempted by Section 73, such as underlying rights in non-PSB content and in programmes transmitted on all other non-cable platforms. As such, we do not think that statutory intervention in the manner proposed in the amendment is necessary.
In response to the question put by the noble Lord, Lord Clement-Jones, I want to make it clear that underlying rights holders already have in place rights agreements with broadcasters. Section 73 only ever applied to cable networks, so the value of underlying rights will have been factored in for transmission on all platforms.
I hope this explanation has assured the noble Lords that the purpose behind their amendment has been met. I therefore ask them to withdraw the amendment.
My Lords, I thank the Minister for the first half of her reply. She repeated pretty much what was in the response: no transition is envisaged and repeal is effectively to be commenced without delay, before the Summer Recess—I hope I have paraphrased her correctly. I take that very much on board, and I am delighted that the Minister has been able to confirm it.
I am not quite so delighted by the second half of her reply. She says that underlying rights holders’ rights have been factored into existing agreements, but that is just the problem: zero value has probably been attributed to the retransmission rights held by PSBs. Of course, until the repeal of Section 73 they will have zero value. After its repeal, value will be ascribed to them, but that means those who signed agreements in the past will not necessarily get the benefit, hence the reference in the amendment to equity. That is a rather important concept.
I will read carefully what the Minister has said—no doubt following the wonderful advice she has received from the Intellectual Property Office—and will discuss it with the Society of Authors and others who are very concerned about some of these issues. I might return to the matter at another stage of the Bill to tease out a little more information from the Minister. In the meantime, however, I beg leave to withdraw the amendment.
Amendment 21 withdrawn.
Amendments 22 and 23 not moved.
24: After Clause 30, insert the following new Clause—
“Transparency and fairness obligations
(1) Authors, artists and performers (“creators”) shall receive on a regular basis timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights as well as subsequent transferees or licensees, and the information shall include information on modes of exploitation, revenues generated and remuneration due.(2) The obligation in subsection (1) may be met by complying with a code of practice collectively bargained between relevant representative organisations of creators and the representative organisations of those who exploit their works, taking into account the characteristics of each sector for the exploitation of works.(3) Any such code of practice is to provide that each creator is to be entitled to a statement of income generated under such licence or transfer arrangements at regular intervals during each annual accounting period, and provide an explanation as to how the creator’s remuneration has been calculated referencing any contract terms relevant to the calculation.(4) In the event of failure of a transferee or licensee mentioned in subsection (1) to comply with a code of practice, or in the absence of such a code of practice, the creator shall be entitled to apply to the Intellectual Property Enterprise Court for a detailed account of revenues due to the creator generated from the modes of exploitation referred to in subsection (1), and in the event of failure, the Court may award damages in the amount of any shortfall in the total amount due to him.”
My Lords, in Committee I explained the importance to authors and other creators of transparency, and the significance of the proposed new EU directive. The noble Baroness, Lady Buscombe, got the point entirely, as ever, and said the amendment would require those organisations exploiting copyright works via licences to provide the relevant creators with regular information on the use and the revenue they generate, and stated that this obligation could be met by complying with a code of practice determined at sector level, which is entirely correct.
I should add for clarity that, if there is a concern by licensees in those circumstances about the leakage of their commercially sensitive information, the way information is channelled can of course be dictated by a code of conduct through appropriate mechanisms, such as the advisers of creators and so forth. That is could be well catered for if there were concerns among those licensees or assignees.
The Minister confirmed that the Government were already engaged in discussions to address this issue. She said that,
“the UK will actively engage in these debates … before considering the case for domestic intervention”.
She also said,
“it is worth giving careful consideration to the part that these industry-led initiatives can play”,—[Official Report, 6/2/17; col. 1481.]
in terms of a code of conduct and so on. As I said at the time, though, she never actually agreed that the principle of transparency should be incorporated into law, whether directly or by transposition. Clearly, if the EU directive is passed within the two-year period after notice of Brexit is given, it may well be incorporated into UK law. The Minister gave encouragement to the principle but did not say that the Government fully supported that element of the directive. Article 14 of the draft directive is very clear in giving creators those kinds of transparency rights.
So I return to the fray on this occasion, and I hope the Minister can warm her words further in the face of this amendment being retabled. I beg to move.
My Lords, I support the amendment of the noble Lord, Lord Clement-Jones. He talked about the principle of transparency, and that is the nub of it. I shall just give an example: the history of pop music has, in many ways, been the history of exploitation of artists in a bad way. Much of that exploitation was based, in the past, on keeping artists in the dark. I am sure that today many licensees and transferees—some of which are huge companies—behave very well, but there is a systemic imbalance here, which means that there is potential for abuse. Artists have a fundamental right to information about exploitation of their work, which is, in any case, useful for knowing quite simply what has happened to their work when it is pushed out into the world.
My Lords, I am grateful to the noble Lord, Lord Clement-Jones, for raising this again today. As both previous speakers have said, it is a really important issue for authors, writers and musicians, who are operating in an increasingly complex world where it is very hard to keep tabs on the use that is being put to their own creative work and the way it is being distributed and accessed. As a result, many in the sector feel that they are not properly rewarded for their creative endeavour. It is obviously crucial to us that we encourage them to continue to be creative and help them to be fairly rewarded because, as we increasingly begin to recognise, that creativity is not only important to them but will be an essential bedrock of the UK’s future prosperity in the years to come.
The noble Lord quite rightly raised the issue of the draft directive on copyright, and he quoted the Minister’s reliance on the discussions of that draft in her response in Committee. However, as with other pieces of draft EU legislation, there is now a horrible feeling that the clock is ticking and that time might run out before the directive can be transposed into UK law. Therefore, we very much support the noble Lord in his bid to bring more certainty to the lives, and the incomes, of our much-valued creators.
I would like to raise two further points. First, the amendments as they stand assume that all publishers have the facility to provide regular statements of income outside the normal accounting periods. This is indeed easy for the large publishers, which already have author portals where this kind of detailed information is uploaded in real time and accessible to authors and their agents on a daily basis. However, we should also spare a thought for the smaller publishing houses, whose growth we also want to encourage, and which might not have such sophisticated accounting systems. The wording of the amendments might be rather too prescriptive or open to interpretation in this regard. We do not want to add too much of an extra burden to those smaller organisations.
