Digital Economy Bill - Committee (2nd Day) (Continued)

– in the House of Lords at 2:56 pm on 2nd February 2017.

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Relevant documents: 11th and 13th Reports from the Delegated Powers Committee

Amendments 54D not moved.

Clause 17: The age-verification regulator: designation and funding

Amendments 55 and 55A not moved.

Clause 17 agreed.

Clause 18: Parliamentary procedure for designation of age-verification regulator

Amendment 55B not moved.

Clause 18 agreed.

Clause 19 agreed.

Clause 20: Enforcement of sections 15 and 19

Amendment 56

Moved by Lord Morrow

56: Clause 20, page 21, line 21, at beginning insert “If the person in contravention of section 15(1) is resident in the United Kingdom,”

Photo of Lord Morrow Lord Morrow DUP

My Lords, I wish to speak to Amendments 56, 58 and 65, which stand in my name and that of the noble Baroness, Lady Howe of Idlicote. At Second Reading, I made clear my concerns about how Part 3 would be enforced. Given the wide-ranging scope of the Bill, I did not expect to get detailed answers to my questions when the Minister wrapped up the Second Reading debate on 13 December. However, I am disappointed not to have received any subsequent reassurances from the Minister about my concerns and I therefore raise the same points again today, in the hope of receiving some concrete answers.

Part 3 of the Bill relies on three enforcement mechanisms, one of which is IP blocking, in Clause 23, which I support but will leave others to discuss. I am concerned about the other mechanisms, which many hope will be used before IP blocking is even considered. My Amendment 56 is to Clause 20, which allows the age verification regulator to impose a fine of either a maximum of £250,000 or 5% of the qualifying turnover. How will this power operate if the website which is not in compliance with the age verification requirements of Clause 15 is based outside the UK? I am not the only noble Lord to have this concern. At Second Reading, the noble Baroness, Lady Benjamin, said that she was concerned about how the Government would be able to ensure that overseas sites would pay these fines. The noble Earl, Lord Erroll, with all his experience chairing the Digital Policy Alliance, also said that:

“One of the things that became apparent early on was that we will not be able to do anything about foreign sites”.—[Official Report, 13/12/16; col. 1214.]

As it seems unlikely that the Government will be able to collect fines from individuals outside the United Kingdom, my probing amendment, Amendment 56, would make that position explicit by ensuring that fines can be imposed only on someone resident in the UK. I would very much like to be proved wrong, but there is no evidence yet as to how this policy will be successfully enforced.

In another place the right honourable Matt Hancock acknowledged that fines would not always work abroad, but said that there were international mechanisms for enforcing them in some countries. I hope your Lordships will bear with me if I repeat a quotation that I also cited on Second Reading. Mr Hancock said:

“We want to be able to fine non-UK residents—difficult as that is—and there are international mechanisms for doing so. They do not necessarily reach every country in the world, but they reach a large number of countries”.—[Official Report, Commons, Digital Economy Bill Committee, 20/10/16; col. 217.]

I repeat the question I posed on Second Reading, and I hope the Minister will set out a detailed explanation of what these international arrangements are, and how they will work. I hope that he will quote chapter and verse on which jurisdictions in the world can be reached by these arrangements, and how easy it would be to use those mechanisms in relation to a site in a foreign jurisdiction to which the said international arrangements apply.

I should stress that this is a probing amendment. I am not saying that if this provision does not work in all jurisdictions it should be removed. If it works in some foreign jurisdictions it is worth keeping, although clearly in that context, the extent of its benefit will be limited by its international reach. I simply want to press the Minister to explain how it will work and in what foreign jurisdictions it will apply.

Given my concerns about the limited utility of the fines mechanism, Amendments 58 and 65 are intended to strengthen the second enforcement mechanisms in the Bill. Financial transaction blocking is set out in Clause 22, the premise of which is one of disrupting the business model of websites. The Minister in another place said:

“Our view is that enforcement through disrupting business models is more powerful because you are undermining the business model of the provider.” —[Official Report, Commons, Digital Economy Bill Committee, 20/10/16; col. 199.]

In practical terms, if a website is not in compliance the age-verification regulator can inform financial transaction providers and ancillary service providers, such as those who support websites with services like advertising, that a website seeking access to the UK market is acting in violation of UK law, and the intention is that these businesses will withdraw their services. Admirable though that sounds, I am not convinced that Clause 22 as it stands will disrupt the business model of websites, because, as I said on Second Reading, Clause 22 does not require the regulator to relay information on non-compliance to financial transaction providers. My Amendment 58 would require this information to be provided to financial transaction providers and ancillary service providers, by amending subsection (1).

Clause 22 does not empower the regulator to require providers not to process transactions with such sites either, nor does it make any demands of the providers to take any action against a non-compliant website. My amendment would place an enforceable duty on payment providers and ancillary service providers to take action against a non-compliant website, similar to the duty in Clause 23, once they had been notified of a non-compliance.

In the Government’s response to the consultation on age verification, they said that they do not think it would be appropriate or necessary to place a specific legal requirement on these payment providers to remove services, basing this on their stated belief that they can rely on such companies to block transactions because their terms and conditions require merchants to be operating legally in the country they serve. Similar statements were made by the Minister in Committee in another place.

On Second Reading I noted that exactly the same arguments were used during the passage of the Gambling (Licensing and Advertising) Act in 2014. At the start of 2017, the evidence on the effectiveness of the reliance on payment providers is far from reassuring. According to a parliamentary answer on the detail that the Minister gave on 12 January, transactions have been blocked for only 11 gambling websites. That seems a very low number to me. One of the difficulties is that depending on terms and conditions does not lend itself to transparency. We require a much more transparent arrangement for what will become the Digital Economy Act.

I also note that no statements have been made about whether ancillary service providers are under the same obligations as the Government argue rest on financial transaction providers. I hope the Minister will tell the House the basis on which the Government believe ancillary services providers will act as part of their enforcement arsenal. I remain concerned that Clause 22 does not give pornography providers strong enough commercial incentives to comply, because they will not be absolutely certain that payments will be blocked in the event of non-compliance. My amendment would remove that uncertainty.

The need for clarity on enforcement was forcefully presented by research from the University of Oxford that I cited on Second Reading. The report Effective Age Verification Techniques: lessons to be learnt from the online gambling industry looked at how age verification on gambling websites had worked. The authors concluded that where there are strict audit and enforcement requirements, there is an incentive to invest in high assurance identity and age verification processes, but where enforcement is patchy and uncertain, the incentives to invest in expensive authentication systems are less clear.

I am convinced that without robust enforcement, all our good intentions in relation to the protection of children will come to nothing. Many noble Lords supported the principle of Part 3 on Second Reading—but principle is not enough. We need rigorous action, and at the moment it is unclear just how the Bill will be enforced to ensure that our good intentions are met. I hope that on this occasion the Minister will respond to the questions I have raised in detail. I beg to move.

Photo of Baroness Benjamin Baroness Benjamin Liberal Democrat 3:00 pm, 2nd February 2017

My Lords, I wish to speak on my two amendments in this group. Amendment 63 relates to the guidance that the age verification regulator may issue under Clause 22(7). It would make publishing this guidance mandatory rather than discretionary. It has been noted by the Delegated Powers and Regulatory Reform Committee that the regulator has extensive powers to issue guidance under Part 3—that is, in Clauses 15(3), 21(9) and 22(7). The guidance required in Clauses 15(3) and 21(9) is mandatory, but in Clause 22(7) it is discretionary.

The effectiveness of Clause 22 is central to the Government’s enforcement strategy. It is great that they want to disrupt pornography websites that are not in compliance with the age-verification requirements of Clause 15(1) by either stopping the money via the payment providers or disrupting other business activities via what the Government deem ancillary service providers—ASPs—a term that is broadly defined in Clause 22(6).

The Bill states that the age verification regulator,

“may publish guidance for the purposes of subsections (1) and (6) about the circumstances in which it will treat services provided in the course of a business as enabling or facilitating the making available of pornographic material or prohibited material”.

It is essential that the guidance in clause 22(7) be published. It is not just something that would be nice to have, which is how the Bill currently stands.

In making the case for mandatory guidance, I would like to make two additional points. First, Parliament should know whom the Government intend should be considered an ASP, so that the debate we are having today can inform the guidance. In their original consultation document on age verification, the Government defined ASPs as,

“services which support and profit from the delivery of pornography on commercial sites. These include, but are not limited to, payment systems, advertising on pornography sites, web-hosting services, and other revenue-generating processes associated with these sites”.

Payment providers are defined in subsection (5) but whether the Government still intend that other types of organisation listed in the consultation document should fall within the scope of Clause 22 is not clear. The truth is that we do not know whether there will be any clear, comprehensive guidance, and that is simply not good enough from the Government. There is a strong argument that the definition of an ASP should be fully provided on the face of the Bill. My hope is that, at the very least, we should have an absolute guarantee that the regulator will provide guidance defining who will be considered an ASP.

Secondly, I would like to raise questions about how social media and media sites will be treated for the purpose of Clause 22. We need clarity on this. If my amendment was accepted, that clarity could be provided through mandatory guidance. I was pleased to hear the Minister reconfirm that all social networking sites will be classed as ancillary service providers, and that this arrangement would apply to the likes of Facebook, Tumblr, Instagram and so on when showing commercial pornographic material.

However, I want to mention briefly user-generated material on social media, an issue that naturally arises in debating this Bill if we are told that it will not cover it, despite a vast amount of hardcore porn that can easily be viewed by anyone, including young children, being just a couple of clicks away. The majority of social media sites say that 13 year-olds are allowed to use their sites. In fact, 75% of all 10 to 12 year-olds in the UK are on one or more social media sites. So there is no justification for a site that says 13 is its minimum age providing easy access to harmful 18-plus material; even less so when the same site also knows that in fact, large numbers of under-13s are its customers.

As it stands, commercial porn sites will be required to introduce age verification to limit access to over-18s, but social media sites escape such a requirement if the material is user-generated. Therefore, we leave the door wide open and we may end up driving kids away from big porn sites straight into the virtual clutches of porn merchants who operate via social media. One suggestion is that perhaps the proposed new regulator could identify individual accounts or profiles persistently publishing pornography on a significant scale on any site or service. The regulator should then have the power to require the owner of the site or service to delete the account or profile, or put it behind an age verification gateway. Importantly, the whole site or service would never be blocked or restricted.

I welcome Amendment 69A in the name of the noble Lord, Lord Paddick, which would seem to be an additional sensible means of beginning to address some of these concerns regarding non-commercial pornography. Requiring the Secretary of State to lay regulations concerning non-commercial porn is helpful. I particularly support the proposal for a warning sign on a website that the user may be about to access pornographic material. A warning of this kind may not be a silver-bullet deterrent but is a welcome step in the right direction and a platform upon which we can build for the future.

If the Government are not going to address user-generated content through this Bill, then I wonder what their child protection policy is with respect to engaging user-generated content. If the Government have reached the conclusion that commercially generated content is something from which children should be protected, then it seems illogical not to be concerned about user-generated content. It is worth remembering that the Government’s manifesto commitment was to,

“stop children’s exposure to harmful sexualised content online”.

There is no mention of how the content was produced. The Government’s response may be that addressing user-generated content is more difficult, but we need to address this issue. I hope that the Minister will meet me and other concerned Peers to discuss this challenge.

I turn briefly to my other amendment, which is short and to the point. Amendment 237 would add a new paragraph to ensure that Part 3 and Clause 80 come into force one year after Royal Assent. The Bill as it stands does not say when, or even if, Part 3 and Clause 80 will ever come into force. This is an oversight which would do our children and young people a great disservice. I am sure that is not the Government’s intention. When the Bill was debated in Committee in the other place, the Minister said he expected that Part 3 would be in effect 12 months after Royal Assent. This is a welcome expectation. However, to give certainty to all the organisations affected by Part 3 and video-on-demand providers who will need to adjust their age verification systems, there should be confirmation of that 12-month timetable by putting that commitment on the face of the Bill. It seems to me that this lack of clarity stands at odds with the explicit commitment to commence other sections of the Bill to a specific timetable. Clause 89 sets out that six sections will come into force the day the Act passes, 17 sections and one schedule two months after Royal Assent, and one section on 1 June 2020. Every other section will depend on the Secretary of State bringing the relevant sections into force by regulations.

This situation with Part 3 is completely unsatisfactory. I urge the Minister to commit to the timetable set out in the other place by tabling an amendment on Report to ensure the child protection measures we have debated will come into effect a year after Royal Assent, and to place on notice all those providing commercial pornographic websites that they will need to prepare to comply with the age verification requirements in Part 3. I look forward to hearing what the Minister has to say in response to my questions and very much hope that the Government will accept my amendments.

Photo of Lord Paddick Lord Paddick Liberal Democrat Lords Spokesperson (Home Affairs) 3:15 pm, 2nd February 2017

My Lords, I have Amendment 69A in this group. Before I discuss that I wish to address a few remarks to the other amendments in the group. I understand the concerns of the noble Lord, Lord Morrow, about enforcing fines on people who are not within the United Kingdom. However, I do not understand how his Amendment 58 would be any more effective if the payment service provider or the ancillary service provider is also outside the UK. Perhaps when he addresses the Committee shortly, he will also indicate to me, because I am a little confused, the difference between his provision in paragraph (a) of proposed new subsection (2) in his Amendment 65, where enforcement of the age verification regulator’s decision on the payment service provider or ancillary service provider is implemented by way of an injunction, and the proposals suggested for a similar process under Amendment 66.

On Amendment 69A, as I mentioned on an earlier group, there are increasing amounts of adult material available on the internet that is not commercial in any sense. Much of it is taken from commercial websites but there is no reference to which website the material has come from, and therefore no suggestion that it is intended as a lure or as providing a link to a commercial site.

To take up issues just raised by my noble friend Lady Benjamin, increasingly there is pornographic material that might be described as “home videos”, either produced by what might be described as exhibitionists and others where innocent members of the public, including some celebrities in recent years, are deceived into performing sexual acts to their computer camera not knowing that they are being recorded for subsequent posting on to publicly available websites. There is also the issue that Liberal Democrats have been very strong in trying to tackle: those instances of “revenge porn” where disgruntled exes post compromising videos online. From what I can see, that type of material is not covered by the Bill, as there is no commercial aspect and no ancillary services involved. There is confusion about what “ancillary service providers” means. In his remarks on an earlier group of amendments, the Minister talked about pornographers to whom ancillary service providers provide their services. In the case of self-generated or home-grown obscene material, though, there is no pornographer that the website is providing a service to, at least in one sense. Perhaps the Minister will clarify that.

The noble Baroness, Lady Kidron, spoke about the fact that there are some social platforms, such as Facebook and Instagram, which are very good at taking down inappropriate material: they have strict rules about obscene material posted on their platforms. However, there are particular difficulties here with platforms such as Twitter and Tumblr. Although 99% of the content is innocent and of no harm to children, or anyone else, there are Twitter feeds and Tumblr pages that have adult material on them. Those are not simply links to porn sites, but actual videos on the actual pages or Twitter feeds. While most have a warning on the front page—NSFW, or not suitable for work, and 18+ only—that is usually also the page that has already got pornographic images on it. Even on Twitter, it may not be clear that the media content is pornographic until one has accessed those images. Clearly, there is difficulty in enforcing age verification on those platforms when the overwhelming majority of the material contained on them is not adult material.

What I believe needs to be explored is making a tool available to those who want to use social media for adult material, so that when the Tumblr page or Twitter feed is accessed, the user is diverted to a page that warns what lies behind and provides an option to divert away from the adult material. That alternative page could be a government-specified warning about the impact that pornography can have on young people, advising where support can be given and so on: the equivalent to the warning messages that are now printed on cigarette packets, for example. Alternatively, the Government could by regulation insist that such a tool was made available, to ensure such a warning page is placed on accounts, as the noble Baroness, Lady Benjamin, mentioned just now, so that people are alerted that such pages or Twitter feeds have adult content on them. It falls short of requiring age verification or blocking such accounts, which I am sure Twitter and Tumblr would resist, but it would still address an important issue.

In its useful briefings on this aspect of the Bill, the NSPCC says there is a particular problem with children who accidentally stumble across adult material. This would go some way to addressing that issue. The NSPCC says a particular problem is pop-up advertisements from commercial pornography sites, which regrettably this amendment does not address—nor is that addressed by any other part of the Bill. Will the Minister tell the Committee whether there is any move by the Government to address that issue?

It is one thing for the BBFC to block a porn site that does not have age verification; it is quite another to suggest—as the Minister said on an earlier group of amendments—that we block a platform such as Twitter, if it fails to do the same for a handful of feeds that contain adult material. I accept that the amendment as drafted is probably far too wide in the powers it gives to the Secretary of State, but it is important that we do not ignore non-commercial adult material, which in increasingly a problem on the internet.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, my amendment to Clause 17, which noble Lords have already discussed, raised the importance of knowing how the Government plan to enforce the Bill through the appointment of one or more age verification regulators. The amendments tabled by the noble Lord, Lord Morrow, and the noble Baroness, Lady Benjamin, raise similar questions about the mechanics and processes of enforcement and I am very glad to be able to speak in support of Amendments 63, 56, 58 and 65.

On Amendment 63, I agree completely with everything that the noble Baroness, Lady Benjamin, has said. If we are not to have real clarity about the identity of ancillary service providers on the face of the Bill, the idea that we can make do with optional guidance is unsustainable. It must be made mandatory. On Amendment 56, I support the call from the noble Lord, Lord Morrow, to hear a full explanation from the Minister of the mechanisms for enforcing the fining provisions in Clause 22 in other jurisdictions, which were alluded to by the Minister in another place.

In the time available today, however, I would like to focus particularly on Amendments 58 and 65. Any noble Lords who were in your Lordships’ House when we debated the Gambling (Licensing and Advertising) Act 2014 will know that I had a major reservation about the Government’s plans to rely on payment providers to enforce the licensing provisions applying to foreign websites. I think that the noble Lord, Lord Morrow, has demonstrated that my reservations were well founded. In response to written Parliamentary Questions I tabled last year, the Government said that, since the law came into effect in 2014, the Gambling Commission has written to approximately 60 gambling websites reminding them of the law, and payment providers have been asked to block payments 11 times. Given the size of the global online gambling market that can access the UK, that surely seems tiny. If we are supposed to be reassured, I suggest that the Government should think again.

