Automated and Electric Vehicles Bill - Committee (1st Day) (continued)

– in the House of Lords at 8:36 pm on 9th May 2018.

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Clause 4: Accident resulting from unauthorised software alterations or failure to update software

Amendment 22 not moved.

Amendment 23

Moved by Lord Borwick

23: Clause 4, page 3, line 12, leave out paragraph (b) and insert—“(b) the manufacturer of the automated vehicle (or owner or registered keeper retrofitting or modifying the vehicle to become an automated vehicle) failing to ensure that latest safety-critical software was automatically installed before that vehicle was moved from a parked and deactivated position.”

Photo of Lord Borwick Lord Borwick Conservative

My Lords, as we go through this Bill, it is remarkable how many amendments overlap each other. It was not necessarily apparent at Second Reading, but we have all from our different directions come out with the same answers. One of them is in the update of safety-critical software.

This Bill seems to have taken some time to go through another place and then to arrive here. Since we first heard about it, it has changed its name on various occasions. It has had aviation included and then taken out. During this period—which I have variously heard has been two or five years—things have changed. The Bill is written as if it is the job of the insured person to update the software. That might have been true five years ago, but nowadays the software is updated automatically. We are, after all, talking about an automated vehicle—the software should be updated automatically.

I believe that the drafting, as we have it, of Clause 4(1)(b) should be changed to the wording in Amendment 23. It is perfectly easy to programme the software so that the vehicle will demand itself to be updated and will not move unless it is done. Given that this is safety-critical software, we ought to make certain that this vehicle itself has enough ability to know whether it is up to date. It can easily do that with modern software systems. So making certain that the vehicle updates itself before it moves from wherever it is in a parked and deactivated position will be perfectly easy. Nowadays, with the design of the Tesla vehicle, all the updating is done automatically—sometimes without the knowledge of the owner or driver. It is easy for the manufacturers to do and a much more modern way of looking at it than the drafted wording in this Bill. I beg to move.

Photo of Lord Geddes Lord Geddes Deputy Chairman of Committees, Deputy Speaker (Lords)

The noble Lord should speak to the amendments.

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury)

You are quite right. I am a pedant as well, and proud of it. I shall start again.

I rise to speak to Amendments 25 and 28 in my name. The first concerns insurance, which is what the Bill is supposed to be about. As the noble Lord, Lord Borwick, has said, because of the time this Bill has been in gestation, the language is not perhaps as we should like. It has effectively defeated me. If you look at Clause 4, for instance, we have:

“an insured person … an insured person who is not the holder of the policy …someone who is not insured under the policy in question”, and then we have, simply, “that person”. I got lost working my way through it.

What this amendment tries to do is to protect the innocent party. What we need from this Bill is that, when an innocent party is injured or their property is damaged by an automated vehicle, they get the money without quibble and all the legal battles take place between the insurance company and whomever may be responsible for the event. It may be that the Bill, as drafted, achieves this. I shall be happy if the Minister tells me that, provided she accompanies it with a plain language explanation as to how the clauses and subsections get us to that point. I do not think this Bill is going to win a crystal mark for clear English.

The purpose of this amendment is to protect the victim or damaged party. We must be clear that the insurance system put in place for automated vehicles is designed in such a way that it does not cause any delay or question over the payment of compensation to the victim, if there is any dispute between the insured person and the insurance company over responsibility for the accident. As the technology becomes more complex, so too could the decision about who is to be held responsible. I understand that this Bill aims to set out the liability of insurers for automated vehicles. So I am seeking clarity from the Minister on this point to ensure that the victim of any potential accident is at the front of our minds when we are discussing these issues.

I shall now speak to Amendment 28. Under the current drafting of the Bill, people would be able to drive their automated vehicle on the roads without having the latest updated software, which could lead to safety risks. The clause would require the Government to introduce regulations requiring automated vehicles to be up to date in order for their automated functions to be used. If a vehicle had a serious mechanical fault that could endanger the driver and others, we would not allow it on our roads. It makes sense that an automated vehicle would similarly present an increased safety risk if its operating system were not updated.