Secondly, and perhaps more importantly, the amendments do very little to help those authors who are beholden to Amazon, which publishes 90% of e-books and is responsible for a significant proportion of physical book sales. Its behaviour in driving down prices through heavy discounting is seriously damaging the incomes of authors and publishers alike. Therefore, you can have transparency and fairness, but we will not add much more value back into the creative sector unless steps are taken to curb the monopolistic behaviour of Amazon. Perhaps the Minister could advise us as to what steps are being taken to monitor that increasing dominance of Amazon and to look at the impact it is having on the income of people who are trying to be creative and whom we very much want to value. At what stage would the Government take steps to intervene to make sure that those incomes are, in some way, protected for the future?
My Lords, I thank all noble Lords who have taken part in this debate on Amendment 24, tabled by the noble Lords, Lord Clement-Jones and Lord Foster. This amendment, which was first tabled in Committee, partly reflects proposals currently under discussion at European level as part of the draft copyright directive, as noble Lords have said this evening. It would require organisations using copyright works via licences to provide creators with regular information on how their work has been used, and the revenue generated by their use. This obligation could be met by complying with a code of practice determined at sector level. The amendment also provides creators with recourse to the intellectual property enterprise court in cases where such a code was not implemented or adhered to.
As we said in Committee, the Government agree that transparent markets can benefit all parties. I particularly understand the potential benefits of transparency in areas such as the creative industries, where individual artists—writers, musicians and performers, as noble Lords have said so eloquently this evening—often deal with large corporations. As noble Lords are aware, the Government are currently in the process of negotiations on the draft copyright directive, and I continue to hold the view that we should allow this process to reach a conclusion before considering the case for domestic intervention. I appreciate that the noble Lords, Lord Clement-Jones and Lord Foster, the noble Earl, Lord Clancarty, and the noble Baroness, Lady Jones, would welcome a firm statement of support for the Commission’s proposals in this area. Unfortunately, however, I am not in a position to give such a statement this evening. However, I can assure noble Lords that the information received in the recent call for views on the directive has been carefully considered, and that the Government will continue to engage constructively in this debate, including in relation to the role of collective bargaining mechanisms and industry-led codes in improving reporting to creators.
I also wish to raise another issue regarding the amendment. The proposals from the European Commission include an ability for member states to adjust or restrict the transparency obligation in certain cases, taking into account, for example, the contribution of an individual creator to an overall work, or the proportionality of the administrative burden. Views on the benefits of these powers are mixed, and are likely to require careful consideration with the creative industries at sector level if the directive comes into force in the UK. However, I believe that it would be imprudent to accept an amendment at this stage that does not appear to provide the Government with similar flexibility. Doing so could risk imposing burdens on publishers, producers and broadcasters that restrict their ability, in effect, to develop new talent. With this explanation and the renewed assurance that the Government really do take the concerns of creators in this area seriously, I hope that the noble Lord will withdraw his amendment.
My Lords, I congratulate the noble Baroness, Lady Buscombe, on finding a new argument at the end; I thought that was magnificent. Imprudence is something that I would never want to be accused of in these circumstances. I thought that this amendment did not reflect fully what Article 14 contained. The Minister was absolutely right: it was entirely the intention that it would not contain that, because of the difficulty of interpretation. It is possible to do that more easily in continental law, rather than when you transpose it into UK law. I shall be very interested to see what our parliamentary draftsmen make of it, if ever they are faced with the task of transposing Article 14 into UK law.
I like the sound of “engage constructively”. I know that the Minister’s heart is in the right place and I think she said something like, “We really do mean this”, so the sincerity was utterly apparent. In the face of that, how can I do anything but withdraw the amendment? I beg leave to withdraw.
Amendment 24 withdrawn.
25: After Clause 30, insert the following new Clause—
“Code of practice on search engines and copyright infringement
(1) The Secretary of State may impose by order a code of practice (“the code”) for search engine providers with the purpose of minimising the availability and promotion of copyright infringing services, including those which facilitate copyright infringement by their users.(2) Any order made under subsection (1) must include appropriate provisions to ensure compliance with the code by the providers.(3) Before imposing the code under subsection (1), the Secretary of State shall publish a draft of the code and consider any representations made to him or her by—(a) search engine providers,(b) rights-holders and their representatives, and(c) any other interested parties.(4) The Secretary of State shall regularly review the code to ensure that it provides the most appropriate mechanism to satisfy the purposes set out in subsection (1).”
My Lords, I move Amendment 25 and am grateful for the support of my noble friend Lady Jones and the noble Lords, Lord Clement-Jones and Lord Foster.
This is a rerun of an amendment that we tabled in Committee. At the time, discussions were in place between rights holders and those who operate the search engines, which are the focus of the amendment, and we were not sure how that would play out. We were promised much, and the Government have again delivered—which is becoming too much of a refrain for my liking. A voluntary code has been agreed between the parties, signed up to and issued—there has been press notification about it, so it must be true. The question is: what will it do? That has not been answered. We have discussed what it might do, but we have not yet seen the wording of the voluntary code. I ask the Minister to circulate to those participating in the debate what is in the much-vaunted code, so that we have a sense of whether it will achieve its purpose.
My concern from what I have heard is in three parts. First, it is large copyright-owners and large inquiry systems such as Google that are involved. That begs the question of whether those who are less able to exercise their rights—particularly those who have individual or small parts of rights in small productions—will have any voice. The reporting that I have read talks about rights holders and search engines working promptly on receiving responses about infringing content to ensure that these things are taken down.
Secondly, there is much talk of expanding efforts,
“to more effectively use such notices to demote domains demonstrated to be dedicated to infringement, and to work collaboratively with rights holders to consider other technically reasonable, scalable avenues empirically demonstrated to help materially reduce the appearance of illegitimate sites in the top search rankings”.
