17A: Because it would give rise to a new head of public expenditure, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.
My Lords, it is a great pleasure to be back at the Dispatch Box to take this Bill, I hope, through its final stages in Parliament. I am very pleased to see how much progress has been made, and I take this opportunity to pay tribute and extend my thanks to my noble friend Lord Kamall, who carefully steered the Bill through Report and Third Reading in your Lordships’ House.
The Government have listened carefully to the points raised in scrutiny on this Bill, both in this House and in another place. We have taken on board recommendations made in both Houses of Parliament and have tabled amendments where those recommendations have strengthened the legislation. I am confident that the Bill is now in a form that will meet its objectives. Importantly for the debate before us today, that includes preserving a balance between landowners’ rights and the wider public interest in delivering telecommunications networks.
As I shall set out now, I hope that your Lordships will agree with Members in another place that Amendment 17 should not remain part of the Bill. The amendment in the name of the noble Baroness, Lady Merron, would add a new clause to the Bill requiring the Secretary of State to commission an independent review of the effect of the Electronic Communications Code, and of the Telecommunications Infrastructure (Leasehold Property) Act 2021, on the deployment of telecommunications infrastructure. Her amendment understandably aims to provide transparency, accountability and ongoing evaluation of the legislative framework that underpins digital deployment in the UK. As the noble Baroness knows, I fully appreciate the sentiment behind it, and I commend noble Lords in all parts of the House for their efforts to improve connectivity. I am grateful for the time given by the noble Baroness and others yesterday to discuss this ahead of our debate today. It is clear that we share the same goal, although our opinions in some instances differ about how to achieve it.
Your Lordships will have seen that the reason given by another place for disagreeing to the inclusion of this amendment is that it would give rise to a new head of public expenditure. This is certainly true, and the financial privilege of the Commons must be respected. However, this is not the only, nor the primary, reason why the Government do not accept the amendment. We believe that the amendment is unnecessary for a number of reasons, which I will set out briefly.
The amendment would seek to impose obligations to review and report on progress towards government connectivity targets and on competition in the market. However, monitoring of these is already in place, and the Government are committed to keeping a very close eye on the impact of the legislation in the future. I will give some examples. Ofcom’s annual Connected Nations report already gives a snapshot of mobile coverage and broadband availability across the United Kingdom. BDUK also publishes quarterly updates on the progress of Project Gigabit, with the latest coverage information available on thinkbroadband. Government connectivity targets and the success of government interventions to increase our connectivity, including through this Bill, can therefore be measured against regular existing reports.
DCMS will continue its engagement with all interested parties once the Bill receives Royal Assent. That will, among other things, help inform a robust implementation strategy, which I know landowner representatives in particular are keen to be involved in. The department will also continue its involvement in regular workshops, attended not only by industry representatives but by members of landowner organisations, including the CLA, NFU and CAAV. These are not just talking-shops; they are producing practical tools, including agreement templates, as well as a pilot communications framework. I will gladly talk a bit more about the great collaboration they are encouraging, and they are also an invaluable insight into how the market is functioning.
I recognise your Lordships’ keenness to see a report on the impacts of the legislation. I hope that noble Lords will be reassured to hear that the findings from this engagement and monitoring will be reflected in an update on how the changes made by this Bill have worked in practice. In line with our existing commitments, the Government will submit this to the relevant Select Committee of Parliament. If that update highlights anything which has a significant impact on delivery or connectivity, the Government will of course see what action can be taken to address this to ensure that our crucial connectivity goals are met. I know that noble Lords will rightly hold us to account on them.
Let me say a little more about why we believe this amendment would not be a better way of going about this. The Government have frequently set out the opinion that the market is settling and that operators and site providers are working together in an increasingly collaborative manner. Though I am grateful to them for their time and their conversations with me and officials at the department, I know that some noble Lords remained unconvinced about this. However, over the last two years, the department has chaired the regular workshops I have just mentioned. One aim of these workshops is to encourage greater collaboration between stakeholders, and they are open to everyone across the industry. As I have said, these workshops provide valuable insights into how the code is working in practice, while supporting better ways of working for everybody in relation to the code.
