Digital Economy Bill

Public Bill Committee, 25 October 2016.

Offences: infringing copyright and making available right

Kevin Brennan (Labour, Cardiff West)

I beg to move amendment 92, in clause 26, page 26, line 18, leave out

“, or will expose the owner of the copyright to the risk of loss.”

This amendment and amendment 93 is a probing amendment to explore the impact of Clause 26 on account holders.

Kevin Brennan (Labour, Cardiff West)

Good morning, Mr Streeter. We now move to part 4 of the Bill. May I say first that it is a pleasure to serve under your chairmanship? I thank you and Mr Stringer for all the work that you have done so far in helping us to get through and scrutinise the Bill.

New clause 33 stands in my name and that of my hon. Friend the Member for Sheffield, Heeley. Although she is not in her place at the moment, I am sure that the rest of the Committee would want to join me in congratulating her on her efforts so far as a first-time Front Bencher. I only hope that I can come close to matching her assiduous scrutiny of—[Hon. Members: “Here she is!”] Right on cue, she makes an entrance so that I can complete my compliments for her efforts so far on our behalf and on behalf of the whole Committee in scrutinising the Bill.

New clause 3 is in the name of the hon. Member for Selby and Ainsty, but we have added our names to it because we think it a very good one. I hope that we can have a substantial debate about it this morning, because there are some real issues that we need to discuss.

This is quite a chunky clause. Amendments 92 and 93 are probing amendments. We just want to explore with the Minister the meaning of clause 26 and to clarify its implications. I should say at the outset that Opposition Members support the principle that there should not be any distinction between physical and digital copyright infringement, and therefore support the proposal in the clause to equalise the penalties for that kind of infringement.

For the benefit of the Committee, I point out that the penalty for digital copyright infringement will be increased, to equalise it with that for the physical world, from a maximum of two years’ imprisonment to a maximum of 10 years. That makes sense if we are to support the principle of there being no distinction between the two, although in supporting that principle we want to ensure that the penalty is used appropriately. Obviously, we want to hear about that from the Minister in his response.

It could be said that elsewhere in the Bill, because of its unevenness, is the implication that there is some kind of binary between the digital and the non-digital world. That, of course, is not true when we get into the real world. My hon. Friend the Member for Sheffield, Heeley, in her excellent scrutiny of the Bill from the Front Bench, has argued that we should have had a properly thought through digital future Bill, given all the issues in play, and that that would have done away with the false division that tends to exist between the digital economy and the general economy.

Instead, we have a bit of a Christmas tree Bill, on which the Government are hanging various vaguely related issues. That is what is in front of us, so that is what we must scrutinise, but the levelling of the law on copyright infringement is, I think, a partial acknowledgement of the point about the false division between the digital and the non-digital worlds. However, in increasing the penalty as the clause proposes, we must be sure that we do not leave a window cracked open for unscrupulous operators to be able to intimidate and take advantage of consumers, whom I do not believe the Government intend to target in the clause. I do not think that the Minister intends to target consumers, but he will tell us that in his response.

The issue is largely a matter of wording. Whenever we scrutinise legislation, however, we have to make sure that no aspect of the law is left unclear by muddled phrasing, so it would be helpful to the Committee—this is the purpose of our probing amendments—if the Minister explained the distinction made in clause 26 between

“the owner of the copyright”,

in line 18 and

“the owner of the right”

in line 35. What do the Government intend by the distinction?

Likewise, stakeholders have expressed concerns to all members of the Committee about the potential interpretation of the phrase in clause 26: “the risk of loss”. The Open Rights Group has expressed concern about the Government’s insistence that there needs to be “reason to believe” that infringement will cause loss or “the risk of loss”. Its fear is that that phrase, “the risk of loss”, could capture quite a wide range of behaviour, perhaps beyond the scope of what the Government say they intend. In particular, its concern is the extent to which that phrase will capture file sharing.

By its very nature, file sharing means that shared music, films or books can be further shared. The Open Rights Group’s fear is that the phrase “the risk of loss” could be said to occur by definition from the activity of file sharing. It fears that, unless there is further clarification on that point, the Bill could be used to pursue individual file sharers. The Minister will know that that is not what the creative industries, which obviously have a concern about any infringement of copyright, say that they want. Rather than pursuing low-activity individuals, the creative industries have opted for a more joined-up, voluntary approach in co-operation with ISPs.

The Minister will be very aware of the “Get it Right from a Genuine Site” initiative, which seems to have been quite successful in beginning to change people’s minds and behaviour as individual consumers by taking an educational approach. That has generally been the preferred approach; the legal approach has generally been reserved for the prosecution of criminal networks and businesses seeking to make a profit out of the infringement of copyright. We know from the “Get it Right from a Genuine Site” campaign that the industry prefers that kind of approach. I think that that is what the Government want—again, the Minister can confirm that—but we want to make sure that that is what clause 26 actually achieves.

If the clause’s intended focus on networks is left unarticulated, there is a fear that so-called copyright trolls could use that fact to intimidate vulnerable consumers. That is why we are exploring the meaning of the clause in these amendments. Copyright trolls specialise in detecting the sharing of online content and sending legal threats to the potential infringers. These speculative and threatening letters are sent in bulk to thousands of account holders after detecting alleged copyright infringement.

Copyright trolls get their profits when a certain number of people are scared enough to respond to those notifications and pay up. Frequently these accusations are incorrect, misleading and sent to account holders who did not sanction any such further file sharing. However, as I understand it, sending that kind of speculative threat to consumers is, unfortunately, perfectly legal. Some are concerned that if the Bill retains the concept of risk of loss, it could aid the trolls by enabling them to argue with more credibility that account holders may face criminal charges and a 10-year prison sentence.

In the Chamber on 8 September, in a debate opened by the hon. Member for Solihull (Julian Knight), we heard all about scamming and vulnerable individuals. All parties agreed that the elderly and the vulnerable are a high risk group and that scams threaten

“their financial, emotional and psychological well-being”.—[Official Report, 8 September 2016; Vol. 614, c. 507.]

Last month, in the House of Lords, a special Intellectual Property (Unjustified Threats) Bill Committee was appointed and it has started to hear evidence. When that Bill was being considered, Lord Lucas, a Conservative, said:

“I applaud the Government for helping our businesses avoid unjustified threats but I would like to know what they intend to do to help the granny in the Clapham nursing home who is being threatened by their smaller, nastier cousins with allegations that she has been downloading pornography illegally.”—[Official Report, House of Lords, 15 June 2016; Vol. 773, c. 16.]

I do not know how real his example was, but this is obviously a topical issue about the danger of copyright trolls being able to exploit the provisions in the clause. Clearly, there is cross-party agreement that trolls and scammers target and exploit vulnerable individuals and that that deserves robust condemnation.

I hope the Minister will also clarify what is meant by “the risk of loss” in the clause and put on the record that the law is written to prosecute networks and businesses rather than individual file sharers and that the Government will continue to pursue profiteering copyright infringers while doing something to deprive trolls of their leverage over the vulnerable. In short, will the Minister clarify what is meant by “risk of loss”? Why does line 18 say

“the owner of the copyright”

and line 35 say

“the owner of the rights”?

Is the intention of clause 26 to prosecute individual file sharers or not? If the Minister can make that clear for the Committee, that will save further debate on the issue.

I turn to new clause 3, also part of the group; it stands in the name of the hon. Member for Selby and Ainsty, in my name and in the name of my hon. Friend the Member for Sheffield, Heeley. It is appropriate that we should have added our names to the hon. Gentleman’s excellent new clause because the issue is of great importance to the music industry in particular—as the hon. Member for Selby and Ainsty will know: he is chairman of the all-party music group. It is entirely appropriate that we should be singing in harmony, from the same song sheet.

I apologise if I go on to say some of the things that the hon. Gentleman is likely to say later in his speech; I am sure he will speak much more eloquently than I. Nevertheless, it is important that the Opposition put on the record our support for the new clause. There is an adage in the music publishing business that he will know: “add a word, take a third” in terms of copyright. In this case, we have added our names to his new clause and stolen the lead vocal. I apologise to him on that score.

The new clause offers a way for the Government to enforce a code of conduct for search engines in relation to sites that infringe copyright. Of course, the issue was in the Conservative party manifesto, which has been much quoted during this Committee; it has become a seminal document for the Digital Economy Bill. We are very grateful that the Government wrote this down, even if they are not carrying it out in the Bill for some reason or other. It is right that we should explore why that is the case. They said:

“We will protect intellectual property by continuing to require internet service providers to block sites that carry large amounts of illegal content, including their proxies…We will work to ensure that search engines do not link to the worst-offending sites.”

Provision of that kind has not been included in the Bill. Everything else has been hung on it, yet that important statement from the Conservative party manifesto does not seem to feature very prominently within the Bill. I suspect that is why the hon. Member for Selby and Ainsty tabled the new clause in the first place. We will probably return later to blocking in relation to the issues we discussed regarding age verification earlier on in the Bill.

We have an incredibly successful creative industry sector in the UK; it is one of the most successful in the world. It is growing at almost twice the rate of the wider UK economy, and in a post-Brexit Britain—if that is, in my view, the unfortunate direction that we are taking as a country—the creative industries are obviously going to be even more vital and will make a huge contribution towards our being a strong exporting nation. They will also play a huge part in projecting our presence as the United Kingdom to the rest of the world. They are hugely important.

The new clause laid by the hon. Gentleman would help reinforce the creative industries’ prominent international position and encourage more inward investment by providing a means of combating piracy more robustly. In other words, if the Minister opposed it, he would be unpatriotic. That is absolutely clear, because the issue is very important to our export industries. I do not think he will oppose it, but it will be interesting to hear what he has to say.

A variety of stakeholders are concerned about this issue, representing many different types of content, but, as I said at the outset, the issue concerns the music industry in particular. I should probably declare an interest at this point: I earned £10.60 last year from PRS for Music for my song writing, on which I have paid the 40% income tax—so whatever net figure we come up with as a result of that.

Chris Matheson (Labour, City of Chester)

Now we’re listening, Mr Streeter. Does my hon. Friend know what that represents in terms of sales?

Kevin Brennan (Labour, Cardiff West)

I shall stick strictly to the amendment, but I think it is mainly in relation to live performances, rather than through physical or online sales.

The impact of copyright infringement is very difficult to quantify precisely because not every copy of a music track that is illegally shared necessarily represents a lost sale. Nonetheless, the scale of illegal downloading and streaming of music remains significant and it continues to undermine the economic health of the UK’s music industry. The Ofcom Media Tracker survey, average retail prices and academic evidence taken together all suggest that the losses from piracy to the UK recorded music industry are between £150 million and £300 million a year. That is a significant loss of value to the UK economy and legitimate music-related businesses.

In recent years there have been a lot of industry initiatives tying to solve the problem, which have got the Government interested and involved. Baroness Neville-Rolfe, the Minister for Intellectual Property, has chaired a series of roundtable discussions and meetings between representatives of the creative industries, including the British Phonographic Industry—the record companies’ trade body—the Alliance for Intellectual Property and the publishers, as well as representatives of leading UK search engines Google, Bing and Yahoo. The meetings were convened to discuss practical steps to be taken on a voluntary basis to reduce the risk of consumers being led to copyright-infringing material by means of search results.

The rights holders proposed a voluntary code of practice, acknowledging that search engines play a valuable role in guiding consumers to sources of legitimate content online and are well placed to work with content owners to reduce the prominence in search results of known infringing websites by methods such as demoting them in search results and delisting. Those tactics are already widely used by search engines in connection with a range of other illegal material.

The guiding principles for the voluntary code of conduct would have been that in the top three results, fewer than 1% link to illegal sites; in the top 10, fewer than 5%; and in the top 20, fewer than 10%. Achieving these objectives would improve the quality of search results and resolve disadvantages that limit the visibility of legitimate sites on which consumers can buy or stream copyrighted works.

Chris Matheson (Labour, City of Chester)

Do not many of the search engines make their money by prioritising businesses and organisations that have chosen to advertise with them? It is therefore easily within their power to change their algorithms at will to meet the requirements that my hon. Friend suggests.

Kevin Brennan (Labour, Cardiff West)

My hon. Friend is absolutely right: it is within search engines’ ability to change the algorithms. I had always thought that the problem might eventually solve itself, because when advertising is placed next to the results of an online search, the companies whose products and services are being advertised appear next to websites that are run in the shadows, often by criminal networks. Surely reputable businesses with statements of corporate social responsibility would not want their advertisements to appear next to a search that turned up an illegal website run by some gangsters somewhere in Russia. However, it turns out that search engines do not solely or even principally make their money from advertising; it is data that are valuable to them. As one of my hon. Friends said earlier, data are the new oil. It is the data acquired on individuals through search engine practices that are so valuable and that enable companies to put product placement in their advertising and search engines to tailor searches to individual consumers online. Embarrassingly, that fact once resulted in a Conservative Member criticising a quote of mine on the Labour party website because the advertising content that appeared next to it was to do with dating a certain type of person. The Member in question subsequently found out that the advert had been placed there not because the Labour party was short of money but because that advert was tailored to his personal search activities. Members should beware when making such criticisms.

My hon. Friend the Member for City of Chester is absolutely right that it is perfectly within search engines’ power to solve this problem. Some efforts have been made by Google, and they worked for a short time, but a search engine search for widely available music by some of the most popular artists in the UK will still return a lot of illegal results. The hon. Member for Selby and Ainsty may wish to cover that point in his remarks, so I will not go into further detail, but BPI research certainly indicates that.

The voluntary approach is not working. We have seen this movie before; we have downloaded it many times, and it always has the same inconclusive ending. New clause 3 would provide it with an ending to match one of the best last lines in the movies, which is “Shut up and deal.” Any offers from Government Members? It is from Billy Wilder’s great film “The Apartment”; Shirley MacLaine says it. The new clause would enable the Government to say to the search engines, “Shut up and deal,” because there is no incentive for search engines to do so at the moment. We are being helpful to the Minister, as is his colleague. We are trying to put a bit of lead in his pencil, and he should welcome this cross-party effort to ensure that progress is made.

One further point: I have a sneaky feeling that the Minister actually agrees with the new clause, although he will not agree with it today, and will want to make this change to the Bill but to do so in the House of Lords. If my prediction is wrong, I will take it back in due course. The only thing that I would say is that it does not do this House’s reputation any good when Governments behave that way. I accept completely that all Governments do it: they know that they want to make a concession on a Bill, but they decide to do it in the House of Lords rather than the Commons. Ultimately, although we hear all the talk about the House of Lords being such a wonderful revising Chamber, the Government should accept once or twice that hon. Members, including those of their own party, come up with amendments that are perfectly sensible and should be incorporated into a Bill. It would help the reputation of this House if the Government were prepared to behave in that manner.

One fundamental aim of the e-commerce directive was to identify clearly which practices fall within and outside safe harbour defences. Part of the legislation— article 16, to be specific—encourages member states and the Commission to draw up a code of conduct at community or national level. However, no such code of conduct has ever been drawn up due to resistance by the search engines. They should not be allowed to avoid parts of legislation at the expense of UK creative industries just because they find it inconvenient. The new clause would end the wasting of Ministers’ time in chairing meetings that go nowhere, the repetitive process of rights holders producing proposals and the practice of search engines consistently refusing to comply to combat piracy, thus ensuring that the digital economy continues to benefit both the UK creative industries and the British public.

New clause 33 is the last amendment in the group. Last month, the Government released their annual intellectual property crime report. Some of the trends are quite startling: they reported 33% more illegal TV programming downloads in March to May 2015 than in the same period in 2013—a rise from 12 million to 16 million. The report highlights as a major concern the proliferation of internet protocol TV, or IPTV as it is known, which offers viewers increasingly easy access to pirated digital content. Technological changes have led to exponential growth in this new form of piracy. Android-based IPTV boxes are being loaded with software linking thousands of streams of infringing entertainment, movie and sport content. The boxes are sold on mainstream marketplaces such as Amazon and eBay, and through Facebook.

The Copyright, Designs and Patents Act 1988 has yet to be updated to reflect the new technology. It offers no effective remedies to copyright owners, who at present can rely only on laws that are not particularly tailored to copyright infringement. The new clause would help prosecute those who pre-load and distribute such devices and make it easier to work with online marketplaces to remove listings by wholesalers of such products.

A central pillar of the Government’s intellectual property enforcement strategy, which was launched earlier this year, states:

“We will comprehensively review all existing methods of legal recourse for IP infringement to ensure they are effective, consistent and proportionate across all IP rights. We also want to ensure that UK business and rights holders continue to have the necessary legal means to protect their IP, as well as ensuring that effective action can be taken against criminality.”

The Government also said that they would consider

“what legislation would be effective in addressing the growing problem of illegal streaming via set top boxes”

and that they would investigate

“the scope for legislation to take action against search engines, ISPs and platforms that facilitate or otherwise support those involved in infringement and counterfeiting.”

That was followed by the IP Minister, Baroness Neville-Rolfe, launching the enforcement strategy in May this year. She set out how the Government were

“looking at new areas where we might need to create new legal tools to tackle new modes of infringement…we will look at the legislation around set-top boxes, and whether we have enough effective remedies to tackle their misuse.”

She stated that the issue of IPTV and set-top boxes accessing infringing broadcasts was well understood by the Government, as was the scale of manufacture and distribution, and she went on to describe how

“these set-top boxes have entered the mainstream consumer market”

and how they are used on a massive scale. She also explained that

“as technology has developed and broadband speeds have increased, it is now entirely possible to receive programmes in high quality over the internet avoiding the use of decoders entirely. Quite simply the original broadcast is captured at illegal data centres that can be located anywhere and is then re-transmitted as streamed signals over the internet. Set-top boxes…are then supplied pre-loaded with apps that can either be used to subscribe to an illegal site or get content for free whilst the site operator generates income from advertising.”

So the IP Minister herself said that something needs to be done about the issue that the new clause addresses. Her conclusion was that

“it is clear that we need some new thinking in this area. The satellite and cable industries and broadcasters continue to invest in better security and enforcement, but it is also clear that the criminals are serious and this sort of organised crime generates huge profits.”

She is absolutely right.

The Copyright, Designs and Patents Act 1988 is an unfit vehicle for the prosecution of offences that involve the supply of IPTV devices designed to pirate content. Supply of devices carrying third-party content can be prosecuted but only via much more complicated routes: normally only the police can investigate and prosecute it, under legislation such as the Fraud Act 2006, the Proceeds of Crime Act 2002 and the Serious Crime Act 2015. As the Committee knows, police resources, especially IP specialist resources, are extremely limited. The law should be developed to give other bodies, such as trading standards offices, clearer abilities and obligations to prosecute such offences.

New clause 33 would amend section 107(1) of the Copyright, Designs and Patents Act 1988 to create the new offence of supply of devices primarily used to infringe copyright. It is entirely logical to amend that section, which is concerned with

“criminal liability for…dealing with infringing articles”,

but which currently focuses only on physical copies of work and on communication to the public. The new clause would bring trading standards offices into the picture, empowering them to make investigations and to enforce the rules on such devices under section 107(1) of the 1988 Act. To minimise the risk of new and uncertain legal tests, concepts or unintended consequences, the drafting adopts for the most part language used elsewhere in that Act.

Our proposal has a long list of supporters in the industry. We are interested to know whether the Minister thinks it is a good idea, and whether he will consider adopting it. If he is unable to do so, perhaps he will give a much clearer picture of the Government’s intentions and why they believe that the Bill is not the right place to introduce these proper restrictions on the use of new IPTV devices.

Nigel Adams (Conservative, Selby and Ainsty)

I rise to speak to new clause 3. It is a pleasure to follow the hon. Gentleman, who knows an immense deal about this area, having been a huge recipient of earnings from rights over the past few years. I am not entirely sure whether all that income was derived from him buying presents for his family, but it is great to see that we genuinely do have talented musicians in this place.

The new clause would create a power that allowed the Secretary of State to consider introducing a code of practice between search engines and rights holders on copyright infringement, which we have heard about. This power could be used only in the absence of a voluntary code between the two parties; it would not automatically create new legislation. Instead, as has been said, it acts as a backstop power if all other attempts to get an agreement between the producers of creative content and those who facilitate access to infringing material fail.

According to the latest estimates from the Department for Culture, Media and Sport, the UK creative industries amount to £87.4 billion in gross value added, and have an export value of £19.8 billion. These are incredibly large sums. Industries such as the music sector contribute immensely to those figures. Last year, five of the top 10 biggest selling artists in the world were British. One in six albums sold globally is from a UK artist. Those are staggering figures, and they demonstrate the appetite for UK music content here and abroad. According to “Measuring Music”, a report developed by UK Music, the industry body, the sector grew by 17% over the past four years and is worth £4.1 billion to the UK economy; it generates exports of £2.2 billion.

Although the UK creative industries are much in demand, copyright infringement remains a significant challenge. It not only has negative economic consequences for our businesses and industries by driving consumers to illegal markets, but seriously undermines the respect for, and value placed on, the creativity and effort that go into producing content—music and films in particular. According to the latest Kantar Media copyright infringement tracker, commissioned by the Intellectual Property Office, 78 million music tracks were accessed illegally between March and May 2016. The same research indicated that 20% of internet users participated in some form of illegal music activity online during that short period. These are very worrying figures, and they remind us that despite the growth in access to legal streaming sites, such as Spotify for music and Netflix for films, piracy remains a significant problem that needs to be tackled.

If we are to ensure a prospering commercial market for UK music that benefits rights holders and creators, it is essential that the main method of discovering music and artists directs consumers to legitimate sources. Search engines are one of the key means by which consumers discover music and artists. However, the prevalence of search results linking to infringing content, particularly on the first few pages of a generated search result, as we heard from the hon. Member for Cardiff West, indicates that more needs to be done. Furthermore, search engines incorporate auto-complete functions that can provide access to terms associated with the discovery of illegal content even before an internet user has finished typing their search terms.

For example, I am sure that you, Mr Streeter, are aware of the artist James Arthur, who was at No. 1 with “Say You Won’t Let Go” until he was knocked off the top spot, as I am sure you are aware, by Little Mix, which caused great excitement in the Adams household. When searching on Google, all I need to do is type in “James Arthur say y”, and I am given an option of clicking “James Arthur ‘Say You Won't Let Go’ download”. This takes me to a series of search results, and the only legitimate link allowing me to access that track legally is at the bottom of the page. It is not acceptable that search engines allow such ease of access to infringing content.