The noble Lord, Lord Morrow, also raised questions about why the Government think that ancillary service providers will act to withdraw their services. I recognise that the Government want to disrupt the business models of pornographic websites, but for some companies, to withdraw their services would be disrupting their own business models. They may be small businesses, not major international organisations such as Visa and MasterCard. In such cases, it would not be in the interests of the business to act. They cannot be expected to do so unless it is made an explicit legal requirement with a clear sanction. My concerns about the absence of any sanction or requirement to act are readily acknowledged by the Government’s own publications, in a manner that I find rather unnerving. In the press release the Government issued when they announced their plans for IP blocking, they said they were,

“also seeking co-operation from other supporting services like servers to crack down on wrongdoers”, and in the notes to the release said:

“Websites need servers to host them, advertisers to support them, and infrastructure to connect them. With the international and unregulated manner in which the Internet operates we cannot compel supporting services to be denied but the regulator will seek to gain cooperation from the industry”.

They seem to be hoping that, although they have inserted this age verification requirement into statute, it is acceptable to back it up with what is effectively a non-statutory, half-hearted good will enforcement mechanism. Lest anyone doubts this, they should review the Government’s evidence to the Delegated Powers and Regulatory Reform Committee about the delegated powers in the Bill. The Government reported on the guidance to be issued under Clause 22(7) about who will be given a notice about non-compliance of pornographic websites. Importantly, the Government said:

“The recipients of those notices can decide whether or not to take action. Accordingly it is considered that no Parliamentary procedure is necessary”.

It seems that the Government hope that by placing the obligation for age verification in statute, we will congratulate them on fulfilling their election manifesto commitment, without—at least as far as Clause 22 is concerned—any credible commitment to enforcement.

We would not be doing our job as a revising Chamber if we allowed such an obviously flawed clause through. It is imperative that the Government accept Amendments 58 and 65 in the name of my noble friend Lord Morrow. The age verification regulator must be required to tell financial transaction providers, and indeed ancillary service providers, not to do business with sites without age verification checks, and to follow up to make sure that no financial, or other, transactions have taken place. Meanwhile, the financial transaction providers and ancillary service providers must know that this will take place and that if they fail to act accordingly, the regulator will place sanctions against them. I hope the Committee will support Amendments 58 and 65.

Photo of Lord Maxton Lord Maxton Labour 3:30 pm, 2nd February 2017

My Lords, I am very reluctant to take part in this debate, because I was not available to speak at Second Reading, which always restrains noble Lords from speaking in Committee. However, I will make three points.

First, I confess openly that I have indulged in sexual activity—I will not say when, as that might be unfair. But I have never fired a gun or a revolver in anger, or taken part in a fight with a knife, or indeed taken part in a fight at all. Yet we are not banning scenes of violence, even on the news, which are seen by children all the time, whereas we are involved in banning scenes of sexual activity. That may be right, but we ought to be looking at other areas of life as well, because they can damage children just as much as sexual activity can.

Secondly, this law as it stands—many noble Lords who have moved or spoken to amendments have admitted this—is almost inoperable. It cannot be enforced—or can be enforced only on rare occasions. That is rather like speeding in your motor car, which is an analogy I have used before. Everybody breaks the law by speeding—or most people do—because they know that they will not get caught. That is rather like this law, as it stands at present. The problem with unenforceable or rarely enforced laws is that they bring the law into disrepute—and that is the danger of this part of the Bill as it stands. We are in danger of bringing in something that is not enforceable and, by doing so, we are bringing the law itself into disrepute.

Lastly, I will give my solution to all of that. The aim of this part of the Bill is not to stop pornography sites but to stop children watching them. There is a simple answer to that—but, unfortunately, it is an answer that the Liberal party do not support and which the Tory Government got rid of when we introduced the voluntary part of it. It is an identity card. If you introduce a mechanism whereby you can get into pornography sites on any device only by using your fingerprint or via eye recognition, or whatever it might be, of course that can stop it. On my iPad I already have a device by which I can save my passwords and which will show them to me when I want to use them. But I can get into it only by using my fingerprint; I cannot do it any other way. I cannot even use my normal four-digit pass code; I can do it only with my fingerprint. Why not do that sort of thing for pornography sites as well? Only adults will be able to get into them; children will be barred by the introduction of an ID card mechanism, so that you can get into it only by that means. Unfortunately I have hospital appointments during the next sitting of Committee, but I hope that on Report I will be able to introduce amendments to that effect.

Photo of The Earl of Erroll The Earl of Erroll Crossbench

My Lords, I have one amendment in this group. I very much support Amendment 65, but there is no point adding anything to what the noble Lord, Lord Morrow, said. He covered it in great detail and for all the right reasons. I will add only for the noble Lord, Lord Paddick, that a lot of the payment service providers—this is the key to it—such as Mastercard, Visa, and so on, are international. If there is a duty on them, they are very good at trying to stick to the law. That would close quite a few holes and make life a bit difficult for sites—so as a deterrent, it would really help.

Sadly, this whole approach to cutting off the ancillary service providers years ago was enough to kill off pirate radio in the 1960s—which I was very sad about. But this time I approve of being able to do it, because I approve of the motives behind it: trying to stop children accessing pornography.

Amendment 68B, in my name, questions what a “large number” of children is. I realise that it is obvious that you have to prioritise, because 80% of the sites are over a certain size and they will definitely come under this. They handle 80% or so of the traffic, or whatever, so I can see that you should check up on them first. But they are also the ones that will comply, because many of them are onside anyway. However, let us say that there are 10% of sites left. That is an awful lot of children, if you do the maths in your head. You knock one nought off the end of however many children there are, but you still leave an awful lot. I therefore do not understand why we are leaving in a “large number” as a constant target. There must come a point when it is worth moving on to the smaller numbers as well. I therefore do not understand the purpose of the clause. It is self-evident that they will have to prioritise. If they do not, they are idiots—and I know perfectly well that the members of the BBFC are not. Therefore I cannot understand the purpose of it.

Amendment 69A, in the name of the noble Lord, Lord Paddick, has some merit in it. As the noble Baroness, Lady Benjamin, said, there is a lot of non-commercial stuff out there. The purpose of this is to stop children viewing pornography. It does not matter whether it is commercial or not. If you put in something like this, there are clever ways in which people will try to define their sites as non-commercial. In particular, if they can start appealing against this—this is where having a complicated appeals process would become so dangerous—I can see loopholes opening up. So we need to start including non-commercial pornography—and it is okay if it takes a year.

I also support Amendment 237, in the name of the noble Baroness, Lady Benjamin. We need to have a deadline. It is something that all sites can work towards. We should say that, on whatever date, if sites are not compliant—we suggest that it ought to be a bit like a speed limit, where you ought to slow down before you hit the 30 miles per hour limit—we will issue notices to the ISPs to block them. Something might happen, because you have a level playing field, everything happens on the same date, and under the amendment in the name of the noble Baroness, Lady Benjamin, they will have a year to do it in. That is probably enough to get your regulations in place and so on. It is a very good idea.

Photo of Lord Browne of Belmont Lord Browne of Belmont DUP

My Lords, I am pleased to be able to support Part 3 of the Bill, and Amendments 58 and 65, in their objective of increasing child safety. However, I am concerned that the Government’s proposal in Clause 22 currently leaves many questions unanswered. I am raising these points in the context of the Government stating in the impact assessment for the Bill, published last May, that the regulatory system to be set up under Clause 22 would merely,

“nudge porn providers to comply and put age verification in place”.

That is not consistent with the much bolder manifesto commitment simply to,

“stop children’s exposure to harmful sexualised content online by requiring age verification for access to all sites containing pornographic material”.

Since then the Government have set out a robust position on IP blocking, which leaves websites little room for doubt as to what might happen if they do not comply with Part 3. The enforcement action is clear: the age verification regulator can issue a notice and internet service providers have a duty to respond. In this regard, and alluding back to the previous debate, I think it is vital that Clause 23 should remain as it is—unamended.

However, there has been no upgrading of Clause 22 in parallel with the introduction of Clause 23, so we are left with the notion of “nudging” websites—which gives me little reassurance that this is a robust approach to enforcement. Under Clause 22(1) the age verification regulator may give a notice to a payment provider or an ancillary service provider, but it is not clear when or if the regulator would inform the service provider that such a contravention was happening. Would it be after a fine was not paid or after a letter had been sent—and, if so, how long would a website have to respond before a notice would be given? I hope that the Minister will set out the Government’s intentions.

I support Amendment 58, tabled in the names of the noble Lord, Lord Morrow, and the noble Baroness, Lady Howe. It would require the regulator to issue a notice under Clause 22(1). The noble Baroness deserves much credit for her persistence in bringing this issue before your Lordships’ House over many years. My bigger concern is that, having set out clearly that internet service providers must act in response to a notice from the regulator, there is no transparent statutory expectation on payment providers or ancillary service providers. How do the Government expect enforcement to take place without this power? Others have set out their case on this point in detail and I will not take up the time of the Committee by repeating it, but I am left feeling concerned that there is no power to require service providers to take any action after receiving a notice from the regulator. Furthermore, such a lack of teeth undermines the Government’s manifesto commitment to prevent children accessing all pornographic websites.

I fully support Amendment 65 in the group, which would make it a duty for payment providers and ancillary service providers to act by removing their services from contravening websites, and makes that duty enforceable. I hope that the Government will agree.

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs)

My Lords, I rise to support in particular the inclusion of Amendment 65 on the requirement for payment services providers to cease providing a service to those who flout the age verification rules, and I am pleased to say that it looks like we are building slightly more of a consensus on that than we did on the previous group of amendments. It seems to us that this is the most powerful measure that can be taken against rogue pornographic sites. If we can cut off their source of income, the likelihood of a positive response is almost inevitable.

The very nature of commercial pornography is based on the vast sums of money that can be made from it. Indeed, when we debated Part 3 at Second Reading, several noble Lords made the point that legitimate pornography sites would welcome the age verification process as they do not make any money from children casually visiting their sites; they want the more serious players to be involved because obviously they are the ones who are going to pay the money, so there is a kind of internal logic to what is being proposed. For these sites, the overriding concern is to harvest the profits, and any threat to that is likely to bring about an immediate response.

However, I also accept the point that we have to get the enforcement right, and I listened carefully to the noble Baroness, Lady Howe, about the experience with regard to the Gambling Bill, some of which I did not know. If there is a problem, let us talk it through and work it out because somewhere in the mix is the answer to our problems.

My noble friend Lord Maxton said that this could not be enforced. I do not think that anyone considers that what is being proposed in the Bill is going to be 100% deliverable or enforceable. We are on a journey and, if we can attack 50% or 75%, we are making progress in this area. It is inevitable that we will have to revisit the whole issue in the future, so we are taking steps towards what I hope will be a fully robust system. Incidentally, I agree with my noble friend about identity cards, although obviously that is another issue. I have tabled amendments on how it is possible to provide age verification on an anonymised basis and I hope that he will look at them. There are new websites that manage the process of checking identity without putting people’s details into the public domain. Technology is moving on in ways I do not claim to understand, but I am glad they are there.

Amendment 65 also refers to the requirement for ancillary service providers to block access to non-complying persons. We have debated this a little this afternoon. While we have some sympathy with that objective, we are keen to ensure that any measure to block sites via ancillary service providers, such as Twitter and Google, are proportionate and deliverable. The Minister and the noble Lord, Lord Paddick, reaffirmed that. We are not talking about taking down the whole of Twitter, so I do think we need to get the proportionality of this right. We will explore this issue more in some of the amendments that we have tabled for debate later on, and we need somehow to have further discussion and debate about social media sites, their responsibilities and what we can do about it.

I was very interested to hear the contributions of the noble Baroness, Lady Benjamin, and of the noble Lord, Lord Paddick, on the issue of what was not commercial but user-generated material, including issues such as revenge porn, which the noble Lord reminded us about. That is an issue that we really need to address and I feel that children are particularly susceptible to getting involved in that innocent exchange of information, which can prove all too damaging and be misused against them by those who are keen to exploit their innocence. We need to build in more protections for children from being exploited in this way. I do not know whether the Minister has any more thoughts on that, but I hope we can explore in more detail the question of what is different between commercial and non-commercial material and how can we make sure that those children are protected?

Finally, I have added my name to Amendment 237, tabled by the noble Baroness, Lady Benjamin, and we agree with the one-year implementation date. As we have already outlined, we feel there is a great deal of more work to be done in this Bill, both in primary and secondary legislation, but we agree that a one-year deadline would produce, on the one hand, space for this additional work to be done and, at the same time, provide reassurance of our ultimate determination to introduce what we hope would be a robust and detailed age verification system which would stand the test of time.

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Lord in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for Culture, Media and Sport 3:45 pm, 2nd February 2017

My Lords, I am grateful to all noble Lords for bringing up these rather difficult points which we have to address. This highlights that trying to fulfil our manifesto commitment is much easier in some parts, but there are also some areas on the edges that we accept are difficult. I do not think we are going to achieve a 100% success ratio and we are cognisant of that.

I shall start by addressing some of the general points that noble Lords made before I get on to the specific details of the amendments. I apologise to the noble Lord, Lord Morrow, for not answering his questions asked at Second Reading. I wrote a long letter on 21 December and I missed out some of his points, although at the end I made an offer to all noble Lords to bring up anything that they wanted.

As far as porn sites overseas is concerned, and how we should enforce this new law against such websites and companies that are not based in the UK, the aim of our policy is to capture all commercial sites regardless of where they are based. Overseas providers will still be incentivised to comply by the elements of the scheme which will disrupt their income streams. ISP blocking powers greatly increase the chance of effectiveness of the whole regime—I will come on to that more in a minute. The regulator will have the power to identify and notify infringing sites and to enable payments providers to withdraw services under their existing terms and conditions. These already require merchants to act legally, both in the country they are based in and in the countries they serve.

It is of course possible that there will be cases where it is difficult to enforce a financial penalty—for example, in the case of websites with no UK presence, as identified by the noble Lord. Even in those cases, however, circumstances may change and the option to enforce will remain. For example, the location of a pornographer may change or enforcement regimes may evolve. The regulator has discretion to take a proportionate approach. What I do not understand, however, is why not even allowing the regulator to include foreign sites is an improvement.

The noble Lord, Lord Morrow, also talked about payment providers and ancillary service providers. I can inform noble Lords that we have had constructive discussions with payment providers and they have indicated that they will act under our regime. The noble Earl, Lord Erroll, confirmed that. There are ranges of potential ancillary service providers. In some cases, the existing the existing terms and conditions will allow them to act when notified by the regulator. We believe that companies will take responsibility when enabling or facilitating the availability of pornography.

The noble Baroness, Lady Benjamin, talked about ancillary service providers that carry pornography not being blocked. The Bill strikes a balance. It is our belief that the key issue is the commercial providers who monetise pornography attracting large numbers of underage visitors in the process. Like the noble Earl, Lord Erroll, we believe that dealing with the largest of these providers will be a great step towards a reduction in access by children.

The noble Lord, Lord Paddick, referred to content such as revenge porn. This was brought up again by the noble Baroness, Lady Jones. We are clear that abusive and threatening behaviour online is totally unacceptable. Legislation is in place to prosecute online abuse. In the case of revenge porn, Section 33 of the Criminal Justice and Courts Act 2015 created a new criminal offence of disclosing private sexual photographs or films without consent and with the intent to cause distress, so there is existing legislation. There is new legislation and old legislation that has been adapted to deal with that very problem.

I shall now come to the detail of the amendments. Clause 20 provides that the designated age verification regulator may impose a financial penalty where someone has breached the requirement to have age verification controls in place, has not complied with an information requirement or has not complied with an enforcement notice. Clause 20 allows the designated regulator to give an enforcement notice where someone has breached the requirement to have age verification controls in place.

Amendment 56 would reduce the regulator’s discretion by restricting its ability to apply financial penalties for a breach of the requirement to have age verification controls in place. It would remove the power to apply financial penalties to non-UK residents in breach of Clause 15(1). The Government’s view is that the regulator should have the flexibility to apply sanctions to persons who are non-compliant, regardless of where they are based. During the Government’s consultation on these measures, arguments were made over the potential difficulties of enforcement, especially on taking action against non-UK companies. We are clear, however, that a flexible approach that includes a number of options is needed. We accept that there may be difficulties in taking enforcement against companies based overseas. However, as I said, we should not restrict the options available to the regulator, which should be able to take a view on enforcement based on the particular facts of any given case.

The Government recognise that financial penalties may not be effective in every case. That is why we have included other options for the regulator. For example, the power enabling the age verification regulator to instruct ISPs to block content to sites that remain non-compliant greatly increases the effectiveness of the whole regime and of compliance by providers of pornography. Our regime is designed to ensure that financial penalties are not the only sanction; there is also the ability to disrupt non-compliant sites’ business models. But we should ensure the regime allows for both fines and enforcement notices as appropriate to the individual, regardless of where they are based.

Clause 22 is an important provision containing powers at the heart of the regime to enable the age verification regulator to notify payment service providers and ancillary service providers of non-compliant persons. Amendment 58 would make it mandatory for the age verification regulator to serve notice to any payment services provider or ancillary service provider under Clause 22(1) where it considers that a person is contravening the age verification requirements in Clause 15(1) or making prohibited material available on the internet to persons in the UK. We need to be careful to ensure that we do not constrain the BBFC, which is expert in this area and committed to its role as an AV regulator in carrying out the role in the most effective way. It is important that the regulator has the flexibility to take the most appropriate action depending on the facts of any given case.

Amendment 63, in the name of the noble Baroness, Lady Benjamin, would require the regulator to publish guidance under Clause 22(7), rather than having the discretion to do so. I realise that the Delegated Powers and Regulatory Reform Committee and the Constitution Committee have made recommendations about increasing the level of parliamentary oversight for this guidance. We have listened to and noted those concerns; we are carefully considering our response to the committees as a matter of priority. Again, as I have said, we will be able to outline that before Report. On the question the noble Baroness asked about who would be classed as an ancillary service provider, I will correct something she said. I think what I said was that the Government, under the legislation, believe that internet sites can be classified by the regulator as ancillary service providers— it is ultimately the regulator’s decision—where they are enabling or facilitating the making available of pornographic or prohibited material. If that is the case, it could be notified.

Amendment 65 would require payment services providers and ancillary service providers to block payments or cease services provided to the non-complying person where the regulator has given notice to the payment services provider or ancillary service provider under Clause 22(1). This approach represents a considerable change. We are quite clear that it is not necessary. It is important that the BBFC has the freedom to build effective working partnerships with payment service providers and ancillary service providers. As part of a proportionate system, it is not necessary for the BBFC to begin regulating those services. We think that the focus should rightly be on the providers of pornography.

Amendment 68B, in the name of the noble Earl, Lord Erroll, relates to Clause 24 and would allow the regulator to exercise its powers in relation to providers wherever persons under the age of 18 were accessing pornographic content. Clause 24 allows the regulator to act in proportionate way, specifying that the regulator may choose to exercise its powers principally in relation to persons who, in the age verification regulator’s opinion, make pornographic material or prohibited material available on the internet on a commercial basis to a large number of persons, or a large number of persons under the age of 18, in the UK. Importantly, Clause 24 gives the regulator discretion, which means it is not bound by the provisions in Clause 24(1). Therefore, the amendment is unnecessary.