I emphasise that the Government fully expect tele- communications operators in particular to recognise the contribution made by those whose land is used to host apparatus. Operators have a responsibility to show fairness, to behave co-operatively and, above all, to treat landowners with respect if real connectivity is to happen. One of the key outcomes has been the creation of a national connectivity alliance, which will officially be launched later this week. That is not a government initiative but has been created by representatives from across the industry. It is an independent body, which will be led by a steering group comprising an equal number of operators and landowner representatives. It will co-ordinate working groups to examine and make recommendations on a wide range of issues of mutual interest, including Ofcom’s code of practice. The alliance’s aim is for these working groups to produce best practice guidelines which can then be used across the industry.
The Government strongly support the creation of this body and believe it can do much to build on the improvements we have already seen in relations between operators and site providers, as encouraged by the work- shops, which in turn will help to speed up connectivity. This improved collaboration is reflected in the number of agreements being concluded, which is increasing year on year. For example, in 2018 only 39 renewal agreements were completed, but by 2021 this figure had increased to 1,015. If the market were not settling, we would not be seeing increases such as this.
The Government are concerned that imposing a time-bound statutory review requirement would not only undo much of the progress that has been achieved since 2017 but would, in fact, lead to market stagnation and increased litigation. The prospect of a further review into the code would make landowners understandably reluctant to enter into agreements until the outcome of the review was published, which would leave operators with little choice but to take legal action to obtain the rights needed to improve and expand their networks. This would inevitably slow down deployment generally, and the hardest-hit places are likely to be those where deployment is already commercially unattractive, such as rural areas, with operators likely to focus their attention elsewhere. I am thinking in particular of the shared rural network programme, which aims to deliver 4G connectivity to 95% of the UK’s land mass by June 2025.
For the reasons I have set out, therefore, the Government firmly believe that the proposals contained in this amendment, although undoubtedly well-intentioned, are unnecessary and risk being a hindrance to the better connectivity and delivery that I know the noble Baroness wants to see. I therefore hope that your Lordships will agree that it should not remain in the Bill.
My Lords, I welcome Amendment 17, which had not even made it to the internet section of the Bill when I looked an hour ago. I also welcome the Minister’s mention of the national connectivity alliance as a good co-operation between site providers and operators.
The reforms in the Digital Economy Act 2017 have resulted in lengthy legal disputes, causing significant delays to rollout. Small businesses and local sports clubs, many of which host telecoms infrastructure on their land, have lost thousands of pounds in income, with no commensurate boost to digital connectivity. This was foreseen by the current Prime Minister during the debate on the Digital Economy Bill in 2016, when he warned:
“Interfering with property rights, as the code does, is a major step for this House to endorse. I therefore urge the Government to ensure that the Bill benefits not just the network operators’ balance sheets, but the public interest.”—[Official Report, Commons, 13/9/16; col. 828.]
Overall, I am disappointed at the lack of compromise elsewhere by the Government and the absence of rigorous evidence for the Bill. It appears that its policy development has been entirely reliant on the telecoms operators. It is vital that the Government use all the tools still at their disposal to limit the most egregious effects of this legislation, including through the use of transitional arrangements.
On preventing backdated payments, the Bill as drafted will allow the courts to impose lower rents on site providers—I meant to declare an interest as a site provider—and this can be dated to years before the court issues its order. This will have the effect of courts imposing backdated payments of thousands of pounds on site providers, despite those rent levels having been agreed between partners in good faith. The Government have promised to consider addressing this issue through transitional provisions, and it is vital that they do so and consult properly with affected parties to ensure that their measures are effective.
The Government have not heeded the significant disquiet on transitional relief on valuation throughout the Bill’s passage through Parliament. I would like to put on the record the significant damage that will be caused to the market by extending the “no scheme” valuation into the Landlord and Tenant Act 1954. If the Government are set on not revisiting them, the changes to the regulatory framework and expansion of the 2017 reforms proposed by the PSTI Bill should be brought in gradually to avoid significant financial shocks for site providers.