I could read that again, because you would probably need to hear it again to have the faintest idea what we are talking about. I fear that it smacks of either a lowest common denominator approach or some hard arm-wrestling in the corridors where the discussion took place to get something that looks reasonable on paper. It does not smack of a real commitment to scourge out the terrible way in which search engines have referred people who should have known better to material that was not cleared for copyright and should not have been made available to them through that route. There is also talk about,
“work to prevent generation of Autocomplete suggestions which lead consumers towards infringing websites”.
It says that work will be done to prevent it, not that it will be stopped.
“Search engines will provide, or continue to provide, processes to promptly remove advertisements”,
linked to searches. So my second point is that this all looks pretty good on the surface, but will it work in practice? I have my doubts.
Thirdly, it will be run by the Minister of State for Intellectual Property, who,
“will oversee the implementation of this Code of Practice, supported by quarterly meetings of all parties, and set requirements for reporting by search engines and rights holders on any matter herein, including in particular those matters where the Code of Practice calls for ongoing discussion”.
At last, we get it:
“The Minister shall review the effectiveness of the Code with the parties after one year, and ensure continuing progress towards achieving the Shared Objectives”—
which is, rather nicely, in my copy, in capital letters, so they must be really important.
It is easy to lampoon this. I am sure it is a good step forward in the right direction, and we wish it well, but I wonder whether it will take the trick on this issue. As we said in a previous discussion, should there not be a backstop power; should these powers not be taken now by the Government to ensure that they can do something if it does not work, if some people move away from it, or if new entrants to the market feel that they have no responsibility to be part of it? These are open questions. There may be a way through, there may not, but we have no way to resolve that because this is a voluntary process.
It took a long time to get to the voluntary code: the working group has been meeting on and off for three or four years, so we know that this is not an easy nut to crack. It is an issue that causes a lot of annoyance and concern. It also affects the earnings of those who have rights that have been abused in this way. There is a feeling—I put it no stronger than that—among those who perhaps know more about this than I do that the search engines do not want to go any further because they fear statutory provision. In other countries and territories—indeed, in America—there is statutory provision, and that has made the difference over there. Why are we not doing that here?
There are a lot of questions about this. The amendment would give a solution to the Government if they wished to take it. I hope that they will consider it, and I beg to move.
My Lords, I am delighted to support the amendment in the names of the noble Lord, Lord Stevenson, and others. I am sure that all Members of the House recognise that there is a serious problem that needs to be addressed, although fewer people are accessing illegal material on the internet as a result of the growing number of relatively cheap and easily accessible alternatives. We should welcome that and the fact that in this country we probably provide a wider range of alternative legal sources—for the downloading of music, for example—than any other in the world. Nevertheless, there continues to be a problem, with about 15% of UK internet users—about 6.7 million people—continuing to download and access illegal material. I therefore welcome any measures that can be taken to introduce ways to prevent that. Of course I welcome the voluntary agreement that has been reached. I congratulate the Minister for Intellectual Property, who I know has worked very hard with the relevant parties, including the IPO, to secure the voluntary code. As the noble Lord, Lord Stevenson, said, the details have still to be worked on and there will be a review in 2017.
I ask the Minister to reflect seriously on this key point. In opposition, I have spent a lot of time moving amendments to various proposals that the Government “may” do something to delete “may” and insert “must”. On this occasion, I am delighted to support the amendment, which says that the Government may do something, if the need arises.
The Department for Culture, Media and Sport is rarely given credit for the important role it plays in the life of this country. As a result, it rarely has opportunities to have legislation before the House. While the Minister may tell me, as she did in a previous debate, that should the voluntary code not work, the Government will consider taking legal action at some point, she would find it difficult to find a legislative peg on which to hang that action.
The Intellectual Property Alliance and others have suggested that we need a backstop mechanism in the event that the code, which we welcome, is unsuccessful in future. For that reason, I hope that the Government will be willing to accept what is a simple amendment giving them power in future if they need it.
My Lords, Amendment 25 returns to the topic of search engines and copyright and would give the Government power to impose a code of practice on search engines to minimise the visibility of copyright-infringing websites in search results.
As we have discussed previously, this is an area in which we have been seeking a voluntary agreement between search engines and rights holders, and I am pleased to be able to confirm that we now have that agreement and have finalised the text of a code of practice. This newly agreed code sets out clear targets for reducing the visibility of infringing websites in search results. The code also specifies a number of areas where rights holders and search engines have agreed to work together with the general aim of supporting legitimate content and reducing piracy. We have always been clear that action is needed in this area and it is a manifesto commitment. But we have also been clear that a voluntary agreement would be quicker, more flexible and, most importantly of all, more collaborative than a legislative intervention. We now have that voluntary agreement and the parties to the code are already working to deliver on the commitments it contains. All parties to the agreement have engaged in these negotiations and the work to date in good faith. They are continuing to work in good faith and I am confident that that will also be the case for work going forwards.
The noble Lord, Lord Stevenson, questioned whether it would be possible to have sight of the code. We do not plan to publish the code in full because details about the number of copyright infringement reports a site can receive before it is demoted might allow pirates to game the system. We are, however, very happy to share the commitments in the code in more general terms.
We understand where noble Lords are coming from in seeking a backstop power, but I return to that word “collaborative”. We have come a very long way in what we have achieved thus far. I can remember working and having discussions with search engines in years gone by, trying to encourage them to respect and accept responsibility for what they do and the impact they can have on others. In that sense, we believe very strongly that we should continue with that collaboration and not consider a backstop power. We do not believe it is necessary. With that explanation, I hope the noble Lord will accept that a statutory power is not needed at present and thus feel able to withdraw the amendment.
Although I am grateful to the Minister for her robust comments about our amendment, I profoundly disagree with them. I cannot see this agreement lasting and believe that there will have to be a backstop power at some stage. Surely the truth is that if it was necessary in America to introduce legislation to get that system to work, it is bound to be necessary in other places where those with the large rights holdings may feel they can operate in a way that is not necessarily in the best interests of consumers in the United Kingdom. I still think, as the Minister touched on at the end of her peroration, that this is something that we will have to drag the search engines towards, because it is not their business model. Their concern is to make sure that they get as many people coming to them and through them to other portals in other areas that they can get to. Their interest in engaging in that is something we will return to in future legislative arrangements. I think that they will be unable to sustain a position in which they act as neutral transferors of other people’s issues and wishes, because it does not work. They will have to accept that they have responsibility to work to make sure that the worst excesses at the moment are resolved in a way that does not hurt rights holders.