Amendment 69A, in the name of the noble Lord, Lord Paddick, would require that websites containing pornographic material made available on the internet not on a commercial basis be given a warning stating that the material which follows is pornographic material. This is an interesting idea and I understand that some sites already have equivalent systems in place. The focus of the Government’s policy is on the commercial providers of online pornographic content. Such companies profit from providing content to UK users with little or no protections to ensure that those accessing it are of an appropriate age. The Bill is a big step and we should not seek it to be a solution to all problems related to children’s access to online pornography. We want companies to take more responsibility where pornography is available and agree that more can be done. The age verification measures in the Bill are a significant starting point and should be given time to succeed before seeking to go further.

Amendment 237, in the name of the noble Baroness, Lady Benjamin, would make Part 3 and Clause 80 come into force at the end of the period of one year beginning with the day on which this Act is passed. Following Royal Assent, the Government intend formally to designate the BBFC as regulator and expect to be in a position to commence the provisions within 12 months of that date. Clearly, we want the provisions to be in place as soon as practicable. However, it is important that the Government retain flexibility without being too prescriptive on timings at this stage.

The noble Lord, Lord Paddick, and the noble Baroness, Lady Benjamin, were right to ask how we prevent porn being available on social media. It will depend on the facts of any given case, but should a social media site focus solely on pornography we think it right that the regulator is able to consider whether the site is making pornographic material available on a commercial basis. However, where pornography is not a substantial part of the site, that will of course be less likely. As I have said before, we think the regulator should be able to consider where sites are enabling and facilitating the availability of pornography. In this case, they would not be subject to the regulatory powers but would be notified that pornographic material was available without age verification, but they would not be required by the Bill to act. We want to achieve a consensual regime. As I have said previously, we are in contact with many social media sites, many of which are keen to act because their reputation and their brand are dependent on being seen to do so.

There has been quite a lot of detail in my response, but I hope that it will be enough for the moment to allow noble Lords not to press their amendments.

Photo of Lord Morrow Lord Morrow DUP 4:00 pm, 2nd February 2017

My Lords, I respectfully thank everyone who has participated in this debate. I have to be honest with the Committee that I am disappointed by the response. However, I must be very truthful, too, in that I am watching the clock with one eye as I have a flight to catch, and I may not catch it if I stand here any longer. So noble Lords may understand why I will be brief. I was looking forward to the Minister perhaps explaining in some detail how the fangs would apply abroad and how that would work. I would be grateful if, even now, he would take that on board. Perhaps he would write to me and outline in some detail how he sees that working.

Very briefly, on the point made by the noble Lord, Lord Paddick, this will bind services and financial transaction blockings only if they have a foot in the UK. My amendment would provide leverage in that instance. That was the point that maybe I did not make clear, but it was the point I was trying to make. Also, I was very struck by the point of the noble Lord, Lord Maxton, when he said that he thought the way forward would be identity cards. If that amendment is brought up at a later stage, he will discover that I am very close behind him going through the Lobby when he makes that suggestion. At least he can look to me for that—whether that is good news or bad news. He does not seem very impressed. I leave it there and thank everyone for speaking today. I beg leave to withdraw the amendment.

Amendment 56 withdrawn.

Clause 20 agreed.

Clause 21: Financial penalties

Amendment 56A not moved.

Clause 21 agreed.

Clause 22: Age-verification regulator’s power to give notice of contravention to payment service providers and ancillary service providers

Amendment 57

Moved by Baroness Jones of Whitchurch

57: Clause 22, page 23, line 44, leave out paragraph (b)

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs)

My Lords, in moving Amendment 57, I shall speak also to Amendments 59, 60, 61 and 64. These amendments address the issue set out by the Minister this morning, but I make no apology for revisiting this and setting out our position so that it is on the record, although I take the point that he may not be able to answer all the points this afternoon.

Nevertheless, I should like us to have that debate. These amendments would remove the reference in Clause 22 to the regulator defining and imposing new controls on what is prohibited material on the internet. Noble Lords will know that there has been increasing concern about the implications of this wording. It is felt that it would give the regulator extended powers of censorship beyond that originally envisaged in the Bill. When our colleagues in the Commons originally raised concerns about press reports that the Bill could be used in practice to extend internet censorship for adults, the Minister, Matt Hancock, was quite clear. He said:

“I have also seen those reports. I think that they misread the Bill. That is neither our intention, nor our understanding of the working of the new clauses”.—[Official Report, Commons, 28/11/16; col. 1284.]

However, others have since put a different interpretation on the scope of the wording, so there has been ongoing concern about what can best be described as mission creep.

The purpose of Part 3 of the Bill is to provide protection for children from accessing online pornography. We all agree with this intention. However, as the wording stands, it potentially sets new limits on consenting adults accessing pornography that is not harmful to themselves or others. This is material that would not receive a film classification certificate, but neither would it be subject to prosecution. It is not helped by the fact that, by all accounts, the Crown Prosecution Service’s guidelines on this issue are out of date. There is a resulting grey area of pornography that by practice, but not by statute, is not prosecuted. We strongly contend that this is not the place to resolve these wider debates on adult consensual pornography. It is an issue for public debate and for consultation at another time.

In more recent days, Matt Hancock has met with various groups of us and has, I understand, accepted that the wording in the Bill is not as it was intended. He has proposed, albeit informally, that instead a definition of prohibited material should be based on that of extreme pornography, as defined in the Criminal Justice and Immigration Act 2008. We agree that this is a helpful proposal that could well resolve the debate.

We regret, therefore, that the Government were not able to produce an amendment along these lines in time for today’s Committee, which is really where some of these important principles should be resolved, before we get into the more formal, technical detail on Report. These amendments flag up our concerns with the current wording to urge the Government to come forward with detailed proposals before Report and, we hope, to build a consensus to go forward on this issue. Child safety is the issue here, not adult consensual pornography. I beg to move.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, briefly, I strongly support what the noble Baroness, Lady Jones, said. That is why these Benches support the amendments. I took quite a look of comfort from what the Minister said early on in today’s proceedings. As the noble Baroness, Lady Jones, said, there are considerable concerns about the width of “prohibited material” and the very existence of that particular set of conditions inserted at a fairly late stage in the Commons.

Of course, we have talked about the site-blocking provisions but the prohibited material aspects really confuse the issue as they deal with access by adults. It was very useful having the meeting with the Minister and his colleague, Matt Hancock, to talk about these issues. Having discussed the matter, we felt that the proposed new definition of prohibited material, limited to the 2008 Act, was acceptable as that is very tightly defined. Again, I entirely agree with the noble Baroness that it was very disappointing that immediately after that meeting the wording as in this amendment was not made available or put down for the Committee. That would have been enormously helpful in settling people’s concerns about the width of the definition of prohibited material, which goes well beyond the harm test used by the BBFC under the Video Recordings Act.

That is really the essence of it—tying it back. I hope the Minister will shortly explain this in greater detail than he did at the beginning of this session to allay our many fears about something fairly extraneous being introduced into the Bill. I stood corrected earlier by the noble Lord, Lord Maxton, about the exact purpose of Part 3, which is to prevent access by children to online pornography. We must be very clear that that is what we are about, rather than trying to censor the internet on a broader basis.

Photo of Lord Browne of Belmont Lord Browne of Belmont DUP

My Lords, on Second Reading, a number of noble Lords raised concerns about censorship and the definition of prohibited material. I found this surprising as we have so often heard the mantra that what is illegal offline is illegal online. Offline, the British Board of Film Classification has operated for a long time on the basis that it will not classify certain types of video work based on the content. This principle is well established and has been in statute since an amendment to the Video Recordings Act 1984 was made in 1994 after the Jamie Bulger murder. That requires the BBFC to have special regard to any harm to potential viewers. A “potential viewer” means,

“any person (including a child or young person) who is likely to view the video work in question if a classification certificate or a classification certificate of a particular description were issued”.

Moreover, it is of course an offence under Section 9 of the Video Recordings Act to supply a video work which the BBFC decided is not suitable for classification. It is also an offence under Schedule 10 to have such a work in possession for the purpose of distribution and supply.

As the Minister said in his closing speech at Second Reading:

“We do not allow children to buy pornographic material offline, and this material would not be classified for hard-copy distribution. The BBFC ?has a well-understood harm test and would not classify material that, for example, depicts non-consensual violent abuse against women, and it may not classify material which is in breach of the Obscene Publications Act, as clarified in guidance by the CPS”.—[Official Report, 13/12/16; cols.1228-29.]

The BBFC publishes its guidelines openly and publicly, and they are produced after wide consultation. In other words, what is classed as prohibited in terms of physical video works is not a surprise to anyone. The last guidelines were published in 2014. Given the argument for “parity of protection” and a level playing field across all media, when R18 material became subject to age verification controls for United Kingdom-based, video-on-demand programming in 2014, the term “prohibited material” was used and based on the material not allowed under the Video Recordings Act. Such material must not be made available by UK video-on-demand producers, meeting the Government’s commitment at the time to,

“ban outright content on regulated services that is illegal even in licensed sex shops”.

In this context, it is not at all surprising that the concept of prohibited material has been carried over to the Bill to bring a level playing field in terms of regulation. It would have been strange had that not happened, as the Government would be saying that this material was acceptable on one media platform but not another. Clearly, that is an unsustainable position.

The amendments in this grouping, which seek to remove prohibited material from the scope of the enforcement measures provided by Clause 22, are concerning. It is important to understand that they also undermine the efficacy of Clause 23, which depends on Clause 22 for its definition of prohibited material. The amendments are informed by the following logic: we want to protect children and the point of this legislation is that it will protect children; and as long as prohibited material is behind age verification checks it will not matter if this material, which is currently prohibited offline, is deemed for the first time to be legal online. I understand this argument but it is based on a false assumption about what the legislation does.

First, age verification requirements will be for the material that is defined as pornographic in Clause 16. That means material that would be classified as 18 and R18 by the BBFC. If material is deemed not suitable for classification, which would be the case for prohibited material, it would not be counted under the Section 16 definition as pornographic and therefore not subject to age verification controls. In theory, this material, which would not be classified by the BBFC, could still be freely available to children and young people on the internet. If that is the case, without enforcement action of the type set out in Clauses 22 and 23 there is no new protection of children from this type of material and the Government’s manifesto commitment is not met. If the Opposition want prohibited material to be accessed by age verification procedures, they would need to amend Clause 16 to bring such material within the scope of Clause 15(1).

Secondly, even if one sought to get round this problem by amending Clause 16 and place prohibited material behind age verification, one would still encounter two major difficulties, one legal and one practical. In the first instance, taking this step would make the current position of prohibited material offline and of UK-based video on demand completely unsustainable. That would constitute sweeping changes which would be completely wrong to introduce without a thorough public consultation. It would not be appropriate for us, or indeed the Government, to change such a long-standing arrangement without a full and detailed public consultation. In the second instance, even if prohibited material was put behind age verification checks, it is important not to fall into the trap of thinking that this makes children safe across the board and that adults can access what they like without concern. We must not forget that both the Government and the BBFC have been very clear that enforcement will be targeted at the bigger sites.

Let us consider the Government’s statements on their approach to enforcement of the age verification proposals. In their response to the public consultation on their age verification proposals, the Government said they wanted to:

“Ensure a targeted and prioritised regulatory approach to monitoring and enforcement, to achieve maximum impact. The Government’s preference is for the regulator to have discretion as to which sites and providers it takes enforcement action against. For example, the regulator should be able to focus on the most popular sites, those known to be most frequently accessed by children and young people, or the size or profitability of the provider”.

In their original consultation document, they had said:

“We anticipate that the sites on this list would be subject to change, and therefore that the regulator would need to regularly reassess the list of top sites. This would put the primary focus of regulatory activity on the sites most regularly visited by UK users, and which account for a proportionately far higher number of total visits to porn websites”.

Indeed, Clause 24 explicitly gives the age verification regulator the power to exercise its functions “principally” in relation to larger websites. The Explanatory Notes say that the clause gives the regulator discretion to,

“exercise its functions in a targeted way, to those providers of pornography who reach the most people or have large turnovers”.

Moreover, the BBFC, giving evidence to the Public Bill Committee in the other place, said:

“We would devise a proportionality test and work out what the targets are in order to achieve the greatest possible level of child protection. We would focus on the most popular websites and apps accessed by children— those data do exist. We would have the greatest possible impact by going after those big ones to start with and then moving down the list”.—[Official Report, Commons, Digital Economy Bill Committee, 11/10/16; col. 46.]

The BBFC suggested that its enforcement would start with the top 50 websites, which 70% of users access, while reminding the Committee that 1.5 million new pornographic website links come online every year.

Given that the Government have been quite open that enforcement will not apply to all websites, and the BBFC’s focused enforcement plans, it is extremely likely that smaller websites will not introduce age verification. In this context, it is simply wrong to suggest that because of the Bill children will not be able to see prohibited material and therefore adults can relax about what they choose to access. The Bill takes significant strides in the cause of child protection. It would be a shame if we in this House took steps to undermine this.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour 4:15 pm, 2nd February 2017

My Lords, time is somewhat against us this afternoon. I will be extremely brief. I pass no judgment on where the line should be drawn. I say simply that it is an unassailable argument that it should be drawn in the same place offline and online. Well before the internet of things arrives, the internet is already regarded as a method of distribution of DVDs, CDs and books, so it would be entirely illogical to have one rule offline and not implement it online.

Photo of The Earl of Erroll The Earl of Erroll Crossbench

My Lords, first I thank the noble Lord, Lord Browne, for supporting my amendment in the last group about proportionality and the order in which websites should be tackled. Moving on to this group, I spoke to this set of amendments when we addressed this issue in the group starting with Amendment 54B—so I can abbreviate my speech and be quick. I support the noble Lord, Lord Browne, on the point made in the part of the briefing he was reading about the Obscene Publications Act and the Crown Prosecution Service advice et cetera being out of step with each other and out of step with enough members of the public for it to matter—that is the real trouble. I had thought to mention one or two of the unsavoury practices that you might find that will not be classified under the current ruling in Clause 23, but I think I have been trumped by the newspapers.

Some in the BBFC probably see this as an opportunity to clean up the internet. But it is not going to work; it will have the reverse effect. This whole issue of what is prohibited material needs to be tackled in another Bill, with a different regulator or enforcer, so it does not get confused with the business of protecting children, which is the purpose of this Bill. It will not protect children anyway, as this material ought to be behind the age verification firewall in any event. In fact, the noble Lord, Lord Browne, pointed out why it might not be: you have a possible lacuna in the Bill. If you say that the material is stuff that the BBFC has classified, the really nasty stuff is not included, because it is not able to be classified—so suddenly Clause 23 might not apply to it. He is absolutely right there. This is one of the dangers, which is why they are having to try and draw in the idea of prohibited material. It would be much easier to remove prohibited material altogether.

It has been suggested to me that the easiest thing would be to alter Clause 16, which deals with the definition of pornography. Instead of having this very limited scope, it would be much easier just to have the one simple definition which is already in Clause 16(1)(e)(i), but with the wording slightly expanded to say, “Without prejudice to the application of the Obscene Publications Act 1959, any material produced solely or principally for the purposes of sexual arousal”. You could leave it at that, and then you would protect children from anything unsavoury that we do not want them to see. That is a much simpler solution than getting into this terribly complicated debate about what is prohibited material.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, I very much share the concerns expressed by the noble Lord, Lord Browne, about this set of amendments and prohibited material. As they stand, the amendments would have the effect of causing the Bill to place 18 and R18 material behind age verification checks, which Clause 16 limits to 18 and R18 material, while prohibited material would be freely available without any such protection. This would be pretty irresponsible and would show no regard for child protection. Even if the Bill was amended so that prohibited material was only legal online if placed behind age verification checks, we should not forget that the important strategy of targeting the biggest 50 pornography sites will not create a world in which children are free from accessing prohibited material, so that adults can relax and access it without concern. Even if the material was made legal online and given a BBFC classification, this would give a measure of respectability in the context of which it would no doubt become more widely available, and thus the chances of children seeing it would be further exacerbated.

Moreover, the crucial point is that we cannot make prohibited material legal in an online environment at the same time as maintaining the category of prohibited material offline. The former would inevitably result in the latter. Mindful of this, and of the fact that the category of prohibited material is long established, it would be wholly inappropriate for the House or indeed the Government to simply end the category of prohibited material online without a major public consultation. I very much hope that the Minister will completely reject these amendments and stand by what he said on this matter at Second Reading.

Photo of Baroness Benjamin Baroness Benjamin Liberal Democrat 4:30 pm, 2nd February 2017

My Lords, I was very grateful to the Minister, Matt Hancock, and to the noble Lord, Lord Ashton, who met concerned parliamentarians to discuss the Government’s thinking about how to move forward on this issue. I look forward to seeing the wording around what will and will not be prohibited in order to ensure that the protections that apply offline also apply online. I believe that we need to build on the consensus in this House that children should be protected from harmful content online and I firmly believe that prohibited content is harmful to children.

The BBFC’s harm test under the Video Recordings Act, on which the definition of prohibited content is based, has proved to be an effective child protection standard offline with DVDs, and online with UK-regulated video-on-demand content. So I ask the Minister for an assurance that the Government remain committed to keeping prohibited content in the Bill. Most importantly, I ask the Minister to confirm that prohibited content will include content which covers simulated sexual abuse of child characters—and I stress sexual abuse in the widest sense, and not limited to rape and incest fantasies. I also want an assurance that the prohibited content I have set out covers not only realistic portrayals of children but CGI material. If this legislation is to be future-proofed, it is vital that CGI portrayals of child sex abuse are prohibited. I would welcome the Minister’s assurance that this will be the case.

This is not about freedom of speech, civil liberties, censorship or invasion of privacy; it is about the bigger case of putting children first, and of protecting and safeguarding our innocent children from harm. I often find myself in agreement with the Opposition Front Bench—but not on these amendments, which take too much risk with child safety. So I urge your Lordships to consider the implications very carefully before pursuing the wholesale removal of prohibited material from Clause 22.

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Lord in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for Culture, Media and Sport

My Lords, this is an important debate, dealing not just with age verification but whether prohibited material should be included. I do not want to stand here and defend opposition amendments or put words into the mouth of the noble Baroness, Lady Jones, who can correct me if I am wrong, but I do not think that the object of the exercise was to completely get rid of prohibited material; it was to raise the extent to which the definitions may have exceeded what was originally intended. I say to the noble Lord, Lord Browne, and others that the point is that the current definition of prohibited material in the Bill allows the BBFC to consider content based on its existing hard-copy guidelines. We recognise that some think this goes too far and therefore we are continuing to listen to views on that. On the other hand, asking the regulator to consider only classifiable pornographic content creates the real risk that more extreme content will proliferate further.