Without the new clause, people would be able to take an un-updated vehicle on to our roads, either by accident or on purpose. Insurance companies could surely factor the increased risk into premiums, which would be higher as a consequence. Most people with smartphones or computers are likely to have software that prevents them from being used until it is updated. There does not seem to be any reason why a similar mechanism could not be included in automated vehicles. By preventing un-updated vehicles from being used, we would achieve safer roads and cheaper insurance.

The primary benefit of AVs is that they reduce the likelihood of human error, yet one of the few areas where scope for human error remains—the responsibility for ensuring that software is updated—would not be addressed even though it would not be difficult to do so. The new clause would address that.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport) 8:45 pm, 9th May 2018

My Lords, it seems that the Government have not thought widely enough about the issue of how software operates these days. Certainly, as the noble Lord, Lord Borwick, said, there is an element here of the concepts being slightly out of date.

My car’s software is automatically downloaded. We became aware a few months ago that it had been updated and now, no matter where we went, it told us that we did not have enough electricity to get there—which is taking range anxiety to its extreme. The problem is that, two visits to the repair shop later, they still have not been able to fix the problem. I would be pretty upset if this were an automated car and people said it was my fault when clearly I had faulty software.

It is also important to remember that, even though software might be automatically downloaded, individuals still have a responsibility, and that responsibility is not to interfere with it. It is not beyond imagination that software on automated cars might impose a maximum speed of 90 miles per hour so that you could not go any faster. It would not be impossible for someone who was pretty clever at interfering with software and writing their own to override this. Clearly there needs to be something in the Bill that expresses the fact that owners, drivers and users of these vehicles should not interfere with the software.

My point is that the Government need to rethink this, about a year or 18 months on from when it was originally thought about, and look at it from the modern perspective of the issues that we are all aware of now in relation to software.

Photo of Lord Berkeley Lord Berkeley Labour

My Lords, these are interesting amendments. When my noble friend Lord Tunnicliffe was speaking to Amendment 25 and mentioned the word “victim”, I began to think, “Well, who is a victim? Can a car be a victim, or only a person?” I think it is too late tonight to start a long debate on that, but perhaps the Minister could think about that some time.

I turn to Amendments 23 and 28. My worry about Amendment 23 is: what happens if the manufacturer has gone bust? In other words, the manufacturer does not actually have to be the person who supplies updates; it can be anyone. My gut feeling is that my noble friend Lord Tunnicliffe’s Amendment 28 is better because it just says that the vehicle may not be operated unless the application software relating to the vehicle’s automated function is up to date. I think that would cover what Amendment 23 covers but in a better way.

What nobody has mentioned tonight, which the noble Baroness touched on, is what happens if the software does not work and you are stuck on a motorway or in a one-way street and cannot move the car? Again, I think that is a debate for another day, but I hope the Minister will have some response to the points made by many noble Lords, particularly about who updates the software.

Photo of Lord Lucas Lord Lucas Conservative

My Lords, I entirely agree with my noble friend Lord Borwick that software updates should be the responsibility of the manufacturer. They are capable of updating it, and of making it automatic that it is updated. I agree with the noble Baroness, Lady Randerson, that systems need to be better than they are at the moment. I note that my iPhone issued by this House is automatically updated with software. About two weeks ago it deleted all my telephone contacts and it resists all efforts by all our excellent people in this House to restore it to normality, because Apple takes no responsibility for this, of course. It just produces the update and there is no recourse to make the thing work properly.

In the case of automated vehicles we absolutely need to have recourse to the manufacturers, and they need to know that that is where liability for these things rests. It is their responsibility to make sure that their fleet of their vehicles on the roads is up to date and functioning as expected. This reflects back into other aspects of the Bill that we have already discussed, as to who should be allowed to make modifications and how the whole fleet of autonomous vehicles should communicate with each other.