Some searches involve wading through several pages of results before getting to the first legal site. That is clearly wrong. The effectiveness of Google making changes to its algorithms—an infringement solution that that particular search engine advocates—remains to be seen. In reply to a written parliamentary question that I tabled on 2 September, the Government admitted on 26 September that it is “not possible to say exactly how” an algorithm change “equates to changes in infringement”. In response to a separate question, they said that it was “not…possible to analyse the…effectiveness” of measures to decrease auto-complete suggestions that provide access to stream ripping and other illegal converter technologies via search results.

In the 12 months up to September 2015, the British Phonographic Industry—the representative body for the recorded music industry, which does much vital work in the pursuit of anti-piracy measures—submitted almost 66.5 million infringing URLs to search engines for removal from search results. The ability of search engines to link to legitimate websites should be straightforward. For example, pro-music.org identifies legal online services. The site identifies that the UK has over 50 legitimate music websites—28 download, 19 subscription and 14 supported through ad services.

Creating a legitimate marketplace increases industry’s capacity for growth and supports overall economic wellbeing. Consumers also stand to benefit from higher-quality search results, clear signposting to legal content, and reduced exposure to malware, viruses, and other types of deceptive advertising. Studies demonstrate that these risks to internet security are sadly prevalent on infringing sites.

Dealing with copyright infringement requires co-operation; the problem can be addressed through positive initiatives. We have seen success in website blocking and, as we have heard from the hon. Member for Cardiff West, from the “Get it Right from a Genuine Site” campaign. UK Music developed an app, aimed at young people, called Music Inc. in partnership with Aardman Animation and the IPO. It raises awareness by simulating the mechanics of the music industry and showing the impact of copyright infringement on business decision making. The app has attracted over 600,000 users since its launch. We have also seen positive results from activities by advertisers and payment providers, and from the work of the police intellectual property crime unit to take advertising and payment services away from illegal sites.

Recognising the challenges, the Government have facilitated a round-table process so that rights holders, industry bodies such as the BPI, and representatives from search engines can discuss the problems of copyright infringement. This process has yet to result in agreement on how infringing content should be tackled. Rights holders are trying to negotiate a voluntary code of practice. We must take this opportunity to ensure that that happens. A code of practice for search engines would result in the reduced prominence of known infringing websites in search results, through demotion and delisting. Search engines already use such practices with regard to a range of illegal activities. The demotion of illegitimate websites would be attractive, in that verified artist websites would benefit in the same way that licensed retail stores do. This is because they will be promoted in the rankings at the expense of infringing sites.

Nigel Huddleston (Conservative, Mid Worcestershire)

Is my hon. Friend aware that rankings are vital? For some search terms, up to 90% of clicks can come from the top three results. Certainly more than 90% of people do not look past page 1, so being at the top is vital to clicks and activity.

Nigel Adams (Conservative, Selby and Ainsty)

My hon. Friend speaks with great knowledge on the subject. That is absolutely vital. Consumers searching are not necessarily aware of which sites are legal and which sites are not, so being in the top few search results is crucial. Much more needs to be done to ensure that genuine sites are recognised when people use search engines.

A code of practice should recognise that its scope includes legitimate artists’ websites where appropriate. The Bill presents an opportunity for the Government to fulfil their manifesto commitment to reduce copyright infringement and ensure that search engines do not link to the worst offending sites. At this stage, there is no specific provision in the Bill to achieve that. Although it is not my intention to push the new clause to a vote, I am keen to hear the Minister’s response, and his ideas about how to ensure that its intentions are delivered.

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

I am sure that the Minister will be glad to hear that I will not be quite as thorough, because everything has been covered already. He was looking somewhat exasperated. I do not know what he was googling; “How to make this Bill go quicker”, perhaps.

Chris Matheson (Labour, City of Chester)

Does the hon. Gentleman not agree that one way to make the Bill go quicker would have been for the Minister not to have tabled so many Government amendments?

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

That is an excellent point. I think that the ambition is to make the amendment paper longer than the Bill. If the Bill is a Christmas tree, the baubles must be hollow, with a little note inside saying “IOU a lot more detail, or an apology.” It has made my first Bill Committee an interesting experience.

Of course we support clause 26 and the spirit behind it. It is important that copyright be protected. Our creative industries in these isles are a huge success story, and they should be fully supported. The hon. Member for Cardiff West gave a thorough and excellent overview of the issues; I know that my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) was delighted to hear that he was on the Bill Committee, as the subject is close to his heart. I would hazard a guess that he has made more than £10.60 from his past efforts. Before I come to the substance of what the hon. Member for Selby and Ainsty said, I put on record my appreciation and admiration for his contribution last Friday. That day showed the worst and best of democracy in this place, and he was part of the best.

On the new clauses, I have been sitting here messaging my staff asking, “Why didn’t we add my name to these?”. We need to learn how things operate a bit better. We fully support the amendments. New clause 3 is an essential addition. As the hon. Member for Cardiff West said, I am sure that the Government will add something at some point, because that is a logical step to take. As has been outlined in some detail, there are millions of sites flagged to the search engines by the relevant bodies. It is not as though they have to go and find them themselves; it is the process by which the search engines do or do not take the sites down that needs to be brought into sharp focus. Clearly, there are efforts at a voluntary approach, but this is the perfect opportunity to put into legislation something that might drive the right outcome and behaviour without the need for follow-through. Past experience supports that idea. We must see some movement in that area.

We support new clause 33 on IPTV boxes. It is necessary to move with the times. This Christmas tree of a Bill has a lot of aspects to do with the broader digital economy, but people will continue to innovate and find new ways of delivering content, and IPTV is one example. Someone in this place recommended an IPTV box to me for my London flat because it is quite a cheap way of accessing content, but I did not follow that advice because I would not want to access any illegal content. These boxes come pre-loaded, and there should be no pretence about it: they are designed to give people a way of avoiding paying for content that they know they should pay for. There is no excuse for that. New clauses 33 and 3 are essential additions to the Bill, and we are delighted to support them both.

Rishi Sunak (Conservative, Richmond (Yorks))

New clause 3 is about protecting content owners from copyright infringement. Most of the discussion we have heard today has centred on online platforms and their particular abuse of music content. However, has the Minister considered the connected issue of the newspaper industry? Historically, newspapers used revenue from advertising to help support their news-gathering operation, and to provide a vital service, especially in regional and local communities—I am sure that Members on both sides of the Committee will have experienced that service in their constituencies. Today, there is a concern that some online platforms are benefiting from such news-gathering, but are not always paying for it in the most appropriate way. That raises questions about the sustainability of the newspaper industry and the vital service it provides. Has the Minister considered the connected issue of newspapers? Will he share any thoughts with the Committee?

Thangam Debbonaire (Labour, Bristol West)

I rise to speak in support of these amendments and new clauses, and to add a bit of colour and flavour to some of the arguments that have already been made. We often talk about rights holders, but we need to be aware that behind those rights holders are individual artists, musicians and technical people. It is not just about my hon. Friend the Member for Cardiff West; it is about the technical people involved in any recording, film or e-book. Many people are involved in those processes, and every time we deny their right to be paid, we are denying them the right to continue working in the way that we would want them to work.

Which of us here has not skipped gaily around the Palace of Westminster, at least in our imagination, with a song in our heart or a tune in our head? Maybe that is just me. Most of us have a favourite film, and we have music at special family occasions. A poem will be read at a funeral and a song will be danced to at a wedding, and all the people involved in producing them need to be paid properly for their work.

There should not be this wild west of a shopping mall where people can access whatever they want for free, without proper provision for reimbursing those involved. Unfortunately, search engines in particular, but also other providers, are allowing that illegal shopping mall to exist, and so artists, writers and others involved in the creative industries are not getting their proper deserts. That is important.

The hon. Member for Selby and Ainsty and my hon. Friend the Member for Cardiff West both mentioned economic value. I emphasise that according to the Government’s own website, the creative industries are contributing £9.6 million an hour to the UK economy. Since we sat down to work, the creative industries have contributed £9.6 million. UK music alone contributes £4.1 billion each year, which is something to think about. The creative industries are growing at twice the rate of the UK economy, at 8.9%, and we want them to continue to grow. We do not want to deny them part of their income—admittedly the minority, but it is still significant.

We tabled these amendments because we need to harmonise copyright and ensure that licensing laws work across the online and offline world. We want to help Conservative Members to fulfil their commitment in the Tory party manifesto, and new clause 3 would help

“the Government to fulfil its manifesto commitment to reduce copyright infringement and ensure search engines do not link to the worst-offending sites.”

We seem to have a degree of cross-party unity on the value of that measure. I look forward to hearing what the Minister has to say, because there is otherwise an absence of a specific provision in the Bill to achieve this.

I want us to make sure that the good examples, such as Get it Right from a Genuine Site, are taken up and followed, to avoid the unfortunate misdemeanours of others, such as search engines that can remain nameless—we can all guess who they are and others may have already mentioned them. It is not okay for search engines to drive—wittingly or unwittingly, but they should reasonably have known—towards illegal sites.

Consumers do not want musicians, film makers and others to be robbed of their just deserts. Mostly, we want to be able to be sure that when musicians have made a piece of music we love, they get properly paid for it. It is incumbent on search engines and others to make sure that that happens, and to use the power we know they have to create their algorithms to work properly in this respect. We would not tolerate a shopping mall in which signs and property space were given to illegal shops selling illegal goods. This is the equivalent.

I am absolutely convinced that the Minister would want to honour the commitment in the Tory party manifesto to rectify that. On Second Reading, the former Secretary of State, the right hon. Member for Maldon (Mr Whittingdale) said,

“there may well be a case for including a legal provision encouraging providers to establish a voluntary code.”

He also said:

“we cannot allow Google and other search providers to go on allowing people access to illegal sites.” —[Official Report, 13 September 2007; Vol. 614, c. 785.]

I am convinced that the Minister will want to take up the mantle he has been thrown by the former Secretary of State and I urge him to do so.

Matthew Hancock (Conservative, West Suffolk)

What a pleasure it is finally to stand to respond to the long interventions and speeches from Labour Members. It is a joy to hear that at least some of them understand and believe in property rights. Conservative Members certainly do.

The discussion has turned into a debate not only on amendments 92 and 93 and new clauses 3 and 33 but essentially on clause stand part. I therefore hope that Committee members will understand if I explain the whole clause in my response.

Kevin Brennan (Labour, Cardiff West)

The Minister is seeking to chair the Committee now as well as being the Minister.

Matthew Hancock (Conservative, West Suffolk)

It is a team effort.

The amendments are to clause 26, which increases the maximum sentence for online copyright infringement from two to 10 years, which is equal to the sentence for physical copyright infringement. The case for this has been made powerfully by Government and Opposition Members and it is an important change. Whether online or offline or a combination of the two, copyright infringement is IP theft and it is right that the maximum sentence is the same.

This sends a clear message that copyright infringement of either kind will not be tolerated and affirms that creators who produce the content that we all enjoy are valued. Furthermore, enforcement agencies will now have proportionate sanctions to tackle this serious criminality, whether offline or online.

We recognise that the maximum sentence of 10 years, even if only for the most serious cases, must be carefully targeted. Consequently, clause 26 also makes changes to the existing offence of online copyright infringement to make it clearer when that offence is committed and who should be considered liable. The amendments speak to some of those points.

The concept of prejudicial effect in the existing legislation will be replaced with a requirement that the infringer intends to make a monetary gain for themselves or knows or has reason to believe their actions will expose the rights holder to a loss or risk of loss in money. I will come to the debate around definition of that in more detail.

The point of this clarification is to act as a safeguard to ensure that the increased maximum penalty is applied only to serious criminals who deserve it and will not apply to those who share material accidently or without knowledge of the consequences.

Turning to the points made by the hon. Member for Cardiff West, or at least the ones that were pertinent—

Kevin Brennan (Labour, Cardiff West)

On a point of order, Mr Streeter. Am I right in saying that as the Chair of the Committee, had I made any points that were not pertinent, you would have ruled me out of order?

Matthew Hancock (Conservative, West Suffolk)

Undoubtedly in order and sometimes very broad ranging. A person who accidentally shares a single file without the appropriate licence, particularly when the copyright owner cannot demonstrate any loss or risk of loss, is not expected to be caught by this offence. I hope that gives the hon. Gentleman assurance on that point. However, of course, criminal infringement will be dealt with on a case-by-case basis and a court must be satisfied beyond reasonable doubt that all elements of the offence have been made out.

Kevin Brennan (Labour, Cardiff West)

We are getting to the crux of the matter: the words the Minister uses are very important. All joking and jibing aside, which he enjoys, there is a serious reason for laying these matters firmly on the record in Committee—that is our serious purpose here and our constitutional role. He said, “is not expected to be caught by this offence”. I fear that that is not really strong enough in response to my points. We need to understand whether it is possible for individual consumers to be captured by it. If so, the Minister should tell the Committee.

Matthew Hancock (Conservative, West Suffolk)

As I said, it is for the courts to decide about criminal infringement on a case-by-case basis, but I am making clear that that is unlikely and not the expected outcome in the case of a person who accidentally shares a single file without the appropriate licence. The reason I do not go further and make it absolute is to ensure that the court can make a fair judgment on this, rather than be bound. I want to go further, because there is another important point here about the impact of this on activities that are currently lawful. We do not expect things that are currently lawful to be caught by this change. This is a change in the scope of the sentence rather than in the definition of the offence. I want to make that very clear.

On the second point that the hon. Member for Cardiff West made about the legal distinction between “owners of copyright” and “owners of the rights”, “owners of copyright” relates to the offence of communicating to the public, whereas “owners of the rights” relates to the performer’s right of making available. This is a legal distinction: they are two separate offences but there is no substantive difference in the meaning of the two. The reason has to do with the legal drafting of the offence rather than the lay understanding of the meaning of the two.

The hon. Gentleman also raised the issue of trolls. I want to be clear that while we understand that some people may receive threatening letters from so-called trolls, we are not aware of any successful court case by these so-called trolls in this area. We do not endorse such aggressive tactics and we understand that this tactic is not widespread, but we will keep it under review.

Going more broadly into the debate that we have just enjoyed, since 2002, when the maximum custodial sentence for copyright infringement was changed, this has clearly been wrong. I am glad that there is all-party agreement on the change to 10 years, but in addition to increasing the maximum sentence, we have recast the relevant offences to include an additional element to the offences, which must be proved before an offence is made out, namely that the infringer intends to make a monetary gain for themselves or another person, or knows or has reason to believe that their actions will cause loss to the rights holder or a risk of loss in money. Amendments 92 and 93 would remove this additional element, but there are several reasons why it should be retained. We should remember that serious incidents of online copyright infringement or infringement of a performer’s making available right already fall within the scope of criminal law, as I mentioned.

It is right that the courts should be able to apply serious sanctions where they are warranted and apply the equivalent sanction to that available for physical copyright infringement, but it is our view that it is important to include the words, “risk of loss” to capture cases where the loss has not yet materialised. We believe that these same scenarios would fall within the current drafting of the offences, which relies on the prejudicial effect, but we have tightened the notion of prejudicial effect following consultation, to be more precise and targeted in the wording being examined today. I hope that satisfies the understandable request by the hon. Member for Cardiff West for clarity to be put on the record as to the intent of clause 26.

I now wish to turn to new clause 3 on search engines. We had a serious debate on the impact of search engines. We come from a position of being strong believers in the protection of property rights, and we want to ensure that the UK retains one of the best IP regimes in the world. Without content, there is no IP to protect, so I pay tribute to the BPI’s work: to support take-downs and to make the eloquent case for stronger IP protection. I also pay tribute to Get it Right from a Genuine Site, which does important work in making sure that culturally it is unreasonable—and seen as unreasonable—to take IP without paying for it.

I turn to my hon. Friend the Member for Richmond (Yorks) who made an important point on newspaper articles that appear in search engines. We support fair remuneration and we encourage content providers and online platforms to work together on this. This is an issue that has been raised with me directly, and it is pertinent to the debate. We want to encourage investment in new content, and we support returns for investigative journalism and other kinds of journalism, and I hope we come to a resolution on fair remuneration between content providers and online platforms, in the first instance. However, my hon. Friend’s intervention is noted.

In relation to clause 3, as the Committee knows from the discussion, the Minister for Intellectual Property, Baroness Neville-Rolfe, has been working closely with search engines and representatives of the creative industries. We are fulfilling our manifesto commitment to ensure that there is a fair return, and the group is currently considering a voluntary code of practice. I agree with the thrust of the arguments made by my hon. Friend the Member for Selby and Ainsty, who put the case strongly. Our intention is for the voluntary negotiations and the voluntary code of practice to come to a successful fruition, and the people involved in those negotiations will doubtless have heard the argument and understood the strength of feeling on this Committee. Given this ongoing work and the existing remedies for removing or blocking infringement content, I hope that hon. Members will agree that now is not the right time for a broad reserve power.

Kevin Brennan (Labour, Cardiff West)

Surely now, when we have a legislative vehicle in front of us that could not have been better designed for this very purpose, is exactly the right time. Committee members would have a right to be annoyed if, in making this broad assertion that now is not the right time, the Minister were subsequently to concede on this point at a later stage in the Bill’s progress, in another place and in an unelected House. Will he tell us truthfully what the Government’s intentions are on this point?

Matthew Hancock (Conservative, West Suffolk)

I care about the substance of getting this Bill through right. There are, of course, important parts of parliamentary process both here and in the other place. Given that the round-table discussions are ongoing, including a meeting next week, now is not the right time for the broad reserve power.

New clause 33 seeks to expand the criminal liability to include the supply of IPTV boxes for criminal infringement. As hon. Members will understand from the tone of my remarks, as a strong believer in property right protection, I understand the concern. The hon. Member for Cardiff West referred to the Copyright, Designs and Patents Act 1988 and the fact that the Minister for Intellectual Property had committed to making sure that we looked at this, and we have done so. This activity is already covered by criminal law under the Fraud Act 2006 and the Serious Crime Act 2015. The City of London police force is investigating cases. It seized over 500 set-top boxes earlier this year and arrested a man for fraud and IP offences.

There is a danger in the digital world of legislating for a specific technology as opposed to legislating for the offence in a technology-neutral way. I strongly prefer the latter. As the law is already in existence in the two Acts that I mentioned, the best thing to do is to prosecute under the existing Acts, rather than try to chase a particular technology, which may well be out of date. Our strategy for tackling IP crime includes a specific commitment to developing an understanding of the challenges posed by IPTV. We now need an approach that tackles the problem, rather than just current IPTV set top-box technology, which will no doubt be superseded in due course by future technologies. The existing criminal offences provide a legislative framework that is broad enough to protect our creative industries. However, I will of course keep this area under review.

I hope Members have been reassured of the work we are doing to make sure we apply the existing criminal law and make sure that intellectual property is protected. I concur with all the remarks made by Committee members about the importance of the creative industries, the importance of supporting content providers and the importance of intellectual property. I hope that with these explanations, the hon. Member for Cardiff West will feel able to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

Thank you, Mr Streeter, for letting us know your decision—not influenced at all, I am sure, by the efforts of the Minister to chair the Committee as well as leading for the Government. I will take into account in my response that you are including clause stand part in this part of our debate.

I made it clear at the outset that amendments 92 and 93 were probing amendments and I am very grateful for Minister’s explanation of the meaning and intention of the wording. As I have made clear, it is not our intention to push the amendments to a Division, but I think we need to cogitate a little further before Report and the latter stages of the Bill and perform a more careful exegesis of what the Minister said when he used the phrase “not expected”.

Matthew Hancock (Conservative, West Suffolk)

I can go yet further on that. The reason this is rightly done on a case-by-case basis is that we are talking about an existing offence. It is important to remember that. We are not making something illegitimate which is currently legitimate; we are adding to what is required to make out an offence. We are not making something that is currently legitimate now illegitimate. That is why it is reasonable to proceed on that basis, with the language that I used.

Kevin Brennan (Labour, Cardiff West)

I am grateful for the further clarification and for the Minister engaging in the discussion. We will think further about what he has said. I think it has been a very helpful exploration of the issue. I am not sure that he is right when he receives advice that the trolling issue is not widespread, which was the phrase he used. Obviously we can dig into that a bit further as we progress with scrutinising the Bill, but I welcome the fact that he said he would keep that under review. This is a very real issue and the fact that there may not be many prosecutions around it is often related to the fact that such activity is not necessarily illegal—the point I made in my contribution. Nevertheless, it can bring great distress to vulnerable individuals. We all know that the issue of vulnerable individuals being targeted by unscrupulous individuals, organisations and networks online is growing.

Matthew Hancock (Conservative, West Suffolk)

The challenge, though, is to ensure that reasonable protection of intellectual property is not ruled out by stopping any such speculative activity. There is a genuine policy challenge in how to support the protection of intellectual property. We are not aware of any successful legal cases by the trolls. People should therefore be reassured.

Kevin Brennan (Labour, Cardiff West)

Quite the opposite, actually. The fact that there have not been any successful legal cases indicates that people are being very successfully scammed out of money because they are too afraid to resist the trolls who come to them saying, “You have infringed copyright.” The fact that there have not been legal cases should be a cause for concern, not complacency. The Minister might like to give that further consideration.

As we have made clear, our intention with the amendments is absolutely to support the protection of those whose intellectual property has been infringed. That is our aim, but as ever there is a balance to be struck. We want to ensure that the most vulnerable in society are not easily targeted by unscrupulous people using the fact that members of serious criminal networks engaged in copyright infringement can go to prison for 10 years under clause 26 to frighten them. Those vulnerable people may not always completely understand the law around intellectual property when they are online, and they could get a notice that could scare them into parting with some of their money. Such cases are a real problem across society in general, and this is just one area of these activities. We should be aware of the problem and be concerned about it. We should not be complacent.

As I have outlined, it is extremely unlikely that any such cases will come to court, because the people claiming that copyright infringement may have taken place are not interested in taking anyone to court. They are only interested in sending out enough notices to get a small number of people to respond and hand over their cash.

It is the same as when scammers send out millions of text messages and phone calls saying that a relative is stranded in some other country and asking for money to be sent immediately. They may say, “We have a wonderful investment that you should participate in,” or, “You as an elderly person should put your money into something, because then you can provide for your children and grandchildren. It’s a sure thing.” All those sorts of activities have become much more prevalent because of the internet, and this issue around copyright infringement is just one area of that. That is the point we are making.

I urge the Minister to go away with his officials, to think a bit more about this issue and to consider how we might be able to reduce the possibility of it becoming an even bigger problem in the future, with the 10-year sentence being used to frighten people even more than they are already being frightened by these scammers and so-called trolls.