I realise that it would have been easier if we had had a definition in front of us today. I know that we have discussed this with various noble Lords. The noble Lord, Lord Clement-Jones, is obviously teasing me because he knows that it takes time. As a lawyer, he will know that these issues are complex, and we have to make sure that all parts of government are happy with the wording. I shall repeat, for the benefit of the noble Baroness, Lady Benjamin, and other noble Lords, the important bits of what I said this morning. It is our intention to protect children from harmful content. Therefore, we have listened to the arguments that, in so doing, the drafting of the Bill may have unintentionally extended the powers of the regulator too far.

I committed this morning—and do so again—to giving this further consideration in order to reach a conclusion that this House agrees is a satisfactory way of meeting our aims of protecting children from harmful pornographic content. I repeat my offer to discuss this with interested Peers. I think that the noble Lord, Lord Browne, and the noble Baroness, Lady Howe, can be temporarily satisfied that we do not intend to get rid of prohibited material entirely. There is not much more to say at the moment, but we will come back to this on Report. In the meantime, I would be grateful if the noble Baroness would withdraw her amendment.

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs)

I am grateful to the Minister. He is absolutely right and I am sorry if I did not make that clear. When we were proposing to take those words out, we were rather hoping that somebody would come up with a definition that would replace them—it was not just an attempt to take them out finally and for ever. It rather highlights the fact that we do not have another form of words to be working with today.

I do not envy the Minister in trying to balance all these different desires to get the wording right. We agree with the principle that offline and online should be dealt with on the same basis, but the problem is that in practice, what happens with offline material is not what is necessarily captured in the current legislation. That is the difficulty we are trying to grapple with. Our aim is to maintain the status quo. We do not want to ruffle any feathers or change anything. We want to make sure that what people can access online has the same checks and balances as offline has at the moment. The problem is the lack of a current substantial legal definition. As I said, there is a grey area, so we have to work our way through it. That is the difficulty.

As I said, I do not think that we should start redefining anything massively without a public consultation. People have talked about that and I agree. We are simply trying to protect the status quo so that adults who currently look at material can carry on looking at it—and this has nothing to do with child protection and children’s access to pornography. We need to understand what we are aiming for, but it is a question of getting the wording right. I am sure that the noble Lord will come up with something with which we can all agree in the medium term. In the meantime, I beg leave to withdraw the amendment.

Amendment 57 withdrawn.

Amendments 58 to 64 not moved.

Clause 22 agreed.

Amendment 65 not moved.

Clause 23: Age-verification regulator’s power to direct internet service providers to block access to material

Amendment 66 not moved.

Clause 23 agreed.

Amendment 67

Moved by Lord Ashton of Hyde

67: After Clause 23, insert the following new Clause—“No power to give notice under section 23(1) where detrimental to national security etc(1) Before giving a notice under section 23(1) requiring an internet service provider to—(a) take steps referred to in section 23(2)(c)(i), or(b) put in place arrangements referred to in section 23(2)(c)(ii),the regulator must consider whether the steps or arrangements would be likely to be detrimental to a matter mentioned in subsection (3).(2) The regulator may not give a notice under section 23(1) where it appears to the regulator that the steps or arrangements would be likely to be detrimental to any of those matters.(3) The matters are—(a) national security;(b) the prevention or detection of serious crime, within the meaning given in section 263(1) of the Investigatory Powers Act 2016;(c) the prevention or detection of an offence listed in Schedule 3 to the Sexual Offences Act 2003.”

Amendment 67 agreed.

Amendment 68

Moved by Lord Paddick

68: After Clause 23, insert the following new Clause—“Anonymity(1) Age-verification providers must be approved by the Age-Verification Regulator.(2) In this section an “age-verification provider” means a person who appears to the Age-Verification Regulator to provide, in the course of a business, a service used by a person to ensure that pornographic material is not normally accessible by persons under the age of 18.(3) The Age-Verification Regulator must publish a code of practice to be approved by the Secretary of State and laid before Parliament.(4) The Code must include provisions to ensure that Age-Verification Providers— (a) perform a Data Protection Impact Assessment and make this publicly available,(b) take full and appropriate measures to ensure the accuracy, security and confidentiality of the data of their users,(c) minimise the processing of personal information to that which is necessary for the purposes of age verification,(d) do not disclose the identity of individuals verifying their age to persons making pornography available on the internet,(e) take full and appropriate measures to ensure that their services do not enable persons making pornography available on the internet to identify users of their sites or services across differing sites or services,(f) do not create security risks for third parties or adversely impact security systems or cyber security,(g) comply with a set standard of accuracy in verifying the age of users.(5) The code must include provisions to ensure that publishers of pornographic material take full and appropriate measures to allow their users to choose the Age-Verification Provider of their preference.(6) Age-Verification Providers and publishers of pornographic material must comply with the code of practice.(7) To the extent that a term of a contract purports to prevent or restrict the doing of any act required to comply with the code, that term is unenforceable.”

Photo of Lord Paddick Lord Paddick Liberal Democrat Lords Spokesperson (Home Affairs)

The amendment is in my name and that of my noble friend Lord Clement-Jones and the noble Baroness, Lady Jones of Whitchurch. I have to say that it is only because we were quicker on the draw that I am leading on this amendment rather than the noble Baroness.

As I have previously alluded to, we believe that age verification is not sufficient protection for children on the internet. It can easily be circumvented, and it would be very difficult to place age verification on such platforms as Twitter and Tumblr. In relying on this mechanism, there is a danger of diverting attention away from other important and effective methods of addressing the issue of children accessing adult material online. Despite our misgivings, we believe that everything should be done to protect the privacy of those who have their age verified to enable them to access adult material on the internet. I am grateful to the Open Rights Group for its briefing and suggested amendment on this issue, which is the wording we have used for our amendment.

Age verification systems almost inevitably involve creating databases of those who are accessing adult material. It is completely lawful for those who wish to look at adult material to access these websites, but it is a sensitive area and many will be wary about or even deterred from accessing completely legal websites as a result. Security experts agree that unauthorised hacking of databases is almost inevitable, and the advice to organisations is to prepare contingency plans for when rather than if their databases are accessed by those without authority to do so. The consequences of breaching databases containing sensitive personal data can perhaps be most starkly illustrated by the public exposé of the personal details of those who were members of Ashley Madison, which reportedly resulted in two suicides. The risk to privacy can be reduced if the age verification regulator approves minimum standards for age verification providers. These are set out in the amendment.

The amendment suggests that the age verification regulator publish a code of practice, approved by the Secretary of State and laid before Parliament. The code of practice should ensure that everything possible is done to protect the privacy of users and to allow them to choose which age verification system they trust with their sensitive personal information. For example, some websites provide a service that enables users to prove their identity online, including their age, for purposes unconnected with access to adult material but which could also be used for that purpose. The full extent of the provisions are set out in the amendment, and the evidence in support of the amendment is set out in the Open Rights Group’s updated briefing on the Bill.

The Constitution Committee addressed this issue in its 7th report of 2016-17:

“We are concerned that the extent to which the Bill leaves the details of the age-verification regime to guidance and guidelines to be published by the as yet-to-be-designated regulator adversely affects the ability of the House effectively to scrutinise this legislation. Our concern is exacerbated by the fact that, as the Bill currently stands, the guidance and guidelines will come into effect without any parliamentary scrutiny at all. The House may wish to consider whether it would be appropriate for a greater degree of detail to be included on the face of the bill”.

That is exactly what this amendment attempts to do. I beg to move.

Photo of The Earl of Erroll The Earl of Erroll Crossbench

My Lords, I want to say a few words because I have been working on the issue of age verification for a long time. I became interested in it when it became apparent a couple of years ago that it was going to come to the top of the agenda. For the last year or so, the Digital Policy Alliance, which I chair, has been working with the British Standards Institution to produce a publicly available specification—PAS 1296—exactly on this issue. Its whole point is to enable anonymised verification of the attribute of your age. People have said that you would have to give the information to the adult content site, the porn site, but you do not necessarily need to.

There are two stages: when the child, or the adult, first arrives at the site; and, if they are allowed into the site, what they then do. At the point when they come to the front page of the site, where they should be asked to prove their age, there should be an option—and this is the point about anonymity—that allows them to bounce off, with a token, to an age verifier. I have on my smartphone, for instance, one from Yoti. I can identify myself to Yoti; it knows about me and can send an encrypted token back to the website, which does not contain any identity information at all—purely the fact that I am over 18. If the regulator later needs to unravel the token because it appears that rules have been breached, it is possible to present the token and start unravelling it—but only with proper powers. The point is that a hacker cannot find out who presented that token. So it is possible now to do what is necessary.

That answers the point made by the noble Lord, Lord Maxton. The problem with an identity card is that it will identify you. If you gave your identity to one of these websites and it happened to be hacked, like Ashley Madison, and if you were a Cabinet Minister—or even like most of us here, actually—your career would probably be in ruins. So I think it is essential that people be permitted anonymity. That is why, I am afraid, I am not in favour of the identity card method. There are other similar ways of doing the same thing—

Photo of Lord Maxton Lord Maxton Labour

I would, maybe, accept the noble Earl’s point in this particular context, but the ID card has, of course, a variety of different uses—particularly if it is a smartcard—rather than just this one.

Photo of The Earl of Erroll The Earl of Erroll Crossbench 4:45 pm, 2nd February 2017

Absolutely; I know what the noble Lord means. I simply meant that this is not necessarily an ID application—except, maybe, to identify yourself to the site which then gives your attribute to the other website.

I am thoroughly in favour of the amendment, and so is the industry. We hope to publish a standard on this in the not-too-distant future, which may help the regulator determine who is a fit and proper person to carry it out.

There is just one other thing I want to say. Once you have done your age verification and then go on to the website, if you then choose to subscribe, and give it your credit card number and everything else, that is up to you. I hope and trust that the sites—I know that they are pretty careful about this—will encrypt properly and guard the information with their lives, if not yours.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

I do not want to overload the Front-Bench contributions from this side, or to turn this into a mutual admiration society, but I want to say that the noble Earl, Lord Erroll, has played a blinder in educating many of us in this House about the possibilities and the technologies being developed on anonymised age verification. As the Minister probably knows, we had a very useful session with many of those developing new apps for this precise purpose. Yoti was one, VeriMe was another—one could go on. There are different types of age verification, which can be chosen by the consumer. The most recent, which is now virtually available for general use, is Yoti, which the noble Earl mentioned. These methods are now available for use; this is not a question of pie in the sky, or of things not being available for a year or so. That makes the amendment highly practical, and, as my noble friend said, it is absolutely essential for the protection of personal privacy.

Photo of Baroness Benjamin Baroness Benjamin Liberal Democrat

My Lords, I support the amendment and congratulate the noble Earl on all the hard work he has done. Six months ago I told him to get on with it, and he certainly has. We had a presentation, and I was so impressed by the progress that has been made in this area. Congratulations, and I thank him very much for all that he and his colleagues are doing to make sure that our children are safe, and that people feel that their data are protected if they go online for age verification.

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs)

I support the comments that have been made by a number of noble Lords. I think we all understand the need for particular care to protect the identity of those who are over 18 and legitimately want to access pornographic sites. Apart from anything else, as has been said, we must protect those individuals from blackmail threats.

In this respect, the age verification process has to be more rigorous in providing anonymity than other regulations where proof of credit card details may have sufficed, but may also have made identification of the individual all too easy. The noble Baroness, Lady Howe, is not in her place, but I understand that the site that does the gambling checks does it on the basis of credit card details. Clearly, that would not be appropriate in the context of the issues we are grappling with here.

Thankfully, as we have heard, the technology is catching up with the need and there are now new age verification provider sites that can carry out the age checks. I am grateful to the noble Earl, Lord Erroll, for explaining in some detail how that works; it is all very reassuring. I do not think I have anything else to add: we have a consensus that some such measure needs to be built into the legislation, and I hope the Minister will agree with us.

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Lord in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for Culture, Media and Sport

My Lords, I am grateful to all noble Lords again, particularly the noble Earl, Lord Erroll, for the teach-in.

Amendment 68 calls for the regulator to approve age verification providers and to publish a code of practice with which those providers must comply. This was similar or identical to the amendment that was rejected in the other place in Committee and on Report. I am afraid that the Government do not consider this clause necessary. However, I can assure noble Lords that we approach this issue with the utmost seriousness.

Clause 15(3) already requires the regulator to publish guidance about the types of arrangements it will treat as being in compliance. As the noble Earl explained, the technology is with us and the providers of age verification controls will be subject to data protection laws. The BBFC is already in discussion with the Information Commissioner’s Office to ensure that best practice is observed. It has indicated that it will give the highest priority to ensuring that the guidance it issues reflects data protection standards. The Government and the BBFC are also in discussion with the Information Commissioner’s Office on privacy and data requirements to ensure that the appropriate guidance is issued, as they are experts in this field.

The Delegated Powers and Regulatory Reform Committee has additionally made a recommendation on the approach to the types of arrangements for making pornographic material available that the regulator will treat as complying with Clause 15(1). We are considering whether we can address those concerns and, as I said, will respond as soon as possible.

As the noble Earl explained, innovative age verification solutions are coming to market, and we want to ensure that the regulator is enabled to make a determination as to the sufficiency of different and new controls. As noble Lords know, there are existing privacy and data security protections provided by the Data Protection Act 1998, administered by the Information Commissioner’s Office. The Act established a framework for the protection of personal data, balancing the privacy rights of individuals with the legitimate needs of organisations to make use of such data. It ensures respect for individuals’ rights to privacy and keeps their personal information secure from abuse. The Act ensures that data are handled safely and securely. It is right therefore that we do not seek here to duplicate this legislative and regulatory framework. However, we agree that we must ensure that it is built into the age verification process in a meaningful way and, as I have said, we will provide a response to the DPRRC recommendation on this matter. In the meantime, I hope the noble Lord will withdraw the amendment.

Photo of Lord Paddick Lord Paddick Liberal Democrat Lords Spokesperson (Home Affairs)

My Lords, I am very grateful for noble Lords’ contributions to this short debate, particularly to the noble Earl, Lord Erroll, for illustrating how a system as set out in our amendment already exists. I join my noble friend Lord Clement-Jones in thanking the noble Earl for his work with the industry. I thank my noble friend Lady Benjamin for driving him on, apparently. I also thank the noble Baroness, Lady Jones of Whitchurch, for her support for the amendment.

The Minister said that the amendment was not necessary despite the Constitution Select Committee believing that such an amendment is necessary. On that basis, I cannot give an undertaking that we will not return to this issue on Report. However, at this stage, I beg leave to withdraw the amendment.

Amendment 68 withdrawn.

Amendment 68A had been withdrawn from the Marshalled List.

Amendment 68B not moved.

Clause 24: Exercise of functions by the age-verification regulator

Amendment 69 not moved.

Clause 24 agreed.

Clause 25 agreed.

Amendment 69A not moved.

Clause 26 agreed.

Amendment 70

Moved by Baroness Jones of Whitchurch

70: After Clause 26, insert the following new Clause—“Review of online abuse(1) The Secretary of State must carry out a review of online abuse.(2) In conducting the review, the Secretary of State must consult—(a) specialists in child protection;(b) people and organisations who campaign for child safety on the internet; and(c) any other persons and organisations the Secretary of State considers appropriate.(3) The Secretary of State must consider measures to prevent online abuse and harassment.(4) The Secretary of State must lay a report of the review before each House of Parliament within six months of the passing of this Act.”

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs)

My Lords, as well as moving Amendment 70, I shall also speak to Amendments 71AA and 71AB, all of which would add a new clause to the end of Part 3 of the Bill. The amendments are all, in different ways, trying to move forward on the increasing social evil of online abuse and trolling.

Amendment 70 would require the Secretary of State to carry out a review of online abuse, consult widely and report back to Parliament within six months of the passing of the Act. Amendment 71AA would require commercial internet sites that host personal accounts to take responsibility for the material posted on the sites, issuing a safety impact assessment, informing the police of violent threats and removing posts that incite violence. Amendment 71AB would require the Secretary of State to issue a code of practice with which social media platform providers must comply and which would include how they should respond to online abuse and how they should protect children. We believe that our amendments all provide the Government with a road map for action on an issue of huge social concern. They are in themselves probing amendments, but provide practical solutions that we hope the Government will take seriously.

The deluge of online abuse has massive child welfare implications. We know that social media sites are increasingly being used to bully, bribe and intimidate young people. The charity Childnet has identified that one in four teenagers suffered hate incidents online last year, and the incidents are increasing. Teenagers with disabilities and from minority ethnic groups are disproportionately targeted. Schools are reporting that malicious posts, personal abuse and fabricated stories are undermining young people’s self-esteem, distorting their self-image and encouraging risky behaviour. All these trends are having a knock-on effect on child mental health, with demand for support increasing and services unable to cope. For example, a record 235,000 young people accessed mental health services last year, but many others were denied the help they need.

I have focused on young people, but we know that this is also a problem in the adult world. The recent survey of MPs highlighted the threats of violence, appalling levels of anti-Semitism and sexist abuse. The MP Luciana Berger has spoken openly about the torrent of anti-Semitic abuse she has received, including threats of violence. The latest reports show a 36% increase in anti-Semitic incidents last year. Luciana reported that Twitter was slow to act, even when cases were drawn to its attention, and that the police and social media did not co-operate effectively to intervene when allegations were made. Even when prosecutions took place, some of the abuse sites could still be accessed on Twitter. Other women MPs have been subjected to graphic messages threatening rape and murder, and we know that those are not always idle threats, as the tragic death of Jo Cox all too starkly reminded us.

Of course, the abuse directed at MPs is a tiny example of what is happening day in, day out, both to those in public office and to private individuals. Some of these incidents are investigated and some are not. For example, we know that 155 people were jailed for sending grossly offensive, indecent or obscene material. Equally, we know that that is the extreme end of trolling, and that many other people have reported that their complaints were not taken seriously. It feels as though we are no longer in an agreed area for behaviour. There are no longer clear rules about what is acceptable and there are no longer clear penalties for those that transgress them.

We do not pretend that the measures we are proposing will be a panacea that will resolve these huge social challenges, but we hope that they might be a first step to capturing the scale of the problem and giving people more reassurance about the direction of legislation in the future.

When a similar amendment calling for a review was considered in the Commons, the Minister, Matt Hancock, passed the problem back to the industry. He said that,

“we expect social media and interactive services to have in place robust processes that can quickly address inappropriate content and abusive behaviour on their sites”.—[Official Report, Commons, 28/11/16; col. 1276.]