I turn to the government evidence base. The impact assessment for the legislation at the time showed that the Government anticipated a reduction in rents of 40%. I have heard stories from site providers who have seen rent reductions of more than 90%, but even the operators accept that the rent reductions have been 63%. Although this is an unsourced and untested figure, it is still a huge reduction.
It is also concerning that the Government have refused to accept other sources of evidence. Last week, following a very useful meeting with the Minister, I received a document from DCMS expressing its concerns over a report produced by the CEBR, an independent and well-respected economic analysis organisation. It made a number of assertions which I believe are incorrect. First, it states that the CEBR report over-emphasises the interests of landowners. This is not borne out by the evidence cited in the Government’s report, which includes research funded or written directly by operators themselves. Secondly, it states that the CEBR report assumes that HMG’s policy will not reduce the number of delayed negotiations. This misses the point of the CEBR critique: the Government’s purpose should not be to expedite disputes but to prevent them arising. The view of the CEBR and the Law Society is that the PSTI Bill does not address this.
Thirdly, the document states that the CEBR assumes that reverting to the pre-2017 regime will not impact operator behaviour. This is based on the false assumption that the CEBR recommended a reversion to the pre-2017 status quo. It does not. Instead, it suggests an alternative code based on the Law Commission’s 2013 report. Finally, it states that delays to code reform will slow the shared rural network rollout. The post-2017 code reforms were already available to operators on all existing sites, and money saved from reduced rents has not been reinvested into the rural rollout. There is no reason to think that the savings from the PSTI Bill will be reinvested, and therefore rent reductions—or their absence—are not linked to the pace of rollout.
I am concerned that the Government are willing to dismiss independent evidence on spurious grounds simply because it does not align with what appears to be a pre-cooked policy direction. It is even more concerning that the Government describe their evidence as uncontested when there has been such widespread and cross-party opposition to this policy. During its consultation on the reforms that would become the PSTI Bill, the Government received over 1,000 responses, and later admitted that the vast majority related to the valuation regime. It is therefore highly inaccurate to suggest that their evidence has not been challenged, or that their position is widely accepted.
Ministers have also disputed factual evidence of the sheer scale of cases being taken to court, asserting instead that, as the Minister has just said, the market is settling and consensual renewal numbers are increasing. It is concerning that the Government see hundreds of court cases each year as the market settling; certainly, in my dealings with the operators, it was not a very calm operation. The lack of proper evidence has created unnecessary risks for the future of this market. I hope that, through Amendment 17, the Government will be open-minded and display more responsiveness to all available evidence in future.
First, I thank the Minister and his officials for corresponding and meeting with me to discuss the Bill. That said, it is a shame that the Government in Motion A have set their face against Amendment 17, which is seeking a review of the Bill within three months, particularly as the festering problem at the heart of the Bill is the valuation method, which was not even a subject of consultation in preparing the Bill.
This legislation legalises extortion. It allows operators to strip site owners of their property rights and to confiscate their incomes, in some cases even retrospectively clawing back site rents paid under legally binding agreements. The Digital Economy Act 2017 has not led to the market being “settled down”, as the Government claim; it has, in fact, produced a steep rise in long and expensive tribunal cases. That rise would be far steeper but for the inequality of rights and resources between telecoms companies and the site owners, meaning that very few can afford to fight their cases. The Government’s claims that agreements are consensual, or can be solved by voluntary alternative dispute resolution, ring hollow when the law is so one-sided and the site owner is threatened by operators throughout any so-called negotiation with expensive court action. The fact is that the pendulum of power has swung way too far in favour of the operators.
DCMS claims that the money the telecom companies save by imposing rent reductions using this legislation is essential to achieving 5G rollout. It bases this claim on some shaky, secretive and one-sided evidence provided by the operators. The Government’s own predicted fall of 40% in rents, which the previous speaker referred to, has, by their own admission, been a 63% fall and, in some cases, 90% or more. As to whether this money is actually needed by the operators, when I asked DCMS even to estimate how much this sum would be for the large and profitable telecoms companies—how much they would actually save—DCMS had no idea of the amount, nor was it able to identify any guarantees that these savings would be passed on to consumers rather than simply enriching the telecoms companies.