Obviously we will not be voting on new clause 3 at this point, because that always happens at the end of Committee proceedings, as you rightly reminded us, Mr Streeter. The hon. Member for Selby and Ainsty made it clear that it is not his intention to divide the Committee on his new clause when we reach that stage, but I say to the Minister that saying simply that it is not the right time for such a measure is not good enough as a response to the range of serious issues raised by Members of all parties.

Thangam Debbonaire (Labour, Bristol West)

I wish to ask the Minister whether he will give us some idea of the criteria by which he will assess when the right time is. I have no way of knowing for sure when that will be without an understanding of his reasoning and the reasons there might be for changing his mind in future.

Kevin Brennan (Labour, Cardiff West)

Obviously I cannot speak for the Minister, but he is free to say something after I have sat down. He is free to intervene now if he wants to clarify that point for my hon. Friend. It would be helpful if he did so, because I think this is exactly the right time for the measure. That is the purpose of new clause 3 and the thinking behind it. The talks have been going nowhere. As I have said, we have seen the movie several times before, and we know how it ends.

Chris Matheson (Labour, City of Chester)

My hon. Friend makes a good point: talks are going nowhere. Would an indication from the Minister that there is an intention to bring the proposals forward into legislation perhaps aid those talks in going somewhere?

Kevin Brennan (Labour, Cardiff West)

In a nutshell, that is the reason for new clause 3, and I am sure that was exactly the thinking of the hon. Member for Selby and Ainsty when he tabled it.

It might help if the Minister indicated when he expects the talks to conclude. He says he hopes there will be a positive outcome to them and that this is not the right time for new clause 3. He likes to talk softly; if new clause 3 were incorporated into the Bill, he could carry a big stick while talking softly about this matter. If he is not prepared to amend the Bill, perhaps he could tell the Committee when he believes the talks should conclude, as that would help to focus minds a bit. Perhaps he could put it on record that he is not happy to allow the talks to drift on and on inconclusively, as they have for many years.

We are not satisfied with the Minister’s response on new clause 3, and I repeat that it is my belief that at some point during the progress of the Bill the Government will concede on that point. It would be a terrible shame if they did not concede to the hon. Member for Selby and Ainsty—one of their own elected Members here in the Commons, who has tabled a sensible amendment—but did so in another place, giving the credit, yet again, to the unelected House for being a wonderful House in revising legislation. There is plenty of expertise right here in the Committee and in this House, among elected Members who know about the subject and know that this is the right thing to do. I urge the Minister to change his mind about new clause 3, if not now, perhaps on Report, when we will no doubt return to the issue.

Finally, I hope it is helpful to you, Mr Streeter, to be aware that it is not my intention to divide the Committee on new clause 33. As for the Minister’s response, I think I referred to the shortcomings of the current offence. I did not say we did not think that people could currently be prosecuted, under the Fraud Act 2006 or the Serious Crime Act 2015; in fact, I specifically mentioned those Acts—it might have been while the Minister was searching for something online. I also mentioned why the Acts were inadequate, and the Minister did not respond. First, they require a great deal of expertise in the area on the part of the police, which is not necessarily a resource that is sufficient to meet the growing size of the problem. Secondly, by amending the Copyright, Designs and Patents Act 1988, my new clause would have not just allowed but compelled trading standards to get involved and would have allowed the body to take action.

It would be useful to hear from the Minister why he does not think it a good idea that trading standards should be brought into play in that way, rather than simply relying on a police force that is under pressure and has many things to investigate—an ever-growing problem. Is it the Government’s position that is it wrong that trading standards would be the right body to involve? It would be extremely useful if the Minister felt able to clarify that. He said that he would keep the matter under review. I welcome that, and I hope he will be able to tell us more about the issue at a later stage, but if he told us at this stage why trading standards is not the right body to involve, that would be helpful.

We have had a fairly comprehensive debate. I do not think I need to add much on clause stand part, apart from that the latest data, published by the IPO, demonstrate the need for Government action. The research found that 15% of internet users—6.7 million people—still access copyright-infringing content, so it is absolutely right that the Government should act. I hope that the Minister feels able to add a bit more, in light of what I have said.

Matthew Hancock (Conservative, West Suffolk)

Very briefly, I mentioned that one of the meetings in the negotiations with search engines is next week. We expect the meetings to conclude over the next few weeks, and that is why the timing is appropriate.

Kevin Brennan (Labour, Cardiff West)

Perhaps I am speaking against what I said earlier, but if the Government do not give way on that point and the talks conclude unsatisfactorily before Christmas, while the Bill is still before Parliament, will they consider amending the Bill at a later stage?

Matthew Hancock (Conservative, West Suffolk)

I do not want to get into answering conditionals that are dependent on some future action. I have made the case for why now is not the right time and I have given the hon. Gentleman the timeframe over which discussions are taking place.

The hon. Gentleman made the case against new clause 33 very well. These are criminal activities, and it is the police’s role to police them. There are increased resources for the police in this area and I look forward to their taking it on. Our principle is not to legislate for specific offences based on an individual technology when offences already exist that can be used to prosecute the illegal activity.

For instance, many IP TV boxes are sold without any software on them; some have it inbuilt and some do not, and the ones that do not can be used for legitimate and illegitimate purposes. It is far better to have an in principle criminal measure on the statute book and to prosecute with that. Everybody can see the united strength of purpose to ensure that such IP theft does not go unpunished.

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

I thank the Minister for his explanation. I know that he and the Government are not fans of amendments that would oblige them to do a report to see how they are doing in the area. However, is there a way of looking at it on an ongoing basis, so that progress can be monitored and we can see how many prosecutions are actually occurring under the current legislation?

Matthew Hancock (Conservative, West Suffolk)

That would be an excellent idea, if the Culture, Media and Sport Committee chose to take it up. That is what Select Committees are for; I know the hon. Gentleman does not like them, but I think they are excellent at scrutinising the Government and everything that is going on. With that response, I ask the hon. Member for Cardiff West to withdraw his amendment.

Kevin Brennan (Labour, Cardiff West)

I beg to ask leave to withdraw the amendment.

Registered designs: infringement: marking product with internet link

Kevin Brennan (Labour, Cardiff West)

I hope that we can dispose of clause 27 more briefly than clause 26; I am sure we will, because it does not contain such controversial matters. By including an internet link in the ways in which a designer can indicate to consumers that their design is registered, clause 27 will remove the excuse that a potential or actual infringer did not know that a design had been registered. Like clause 26, it will do away with the false binary in law between online and offline by offering a digital means of checking design right protection. As I understand it, in addition to or instead of including the design registration number on the product itself or on the product packaging, the designer may include details of or a specific link to a website, with the important caveat that that website must be available at no cost to the visitor and must clearly associate the product with the number of the design. That ought to make it easier for designers to update and communicate design registration and other information about the rights associated with products without constantly having to change their packaging or their products. That will, in turn, make registering design cheaper for the designer.

Clause 27 could also act as a deterrent to the copying of designs by demonstrating and reminding people that design right protection exists. At face value, it seems like a welcome clause to include in the Bill. We certainly hope that it will lead to significant reductions in the cost of design registration, making it easier for designers to protect and enforce the registration of their work.

Can the Minister confirm in his response whether that assessment of the clause’s purpose is reasonably accurate? Has any assessment been made of the impact on the costs of design registration? Can he give us any practical examples of how the current law is causing problems—in other words, the problems that the clause seeks to rectify? Practically, how could the clause have prevented such problems, and how will it prevent them in future if approved by the Committee?

Matthew Hancock (Conservative, West Suffolk)

First, that was an extremely good and unusually succinct description of the clause. The hon. Gentleman asked about costs; we think that it will reduce costs to business. In terms of the current problems, physically changing the required registration details on products imposes a cost. For instance, some businesses produce labels that must be applied to every single product. Such costs are unnecessary if a single label or web address can be built into the design and the update can then be done digitally rather than physically. It is, after all, illegal to claim that a product is registered when it is not. Therefore, the changes are required by law, and it is far cheaper for everybody if they are made on a website that is referenced on the physical product, rather than on labels, or sometimes labels stuck over labels. I am glad that there is cross-party understanding of and agreement on the clause, and I commend it to the Committee.

Copyright etc where broadcast retransmitted by cable

Nigel Adams (Conservative, Selby and Ainsty)

I beg to move amendment 63, in clause 28, page 27, line 31, leave out subsections (3) to (5).

This amendment, together with Amendment 64, are probing amendments to identify a timeframe for the repeal of section 73 of the Copyright, Design and Patents Act 1988 as it is not clear when the repeal will come into force. The amendments would mean that repeal of section 73 of the CPDA would come into force as soon as the Bill receives Royal Assent.

Nigel Adams (Conservative, Selby and Ainsty)

These are probing amendments to clauses 82 and 28 in order to establish a timeframe for enacting the provisions in clause 28, which repeals section 73 of the Copyright, Designs and Patents Act 1988. I warmly welcome those provisions, but from the clause as it stands, it is not quite clear when we can expect this important measure to come into force. The amendments would mean, instead, that repeal of section 73 of the 1988 Act would come into force as soon as Royal Assent is granted. That would involve consequential amendments to clause 28 to delete subsections (3) to (5), as Royal Assent would remove the need for them. Otherwise, in the Bill as drafted and as stipulated in clause 82, clause 28 would come into force on whatever day the Secretary of State appoints in regulations made by statutory instrument, which could mean further delay.

As I pointed out on Second Reading, online service providers such as TVCatchup use section 73 to make money from public service broadcaster channels by re-transmitting their content while selling their own advertising around it. That undermines the public service broadcasters’ own online streaming services and on-demand catch-up services, affecting the audience, advertising and sponsorship revenue of commercial PSBs. Furthermore, none of that money is being paid to the public service broadcasters, the underlying talents and the rights holders, and none is flowing back into original UK content production.

I have an important film studio in my constituency, so I take this issue very seriously. We want to see more great productions, such as “Victoria”, which was filmed largely at Church Fenton in my patch. The UK television sector is at the heart of the UK creative industries. It is a vibrant and dynamic sector, providing outstanding world-class content that is the envy of the world. Such programmes are also hugely popular internationally, and the UK is the second-largest exporter of TV in the world as a result. It is therefore vital that we do all we can to help protect investment in the programmes that viewers around the world love. For those reasons, it is important that the provisions in clause 28 to repeal section 73 of the 1988 Act are enacted as soon as possible.

The PSBs first wrote to the Intellectual Property Office asking for a repeal of section 73 eight years ago; since then they have spent a lot of time and money in litigation. Meanwhile, TVCatchup has made millions on the back of the PSB content. The only reliable way to stop that exploitation and ensure that people who make and own the programmes that viewers love gain a return on their investment is to repeal section 73. The public service broadcasters have been in litigation with TVCatchup for many years, and until section 73 is repealed those parasitic websites will be able to profit from the PSB content without any of the payment going back to the public service broadcasters.

Section 73 also allows cable platforms to profit from PSBs that invest in content, which means that the PSBs are effectively subsidising global cable giants. It prevents the commercial PSBs from negotiating with cable platforms for their PSB channels. In a normal situation, they would be able to negotiate freely, as they do for their digital channels such as ITV2 and E4, but section 73 currently prevents that.

Cable platforms make money out of PSB content while still benefiting from a regulatory regime designed for a different era, under which no payments go back to the PSB or any other holders of rights to the content.

Chris Matheson (Labour, City of Chester)

The hon. Gentleman talks about a different era. Does he think that it was right to introduce section 73 at the time, because it allowed cable platforms to develop, but that things have moved on quite a bit since then?

Nigel Adams (Conservative, Selby and Ainsty)

The hon. Gentleman is yet again spot on. It clearly is of its time. The idea was to try to help a nascent cable industry, and the legislation has done that; we have a healthy TV industry across all broadcast platforms, including cable and satellite. That legislation has done its job.

On pay TV platforms, such as Virgin and Sky, up to 50% of some of our most valuable content, such as drama, is viewed via subscription personal video recorder, from which the pay TV platforms derive substantial benefit. That undermines the commercial PSBs’ ability to secure a return from advertising, because much of their advertising is skipped, and materially reduces as critical opportunities to generate secondary revenue—for instance, from on-demand services or box sets—because libraries of valuable drama content can be built up for free on the PVR. I therefore urge the Government to ensure that repeal of section 73 is delivered at the earliest opportunity. That would mean that those who wish to re-transmit or otherwise use PSB services in the future will have to negotiate to do so, which seems only fair. They should be able to negotiate within the must-offer regime in the Communications Act 2003. That would enable those who create the content to make a return on their investment and continue to make the programmes that viewers love, which are the envy of the world.

There has been extensive consultation on the issue so there is no need for further delay. I will therefore be very grateful if my right hon. Friend the Minister can provide more detail on the timeframe for the repeal of section 73 of the 1988 Act, as included in clause 28.

Kevin Brennan (Labour, Cardiff West)

I rise to speak to our amendments 189 and 94. I note the well-informed and cogent points made by the hon. Member for Selby and Ainsty, and I understand why the Government want to repeal section 73 of the Copyright, Designs and Patents Act 1988, as he laid out. Clearly apps such as TVCatchup cannot be allowed to profit from public service broadcasting content without making any sort of contribution to its creation, either by paying for it or in some other way; without agreeing some kind of licence for its use; and without abiding by public service broadcasting standards for its distribution. It is entirely logical to repeal the section and we support the intention to prevent TVCatchup from doing what it does, but the Government need to explain the knock-on effects on the market.

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

The SNP also supports and welcomes the repeal of the section 73 of the 1988 Act. I agree with supporting original drama, but I wonder about how Virgin in particular is affected, because Virgin is also rolling out broadband and helping the Government in their other targets. Perhaps the Minister can assure us that that has been considered and that pricing will not prohibit meeting other Government objectives.

Kevin Brennan (Labour, Cardiff West)

I am sure the Minister has heard what the hon. Gentleman said and will want to address it in his response. The hon. Gentleman is quite right to point out that Virgin in particular will be affected.

The Government’s reform is well meaning, but they need to explain how it will not put further pressure on the public service broadcasting compact. They need to answer questions about their long-term plans for television distribution and how this part of the Bill affects that. Public service broadcasters exist for a reason, as an intervention in the market and as part of public policy. We need to ensure that they do not accidentally drift out of existence or into insignificance, and we need to know the Government’s intentions.

In their response to the consultation on the repeal of section 73, the Government said that they do not expect or want to see charges from public service broadcasters to cable operators for their main channel content. If that is so, I ask the Minister in a genuine spirit of inquiry whether there is an argument for the Government to make it clear in legislation that they do not want to see such charges, because at least some of the public service broadcasters do not share that view. None of us believes that a dispute between a major public service broadcaster such as ITV and a major TV platform such as Virgin is in the viewer’s interest.

The amendments are intended to explore whether the Government are sure that they are not risking those viewers ultimately having to pay more than they should for what should be a free public service broadcast. What is the Government’s view on the risk that those viewers could lose that service, at least for a period of time, if a major dispute of that kind arose as a result of the repeal?

Even if the Government can establish that the cashless trade of carriage for content between cable operators and public service broadcasters will continue, other questions still need to be answered. Following the tabling of the amendment, we noticed that the Government have taken our advice on board and launched a 24-page technical consultation, which came out yesterday, on possible transitional arrangements for the repeal of section 73. That consultation acknowledges the possible effects of the repeal on performers’ rights and the potential need for a rights mechanism, which reinforces the point made earlier by my hon. Friend the Member for Sheffield, Heeley in her extremely able contributions: that the Bill was simply not ready for discussion when it was introduced. This sort of thing really should have been done before the Bill came to Committee.

When all that is taken together with all the other reports that my hon. Friend listed in her contributions and the Government amendments that have been published alongside the Bill, one gets the clear impression that the Minister is making it up as he goes along. It is a bit like that Wallace and Gromit film, “The Wrong Trousers”, when Wallace and Gromit are on the rail track and Gromit has to lay the track as they are proceeding, rather than the track already being laid before embarking on the journey. That is the problem with the Bill: the track has not been properly laid and the Bill has been introduced far too quickly, no doubt for some obscure business management reasons buried within the Whips Office. It is unfair of me to mention that because the hon. Member for Beverley and Holderness cannot respond, but there is undoubtedly some reason of that kind behind why the Bill has been introduced when it is not oven ready.

Given that the Government seem to be taking inspiration directly from our amendments by publishing the technical report, and knowing how closely they follow our advice, I will take this opportunity to give them a few more pointers on topics to consider through the consultation process that we called for in our amendments. There are currently four different distribution mechanisms for television: there is digital terrestrial television, which is used by Freeview, TalkTalk and BT, via YouView; there is cable, which has already been mentioned, in particular around Virgin Media; there is satellite, which is used by Sky and Freesat; and, as we discussed earlier, there is now IPTV, which can be, and is, used legitimately by BT for its own channels.

Each of those four distribution mechanisms operates under a different legislative and regulatory regime with a different basis of carriage of must-carry public service broadcast channels. At the moment, public service broadcast is paid for digital terrestrial television distribution on one basis, and satellite distribution on another, but not for cable or IPTV distribution. Looking back, it is easy to see how that distinction arose. Earlier Governments sought to try to support a variety of platform levels to enable technological innovation—multi-channel TV was only possible in the 1980s via satellite; it had not been previously possible—or to create competition, or both.

Not so long ago, when I was growing up—this will be within the memory of many of us on the Committee—people would ask, “What’s on the other side?” when watching television. My wife is from the United States of America, and when I first said that to her, she said, “What do you mean, ‘What’s on the other side?’ Do you mean on the other side of the television?” She had no understanding of the concept because they had multi-channel platforms much earlier in the United States than we did in this country.

The world has changed radically but those different regulatory regimes exist, which is why our amendment asks the Government to investigate, produce a report on the implications of the repeal and undertake a comprehensive consultation on the future of television content distribution and public service broadcasters. Does the Minister think that there is any danger that in doing this, although it is something to be supported, the Government are just tinkering around the edges, as they have done recently with the technical platform services or TPS regime, which applies only to Sky?

Although the previous Government recognised the problem, rather than having a formal review and update of the regulation, they merely applied some pressure, which, short of legislation, did result in a slightly better deal for public service broadcasters, but the problem is that the terms of that type of deal remain opaque, so it is impossible for us to judge whether it is truly fairer for public service broadcasters. Does the Minister believe that this approach is equitable compared with distribution arrangements on the other platforms? Should that be subject to the report that we are asking the Government to consider producing?

The Secretary of State has had in this area not just powers, but duties. Since the Communications Act 2003, she has been required

“from time to time to review…the terms on which”

must-carry PSB services

“must be broadcast or otherwise transmitted.”

Those duties do not appear to have been exercised properly recently. The TPS regime has not been reviewed by either Ofcom or the Government in a decade. Why not, especially as it was obvious a few years ago that that regime was no longer fit for purpose? When considering section 73 of the 1988 Act, why have the Government ignored the question of PSB distribution arrangements over all distribution platforms? The Bill was a good opportunity to consider all these issues in the round, rather than trying to treat section 73 as an isolated issue, so I hope that the Minister will be able to explain his thinking on that to the Committee.

All this is occurring in the context of viewers changing their habits. They are watching more online and more on catch-up. Those are growing trends, so distribution over the internet—both live, via multicast IPTV, and on catch-up, via unicast—is growing. In its 2015 review, Ofcom framed that as a “threat” to public service broadcasters. It is certainly a change and certainly a challenge to the Government and to regulators to consider how they can best support and enable that shift, to be a success both for public service broadcasters and for platforms.

These days, watching television is like the old Martini advert that many of us remember: “Any time, any place, anywhere, there’s a wonderful dream you can share”. That is exactly the way people are now consuming television: any time, any place, anywhere. That is the present, not the future. How do we ensure that viewers can watch the public service broadcast content that they want to, when they want to and how they want to? How can we ensure that public service broadcasters continue to have reach and prominence, which enables them to fulfil their obligations and appropriately reflect their funding? What opportunities are there to draw more people online, perhaps for the first time, to find the high-quality television content available via public service broadcasters?

Online viewing is not a problem; it is how viewers are choosing to watch, and that will continue to be the case. What is a problem is if there is no strategic thought by the Government on these issues at this time of enormous technological and behavioural change. The particular issues in relation to distribution raised by the repeal of section 73 connect to wider and now pressing questions about the public service broadcast compact. Thirty years ago, the terms underpinning the public service broadcasters were clear: they were reserved access to valuable spectrum and prominence on that spectrum. That created valuable and well-funded monopolies, either from advertising revenue or from the licence fee. However, the Committee knows that we have to consider that every aspect of that regime is undergoing rapid change, and the repeal of section 73 allows us to think about that and to consider the possibility that the Government need to do the strategic—

Kevin Brennan (Labour, Cardiff West)

I thank the Minister for his warm acclamation of support for my continuing. As he will be aware, any huffing and puffing may influence how long I speak, but perhaps not in the way he hopes. It is a great pleasure to see you back chairing our proceedings this afternoon, Mr Streeter, having done so ably this morning without needing to heed any of the unsolicited advice from the Minister on how to chair a Committee. You did an absolutely superb job, and everyone on the Committee thanks you for that.

When stumps were pulled this morning, we were discussing amendment 189. To remind the Committee, that amendment calls on the Secretary of State to

“produce a report on the implication of the repeal of section 73 of the Copyright, Designs and Patent Act 1988, and…undertake a comprehensive consultation on the future of television content distribution and public service broadcasters.”

We feel that the repeal of section 73 has big potential implications, and we need to know what the Government’s strategic thinking amounts to on those issues. I was talking about how things were 30 years ago with public service broadcasters. They were reserved access to valuable spectrum and given prominence on that spectrum. That created a valuable and well-funded monopoly, whether that was advertising revenue for ITV or money from the licence fee for the BBC. We were going to discuss how every aspect of that original deal is undergoing rapid change, and that is why our amendment is important.

Spectrum is more valuable than ever. In 2015, Ofcom acknowledged that if the spectrum that public service broadcasters use was priced commercially, it would be out of reach for PSBs. Then again, other distribution methods are evolving rapidly. It is perfectly possible to imagine a day when spectrum is not used for direct TV broadcast at all, and that day might not be as far in the future as we might think.

We know that the prominence of public service broadcasters is coming under enormous pressure. Recent moves by Sky have made it very hard to find live TV or public service broadcast content at all, and that is potentially a serious assault on the public service broadcasting compact. Prominence enables scale, and scale has been the commercial and policy basis of our public service broadcasters from the start. It makes them economic and makes the notion of public service broadcasters tangible, so that they are not just widely available, but widely watched. We will return to that topic in our consideration of the next group of amendments, but it is relevant to any report that might be produced through the amendment.