At the moment, it is a “large copyright holders against large search engines” agreement, and on that level it might operate. I do not think it will be effective. I do not think it is sustainable because there will be new people coming in and business models and practices will change—we cannot foresee that. Power will be necessary. If the Government will not seize a gift that is worth a lot of future pain and help them avoid the difficulties they will face in trying to find the legislative time—as the noble Lord, Lord Foster, said—to put this in, we cannot make them do it. I beg leave to withdraw the amendment.
Amendment 25 withdrawn.
25A: After Clause 30, insert the following new Clause—
“Review of sale on the internet of counterfeit electrical appliances
(1) Within six months of the coming into force of this Act, the Secretary of State must commission a review of the sale on the internet of counterfeit electrical appliances.(2) The review must consider whether operators of trading websites that allow individual sellers to use those websites to sell electrical items should be required to report to the police and trading standards authorities any instances of the selling of counterfeit electrical appliances which are arranged through their website.(3) The Secretary of State must publish the report of the review, and lay a copy of the report before each House of Parliament.”
My Lords, I have resubmitted this amendment because we consider this to be a matter of concern. As I have said, the large majority of these counterfeit goods are sold through internet portals and their sale has often resulted in fires and damage. They undermine well-known brands and are a great danger. It is no surprise that the Electrical Safety Council is drawing attention to this issue and wants the Government to address it.
When I previously raised this issue, the noble Baroness, Lady Buscombe, mentioned Operation Jasper and the trials that are being carried out with counterfeit goods. I have since learned that electrical goods are not included in this project and that is why I have resubmitted the amendment. We need some action on this problem. If the noble Lord or the noble Baroness can assure me that they will take this forward—perhaps meet with the Electrical Safety Council—and look at how progress can be made, I will be happy to withdraw the amendment. But the Government must consider taking action on what is an increasing danger and a growing problem. It is perpetrated through internet portals and the people who provide the online retailing must look at the problem too and take some responsibility. I beg to move.
My Lords, I am grateful to the noble Baroness for waiting patiently for the last group of amendments. By the standards of our Committee deliberations, this is pretty reasonable—we have done well. I am also surprised that Opposition Members have been longing to give us delegated powers and allowing us to say “may” instead of “must”, which we have nobly resisted. But this amendment has gone back to a more traditional view, which is to make the Government formally review and report on sale of counterfeit electrical goods on the internet. We did, as the noble Baroness said, discuss this very issue in Committee and a similar amendment was withdrawn. Being serious, the sale of any type of counterfeit goods obviously has the potential to harm consumers and the economy and, importantly, damage traders who do business legitimately; and it often supports organised crime. As my noble friend Lady Buscombe said, the Government take this matter very seriously, which is why the Intellectual Property Office is committed to tackling counterfeiting of all kinds.
Since we discussed this issue in Committee, the IPO has continued to push forward with the work outlined in the Government’s IP enforcement strategy. Officials from the IPO have now met with representatives of all the main online sales platforms in the UK to discuss what steps they are taking to tackle the sale of counterfeit goods, as well as devices which may facilitate copyright infringement. I am reassured to hear from those conversations that the main online players in the UK all share our concern about this issue.
We have also made it very clear that we expect these platforms to continue to develop and improve the systems they have in place to tackle counterfeiting. They have given us details of a number of steps they are taking to do just that. This is an evolving area, with criminal behaviour and technology both changing as we go along, so we will continue to engage with those platforms and their equivalents in countries such as China to ensure that IP rights and the safety of consumers remain a priority across the board. As a separate work stream, police, trading standards and industry representatives have continued to work on Operation Jasper, tackling the sale of counterfeit goods via social media. This work has been ongoing for some time and is an excellent example of the value of the collaborative approach in this area.
In addition to this work, the IPO has now started to gather data for the next edition of the annual IP Crime Report. It will be published in September of this year and will contain the best available evidence on the scope and scale of counterfeiting in the UK, and will include material about the sale of electrical goods online. In the light of such work and the other elements of the strategy that we have discussed previously, in the Government’s view it is not necessary to have a statutory commitment to review and report on counterfeit electricals this time. The noble Baroness made a generous offer, and I hope I have done enough to persuade her to withdraw the amendment.
I thank the noble Lord for his response. Certainly, his comment that electrical products are specifically being taken into account is reassuring. Will he write to me indicating in what way those goods are being incorporated in the trials, as there is a huge difference between a counterfeit handbag and counterfeit electrical goods? Although the response I received previously stated that trials were going on, it did not deal specifically with electrical goods. If the Minister would be kind enough to provide information on that in a letter, I will happily withdraw the amendment.
Amendment 25A withdrawn.
Consideration on Report adjourned.
Nutrition: Women and Girls
Question for Short Debate
My Lords, I noted with great interest that 190 noble Lords spoke over the last two days on the European Union (Notification of Withdrawal) Bill, and that the debates did not conclude until nearly midnight on both days—indeed, after midnight on the first day. Therefore, I am particularly grateful to noble Lords for staying late again tonight and for speaking in this debate, for which I thank them.
International Women’s Day will take place next month and last month there was a debate in this Chamber on employment skills for women and girls. This debate is therefore very timely. As someone who has worked extensively in the NHS, I have seen at first hand just how critical good nutrition is for survival, recovery, good health and well-being. Good nutrition is the foundation for development. Without the right nutrients at the right time, none of us would grow to fulfil our physical or, indeed, cognitive potential.
While my contribution to this debate focuses on the urgent need to tackle undernutrition in low and middle-income countries, as that is where much of the burden of undernutrition is in women, girls and children, let us not pretend that, as a rich country, we are immune to these issues. Every country in the world suffers from one or more forms of malnutrition, be it undernutrition, overnutrition or micronutrient deficiencies.