He went on to say that fast-changing technology made legislating difficult and that the existing action being taken by social media companies was the best approach. This is not an adequate response. The social media sites have been extremely slow to face up to their responsibilities, and they have proved to be very reluctant to intervene and take down abusive content. There is also a huge grey area as to where the police will intervene and what protection the public can expect them to provide.

We believe that initiatives of the kind that we are proposing here are timely and necessary. They would allow a proper debate about the rules of online interaction in the future and would help to clarify the responsibility for who should uphold those rules. This problem will not go away; it will get worse. Our amendments would provide the first step to getting our public norms and standards back in balance, and I hope that noble Lords will support this initiative. I beg to move.

Photo of Baroness Janke Baroness Janke Liberal Democrat 5:00 pm, 2nd February 2017

My Lords, this group of amendments includes Amendment 233A, which is in my name and that of my noble friend Lord Clement-Jones. When I read the initial amendments proposed by the noble Baroness, Lady Jones, I felt supportive towards them. They relate particularly to children, but, as she has said, there is also an issue with regard to adults.

As the noble Baroness, Lady Jones, said, not only Members of Parliament have suffered and spoken about this—and I am glad that they have done so—but people with disabilities or learning difficulties. Social media sites are often used as a tool by stalkers, and, as the noble Baroness said, such behaviour has led to people suffering mental illness and, at times, to murder. I very much support the amendments in her name. The difference between them and my amendment is that mine would introduce a criminal test under the guidance of the CPS. I think we all agree that we must have some form of enforcement of the action that should be taken against this form of behaviour.

It seems to me that the providers have to take some responsibility. It was put to me that, if people were damaging themselves fighting and stabbing each other in a pub, the landlord would have some responsibility for that. The internet service providers also have some responsibility in this matter.

I realise that this is a difficult area to legislate for, and I know that there are other forms of legislation. Here we are looking for a way to work with interested parties, such as the NSPCC. We have made progress on action for children, but we are woefully behind in taking action against this damaging behaviour against adults.

I very much support the amendments in the name of the noble Baroness, Lady Jones, and I hope that the Minister might support some of the sentiment, and the letter, of my Amendment 233A.

Photo of Baroness O'Neill of Bengarve Baroness O'Neill of Bengarve Crossbench

My Lords, I had not intended to speak on this point, but this may be relevant evidence. Last year, I went to a meeting with a parliamentary group that was looking at hate speech issues, and a representative of Facebook was there. She said—one may say that this did not show quite a correct view of freedom of expression—that Facebook takes down whatever its customers find offensive. A member of the public said, “Actually, when you have had 20 independent complaints, you take it down and it is immediately put up again”. That second step is where the remedies are not working at present. It does not get taken down. This was mainly about anti-Semitic hate speech of a vile sort that would have been well known in certain quarters in the 1930s. This is an urgent matter, which we need some remedy for.

Photo of The Earl of Erroll The Earl of Erroll Crossbench

My Lords, it has been suggested to me that this group of amendments could also be used in the code of practice and the safety responsibilities could also be drawn up to include non-age-verified pornography.

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Lord in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for Culture, Media and Sport

My Lords, the Government take the harm caused by online abuse and harassment very seriously, and we will continue to invest in law enforcement capabilities to ensure that all online crime is dealt with properly.

Amendment 70 would require the Government to carry out a review of online abuse and lay a report before Parliament within six months of Royal Assent. We do not believe that it is necessary to include provision for a review in primary legislation. As part of the ending violence against women and girls strategy, we have established an official government working group to map out the current issues, prevalence, initiatives and barriers to addressing gendered online abuse and to produce an action plan.

We are absolutely clear that abusive and threatening behaviour is totally unacceptable in any form, either offline or online. As the Committee will be aware, any action that is illegal when committed offline is also illegal if committed online. Current legislation, some of which was passed before the digital age, has shown itself to be flexible and capable of catching and punishing offenders, whether their crimes were committed by digital means or otherwise. The Protection from Harassment Act 1997 was amended to introduce two new stalking offences to cover conduct that takes place online as well as offline. In addition, the Government will be introducing a new civil stalking protection order to protect victims further.

We will continue to take action where we find gaps in the legislation, just as we did with cyberstalking, harassment and the perpetrators of grossly offensive, obscene or menacing behaviour, and of course we introduced a new law making the fast-growing incidence of revenge porn a specific criminal offence.

The Law Commission recently consulted on including a review of the law covering online abuse as part of its 13th programme of law reform, which will launch later this year. It is expected to confirm with Ministers shortly which projects it proposes should be included.

We are also working to tackle online abuse in schools and have invested £1.6 million to fund a number of anti-bullying organisations.

In addition, we are working to improve the enforcement response to online abuse and harassment so that it can respond to changing technologies. The Home Office has also allocated £4.6 million for a digital transformation programme to equip forces with the tools to police the digital age effectively and to protect the victims of digital crime, including online abuse and harassment. Police and prosecutors evidence offences carried out digitally, non-digitally or both. The CPS Guidelines on Prosecuting Cases Involving Communications Sent via Social Media makes clear the range of criminal law which can be brought to bear on offences committed through social media. Moreover, from April 2015, police forces have been recording online instances of crimes, including stalking and harassment.

I shall talk about the next three amendments together, as they all cover the duties of social media sites. Amendment 71AA seeks to make it a requirement for all social media sites to carry out a safety impact assessment. Amendment 71AB seeks to require Ministers to issue a code of practice to ensure that commercial social media platform providers make a consistent and robust response to online abuse on their sites by identifying and assessing online abuse. Amendment 233A seeks to impose a duty on social media services to respond to reports posted on their sites of material which passes the criminal test—that is, that the content would, if published by other means or communicated in person, cause a criminal offence to be committed.

The Government expect social media and interactive services to have robust processes in place that can quickly address inappropriate content and abusive behaviour on their sites. On the point made by the noble Baroness, Lady O’Neill, it is incumbent on all social media companies to provide an effective means for users to report content and perform the actions that they say they will take to deal with this. We believe a statutory code of practice is unworkable because there is no one-size-fits-all solution. Dealing properly with inappropriate content and abuse will vary by service and incident. Technological considerations might differ by platform and as innovation develops. Users will benefit most if companies develop their own bespoke approach for reporting tools and in-house processes.

Social media companies take down content that is violent or incites violence if it breaches their terms and conditions. We expect them to inform the police where they identify significant threats or illegal activity happening on their sites. It is, however, extremely difficult to identify where the threat has come from and whether it is serious. We work closely with companies to flag terrorist-related content and have so far secured the voluntary removal of over 250,000 pieces of content since 2010.

I can assure the Committee that we share the sentiments expressed in these amendments. At the moment, though, they are not practical or necessary, so I hope on that basis noble Lords will not press their amendments.

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs)

My Lords, first, I am grateful to the noble Baroness, Lady Janke, for stressing her point on enforcement. That is at the heart of the debate that we are having today. A lot of fine words are being said, but they are lacking the guts and enforcement to make any real change.

I am also grateful to the noble Baroness, Lady O’Neill, who quite rightly made the point that material does not consistently get taken down. That very much chimes with evidence that we have received as well. Luciana Berger MP has made the point that, even when a case of anti-Semitism was taken to court and the perpetrator was taken to jail, the site that they had created stayed up on social media and was still there for anyone to access—that cannot be right. It raises questions about the responsibility of social media sites and whether they are acting with enough responsibility and consistency.

I was really saddened by the Minister’s response this afternoon, because I felt there was a degree of complacency in what he said. I do not know how much more evidence he needs to realise that the current arrangements are not working. As we have been saying, children and adults are suffering. There does not seem to be a mechanism where, if you feel that you are being abused, threatened, or having vile things said about you on sites, you can get any consistent recourse to have the matter dealt with. People say, time and again, that social media sites and the police are not working together consistently. On some occasions social media sites take action, but then the police do not follow it up. Sometimes it is vice versa: the police get involved, but then the social media sites do not carry out their responsibilities. This needs another look at—whatever the level or structure for which that is appropriate.

I will not press my amendments today, but I will not give up on this issue. I say to the noble Lord—and it may be that we can have further discussions on this—that a more robust response is needed from the Government than we have had so far, so I hope we can carry on this discussion. I beg leave to withdraw my amendment.

Amendment 70 withdrawn.

Amendment 71

Moved by Baroness Jones of Whitchurch

71: After Clause 26, insert the following new Clause—“Internet pornography: requirement to teach age requirement and risks as part of sex education After section 403(1A)(b) of the Education Act 1996, insert—“(c) they learn about the risks and dangers of internet pornography, and the legal age requirement to access internet pornography under Part 3 of the Digital Economy Act 2017.””

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs)

My Lords, Amendment 71 requires schools to teach the risks and dangers of internet pornography, as well as an understanding of the new age restrictions which will apply to accessing pornography. This is not a new issue. For the last six or seven years we have been pushing for updated guidance on sex and relationship education. It remains a mystery as to why the Government have been dragging their feet on this issue for quite so long. The fact that our amendment addresses only part of this bigger demand results from the restrictions placed by the scope of the Bill, rather than from a watering down of our commitment to PSHE being a mandatory part of the school curriculum.

Our demand is also not a party-political issue: it has huge cross-party support. The recent report of the Women and Equalities Committee, chaired by Conservative Maria Miller, highlighted growing levels of sexual harassment and sexual violence in schools. It found that children were sharing revealing images of themselves online and that watching pornography is becoming commonplace. It also found that sexual abuse of girls has become an accepted part of everyday life in schools. At the same time, chairs of four Select Committees, alarmed by the evidence they had seen of online and personal abuse, have written to the Secretary of State urging her to make an updated SRE curriculum compulsory. We also know that Ofsted has said that the teaching of PSHE is not yet good enough.

A clamour of parents, teachers and even pupils themselves has said in surveys that they need more help to understand the dangers of internet imagery and abuse, and to make young people more self-aware and resilient. A recent NSPCC report identified that children exposed to sexually explicit material developed unrealistic attitudes about sex and consent, including an increase in risky sexual behaviour. A recent IPPR report identified that almost eight out of 10 young women said that access to pornography put pressure on girls to look and act in a certain way.

In the meantime, the number of sexual offences in schools reported to the police has risen to 5,500, more than 1,500 of which were from children aged under 13. There is no doubt that this is the tip of the iceberg, so why have the Government failed to act on what is a crucial child safety issue? Apparently, Justine Greening has indicated that the issue is near the top of her in-tray. The noble Lord, Lord Nash, said in this Chamber last year that he hoped to have something more to say on this issue shortly. But when a similar amendment was debated in the Commons during the course of the Bill, the Minister, Matt Hancock, said that,

“the measure is not necessary, because e-safety is already covered at all stages in the new computing curriculum that was introduced in September 2014”.—[Official Report, Commons, 28/11/16; cols. 1275.]

We believe that this response completely misses the point about where this education should take place. It is not just a technical question about online safety; it should be taught by professionals who are able to explore the importance of sex in the context of strong, mutually respectful relationships. This is why we believe the right place for this education is as part of a compulsory sex and relationships curriculum. Most experts, parents, teachers and children agree with us. Therefore, I beg to move the amendment.

Photo of Lord Storey Lord Storey Liberal Democrat Lords Spokesperson (Education) 5:15 pm, 2nd February 2017

My Lords, I added my name to the amendment. I find it bizarre that we have spoken for a couple of hours now about the dangers of internet pornography, and we have rightly worried about sexting, the harm that inappropriate images would cause to children, and about possible dating sites, but when it comes to educating children and young people we wring our hands and walk away from it. I do not understand that. Any parent would want their children to know what is going on. As the noble Baroness said, any child would want to have professionals talking these issues over with them and educating them about them.

Children need to be taught about the dangers of meeting people online, the risks of dating apps, the consequences of sexting and the problem that young girls feel they have to look and appear in a certain way. No wonder the levels of anxiety and depression among teenage girls are, as we have heard, the highest ever. Research by the DfE—not some distant organisation, but the Government’s own department—found that 37% of girls feel miserable and worthless. That should not be happening in 2017. What on earth is going on? There are frightening levels of self-harm, with a 52% increase in the number of admissions of self-harming children under the age of 16.

I congratulate the noble Lord, Lord Stevenson, on putting down this amendment. He and many Members of this Chamber—on the Government Benches, on the Opposition Benches and on the Cross Benches—know that we have raised this issue over and again. During all the time that we have pressed for such a measure to be introduced, the Government have shrugged their shoulders and said, “Well, you can do it”. Yes, it is compulsory in maintained schools, but it is not compulsory in academies or free schools. As academies now make up more than 70% of our secondary schools, there is real concern about what is happening with sex and relationship education.

It is interesting that Ofsted found in 2013 that 40% of schools that offered sex and relationship education required improvement or were inadequate in their provision of it. Even though schools provide the subject, there is real doubt about the quality of that provision. The noble Baroness was right that it has to be properly taught and that we have to ensure that the syllabus is of the highest possible level.

I want to cite a couple of other figures which highlight how worrying this whole issue is. In 2016, a parliamentary report found that almost a third of 16 to 18 year-old girls had experienced touching at school, while 70% of 11 to 15 year-olds in England said that they believed sex education should be compulsory, and a whopping 94% said that they wanted to learn about the risks and consequences of sharing pictures with people online or on social media. Our own children want us to make this subject available at school. Will we not listen to them? Barnardo’s research shows that three-quarters of young people believe that sex and relationship education would make them feel safer.

What are the arguments against? It used to be, “Well, this is for the parents to do”. The argument that I now hear raised from time to time is, “Well, we couldn’t really force faith schools to teach sex and relationship education, because some aspects of it might go against their own religious belief”. Really? I just do not accept that. Faith schools do a hugely important job in our society, but part of that job must also be protecting our young children. I and my party wholeheartedly support this amendment.

Photo of Baroness Kidron Baroness Kidron Crossbench

My Lords, since the Bill introduces age verification, it follows that that children must be informed users. Not only does that make it more likely that they observe it but it would give teachers the necessary opportunity to discuss what they might find a difficult subject. Like others, I believe that this is a tiny part of a broader picture.

As some noble Lords know, I regularly speak in schools about pornography but more broadly about young people and their relationship to the internet. I have to report to the Committee that they have a palpable appetite for better digital education, not only SRE but a much broader digital education. By that, they mean a comprehensive understanding of the purposes and methods by which platforms and businesses interact with them, their rights as consumers and citizens and their urgent desire for some code of conduct. Interestingly, they want a code of conduct that covers their behaviour to each other. They also want a code of conduct that would determine the behaviour of businesses and platforms towards them. Above all else, you find what they want is a single moral landscape that recognises that the distinction between online and offline is completely immaterial to them.

Part 3 of the Bill deals with a single issue and this amendment deals with a narrow piece of learning. But the young people I speak to yearn for more. They repeatedly complain that e-safety is narrow, repetitive, badly delivered, and comes in the wrong lessons and from the wrong teachers. Although they themselves have fast fingers, many if not most have little idea of the workings of the technology they are using, let alone the full gamut of risk, from fake news to fake friends. A young person who can spot spam without clicking, is one less likely to see the unwanted adult sexual content that is our subject today. A young person who is knowledgeable about the way their personal data are collected is less likely to make bad decisions about what, where and when to give them up.

Children are not simply the objects of our concern; they are participants in their own good outcomes. We must learn to listen to their stated needs, not relentlessly pursue an adult agenda. I direct the Minister to the recent report of the Children’s Commissioner, Growing up Digital; to the report published this week, The Internet on our Own Terms, which captures the policy recommendations of young people; and to the evidence collected by the Communication Committee’s inquiry “Children and the Internet”, all of which has a great deal to say about the value, nature and scope of the education that children need.

In supporting this amendment I ask the Minister not only to recommend it to colleagues, but to listen very carefully to young people about the scope of the learning and the manner of teaching that they feel makes them secure and able users of the internet, which ultimately will help them to be contributors to the cultural shift that must accompany the legislation that is in front of us.

Photo of Lord Paddick Lord Paddick Liberal Democrat Lords Spokesperson (Home Affairs)

My Lords, I shall speak very briefly, as my name is on this amendment, to support what other noble Lords have said and echo the noble Baroness, Lady Jones of Whitchurch, in that we also tried to table a broader compulsory sex and relationship education amendment to the Bill but were told it was out of scope.

We have to address the fact that despite our best efforts young people, and indeed very young children, will be confronted with inappropriate images and inappropriate adult material on the internet, and they need to be taught how to respond. They need to be taught to turn it off immediately and to tell their parents about what is happening. Older children need to be told that the way in which actors in pornographic films treat each other is not the way that we expect our young people to treat each other.

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Lord in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for Culture, Media and Sport

My Lords, I think we can all agree—and I certainly do—that this amendment has expressed very worthy concern about the safety of young people growing up in modern Britain today, and it is of great interest to many Members of this House and Members of the other place too.

As we have always said, age verification is not a panacea, and should certainly not be seen as the limit of child online protection activity in which the Government and key stakeholders are involved. Age verification controls are a part, but not all, of the approach to protecting children from potentially harmful content online. Education, awareness-raising with parents and carers, and equipping children with the resilience and tools to deal with their online experiences are critical. So I can agree with much of what the noble Lords, Lord Storey and Lord Paddick, and the noble Baroness, Lady Kidron, have said on this subject.

Keeping Children Safe in Education, the statutory guidance for schools and colleges on safeguarding children and safer recruitment, sets out that governing bodies and proprietors should ensure that children are taught about safeguarding, including online, through teaching and learning opportunities as part of providing a broad and balanced curriculum.

As my honourable friend the Minister of State for Vulnerable Children and Families, Edward Timpson, has said in previous debates during the passage of the Children and Social Work Bill, this Government heard the call for further action on improving the quality of PSHE provision in schools and we are fully committed to exploring all the options available. I understand that this will come up in the Report stage for that Bill in the other place, where the Government committed to providing an update to Parliament on the issue.

This Government are clear that to improve provision any change must be made in the right way with proper consideration of all the issues, including online safety. I assure the Committee that the Government are committed to handling this important matter well. We intend to work with stakeholders and listen to the voices of young people over the coming months. With that assurance, I hope the noble Baroness can withdraw her amendment.

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs) 5:30 pm, 2nd February 2017

I thank the Minister and the other noble Lords who spoke in support. What the Minister said was quite right: if we were to start drafting Part 3 on our own terms, it would begin with education and everything else would filter down after that. The age verification process is definitely a supplementary part of a bigger challenge we face.

I accept, as the Minister said, that maybe progress is being made on this matter in another place on another Bill. That Bill will probably be resolved before we come back on Report so we will watch what happens in the other place in some detail. If it is are not able to resolve it, maybe we will be—so we could return to it at that point. In the meantime, I beg leave to withdraw the amendment.