This money, which had a huge impact on the site owners, is being removed from communities, small enterprises and farming families, thereby depriving them of much-needed funds to invest in their own businesses and activities locally. Are these operating companies really so hard up that they need to rob site owners in this way? I see in the Financial Times today that one of them is selling half its sites to a global private equity company. That should certainly raise a pretty tidy sum.
The House should also take note that the operators empowered by this legislation are not even regulated. At the heart of the problem is an absurd site valuation process that urgently needs to be reviewed and rebalanced so that site owners and operators can work as willing parties to achieve 5G rollout. As mentioned earlier, the House should note that this illogical valuation process was not included in the earlier consultation on this Bill.
I urge the Minister to listen to the concerns from all sides, notably from his own Benches in this House and the other place, as well as professional bodies in support of a review or at least to bring forward a meaningful government amendment to review the valuation method towards some valuation middle ground. He has not done so and no single amendment has so far been accepted by the Government. The telecoms operators which have lobbied so successfully for this opportunity to enrich themselves must be delighted with this early Christmas present. The families and the organisations being plundered may have a rather different view.
My Lords, I greatly support this amendment, as I did at an earlier stage of the Bill. Therefore, I have to say that I do not agree with the Motion in the name of the noble Lord, Lord Parkinson.
I detect in the brevity of the reasons given for why the Government were not able to accept any of the matters put forward—and mentioned just now by my noble friend Lord Cromwell—the same endeavour to deny due process. Blocking the evidential basis in what has been brought before this Bill will then affect the process of getting a fair deal at the end. Exactly the same process will be relied on in any tribunal case or in any alternative dispute resolution forum. This is why proper access to an independent adjudicator is, in my estimation, already prejudiced by the processes in this Bill.
Seen in the context of the transfer of private rights from individuals and small property owners to an influential and well publicly funded band of corporate middlemen, the site companies, this, I am afraid, bodes ill. Certainly, I as a property professional and valuer can see this very much in the economic context—of course, valuers do not make the rules; they simply interpret what others are doing outside. This is why I have consistently said that this is something that will adversely move the goalposts, if not the whole playing field.
The measure in this Bill rolls back 60 years of compulsory acquisition and compensation practice. I am not clear that the subsequent need, as will occur as a result of the Bill, to claim damage occurring at a later date does anything other than reverse the burden of proof in favour of the state—or, in this case, the operatives of the state, and against the individual. I think that alters the parameters of fair compensation.
I wish the proposed alliance that the Minister referred to every good fortune, but I do not believe that it will do anything to improve on what has been nothing short of a land rights grab. I predict that a great number of the claims made in support of this will not be borne out by the facts when we look back in due course. On the delivery of the demonstrable public interest benefits, also referred to by the noble Lord, Lord Cromwell, where is the objective evidence? I predict that it will not even be visible in the corporate operation of the telecoms industry. So it is no good looking for that particular needle in that particular haystack.
What about the public utility performance by those not subject to public utility oversight and objectives? That was a point mentioned by the noble Lord, Lord Fox, at an earlier stage in our deliberations. If there is an impression of site providers being turned over, to use the cant of the trade, I am equally certain there will be a similar attempt to turn over the public interest in due course, which will be equally devoid of any evidence base or provable cause and effect. From a valuation standpoint, the absence of evidence, cloaked as it is often in confidentiality, forms a useful basis neither for the processes of this Bill nor for ADR or before a tribunal.
The basic premise of altering the valuation principle from market value to, effectively, land value—or, to put it in my terms, existing use value—is undefined as a concept. It is haphazard in practice, because it will relate simply to the actual use at any given time, so there will be very little consistency involved there. It is a basic denial of core transactional philosophies that sit behind all valuation and all transactions in the marketplace, and all confidence in the handshake that I have mentioned before in this House that is between the parties. The consideration is always—has to be, by definition—worth more to the recipient than the asset itself. It cannot be otherwise. I see this as a denial of that principle.