Just as in Pakistan, India or Malawi, without good nutrition our economy suffers, our society suffers, and, as individuals, we suffer too. SDG 2, to which we as a country are signed up, and fully support, states:
“End hunger, achieve food security and improved nutrition”.
Point 2.2 of the goal states,
“by 2030 end all forms of malnutrition, including achieving by 2025 the internationally agreed targets on stunting and wasting in children under five years of age, and address the nutritional needs of adolescent girls, pregnant and lactating women, and older persons”.
Some good progress has been made but despite all the progress we have seen in recent years, sadly, undernutrition, much like poverty, is sexist, given that 70% of the 1.3 billion people in poverty on this planet are women. Of all those who are undernourished worldwide, 60% are women. In 2013, a woman’s life was lost in pregnancy or childbirth every two minutes, with anaemia being a major risk factor impacting around one in five deaths.
I was very fortunate to visit India last year with RESULTS UK. Uttar Pradesh is the largest state in India with a population of 200 million. According to the Rapid Survey on Children, in 2013-14, it was the home of 21 million children under five. Some 50% of the children had stunted growth, 10% had wasted muscles and 34% were underweight. It was also evident that adolescent pregnancy and anaemia contributed to a high prevalence of low birth-weight and subsequently undernourished children. However, I was pleased to note that education and nutritional programmes had been commenced to tackle these issues in the state.
Worldwide, it is estimated that more than 200 million children under five fail to reach their full development potential largely due to malnutrition. Women make up 63% of adults without minimal literacy skills and 18 million girls a year are forced into early marriage. We must not forget older women. Many of the diseases suffered by older people are the result of dietary factors, some of which have operated since infancy. These are compounded by the ageing process. It is noticeable that many Governments have few policies to prevent undernutrition in older women.
Inadequate diet and malnutrition in older women are associated with a decline in their functional status, impaired muscle function, decreased bone mass, immune dysfunction, anaemia, poor wound healing and delay in recovering from surgery and higher hospital rates and mortality. Women suffer 80% of all fractures due to osteoporosis, with diet being a key factor in this. Shocking statistics such as these are not scarce and certainly cannot be addressed without a change in approach. The Food and Agriculture Organization recognises gender inequality as both a cause of, and result of, malnutrition. We must acknowledge this inextricable link if we want to get to grips with the scourge of malnutrition.
I am proud that the UK Government have stepped up to the plate when it comes to championing good nutrition and have set the bar high. They held the Nutrition for Growth summit in London in 2013. I am sure that the Minister will say more about the impact that UK aid is having on nutrition for women and girls but it is crucial that we keep up the pace. Just a one-off N4G event cannot help us end undernutrition in vulnerable and disadvantaged groups. What is key, especially in this current climate of some anti-aid sentiment, is maintaining the political leadership. I am therefore pleased to learn that the Secretary of State for International Development intends to increase spending on nutrition, and I commend her for that. Will the Minister say what the Government’s plans are to increase investment in, and expand programmes for, women’s and girls’ nutrition in 2017? For instance, can we expect a big initiative such as Nutrition for Growth to show our Government’s continued commitment to this issue, and through which they could encourage other Governments to step up their efforts too?
While it is crucial to have the resources to carry out this important work, it is equally important to identify the right places to invest them. Programmes such as Supporting Nutrition in Pakistan, involving food fortification with iron and folic acid, and other efforts in agriculture and sanitation are being led by the World Bank, the Australian Aid agency and NGOs with a strong understanding of this issue, such as the Canada-based Micronutrient Initiative. These are good examples of how the UK is leading efforts on women’s and girl’s nutrition in partnership with other stakeholders. Another superb initiative is the Scaling Up Nutrition movement.
I am sure we all agree that aid alone will not solve this problem. We all want to see countries stand on their own two feet and lead this fight. By bringing together civil society and Governments across 58 of the world’s poorest countries, SUN is developing a unique platform that can facilitate the kind of shared learning that drives country ownership. I saw this first hand when I visited Uttar Pradesh. I would be interested to hear about the Minister’s assessment of SUN and whether his department has plans to scale up support for the movement given the importance of the work it does.
It is also important here to talk about adolescent girls, as they are such a critical link in the cycle of malnutrition and poverty. The aid agencies and NGOs are doing an important job in improving nutrition among other demographics, but there is evidence that adolescent girls are still being left behind. One in three girls aged 15 to 19, in countries where data are available, are anaemic. This is absolutely shocking. How can we expect adolescent girls to attend school—forget excelling —when they are constantly weak, dizzy, lack concentration, and at risk of disease through reduced immunity? I appreciate that there is a huge blind spot in data and in our knowledge of the nutritional status of many of these girls globally. However, this is an area where the UK could lead the way, with much greater outcome-focused programmes and research.
Another area where I see space for greater impact and value for money is through better integration. Given the links nutrition has with other development sectors, such as health, agriculture and education, perhaps more could be done to better integrate nutrition into DfID’s other aid programmes. I hosted a round-table discussion in this House just before Christmas with RESULTS UK, and I was pleased to hear the DfID official in attendance state that steps were already under way to better combine health and nutrition programming. It is crucial that, where possible, DfID includes specific nutrition objectives and indicators in its other programmes that have an indirect impact on nutrition outcomes for girls and women. Perhaps the Minister could share with us a little bit about the progress in this key area.
To conclude, on a more general note, like many noble Lords in your Lordships’ House, I was deeply concerned when I heard about the reversal in the United States of the Mexico City policy, or the gag law, as it is otherwise known. Increasing access to family planning services—I say this as I was a midwife and a health visitor in my early twenties—is one of the most practical solutions to reducing malnutrition in women as well as giving women basic empowerment over their own bodies. Bill and Melinda Gates have already made it clear that,
“this shift could impact millions of women and girls around the world”,
“could create a void that even a foundation like ours can’t fill”.
I echo this concern and ask the Minister what assessment the Government have made of the impact of this policy change on our own aid programmes and how they might be affected.