Public service broadcasters are no longer the cash cow monopolies that they arguably once were. We have been in a multi-channel world for a long time, but on-demand viewing is accelerating that change even further. Public service broadcasters are not just competing for viewers with commercial channels, but with different offers from such organisations as Netflix, Amazon and YouTube and from other options, such as gaming. Netflix now outspends the BBC on original content development. It is a significant player in the original content market.

To be clear, I am not necessarily echoing what the Prime Minister said in her speech to the Conservative party conference. She seemed to be trying to channel Sam Cooke by saying, “Change is coming”, many times during her speech, but plenty already has changed, and the pace of that change is accelerating. The Government need to face up to this, and that is why we are suggesting that they should hold a proper review of the interconnected issues of distribution, carriage, content creation, prominence and funding before developing and pursuing a clear and fair strategy for television distribution in general, and public service broadcasting distribution specifically. That is what this amendment seeks to achieve. Without that proper vision for how our public sector service broadcasters will operate in a fast-changing, multi-distribution, multi-channel, globalising world, we worry that not only will they not thrive as public service broadcasters, but that ultimately they may not survive. As I said earlier, we should not allow that to happen, and we certainly should not allow it to happen by accident.

The Minister must make it clear that he wants public service broadcasters to survive. I believe that he does, but he also has to make the Government’s strategy clear in the light of this rapidly changing, complex world. It is to be hoped that he can partly do that in response to the amendments, as well as laying out his views on our suggestion of producing a comprehensive report on the subject.

We are also discussing amendment 94, which is a probing amendment that is intended to tease out a timeline for the repeal of section 73. It relates a little to the amendment that the hon. Member for Selby and Ainsty moved earlier in that it has a similar purpose. We just want to find out what the Government’s thinking is. Our amendment differs from his in that it states that the repeal should come into effect two months after Royal Assent, whereas his amendment states that it should come in immediately after Royal Assent. We will not press amendment 94 to a vote, but we want to hear the Minister’s thoughts and plans in relation to it.

Nigel Adams (Conservative, Selby and Ainsty)

The hon. Gentleman may well cover this in his further remarks, but I would be delighted to hear his view on why there should be a two-month delay after Royal Assent.

Kevin Brennan (Labour, Cardiff West)

The hon. Gentleman is right to probe me on that. The truth of the matter is that there is a convenient clause to which we could add our amendments, which starts things two months after Royal Assent. As I said, amendment 94 is a probing amendment and I am sure the Minister will tell us all the reasons why it is technically defective. I will not push it to a vote so I am prepared to hear that, but we want to use it as a method of finding out the Government’s position.

Section 73 was originally introduced to encourage the roll-out of cable and to help a fledgling platform compete against terrestrial television by ensuring that cable platforms had access to public service broadcasting content. The Government have agreed that this policy objective was met some time ago, and in July reported that they were

“satisfied that the objective of ensuring that PSB services (as well as other TV services) are available throughout the UK has been met, and therefore section 73 is no longer required to achieve that objective.”

Subsection (3) states:

“The Secretary of State may by regulations make transitional, transitory or saving provision in connection with the coming into force of this section.”

Inasmuch as this generally means that the state will repeal section 73 when it sees fit, there are concerns among some public service broadcasters about understanding more clearly the Government’s intentions in relation to the timetable for that repeal. It would not be such a pressing issue were section 73 merely a harmless hangover and simply moribund. However, as we have heard, it is more than a legal anachronism. It is a loophole through which taxpayers’ money is effectively funnelled into private businesses.

As we have heard, section 73 allows companies, such as TVCatchup and FilmOn, to live stream the content of public service broadcasters and other channels online without permission. In other words, the money the public pay through their licence fee pays for content that is then, in effect, given away for free to companies other than public service broadcasters. Those companies then monetise that public service broadcasting content by placing their own advertising around it.

Public service broadcasters are granted public funding and the other advantages we have talked about on the understanding that, in exchange, they are obliged to air content that works for the public’s benefit, rather than solely for the benefit of commercial interests. Section 73, in effect, allows TVCatchup and FilmOn to benefit from that same public funding, but those companies are clearly not held to the same standards. That amounts not only to the taxpayer unwittingly subsidising those businesses, it effectively directs funds away from PSBs and impacts on their ability to generate legitimate commercial revenues and to reinvest in the wider creative economy. Those live-streaming sites increase public service broadcaster reliance on public money and can fuel a vicious cycle of under-funding.

There is cross-party agreement that that is wrong and has to be put right, which is what the Government are seeking to do, but why do we have to rely on the Secretary of State to

“make transitional, transitory or saving provisions”

for repealing section 73? Is it not the case that broadcasters and the public deserve a more explicit timeframe, for the reasons I have laid out, so that this does not persist for any more time than is absolutely necessary? Not only is that fair, but it would provide more certainty for public service broadcasters and ensure that their investment in UK content is protected. Amendments 63 and 64, which the hon. Member for Selby and Ainsty tabled, would mean the repeal of section 73 immediately after Royal Assent, which offers one way forward. Our probing amendments offer another alternative if the Government need more time.

Public service broadcasters first wrote to the Intellectual Property Office to ask for the repeal of section 73 in 2008. In the meantime, TVCatchup has obviously made millions on the back of PSB content and the European Commission has launched infraction proceedings against the UK Government, on the basis that section 73 denies public service broadcasters their intellectual property rights for their content, which is guaranteed under the 2001 copyright directive. It would also be helpful to know from the Minister how he believes that infraction proceeding plays into our discussion on the amendment, the repeal of section 73, and what role it has to play if the Bill indeed repeals section 73. In short, will the Minister explain why he is not offering a clear timetable for repeal in the Bill?

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

I feel that I should thank you for your chairmanship, Mr Streeter; I feel a bit left out, given that the Opposition spokesperson did it. Thank you so much for your chairmanship. It is nice to see a smile at the top table.

I will add a couple of brief points. I am surprised the hon. Member for Cardiff West earned only £10.60. I thought he displayed some creativity. I have never heard so many song lyrics or titles; I do not know if he is on commission for that. Hopefully, journalists across the country are googling—that is appropriate, given what we are discussing today—for what content he has earned £10.60, so that number may go up.

Matthew Hancock (Conservative, West Suffolk)

Other search engines are available.

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

Indeed—I thank the Minister. There is an interesting point here about the importance of parity across channels. The Scottish National party is clear in supporting the repeal of section 73. The hon. Member for Cardiff West made a point about the many different ways in which people can access content, which he articulated well, and the importance of being consciously competent across all areas when making legislative change. I am interested in hearing the Minister’s remarks on that.

We noted earlier the concerns specifically in relation to Virgin as a large cable company, but I want to put on the record very clearly that we absolutely support the Government in repealing section 73. As these models change and people access content in different ways, the ability for them to earn revenue from the content they produce becomes all the more important, because they cannot necessarily rely on its being consumed in a way that ensures that advertising revenues naturally flow. I emphasise that we support this, we welcome the Government’s bringing it forward but we would like a bit more clarity from the Minister around the broader picture.

Matthew Hancock (Conservative, West Suffolk)

I am delighted to respond to these points. I take this opportunity to commend the Opposition Front Benchers and, in particular, the hon. Member for Sheffield, Heeley, for how she proved, earlier in Committee, how it is possible to put points with great clarity and precision, such that on Thursday we rose early—somehow that seems unlikely today.

Kevin Brennan (Labour, Cardiff West)

Will the Minister give way?

Matthew Hancock (Conservative, West Suffolk)

No. The Government are committed to repealing section 73 of the Copyright, Designs and Patents Act 1988, following public consultation which ended this year and concluded that section 73 is no longer relevant. Amendments 63, 64 and 94 seek to ensure that the repeal will be brought into force rapidly following Royal Assent and amendment 189 would provide for the Government to produce a report on the implications and a consultation on the future of television content distribution and public service broadcasters. I should say that after today’s Committee session I think that my hon. Friend the Member for Selby and Ainsty will be known as “the IP king”. He has been the most ardent defender of intellectual property and its protection and he made very strong arguments.

On the case for a report and a consultation, Opposition Front Benchers asked the Government to face up to the challenges of new technology and its impact on public sector broadcasting and more broadly, and it is absolutely true that there is a huge impact of technology, both in distribution methods and in software, in terms of how we are watching content. Indeed, I understand that in China more films are watched on a hand-held than on a fixed device, and the trend is in the same direction here. This is clearly a very big issue and I am glad that all members of the Committee are alive to it.

I would say, though, that in response to amendment 189, we did just hold a public consultation precisely on the balance of payments between television platforms and the public sector broadcasters which considered the regulatory framework. It considered these questions and came forward with the proposal to repeal section 73. So I gently say to Opposition Front Benchers that, although I can see the point of the amendment, the report that they seek and the consultation that they are asking for by way of what I accept is a probing amendment is what we delivered through that consultation earlier in the year. The changes that we are seeking to make in legislation are a conclusion of exactly the sort of consultation that they have been looking for. The consultation was published on 5 July. I am glad that its conclusions have cross-party support.

We strongly support public service broadcasting in the UK. We believe that it has a long, vital and sustainable future and we will ensure that it does. I cannot give a clearer commitment to public service broadcasting. Even through these changes in technology, the evidence on viewer habits shows that public service broadcasting remains valued and valuable, and we support it.

I turn to some of the detailed questions. I was asked about the TPS regulatory regime. That was also considered as part of the consultation. We decided that different regulatory regimes are still appropriate, given the differing technical requirements of different TV platforms. There is a big change: an amalgamation of different delivery platforms for broadcasting from the old cable, terrestrial and satellite, and increasingly things are moving to broadband and fibre.

Following our discussion last week, I note that today TalkTalk has announced a full roll-out of full fibre to the whole of York, so there is progress in the full fibre drive that we are looking for in this country. However, there remain different technologies, so we think that it is still appropriate to have different regulatory regimes for them, although clearly the interoperability between them is important. I hope that that explanation addresses the point.

Kevin Brennan (Labour, Cardiff West)

Does the Minister have any concerns, or did the review reveal any concerns, about the point that I made about the opaqueness of the kind of deal now done under the TPS regime? That makes it impossible to judge whether it is truly fairer to public service broadcasters.

Matthew Hancock (Conservative, West Suffolk)

I will come to that and answer it alongside the question about the impact of removing section 73 where there are must-offer obligations. In truth, there are a huge number of commercial deals between the public service broadcasters and those that carry the PSB content to a wider distribution network. Whether it is through the TPS regime or the regime that we are discussing, many PSB broadcasters have contractual arrangements for their non-PSB content. That happens perfectly reasonably, whether it is through that regulatory regime or through a non-PSB deal delivered using non-satellite transmission.

We do not expect PSB content to be withdrawn because of the existence of contractual arrangements for PSB content replacing section 73. Indeed, there are contractual arrangements for lots of non-PSB content, so I do not see why those contracts cannot be entered into, but the issue does lead to the question whether there should be a transitional regime to ensure that there is no interregnum.

In the event of a PSB and a platform failing to agree terms for the carriage of a service, it is for Ofcom to consider whether the proposal of the PSB was compliant with the must-offer obligations in its licence. Were Ofcom to conclude that it was not, it would expect the PSB to submit a revised offer to the platform. Until now, Ofcom has not had to intervene, because no disputes have arisen presenting any real risk of refusal to supply by PSBs or to carry by platform operators.

The timing question was raised by my hon. Friend the Member for Selby and Ainsty and by the Opposition. The consultation report included an assessment of the implications of repealing section 73, and there was recognition of the potential impacts on the underlying rights market, meaning that the Government have decided that a further technical consultation should be run by the Intellectual Property Office.

I assure the Committee that the Government have every intention of bringing into force the repeal of section 73 rapidly; we plan to do it before the start of summer recess 2017. Repealing section 73 immediately could impact rights that have previously been exempt from remuneration in relation to the underlying copyright content in cable retransmissions, such as those held by scriptwriters or musicians whose intellectual property forms part of the relevant broadcast content. Our approach is to ensure an orderly transition.

Some respondents to the original consultation said that there could be disputes between the cable platform and the underlying rights holders when trying to agree terms and that a transitional period may be helpful. The Intellectual Property Office is currently running a brief technical consultation, as has been mentioned, to examine the extent of those issues and to assess whether any transitional measures are required.

I do not want to prejudice the outcome of the consultation, but in terms of whether a transitional period would be required, the IPO’s consultation seeks views on options ranging from no transitional period to a transitional period of up to two years following Royal Assent. Even if the full transitional period is decided on as a result of that consultation, and assuming that the Bill receives Royal Assent in spring 2017, we expect the repeal of section 73 to come fully into force by spring 2019 at the latest.

Kevin Brennan (Labour, Cardiff West)

The Minister talked about bringing the repeal into force rapidly before the summer recess in 2017, and then issued further caveats and talked about 2019. Will he clarify that for the Committee?

Matthew Hancock (Conservative, West Suffolk)

Yes. We will bring the repeal into force before the start of the summer recess in 2017. There may then be a transitional period, depending on the current IPO consultation, but the maximum transitional period, should there be one, will be two years. I added two years on to the summer recess of 2017 to get to what the Government call spring 2019—it will probably be the warmer end of spring.

Nigel Adams (Conservative, Selby and Ainsty)

Will the Minister give some indication of the potential timescale of the IPO’s technical consultation?

Matthew Hancock (Conservative, West Suffolk)

It is a four-week consultation and it started yesterday, so it has three weeks and six days to run, if my maths are right.

Kevin Brennan (Labour, Cardiff West)

I am grateful to the Minister for clarifying that timetable as he envisages it. In addition to that, during the course of my remarks I talked about the possibility of a dispute arising between a public service broadcaster and a platform following the repeal of section 73. What is the Minister’s view on how that sort of dispute could be resolved without consumers being affected?

Matthew Hancock (Conservative, West Suffolk)

That could easily be resolved by a contractual agreement, as the two parties in such cases have in many other examples. For example, Channel 4 has a PSB element and non-PSB channels. The non-PSB channels are not covered by section 73, so the PSB element of Channel 4’s broadcasting will be in a similar position to its non-PSB element in future. Since those contractual arrangements exist between the parties covered by section 73, I see no reason why they cannot pretty quickly put in place similar contractual arrangements, not least because the decision to repeal section 73 was taken some months ago and the companies have had some time to prepare.

The final point raised was about the impact of the repeal on Virgin Media’s broadband roll-out. I see absolutely no link between the two. I am delighted that Virgin Media is looking at a broader, full-fibre roll-out, in the same way that TalkTalk has announced further progress today. Nobody at Virgin Media has raised this link with me, and given that Virgin Media is owned by one of the most well-capitalised companies in the world, I cannot see any crossover between the two—and I think it is disingenuous to suggest there is. With that, I hope hon. Members will withdraw the amendments so we can proceed.

Kevin Brennan (Labour, Cardiff West)

As I made clear, it is not our intention to put our amendments to a vote at this stage. The debate was extremely interesting, important and useful, despite the Minister’s seeming resentment of having debates that go into the detail of the Bill and despite his remarks about rising early. He should be careful about making such remarks, given that he was late for the first sitting of the Committee.

There is an important issue at stake here: in our proceedings, the Government get their way because they have a majority, but the Opposition have their say. That is the constitutional principle on which we are all here and it is the role that we play. The Minister’s continual grumpiness about that is not helping his cause. I thought it was a useful debate that has revealed and drawn out more clearly some of the Government’s thinking on the timetabling of the repeal of section 73. We are not going to put our amendments to a vote at this stage, but these are matters we might revisit later.

Nigel Adams (Conservative, Selby and Ainsty)

I very much enjoyed all the contributions, which were incredibly complete, informed and eloquent.

I beg to ask leave to withdraw the amendment.

Kevin Brennan (Labour, Cardiff West)

We are dealing with this group in a slightly novel way. I will discuss new clauses 14 and 17 and then move on to my clause stand part remarks.

New clause 14 calls on the Government to produce a report exploring the options available for future-proofing the at-risk listed events regime, which helps ensure that sporting events such as the Olympic games remain universally and freely available. The listed events regime has been enormously successful and is popular with the public, but it is undoubtedly currently at risk and could become obsolete unless the Government take action to make sure that that does not occur.

I ask the Minister to consider revising the qualifying criteria to deliver a listed events regime fit for the digital era, which we are discussing in this Bill. Since the 1980s, successive Governments have sought to ensure that TV coverage of certain major sports events remains available to everybody, irrespective of their ability to pay. The UK has an A list, which is designed to preserve live coverage of certain major events on free-to-air television—for example, the Olympic games, the football World Cup, the Grand National and the rugby World Cup final. There is also a B list that does the same for TV highlights—for example, the Six Nations rugby tournament and the Commonwealth games.

The listed events regime helps ensure that events such as the Olympics, the recent European football championships—in which Wales reached the semi-final—and Wimbledon all reach the widest possible audience, delivering enjoyment to millions, inspiring the next generation to get active, creating role models and helping make sport aspirational. In total, 45 million people in the UK watched Rio 2016 and the Euros this summer and more than 10 million people watched Laura Trott and Jason Kenny on BBC television both secure gold medals on the same day at Rio 2016.

The listed events regime strikes a balance between ensuring the public can gain free access to major events and the understandable desire of pay TV operators and sports federations to try and maximise their commercial revenues. Importantly, the regime does not prevent pay TV from acquiring TV rights to listed events; it simply ensures that qualifying services can acquire the free-to-air rights on fair and reasonable terms.

Under the current rules, the benefits of the listed events regime are restricted by statute to channels that are first, free, and secondly, received by at least 95% of the UK population. Those criteria are becoming increasingly outdated as the number of homes giving up their TVs for other media devices begins to rise; the 95% criterion will probably not be met by any TV channel at some stage in the course of this Parliament. It would be interesting to know whether the Minister recognises that that is the case and whether Ministers are thinking about it.

As a result, regulators would have no clear legal basis for discriminating between channels, which would likely lead to listed events being ultimately far less widely available and watched. That shows quite clearly that the qualifying criteria need updating, and there are options for doing that. We are trying to explore those options with our new clause in Committee this afternoon—performing our proper constitutional role, much to the resentment of the Minister.

The BBC prefers the option in which the 95% reception criterion could be updated and replaced with a measure testing whether the channel is widely watched. That would require a qualifying service to have reached at least 90% of the public in the last calendar year. That would ensure that the public continued to have access to these sporting events on channels that are easy for audiences to find and that we know they actually watch in large numbers; that is obviously the intention of the current regime. That measure would be a proxy for factors including free-to-air continuous availability, popularity and audience awareness. The proposed test would be consistent with the spirit of the regime and aligned with wider public benefits such as offering moments of national celebration and inspiring physical activity, as well as being simple to implement and more stable than the current reception test.

Furthermore, such a test would be open to any service that was free at the point of use, committed to maximising access and not tied to any one distribution platform, so it would be more able to incorporate broadband streaming, for example, as counting towards the reach of a service as and when the infrastructure allowed. That would prevent the regime from being manipulated by organisations whose purpose was to maximise the attractiveness and availability of pay TV services by providing nominally free coverage on channels that may meet an availability threshold but of which there is very low awareness.

There are alternatives. It has been suggested that the qualifying criteria might be interpreted differently—I am talking about adding broadband availability towards the 95%. However, some feel that that may involve major risks. The combined coverage of the UK’s commercial digital terrestrial TV multiplex and broadband may well allow services distributed via those means to qualify, yet their geographic coverage would exclude large rural areas. That would particularly be an issue—I say this as a Member representing a constituency in Wales; I am sure that the hon. Member for Berwickshire, Roxburgh and Selkirk, who speaks on behalf of the Scottish National party, will be aware of this—in the nations, where there is often greater difficulty with coverage in large rural areas, but it also applies to parts of rural England and, indeed, Northern Ireland.

Furthermore, broadband will not be able consistently to deliver a guaranteed quality of live streaming to mass audiences for some time to come. The BBC, in particular, feels that including broadband in the criteria implementation would be hard to measure and to implement.

The report proposed in our new clause would be an opportunity to fully explore concerns and the different options available for modernising the listed events regime. As I said, those events are very much valued by, and seem very much to be of benefit to, the public. Four in five people say that listed events are important to society. One in four said that the BBC’s 2012 Olympic coverage inspired them to take part in sport. Wide exposure of free-to-air sport can inspire, create role models and make sport aspirational. Indeed, it can bring the country, and the nations within the UK, together. Public service broadcasters likewise understand the importance of listed events and are committed to making sport freely available to all. Even though public service broadcasters are responsible for only 5% of sports output in the UK, they are responsible for 60% of sports viewing. That is something we would not wish to lose as a country, almost by accident, because of the technological changes that we have been discussing.

The UK has a mixed ecology that balances the public’s free access to major events with the potential for pay TV operators and sports federations to generate commercial revenues. The threat to listed events may radically tilt that balance. Rather than risk the abolition of listed events by the back door, Parliament and the Government should urgently consider revising the qualifying criteria to deliver a regime fit for the digital era. With this amendment, the Digital Economy Bill could be the vehicle to ensure that this happens. I shall be extremely interested in what the Minister has to say about this, and in the Government’s view of this important and much cherished feature of our sports broadcasting ecology. The Minister can feel free to dilate at length when he responds.

New clause 17 stands in my name and that of my hon. Friend the Member for Sheffield, Heeley. It proposes modernising the public service broadcasting prominence regime, as recommended by Ofcom, by extending the law to on-demand services and the menus, where they are found. Since PSB prominence was legislated for in the Communications Act 2003, many gaps have emerged. The Act was designed in a markedly different TV landscape, even 13 years ago. It was four years before the introduction of the BBC iPlayer, for example. It was eight years before the digital TV switchover took place, and seven years before the introduction of the iPad. It created public service broadcasting prominence principles for broadcast TV sets, but not for connected TV sets, public service broadcaster channels, or PSB catch-up services, such as BBC iPlayer.

The regime has not kept up well, even with the multichannel world. For example, as I am sure hon. Members with young children will be aware, CBeebies and CBBC are behind 12 US cartoon network channels in the channel listings of the UK’s leading pay platform, Sky. As someone who was brought up on public service children’s television broadcasting—God knows what I would have been like if I had not been—and as a parent, I think that that is a shame, and that the Government should have a view on it.

Graham Jones (Labour, Hyndburn)

“Play Away”!

Kevin Brennan (Labour, Cardiff West)

I am not going to respond; I shall focus on my remarks. My hon. Friend may wish to regale us later with his favourite children’s TV programmes or public service broadcasters.