Amendment 71 withdrawn.

Amendment 71A

Moved by Lord Stevenson of Balmacara

71A: After Clause 26, insert the following new Clause—“Independence of the British Board of Film Classification(1) The BBFC is to be a body corporate which is independent from the Government.(2) All appointments to the BBFC are to be subject to fair and open competition.”

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, we spent a considerable amount of time earlier in Committee on the question of the powers that would be allocated to any regulators appointed under the Bill. We did not spend much time on who the regulators would be, although some concerns were raised. However, over the weeks and even today, we have increasingly gathered that the Government’s intention is that the British Board of Film Classification, the BBFC, should be given a major role in the work discussed in this particular part of the Bill.

I will start with the report of the Delegated Powers and Regulatory Reform Committee, which has already been extensively referred to in the debate. It raised questions about what the position would be of any regulator appointed under the powers being taken in the Bill. It said, for example, that the age verification regulator—without naming that regulator—will have powers including,

“to require the provision of information … impose substantial civil penalties … take steps to direct internet service providers to block access to material … and … publish guidance”.

Of course, there is a quite a lot in the report that we have already discussed about how and under what conditions a body such as the regulator that will be appointed should be able to publish guidance, particularly if it is on behalf of the Secretary of State and has not been subject to discussion within Parliament.

Without having any expert knowledge of the work of the committee, I think that, had they known directly who the regulator would be, they might also have raised the issue in my amendment: the status and constitution of the body that is likely to be appointed. I assume that the comments made by the Minister earlier in this Committee session that the BBFC is to be appointed will be carried forward in due course. If I am wrong, obviously the points I make are still valid—although they may apply to a different regulator of a different nature.

The issue I want to pick up comes in paragraph 15 of the DPRRC report, which talks about a memorandum exchanged between it and the department in relation to the powers that would be applied to the regulator. It starts by saying where those powers are found: in Clause 17. It explains that the department feels that it is important to retain flexibility as to who is to be appointed to ensure that the right person or persons are appointed as a regulator. Of course, that point has probably now been overcome by time. It also makes the point that the functions could be regulated. Indeed, we had earlier recommendations that suggested quite persuasive arguments for the regulatory burden to be carried by more than one body. I hope that we will be able to make progress on this as we move through the Bill.

It is clear that if the regulator is to be the BBFC, the work of which is really the basis for the classification system that will be relied on in the legislation, it has a designation to do only part of its work under the Video Recordings Act 1984. It is important to pause here. The amendment that I am putting forward asks the Government to think hard about the correctness of a decision to appoint as a regulator a body that is only partially covered by statute at present. Does the Minister think it right that a private company over which the Secretary of State has limited powers in relation to who is appointed to that body should take on the sorts of responsibilities on civil penalties and the blocking of activity, as well as regulatory functions?

As the amendments suggests, does he not think that it might be more appropriate to look carefully at the body that takes on these responsibilities and to propose, as I do, that it should be either a body corporate or subject to more extensive powers of direction as to who is appointed and how any appointments are made? If that were the case, we could have more confidence in the ability of that body to make the right decisions in relation to all the functions that it has, which extend quite widely, and in particular to age verification, which is the subject of the Bill.

The British Board of Film Classification is a private company. Its number is 00117289. I checked today on the company’s register and, limited as the information is, it is quite revealing. It was first incorporated on 17 August 1911. So for nearly 107 years it has been a monopoly operator in a private capacity, acting in some senses on behalf of the Government in some of its functions. As I said, there are statutory functions in relation to video and now DVD, but none to any great extent in relation to film classification, which is the basis of the work that is being carried on in the Bill.

It is well known that, in its original form, the BBFC was called the Incorporated Association of Kinematograph Manufacturers Ltd. It was created by the then manufacturers of projection equipment to protect the investment that they made in cinemas up and down the country against the watch committees, which had sprung up before but were now displaying an active concern about the impact of films on the morals of the population. This still exists. Technically, films are licensed for exhibition in the United Kingdom only through the local authorities. They normally take the advice of the BBFC. That was a clever move by the manufacturers of the equipment, which was at risk, to ensure that they stepped in ahead of the possibility of moral outrage by creating a situation in which they said and alleged that people would not be shocked by the sorts of thing that might cause alarm and despondency around the country. At that stage they could not have anticipated that Life of Brian is still banned in Glasgow—I think that I am right in saying that. That may or may not be of interest to anybody in the Committee, though perhaps it woke your Lordships up a bit. That is the kind of thing that can come from this rather unfortunate arrangement.

I will recap slightly. This private company last year made a profit of approximately £1.5 million on a turnover of £5.4 million. It owns freehold property not a million miles from here worth quite a lot of money. It has a board appointed by itself and a membership that is not disclosed in the company’s records. It operates in an area of considerable complexity and certainly some moral concern—and it is about to be given additional statutory responsibilities. Those are the main points that I want to make in this amendment.

I do not know whether what I propose in this amendment is right. It is an issue that should be thought carefully about before we move further. For instance, within the BBFC structures at the moment there is no appeal system. The regulatory functions of the Secretary of State are limited; they are mainly related to video and not to film. The powers that are about to be referred to it are mentioned by the Delegated Powers Committee as being of concern, so we need to find a way through that. We have yet to see how that will happen because we have not yet had the Minister’s response. I beg to move.

Photo of Lord Paddick Lord Paddick Liberal Democrat Lords Spokesperson (Home Affairs)

My Lords, I support the amendment but not necessarily for the reasons articulated by the noble Lord, Lord Stevenson. Our concern is that if the Government started to appoint members of the British Board of Film Classification and therefore it was not independent of government, we would have a situation in which the Government would potentially be involved in deciding which films or material should be censored or not, which is not a path we would like to go down, particularly in the current climate of populism and the historical issues that that raises.

Photo of Lord Arbuthnot of Edrom Lord Arbuthnot of Edrom Conservative

My Lords, the noble Lord, Lord Paddick, has just given the speech that I was rather expecting the noble Lord, Lord Stevenson, to give. The amendment suggests that the Government should be completely out of the running of the BBFC, yet in his very interesting and important remarks, the noble Lord, Lord Stevenson, said that he was a bit concerned that the Government should think it right for this private company, over which the Government have very little power, to have such responsibilities.

The noble Lord, Lord Stevenson, was right to say that the current position is that the BBFC appoints itself. The council of management is chosen from leading figures in the film industry; that council chooses the president and the director, and then they do this important work. If we are to change that, we need some evidence that either there is a risk of the Government interfering in these decisions or that these decisions are being got wrong in some respect. I am not aware that these decisions are being badly taken. As far as I can tell, the BBFC is doing a pretty good job, and until we are clear what regime we want to go to, I would rather leave the law as it is.

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Lord in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for Culture, Media and Sport

My Lords, I am grateful to noble Lords who contributed to this brief debate, especially the noble Lord, Lord Stevenson, who demonstrated his long experience in the world of film trivia.

The BBFC is an independent, not-for-profit, non-governmental body which classifies films and videos. The BBFC operates a transparent, trusted classification regime based on years of expertise and published guidelines that reflect public opinion. It is self-financed through fees from industry for the work it carries out on classification. It protects children and other vulnerable groups from harm through its classification work, which is legally enforceable and empowers consumers, particularly parents and children, through content information and education. In addition, it is the independent regulator of content delivered via the UK’s mobile networks. Using the standards in the BBFC’s classification guidelines, content which would be age-rated 18 or R18 by the BBFC is placed behind access controls and internet filters to restrict access to that content by those under 18 on all non-age-verified phones.

Amendment 71A introduces a new clause which seeks to clarify the position of the BBFC as an organisation independent of the Government. This proposed new clause also seeks that all appointments made by the BBFC be subject to fair and open competition. I am afraid we do not agree with the noble Lord, Lord Stevenson, that it is necessary to make provision for the independence of the BBFC. The role of age-verification regulator will be one that the BBFC carries out alongside its other independent roles. We do not seek this requirement for its work under the Video Recordings Act, where BBFC officials are also designated by the Secretary of State via notification through Parliament.

The Bill sets out clearly the powers of the regulator, and where it is thought appropriate that the Secretary of State should have a role, this is made clear. For example, in relation to ISP blocking it will be important that the Government and the BBFC work together on a deconfliction process. The Bill provides for a parliamentary procedure for the designation of the regulator, as it is right that Parliament should have the opportunity to scrutinise this important appointment. As we have already covered, the DPRRC has made a recommendation on the designation of the regulator and I assure noble Lords that we are currently considering this carefully before responding.

The other requirement in this proposed new clause is that any appointments made by the BBFC should be subject to fair and open competition. The BBFC is an independent body, and it is not the place for government to set prescriptive guidelines on its recruitment practice in a Bill. The BBFC is a well-respected organisation, as my noble friend mentioned, and has unparalleled expertise in classifying content. I have every confidence the BBFC will deliver on its aims.

With that explanation, I hope the noble Lord will feel able to withdraw his amendment this afternoon.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education) 5:45 pm, 2nd February 2017

I thank those who have contributed to the debate. I should make it very clear that I was not in any sense suggesting that the Government should take a closer or more direct action in relation to the work that we are talking about. The Minister made it very clear that the case was for an independent body. I had in mind a not dissimilar situation that arose in a Bill that the noble Lord and I debated only recently, when it was decided that an organisation set up as a private company, which was operating in the public interest, should move from that position and be given company status under a royal charter. The National Citizen Service Trust emerges very shortly from that chrysalis, and it struck me that there were parallels—the Minister is smiling, so I think he gets the point I am making.

The response was also interesting in that the Minister was making the same point that I was making, but from a slightly different direction. It is inevitable that the Government and the regulator so appointed—probably the BBFC—will have to think very closely together about these matters. I think the Minister said they had to be on a “deconfliction” basis—a new word that I have not heard before, although I think I get the message. I think it also means that they have to be of similar mind and aiming in the same direction. In time, the need to ensure that this work is done properly and effectively, in accordance with broad principles already set out in statute law elsewhere, will inevitably mean that the Government should take the steps I am suggesting here, even if it may not be appropriate yet to do so. In saying that, I am not aware of any evidence that would convince the noble Lord who spoke from the other Benches that there is need for urgent action here. I just feel uncomfortable about any body that has responsibilities of a statutory nature not being subject to statutory control. That is really the basis of this, but in the meantime I beg leave to withdraw the amendment.

Amendment 71A withdrawn.

Amendments 71AA and 71AB not moved.

Clause 27: Offences: infringing copyright and making available right

Amendment 71B

Moved by Lord Stevenson of Balmacara

71B: Clause 27, page 28, line 8, at end insert—“( ) In section 107 (criminal liability for making or dealing with infringing articles, etc.), after subsection (1) insert—“(1A) A person commits an offence who—(a) manufactures for sale or hire,(b) imports into the United Kingdom otherwise than for his private and domestic use,(c) in the course of a business—(i) sells or lets for hire;(ii) offers or exposes for sale or hire;(iii) advertises for sale or hire or otherwise promotes;(iv) possesses in the course of business with a view to committing any act infringing copyright;(v) installs, maintains or replaces;(vi) distributes; or(d) distributes otherwise than in the course of a business to such an extent as to affect prejudicially the copyright owner,any article or related software which is primarily designed, produced, or adapted for, or which is primarily used for, the purpose of enabling or facilitating copyright infringement and which he knows or has reason to believe will be used (whether alone or in conjunction with another article or service) to infringe copyright.”

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, this moves us into Part 4 and intellectual property. We start with rather a narrow but quite important point about the way technology is moving forward in this area and the need to make sure that the statutory basis under which we look at issues relating to broadcasting and television is kept up to speed. I am joined in Amendment 71B by the noble Lords, Lord Clement-Jones and Lord Foster, for which I am very grateful. I am sure they will give more examples of and more detail on the topic that we are discussing in this group, about devices and services that infringe copyright.

These amendments look at digital TV piracy, which is a relatively new phenomenon but has come about because of the growing amount of close-to-live retransmission of broadcasts—and indeed of live broadcasts themselves—and the services that provide on-demand access to films, television series and other audio-visual content, including music. The categories are slightly different, but they are both very damaging to rights holders. Devices normally feature a mixture of both categories of services, and you can buy them readily on the open market and install them yourself, so it is a growing problem for those who control content and wish to make sure that rights holders earn from it.

These amendments suggest changing two sections of the Copyright, Designs and Patents Act. Amendment 79A relates to Section 297A and transmissions, while Amendment 71B relates to Section 107 and on-demand services. I beg to move.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, as the noble Lord, Lord Stevenson, has said, we strongly support this amendment and I am grateful to him for having tabled it. I shall go into a little more detail than he was able to do in order to illustrate some aspects that very much concern the creative industries. A substantial and growing threat is posed to the creative industries by a combination of faster broadband speeds and the widespread availability of cheap plug-and-play devices offering access to infringing software. These devices can be simply plugged into TV sets, offering viewers increasingly easy access to pirated digital content. The Government’s IP enforcement strategy recognises this threat.

The creative industries are deeply concerned about the growing scale of digital TV piracy and have noted a significant increase in the levels of illegal streaming, which inevitably undermines business models within these industries and threatens investment in new content creation. Clearly, the challenge needs to be met on multiple levels, including education campaigns, use of technology, increased enforcement activity and, crucially, clearer laws which are simpler to enforce.

There are a variety of ways that users access infringing content. Typically, this involves a device such as a USB stick or small android box which is plugged into a TV set using a standard connection. The device can be “fully loaded”, meaning it has software and add-ons preconfigured, giving access to thousands of streams, or users can purchase boxes with software such as Kodi installed—an open-source software platform—and then source and configure their own illegal add-ons. The Government’s own statistics highlight the significant growth in the use of this technology, and research by the Industry Trust for IP Awareness shows worrying signs that such behaviour is becoming normalised and socially acceptable.

The scale of the problem is very significant. Listings on Amazon give the boxes a legitimacy—the Industry Trust study revealed that 44% of people assume that if they buy a box or stick from a retailer such as Amazon, it must be legal. An Amazon search for “Kodi” just yesterday auto-completed with “Kodi box fully loaded” and “Kodi fully loaded TV box with Sky Sports and Movies”. That “Kodi” search produces 4,554 results. The first listing is highlighted as an Amazon best-seller and is on offer through Amazon Prime, despite the Q&A under it saying rather different things. IPTV boxes, as they are called, are widely available, with more than 14,000 listings across 511 online marketplaces, equating to more than 4 million items in stock globally. There are more than 200,000 videos on YouTube providing a step-by-step guide on how to install and use Kodi add-ons in order to stream free TV.

Given the rapid growth of such devices, it is not unreasonable to suggest that illegal IPTV boxes could become the second largest pay-TV operator in the UK within 18 months. Despite the IP enforcement strategy identifying the problem, there appears to be a reluctance to make the law simpler and more effective. At present, law enforcement has to rely on general provisions, such as aiding and abetting offences under the Fraud Act, or encouraging offences under the Serious Crime Act. This is because the Copyright, Designs and Patents Act does not address today’s or future issues, and the various offences in it do not include what is by far the most prevalent offence today: the supply of devices intended to commit digital piracy. A specific offence is much needed and was proposed in the other place as an amendment to the Bill.

There are examples of law enforcement agencies such as trading standards and PIPCU being unable to pursue strong cases due to the lack of an appropriate offence. As a result, despite the industry dedicating considerable resources over a long period to protecting its intellectual property through existing enforcement mechanisms, there has been insufficient success and what limited progress has been made has taken far too long. Now, a fit-for-purpose enforcement regime is needed which is kept up to date with technological advancements and new risks posed. This requires the creation in the CDPA of a specific offence relating to devices used for IP infringement.

We have been told that over the past year, the Sky security team has identified more than 100 cases involving digital TV piracy, but they have been extremely difficult to pursue through trading standards or, indeed, through PIPCU. The industry has gone to the extent of seeking counsel’s advice on whether anything in existing law adequately covers the offences involved. It is clear that, while there has been a recent successful five-week private prosecution of a complex case involving pan-European organised crime, this is not the most efficient way to deal with a new challenge. The CDPA, originally written in 1988, needs to be updated to reflect new technology and the subsequent risks posed. New legislation would help trading standards to prosecute those preloading and distributing IP devices.

I very much hope that the Minister will take this opportunity to support this important amendment.

Photo of Baroness Kidron Baroness Kidron Crossbench

I too support Amendments 71B and 79A. It is perhaps worth reiterating my interests as a film maker and, therefore, often a rights holder. I share the concerns of broadcasters about the challenges of piracy and the implications for future financing of original content. The noble Lord, Lord Clement-Jones, has done justice to that point.

This is also a generational issue, as 11 to 15 year-olds are the biggest users of these devices, which are plugged directly into television sets. Technical studies of IPTV use recently conducted by the Industry Trust revealed that they often include unauthorised apps, add-ons and advertising, and totally bypass the current systems of parental control, age rating and BBFC guidance. They are not subject to the usual protections that apply to content that we normally view on our television screens. If they can be bought from legitimate retailers and paid for through legitimate payment providers, we can hardly blame people for not really understanding that they are illegal.

Contrary to the Minister’s previous suggestion that I might like to shut down Twitter—far from it. By what other means would I know what the American President was thinking day and night? I am not a huge fan of blocking or censorship.

I beg noble Lords’ patience, as I want to go back to something that we may have gone through. It is about consistency. My argument is all about consistency. I was disappointed by what the Minister said about social media companies, which seem to have picked up very few responsibilities this afternoon.

I wonder whether we have done the maths right. Surely, even a small slice of these huge companies with their billions of daily interactions is comparable with the large sites entirely dedicated to pornography. I have listened very carefully to the debate and wonder whether, if we had been using the word monetise rather than commercial, we might have got a little closer to where we need to go. I hope I will be forgiven for going back to Part 3, but I have risen to speak about consistency.

Given the ambition of Part 3 of the Bill, it seems inappropriate that unregulated content is being delivered to TV screens outside of Ofcom or BBFC oversight. I feel that every child, parent or carer should have access to the technical and regulatory protections while streaming content on their TV screens, should they elect to use them. The current legislative framework is out of date and does not make it sufficiently clear that devices adapted for digital TV piracy should not be sold by legitimate online retailers. As a result, children are watching content in an unregulated context. That should be a factor when considering the merits of these amendments.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour 6:00 pm, 2nd February 2017

Very briefly and anecdotally, I had a briefing session with Sky and the Motion Picture Association and, as somebody who is in the wrong age group for being able to use these kinds of things, I was absolutely appalled at how easy it is to get hold of a pirated film. I agree with the wording of the amendments; they are sufficiently vague that they will, hopefully, future-proof us. If they were too detailed, we would run the risk of having something that the criminal classes would find it all too easy to evade. I urge the Minister to give this consideration.