At times like these, bold UK leadership is more important than ever. As a nation, we have made the decision to leave the European Union, giving us the opportunity to forge a new role for ourselves in the world. Our commitment to the world’s poorest and most vulnerable has seen us, in recent years, become the only G20 country to allocate 0.7% of GNI to overseas aid. We should stand tall and be proud of this commitment, carrying it forward with us as we make the important strategic decisions that lie ahead. Delivering the Conservative Party 2015 election manifesto pledge to improve the nutrition of 50 million people by 2020 is the perfect way to do this, and would demonstrate to the world that Britain is a compassionate and outward-looking global leader, committed to improving the lives of the world’s poorest—better nutrition for better lives.
In conclusion, I put on record my appreciation and thanks to RESULTS UK and Age International for supporting me in the preparation of this debate.
My Lords, I congratulate the noble Baroness on bringing this important debate to the Floor of the House. I put my name down to speak in it because I wanted to identify myself and these Benches with this important issue—which my noble friend will also do—and at the end of my remarks I have a few questions for the Minister to consider.
It is inevitable that statistics will be bandied about during a debate like this, and some of them are startling and shaming. Malnutrition is partly responsible for 45% of childhood deaths. It destroys the most human potential on the planet. Children who are stunted are not just below their global peers in height but are behind them in cognitive development, and that will limit these children their whole lives. Nutrition is the biggest missed opportunity in global health, and were it solved, it would unleash waves of human potential. Yet overall, only 1% of foreign aid goes towards basic nutrition. Malnutrition is not starvation; malnourished children can be getting enough calories but not the right nutrients. That makes them more susceptible to conditions like pneumonia or diarrhoea—and more likely to die from them.
Over half of the world’s population lives in cities, a trend that will accelerate more quickly in the coming decades. In many cities, over half the population lives in informal settlements and slums, and rates of malnutrition are exceedingly high. Urban food systems in many countries are not developing rapidly enough to cope with the challenges of a fast-growing population, a factor which increases obesity levels as traditional diets are swapped for snacks and high-energy foods. So in many ways the global food system is broken.
Estimates seem to vary, but GAIN says that in total about 3.5 billion people—half the people on the planet today—are malnourished in one way or another. Each day, 795 million people go hungry. Each year, malnutrition undermines billions of people’s health. It kills probably 3.1 million children under five and leaves 161 million stunted. Rapid population growth and climate change pose new challenges to an already overburdened food system.
It is clearly obvious—I know that the British Government agree with this—that solving these problems can be done only as part of a collective global effort.
There are some simple and some not so simple solutions. Breast-feeding within the first hour and exclusively for the first six months is the first and simplest intervention and has long-term benefits for nutrition. However, of course it needs the mother to be healthy enough to breast-feed, and it requires the culture surrounding her to encourage her and requires her to understand that that is the best start she can give her child. Of course, the noble Baroness is quite right that this is a women’s issue in particular.
Experts are also figuring out how to breed crops with higher nutritional levels and how to get key nutrients in the food supply, in either salt or cooking oil. Those are promising approaches. However, nutrition is still one of the biggest mysteries in global health. Nutrition gets better as a country gets richer, but it does not seem to have any noticeable effects on positive outliers—there are poor countries with almost half their children undernourished.
In exploring some of the solutions put forward in this area, I came across the Nutrition Knowledge Bank—part of the GSMA mNutrition initiative to help tackle malnutrition in Africa and Asia—which is a collection of content on good nutritional practices and includes downloadable factsheets and mobile messages. This is not the complete answer, but it must be part of the solution, which is to do with knowledge and accessibility and using modern technology to improve nutritional practices, particularly for women and the vulnerable groups we have mentioned. I was struck by the work being undertaken by mNutrition in the various places in the world where it works.
The noble Baroness mentioned the targets that the World Health Organization put forward in this area. The Comprehensive Implementation Plan on Maternal, Infant and Young Child Nutrition, which the WHO endorsed in Geneva in 2012, set some very high targets indeed for solving this problem. The plan proposes:
“40% reduction of the global number of children under five who are stunted … 50% reduction of anaemia in women of reproductive age … 30% reduction of low birth weight … no increase in childhood overweight … increase the rate of exclusive breastfeeding in the first six months … reduce and maintain childhood wasting to less than 5%”.
Five action points flow from the World Health Organization’s proposals. I will not go through those in detail, but I ask the Minister whether the British Government are working to the action plan, to what effect and with what resources.
When the British Government were tackling tobacco as a public health issue, one of the biggest drivers of change in governmental practice were the strong rules about discussions with the tobacco industry. What discussions have been had, and what is the relationship, between the Government or DfID and the food industry? Some of the large companies providing food throughout the world that is not nutritious are based in the UK and Europe. Are the British Government thinking about how to deal with this fact? Indeed, is the Minister being lobbied by some of our large food manufacturers? When we were addressing the issue of tobacco, tobacco companies switched their attention from the first world to the third world because that was where they could make their money. That issue occurred to me and I genuinely do not know what the answer to the question is, but it is one that we need to ask. Does DfID have guidelines on this matter?
Has thought been given to how we will continue to be a leader in our aid programmes, particularly on this one, in a world in which we will not necessarily be able to join forces with our European colleagues in a coherent way, given that a lot of our aid work is currently done through our relationships with the European Union? Also, what consideration has the Minister given to the changing attitude of the new Administration in the United States of America to world aid and to the United Nations and its institutions? I accept that it might be too soon to say, but these are things that we need to think about.
My Lords, I too thank the noble Baroness, Lady Manzoor, for initiating this debate, which, I think, follows on from Questions. There is a consensus in this House on the 0.7% aid target and enshrining it in law. The reason for that is very practical: it allows the United Kingdom to support long-term sustainable development projects which really make a difference to the lives of the world’s poorest and most marginalised people. The UK’s commitment to improve the nutrition of 50 million people by 2020 is a good example of this, and is the example I would like the Prime Minister to write about in the Daily Mail. It is exactly these issues that we need to be focused on, and I therefore very much appreciate the noble Baroness’s initiating this debate.