PSBs now face a far bigger transition to online delivery of TV programmes, and the regulatory regime lags far behind, so we should not miss any opportunity presented by the Bill to do something about this ever-changing situation. A growing number of existing and future services are being left out of scope, from BBC iPlayer to the now online-only youth service BBC 3, and from the new BBC iPlayer Kids, offering access to the best BBC kids’ content, to the upcoming iPlay, which will be a front door to the best British children’s content from any provider. Equally out of scope in the current regime are growing numbers of major gateways to accessing public service broadcaster content. The number of connected television sets in the UK is expected to nearly triple over the course of this Parliament, from 11 million to 29 million.

While public service broadcasters are doing all they can to negotiate commercially the prominence that their audiences expect, that is becoming harder all the time. Services that pay for prominence can increasingly be prioritised over public service broadcasting services such as BBC iPlayer, or on connected TV. In other words, PSBs can increasingly be gazumped. This problem is faced by public sector broadcasters in general, and it is particularly challenging for the services intended for broadcasting to the nations, especially in the Welsh language—and, in Scotland, the Gaelic language. I am thinking of services such as Sianel Pedwar Cymru, or S4C, and BBC Alba, which carries excellent coverage of the Guinness Pro 12 rugby, and I often watch it for that reason.

The Communications Act 2003 gives Ofcom a duty to ensure that “appropriate prominence” on TV platforms is given to S4C, or “S Pedwar C”, as it is often known in Wales, along with BBC Alba as a BBC service. This has generally resulted in a reasonable degree of prominence. However, on Virgin Media, for example, S4C is channel 166, I believe, and BBC Alba might be channel 167. It is certainly in that range; it is not among the top picks on the prominence list, where you would find channels such as BBC 1 and BBC 2.

The extent varies according to the platform and the geography, but connected TVs such as Sky Q are increasingly relegating the TV guide, and thus access to the nation’s TV channels, to a far less prominent position than their own top picks, box sets or movies. In Wales, it takes 11 clicks to get from the Sky Q home page to S4C. That is hardly prominence. TV catch-up players are also out of the scope of the regime, despite being an ever more popular means of accessing programmes. BBC iPlayer—the largest platform for services such as S4C and BBC Alba on-demand content—has less prominence than the Sky top picks, box sets or movies.

New clause 17 attempts to combat this by adapting public service broadcaster legislation to the existing technological landscape by adding on-demand services such as BBC iPlayer to the list of services to be given prominence. That follows the precedent of TV licensing laws, which were updated from September 2016 to cover BBC on-demand services, which provide a platform for S4C and BBC Alba, as well as TV channels. Such a measure would be in the spirit of the Bill. The Bill is supposed to recognise that the law needs to be updated to take into account the digital present and future. The new clause takes a similar approach to what the Government have already done in increasing the maximum imprisonment for online copyright infringement, which we discussed earlier today. It would, in the same way, correct inadvertent loopholes that have developed in legislation.

Furthermore, modernising the regime would increase the prominence of the nation’s services. Some hon. Members may be aware of the intense political battles that were fought in the early 1980s to secure these services. To the credit of the Conservative Government of the time, they did, albeit after an intense political battle, meet their commitment to setting up a Welsh language television service in the form of S4C. There is an obligation on us in this House, and on Parliament in general, to safeguard the prominence of such services, because great sacrifices were made to establish them.

The new clause would also enable the Secretary of State to add, by order, on-demand programming services of commercial public sector broadcasters to the services that she may identify. That affords the Secretary of State greater flexibility than having to identify services—and any necessary public service conditions, such as free availability—in primary legislation. Ofcom would set qualifying criteria to determine which connected TV menus were in scope, and to ensure that the updated regulation would be proportionate and targeted. The qualifying criteria would be based on a relatively high significance threshold; for example, they could capture only those TV platforms that are used by a significant number of people to access TV and on-demand services, such as Sky, Virgin, YouView, BT, TalkTalk, Freeview and Freesat. Ofcom’s authority to require such public service broadcasting prominence would be clarified by the replacement of the opaque phrase “Ofcom consider appropriate” with “required by Ofcom”.

In summary, new clause 17 shares the principle of levelling the online world with the offline seen elsewhere in the Bill. Updating the Communications Act 2003 would ensure that recent technological developments were not used to undermine the desired outcome of previous legislation on PSB prominence. It would achieve that by extending prominence to on-demand services and the TV on-demand menus where such services are found. It would not only future-proof PSB prominence but safeguard our nations’ hard-won services.

As we are also dealing with clause stand part, I will refer briefly to the issues that need to be highlighted in that debate. As we said earlier, section 73 of the Copyright Designs and Patents Act 1988 was first introduced to encourage cable networks to expand and compete against terrestrial television, but since then, there have been developments such as TV catch-up, as was mentioned by the hon. Member for Selby and Ainsty and others. Given that the clause will repeal section 73—something with which we agree in principle—we will support it. During this debate, we have sought clarity on timetabling, and we are glad that the Minister has given us more information about that; we may need to press further on that.

As public broadcasting has evolved to digital transmission, section 73 continues to support the universal availability of PSB broadcasting to the 250,000 premises where cable is available but a digital terrestrial television signal is not. Some stakeholders feel that the clause as it stands does not take into account the continuing importance of cable, or the repeal’s potential effects on that service. Section 73’s aim of helping cable to compete may have been met, but it still serves a function in reaching the target relating to broadcasting to those 250,000 beyond a DTT signal.

Virgin Media feels that if the only reason to repeal section 73 is its abusers, such as TVCatchup, there is no reason not to underpin the clause with a guarantee for those who have not and do not abuse PSB content. Other stakeholders feel that the clause merely plugs a hole and does not sufficiently streamline the current system, which consists of four different types of broadcasting. Consultation or no consultation, the fact remains that the clause was hastily written, and it is not clear that all its implications have been understood. We may wish to return to some of the issues in this clause later in the Bill.

Matthew Hancock (Conservative, West Suffolk)

Hear, hear!

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

Oh, the curse of a word of praise from the Minister! I thank him none the less.

I support these two excellent new clauses tabled by Labour Members. I was delighted to hear the Minister say in response to the debate on the last clause, “We strongly support public service broadcasting.” Hot on the heels of that, the Opposition have provided him with an opportunity to put his money where his mouth is and show that he truly does. I think—at least, I hope—that we all support public service broadcasting, but there has been a lot of chat in this place about the PSB funding settlement and about it not encroaching on competition. Let us push beyond that to consider how to support public service broadcasters. Let us find a way to ensure that they maintain their place in an adapting world.

I will touch briefly on both clauses. New clause 14, on the review of listed events, is close to my heart. I note that the football World cup is one of them; I do not know whether we can table an amendment to ensure that Scotland has a chance of getting there—

Kevin Brennan (Labour, Cardiff West)

You’re going too far.

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

I thought so. At least when we eventually get there, we will not expect to win it, unlike others.

Chris Matheson (Labour, City of Chester)

Like in 1978?

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

“We’re on the march with Ally’s Army. We’re going to win the World cup.”

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

I will keep to the subject with a bit of brevity and levity.

I support the Labour move to review this whole area to ensure that we have a set of listed events that is fit for purpose and, more importantly, to ensure that the protection will continue. Likewise, we fully support new clause 17 on prominence. The Committee has spent a lot of time talking about the changing digital landscape. There is no doubt that if we do not introduce measures to protect listings, the public service broadcasters will disappear, slide down the pecking order and be harder to find. We will then be on the slow road to an argument that says that public service broadcasting is not as popular as it once was, but the reality will be that it is just difficult to find.

I conclude by thanking the Labour party for beating me to it with both amendments, to which I should have added my name and which I fully endorse.

Graham Jones (Labour, Hyndburn)

It is a pleasure to serve under your chairmanship for the first time, Mr Streeter. My hon. Friend the Member for Cardiff West encouraged me to talk about children’s programmes—I was thinking about “Play Away”—and I apologise for not being here earlier. I was observing a NATO training exercise as part of the armed forces parliamentary scheme.

I rise to talk about retransmission charges, and I will do so briefly because I am conscious of the time. We obviously have a listening Minister who is deeply concerned about these matters, and I hope he will go away and give due consideration to some of the points that have been raised, perhaps coming back with some thoughts of his own and some changes that could improve the Bill. On retransmission charges, repealing section 73 of the Copyright, Designs and Patents Act 1988—the intellectual property rights element—is important and welcome. It will put Virgin on an equal footing with the public service broadcasters in the marketplace of buying and selling channels.

I will return to that second issue and the financial impact in a moment, but I will first highlight an anomaly. Unless there has been a change in the last few days, the Bill does not include satellite channels, which fall under the Communications Act 2003. The Sky platform is exempt from the Bill and will not be liable for retransmission charges, which seems to be a market anomaly—I stand to be corrected by the Minister. We should have a level playing field for everyone. Sky benefits significantly not only from the five public service broadcast channels but from some of the other channels—my hon. Friend the Member for Cardiff West has just mentioned S4C and Alba, among others—and the radio stations. Sky has a huge commercial advantage in not paying for receiving something that is very complementary to its platform. We are applying a principle to Virgin, and the Bill should treat Sky equally.

We demand a lot from public service broadcasters, particularly the BBC, for which we pay a licence fee, and it is only right that the BBC should be able to recover some of that money for the licence fee payer in the commercial marketplace, rather than the service being literally given away to some platform providers. There is obviously a commercial benefit to the Sky platform or, for that matter, any satellite platform that automatically has to deliver PSBs under the 2003 Act. There ought to be something that provides clarity and a level playing field, because without it, Sky has another advantage among the many it already has.

My hon. Friend the Member for Cardiff West touched on sports. There is a commercial structure around sports, where we have to look at redistributing some of Sky’s content into public service broadcasting, and around protected sports events. I certainly agree with my hon. Friend, who made a powerful point.

Returning to the retransmission charges, it is important we have a level playing field. Virgin will be charged and I believe Sky will not be—there is nothing in the Bill to suggest that Sky will be forced to pay retransmission charges, but perhaps the Minister has something—

Matthew Hancock (Conservative, West Suffolk)

I will come to that later.

Graham Jones (Labour, Hyndburn)

Okay. If the Minister has any proposals, can he provide some clarity? There does not appear to be any and there are many people out there raising questions about this.

The guidance seems to suggest there will be no material change to the relationship between Virgin and public sector broadcasters, despite the repeal of section 73 of the 1988 Act, so I look to the Minister for some advice on where we are with that. The Government expect the relationship to be neutral, with no cost transfer. Will the Minister clarify that and confirm that he is not giving with one hand and taking away with another, but is in fact allowing public service broadcasters, such as the BBC licence fee payer, to receive payments for programmes produced by the BBC and the other public service broadcasters?

I want to pick up on the comments made by my hon. Friend the Member for Cardiff West about new clause 17 and perhaps add my own thoughts. The Government have taken their eye off the electronic programme guide. I would ask them to cast their eye back over it, as my hon. Friend suggested. Eleven clicks to S4C is just ridiculous, but we all see now—when people are reminded and it is pointed out to them, they say, “Oh yes, that is true.” Sky has put the electronic programme guide on the second tier, where there is Sky Box Office, Sky products and Sky everything else. We are seeing a diminution of the electronic programme guide and Ofcom unable to act in the public interest.

This is important because we are talking about a huge commercial space and, very quietly, Sky has clearly adapted that space for the benefit of the Sky platform. Other people are going to come along and we will see that contested. Companies such as Netflix in particular, which wants to enter the market in an assertive manner, want a big presence and are willing to spend a lot of money. Only in the last week, we have seen the amount of money that it has been suggested that Amazon is spending on Jeremy Clarkson’s latest foray into high-speed petrol-head motoring. Is it £160 million? There is a considerable amount of money in the marketplace from these other organisations and broadcast providers, and we are going to start to see the electronic programme guide being contested. In fact, it is already being contested, as Sky has already snatched the front page of the EPG on its platform.

I raise the following points with the Minister: Ofcom currently seems to be behind the curve on this issue and the guidance needs to be updated. We do not want to see public service broadcasters relegated in any way, shape or form. We do not want to see the design or architecture of the EPG manipulated so that maybe the BBC is number one but somehow Netflix catches people’s eye more prominently, with small letters for the first five and big graphics for some of the more commercial providers, such as Amazon. It is not just about having slots one to five; Ofcom should be mindful of the actual graphic presentation.

We do not want to see adverts creeping into the EPG either, so Ofcom needs to be absolutely clear in the regulations and guidelines about the type of space that the EPG is. The Government should be mindful not only of platform providers such as Sky, but of TV manufacturers, which will come over the hill and see the space. Someone will turn on their television and, after “LG—Life’s Good”, the first thing they will see is Netflix in the top corner, before they even click on an EPG. Technology is moving fast and the presentation of available services must have some framework and clearer guidance from Ofcom, because it is important that we do not end up in a world where public service broadcasters are relegated several clicks away from primacy—ITV needs the commercial return and Channel 4 also has a commercial element and needs the returns on advertising. That scenario should not be allowed, as it would affect the broadcasters as a business, along with their funding model and audience figures and therefore their advertisers and advertising revenue. We absolutely must be clear about what the graphical interface and its parameters should be—no adverts—and also about which broader platforms might seek to enter the market, such as TV manufacturers.

I welcome new clause 17. The Government have a lot of work to do on EPG guidance, because this legislation will go down for the next 10 years and in that time we will see incredible technological advancements, with companies wanting to capture that prime retail space. It is incumbent on the Government to step in, not just to make the situation better and more consistent for the viewer but to protect the public service broadcasters, as not only the licence fee payer but the advertiser on the commercial channels is affected. We have a national interest, therefore, in protecting that space. It is important that the Government revisit the EPG guidelines.

I am interested in hearing the Minister’s comments on my questions, particularly his clarification regarding Sky and the 2003 Act—I cannot find anything on that in the documentation—and also some reassurance on the EPG.

Matthew Hancock (Conservative, West Suffolk)

Terrific! I am delighted to respond. As we know, clause 28 will repeal section 73 of the Copyright, Designs and Patent Act 1988, which currently provides that copyright in a broadcast of public service broadcasting services, and any work in the broadcast, that is retransmitted by cable is not infringed when the broadcast is receivable in the area of the retransmission. In effect, that means that cable TV platforms are not required to provide copyright fees in relation to core public service broadcasting channels. The provision was brought in at the onset of the cable industry in the UK to provide for the industry to compete with terrestrial by providing PSB content. However, that was a long time ago and technology, as everyone has noticed, has moved on a long way.

Last year we consulted on the repeal of section 73, and I am glad that there is cross-party agreement on it. The conclusion that the Government reached, and which has been agreed to by the Committee, is that the section is no longer relevant. There are a wide variety of platforms that ensure that virtually everyone in the UK is able to receive public service broadcasts and, following the completion of the digital switchover in 2012, digital TV services are now available to more than 99% of customers, whether through terrestrial, satellite, cable or fibre platforms. The cable market has moved from a large number of local providers in the 1980s, when section 73 was introduced, to one big one, and it has also gone up massively in scale, from hundreds of thousands to more than 4 million subscribers.

We are satisfied that the objective of ensuring that PSB services are available throughout the UK has been met. Therefore, section 73 is no longer required. Moreover, as my hon. Friend the Member for Selby and Ainsty pointed out earlier, this also closes a loophole, because live streaming services based on the internet are broadcasting TV programmes and relying on section 73 to exploit PSB content by retransmitting channels and selling advertising around the service without any of the benefit flowing to the PSBs. I think we all agree that is wrong, so I am glad there is cross-party support for the change.

Let me respond to some of the questions that were put, looking first at new clause 14. I am a strong believer in the listed events system. Major events such as the Olympic games and the FA cup final draw huge audiences. The listed events regime has worked well. The status of these events, as listed events, boosts them and their broadcast to the nation brings us together. I am delighted that the SNP supports the listed events regime as well. I fear I am going to have to resist the SNP’s suggestion that we should use the listed events regime to ensure that Scotland is always in the World cup finals, in the same way that we cannot legislate for the tide never to come in or the sun never to set, but it is very important and it is close to people’s hearts.

The right to broadcast listed events must be offered to qualifying channels, defined as those that are received without payment by at least 95% of the UK population. Ofcom is responsible for publishing the list of channels that satisfy those criteria. We have no evidence to suggest that recent developments, with more online viewing, will put the BBC or other PSBs at immediate risk of failing to meet these qualifying criteria. I know that concern has been raised, but I have discussed it with the BBC and Ofcom, I have gone into the details, and I am not convinced there is a risk in the near term at all.

Kevin Brennan (Labour, Cardiff West)

I did say that, because of the criteria’s increasingly outdated nature, the 95% threshold will probably not be met by any TV channel at some stage during this Parliament. Is the Minister telling the Committee that that is categorically wrong?

Matthew Hancock (Conservative, West Suffolk)

Yes; I disagree with that analysis. Were that to become the problem, then we would need to act, because we support the listed events regime. However, we do not agree with the analysis that the hon. Gentleman has put forward, not only because of the measurement on the existing, most restrictive definition of the 95%, but because the definition of qualifying channels are those that are received without payment. There are many ways to receive a channel without payment, including online, so viewers moving from terrestrial TV to online does not necessarily—and in my view does not—remove them from that 95%.

Kevin Brennan (Labour, Cardiff West)

The Minister has made the point, and I thank him for making it categorically: he believes that that will not happen during this Parliament. However, he also said that if it were to happen, the Government would have to act. Is that not the very reason why he should support the new clause? It would give legislative backing to the Government to produce a report to examine what ought to be done in those circumstances.

Matthew Hancock (Conservative, West Suffolk)

No, because I do not think that is going to happen. The hon. Gentleman also raised the question of what we should do if the legislative underpinning of the regime were to collapse. He came up with a specific proposal. I think that the proposal is itself flawed because it was to switch the measure from channels received without payment to those that are viewed, and that changes its nature significantly: from channels that are received, so can be viewed by somebody, to those channels that are viewed, which would be far more restrictive in terms of the channels that could then provide listed events. It is not a surprise to me that it is incumbents who want to make that argument because they are the ones that are watched, as opposed to those that can be watched.

Kevin Brennan (Labour, Cardiff West)

The Minister alluded at the end to the fact that we are not making that proposal in our new clause. We were rehearsing that argument during discussion of the new clause. Obviously he does not agree with it, but it is important to put on the record that that particular proposal is not in the new clause. It asks for a report.

Matthew Hancock (Conservative, West Suffolk)

I am grateful for that clarification. We will obviously keep the matter under review. It is important that the listed events scheme continues to operate. I could not be clearer in our assessment of the definition of qualifying channels based on the existing statute. A specific review within 12 months of the legislation’s coming into force is in my view not necessary, but we will keep the situation under close review.

New clause 17 would amend the public service broadcaster prominence review. The hon. Member for Hyndburn made a powerful and eloquent speech with some incredibly good points in it. The new clause would extend the prominence provisions to on-demand services such as catch-up TV and connected TV on-demand menus. The matter was considered in the balance of payments consultation. We have very strong support for S4C and some of the other channels mentioned in the debate, but our conclusion was that we have not seen compelling evidence of harm to PSBs to date, so we decided not to extend the EPG prominence regime at this stage.

In a way, the debate has brought out the challenges in this area. The hon. Gentleman started talking about the description of the graphical representation on an EPG, and the discussion can easily get into acute micromanagement of an EPG when the increasing integration of TV and internet services makes that more rather than less redundant. I therefore caution against an attempt at extreme micromanagement of the interface.

Graham Jones (Labour, Hyndburn)

The Minister flags up a cautionary point, but I again ask him a question I asked earlier: if he had a graphical interface with tiny letters that fulfilled its obligations, but at the bottom it said, “Amazon” and “Netflix”—it effectively had some commercial advertising —would he be happy to see that? Would that satisfy his current position? Alternatively, would he reflect and think, “That is not quite right”?

Matthew Hancock (Conservative, West Suffolk)

The hon. Gentleman is a great man who is worried about my happiness, but this is not about my happiness; it is about what is best for public service broadcasting and the PSB compact. My response is that it is for Ofcom to issue guidance on ensuring that the EPG works. It is better done that way, so that it can be proportionate, flexible as technology changes over time and not micromanaging things. The guidelines do that and pull that off. That is why when we considered the proposal as part of the consultation, we decided not to go there.

Graham Jones (Labour, Hyndburn)

I welcome the opportunity to engage in the issue, but when the Minister looks at Sky taking over the splash screen and relegating the EPG to the second tier—obviously Ofcom cannot act in that case, or it would have done already—is he happy?

Matthew Hancock (Conservative, West Suffolk)

Again, my happiness is secondary really, but my problem with the proposition being put forward is that trying to define sub-menus and user interfaces in regulation, especially statutory regulation, is incredibly hard. The technological landscape is shifting quickly. It is best left to the Ofcom guidance to answer such questions. We looked into the matter in some detail in the consultation, so I hope that the hon. Gentleman will withdraw his support for the new clause.

Kevin Brennan (Labour, Cardiff West)

The Minister is saying that it is up to Ofcom to decide, but is not the point that what we are trying to do here is exactly what Ofcom is proposing?

Matthew Hancock (Conservative, West Suffolk)

No, because it is for Ofcom to issue guidance on linear EPGs. Ofcom is required as a duty to make the system work. Rather than going further down this route, having considered it, we do not want to be over-prescriptive, given the technological changes that are happening. With that, I hope that hon. Members will withdraw their amendment and then vote that clause 28 stand part of the Bill.

Kevin Brennan (Labour, Cardiff West)

Yes, briefly. As you say, Mr Streeter, we will come to the new clauses later in the Bill. I do not think that it will necessarily be our intention at this point—we will cogitate further—to push them to a vote, but there are issues here to which we might want to refer on Report. One of my colleagues has pointed out that the Minister did not answer a question about Sky. Rather than making another speech, does he want to intervene during my brief remarks?

Matthew Hancock (Conservative, West Suffolk)

As I said in the discussion of the previous set of amendments, Sky is subject to a different regulatory regime. There are conditional access charges for satellite within that regime, which must be fair, reasonable and non-discriminatory for all channels. We considered that as part of the balance of payments consultation and came to the conclusion that it did not need to be changed, because of the requirement set out in the DPS code.

Kevin Brennan (Labour, Cardiff West)

I am grateful to the Minister for saving us time with that helpful intervention.