Photo of Lord Foster of Bath Lord Foster of Bath Liberal Democrat Lords Spokesperson (Business, Energy and Industrial Strategy)

My Lords, I, too, will be brief, but I think it is important that we keep pointing out the number of problems that are currently not being addressed. My noble friend Lord Clement-Jones has given some figures, as have the noble Baroness, Lady Kidron, and others, but it is worth recalling, for example, that in the second quarter of 2016 alone, no fewer than 51 million pieces of film and TV content were accessed illegally online, according to the Intellectual Property Office.

The case has already been made that this is damaging very seriously the commercial ability of the legal providers of content. We know from another survey that one in five people who are using this illegal approach has now either completely cancelled or cut down their subscription to legal platforms. As has been pointed out, any attempt at enforcement has so far found itself in difficulty because of the inadequacy of the existing legislation—hence the call in both Amendments 71B and 79A that we put in place a fit and proper enforcement regime and definitions of specific offences.

The noble Lord pointed to the briefing he had from Sky—and no doubt he will have heard from Sky about the number of times that it has been able to identify illegal activity going on, whether it is with local trading standards or the Police Intellectual Property Crime Unit, but has had difficulty taking prosecutions through to the final stages. People have got away when perhaps, if we had had fit and proper legislation as is being proposed here, that would not have been the case.

Sky gave one example:

“Following an investigation … where live sport was being streamed and made available on IPTV boxes via two websites, a referral was made to PIPCU in September 2014. Search and seizures were made in July 2015 … the pirate was remanded in custody, he was later released following an appeal. Two years later, the pirate has re-opened his site with the same name but moved from .net to .biz with the Crown Prosecution Service still considering”— how it might go about prosecution. It is for this sort of reason that we need these amendments, or something like them.

Photo of Baroness Buscombe Baroness Buscombe Baroness in Waiting (HM Household) (Whip)

My Lords, Amendments 71B and 79A seek to expand the existing criminal liability for making or dealing with copyright-infringing articles and the restrictions on unlawful decoders to include the supply of devices and software—such as set-top boxes or IPTV boxes and illicit software apps or extensions—intended to be used for copyright infringement.

An amendment with the same or a similar ambition was first tabled in the other place and then withdrawn. The Government are still of the view, as they were then, that illicit streaming and the infrastructure and devices that enable it pose a very serious threat to legitimate copyright owners and service providers. We share the wish of those behind these amendments to ensure that this harmful activity is properly tackled. I agree with the noble Lord, Lord Clement-Jones, that this poses a real threat to the creative industries.

That does not mean, however, that we should jump immediately to introduce new criminal provisions to copyright law. As previously discussed in debate in another place, the Government believe that this activity is already covered by existing offences. Relevant provisions include those contained in the Fraud Act 2006, the inchoate offences in the Serious Crime Act 2007, and other provisions of the Copyright, Designs and Patents Act 1988.

In December a supplier of IPTV systems that enabled viewers to watch unauthorised content was convicted for conspiracy to defraud and sentenced to four years’ imprisonment. A second supplier received a two-year suspended sentence. This conviction shows that the courts agree that this behaviour is already illegal and must be tackled appropriately. But we recognise that court cases take time and cost money, and that this is a complex area of law where enforcement agencies may not feel well equipped to take on investigations and carry them through to prosecution. That is why we are working on a range of interventions to tackle this behaviour.

Officials at the Intellectual Property Office are working with the Crown Prosecution Service and the police to develop guidance on how the existing offences may be effectively applied, and we will be running a public call for views over the coming few weeks to ask investigators, prosecutors and industry representatives whether they think the existing legislation is providing all the tools that are needed.

IPO officials have also been meeting intermediaries, especially those platforms where these devices are sold, and others whose legitimate businesses facilitate, however unknowingly or unwillingly, this criminal behaviour. We need to work together with a broad coalition to tackle illicit streaming, and everyone in the supply chain has a part to play. This is very much an area where we want to make progress. We believe that we are making progress on a number of fronts. The Minister for Digital and Culture committed in the other place to bring forward legislation if the evidence shows that it is needed—but that case has not been made yet.

With reference to what the noble Lord, Lord Gordon of Strathblane, said, I think it is right to emphasise that the ever-changing nature of how criminals operate means that they will quickly circumvent technology-specific legislation. We have to be careful when we talk about primary legislation. The changing way in which content is consumed means that specific legislation such as that proposed may be rendered obsolete, unprosecutable or both. I hope that with this explanation, the noble Lord will feel able to withdraw the amendment.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

Before the noble Lord, Lord Stevenson, expresses his view of the Minister’s response, may I ask her a few questions? She gave a bit of a “curate’s egg” response, giving with one hand and taking away with the other. At the end of the day it might be considered that a criminal offence is appropriate—but as to the call for evidence, does the Minister have a timetable that she can reveal to the House for this to take place? Will it include the role of intermediaries?

I think that the Minister can understand some of our impatience in this area: legislative opportunities to deal with this kind of infringement are few and far between, and this is a major problem. The percentage of people using this software and these boxes is rising inexorably, and that is having a very bad impact on the business models of many in these industries. We urge urgency on the Government.

Photo of Baroness Buscombe Baroness Buscombe Baroness in Waiting (HM Household) (Whip)

I respect what the noble Lord has just asked, but I did say—maybe I was not clear—that we would run a public call for views over the coming few weeks.

Photo of Baroness Buscombe Baroness Buscombe Baroness in Waiting (HM Household) (Whip)

Absolutely—weeks. We will ask investigators, prosecutors and industry representatives whether they think the existing legislation provides all the tools needed. IPO officials have also been meeting intermediaries, and I am sure that they would welcome more such meetings to see that we get this right.

Photo of Lord Maxton Lord Maxton Labour

That does not include material that would not be shown otherwise on either a tablet, a computer or on television. I am wearing the tie of Hamilton Rugby Club, and I can watch the games on YouTube the week after.

Photo of Baroness Buscombe Baroness Buscombe Baroness in Waiting (HM Household) (Whip)

My Lords, we are talking about taking on the seriously important issue of all illegal access. That is part of the problem with primary legislation as it is very often not otiose but an anachronism before it has even begun. So often primary legislation leads to us being behind the curve. In fact, I remember so well sitting where noble Lords opposite are sitting when the then Communications Bill was taken through the House in 2003. I remember asking officials why there was no mention of the internet in 2003 given that a certain person called Mark Zuckerberg was developing Facebook and the new world of social media. I was told privately, “Because it’s too difficult”. We are dealing with complex areas of law but I have history in this regard. I look at the noble Lord, Lord Gordon of Strathblane, who, of course, was sitting on this side of the House in those days. I think he will attest to the fact that we were grappling then with issues which almost immediately turned out to be behind the curve when that enormous piece of legislation was introduced. I hope noble Lords will accept that it is much more important to try to get these issues right than enshrine our hopes of tackling these serious problems in primary legislation in ways that will not work almost immediately.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

This has been a very useful exchange and I think that we have moved forward a little. I think the noble Baroness would accept that the point on which we ended was really the point that the noble Baroness, Lady Kidron, made—that there is a way of getting into this argument which tries to embrace that point about the technology. We may not have the flexibility or the ability to work the technology as well as our children and grandchildren do. It may be a generational issue. The problem may lie more in enforcement than in changing the law because, as the noble Baroness pointed out, the Fraud Act, the inchoate offences legislation and the CDP Act all contain provisions which can probably be used to tackle this issue. However, there is a lack of fit with that movement forward and the technology and the use being made of it by younger generations who do not see the issue in quite the same terms as we do.

Intellectual property as a business model is not well served by traditional models involving traditional economics. The whole point about a patent is that it gives you the monopoly that most of competition law seeks to remove, albeit for a limited period. Copyright is no different in that sense. This is not perhaps the time to argue this, certainly not at this stage in the proceedings, but it could be argued that by going to a “life plus 70 years” model for copyright—noble Lords who are earning money out of this should close their ears—we are probably making a mistake which future generations will want to come back to, because the incentive to invest in innovation has to be matched against the right to exploit that at some point. Arguably, life plus 70, particularly as people live longer, is probably not the appropriate model and a more restricted term, which would also be subject to additional requirements to make material available, might be the way forward. In that sense, some of this stuff might not therefore be a problem today as opposed to when we are a long way into it.

However, I welcome the investigation that the noble Baroness mentioned. The timing seems rather rapid for government; I was surprised to hear it but, if that is the case, who are we to say no to it? If the commitment is there and the Government are prepared to bring forward legislation to tackle this issue—I am sure that she said this, as I wrote it down—we could not be more happy. I beg leave to withdraw the amendment.

Amendment 71B withdrawn.

Amendment 72 had been withdrawn from the Marshalled List.

Clause 27 agreed.

Clause 28 agreed.

Clause 29: Copyright etc where broadcast retransmitted by cable

Amendment 73

Moved by Lord Clement-Jones

73: Clause 29, page 29, line 32, leave out subsections (3) to (5)

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, in moving Amendment 73 I wish to speak also to Amendment 235. It has been a longish road towards Clause 29. I seem to remember putting down an amendment similar to this clause on two previous occasions when we had considerable debate about its merits. I am delighted that Clause 29 has finally, after much debate and discussion within government and outside, seen the light of day. I welcome the Government’s saying that they are seeking to implement repeal soon. However, there is considerable concern that they may attempt to delay effective repeal through transitional arrangements for up to two years. There is a very strong view within the television industry that Section 73 should be repealed as soon as possible in order to provide certainty for PSBs and to ensure that investment by public service broadcasters in UK content is protected.

Public service broadcasters invest around £2.5 billion per year in programming, the vast majority of which is original UK content. That investment is key to the delivery of UK-originated public service content to UK audiences and to sustaining the UK’s position as the world’s second-largest TV programme exporter. Section 73 is causing considerable harm to broadcasters in the wider creative economy by providing an unintended loophole that enables companies such as TVCatchup and FilmOn to live-stream the content of PSBs and other channels online without permission. Those companies then monetise content by placing their own advertising around it, directing funds away from PSBs and from further investment in the UK’s creative economy. That directly impacts on the ability of public service broadcasters to generate legitimate commercial revenues and reinvest in the wider creative economy, while also harming the rights of independent producers who own the content. I am very much in sympathy with the amendment tabled by the noble Lord, Lord Stevenson, which in a sense attempts to capture some of that additional revenue.

As noble Lords have debated on a number of occasions, the impact of current legislation is such that it is specifically the main public service channels, which together command the largest proportion of investment in original UK content, that are allowed to be streamed by online services without permission. I am glad that the Government have finally recognised the issue. They say that the repeal of Section 73 will also have the beneficial effect of closing the loophole used by the providers of internet-based, live-streaming services of broadcast television programmes. Of course, Section 73 was originally introduced to encourage the rollout of cable, and the Government clearly recognise that the original policy objective was met and is no longer appropriate.

The issue of cable in the UK is also extremely important. There is absolutely no justification for overriding public service broadcaster copyright to confer an advantage on one of the world’s largest cable operators. Indeed, I understand that the European Commission has launched infraction proceedings against the UK Government on the basis that Section 73 denies PSBs their intellectual property rights in their content, which are guaranteed under the 2001 copyright directive. I welcome many aspects of the Government’s approach in this respect, including their recognising that it should be possible for the PSBs to come to an arrangement for carriage of their content.

At Second Reading the noble Lord, Lord Ashton, said:

“As regards the remuneration issue from the abolition of Section 73, the Government are not seeking to set any retransmission fee arrangements”.

That is certainly movement on the Government’s part, which we very much welcome. As the noble Lord said:

“These will be negotiated in the context of the existing ‘must offer/must carry’ regulatory framework. This will mean there is likely to be some, albeit limited, value extracted in any future negotiations between public service broadcasters and Virgin Media”.

My noble friend Lord Foster teased out further clarification of the Government’s position from the Minister, when he reminded him that the Government had said they expected that,

“there will continue to be no net payments between all platform operators and the PSBs”.

The Minister replied:

“We think it should be left to the market to decide that”.—[Official Report, 13/12/2016; col. 1229.]

Again, that is progress, which we very much welcome.

The big question is, therefore: do we really need transitional arrangements? We on these Benches see absolutely no need for transitional arrangements of that kind. The Government talk about additional burdens with regard to adapting to new requirements. The IP consultation on transitional arrangements, which took two years, has closed, but transitional arrangements are completely unnecessary. The public service broadcasters already have a number of contractual arrangements for channel carriage in place with Virgin, parts of which can form a starting point for contractual discussions regarding the PSB channels. PSBs already buy the rights for retransmission of their PSB channels on the “traditional” cable platform, so there should be no difficulties with the other underlying rights-holders. Both sides have had plenty of time to prepare for a negotiation. Delay will simply increase the loss to the UK’s PSB system. As we in this House know, the issue has been in discussion for many years; I think the PSBs first wrote to the Intellectual Property Office in 2008 to ask for the repeal of Section 73. We have spent a huge amount of time discussing it, but the industry has also spent time and money in litigation since then. We know that TVCatchup has made rather a lot of money on the back of PSB content during that period.

Repealing Section 73 as soon as possible will give PSBs the certainty to continue to invest. That is the tenor of this amendment, and I very much hope that the Government will accept it and repeal Section 73 without delay, so that the beneficial consequences I have outlined will occur. I beg to move.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees 6:15 pm, 2nd February 2017

I must advise the Committee that if Amendment 73 is agreed to, I cannot call Amendment 73A by reason of pre-emption.

Photo of Viscount Colville of Culross Viscount Colville of Culross Crossbench

My Lords, I declare an interest as a director and producer of television programmes for public service broadcasters. I have put my name to Amendments 73 and 235 because I want the public service broadcasters in this country to benefit as soon as possible from the repeal of Section 73. I also support Amendment 73A, which seems a very sensible use of any money the PSBs might garner. The question of whether there should be a transitional period after the repeal of Section 73 seems to revolve around the issues of whether underlying rights need to be worked out as part of the retransmission negotiations and whether it will take time to introduce a new structure for negotiating licensing arrangements between PSBs and cable providers.

At the moment, all channels, including the PSB channels, routinely buy the rights for “traditional” cable retransmission if they anticipate content being carried on cable, so rights should not be a problem. Therefore, any negotiations will focus on the licensing arrangements between the PSBs and the cable providers. As there is already a structure in place for the licensing arrangements of the PSBs’ non-core digital channels, this surely cannot be an excuse to put off the introduction of a similar framework for the core channels the moment Section 73 is repealed. I, too, am saddened by the extraordinary amounts of money that seem to be made by the streaming catch-up websites, such as TVCatchup and FilmOn. The litigation appears to suggest that millions of pounds has been made by these websites and therefore lost by the PSBs. The sooner we can stop that loophole, the better.

There is a genuine need to give extra financial support to the PSBs in this country. As the noble Lord, Lord Clement-Jones, said, they are the major customers for original UK content in all genres. They are threatened by the success of BSkyB and, in the BBC’s case, threatened with a 20% cut in funding as it takes on the burden of the concessionary TV licence fees. The noble Lord, Lord Clement-Jones, said that huge amounts of money would not be made by the repeal. However, the 2013 NERA report in the US noted that the free-to-air American broadcasters received $3.3 billion in retransmission payments, while the fees accounted for less than 3% of the cable operators’ cost. Therefore it seems that while UK PSBs will be able to raise extra money from new retransmission fees to invest in new content, the repeal will not have much impact on the price charged to the viewer. The removal of Clause 29(3) and the rapid introduction of the repeal of Section 73 will benefit both the PSB content providers and the creative industries across this country.

Photo of Lord Black of Brentwood Lord Black of Brentwood Conservative

My Lords, I should like to say a few words in support of Amendments 73 and 235, to which I have added my name, and in doing so draw attention to my media interests as listed in the register. Like the noble Lord, Lord Clement-Jones, whose summary of the issues was excellent and which I wholeheartedly endorse, I warmly welcome Clause 29 and the Government’s decision to scrap Section 73, but I urge them to get on with it straightaway rather than having any form of transitional period, as time really is of the essence.

There is a good reason for that. No one can be in any doubt about the speed of change right across the media. A technological tsunami is overwhelming all those involved in content production, while the pace of development in the sector is relentless and punishing. It is the clear responsibility of any Government that believe in the creative economy—and this Government certainly do—to do all they can to support them through it, in this case by allowing the commercial television sector to invest more in world-class content. The question of retransmission fees is one where the Government can be a real help or, indeed, a real hindrance.

The legislation that is being repealed is nearly 30 years old. When it was put on the statute book, the fax machine was a technological novelty and there is simply no rationale for it continuing a day longer than it has to. Like the noble Lord, Lord Clement-Jones, I cannot see any reason for there to be a transitional regime, especially as all those involved have had fair warning of something which, as he said, we have been discussing since 2008. A further delay of up to two years is a lifetime in the creative industries and Section 73 is doing real harm now. If we are committed to a successful commercial public sector broadcasting industry and want to see investment in brilliant content, we should make sure that Section 73 goes as soon as the ink is dry on this legislation. Any law that is out of date and doing positive harm should go straightaway and not linger. It would be a real boost right across the whole of the UK’s creative economy and ensure that it gets an immediate benefit from this very important Bill.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, this has been a good debate on a topic that has been well rehearsed in this House. I have stood at this Dispatch Box and in the Moses Room trying to support the Government in their attempts to get to the root of this issue over a number of years and I sense that we are reaching the end of a journey. At this stage I am not opposing the decision by the Government that is reflected in the Bill to remove Section 73, but when the noble Baroness responds I hope she will be very clear about some of the thinking behind it. I do not think the issue is as uncomplicated as some other contributors to the debate have said.

In the first place, I understand that the primary reason is the abuse that has been exercised by non-cable operators in recent years, referred to by the noble Lord, Lord Clement-Jones, in relation to using Section 73 to try to gain access to PSB material for retransmission on iPad and other devices, but not on cable. Obviously, the review carried out by the Government was important, but the conclusions seem to reflect the fact that the thinking is still that the “must offer, must carry” provision will interpose itself into any negotiations about value. That is because if you must offer and there is a “must carry”, that will not make it a free and open negotiation about what the price should be. So I shall be interested to hear what the noble Baroness thinks. I understand that the Government have decided that although the repeal should go ahead, it should not result in significant fees flowing from cable operators to PSBs so, as I say, I should like to know what the thinking is on that.

While I agree with the way the Government are going forward, I worry about the risk of blank screens. If negotiations are to take place but result in a failure to agree, a very large number of people who have signed up in good faith to cable channels might not be able to watch the programmes that primarily drove them to sign up; that is, those of the PSB channels. In that sense it is important that we get absolutely the right story on that.

