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Digital Britain
Statement
4.22 pm
The Minister for Communications, Technology and Broadcasting (Lord Carter of Barnes): My Lords, with the leave of the House, I will now repeat a Statement made in another place by my right honourable friend the Secretary of State for Culture, Media and Sport. The Statement is as follows:
“Britain’s digital industries are among the most successful in the world. The global technological revolution means that, if we make the right decisions now, they can continue to grow and Britain will continue to prosper from them. Today, the Digital Britain report, part of the Government’s industrial activism approach, spells out how we can make the most of the opportunities today and in the years to come.
The report covers four broad themes. First, we will only make the most of the digital revolution with the right infrastructure. Just as the bridges, roads and railways were the foundations of Britain’s 19th-century industrial strength, our digital communications infrastructure will help power our future success. Businesses, other organisations and individuals increasingly want access to high-capability, high-speed networks that are both fixed and mobile. This is key to Britain’s competitiveness.
As a first step therefore, we are reaffirming our commitment to ensure universal access to today’s broadband services, delivered through a public fund, including money that has not been used for the digital television switchover process. However, we also need to ensure that Britain has the best next-generation fixed broadband for the entire country. Many other countries around the world are already investing heavily in this. Here, in the United Kingdom, we have already seen an energetic market-led rollout of next-generation fixed broadband networks.
The economics of building what are essentially new networks, as opposed to increasing the capability of existing networks, means that, left to the market, true super-fast connectivity will only reach two-thirds of homes and businesses over the next decade. The other third would be excluded.
In the United Kingdom, largely as a result of competition and regulatory intervention, telecommunications prices for the consumer have fallen significantly in recent years and are expected to fall further as technology advances. We have concluded, therefore, that the fairest and most efficient way of ensuring that people and businesses are not left out is to use some of that saving in the form of a small levy on all copper fixed lines, to establish an independent national fund which will be used to ensure maximum next-generation broadband coverage. To complement improvements to fixed connectivity, we also need to modernise our wireless networks. This report sets out
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Today’s report also sets out our intention to upgrade all our national radio stations from analogue to digital by 2015, with digital audio broadcasting—DAB—firmly placed as the primary platform. But having the right infrastructure alone will not be enough unless everyone can use and benefit from the opportunities that new technologies offer, so participation is the second big theme in today’s report.
Technological progress reduces costs, so affordability is partly being addressed by the market. However, we are complementing that market progress with government action. A £300 million Home Access scheme gives children in low-income families access to computers and the internet. As well as being able to afford the technology, people need capability and skills. We address those in a number of ways in the report. I am pleased to announce the appointment today of the entrepreneur Martha Lane Fox as the new digital inclusion champion. We are also publishing the report by my noble friend Lady Morris of Yardley on digital life skills.
The third key theme of the report is about content—sustaining and strengthening our creative industries and securing plural provision of key public service UK content in the digital age. As noble Lords will know, the ease with which digitised content as opposed to physical content can be copied makes it increasingly hard to convert creativity and rights into financial reward and businesses. The Government believe that taking someone else’s property and passing it on to others without consent or payment is wrong.
Developing legal download markets will best serve both consumers and the creative industries, but we will also legislate to curb unlawful peer-to-peer file sharing. Ofcom will be given a new duty to reduce that practice significantly, including two specific obligations: the notification of unlawful activity and, for serial infringers, identity release to enable targeted legal action by rights-holders. We also propose technical measures by internet service providers, such as bandwidth reduction for serial infringers, if other measures prove insufficient. We will also implement a new, more robust system of content classification for the video games industry, building on the Pan-European Game Information system with a strong UK-based statutory layer of regulation, ensuring protection for children now and in the future.
I now turn to the evolving role of the BBC, Channel 4 and the need to protect public service content, particularly in the nations and regions of our country. In the digital age, a strong, confident and independent BBC is as important as ever. The Government support multiannual licence fee settlements for the BBC so that it can plan ahead and act independently of day-to-day political pressures. We also believe that it is in the BBC's own interests to evolve into more of a public service partner with other media organisations and to see itself as an enabler of digital Britain. We have therefore been encouraging discussions about a joint
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The regulator Ofcom’s recent public service review also highlighted the importance of news in the nations and regions. We welcomed its report and the BBC’s response supporting partnerships. Partnerships are very welcome, but may be insufficient to meet the scale of the challenge. We believe this will require a secure and sustainable funding stream in addition to those partnerships. The licence fee is the existing major intervention for UK content. There is nothing, as noble Lords will know, in either the BBC Charter, or legislation, to say the BBC must have exclusive rights to it. Independent of the level at which the licence fee is set after 2013, we will consult on the option of sharing a small element of it post-2013 to help ensure high- quality, plural provision, particularly in the regions and nations.
Subject to that consultation, we will use some of the current digital switchover underspend to fund pilots of this model in Scotland, Wales and one English region between now and 2013. We have, however, made it clear to the BBC and others that we are open to alternative proposals should they wish to make them during the consultation. Alongside the Digital Britain report, we are publishing a range of related documents, including the outcome of the review by the Office of Fair Trading of the media merger regime and local and regional media.