Graham Jones (Labour, Hyndburn)

This is an opportunity to ask my hon. Friend a question. There seems to be some doubt about the relationship between Sky’s retransmission charges and public service broadcasters. Does he know whether Sky pays for public service broadcasters? I understand that Sky pays for ITV commercial channels, but as I understand it, it does not pay anything for public service broadcasting.

Kevin Brennan (Labour, Cardiff West)

We discussed this issue, and the nature of that regime, earlier today. My observation was that the situation was extremely opaque, which is why we proposed earlier amendments to the Bill to suggest that the whole area should be reviewed—for that very reason. My hon. Friend makes an extremely pertinent point. It will be worth reading his remarks, and those made earlier today by Government and Opposition Committee members, on that point.

When we discussed new clause 14, which deals with listed sporting events, I worried that there is a degree of complacency in the Government. People will have heard what the Minister said about the issue, and we will be interested to hear what others have to say about his response. We should lay down a marker to say that we do not think that the Government are really listening or hearing what we are saying about this subject, and they are not sufficiently attuned to the dangers to listed sporting events. I know that the Minister is a keen and successful sportsman in his jockeying activities, on which I congratulate him. I am sure that he would want to see—

Matthew Hancock (Conservative, West Suffolk)

Not the Grand National, though.

Kevin Brennan (Labour, Cardiff West)

National hunt or flat? I cannot remember.

Matthew Hancock (Conservative, West Suffolk)

Flat.

Kevin Brennan (Labour, Cardiff West)

He is a flat racing jockey—and, from what I have seen, a very good one—but he should be concerned about the possible future of events such as the Grand National, which, as he rightly said, bring the country together and are meaningful and important cultural events as well as sporting ones.

On new clause 17 and PSB prominence, again, the Minister says that he has not seen compelling evidence of harm, but I think that we supplied him with plenty of compelling evidence of the potential for harm, which is what the Bill is about. It should be about the digital future, as we have said. I take his point about extreme micromanagement—that is valid—but we are not talking about that; we are talking about setting clear parameters to ensure that public service broadcasting prominence remains across all platforms. Although we are unlikely to press the new clause to a vote later, we reserve the right to return to these issues.

Disclosure of information to improve public service delivery

Louise Haigh (Labour, Sheffield, Heeley)

I beg to move amendment 98, in clause 29, page 28, line 25, leave out “had regard to” and insert “complied with”.

This amendment provides stronger compliance with the code of practice on the disclosure of information.

Louise Haigh (Labour, Sheffield, Heeley)

I am very grateful to my hon. Friend the Member for Cardiff West for giving me some much-needed time off. I do not wish to disappoint the Minister by not being as brief as we were earlier, but I am not sorry, because part 5 really does require some further scrutiny. I think the Government know that it was not ready for Committee, not least because they have tabled several dozen amendments to it, but also because the codes of practice were not in good enough shape last week, according to the Information Commissioner, but were published just a few days later—some civil servants were clearly working overtime in the intervening period.

Clause 29 allows specified persons to share data for a specified objective. All national authorities will be enabled to lay regulations through secondary legislation for exactly what those data-sharing arrangements will be and what they will be for. In doing so, this clause lays out that they will be required to ensure the secure handling of information and to have regard to the codes of practice. Our amendments seek to strengthen this and to ensure that anyone involved in the sharing of data under these new powers is in full compliance with the codes of practice that were published last week.

I want to be very clear here: the Opposition do not oppose the Government’s sharing data among themselves to improve policy making and public services, but we must get this absolutely right and we are still a long way away from that, given the state of the current proposals. This is a key point: the public support the sharing of data to better enable the Government to provide services and to better enable the public to make use of those services, but public trust is fragile and has been rocked in recent years by varying degrees of incompetence in managing those data. Before Government Members point out that previous Labour Administrations were just as guilty, I should say that I fully accept that. This is not a political but rather an administrative point, which is why such proposals need to proceed with the utmost caution.

The Information Commissioner produced a very instructive report on this very point, which is extremely important to this part of the Bill, because it demonstrates the circumstances in which the public are happy for their data to be shared. The commonly recurring themes of what the public want regarding data could not be clearer: they want control over their data; they want to know what organisations are doing with those data; and they want to understand the different purposes and benefits of sharing their data. In that context, 63% of people agreed that they had lost control over the way in which their data are being used. This demonstrates that if there is to be sharing of data, which we support, there must be very clearly defined safeguards based on consent and transparency.

This part of the Bill gives considerable powers to Government to share data, but there are essentially no safeguards built in to ensure privacy, data protection, proportionality and a whole host of other principles that should sit alongside data sharing. It is vital that these reforms go ahead and we are completely in favour of effective data sharing across Government to achieve public sector efficiencies, value for money, improved public sector services, take-up of benefits for the most vulnerable, such as the warm home discount or free school meals, and, most importantly, an improved experience for those who use public services.

The Minister for Digital and Culture claimed in an evidence session that the safeguards are in the Bill, but that is simply not the case. I would be grateful if the Parliamentary Secretary, Cabinet Office outlined what safeguards he thinks there are. As I, a relatively amateur observer, as well as those who are much more expert in the matter read it, the safeguards are to be added at a later date, written up by the Government and consulted on with people whom the Government deem fit to consult. Furthermore, there is absolutely nothing the public sector does that is not covered by the clause. I would be grateful, therefore, if the Minister gave give us a single example that that—I quote from the clause—for the purposes of

“the improvement of the well-being of individuals or households”,

or of improving

“the contribution made by them to society”,

would not deliver.

The codes that were published last week gave examples of objectives that would fall foul of those criteria, including those that are punitive. It is useful to see the examples, but it is of concern that the Bill does not explicitly exclude a punitive objective. The codes also include examples of objectives that are too general rather than too specific, and it would help if the Minister said exactly where the line about what is too specific is drawn. Improving levels of safety in a neighbourhood is given as an example of an objective that is too general, but would reducing the number of burglaries in a neighbourhood, for example, be specific enough?

The Government have stated that the proposed powers are to support:

“The delivery of better targeted and more efficient public services to citizens; The detection and prevention of fraud against the public sector and citizens to manage debt more effectively; and better research and official statistics to inform better decision-making.”

Of course, no one could disagree with any of that and the majority of respondents and, in fact, all the witnesses we saw two weeks ago, agreed with the purpose of the proposals. However, as the Government’s summary of responses to their consultation, “Better use of Data in Government” stated:

“The majority of responses were supportive of the proposals and the need to ensure appropriate safeguards, accountability and transparency are in place to build trust with citizens on the usage of their data.”

Crucially for the purposes of the debate, several respondents favoured such measures being in primary legislation as opposed to codes of practice.

Not only are the objectives not limited in the Bill, but the bodies that can share or receive data are not particularly limited. Subsection (3) states:

“A person specified in regulations under subsection (2) must be—

(a) a public authority, or

(b) a person providing services to a public authority.”

The Government’s consultation set out that they intend to proceed with proposals to enable non-public sector organisations that fulfil a public function on behalf of a public authority to be in scope of the powers. They said, in response to their consultation:

“We will strictly define the circumstances and purposes under which data sharing will be allowed, together with controls to protect the data within the Code of Practice. We will set out in the Code of Practice the need to identify any conflicts of interest that a non-public authority may have and factor that information in the decision-making”.

It seems pretty comforting that the Government will strictly define the circumstances and clearly identify conflicts of interest. It is right that they do that, given that the majority of the respondents supported the proposals,

“as long as appropriate strict controls are in place to safeguard citizen data against misuse.”

Again, I quote from the Government’s consultation.

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

It is good to see the shadow Minister back in her place. She is making an excellent start to this section of the debate, pulling out many of the key issues. I am afraid that the ministerial team might not like the scrutiny that the process is supposed to provide—and essentially does. The point about transparency is critical and there is a confidential submission that points out that transparency does not prevent people from doing anything; it simply requires them to be accountable for what they do. We have recently seen the case of HMRC outsourcing to Concentrix the ability to collect tax credits. Data from another source were used, and we all know the damage that can be done when that is not done well.

Louise Haigh (Labour, Sheffield, Heeley)

I am grateful for that intervention. I am very aware of the Concentrix case and will come on to it shortly.

On the inclusion of non-public sector authorities and the Government’s intention to strictly define the circumstances and purposes under which data sharing with such organisations will be allowed, their statement of intent was clear. However, only one paragraph in the 101-page draft code mentions non-public sector organisations. That paragraph says that an assessment should be made of any conflicts of interest that the non-public authority may have but it does not give any examples of what those conflicts of interest might look like, so perhaps the Minister will elaborate on that when he responds. It states that a data-sharing agreement should identify whether any unintended risks are involved in disclosing data to the organisation—the risk regarding Concentrix was just highlighted—but the code of practice does not list any examples or set out how specified persons might go about ascertaining those. It also states that non-public authorities can only participate in a data-sharing agreement once their sponsoring public authority has assessed their systems and procedures to be appropriate for the secure handling of data, but it does not give any sense of what conditions they will be measured against or how officials should assess them.

That is not the kind of reassurance that was provided in the Government’s consultation response. Given that these are draft codes, I hope the Minister will take what I have said away and improve them, not least because of the recent scandal relating to the US multinational company, Concentrix, which was contracted by HMRC to investigate tax credit error and fraud. Concentrix sent letters to individuals—mostly working single mothers across the country receiving tax credits—in what was essentially a large-scale phishing exercise. Not only did it get things catastrophically wrong by cancelling benefits that it should not have cancelled and leaving working mothers destitute over many weeks and months in some cases, but it performed serious data breaches in sending multiple letters to the wrong individuals and disclosing personal information.

We have made it very clear that the Bill could have done with considerably more work before it was brought before the House. I understand that the civil servant who wrote part 5 has now left, or is in the verge of leaving, the employ of the civil service, so there is even more reason for us to work cross party and with expert organisations on improving the proposals.

As I have said, public trust in Government handling of data is not strong. Unfortunately, the public have not been given any reason to put their concerns to rest. The recent National Audit Office report, “Protecting information across government”, revealed the prevalence of weak controls on the protection and management of personal information in Government. Any continuation of the existing poor information management identified by the NAO, or the further weakening of cyber-security and data protection implied by part 5, is likely to have negative economic and social impacts.

As the Information Commissioner’s Office commented:

“It is important that any provisions that may increase data sharing inspire confidence in those who will be affected. Our research shows that the public are concerned about who their data is shared with and reflects concerns that they have lost control over how their information is used. Even apparently well-meaning sharing of data such as GP patient records for research purposes can arouse strong opinions.”

This is an important time to strengthen cyber-security and the minimisation and protection of data, which is why it is so important to get this part of the Bill right. A huge prize is on offer, but this has the potential of going the way of the care.data scandal. Frankly, it is astonishing that neither Ministers nor civil servants have learnt their lessons from that very regrettable episode, because there was absolutely nothing wrong with the principle of care.data either; it attempted to achieve exactly the kind of aims as the Bill’s reforms.

The idea was to create a database of medical records showing how individuals have been cared for across the GP and hospital sectors. Researchers believed that the information would be vital in helping them to develop new treatments as well as assessing the performance of NHS services. The records would be pseudo-anonymised, meaning that the identifiable data would be taken out. Indeed, they would just contain the patient’s age range, gender and the area they lived in. However, researchers could apply for the safeguards to be lifted in exceptional circumstances, such as during an epidemic. That would have needed the Health Secretary’s permission.

The concept had the backing of almost the entire medical community, many charities and some of the most influential patient groups. The UK’s leading doctors told us how access to so many NHS records would help them to understand the causes of disease, quickly spot the side effects of new drugs and detect outbreaks of infectious diseases.

The problem with care.data was that the advantages and the principles upon which the data would be shared were simply not communicated by the Government or by NHS England, and so it attracted the criticism of bodies as disparate as the British Medical Association, the privacy campaign group Big Brother Watch and the Association of Medical Research Charities. Such was the botched handling of the publicity surrounding care.data that, by April 2014, the launch was aborted. However, it emerged the following June that nearly 1 million people who had opted out of the database were still having their confidential medical data shared with third parties, because the Health and Social Care Information Centre had not processed their requests.

A review by the National Data Guardian, Dame Fiona Caldicott, found that care.data had caused the NHS to lose the trust of patients, and recommended a rethink. That prompted the then Life Sciences Minister, the hon. Member for Mid Norfolk (George Freeman), to announce that the scheme was being scrapped altogether, even though £7.5 million had already been spent on constructing a database, printing leaflets, setting up a patient information helpline and researching public attitudes to data sharing.

The Caldicott review established a set of Caldicott principles, with the primary one being that the public as well as the professionals should be involved in data-sharing arrangements. Dame Fiona Caldicott proposed a simple model that gives people the option to opt out of any of their information being used for purposes beyond care. She said:

“We made it slightly more complicated by saying it was worth putting to the public the choice of having two separate groups of information to opt out of – [those being] research and information used for running the health service. If you put all of the possible uses of data currently in the system together and asked people to opt in or out of that, it’s actually asking them to make a choice about a very big collection of information. [People] may want to have the possibility of saying, ‘Yes, I’d like my data to be used for the possibility of research, but I don’t want it to be used for running the health service’.”

She also made it very clear that the benefits of data sharing and what it means need to be communicated clearly to the public, as there is a lot of confusion around how the data are shared.

Absolutely nothing has changed since that disaster and the subsequent review, so it is concerning not to see those basic principles included in the Bill. I am interested to hear the Minister’s response to those principles laid out by the National Data Guardian. The public need to be able to trust organisations that handle their data and they need to retain control over those data. Both those things are essential to build confidence and encourage participation in the digital economy. The principles have been debated over the past several years at the European level, and we should be told here and now—today—whether the Government intend to implement the EU’s General Data Protection Regulation. If they are, why is the Bill not compliant with it?

The new EU GDPR and the law enforcement directive were adopted in May and will take effect from May 2018. The GDPR includes stronger provisions on: processing only the minimum data needed; consent; requirements on clear privacy notices; explicit requirements for data protection by design and by default; and on carrying out data protection impact assessments.

Although the Government’s arrangements for exiting the European Union have yet to be decided, it seems likely that the GDPR will take effect before the UK leaves, so the Government will have to introduce national level derogations prior to its implementation. If that is the case, there will have to be a thorough consideration of the impact of the new legal framework on all aspects of the Bill affecting data sharing, including implementation arrangements. Indeed, as the Information Commissioner said when giving evidence to the Committee two weeks ago:

“There may be some challenges between the provisions and the GDPR… There would ?be a need to carefully review the provisions of this Bill against the GDPR to ensure that individuals could have the right to be forgotten, for example, so that they could ask for the deletion of certain types of data, as long as that was not integral to a service.”––[Official Report, Digital Economy Public Bill Committee, 13 October 2016; c. 112-13, Q256.]

The GDPR states that data are lawfully processed only if consent has been given by the individual, which is completely lacking in this section of the Bill. It also gives data subjects that right to withdraw consent at any time:

“It shall be as easy to withdraw as to give consent.”

Controllers must inform data subjects of the right to withdraw before consent is given. Once consent is withdrawn, data subjects have the right to have their personal data erased or no longer used for processing.

Part 5 makes little mention of security or privacy, or how such data sharing will comply with obligations around informed consent and the ability to revoke consent. It is not explained, for example, how it will be possible for a citizen to revoke consent if data have been copied and passed on to third parties, particularly if it was done without their knowledge. Once digital data are held by third parties and no longer under the control of their original owner, it will be difficult to know who has a copy and equally difficult for a citizen to revoke consent to the access and use of such data.

In fact, the Bill makes no mention of consent at all, and the codes are clearly not designed to support a consent-based model. If that is not the case, we would be grateful if the Minister confirmed on exactly what principles the codes were designed and what principles should always be adhered to, in his opinion, when sharing data. In the consultation, the Government said that the following principles should apply:

“no building of new, large, and permanent databases, or collecting more data on citizens; no indiscriminate sharing of data within Government; no amending or weakening of the Data Protection Act; and safeguards that apply to a public authority’s data (such as HMRC) apply to the data once it is disclosed to another public authority (i.e. restrictions on further disclosure and sanctions for unlawful disclosure).”

If the Government hold those principles so dear, why were they not included in the Bill? Where are the principles for transparency, security, necessity, data minimisation and proportionality?

Further issues with the lack of safeguards in primary legislation include the fact that privacy must only be considered; it is not a right. There is no reference anywhere to the role of data protection officers, who are critical for public bodies; that is surely an oversight given the requirements on data protection officers in the general data protection regulation. There is also no mention at all of transparency, which is particularly conspicuous by its absence. The Bill completely lacks any requirement for transparency about what data flows already exist and what new ones will be established. Care.data was only an exception insofar as it hit the public domain first.

We will table a new clause later in the Bill that will make transparency mandatory in a public register of data sharing agreements. Full transparency helps build trust in the process, so the details do not matter. If there is no transparency, there can be no trust in the process. Transparency must be absolutely central to the process, alongside privacy and security. We would argue that it is the most important principle on which the proposals should be built.

The Government seemed to agree during the public consultation and design of their proposals, but I am afraid that we simply do not trust the Government’s current data practices, if the concerns raised by ex-Government employees tasked with improving those practices are anything to go by. Last summer, the Government Digital Service experienced a mass walkout over the Cabinet Office’s failure to get to grips with Government digitisation. We heard from the former head of that service during an evidence session about his deep concerns about the proposals. Those concerns were expressed by an individual whose job it was to promote data sharing around Government to improve public service delivery.

We want the Government to produce a register on data sharing arrangements. We are pleased to see audits mentioned in the codes of practice, but I do not believe that they would actually be possible, based on the current practices that abound across Government. A named day question was asked of the Cabinet Office last week about whether it had an audit of the data sharing arrangements across Government. Although the deadline for the answer to that question was yesterday, we have yet to hear whether the Government even know who is sharing what across Government, how they are doing it, why they are doing it and how the data are being secured and protected—never mind what ISDN lines run to each Department, enabling other agencies, other organisations and perhaps even other Governments to look up data held by Government.

We will come back to those points during later debates, but I hope that the Minister can assure us, in relation to clause 29, that he is getting a grip on the issue, particularly given the significant new powers that the clause imparts to the Government. The Government consultation said:

“Transparency was a key recurring theme raised by citizens and representatives from across the range of sectors. The view expressed was that trust could be built by ensuring that citizens could understand what data was being accessed, how it was being used and for what purposes.”

However, the public have not yet even seen the draft codes of practice, as they have not been made available on the parliamentary or Government websites. It puts the more than two-year consultation process to shame that we cannot even invite debate from the public on this vital part of the Bill. Ministers claim that the legislation resulted from the open policy-making process, but we heard from several witnesses that that was not actually the case. Many were surprised, to say the least, by the proposals published in the Bill, as they bore no relation to the discussions or proposals put before them as part of that process. One organisation’s written evidence is incredibly damning. It states:

“The Cabinet Office misled everyone involved, wasted a vast amount of time and goodwill, and went ahead with doing what they were going to do anyway. At the very last minute, they vastly expanded the scope of the work, with the only material provided in non-aural form being the presentation title and the department of the civil servant presenting. The process ignored the hard problems, and did whatever the Cabinet Office wished to do in the first place.”

Louise Haigh (Labour, Sheffield, Heeley)

Of course. Thank you very much, Mr Streeter.

Our amendments would ensure that the codes of practice, which have been vastly improved over the past week, are statutory. It is important that the principles and safeguards outlined so far are included and are statutory. That is what I have been alluding to so far in my speech. It seems pointless for civil servants to have put all this work into the codes for them merely to be regarded, rather than statutorily complied with. The codes must be improved further, and we hope that Ministers and officials will work with the industry and organisations to do just that, but we want to see them referenced properly in the legislation and properly complied with. Anything less means that the powers enabled in the clause dwarf any safeguards or checks included in the codes.

Amendment 99, in my name and that of my hon. Friend the Member for Cardiff West, would help to build trust in the Government’s data-sharing provisions—trust that has been rocked over a number of years. That trust is absolutely essential if this extension of the Government’s data-sharing powers is to be effective. It is worth noting again that the draft regulations allow a significant extension of data-sharing powers with a significant number of Departments. That extension is rightly set within defined and strict criteria, but some of the definitions contained within those criteria are at best vague.

Subsection (8) of clause 29 allows for the sharing of data if it is of defined “benefit” to the individual or households. Subsection (9) allows for the sharing of data if it

“has as its purpose the improvement of the well-being of individuals or households.”

While the extension is ostensibly for tightly defined reasons, those reasons are in fact so broad that they could refer to anything at all.

We again come back to the point about public trust. The public want to know why their data are being shared and that it is strictly necessary. Amendment 99 would help build that trust by ensuring that, under clauses 29, 30 and 31,

“the sharing of information authorised by the regulations is minimised to what is strictly necessary…the conduct authorised by the regulations to achieve the “specified objective” is proportionate…”

and that

“a Privacy Impact Assessment…has taken place”.

The amendment would require the Minister to establish a review that consults the Information Commissioner and the public on the effectiveness of the measures. The amendment would require the Minister, after a three-year period, to review the operation of these provisions to decide whether they should be amended or repealed.

A similar measure is included in the Bill in the provisions relating to data sharing for the purposes of the collection of public debt, so it is puzzling that it is not included in this part, too, as these provisions are so much broader and just as risky, if not riskier. Individuals are right to be anxious about their sensitive data being shared. The amendment would allow for the public to be reassured that their data are being handled within the strictest confines.

Amendment 96 would give individuals a right to access and correct their own data. Empowering citizens to have access to and control over their own personal data and how they are used would clearly help improve data quality. Citizens could see, correct and maintain their own records. Data need to work for people and society. Citizens need to be actively engaged in how their data are secured, accessed and used. Again, that needs to be put on the face of the Bill.

Part 5 does not make clear how proposals to data share comply with the Government policy of citizens’ data being under their own control, as set out in paragraph 3 of the UK Government’s technology code of practice. Indeed, the proposals appear to weaken citizens’ control over their personal data in order for public bodies and other organisations to share their data. Weakening controls on the protection of their data is likely to undermine trust in the Government and make citizens less willing to share their data, challenging the move towards digital government and eroding the data insights needed to better inform policy making and related statistical analysis. That type of organisation-centred, rather than citizen-centred, approach characterised the failure of the top-down imposition of care.data in the NHS. That is why we tabled these amendments.

Chris Skidmore (Conservative, Kingswood)

It is an honour to serve under your chairmanship, Mr Streeter, and to be standing here making my Committee debut. The hon. Member for Sheffield, Heeley is obviously new to the business as well, and I hope to follow her example. She has been gracious and proportionate in holding the Government to account. I hope we can have a full and frank exchange—hopefully, a rapid one—as we move through part 5.