I am also happy with Amendment 25; it is an excellent thing. I would only point out in the drafting of Amendment 28 that it refers to “public roads” whereas the Bill refers to “public spaces”. With reference to a conversation I had earlier with the noble Earl, Lord Lytton, that presumably includes the airspace above public spaces, so the Bill includes your future Amazon drone wandering along six feet above the pavement to drop your parcel over your gate. I see nothing in the Bill that excludes airborne vehicles—or indeed waterborne vehicles—so I presume that both are included in that definition of public spaces. I do not know which definition of public spaces is being referred to. The ones I can find in legislation are pretty vague and not really related to this subject, but I would assume that at the same time as thinking we are dealing with road vehicles, we are also dealing with ones that could be airborne—at least within reasonable reach of the ground.

Photo of Lord Borwick Lord Borwick Conservative

My Lords, I think I rather agree with the noble Lord, Lord Berkeley, about Amendment 28, tabled by the noble Lord, Lord Tunnicliffe, being better than my Amendment 23. It is better because the point about manufacturers going bust had not occurred to me—so putting it into the passive is a much better way of doing it.

Amendment 25 seems to be approaching a sort of strict liability basis, with the automated vehicle’s insurer responsible even if that vehicle was not responsible in any way for the accident. I refer him to the accident that was reported a couple of days ago with a Waymo vehicle in which another car went into it. It was absolutely not the fault of the automated vehicle; it was hit by a manually controlled car. In that case it would seem to be particularly unfair that the insurer of the automated car had to pay out and then recover from somebody else. That was an entirely innocent case where the automated vehicle was totally not responsible for the accident.

A lot of this will come out in due course as we learn more. It is a problem at this stage that we have to legislate to get the insurance right in an industry that is developing.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

My Lords, the provisions in the Bill will ensure that victims of an accident caused by an automated vehicle that is driving itself will be covered by the compulsory insurance in place on the vehicle. It is the intent that the victims of such accidents will get quick and appropriate compensation.

In Amendments 23 and 28 my noble friend Lord Borwick and the noble Lord, Lord Tunnicliffe, raise the important issue of safety-critical updates to vehicles. It is not the function of the Bill to provide software standards or requirements for automated vehicles. The Bill provides an insurance framework so that victims have quick access to compensation in line with existing practices, and is just one element of a wider regulatory programme to ensure that people and businesses in this country can benefit from the safe introduction of automated vehicles.

The purpose of Clause 4 is to deal with the relationship between the insurer and the insured person in certain circumstances. This addresses the point of the noble Baroness, Lady Randerson. It exists specifically to deal with the insurer’s freedom to exclude liability in the small number of potential situations where the owner needs to act to install a safety-critical software update and knowingly chooses not to install it, or the owner makes unauthorised software alterations, thus putting themselves and others in harm’s way. The clause is designed specifically to deal with that. It mirrors the situation for the compulsory insurance of conventional vehicles, where a driver would not be protected if they drove a vehicle that they knew was unsafe or not roadworthy.

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury)

Perhaps the Minister could help me a little here. If a vehicle is not insured today, and a pedestrian is harmed, say, who had no responsibility at all, my understanding is that they will get an instant payout from some sort of collective fund. Is that correct? If it is, is it the intention of the Bill to have a similar situation, including possibly defective software?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

I am pleased that the noble Lord has allowed me to address this point, because it goes to defective software. As the noble Lord said, it would be a legal requirement that all automated vehicles must be insured, but there will be instances when vehicles are driven illegally, as we see today. I will take this opportunity to clarify that the Motor Insurers’ Bureau will continue to play the same role as it does now with uninsured and untraced drivers, so that victims involved in collisions with uninsured automated vehicles will have quick and fair access to compensation, in line with conventional insurance practice. This arrangement is not currently covered in legislation nor included in this legislation; it is covered through an agreement between the Secretary of State and the Motor Insurers’ Bureau. We are discussing what changes are needed to that agreement to sufficiently and appropriately incorporate automated vehicles within the existing process.

On software updates, Clause 4 anticipates that vehicle manufacturers will want to ensure that their vehicle systems are as safe as possible for consumers. As my noble friend Lord Borwick said, we expect that most updates will be done automatically and will be the responsibility of manufacturers. This is something that manufacturers acknowledge. Vehicle safety standards, which include software, as I have mentioned before, are still being discussed at the UNECE level. The requirements for system updates form part of the international discussions on the standards that will ultimately form the basis of the type-approval process that the vehicles must pass before they are sold in the UK.