The fourth key theme in the Digital Britain report is the continued modernisation of government itself. The digital revolution has huge potential to improve the services Government and public bodies provide and to reduce costs. Leave out if short on—
I am sorry, my Lords, it says here “Leave out if short on time”, which I believe I am.
The report sets out how public services will be delivered primarily online and electronically, making them quicker and more responsive to the public while saving money for the taxpayer. This report, even without the paragraph I have just missed, will help accelerate Britain’s recovery from the biggest economic shock the world has seen since the Second World War. It is a central part of our industrial strategy. It will be key to our economic growth, social cohesion and well-being as a nation and I commend it to the House”.
My Lords, that concludes the Statement.
4.32 pm
Lord Luke: My Lords, I thank the Minister for repeating the Statement. He must be a little disappointed that he was not able to give the Statement himself. It is his report and his speciality, but the DCMS is one of the few departments where the Secretary of State continues to reside in the House of Commons. His introduction to the Statement has been pre-empted not only by the Secretary of State in another place but also by the Prime Minister in an article in the Times
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Like my honourable friend in another place, I am disappointed not only by the way in which the report has been handled by the Government, but also by the content. We on these Benches were hoping that the final report would meet the promises we were given at the announcement of the interim report in January. It is clear that that has not been achieved. The report introduces another 12 consultations. In no way can that be considered a final report. We have yet to see what the Government will do on a range of matters; some of them new, some of them, like the possibility of giving Ofcom the power to tackle copyright infringement, familiar.
The question of illegal file sharing as a whole has been around for years. The report confirms that the Government still have little idea what to do. Once again, they have resorted to setting up another talking shop rather than finding positive steps forward to address the issue. During a debate tabled by my noble friend Lord Lloyd-Webber on the subject in April this year, my noble friend Lord De Mauley queried what a new organisation would do that Ofcom or the Government could not. The answer he received was that the whole issue was still out to consultation. I hope I will receive a fuller answer today. It has been clear for a long time that any effective enforcement of rules will have to be done, in the main, by private companies. I am glad to see that this report accepts that, to some extent. The recent announcement that Virgin and Universal Music will be launching a legal alternative to pirate downloads is a welcome indication of a possible way forward.
I find it extraordinary that the report of what the Minister’s right honourable friend in the other House said differs from what he said. He said:
“The Government believe that taking someone else’s property and passing it on to others without consent or payment is wrong”,
whereas his right honourable friend in another place said:
“The Government believe that taking someone else’s property and passing it on to others without consent or payment is tantamount to theft”.
The Government should be focusing their attention on encouraging exactly this sort of private sector solution rather than on establishing yet another quango.
The inability of the Government to develop an effective policy is also clear in regard to the proposed joint venture between Channel 4 and BBC Worldwide. All the Minister is able to say about it is that talks are ongoing. Talks have been ongoing for months. What real progress has been made? Is there any real chance of a successful resolution to these talks? When does the Minister expect them to be concluded?
On the matter of local news provision, we feel that the Government, while initially sounding as if they had got it right, have unfortunately veered off in the
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Another critical question that the Minister alluded to a few times in the Statement was the cost of implementation of their proposals. It is clear that the DCMS cannot expect the Treasury to look upon expensive policies with a favourable eye and that the economic situation makes finding private sector partners to make up any funding shortfall extremely difficult and, indeed, unlikely. Nowhere is this clearer than in the Government’s attempts to find a private company to bear the costs of rolling out universal broadband. BT and Virgin are focusing their efforts on the more profitable urban centres, and using satellite broadband to connect rural British households is apparently going to cost £500 million. Therefore, the Government have decided to fund universal broadband with a levy. As my honourable friend in another place pointed out, the figures on this levy are extremely murky and would seem to suggest that a 20-year levy will be needed. Has there been a more accurate analysis of how much money will be saved after all the transmitters have been switched over?
The Government have also resorted to looking for money within the licence fee. Accepting that there is surplus money within the BBC, they are contradicting everything they said recently about the absolute necessity for an above-inflation rise in the licence fee. On these Benches, we disagree that any surplus should be hived off to other projects. The licence fee has always been raised on the principle that it pays for the BBC’s core services. If that is not the case, it should be returned to the licence fee payer.
I was also interested to hear the last few points of the Statement. I entirely agree that the Government’s handling of data and the current purchasing of IT systems have huge potential for improvement. It seems extraordinary that it is only now that the Government have realised that the digital revolution raises questions of data security and that that should have an impact on how they operate as a major buyer of IT systems. Given the endless succession of data losses and IT disasters in recent years, one would have thought that that conclusion could have been reached rather earlier.
Finally, I should highlight that if anything is likely to throw up an impediment to the successful implementation of the type of digital economy to which the report refers, it is the constant reshuffling of responsibilities within the Government. The Minister has indicated that he will be resigning and will not therefore be available to drive this report through to its conclusion. I am not surprised by his decision. He gave a very good impression of enthusiasm when
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4.41pm
Lord Clement-Jones: My Lords, just to change the tone slightly, I shall start by saying that while not agreeing wholly with the content of this paper, I congratulate the noble Lord, Lord Carter, on its production and the fact that it was produced on time. He was clearly the right person for the job. Indeed, he was probably the only person, given his background. We will all miss him when he steps down as a Minister.