The Government share information every day. Like every organisation, we rely on information to deliver the support and services that everybody relies on. These proposals will not do anything radical. They are simple measures designed to provide legal clarity in uncontroversial areas. The hon. Lady said that the Bill’s objectives are too broad, but I am afraid I disagree. We have made available draft regulations that set out three clear objectives, which are constrained and meet the criteria. I believe it is possible to strike a balance between the regulations and the evidence to set out specific objectives on identifying individuals and households that have multiple disadvantages, improving fuel poverty schemes and helping citizens retune their televisions when the broadcasting frequency is changed in a couple of years’ time.

The hon. Lady mentioned some specific examples. I want to turn to the fuel poverty schemes. When we look at those several years down the line, I genuinely believe that we will be proud to have sat here and legislated in a Committee that introduced data-sharing measures that enable, for instance, a significant number of vulnerable people to benefit from the warm home discount scheme. At the moment, about 15% of warm home discount scheme recipients are classed as fuel poor, according to the Government’s definition. By utilising Government-held data on property characteristics to benefit the recipients, we estimate that that figure could be at least tripled. That could mean that an additional 750,000 fuel poor households receive a £140 rebate off their electricity bill each year.

We know that some vulnerable households miss out on the warm home discount because they need to apply and they either do not know the scheme exists or, for one reason or another, are unable to complete an application. Our proposed changes could result in the majority of the 2.1 million recipients receiving the rebate automatically. It will come straight off their energy bills without the need to apply. That is simply an extension of the data-sharing measures that already exist in the Pensions Act 2014 for pension credit. It is evolution, not revolution.

That example clearly sets out how we will require data to be shared among Government organisations and for there to be a flag to suppliers of eligible customers. In that instance, we will require the suppliers to use data only to support customers. Each objective will require a business case setting out the purpose and participants, which will be approved by Ministers and subject to parliamentary scrutiny.

I note that we are debating clause 29 stand part as well as the amendments, so after talking generally about part 5, let me move on to the clause. I believe that these powers do not erode citizens’ privacy rights. They will operate within the existing data protection framework. The new powers explicitly provide that information cannot be disclosed if it contravenes the Data Protection Act 1998 or part 1 of the Regulation of Investigatory Powers Act 2000. Further, they are carefully constrained to allow information to be shared only for specified purposes and in accordance with the 1998 Act’s privacy principles.

The new codes of practice, which the hon. Lady mentioned—I have been assured that they are on the parliamentary website—have been developed to provide guidance to officials in sharing information under the new powers in respect to public service delivery, fraud and debt, civil registration, research and statistics. The codes are consistent with the Information Commissioner’s data sharing code of practice. Transparency and fairness are at the heart of the guidance. Privacy impact assessments will need to be published, and privacy notices issued, to ensure that citizens’ data are held transparently. I was delighted that the Information Commissioner wrote to the Committee on 19 October saying:

“Transparency is key to building people’s trust and confidence in the government’s use of their data. I am pleased to see that further safeguards such as references in some of the codes to the mandatory implementation and publication of privacy impact assessments (PIAs), and reference to my privacy notices code of practice, have been highlighted in the Bill’s codes of practice.”

Louise Haigh (Labour, Sheffield, Heeley)

The Information Commissioner also said that she wanted the privacy impact notices to be included in the Bill, and the codes to be explicitly subordinate to her code on data-sharing practices. Will the Minister confirm that those codes are indeed subordinate? Will he also explain why the codes are not included in the Bill if they are so central to the process?

Chris Skidmore (Conservative, Kingswood)

I will come to the second point later. On the Information Commissioner’s desire to include privacy impact assessments, it is clear to me from her letter that she is now content with the situation as it stands:

“I am content that the codes all now reference and better align with the guidance on sharing personal data set out in our statutory code and include effective safeguards to protect people’s information.”

Louise Haigh (Labour, Sheffield, Heeley)

The Information Commissioner was referring to the codes being improved since she gave evidence to the Committee. Later in that letter, which I think the Minister has in his hand, she goes on to say that she stands by the other evidence, both the oral evidence that she gave the Committee and her written evidence, which included her view that privacy impact notices should be in the Bill.

Chris Skidmore (Conservative, Kingswood)

The Information Commissioner also mentions that, on privacy impact assessments and with reference to her privacy notices code of practice:

“This will build in transparency at two levels:—”

in the current situation—

“greater accountability through the publication of PIAs and timely and clear information for individuals so they can understand what is going to happen to their data.”

The Government remain committed to working with the Information Commissioner’s Office. When it came to the evidence sessions, I was aware of the fact that we had a long process discussion around the codes of practice and when their publication dates were due. It was very important for me, as a Minister, to ensure that we had the confidence of the ICO going forward and that we could publish those draft codes. We will continue those conversations.

When looking at putting the codes or privacy impact assessments in the Bill, it comes back to the key point of being able to continue that conversation when it comes to a transformational technology that we may not even know exists at the moment and that may radically change our ability to look at how we data share. At the moment we are looking at specified portals through which we will data share for the benefit of the most vulnerable in society, but there may be a new technology that allows the Government to expand our scope. If that new technology comes into being and we write the codes and privacy impact assessments into the Bill, we will have the chilling effect of ossifying the practice; it will impact on our ability to adapt and to be able to look at new technology, to move fast and to realise the opportunities that we may have to data share for the benefit of the most vulnerable in society.

Louise Haigh (Labour, Sheffield, Heeley)

I completely agree that we should not tie ourselves down in the Bill, particularly to technology. It came through loud and clear from the evidence sessions that part 5 seems to tie us to a very outdated approach to data sharing. It does not talk about data access; we heard that an awful lot in the evidence sessions. The Bill goes against the Minister’s own guidance on that. We should look not at bulk sharing, which takes us back to when we had filing cabinets or were sending across spreadsheets and databases on USB sticks, but at using application programming interfaces and canonical datasets, on which the Cabinet Office is leading the way. I would appreciate it if the Minister commented on that.

Chris Skidmore (Conservative, Kingswood)

The hon. Lady highlights the argument I am trying to make, which is that the data-sharing measures in the Bill are proportionate, constrained and there to ensure that we can bring public confidence with us, which she mentioned. That is why we have highlighted specific portals through which we will be able to share Government information across Departments. In future, there will be secondary legislation powers to review and expand that, but there will be a whole process for which we need scrutiny.

That is why the Bill is so important: by highlighting how we can help those most in need and how, when it comes to data and consent, some people are in circumstances, by virtue of being in deprived communities or particularly vulnerable, of not knowing that they can benefit from their data being shared. It is the Government’s responsibility to act in this particular area to ensure that data are shared for the benefit of the most vulnerable. That is why the Bill is designed as it is. We have the secondary regulations in place, limited as they are at the moment, going through impact assessments and everything that we need to ensure that we have a proportionate response to sharing data.

I fully appreciate what the hon. Lady said but I hope that she will accept that the Government have pulled out all the stops to ensure that we can take public confidence with us. That is why, for instance, under clause 33, new criminal sanctions have been developed to protect information shared under the new powers in respect of public service delivery, fraud, debt and research, so those convicted of offences could face a maximum penalty of up to two years imprisonment for illegal data sharing, a heavy fine or both.

No statutory restrictions that currently exist on sharing of data, such as in the Adoption and Children Act 2002, will be affected by these data measures. When it comes to audits, which the hon. Lady mentioned, data-sharing agreements entered into under the power will set out a governance structure of how audits will take place. This structure will oversee the arrangement and what participating bodies are required to do under data sharing. The Information Commissioner’s Office also has a general power to conduct audits, including compulsory audits of Departments and organisations to check that they are complying with the law in relation to the handling of personal information. All bodies are required to comply with the ICO’s request for assistance so that it can determine whether data have been processed lawfully in data-sharing arrangements. The ICO can pursue criminal proceedings where necessary.

Louise Haigh (Labour, Sheffield, Heeley)

Will the Minister confirm that every Department that undergoes a data-sharing arrangement will complete a full audit of all data-sharing arrangements in that Department? Will that be available under the Freedom of Information Act?

Chris Skidmore (Conservative, Kingswood)

On the individual point of audit, I will have to write to the hon. Lady. I will further consider her amendments and speak about them when we discuss three-year reviews. I want to ensure that bodies sharing information under the public service delivery power, for instance, strictly observe and follow codes of practice. Although I welcome the intention of the amendments, I think they are unnecessary. The Bill sets out the key conditions for disclosing and using information, including what can be shared by whom and for what purposes. We followed the common approach taken by the Government to set out details of how data are shared in the code of practice.

I want to return to the hon. Lady’s question of whether we use “have regard to” or “comply with”. The wording, “have regard to” already follows common practice in legislation, as illustrated in section 25 of the Immigration Act 2016 and section 77 of the Children and Families Act 2014. As the power covers a range of public authorities and devolved territories we want the flexibility that I mentioned about how the powers are to be operated, so that we can learn what works and adapt the code as necessary. To put it into the Bill, as I mentioned, would hamper that ability to adapt for future purposes. If bodies fail to adhere to the code, the Minister will make regulations that remove their ability to share information under that power, as is indicated, indeed, in part 11 of the code of practice, which states:

“Government departments will expect public authorities wishing to participate in a data sharing arrangement to agree to adhere to the code before data is shared. Failure to have regard to the Code may result in your public authority or organisation being removed from the relevant regulations and losing the ability to disclose, receive and use information under the powers”.

Amendment 106 requires the Minister to run a public consultation for a minimum of 12 weeks before issuing or reissuing a code of practice. The code of practice is essentially a technical document that sets out procedures and best practice with guidance produced by the ICO and Her Majesty’s Government. Clause 35 requires the Minister to consult the Information Commissioner and other persons, as the Minister thinks appropriate. I think that that strikes a good balance. Indeed, as I mentioned, we have been working closely with the ICO to ensure that there is confidence in the codes and the Information Commissioner states:

“I am pleased to report that significant progress has been made since my evidence session and I am content that my main concerns about the codes have now been addressed”.

I think it is very important to put that on record.

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

I welcome the Minister to his place. He comes across, to me, as rather bullish now, despite the damning evidence we heard over a very condensed couple of days. Does he think that he has cracked it now, that these codes of practice are all fit for purpose and that we should be sufficiently reassured?

Chris Skidmore (Conservative, Kingswood)

The codes of practice remain in draft form and obviously we are in Committee having a discussion around the nature of what is in the codes of practice. We had criticisms last week of, “Where are the codes of practice?” We were still in the process of a conversation about the codes of practice with the Information Commissioner’s Office to ensure that the Information Commissioner was content. If she is content with the codes of practice as they currently stand, I am not one to go against the ICO. I am not saying that that is a form of complacency, although maybe the hon. Gentleman is, but I trust the ICO’s decision and am confident in its ability to deliver on the codes as they currently stand.

Calum Kerr (Scottish National Party, Berwickshire, Roxburgh and Selkirk)

I thank the Minister for that mildly reassuring answer that the codes of practice are a work in progress. We welcome that, but in the spirit of helping improve them, I hope that he will consider some of the feedback from Big Brother Watch, which I thought gave the Committee excellent advice. Although Big Brother Watch recognises that the draft codes published by the UK Statistics Authority on research and statistics are detailed and comprehensive, it says that the draft codes published by the Cabinet Office and the Home Office are the polar opposite, offering very little detail or clarity.

Chris Skidmore (Conservative, Kingswood)

The codes are quite extensive in terms of being able to provide the material information that is there. They have gone through an extensive process. Although we had evidence from certain critical witnesses drawn by Opposition Members, there was also significant support for data-sharing measures and the ability to have flexibility through the codes.

As for considering how to go forward, the codes are now published—the hon. Gentleman can read them for himself—and the ICO is now content with the codes. That is a great position from which the Government intend to move forward. In terms of whether the codes are comprehensive, it is set out that the Government have a duty to consult the ICO and territorial Ministers. That is important, and we are following a process and a journey over which the Bill has been developed for a number of years. We are content that we are on track.

I welcome the intention of amendment 99 that only the minimum and necessary information is shared under the power to achieve the objective. The principles are set out in the Data Protection Act 1998. The public service delivery power will need to operate in compliance with the 1998 Act. The principle of data minimisation is also strongly embedded in the code of practice, to which specified persons who use the power must have regard.

In addition, the public service delivery power is intended to act as a more conventional gateway to allow public authorities to share information without the need for central oversight by Whitehall. It is important to reflect on that. Rather than having the dead hand of Whitehall overlooking a measure that should allow for local flexibility and local freedom, we expect a large number of local authorities to use the power to deliver their troubled families programmes. A central monitoring power could impose significant resourcing burdens, which we felt were unnecessary given the intended positive outcomes for citizens. On that basis, we feel that the amendment is unnecessary.

Amendment 95 intends to modify the definition of “personal information”. The definition in the Bill is consistent with section 39 of the Statistics and Registration Service Act 2007, which relates to the confidentiality of personal information. It has been drafted with that consistency in mind. The amendment proposes a definition that includes a vague group of persons. We believe it unsuitable because of its vagueness, and it risks causing confusion.

Amendment 96 requires that data subjects be allowed to request and correct as necessary personal information relating to them that is disclosed under the public service delivery powers. The amendment is unnecessary because the data subject already has those rights under the Data Protection Act 1998. In addition, the impact of such an amendment on public authorities would be significant. An assessment would need to be made of how many requests could be made to public authorities, and of the resulting resourcing requirements in terms of staff and any supporting technical infrastructure. Work would also need to be carried out to ensure that we can verify the identity of individuals requesting access to data and assess the risk of corrections and modifications to data held being made for the purposes of committing fraud.

I understand the intention of the amendments, and I hope that the hon. Member for Sheffield, Heeley will understand that the Government believe that progress has been made, as well as provision for ensuring that the sharing of data is proportionate. The regard for individuals’ privacy is central to the Bill and is set out in the code of practice, and the Government have put in place measures to work with the ICO and other civil society groups on that. I urge her to withdraw the amendment.

Graham Jones (Labour, Hyndburn)

I want to make a small point about part 5, chapter 1, clause 29. There is one small glaring omission that the Government ought to look at and which has been raised by my local authorities. In Hyndburn, we have what the Minister will understand as a two-tier authority. We have a district council and a shire council as opposed to, in metropolitan areas, a unitary council. The Minister is probably wondering where this is going: when light is thrown on an example, some of the problems begin to be seen.

My shire authority wanted to increase the uptake of free school meals but a lot of the data on constituents in the borough of Rossendale and the borough of Hyndburn, which I represent, are held by the local district authority. That includes data on council tax benefit, housing benefit and numerous other small interventions carried out by the district council. A unitary council does not have that problem. It can share data and resolve such problems. It can identify people and send out public information to potential recipients—beneficiaries—of free school meals, who trigger the pupil premium.

I will give an example of how that problem is inflated. We currently have free school meals for everyone aged between four and seven, so parents see no reason to come forward and register their children for the meals, which then does not trigger the pupil premium. In a unitary authority, relevant information in other council departments would be readily available, but in my two-tier authority, the chief executive of Lancashire county council says to me, “We want to increase the uptake of free school meals, particularly for four to seven-year-olds, because we want to trigger the pupil premium, but we can’t find potential recipients. We have some data on people who may use some of our services and may be entitled and some people who we could disseminate public information to, but there is a whole tranche of people we can’t see—we are blind to them, they are just not on our radar. There is no scope for us to see who they are.” That is because, of course, it is Hyndburn borough council and Rossendale borough council that have an interface with those people—they come into their offices regarding a plethora of issues—and those people may well benefit from free school meals. In this case, however, they will not benefit if their children are aged between four and seven so, again, they are not likely to see the connection.

My upper-tier authority, Lancashire county council, cannot access the relevant information that my local authority, Hyndburn borough council has, but a unitary authority does not face that issue. That is not fair or reasonable. It is not conducive to public policy. It is not reaching the target audiences that the Government themselves want to reach. This Government brought in the pupil premium and they want to push that policy, yet the absence of data sharing between upper and lower-tier authorities prevents Government policy from being pursued and creates an unfair situation.

So I left my chief executive’s office at Lancashire county council and travelled the distance to meet the chief executive of my local district council, who fully understood the problem, and we were able, in some way, to get that public information out to the relevant people. There was no direct contact, however, and those issues are problematic when they should not be. I believe that the Government should look at the clause, and look at that inequity. It is not right. It is not good for the delivery of public policy. Clearly, it creates barriers to reaching some people while others can be reached. The Government ought to come back with something that exempts local authorities, because without a shadow of a doubt there should be parity between unitary authorities and two-tier shire and upper county council districts.

I hope the Government come back and create that level playing field—that parity of opportunity—for the Government to be able to pursue their own policies through local government mechanisms without this barrier impinging on those very same Government policies, which are probably not reaching the people they ought to reach because of this inequity and this element that is missing from the Bill.

I ask the Minister to take a deep look at this issue, to create parity and to bring forward something that will bring my two local authorities together and not create a barrier between the two, and certainly not create this iniquitous situation whereby unitary authorities are able to deliver these public services but my two chief executives cannot deliver them to the very people who ought to be receiving them.

Chris Skidmore (Conservative, Kingswood)

To respond to the hon. Gentleman on his specific point, we will update the lists of bodies able to share information of the public service delivery power, and the PSD power allows for new objectives to be added by regulations if they meet the conditions specified in primary legislation. So the issue of the pupil premium, which he mentioned, may be one of the many worthy purposes for which new objectives could be created.

I would like also to draw the hon. Gentleman’s attention to the disclosure of information in the draft regulations, which I hope will reassure him. Paragraphs 21 and 22 of schedule 1 to the Bill refer to the organisations that will be sharing data, or that will be permitted to do so once they have applied to do so, including the county councils of England, the district councils in England and even the council of the Isles of Scilly. We recognise that there is that local government fracture that he mentioned and we hope that when it comes to data-sharing measures we will be able to heal that.

Louise Haigh (Labour, Sheffield, Heeley)

It was disappointing not to hear the Minister mention the General Data Protection Regulation and explain why this legislation has not been written in compliance with it, or my points about non-public sector authorities. I hope that he can return to those issues later in his remarks.

On the point about the Information Commissioner, in her evidence she supported statutory codes of practice. She also recommended that Parliament should review all aspects of data-sharing, and not just the clauses relating to fraud, after an appropriate time, which is what informed our amendment.

As our amendment says, we would also like the codes to make it clear that good cyber-security practice should not be about data sharing and that it should be about leaving the data with their original owner. I hope that the Minister will return to those issues when he comments on later stages of the Bill.

With that in mind, I beg to ask leave to withdraw the amendment.

Disclosure of information to gas and electricity suppliers

Chris Skidmore (Conservative, Kingswood)

I beg to move Government amendment 108, in clause 30, page 29, line 21, at end insert “, or

() the making of grants (by any person) under section 15 of the Social Security Act 1990 in accordance with regulations under that section made by the Scottish Ministers or the Welsh Ministers.”

This amendment enables information to be disclosed by a specified person to a licensed gas or electricity supplier for the purposes of a scheme in Scotland or Wales for the payments of grants to improve energy efficiency under section 15 of the Social Security Act 1990.

This clause enables the person specified in regulations to disclose information to gas and electricity suppliers. The disclosure must be for the purpose of reducing energy costs, or improving energy efficiency or the health or financial wellbeing of those living in fuel poverty, and it must be disclosed for use in connection with one of the fuel poverty support schemes listed in the clause.

The schemes referenced are the warm home discount scheme and the energy company obligation. Although the territorial extent of both these schemes is GB-wide, fuel poverty itself is a devolved matter. Officials in the devolved Administrations, including Labour-run Wales, have asked for Scottish and Welsh fuel poverty schemes to be included in the provisions of the clause. That is because there are grant schemes that fall under section 15 of the Social Security Act 1990 that address fuel poverty in Scotland and Wales. Those schemes would also benefit from the ability to share information between public authorities, and with gas and electricity suppliers, for the provision of assistance to fuel-poor households. The schemes are Nest and Arbed in Wales, and Scotland’s home energy efficiency programme. They help to reduce energy costs, or to improve energy efficiency or the health and financial wellbeing of people living in fuel poverty. The same safeguards will be in place as for all data disclosed under the clause—that is, data can only be disclosed by persons specified in regulations and for the specific purposes identified in the clause. All persons involved in a data-share must have regard to the code of practice.

The inclusion of these grant schemes will strengthen the ability to deliver better targeted, cost-effective fuel poverty schemes in Wales and Scotland.

Louise Haigh (Labour, Sheffield, Heeley)

May I welcome the Minister to his position? It was remiss of me not to do so earlier; he is the model of a patient Minister and very polite with it, too.

As with clause 29, we very much support the objective behind the proposals in clause 30—to identify the individuals most in need of warm home funding and any other grant or benefit that will alleviate fuel poverty. As we heard from Citizens Advice, energy firms have found it difficult to establish whether people are entitled to funding, so people who should get the help do not get it. Sharing the data should smooth that process. We know that fuel poverty is a significant contributor to debt. StepChange said that about 10% of its clients would be within the old definition of fuel poverty—they spend more than 10% of their income on fuel—and it has seen the number of people in gas and electricity arrears rise sharply from where things were in 2010.

However, there are concerns about disclosing personal data to gas and electricity suppliers, again with no detail on what personal information might be disclosed or how. There is none of the legal or technical detail essential to ensure data security, the ethical use of data and the necessary trust framework essential to protect the rights, privacy and security of citizens. The same problems plague the rest of part 5, not least that the general data protection regulation explicitly bans the use of data to monitor the behaviour of people in a way that could be seen as profiling, so we would appreciate the Minister’s comments on that point.

As we have seen, the warm home discount can work well, but it must be set within strict safeguards. The initial legislation was introduced to allow data sharing to be carried out, and we know that the Department of Energy and Climate Change was extremely careful with the idea, and concerned about public perceptions about trust and private sector companies’ use of data. There was a great deal of anxiety about the public view when the proposal was put as a theoretical proposition. The public are not convinced about the sharing of data with private companies—let alone between Departments—and particularly with private providers such as energy companies who have a potential commercial stake in the data.

That is why the warm home scheme currently works through data from the DWP and energy suppliers going to a third party, which crunches the data to identify the matches. The energy suppliers are then sent onward a list of their eligible customers and the data are deleted from the third party’s computers. The data are not held on any computers; that provides an appropriate safeguard for all individuals concerned. That is critical to alleviating concerns about the sharing of personal information.