There will be robust standards in place before these vehicles arrive to market, which will include the updating of safety-critical software. I can reassure noble Lords that vehicles will have to meet these standards before they are made available on the market. I fully appreciate the noble Lords’ intention to ensure that automated vehicles’ software is up to date, so that they are functioning safely—but, as with our previous debate on standards, we do not think it is right to act unilaterally at this time.

All noble Lords, including myself, are in the same place on this. We expect that vehicles will not be deemed safe to use, and therefore will not be placed on the list and covered by insurance, unless the safety-critical software is in place. It is a complex issue; we still do not know exactly how the software is going to work. We see some good examples from Tesla and Apple, but this is part of extensive conversations at an international level, with manufacturers and other countries, to understand how best to deal with this.

Amendment 25, tabled by the noble Lord, Lord Tunnicliffe, requires the insurer to pay out first and then recover from the liable party. I hope that I can say this in plain English. Subsections (3) and (4) of Clause 4 already work with Clause 2, where the insurer has a first-instance liability to pay the injured party. I believe that Clause 2 is clear on that, and where the liabilities of insurers are when the accident is caused by an automated vehicle. I think that the current wording fulfils the intention behind the noble Lord’s amendment.

As I have said, the policy intent of the Bill is to mirror as closely as possible the existing framework for conventional vehicles. The insurer would be initially liable to pay compensation to any victim, including to the driver who had legitimately handed control to the vehicle. The insurer would then have the right to recover costs from the liable party under existing common and product law. I think that that is covered.

My noble friend Lord Lucas asked about drones. I do not actually think that they will be covered by the Bill, because of the definition in Clause 1(1) that it is,

“a list of all motor vehicles that … are or might be used on roads or in other public places in Great Britain”.

I cannot preclude the fact that there may be some kind of drone in future that may be able to travel on public roads and then move into the air, but this Bill specifically deals with motor vehicles, and we have yet to see such a drone.

On software updates, we believe that it is too soon to legislate in these areas, and we do not believe that this Bill is the right place for it. However, I reassure noble Lords that the conversation is ongoing at an international level, because we are all aware that we do not yet have a solution to it and we want to make sure that we set standards in the right place. On liability, we believe that the provisions in the Bill already provide for the policy intent behind Amendment 25. Based on that, I hope that my noble friend will be able to withdraw his amendment.

Photo of Lord Borwick Lord Borwick Conservative 9:00 pm, 9th May 2018

My Lords, I beg leave to withdraw the amendment.

Amendment 23 withdrawn.

Amendments 24 and 25 not moved.

Clause 4 agreed.

Amendment 26

Moved by Lord Lucas

26: After Clause 4, insert the following new Clause—“Right of insurer to data and control(1) An insurer may require, as a condition of insurance, that an automated vehicle transmits to the insurer when requested, at specified intervals or in real time, such data as the insurer may specify.(2) An insurer may require, as a condition of insurance, that an automated vehicle behaves in a fashion specified by the insurer on receipt of electronic instructions from the insurer.”

Photo of Lord Lucas Lord Lucas Conservative

My Lords, I beg to move Amendment 26, which has at its heart the flow of data between a driver and the insurer—but, more particularly, between an automated vehicle and the insurer. It suggests that the insurer should have the right to require data flows to be made in ways that are specified by them to support the contract for insurance. I am particularly thinking of data that might flow at the time of an accident so that the insurer can capture the full dataset at that point rather than risking it being destroyed, perhaps by a later fire or some other consequence of the accident. But we might also get a situation in which insurances flexes with the state and use of the vehicle. To go back to an aspect of my earlier Amendment 10, data flows are an important part of how we consider our relationship with automated vehicles.