This has significance. Although outside people may think this is a wonderful idea, when it comes to the individual deals that needs to be done, it will have a chilling effect—I think it can be no other than that. I believe that sentiment is already actively moving against it. I do not know, because the Minister has not come up with it, where the evidence of the deals being successfully done has come from. For all I know, it may be generated by housebuilders keen to get good 4G coverage for their latest new housing development. That is fine, but it does not make the daisy chain of 5G connectivity across the country successful, and I think we really have to consider that.
I would still be very supportive of a review. If anything, I would like it to start a bit later and be more searching. That is essential, because we are sleepwalking into the unknown in terms of valuation technology, market sentiment and, above all, the evidential base. I would not be doing my duty in this House if I did not say that that fills me with considerable concern. This is no way to produce results that command universal buy-in, bearing in mind that everybody agrees that 5G and the better rollout of 4G are desirable in their own right. If what is happening before us is not snatching defeat from the jaws of victory, dissent and disillusionment from what should be a common purpose, I do not know what is.
My Lords, I will briefly add my disappointment to that voiced by a number of other noble Lords. I note, as previously, my various interests relevant to this legislation. I also welcome the noble Lord, Lord Parkinson, back to his seat and thank him for the time he took to meet me and the noble Lord, Lord Cromwell, last week.
I asked in Committee, as long ago as June, for the data on which the Government were basing their approach to valuations in this legislation. I was promised it nearly six months ago. We finally received it last week—two pages of rather thin A4 paper which say that the Speed Up Britain campaign presented evidence to the House of Commons committee that average rent reductions are in the region of 63%. That is it—the evidence on which the entirety of this valuations issue is based. It is incredibly disappointing that it took so many months to get it and that there is really no evidence whatever.
I note also, as the noble Earl, Lord Lytton, just stated, that we are given numbers of 39 agreements in 2018 and 1,015 in 2021. To what extent do those agreements fulfil the Government’s connectivity and Project Gigabit ambitions? Where are they taking place? Are they rural or urban agreements? It is of no use simply to give us bare numbers.
The noble Lord, Lord Parkinson, undertook from the Dispatch Box that the Government would provide regular updates to relevant committees. I would like a bit more specificity, if he can, on exactly which committees the Government will provide updates to, how regularly they will be provided, what their content will be and whether they will be published to the whole House, as I imagine they should be. Just undertaking to provide updates is simply not sufficient.
My Lords, I am grateful to the Minister for his earlier engagement on the issues represented by this amendment and for outlining why the Government will not accept it. It was rather fuller, I am glad to say, than the embarrassingly short set of reasons set out, as he almost admitted himself.
The noble Lords, Lord Northbrook and Lord Cromwell, and the noble Earls, Lord Lytton and Lord Devon, have very cogently explained why they believe—as we do on these Benches—that an independent review of the Electronic Communications Code is needed to get our telecoms legislation to the right place. Indeed, the noble Baroness, Lady Stowell of Beeston, said on Report that
“the case for Parliament imposing this independent review is compelling.”—[Official Report, 12/10/22; col. 834.]
I absolutely agree. We have heard powerfully today why there is such a strong view that this Bill is unfairly skewed against site owners, many of which are small societies and clubs. We must get the balance right for the Electronic Communications Code between operator and landowner and ensure that it is fit for purpose in delivering broadband and 5G rollout targets.
These targets have changed markedly over time. There has been a continual shifting of the Government’s gigabit target, which it seems has now shifted from over 99% to 85% of premises by 2025. There is a continuing rural/urban divide, and real problems with latency in rural areas.