At present, therefore, companies with no public accountability learn nothing of any commercial value to their activities, which is a crucial point. The sharing of data cannot be done if there is a company with a potential conflict of interest. However, clause 30 allows for the disclosure of information to gas and electricity suppliers to help people living in fuel poverty and within other tightly defined criteria. Although the clause is clear that data may be used only for the purposes intended, unease will remain about why, in this instance, the Government have allowed personal information to be shared with electricity suppliers rather than with a third-party trusted provider.

There will be a serious concern that electricity and gas suppliers are being passed information whose content could present a potential conflict of interest. Nobody is suggesting that the electricity or gas suppliers would do anything in breach of their obligations, but the risk is certainly there. That was the basis behind the creation of a third-party supplier in relation to the warm home scheme.

We therefore welcome the creation of an offence for passing on any of this information and we welcome the maximum sentence of two years. It provides a clear steer from Government on the sensitivity of the data, yet clearly we would prefer that the disclosure would not happen directly at all.

Important research conducted in 2012 by the Wellcome Trust examined this difficult policy area and some of the public sensitivities surrounding it. The research found that

“The general public has an awareness of powerful external forces, namely: a Government that is seeking to reduce spending in the economic crisis; a myriad of fraudsters and cheats, swindling the State and the individual; aggressive and increasingly sophisticated individual marketing; and a fast-changing technological world that is hard for many people to keep up with, plus a general push towards everything moving online. Trust has been lost in major institutions…and the NHS is in crisis, with some fearing discrimination in provision of health services in future.

In relation to data sharing activities that have used energy consumption data…the annual tracking report on individuals attitudes and awareness of data protection, by the Information Commissioners Office…showed that the majority of respondents had concerns about the handling of their personal information: 93% of respondents concerned which is an increase of 23% since 2004”.

Research from Citizens Advice and NatCen Social Research found that

“the private sector is viewed as being motivated to sell data to third parties…whereas the public sector are thought to be more motivated to deliver public benefits.”

That really gets to the crux of the matter—individuals are happy for their data to be shared within strict provisions so long as it is a clear benefit to them and with clear safeguards. But in the absence of a clear definition that lack of trust will remain. In that context, it is important that the Government tread carefully and the warm home discount prototype provides a helpful model to follow.

More broadly, there is concern about the potential use of fuel poverty as a Trojan horse to establish a gateway that could then be expanded beyond the bounds of current consideration. That is thankfully addressed, however, by the legislation’s intention that every proposal to share data would need to involve the Information Commissioner. We are therefore happy to accept clause 30.

Chris Skidmore (Conservative, Kingswood)

Clause 31 will enable specified public authorities to share information with gas and electricity suppliers or other persons specified in regulations. The disclosure must be for the purpose of reducing energy costs, or improving energy efficiency or the health or financial well-being of people living in fuel poverty, and it must be disclosed for use in connection with an energy supplier obligation scheme. The energy supplier obligation schemes referenced are the warm home discount scheme and the energy company obligation.

The warm home discount scheme provides a £140 energy bill rebate to certain vulnerable households during the winter months, helping those households to heat their homes. Some pensioner households already receive the rebate automatically, but that is possible only if the Government are able to inform the energy supplier, through a data match, which of their customers should receive it. It is important to recognise that that is not a new process. Rebates have been provided automatically to pensioner households in that way since 2011, and the process is considered to be working well. Not only has it helped to ensure that those entitled to support receive it, but it has significantly lower administrative costs—evidence suggests automatic payments cost under £1 per customer to deliver, compared to costs of up to £30 per customer for the non-automated method.

The hon. Member for Sheffield, Heeley mentioned the issue of trust and whether energy suppliers can be trusted with those data. She asked for an assurance from the Government on the continuity of the current scheme and whether similar security measures would be put in place. I can give her that reassurance. The sharing arrangements with third parties will remain exactly the same. Under current data-sharing arrangements for the warm home discount, suppliers are given a simple “yes”, “no” or “unknown” answer as to whether their customers were in receipt of state pension credit and so eligible for the core group rebate under the scheme. We would simply look to expand those disaggregated data. If wider data-sharing arrangements are put in place for fuel poverty schemes, we would expect only Government data to be shared with suppliers under those arrangements, which would have a similar yes or no answer as to whether the customer was eligible for support. The existing warm home discount core group of pensioners already receive automatic support through data sharing. It is a popular scheme and serves as proof that this model works and is safe.

The warm home discount scheme and the energy company obligation represent around £1 billion of investment per year. Although substantial, that is still a finite resource that needs to be targeted as effectively as possible on those who need it most. The data sharing enabled by this clause will significantly strengthen the ability to deliver better targeted, cost-effective fuel poverty support to households who need it the most.

Chris Skidmore (Conservative, Kingswood)

I beg to move amendment 109, in clause 32, page 30, line 18, at end insert—

“(ba) for the prevention or detection of crime or the prevention of anti-social behaviour,”

This amendment and amendment 112 create a further exception to the bar on using information disclosed under Chapter 1 of Part 5 of the Bill for a purpose other than that for which it was disclosed. The amendments allow use for the prevention or detection of crime or the prevention of anti-social behaviour.

Chris Skidmore (Conservative, Kingswood)

These Government amendments concern sanctions for unlawful disclosure and the disclosure and use of data to prevent and detect crime or prevent antisocial behaviour. A person receiving personal information under the public service delivery, debt, fraud and research powers cannot disclose that personal information unless it is for one of the exceptional reasons listed in the Bill, such as preventing loss of life or for national security. Technical amendments will ensure that it is clear that the list of exceptional reasons includes the prevention or detection of crime, or the prevention of antisocial behaviour.

The Bill provides that any person who contravenes the prohibition on further disclosure is guilty of an offence, which carries a penalty of imprisonment, a fine, or both. The introduction of criminal sanctions shows how seriously we take our responsibility to protect personal information, and we consider that it represents a key safeguard to accompany the new powers. It is imperative that individuals handling personal information under the powers take great care in handling that information.

We do not think that mistakes when handling personal data are acceptable, but we do not want to criminalise honest mistakes. The current drafting is slightly overzealous, so amendments 117, 128, 139 and 158 ensure that criminal liability arises only where there has been intent to disclose information. In circumstances involving disclosures made in error, we consider that other sanctions would be more appropriate, such as those set out in the Data Protection Act 1998 or internal disciplinary action.

The remaining amendments are minor technical amendments to ensure that information received under the powers can be shared to assist legal proceedings or criminal investigations outside the United Kingdom where necessary, while maintaining consistency across our clauses and aligning with other similar provisions in other legislation.

Louise Haigh (Labour, Sheffield, Heeley)

These Government amendments are technical and seem absolutely fine, apart from the provision to prevent antisocial behaviour. It is not clear to me why the disclosure would be necessary for the purposes of antisocial behaviour as defined under Anti-social Behaviour, Crime and Policing Act 2014. Can the Minister provide a clearer explanation of why any data that are ostensibly there to be shared for the purposes of alleviating fuel poverty and managing public sector debts would be used to prevent antisocial behaviour? Does that point to the concern I expressed earlier about the provisions leading to a broader scope for the use of information?

Chris Skidmore (Conservative, Kingswood)

The exemption has been included to ensure that if information received under the powers points to possible antisocial behaviour, it can be shared. That is intended to avoid any risk that by failing to refer explicitly to antisocial behaviour we cause ambiguity about whether certain information on antisocial behaviour can be shared. That ambiguity would have a chilling effect on multi-agency responses to antisocial behaviour, thereby undermining one of the key purposes of the 2014 Act.

Louise Haigh (Labour, Sheffield, Heeley)

Can the Minister give an example of how data relating to fuel poverty shared between a Government agency and a gas and electricity company could possibly relate to antisocial behaviour?

Chris Skidmore (Conservative, Kingswood)

We are talking about public service delivery powers, which do not just cover the warm home discount, attractive though that is. I know that all members of the Committee will be grateful, when this legislation goes through, to go back to their constituents and talk about being on this Bill Committee and how they delivered savings for millions of pensioners, but there are other key aspects of the Bill in relation to the troubled families programme and those living in communities blighted by antisocial behaviour. Data sharing around those programmes could create data matches that point to antisocial behaviour taking place or flag that up. We have a public duty to ensure that we have that power so that we can protect those vulnerable people whose lives are blighted in communities affected by particular types of antisocial behaviour.

Louise Haigh (Labour, Sheffield, Heeley)

I beg to move amendment 101, in clause 33, page 31, line 19, leave out “or permitted”.

Louise Haigh (Labour, Sheffield, Heeley)

The amendments would restrict the onward disclosure of data. As we know, the public value their data, and the amendments would place a higher test on onward disclosure.

It is important that data disclosures of information as sensitive as we have been discussing are appropriately considered; they must not simply be nodded through. Introducing a principle of necessity would mean that organisations have to make a case, rather than merely tick a box. Crucially, that would help to make the Bill more consistent with existing data protection. As the Information Commissioner’s data sharing code of practice clearly states:

“You should employ ‘need to know’ principles, meaning that other organisations should only have access to your data if they need it, and that only relevant staff within those organisations should have access to the data. This should also address any necessary restrictions on onward sharing of data with third parties.”

The ICO’s data sharing code of practice could not be any clearer. It is designed to protect an individual’s data and to prevent any onward disclosure to the organisations that have access to those data.

The Data Protection Act is also framed in terms of necessity. The ICO’s code of practice states:

“The processing is necessary because of a legal obligation that applies to you (except an obligation imposed by a contract)…The processing is necessary to protect the individual’s “vital interests”. This condition only applies in cases of life or death, such as where an individual’s medical history is disclosed to a hospital’s A&E department treating them after a serious road accident…The processing is necessary for administering justice, or for exercising statutory, governmental, or other public functions.”

The amendments, which would insert the word “necessary”, ask a simple question: why are the exemptions in the Data Protection Act set aside when there is disclosure of confidential personal data for certain public interest purposes? That is already clearly well established. For example, in the context of policing, section 29(3) of the Data Protection Act states that:

“Personal data are exempt from the non-disclosure provisions in any case in which”

the disclosure is for any of the purposes of a criminal investigation, and failure to disclose

“would be likely to prejudice”

that investigation. One element of the application of that exemption from the non-disclosure provisions has the effect of excluding the lawfulness of the disclosure. It therefore protects the disclosing body from action for breach of confidence.

To disclose under the Data Protection Act, there has to be prejudice to an investigation before a disclosure of personal data can occur. Clause 33(2)(e) refers to disclosures

“made for the purposes of a criminal investigation”,

with no test of prejudice. The advantage of the amendments is that they would bring in the word “necessary”. That minor shift would at least ensure that the disclosure of personal data is proportionate.

Similarly, section 35(2) of the Data Protection Act permits disclosure of personal data for legal proceedings without risk of the disclosing party being subject to an action for breach of confidence if the disclosure of personal data

“is necessary… for the purpose of, or in connection with, any legal proceeding”.

In contrast, clause 33(2)(f) does not include the word “necessary” and reduces the threshold of disclosure to one that could facilitate speculative disclosures that could not be made under the Data Protection Act. We would be grateful if the Minister explained why the necessity is removed and why the DPA provisions are not sufficient when personal data are disclosed, but only when it is necessary in connection with any legal proceedings. The amendments would align disclosure with the provisions of the DPA.

The changes to clause 33(2)(h)(i) to (iv) are proposed to make it clear why the DPA is insufficient. Schedule 2(4) permits disclosure of personal data if it

“is necessary in order to protect the vital interests of the data subject.”

Schedule 2(5)(b) allows disclosure that is necessary

“for the exercise of any functions conferred on any person by or under any enactment”.

Can the Minister describe what disclosures of personal data do not fall within those two provisions? The amendments insert the word “necessary” and simply align the disclosure with the Data Protection Act.

Chris Skidmore (Conservative, Kingswood)

Amendment 101 looks at tightening the restrictions around the onward disclosure of personal information in clause 33. Its effect would be to restrict the onward disclosure by public authorities to only those purposes required by existing legislation, rather than those permitted by existing legislation. Amendments 102, 103 and 104 would restrict the ability of public authorities to onwardly disclose personal information under this power for matters of great importance to all of us. The Government believe the amendments would have the effect of restricting our ability to share information for matters such as saving lives, investigating criminal activities and safeguarding vulnerable adults and children, unless it can be determined “necessary”.

Unfortunately, amendment 101 would considerably reduce the scope of public authorities to share data under that power. We are looking to provide legal clarity. Many existing legislative gateways for information sharing by public authorities tend to be permissive, rather than mandatory. Given that the purpose of the power is to provide legal clarity around data sharing to better target public services, the Government believe the amendment would, at best, introduce a degree of uncertainty as to whether a proposed data share is legal and, at worst, place a bar on existing permissive information sharing gateways for a range of important purposes.

Amendments 102, 103 and 104 could, in practice, inhibit public authorities from disclosing information, or delay them from disclosing it until they were content it was “necessary” to do so. The consequence of the amendments would therefore be to create an uncertainty where we are trying to provide legal clarity.

I welcome the intention behind the amendments—to ensure that personal information is disclosed—yet we believe they would create uncertainty. Furthermore, they are unnecessary as the powers are to be used in a way that is consistent with the DPA, and tough penalties under the new criminal offence will help ensure public officials handle the information lawfully. I invite the hon. Lady to withdraw the amendment.

Louise Haigh (Labour, Sheffield, Heeley)

I am concerned about why the Minister thinks the amendments will provide confusion; they will actually bring the clause into alignment with the Data Protection Act 1998—currently, large swathes of the Bill are not. Personal information is not defined as in the Data Protection Act, and nor are other clauses in this part. With your leave, Mr Streeter, I will test the will of the Committee.

Code of practice

Chris Skidmore (Conservative, Kingswood)

I beg to move amendment 118, in clause 35, page 32, line 30, at end insert—

“( ) The code of practice must be consistent with the code of practice issued under section 52B (data-sharing code) of the Data Protection Act 1998 (as altered or replaced from time to time).”

This amendment requires a code of practice issued under clause 35 by the relevant Minister and relating to the disclosure of information under clause 29, 30 or 31 to be consistent with the data-sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998.

Chris Skidmore (Conservative, Kingswood)

These are minor and technical amendments to clauses on the code of practice and statements of principles that will be issued under part 5 of the Bill. The amendments will require that the code of practice be consistent with the data sharing code of practice issued by the Information Commissioner under the Data Protection Act 1998, ensuring greater clarity for practitioners and increased transparency for citizens about the relationship between the provisions in the Bill and the DPA. The amendments have been tabled with our conversations with the ICO in mind; we have the Information Commissioner’s confidence that the codes are right. I commend the amendments to the Committee.

Louise Haigh (Labour, Sheffield, Heeley)

I beg to move amendment 106, in clause 35, page 32, line 42, at end insert—

“(ea) the public for a minimum of 12 weeks, and the relevant Minister, must demonstrate that responses have been given conscientious consideration, and”.

The amendment relates simply to the fact that the Opposition would like a full public consultation on the draft codes of practice. A much better version has been put before the Committee, and I understand that it is now on the parliamentary website, but we would like a proper consultation period, not just a consultation with whomever the Government see fit to consult.

Chris Skidmore (Conservative, Kingswood)

Amendment 106 would introduce a requirement for the Minister to publicly consult for a minimum of 12 weeks before issuing or reissuing the code of practice under clause 35.

Many details of the code of practice are drawn from the ICO data sharing code of practice. Others were drawn from two years of open policy making with civil society and other groups. We have just discussed a Government amendment intended to ensure that our codes will be consistent with the ICO’s data sharing code of practice. On that basis, we see no need for a compulsory public consultation before issuing the code, and even less need to make it a requirement in respect of any reissue. Some future changes to the code may be minor. We do not see a need to run a public consultation in those instances—indeed, to do so would be disproportionate in a great number of such cases.

Clause 35 requires that the Minister consult the Information Commissioner and other persons as the Minister thinks appropriate. Those other persons will include civil society groups and experts from the data and technology areas. We will run a full public consultation when a significant revision is expected, such as before the EU data protection regulation comes into effect, which I believe will be in May 2018. The clause as drafted provides the flexibility required. On that basis, the amendment is unnecessary and I invite the hon. Lady to withdraw it.

Louise Haigh (Labour, Sheffield, Heeley)

I am pleased to hear that the Government intend to consult on major revisions, and I hope that the draft codes, although much improved, will improve further in Committee, particularly in the areas outlined earlier relating to non-public authorities. As the Government have not listened to many of the recommendations made in their own consultation earlier this year, perhaps it is a futile amendment. I beg to ask leave to withdraw the amendment.

Louise Haigh (Labour, Sheffield, Heeley)

I will just lay some further concerns about the draft codes. Clause 35 requires specified authorities and specified persons to have regard to the code of practice. We have conducted our own mini-consultation. One member of the Government’s own open policy group described the codes of practice as “discursive and poorly constructed”, another as “empty waffle”. Agreement was widespread that they still require significant legal and technical improvements, and that safeguards should be included in the Bill itself.

Part 5’s provisions for personal data sharing enable officials to decide unilaterally when they may access and share citizens’ personal data without consent and for purposes other than that for which it was provided. It raises serious concerns about how the UK will be able to host any EU citizens’ personal data post-Brexit. If UK officials are able to access and use their data without consent, it is highly unlikely that the EU will regard that as approaching anything like “adequacy” with respect to the general data protection regulation.

It is an incredibly worrying aspect of the Bill and the accompanying codes of practice that nowhere do they refer to the EU’s GDPR, which will not come into effect until 2018, as the Minister said, although the Information Commissioner’s Office has stated that organisations must comply with the GDPR if they wish to continue to do business across the EU or with EU citizens’ data. Although we are referring to Government agencies and Departments, there is every likelihood that they will process EU citizens’ data.

Where consent is to be overridden by officials, the approach is not well defined. There is no consideration of or support for alternative approaches, such as empowering citizens to be helped by letting them nominate someone other than officials to act on their behalf, rather than officials doing so. There is inadequate attention to transparency and accountability. We have many lessons to learn from the Estonian Government, as we heard in evidence sessions.

Furthermore, the personal data-sharing code perpetuates errors from the two-year consultation. For example, when the code refers to application programming interfaces, it incorrectly implies that they are a new thing. They are not, with modern web APIs generally recognised as having been in existence since around 2002—hardly state of the art. The code also displays no apparent awareness of, for example, zero knowledge proof, a method by which one party can prove to another that a given statement is true without conveying any information apart from the fact that the statement is true.

For that reason, both technical and legal safeguards must be within the Bill, not the lengthy and vaguely drafted codes of practice relating to personal data. Quite simply, none of the codes contains the safeguards alluded to earlier in the consultation and Bill process. In the interests of time, I simply say to the Minister that we will revisit concerns about the codes of practice. We have serious concerns about the lack of transparency still built into the codes of practice, let alone on the face of the Bill, and we would like some updated technological references in those codes.

Disclosure of information by civil registration officials

Louise Haigh (Labour, Sheffield, Heeley)

I beg to move amendment 97, in clause 38, page 36, line 15, at end insert—

‘(2A) An authority or civil registration official requiring the information must specify the reasons for requiring the information to be disclosed.

(2AA) Information disclosed under this section shall not be shared with any other public or private body beyond those specified in subsection (1).”

Louise Haigh (Labour, Sheffield, Heeley)

These provisions, more than any others in relation to civil registration officials, have surprised and confused those involved in the data-sharing proposals and the open data policy-making process, as they were never mentioned in the more than two years of discussion about data sharing in that open policy-making group. In the Government’s consultation response, they said that

“a large number of individual respondents and representatives from civil society stated strong opposition to the proposed power providing the ability for the bulk sharing of data, believing that the power would effectively create an identity database and enable personal data to be shared between public authorities even where there is no public benefit to do so.”

The amendments would address exactly that.

The publicly stated policy intent of the clause is to allow a citizen interacting with the Department to allow that Department to confirm their civil registration information electronically. That could undeniably enable better informed decision making, allocation of resources and service delivery, and would support the modernisation of public services. However, as drafted, the legislation also allows the entire civil registration database to be copied over to arbitrary locations for arbitrary purposes. That is not the same thing as a citizen allowing access when using digital services.

There are further concerns about the clause’s lack of compliance with the Data Protection Act 1998. Civil registration documents will be shared in bulk to improve service delivery where there is a clear and compelling need, according to the Bill. However, “clear and compelling” remains a lower test than the Data Protection Act’s “necessary and proportionate”, and is likely to be challenged. The use of bulk data runs counter to the Centre for the Protection of National Infrastructure guidance, which warns of the risks associated with bulk data, particularly from hostile foreign intelligence services.

The example given by Government that would require the sharing of civil registration data is around child reference numbers, which become national insurance numbers. National insurance numbers used to be attached to child benefit. It worked on the assumption that every parent would claim child benefit for their child and, when that child reached 15 and a half years of age, their national insurance number would be dispatched.

When the Government changed their policy on child benefit and effectively restricted it to parents who earned less than £50,000 per year, that created a potential problem for the assigning of national insurance numbers. The proposals will presumably address the problem by using birth-certificate data to inform who should be issued with NI numbers and when. That seems a perfectly reasonable and sensible method to correct an unintended consequence of the changes to child benefit policy, but can the Minister give us any other examples of when and why such bulk data sharing would ever be necessary or proportionate? The example I have just run through is incredibly specific and I hope that it would not be and is not repeated across Government.

Clause 38 states:

“A civil registration official may disclose information under this section only if the official is satisfied that the authority or civil registration official to whom it is disclosed…requires the information to enable the recipient to exercise one or more of the recipient’s functions.”

That suggests that consent is to be moved away from citizens to officials, leaving the latter to decide when to share personal data, even if the data were not provided by the citizen for that purpose. That highlights a notable characteristic of the Bill: its apparent intent to move the control of personal data away from citizens and to officials. It proposes that the decision on what to share and with whom will be determined by regulations made by the “appropriate national authority”, which means the relevant Minister. Consent to use personal data will thus be moved away from the citizen to the Minister and, in practice, to officials.

Amendment 107 would require any disclosures under the provision to have the consent of the citizen or their legal representative, and would thereby prevent disclosures or all entries in bulk under the legislation. It would also remove any bulk sharing, simply enabling the sharing of information relevant to the task at hand.

Amendment 97 would require the authority or civil registration official to specify the reason for disclosing information and ban the sharing of information beyond those individuals or bodies specified in new section 19AA(1). Given that that is made explicit in all the other chapters of part 5 of the Bill, we assume it is an oversight that it has not been included in chapter 2.

Graham Stuart (Conservative, Beverley and Holderness)

rose—

Written evidence reported to the House