Our Amendment 73A, which I am delighted to hear is supported by the noble Viscount, Lord Colville, the feeling is that if money is to be paid for carrying this material, it is important that it should be recirculated into original British production and not used simply to repay shareholders and others.

Photo of Baroness Buscombe Baroness Buscombe Baroness in Waiting (HM Household) (Whip) 6:30 pm, 2nd February 2017

My Lords, I thank all noble Lords who have taken part in this important debate on the issue of retransmission fees. A number of noble Lords have tabled amendments urging the Government to get on with the repeal of Section 73 as quickly as possible.

The Government, through the Intellectual Property Office, consulted on the technical aspects of the repeal, including on the question of a transition period. The Government will, hopefully very shortly—and I say that with some strength—be publishing their response to this consultation, and I believe that the noble Lords will find this response enlightening and helpful. I therefore suggest that we return to this issue on Report, where I can fully set out the details of how the repeal will be conducted.

The noble Lord, Lord Stevenson, also tabled an amendment that would require any new fees which may flow to the public service broadcasters to be reinvested in original British content. I believe it is premature to legislate on this issue. We need to see how this new market develops after the repeal of Section 73. The British broadcasting landscape, with its steady flow of high-quality output, is envied around the world. The public service broadcasters are already pulling their weight here and face content requirements set by Ofcom. I do not believe that it would be necessary or desirable to legislate in this area that works so manifestly well for British audiences.

Clause 29 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—retransmitted by cable is not infringed where the broadcast is receivable in the area in which it is retransmitted. In effect, cable TV platforms are currently not required to provide copyright fees in relation to the core public service broadcaster channels. Last year, the Government consulted on the repeal of Section 73 and the balance of payments between public service broadcasters and TV platforms. The conclusion reached was that Section 73, as noble Lords have said tonight, is no longer relevant.

Today, there are a wide variety of platforms which ensure that virtually everyone in the UK is able to receive public service broadcasts. Following digital switchover, completed in 2012, digital television services are now available for over 99% of consumers through a combination of digital terrestrial television, satellite and cable platforms. The cable market has now moved from a large number of local providers in the 1980s to one big provider and a few—very small—local platforms, and from 130,000 subscribers to over 4.5 million to date. The Government are satisfied that the objective of ensuring that public service broadcast 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.

Moreover, the repeal of Section 73 will close a loophole used by providers of internet­based live streaming services of broadcast television programmes. These providers are relying on Section 73 to exploit PSB content by retransmitting channels and selling advertising around the service, without any benefit flowing to the PSBs.

I hope that, on that basis, noble Lords will feel able to withdraw their amendments.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I thank the noble Viscount, Lord Colville, and the noble Lord, Lord Black, for their comments and support for these amendments.

The noble Viscount, Lord Colville, talked about underlying rights and of course, there should not be any anxiety about whether these have been obtained sufficiently for retransmission. Channel 4 tells us that it has a multiyear contractual arrangement in place with Virgin Media for which all the rights are cleared, so there is no impediment. The noble Viscount also made the point that the money involved in retransmission fees is a large amount for public service broadcasters but relatively small for cable operators. That is another factor.

The noble Lord, Lord Black, stressed the point about time being of the essence. I am delighted that the Minister responded to that, because we are in a context where the creation of world-class content to be competitive on the world stage could never be more important. He described further delay of two years as being a lifetime in this industry. That is absolutely true.

In the circumstances, and compared with many ministerial responses, I thought the Minister’s response extremely positive. I do not think I have ever had such a tantalising response about revealing all on Report. That is quite something.

I may be getting this wrong and the Minister can correct me, but I assume there will be some sort of revelation on Report about the timetable. I am perfectly happy to table a probing amendment to get the full benefit of her response on timing, but if she is going to table an amendment that would move things towards the kind of timing we are looking for in this amendment, as a result of the technical consultation finally being determined by the IPO, I will not quarrel with that. I am very happy to suspend judgment, but a nod is as good as a wink in Committee. If the Minister would like to say anything further about what precisely she meant by what she might do on Report, I am open to suggestion.

Photo of Baroness Buscombe Baroness Buscombe Baroness in Waiting (HM Household) (Whip)

My Lords, I will not be tempted at this stage, but I repeat that, when we get to Report, I think noble Lords will find my response enlightening and helpful.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, that is even more positive than the first time around. In those circumstances, we will suspend judgment. I beg leave to withdraw the amendment.

Amendment 73 withdrawn.

Amendment 73A not moved.

Clause 29 agreed.

Amendment 74

Moved by Lord Clement-Jones

74: After Clause 29, insert the following new Clause—“Remote e-lending(1) Section 5 of the Public Lending Right Act 1979 (citation, etc.) is amended as follows.(2) In subsection (2)—(a) in the definition of “book”—(i) after “(an “audio book”)” insert “which has been licensed by the publisher on agreed terms for library lending”,(ii) after “(an “e-book”)” insert “which has been licensed by the publisher on agreed terms for library lending”;(b) in the definition of “lent out”, for paragraph (b) substitute—“(b) includes communicating by means of electronic transmission to a place other than library premises”.”

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I am very conscious of the time and I will try to be as brief as I can. The amendment is designed to amend the Bill to extend the public lending right to remote e-book lending.

The way we access books is increasingly changing as technology offers new ways to access the written word. Libraries are now lending many e-books: 2.3 million e-book loans were made in 2015 alone and the figure in 2016 was more than 3 million. But authors are not being remunerated for those loans, despite the Government having committed in principle as long ago as March 2013 to extending PLR payments to e-books when a suitable opportunity arose.

The public lending right allows authors to be fairly paid for each loan when their work is lent through public libraries. It is designed to balance the social need for free public access to books against an author’s right to be remunerated for the use of their work. The scheme provides authors with a modest payment of around 7p each time one of their books—written or audio—is borrowed from a public library. More than 22,000 writers, illustrators, photographers, translators and editors receive PLR payments each year under the Public Lending Right Act 1979 and subsequent amendments. There is a minimum payment threshold of £1 and a maximum of £6,600. Although this does not replace the royalties authors would receive if their book had been purchased by each borrower, PLR provides a significant and much-valued part of many authors’ incomes, particularly for authors whose books are sold mainly to libraries and for those whose books are no longer in print but are still being read.

While the Digital Economy Act 2010’s extension of PLR to audiobooks was a useful and overdue reform—I remember well when we passed it—the extension to on-site loans of e-books was nugatory, as no such loans are made. By contrast, remote e-book lending has increased significantly and is increasing much faster than physical lending, particularly since reduced opening hours and the regrettable extensive library closures that the Government have taken no action to prevent mean that it is more and more difficult for readers physically to visit a local library.

Writers are keen to see the Government develop the public lending right to reflect modern media. I should stress that even though the precise wording of the amendment is not agreed across the board, its spirit is strongly supported by a range of bodies, including the ALCS, CILIP, the Booksellers Association, the Society of Authors, the Association of Authors’ Agents, the SCL Leading & Managing Public Libraries and the Publishers Association. So it has extensive support in principle.

The amendment would amend the Digital Economy Act to ensure that remuneration is received by writers for remote e-lending at the same rate per loan as for physical books. It is vital that authors receive remuneration for loans of their works, irrespective of format. The principle of remuneration that enables authors to work should not be unfairly obstructed by technical and technological change. I know that Europe is not fashionable in some quarters, but a recent opinion of the Advocate-General relating to a case on rental and lending in respect of copyright works currently before the Court of Justice of the European Union supports this view. He said:

“The lending of electronic books is the modern equivalent of the lending of printed books”.

This removes the Government’s previously expressed concern that such a change may not be compatible with the copyright directive—it clearly is.

The ability to access e-books facilitated by public libraries is a service valued by the public, and remuneration for public lending is a requirement of European law under the rental and lending directive. The current situation where millions of e-book loans receive zero remuneration is unlawful and creates significant prejudice to writers. It also places libraries in a position where works lent regularly may infringe authors’ rights.

The changes needed are achieved simply by taking measures to amend the Digital Economy Act 2010 by removing Section 43(2)(b), which sets remote loans outside the definition of lending under PLR. It would also be necessary to add a sentence to make sure that the commercial market was protected and that e-lending was put on a par with physical lending. The jargon in the trade, used by the Sieghart report which recommended that PLR be extended to remote e-lending, is “frictions”—which basically are the conditions under which digital books can be loaned to one reader at a time, just as with a physical book.

Other conditions are that a digital copy of a book can be loaned only for a limited period and that digital copies of books should be deemed to deteriorate, ensuring their repurchase after a certain number of loans. Those conditions are broadly accepted by the industry, but there was no desire to incorporate them in primary legislation so that they might be taken on board in the commercial arrangements made between publishers, authors and libraries.

The cost of this measure would be negligible, but the principle is extremely important—as was recognised by the Government in 2013. I hope that they will take this on board, because it is long overdue. It would do proper justice to our authors and writers. I beg to move.

Photo of The Earl of Clancarty The Earl of Clancarty Crossbench

My Lords, I apologise for not having spoken at Second Reading. I want, however, to speak to Amendment 74, to which I have put my name, and to Amendment 79B.

I very much support Amendment 74, in the name of the noble Lord, Lord Clement-Jones, although I am delighted that there is now a firm agreement between the interested parties—including CILIP, ALCS and the Society of Authors, among others—for an amendment which is almost but not quite the same as Amendment 74. I hope that this tweaked amendment, which clarifies the nature of what is being loaned, or an amendment equally acceptable to all parties, can be brought forward by the Government and accepted on Report.

The last study into earnings commissioned by ALCS, published in 2015, found that the median income for professional authors was only £11,000, with authors sometimes earning nothing in a year. PLR, while being a modest payment—as the noble Lord, Lord Clement-Jones, has pointed out—of about 7p a book, can therefore be a significant part of the income for many authors, as well as illustrators, photographers, translators and editors. The carefully set cap of £6,600 on individual earnings from PLR means that there is a fair distribution of the pot without inordinate benefit for the high earners. Also, in his 2013 review on e-lending William Sieghart says that,

“for writers, the extension of PLR to the digital and audio world would allow for much more accurate financial recognition for the borrowing of their books”.

PLR is a legal and, I believe, a moral right, which in the modern age should be applied to the digital format as much as the physical. Particularly considering that over 3 million e-book loans were made in 2016 alone, removing the anomaly of the absence of PLR for the remote e-lending of e-books and audiobooks cannot come a moment too soon. Indeed, Matt Hancock said in the other place on 28 November last year that the Government will,

“bring forward legislation as soon as possible”.—[Official Report, Commons, 28/11/16; col. 1341]

This followed the European Court of Justice’s ruling that e-lending is allowable under the “one copy, one user” principle, removing a final barrier to a go-ahead. This is the perfect opportunity to introduce PLR for e-lending, and in this Bill an appropriate place to do so. The cost of introduction would be low. There will be no better chance, so I hope that the Government will support this.

Amendment 79B would remove a parallel anomaly. The Society of Authors rightly argues that e-books should be VAT exempt in the same way that print books are—for the reason that VAT on either would be, or is in the case of e-books, a tax on knowledge. The Society of Authors say that VAT on e-books is,

“a barrier to education and research, to adult literacy and to book sales in general”.

Adult literacy, in particular, urgently needs to be encouraged in every way possible, and this is one way to do so.

Photo of Lord Arbuthnot of Edrom Lord Arbuthnot of Edrom Conservative 6:45 pm, 2nd February 2017

My Lords, conscious as I am of the time, I shall simply say that I hope that the Minister will be able to respond positively to this for the very good reasons given by both noble Lords who have just spoken. It is a matter of natural fairness; it reflects the convergence issues which have been spoken about in this Committee already; it reflects the technological tsunami that my noble friend Lord Black has spoken about; and it reflects what the Minister Matt Hancock has said in another place.

Photo of Lord Maxton Lord Maxton Labour

My Lords, I too support this amendment, but—there is a “but” to it—there are of course two types of e-books. There are those physical books which have been transferred over and copied into an e-system, but there are also increasingly a number of authors who write an e-book directly; they do not publish them at all in written form. I am not sure that this amendment takes account of the fact that there are increasingly these two different types of e-books.

Secondly, the fact is that Amazon which, rightly or wrongly, is the major contributor to the e-book revolution—I have a Kindle in my own pocket, which I read, and I have never picked up a book since I bought it—does not take part in the British national library system at all, as far as I am aware, although it does in America. Increasingly, Amazon is setting up its own lending system, where you can borrow an e-book from Amazon for a relatively small sum of money. You can only borrow it for three or four weeks at a time, but you can borrow it directly from Amazon. I have just a quick question to the Minister. Is there any progress in terms of Amazon becoming part of the system? I gather that one of the problems is that it uses a different type of e-book to the one that is used by the public libraries in this country.

Photo of The Duke of Somerset The Duke of Somerset Crossbench

My Lords, I intervene briefly to support this amendment, which seeks to rebalance the need for public access to all types of books against authors’ rights to some modest payment for their work. The PLR gives authors a small income where their books are sold mainly to libraries. The main point is that the PLR was extended to audiobooks in the 2010 Act for on-site loans but the need here is to extend it to remote loans, an area quickly increasing in popularity where items are downloaded to a computer situated away from the library.

We heard that zero remuneration is now illegal after the European Court of Justice ruling last November, so I expect that the Minister will have no difficulty in accepting this simple but important amendment. However, that ruling also drew attention to the difficulty of ensuring that only one copy is downloaded and that after expiration of the lending period no further listening can be enabled. Could the Minister indicate how this might be enforced or will it probably just be ignored?

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, briefly, I apologise to the House for the brevity of our Amendment 79B. We ran out of time and did not have the skills or ability to write an amendment that should properly have been in the Budget. We also lacked the temerity to do that. It is an aspiration not a probing amendment; it does not even qualify for that. It is a flag-waving exercise as we ought to think harder about the tax on knowledge. As the noble Earl, Lord Clancarty, said absolutely rightly, it is ridiculous that we believe that books in physical form somehow transmit knowledge and are worthy of having a VAT-exempt regime but when they are downloaded they must be subject to VAT. That seems unfair. We support Amendment 74 in the name of the noble Lord, Lord Clement-Jones, and look forward to hearing the responses from the noble Baroness.

Photo of Baroness Buscombe Baroness Buscombe Baroness in Waiting (HM Household) (Whip)

My Lords, I thank all noble Lords for this important debate and for this proposed new clause. It seeks to extend the public lending right to include remote lending of e-books and e-audiobooks by public libraries. This would allow authors of these to receive payments from the public lending right fund, as they do for public lending of printed and audiobooks. It would also amend the definitions of e-books and e-audiobooks so that these works could be lent by public libraries only if they have been licensed by publishers on agreed terms for library lending.

The Government support recognising authors for e-lending by libraries. We committed in our manifesto to work with libraries to ensure the public can access e-lending, and to appropriate compensation for authors that enhances the public lending right scheme. As the Minister in another place confirmed, we intend to legislate to extend the public lending right to include remote e-lending. In response to the noble Lord, Lord Maxton, I say that our intention is to include all e-books regardless of technology.

This proposal is supported across the sector, including by libraries, authors, publishers and booksellers. I am therefore pleased our commitment is also supported by noble Lords in this House. Public libraries increasingly provide e-lending to support reading and literacy in response to the needs of their communities. Most library loans remain of printed books, with over 200 million such loans in Great Britain in 2015-16—so not everyone has given up the printed word, as has the noble Lord, Lord Maxton. However, e-lending is growing, with 4 million e-book and 1 million e-audiobook loans in Great Britain in the same period.

In considering how to legislate to extend the public lending right to include e-lending, we are engaging with representatives of authors, libraries, publishers and booksellers to understand their views. A number of these have raised points that need careful thought before the Government table their own clause.

One point made by representatives of authors and publishers is that an amendment to the legislation should include protections for the commercial market. The proposed new clause seeks to do this by specifying that e-books and audiobooks could be lent out from public libraries only if they had been licensed by publishers on agreed terms for library lending. However, others had raised concerns about whether such a provision might impact on public libraries’ ability to acquire and lend e-books.

This is an important issue. Officials have therefore met sector representatives to allow us to consider carefully the views and decide on the appropriate way to proceed with our commitment. I understand that the discussions in recent days have been promising and that the respective parties have been considering whether they can agree a settled view on the issues. We want to continue to work together to support a strong book sector that helps promote opportunities for reading and learning by the public, so we intend to table our own proposals for the necessary legislative changes as soon as possible. We will carefully consider these views in deciding how to proceed. I hope therefore that noble Lords will not press this proposed new clause.

Amendment 79B requests that e-books be exempt from VAT. Issues affecting taxation are a matter for the Chancellor of the Exchequer. It would therefore be inappropriate to include this amendment in this Bill. There are other difficulties, however, in accepting such an amendment. VAT is an EU-wide tax and is applied by member states within agreed structures. While we remain in the EU we are bound by our international obligations. This amendment would cut across those obligations in respect of VAT. EU VAT law, agreed unanimously by member states, currently specifically requires the standard rate to be applied to all electronically supplied services. This includes e-books, which are services, not goods. Because of this, if we accepted the amendment we would be in breach of our obligations. To make the change proposed in this amendment a change of EU law will be necessary, supported by all 28 member states. While a proposal is currently on the table there have been a variety of different reactions from member states and no unanimous agreement. I hope that the noble Lord will therefore not move his amendment.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I thank those who have taken part in the debate. The noble Earl, Lord Clancarty, has throughout been a doughty campaigner for the arts and for authors. I also thank the noble Lord, Lord Arbuthnot, for his contribution, and the noble Lord, Lord Stevenson, in particular for an amendment that we would all support if only it were practical. Who knows? There may be some silver lining to Brexit at the end of the day. I do not think that that is quite substantial enough for many of us but it is certainly a little glimmer. I thank the noble Duke, the Duke of Somerset, as well. Of course we always bow to the superior technological knowledge in these matters of the noble Lord, Lord Maxton. I agree with the Minister: I am still an aficionado of the printed book, and am one of the digital book. There is a place for both in one’s library.

I welcome what the Minister said. In a way she performed a political ju-jitsu on us by thanking us for supporting her government line on this, which I thought was magnificent. I accept that it is in the Conservative manifesto. The Minister in the Commons pledged to come up with a solution to this. All that we have done really is to give the Government a bit of a push today. This wording is not the agreed wording. Agreement was reached, at the final hour—not in time to include in Committee today—between the various parties involved, particularly CILIP. As the noble Earl, Lord Clancarty, said, I am delighted that there has been agreement reached between the parties and the wording about which I have been told will perhaps be the wording to which the Minister will return, having performed her ju-jitsu at Report. Perhaps I have her in an armlock now to come back at Report with a suitable amendment. In the meantime, I beg leave to withdraw the amendment.

Amendment 74 withdrawn.

House resumed.

House adjourned at 6.59 pm.