I want to make one point that is of a slightly negative nature. I was extremely disappointed, not to say incensed, by the late arrival of the Statement, which arrived one hour and 10 minutes before the expected time of delivery and the paper itself, which arrived 35 minutes before the expected time of delivery of the Statement in the House, and that was only because of a raid on the Government Chief Whip’s office. That does not serve the Minister well; it does not reflect well on either the DCMS or the department, whose name escapes me temporarily—I think DBIS is the shortened version. It demonstrates contempt for the proceedings of this House, and it does not serve a Minister of the noble Lord’s calibre at all well.
As we know, the two departments have had a little over eight months to put this Digital Britain report together. On these Benches we got half an hour to read it and to write our response. That is not acceptable and I hope that if the Leader of the House reads this, she will take due note and change the practices of the House so that we have the ability to respond properly.
I noted with great interest what the noble Lord, Lord Luke, had to say about the press. Indeed, I was extremely interested in the article of the noble Lord, Lord Carter, in the FT, which I thought gave nothing away. It was a perfectly proper article to write on the morning of the release of the report because it talked essentially about the justification for the paper on the basis of an industrial strategy. It seemed to me that that paper put the creative industries, in many ways quite rightly, on the same basis as the pharmaceutical industry, financial and professional services, and so on. The dimension that we really must not forget today is that it is not simply about industrial policy, but creative and cultural strategy, which is different in many ways. This paper reflects it. We are talking about the content, not simply the way in which that content is delivered.
The important thing about the Digital Britain experience—both the interim report and this one—is that it recognises the crucial nature of our creative industries for the future economy of the UK. We have a huge amount of ground to make up. I was recently in Hong Kong and South Korea where universally they have super-fast, one gigabit per second broadband. That is a different dimension from anything that we have in this country, which will serve them extremely well in the future.
Sadly, having invested some hope that this report would settle some of the issues, we find that this is but another interim report. Incidentally, I make it another 11
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There are, however, some very welcome aspects. We now know that the PEGI is to classify video games—a pan-European solution that we have always favoured. A tax break for the games industry is being contemplated, which is very welcome as well. And we finally have a date for switchover to digital radio in 2015, which we on these Benches have asked for consistently. We also have shared concerns about the need to protect intellectual property; millions are being lost by creators, whether of music or film, and potentially, in the future, of books, through illegal downloading and file-sharing. Partnerships between ISPs and rights holders to create new commercial models are the way forward in many areas. Yesterday’s deal between Universal and Virgin is a good example. Statutory measures, however, are also needed, and we very much welcome the steps that are proposed; they are proportionate and avoid the heavy-handed “three strikes and you’re out” proposals by some countries, such as France. But what has happened to the digital rights agency that had its own paper published after the interim report? I do not see any mention of that in the Statement and I did not find any reference to it in the main body of the final report.
Overall, the proposals for broadband are far reaching and welcome, but the proposed timing means that those in remote rural areas will be disappointed at having to wait until 2017 before the benefits of super-fast broadband are likely to reach them. Should not the emphasis now be on encouraging commercial pull-through so that even more needs to be done to drive forward initiatives such as smart metering, e-democracy and digital healthcare to stimulate demand and hence investment?
Given the real fall in the costs of telecommunications, as the Minister mentioned, the proposed small levy on all copper fixed lines to pay to get near-universal super-fast broadband seems to us imaginative and acceptable. But, even though this is a small sum, it is in the nature of a regressive, fixed charge like a poll tax; I very much hope that he will consider exemptions, at least for pensioners.
We also welcome the reaffirmation of the multi-annual licence fee settlement for the BBC. We welcome the plans to support regional and local news; we have no problem with the BBC’s involvement with this, anymore than with its helping the rollout of broadband.
We are, however, deeply concerned about the fact that what is initially proposed is essentially a top-slicing of the licence fee. Top-slicing sets a precedent that, in
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Clearly, there is a great deal of work to be done and further decisions to be made. It is disappointing that we are still at the stage where we have not yet got final determination on so many areas. This is a work in progress but, limited as it is, we on these Benches welcome it.
4.49 pm
Lord Carter of Barnes: My Lords, I very much thank both noble Lords for their contributions. I was perfectly content for my senior colleague in the other place to be the first person to read his Statement. I suspect, despite my gentle rewording of “tantamount to theft” to “wrong”, that I was considerably happier to re-read his Statement than he was to read his.
One of the things that we see in the public domain is the public’s engagement with political debate and a desire for deliberative and informed discussion about real issues as opposed to knee-jerk rejections of policy positions, whoever presents them. I would be the first to say that issues remain in this report—there clearly are—but I will try to deal with the substantive questions, most of which were asked by the noble Lord, Lord Clements.
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