Both the noble Lord, Lord Kamall, in his brief tenure as the noble Lord’s predecessor and successor, and the noble Lord, Lord Parkinson, have asserted that everything is starting to settle following the 2017 reforms to the Electronic Communications Code. Indeed, the noble Lord, Lord Kamall, promised to make the evidence available as soon as possible, but such evidence as we have heard to today, as has been received, is highly questionable; the source, Speed Up Britain, is actually the operators themselves, as the noble Earl, Lord Devon, has said. The fact of increasing numbers of renewals does not show that the market is necessarily operating properly, when the objective of the Bill after all is to bring forward new sites and thereby increase rollout.
The CEBR report referred to by the noble Lord, Lord Northbrook, was commissioned by Protect & Connect, but was researched independently, unlike the research for Speed Up Britain. It points to far higher rent reductions than those of 63% cited by the Government, and a much wider market impact, as well as a reduction in the pace of rollout. The Government have not properly explained why they reject the evidence of the CEBR report.
As regards litigation, I believe that the Minister has indeed read the recent article in the Times headlined “Telecoms cases swamp tribunals”, which starts off:
“Fears are growing that land tribunals are being inundated by a rising tide of telecommunications cases since ministers amended rules to boost the country’s drive towards faster broadband.”
That seems to be stronger evidence of problems with the post-2017 ECC than anything the Government have produced. How does the Minister see the number of cases being reduced as a result of this Bill? The lack of official, proper evidence strongly underpins the arguments for an independent review.
The noble Lords, Lord Kamall and Lord Parkinson, have also asserted that the amendment overlooks the substantial review and reporting mechanisms that are already in place. Indeed, the noble Lord, Lord Parkinson, today mentioned Ofcom, BDUK and the DCMS, but what specific review of the operation of the Electronic Communications Code will be in place regarding the KPIs—key performance indicators—to actually deliver the Government’s strategy? The Minister has promised rolling workshops and he tried to explain what they were designed to achieve. As for a “pilot communications framework”, I am not sure I quite understand what that is designed to achieve. The key issue is whether the Government will look at how the market is functioning and whether the workshops will be designed to make sure that changes are made so that the market does function properly.
The Minister also prayed in aid the very newly created national connectivity alliance. He gave some warm words about the interests of landowners, and I hope that it is a fully representative body, but surely best practice guidelines, which have no enforcement mechanism, are not going to cut it either in ensuring how the Electronic Communications Code operates in light of the amendments made by this Bill. Will the national connectivity alliance specifically be asked to report on the functioning of the market? That is an extremely important aspect.
This is in the context of the Government continually failing to hit targets on broadband connectivity and digital deployment. I am sorry to say that their reluctance to agree to a review of this nature is just another example of their unwillingness to be scrutinised. I hope that the Minister can give us a better answer, but so far it has been extremely disappointing.
My Lords, I am sure the Minister has picked up on the mood of your Lordships’ House today, as I know he will have done in previous debates. I am grateful to him for outlining the Government’s approach on infrastructure rollout and the concerns regarding a review. However, like other noble Lords who have spoken today, I feel that the department is still missing the point. It is appreciated that the Minister acknowledged the sentiments behind the original amendment. In common with other noble Lords, I am also grateful for the time that he and his officials have given to the discussion and consideration of the points that have been raised.
However, the original amendment before this House, which we are looking at again today, was intended to help the Government—something I emphasised in the meeting with the Minister—not least because it is an attempt to bring together balance, fairness and efficiency and to take a rather different approach from the one we have seen thus far, which the noble Lord, Lord Clement-Jones, has just referred to, of a trajectory of continually watering down ambitions because the regime is simply not delivering at the required pace. It would be better to tackle the root problems to find a way forward than moving the goalposts, which is what has been happening so far.
The creation of new stakeholder bodies could prove to be a positive step, but we need to acknowledge that this is not the first time we have seen such an initiative. DCMS already runs a number of working groups, and the discussions within them have rarely led to any significant breakthroughs. It would be of interest to hear why the working groups in this setting will be any different. While wishing the national connectivity alliance well in its efforts, establishing new groups or structures will be of little use if they become—as other noble Lords have said—talking shops, or, very significantly, if underlying regulation becomes ineffective.