Photo of Lord Borwick Lord Borwick Conservative

My Lords, Amendment 27 is a probing amendment, triggered when I first read this Bill, which happened at about the same time as the very first fatal accident in America from a Tesla vehicle, when it was it was speculated in the press that Tesla would not release the data from the vehicle because it had proprietary value to Tesla. In fact, as I understand it, Tesla released the data in due course. However, I could imagine circumstances in which the owner or manufacturer of an automated vehicle believed that the less which was found out about this accident, the better for them.

One of the greatest advantages to the insurance industry of the automated vehicles is the enormous quantity of data that will be available from them. Not only will there be the product of six or more cameras facing every single direction but all the other information picked up about speeds can and will be stored in the vehicle as it goes by. Maybe the industry would be grateful if the Minister could confirm that to delete such data would be the offence of perverting the course of justice. However, in the meantime I wanted to propose the amendment.

Amendment 30, the next one in this group, is on the question of regulations, which has already been touched on in earlier debates about standards. However, I believe that the range of aspects of automated vehicles that we have discussed this evening is very great, and there is clearly a lack of knowledge on the part of noble Lords such as myself, not just about the sheer detail of this but about the industry and what is coming on. So many different things are happening, and each of them is an outstanding opportunity for the country. We need a legislative background that can cope with completely new circumstances, not only prohibiting things that are brand new and thoroughly bad but permitting things which are brand new and have not been invented yet.

On the suggestion that we can revert to new primary legislation, given the number of years it has taken to develop this legislation and the constant pressure on legislative time in both Houses, it would be wise for the Government to take regulatory powers to come up with new regulations to deal with new matters. Therefore, these limited new regulatory powers are proposed in Amendment 30.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport)

My Lords, I take this opportunity to ask the noble Lord, Lord Lucas, for a little more information about his intention with regard to this amendment on transmission of data. One can see advantages to that flow of data, and one knows that it would naturally take place, because technically it can take place. However, there are huge issues about privacy. I am not entirely sure that I would want—to grasp an example from the air—information to be in someone else’s hands about the fact that I go swimming every week, so that suddenly a department store starts trying to sell me swimsuits every day of the week. I do not want that unnecessary invasion of my privacy. There could be very much more sensitive issues. I could be visiting a hospital and wanting to keep my medical condition private—that kind of thing. There have to be rules about what this data is used for, how it is kept, and so on. Is it the Minister’s view that current legislation on data and privacy going through this House would cover that sort of issue, or will we need other legislation to cover it? Does the noble Lord, Lord Lucas, envisage a sort of situation akin to the black box that some drivers use now to reassure their insurance company that they are driving safely and within speed limits, and so on, which, in return, keeps their insurance premiums down? I am interested in that point.

Finally, I will make a comment about Amendment 30. I am not usually keen on giving the Government delegated powers but there are some sensible limits on this here. I understand that we are envisaging a future; we cannot predict every requirement accurately and we cannot wait around on every occasion for primary legislation—so, as far as that goes, it seems a sensible proposal to me.

Photo of Lord Lucas Lord Lucas Conservative

I share the noble Baroness’s admiration for my noble friend’s Amendment 30, which puts things in a very simple and clear way and is well worth having in the Bill. As far as the insurance amendment is concerned, I was looking for a way within the narrow confines of the Bill of illustrating the need for the Government to go further now. Even dealing with the subject of insurance, there are matters that need to be discussed now which we may need to bring into secondary legislation to enable things to operate properly. We should make provision for these things to be done in the Bill. I do not have answers to the questions that the noble Baroness has asked. I imagine that, in an automated world, having a dump of the data for the quarter of an hour before an accident and through as far as the machine keeps recording would be a useful way of establishing what happens during an accident; it really ought to be something we are thinking about, even in the narrow confines of this Bill.

I turn to what my noble friend said about motor vehicles. I presume the Bill will somehow, through the atmosphere of legislation, pick up the definition of motor vehicle from Section 185(1)(c) of the Road Traffic Act 1988:

“a mechanically propelled vehicle, intended or adapted for use on roads”.

However, I think the Bill uses motor vehicle in a slightly different sense, as vehicles that,

“are or might be used on roads”— that is okay so far—

“or in other public places”.