As we have heard from my noble friend and from the noble Baroness, Lady Manzoor, good nutrition is the foundation of sustainable development, and of building health and resilience. Twelve of the SDGs agreed in New York have indicators relevant to nutrition. Without strong nutrition, other health interventions are less effective. Nutrition interventions also promote economic development. Every $1 invested in nutrition achieves a $16 return in benefit. That is the key message of our overseas development work, which we should put into the media in order to respond to some of the ridiculous arguments that have been made. Countries lose at least 10% of their GDP because of malnutrition. It stagnates personal, societal and national development. That is why it is so key that we make progress on this. As we have heard, for women and girls, who are often most vulnerable to under nutrition, nutrition interventions are crucial for supporting their full development potential.
The second SDG is to:
“End hunger, achieve food security and improved nutrition”.
Its second target is:
“By 2030, end all forms of malnutrition, including achieving, by 2025, the internationally agreed targets on stunting and wasting in children under 5 years of age, and address the nutritional needs of adolescent girls, pregnant and lactating women and older persons”,
as the noble Baroness, Lady Manzoor, pointed out. Older women are particularly vulnerable to malnutrition, and attempts to provide them with adequate nutrition encounter many practical problems. Their nutritional requirements are not well defined and ageing affects nutrient needs—some requirements increase while others decrease.
As we have heard, good nutritional status reduces maternal deaths, improves school outcomes, and contributes to delayed marriage and pregnancy. It saves lives, improving potential and promoting progress, alongside intergenerational health and prosperity. The onset of menstruation in adolescent girls results in a much higher demand for nutrients. Not receiving them can lead to anaemia, which compromises growth and causes fatigue, dizziness, weight loss and reduced immunity. The impact of poor nutrition on maternal health is irrefutable: deficiencies of essential micronutrients and energy during pregnancy can cause maternal complications and haemorrhages and, in many cases, as we have heard, mortality. Nutritional deficiencies can also contribute to foetal birth defects and foetal or new-born mortality. There is no doubt that improving nutrition, alongside good antenatal care, can improve these numbers dramatically. Good nutrition is crucial for unlocking the potential of women and girls across the life cycle and for giving them the best opportunity to become active members of their community.
As my noble friend highlighted, around half of under-five deaths can be attributed to underlying malnutrition. Malnourished children are nine times more likely to die from common childhood infections such as pneumonia and diarrhoea, and improved nutrition is key to changing the prospects of many. In low-income countries, 37.6% of children aged under five are stunted. They are likely to grow into stunted adolescents. For girls, this means they face a higher risk of pregnancy-related complications. Stunting is one of the leading causes of death among this demographic. Over 2 billion people suffer from micronutrient deficiencies. Anaemia, often a result of iron deficiency, affects 500 million women of reproductive age and is responsible for nearly 20% of maternal deaths. In 21 countries out of 41 with data on anaemia prevalence, more than one-third of adolescent girls are anaemic. Undernutrition has a devastating impact on the physical and development potential of girls. Malnourished adolescents go on to lose around 10% of their lifetime earnings as adults. This affects the economic development of these countries which is so vital if we are to change and challenge poverty in our world.
As my noble friend Lady Thornton and the noble Baroness, Lady Manzoor, said, we can be proud of the United Kingdom’s leading role in the world in the fight against malnutrition. Certainly, this commitment was renewed in the recent bilateral development review, about which we have spoken in this Chamber, following on from 2013 when the UK hosted the inaugural nutrition for growth conference in London and made financial commitments—£655 million for nutrition-specific interventions and £604 million for nutrition-sensitive interventions until 2020. As the noble Baroness, Lady Manzoor, said, the Government, as part of their 2015 manifesto, pledged to improve the nutrition of 50 million children aged under five, women of child-bearing age and adolescent girls in developing countries by 2020, which is the N4G commitment.
However, despite these commitments, the world is not on track to achieve the 2025 global nutrition targets. We need to fundamentally address these issues. I welcome DfID’s plan to improve the nutrition target by 2020 and I urge the Minister to commit the Government to invest a further £530 million after 2020. DfID should rapidly disburse its 2013 commitments to nutrition and increase its ODA to nutrition, because it is the key to development; £530 million of new money should be invested between 2016 and 2020 because good nutrition, as we know, has a significant impact on improving women’s economic development, as well as on health.
We need an integrated approach which delivers nutrition as part of a package of wider health and poverty reduction intervention and improves the value for money of health investments. I hope the Minister will support the scaling up of nutrition-specific interventions to tackle all forms of malnutrition and the integration of these interventions into the design and delivery of reproductive, maternal, new-born child, adolescent and other health programmes.
In 2015 the Government made a commitment to leave no one behind in their development work. DfID should ensure that nutrition programmes target and improve nutrition for the most vulnerable and hardest to reach. Does the Minister agree that to do this, DfID should produce disaggregated data for prioritising investments, with a focus on high burden irrespective of low/middle-income status, and allocate resources to strengthen national information systems to ensure that we have that proper and adequate data?
My Lords, I join other noble Lords in paying tribute to my noble friend Lady Manzoor for securing this debate. The subject is dear to heart. She has devoted her professional life to it and brings that experience into your Lordships’ House. Her convening of the round table before Christmas enabled an exchange of views with the DfID officials who attended and was helpful in shaping our policy in relation to this issue. I also thank the noble Baroness, Lady Thornton, and the noble Lord, Lord Collins, for their thoughtful contributions from the Labour Benches on these matters. They rightly pointed out that nutrition is the basis, the building block, for all other development. It is crucial, not only in the sustainable development goals but as a woman’s issue in the lead-up to International Women’s Day.
As an aside—I hope the House will bear with me—I am particularly disappointed that we have not heard from the Liberal Democrats; in fact there is no one on their Benches. Normally I would not make reference to that but, because I have had some extra information as to why that may be the case, I want to put on record that this is an important issue that is central to development and we should focus on it and make sure our voices are heard.
Malnutrition still affects one in three people globally. It is holding back the growth and development of both people and countries. Women affected by undernutrition are more likely to give birth to small babies, and those babies will be disadvantaged throughout their lives. Undernourished children are more likely to die young, contributing to 45% of all under-five deaths. Children who survive do less well at school, have 10% lower lifetime earnings and are more likely to have undernourished children themselves.