We welcome both sides of the rent debate getting around the table, but it is important to say that our concerns about rollout go beyond issues around the valuation of land. In any event, as the Minister has said, Parliament will not have a full role in the upcoming discussions. As the noble Earl, Lord Devon, has indicated, we could do with some more detail about the reference the Minister made to the way in which Parliament will be referred to in the deliberation. I would also appreciate the level of detail that has been requested.
These problems are not going away—if anything, the situation is likely to get worse before it gets better, particularly given the increased volume of tribunal cases and the Government’s refusal to make their new arbitration process mandatory. It seems that the Government hide behind existing processes, claiming that an independent review would unnecessarily duplicate Ofcom’s role, but the fact remains that the current system is not working, and that is what we have to address. The disputes and regulatory ambiguity mean that we are not delivering the upgrades that millions across our country so badly need.
I am sure we all agree that better connectivity is crucial to future economic growth—which is supposed to be the Government’s priority—but with every delay to our rollout and every problem that is being faced, we are losing ground to international partners. Yes, the Bill will deliver progress in some areas, which is why we will not delay its passage any further, but without concerted efforts, we are likely to simply rerun these very same debates again and again in the years to come. There was a window of constructive opportunity here, and I put on record my great disappointment that the Government have not recognised this.
My Lords, I am grateful to noble Lords for the points they raised in the debate today. I will try to respond to the questions that they have asked. I understand your Lordships’ desire to ensure that the Government are held accountable, as we should be, for the legislation that we enact, and that we are taking appropriate steps to monitor its impact. I would certainly not disagree with that sentiment.
I will start with the comments on the valuation regime, raised particularly by the noble Lord, Lord Cromwell. This, of course, has been debated at length throughout the passage of the Bill, both in your Lordships’ House and in another place. I am grateful to the noble Lord and others for their time to discuss this in more detail, but we are now reaching the point where we are at risk of repeating ourselves. There are no new points to be added at length. I ask noble Lords to bear in mind that the valuation regime was introduced through the Digital Economy Act 2017. In the intervening period, the public interest in access to digital services has only increased—a fact underlined, of course, by our reliance on those services during the Covid-19 pandemic. The case for a framework which encourages investment has, therefore, never been stronger, and we think the statutory valuation regime is an important part of that framework.
My noble friend Lord Northbrook and others mentioned our scepticism about the CEBR report. This is not to denigrate the CEBR itself, and I will not expand on the points contained in the note that he and other noble Lords have seen, to which he referred. I underline, however, that it was commissioned by the campaign group Protect and Connect, as the noble Lord, Lord Clement-Jones, acknowledged, and there are certain campaigning groups that have been, throughout the passage of this Bill, seeking to influence the debate, which have vested interests in the matter. They are perfectly at liberty to make their points in the way that they wish, but it should be borne in mind that the organisation funding this campaign stands to make significant financial gains if the changes to the 2017 valuation framework are reversed.
I hope I can give greater reassurance to my noble friend Lord Northbrook on the point he raised about transitional measures. The Government are considering the implementation strategy for this Bill very carefully, including possible transitional provisions. I reassure noble Lords that the implementation of the Bill will be discussed with all interested parties, including those representing the interests of landowners. The Government are committed to ensuring that the Bill is brought into force not only in a timely manner but in a sympathetic and responsible way, taking into account the range of impacts that different approaches may have on different groups.
The noble Earls, Lord Lytton and Lord Devon, the noble Lord, Lord Cromwell, and others flagged the evidence base on which the Government’s conclusions are based. The Government’s position is based on a wide range of information. That includes data on coverage and connectivity, which is collated by Ofcom and which demonstrates that substantial progress has been made since 2017. I repeat my apology to the noble Earl for the delay in sending him the data during our debates on this Bill, partly because of the interruption in service on my part. It is true that we have taken into account data provided by the industry on the number of agreements completed since 2017, but these are data that can be supplied only by the industry. If the valuation framework had stalled the market or slowed down deployment, it would not be in the sector’s interests to try to maintain that framework.