Clearly, we have a different definition of motor vehicle here from the one in the Road Traffic Act. Therefore, we are somewhat adrift; we are dealing with things that might be used in public spaces and therefore presumably might interact with footpaths, crossing all sorts of land; they could include the sort of thing that mows golf courses too, which might very well go automatic, or the farming equipment my noble friend was referring to. If you have a footpath across the land and one of these vehicles is trundling across it, it is occupying a public space at that point; we are encompassing a wide range of vehicles beyond the definition in the 1988 Act. This might be something worth resolving at some stage.

Photo of Lord Young of Cookham Lord Young of Cookham Lord in Waiting (HM Household) (Whip), Lords Spokesperson (Cabinet Office)

My Lords, the co-pilot is in charge of this group of amendments. As my noble friend Lord Lucas said, our transport networks are becoming increasingly digital. The regulation of the collection, sharing, use and deletion of data will be vital. Several stakeholders, including the insurance industry, have highlighted the need to ensure access to automated vehicle data, not least because it will help determine who is liable in the event of an accident, as my noble friend has just said.

While we certainly recognise the potential value and use of data, especially for vehicle insurers—and the need to look at the subject of data generated from automated vehicles—as with many previous amendments we do not consider that now is the correct time to start making provision for access for insurers, as suggested by my noble friend in Amendment 26. Nor do we believe that this is the right time to consider new offences regarding the deletion of data, as suggested by my noble friend Lord Borwick in Amendment 27. However, I shall seek to give both noble Lords some reassurance.

It is likely that the international UNECE regulations underpinning the type approval system, which allows vehicles to be sold in the UK, will require the use of a data collection and storage system in automated vehicles. In response to my noble friend’s Amendment 26, it is of course important that insurers have access to the data they need in order to establish liability for any accident. I hope that he finds that reassuring. However, to balance the needs of industry and consumers, we still require detailed engagement on which parties will require access to this data and how it should be shared. It is clear that some data collected by automated vehicles, such as location information, may constitute personal data and will therefore need to be handled appropriately—a point made by the noble Baroness, Lady Randerson. Therefore, there is a need to balance the personal privacy of automated vehicle users with the public good, and this is an area that will most likely need to be resolved internationally to help ensure consistent standards.

I assure noble Lords that the Government, like others around the world, are investing heavily in automated and connected technologies that will assist in providing evidence of what minimum data recording and sharing requirements might be needed. At a very minimum, the vehicle should store information about who or what was in control of the vehicle at the time of a collision. I hope that that addresses Amendment 27, in the name of my noble friend Lord Borwick. Further work must be carried out on an international level before we start introducing legislation for offences, but I hope that he will be reassured by the fact that officials from the Department for Transport are working within the UNECE to ensure that international vehicle standards support connected and autonomous vehicle technologies, including on data recording, storage and retention.

On my noble friend’s specific concern, we will of course need to give proper consideration to the need to avoid data deletion, and this is something that will be discussed as part of our ongoing work. The deletion of data could already be unlawful depending on the circumstances and if the accident is subject to legal proceedings.

The Department for Transport will continue to participate fully in these international fora, equipped with the views of the UK manufacturing and insurance industries and with evidence from UK trials currently taking place and the first automated technologies that are coming to market.

With regard to data in general, I reassure the noble Baroness, Lady Randerson, that the House has recently debated the Data Protection Bill, which is currently in another place. That Bill will modernise the data protection laws in the UK to make them fit for purpose for our increasingly digital economy and society. It will ensure that modern, innovative uses of data can continue, while at the same time strengthening the control and protection that individuals have over their data. It is those terms, along with the international standards for vehicle data, that we will have to consider when we legislate domestically—but now is not the time to do so.

Turning to proposed new subsection (2) in Amendment 26 on the right of the insurer to control the behaviour of an automated vehicle, we do not think that it would be appropriate for insurers to set the behaviour of automated vehicles. The commercial drivers underpinning insurance decisions may not accord with the wider interests of society as a whole. I hope that noble Lords will agree that this is most appropriately carried out internationally through the UNECE, primarily through Working Party 29, the world forum for the harmonisation of vehicle standards, but also through Working Party 1, the Global Forum for Road Traffic Safety. Where appropriate, this will be legislated for domestically as part of our ongoing regulatory programme.