The economic consequences of undernutrition in affected countries represents a loss to GDP of 10% year on year, whereas every pound spent on reducing stunting has an estimated £50 to £60 return in increased incomes and economic growth. Therefore, tackling malnutrition is critical to reaching at least 11 or 12 of the global goals. Eradicating disease, ending extreme poverty and empowering women will happen only if they are free from malnutrition. A healthy, prosperous and stable world is much less likely while malnutrition persists.
Nutrition is a long-term development challenge and an immediate humanitarian challenge. In 2017 the world is facing unprecedented humanitarian needs. A famine in South Sudan was declared today, along with Her Majesty’s Government’s response to it. It is a call to arms for the international community to respond much more effectively and urgently to the challenge already in South Sudan and just around the corner in Somalia, north-east Nigeria and Yemen. The international community must get much more to the forefront of these issues. However, as the noble Lord, Lord Collins, said, we can rightly be proud of the fact that the UK is leading in this area. We support the comments and remarks of the Secretary of State, Priti Patel, made today to the international community.
UK aid on the ground is saving lives. Now we are calling on the international community to step up its support. The longer we wait, the higher the price humanity will have to pay. For all these reasons, improving the nutrition of women, girls and children in general is a top priority for our work in developing countries. It is for these reasons that at the Nutrition for Growth summit in 2013, to which my noble friend Lady Manzoor and the noble Lord, Lord Collins, referred, we pledged to invest more in programmes that address both the immediate and underlying causes of malnutrition. It is for these reasons that in 2015 the Government committed to the nutrition of 50 million people—women, girls and children—globally by 2020.
Delivering this result will be a priority for DfID, with a focus on quality and value for money. I am pleased to say that we are on track to do that, thanks to the work we are doing to scale up on nutrition across the 20 priority countries that we have identified. More broadly, we are far from complacent. In the coming months my right honourable friend the Secretary of State will launch a new UK position paper on nutrition. This will set out further accelerated and intensified action. The noble Lord, Lord Collins, invited me to say a little more about what the financial resource behind that might be. Like me, he will have to be patient to see that coming forward, but I hope that it will be something where, as on so many things, there is cross-party support.
Our new approach will be built on the latest evidence. This shows clearly that there is a basic package of things that need to be done to most effectively tackle malnutrition. This includes vitamin A and zinc supplements for children, maternal micronutrient and calcium supplementation, breast-feeding promotion—which the noble Baroness, Lady Manzoor, referred to—education around complementary feeding, and specific management of severe acute malnutrition, the most life-threatening form of malnutrition.
The evidence also points towards focusing on both girls and boys under five years, as this is when malnutrition is most likely, has the biggest impact on children’s future potential, and can be most easily prevented. It is also increasingly clear that, for maximum impact, we need to focus more on adolescent girls—a point made by the noble Lord, Lord Collins, and my noble friend Lady Manzoor—both for their own benefit and to prevent malnutrition in future generations.
As my noble friend Lady Manzoor articulated so clearly, we need to ensure that the wider DfID portfolio—be it health, water, agriculture, or economic development programmes—is addressing malnutrition at the same time as hitting other objectives. Our recently published Economic Development Strategy commits us to do this very thing, and we are now specifically looking at how we can go further in integrating nutrition into health. This multisectoral approach not only delivers better results; it also represents better value for money. Delivering multiple outcomes through our programmes maximises the impact of every pound spent.
While tackling undernutrition will remain DfID’s primary nutrition focus, failing to consider overweight and obesity will leave many countries with a costly public health problem in the future. DfID will therefore also identify ways to avert overweight and obesity through our work on undernutrition in low-income countries, making the most of UK expertise in this area. Preventing undernutrition itself will play a role, as undernourished children are at increased risk of being overweight, of obesity and of related non-communicable diseases in adulthood.
As I have outlined, nutrition is a top priority for DfID’s work. However, the UK acting alone cannot of course rid the world of malnutrition. The noble Baroness, Lady Thornton, rightly pointed this out and stressed the importance of working with our European partners. At present, we continue to do that through the European Development Fund. In future, we will continue to work with them through the many multilateral institutions in which we have a shared position, involvement and concern.
Inequalities in malnutrition are also increasing. Girls, excluded ethnic groups, children with disabilities and displaced people—some examples of whom the noble Baroness, Lady Manzoor, referred to in respect of her visit to India—and those living in fragile and conflict-affected states are particularly affected. The new UK position paper will therefore also set out our determination to galvanise the international and business communities to follow our own leadership on nutrition. We will specifically ask countries which are home to large numbers of undernourished people to set out quality, multisectoral plans and financial commitments to tackle undernutrition. We will continue to support the Scaling Up Nutrition movement, by contributing to the costs of the secretariat and by providing assistance to Governments within the movement to improve their nutrition programming.
We will seek new commitments from businesses, which have a crucial role in improving both supply of and demand for nutritious food. The noble Baroness, Lady Thornton, raised a good point about potential conflicts of interest within the food industry. We are supporting the development of guidelines to ensure responsible behaviour by businesses on nutrition, working with Access to Nutrition Index to promote improvement in business practice.
We will lobby other potential global funders of work against malnutrition to step forward and step up, including through the Power of Nutrition financing facility. And we will call on our multilateral partners to up their game, focusing more sharply on supporting Governments to develop and implement their own national nutrition plans.
To advance this agenda, the UK will play a leading role in a series of global nutrition events throughout 2017. Starting with a global call to action at the World Bank spring meetings in April, there will be moments for each group of stakeholders to make new commitments at that point.
Lastly, we will invest to ensure there are better data—a point raised in the debate, and the point about disaggregation of data was particularly well-made—to measure the impact of our own and others’ efforts, and to ensure that we and others can be held to account for delivery.
I am grateful to my noble friend Lady Manzoor for raising this timely debate, and for the expertise she brings. I am grateful also for the contributions of the noble Lord, Lord Collins, and the noble Baroness, Lady Thornton, on this crucial issue. We will continue to work with civil society and the private sector, to get the world back on track and make sure we achieve Global Goal 2 by 2030, and leave no one behind.
House adjourned at 7.36 pm.