A number of noble Lords talked about the reduction in rent, which we have seen since the 2017 reforms. It sounds as though we might not come to an agreement on the precise figure, but rent is only one element of the financial package that operators may offer to landowners. Within the legislative framework, separate sums can be offered as compensation to cover potential loss and damage; other variations might occur in practice within the market. For example, as part of the financial package, operators might choose to offer an early completion incentive payment. I am concerned that some of the case studies that have been drawn to noble Lords’ attention may ignore the overall package offered to landowners or fail to acknowledge that figures presented might have been an opening offer, when ultimately very different terms might have been agreed once proper negotiations have taken place. The amount of rent received will, in practice, often depend on the much wider circumstances in which financial offers are made and final terms are agreed.
The noble Lord, Lord Clement-Jones, mentioned the report in the Times this week about the burden on the courts. It has been suggested, including in that article, that the 2017 reforms have caused courts to be overloaded and that that will delay the rollout of 5G services. If litigation backlogs were having an adverse impact on digital targets, that would certainly be a cause for concern, but we do not agree that is the case. The industry reports year-on-year increases in agreements being completed, and significant progress continues to be made towards the Government’s coverage targets.
Importantly, the figures which the DCMS has received from the Ministry of Justice show that only a fraction of cases commenced go all the way to a final hearing; the vast majority are resolved at a much earlier stage and without the intervention of the courts. This strongly suggests that effective and timely use of the alternative dispute resolution where appropriate can reduce litigation. For example, in the year starting 1 April 2020, 102 Electronic Communications Code court applications were received by the Upper Tribunal but only 11—around 10 %—were determined at a hearing.
The noble Lord, Lord Cromwell, asked whether the cost savings made by operators since 2017 are being passed on to consumers, and he is right to do so. We have always been clear that we do not think it is reasonable to expect the sector to provide pound-for-pound accounting to demonstrate that savings from code agreements translate into network investment or reduced pricing for their consumers. However, since 2016, the Government have set challenging coverage and connectivity targets demanding a level of industry investment which we believe requires us to maintain a legislative framework which makes deployment as cost effective as possible. For example, the shared rural network which I mentioned in my opening remarks will be underpinned by £530 million of industry investment.
As regards passing on savings directly to consumers, the department also works with the industry on measures to ensure that services can be made available to as many families as possible: for example, our work with broadband and mobile providers to bring high-quality, low-cost social tariffs to the market for as little as £10 a month. Available to people claiming universal credit as well as other means-tested benefits, social tariffs are available in 99% of the UK and from a range of providers, including BT, Virgin Media, Sky and Hyperoptic. DCMS continues to work with operators and consumer groups to help increase awareness of these low-cost offers to ensure that support reaches those who need it.
The noble Earl, Lord Devon, asked me to say a bit more on our commitment to report to the Select Committee, which was echoed by the noble Baroness, Lady Merron; I am very happy to do so. The Select Committee to which I referred was the cross-party Digital, Culture, Media and Sport Committee in another place. Different parts of the Bill will commence at different times, and in order to gain the maximum benefit and insight from the process, it is important that all the provisions are given an opportunity to bed in. It is therefore a little difficult at this stage to say as precisely as I think the noble Earl hopes me to when the report will be prepared and submitted, as it just is not possible to say that for each of the provisions in that detail at this stage. However, the Government are of course aware of the current expectation contained in the Guide to Making Legislation, which is that this will be done between three and five years after commencement. For the same reasons, neither would it be appropriate to pre-empt exactly what the report might contain, but it will provide a preliminary assessment of how the Act has worked in practice, taking into account its objectives and supporting documentation, such as the impact assessment.
The need for faster and more secure connections is constantly growing, making this legislation ever more vital to support the UK’s infrastructure. I am grateful to noble Lords and to Members in another place for their efforts to improve the legislation, as indeed they have done—I have certainly learned more about things such as telegraph poles and internet-connected smart toasters than I could ever have imagined. The Bill is in a fit state to proceed to the statute book. It will help people up and down the country to access the digital services they need and with greater confidence about their cybersecurity. I beg to move.
Motion A agreed.