I assure noble Lords that vehicles that appear on the Secretary of State’s list will be able to drive themselves safely. We will act to ensure this through our active role in the international negotiations shaping these standards and through the development of our domestic road traffic laws and guidance as part of our ongoing regulatory programme.

I appreciate the helpful and well-intentioned Amendment 30, tabled by my noble friend Lord Borwick, proposing a delegated power to create further legislation for automated vehicles. However, I am mindful of the Government’s ongoing need to be clear and transparent about delegated powers to ensure proper parliamentary scrutiny and of the reservations in many parts of the House about Henry VIII-type powers. At this stage the Government are unable to say how the power proposed by my noble friend would be used. However, I have listened carefully to the arguments from all sides of the Committee and will consider this again ahead of Report.

As part of the continuing regulatory programme relating to AVs, it will no doubt become necessary to legislate further when more is known about the technology. The Law Commission may make recommendations in this regard. Perhaps I could just say a word in response to questions that have been raised consistently through our debates about what happens next. We already have the power, through the Road Traffic Act, to amend our vehicle construction and use regulations, along with updating rules and guidance within the Highway Code, to support the development of AVs.

At this stage we do not know what other powers we will need, which is why the Law Commission is carrying out a far-reaching review of our regulatory framework with respect to AVs. This is a three-year project, launched on 6 March this year. It will produce a scoping report, as the first stage in identifying and consulting on future areas of regulation, towards the end of 2018, and this will inform the Government’s next moves. So although I understand and appreciate the intention behind the amendments, we do not consider that they are appropriate for this Bill—and against the background of the assurances I have given, I ask my noble friend to withdraw his amendment.

Photo of Lord Lucas Lord Lucas Conservative 9:15 pm, 9th May 2018

My Lords, I am grateful to my noble friend for that reply. I will assume that included in it, but not vocalised, was a promise to write to me about the definition of motor vehicles. I like my moments of pedantry as well as the next man, and I would be interested in pursuing that subject in correspondence.

On the main points, I am delighted that my noble friend found at least half a warm word for my noble friend Lord Borwick. I think there is a real opportunity here that, with a little persuasion and some crafting of the amendment, we might, unusually, find ourselves supporting the Government in giving themselves some powers that they do not yet know how to use, within this limited area, because it would have such a potentially positive effect on the economy of the UK. I beg leave—

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport)

Before the noble Lord sits down, is he aware that there are now reasonably big drones delivering goods? They trundle along pavements and across level crossings and so on, appearing to behave a bit like pedestrians. I have been thinking about what the noble Lord is saying, and he is raising a good point. What is the difference between a drone delivering an Amazon parcel and a driverless van delivering an Amazon parcel? The only difference is probably the size, so there will have to be some definition of a cut-off point—unless we are going to insist that drones are insured, in the same way as vehicles.

Photo of Lord Berkeley Lord Berkeley Labour

Before the noble Baroness sits down, may I ask her whether she really thinks that drones trundle along pavements?

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport)

I have indeed seen them. There are experimental systems that are wheeling along pavements.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport)

Not in Wales, no—in London. We are not that advanced in Wales.

Photo of Lord Lucas Lord Lucas Conservative

The noble Baroness raises a very valid point. What we seek to regulate is autonomous automated vehicles that are likely to interact with people. That will include delivery drones, whether they are flying or trundling on the pavement. It would be quite useful in parts of London to be able to go amphibious and drop into the Thames for a bit, run up the river and then back on to the bank. We are talking about things that will interact with the public. I hope we are looking at a wide definition here and not just talking about things that are supposed to confine themselves to the road. One of the virtues of automated vehicles is that they do not have the same need to do that as other things, and they might well turn out to be quite versatile. I look forward to learning in correspondence where we are on the definition, and I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Amendment 27 not moved.

Clause 5 agreed.

Amendments 28 and 29 not moved.

Clause 6 agreed.

Amendment 30 not moved.

Clause 7: Interpretation

Amendments 31 to 35 not moved.

Clause 7 agreed.

Amendment 36

Moved by Lord Tunnicliffe

36: After Clause 7, insert the following new Clause—“Review of Part 1(1) By September 2019, the Secretary of State must lay a report before Parliament assessing the effectiveness of the system for defining and insuring automated vehicles introduced by Part 1 of this Act.(2) The report must consider—(a) the impact on the insurance industry,(b) the impact on the cost of insurance premiums for automated vehicles,(c) the impact on the uptake of automated vehicles, and(d) the levels of disagreement between manufacturers and insurers on liability.”

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury)

My Lords, we all agree that in the future automated vehicles have the potential to improve personal transport arrangements as well as air quality, which is crucial given the dire state of the environment and its impact on health. Solving questions of how automated vehicles can be insured is essential and we welcome the fact that the Government are setting out how to do that. However, it is important to assess how measures work in practice, not only in legislation. It is particularly important that the Government should ensure that regulations are working as intended and should monitor unexpected impacts, which are always there, before attitudes and practices become entrenched and before automated vehicles become common on our roads.

Although the list in the amendment is not exhaustive, given the focus of Part 1 of the Bill it makes sense for a report to consider the impact that measures have on the insurance industry, on the cost of premiums for policyholders, on the uptake of automated vehicles and on disagreements between insurers and manufacturers on liability. This will be a fast-moving area and—who knows?—we may have to revisit areas of this Bill in the future as advances in technology take place and the advances impact on how these vehicles are insured.

It is important that Parliament is kept informed of the effectiveness and impact of the legislation to make sure that we keep it up to date as new technologies in this area are developed. I beg to move.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

My Lords, the Government are taking a step-by-step approach to our regulatory programme in relation to automated vehicles. Where the evidence base exists for regulatory change, we will act so that the UK public and businesses can benefit from innovative new vehicle technologies as soon as they arrive to market. As we noted when we initially consulted with the public and industry in 2016, each of these steps, taken through either primary legislation, secondary legislation or guidance, will be subject to a process of scrutiny and ongoing review.

On the automated vehicle insurance measures, as part of this regulatory programme we will continue to engage with the DVLA and other motoring agencies, the insurance industry and other relevant stakeholders to make sure that the system works effectively as the new insurance framework is implemented, and that we are still meeting our intended policy objectives to provide a compulsory insurance framework for automated vehicles.

As noble Lords will be aware, we have produced a detailed impact assessment looking at the potential direct economic effect on the insurance industry from introducing these measures. As my noble friend has just explained, the Centre for Connected and Autonomous Vehicles has asked the Law Commission to undertake a far-reaching review of the UK’s legal framework for automated vehicles. This may consider a wide variety of areas of law, including the liability and the insurance provisions set out in the Bill.

Unlike with many other amendments we have discussed today, I will not be arguing that the Bill is the wrong place for this amendment. However, it asks for a report by September 2019, which would be too early to consider whether the scheme is effective. It is not anticipated that there will be many—or even any—vehicles to which the insurance provisions apply. However, I understand and share the noble Lord’s intention to ensure that the system that is in place is working effectively, and ahead of Report I will consider whether there is anything further we can do in this area. With that in mind, I hope that the noble Lord will feel able to withdraw his amendment at this stage.

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury)

My Lords, I thank the Minister for her response. There is a wider point, which perhaps I should have made before—though I think she is erring towards agreeing with me—which is that it seems possible that the first fully automated vehicles could be ferrying children to school in, say, five, 10 or 15 years’ time, without this issue coming back to this House at all, by virtue of the wide powers that many of the road traffic and other Acts have to do things by order, for example. Therefore I hope that we will be able to find some sort of reporting compromise that ensures that this House and, ideally, Parliament in general, is kept informed of developments in this exciting and innovative area. I beg leave to withdraw my amendment.

Amendment 36 withdrawn.

House resumed.