Product Security and Telecommunications Infrastructure Bill

Commons Reasons

Motion A

Moved by

That this House do not insist on its Amendment 17, to which the Commons have disagreed for their Reason 17A.

17A: Because it would give rise to a new head of public expenditure, and the Commons do not offer any further Reason, trusting that this Reason may be deemed sufficient.

My Lords, it is a great pleasure to be back at the Dispatch Box to take this Bill, I hope, through its final stages in Parliament. I am very pleased to see how much progress has been made, and I take this opportunity to pay tribute and extend my thanks to my noble friend Lord Kamall, who carefully steered the Bill through Report and Third Reading in your Lordships’ House.

The Government have listened carefully to the points raised in scrutiny on this Bill, both in this House and in another place. We have taken on board recommendations made in both Houses of Parliament and have tabled amendments where those recommendations have strengthened the legislation. I am confident that the Bill is now in a form that will meet its objectives. Importantly for the debate before us today, that includes preserving a balance between landowners’ rights and the wider public interest in delivering telecommunications networks.

As I shall set out now, I hope that your Lordships will agree with Members in another place that Amendment 17 should not remain part of the Bill. The amendment in the name of the noble Baroness, Lady Merron, would add a new clause to the Bill requiring the Secretary of State to commission an independent review of the effect of the Electronic Communications Code, and of the Telecommunications Infrastructure (Leasehold Property) Act 2021, on the deployment of telecommunications infrastructure. Her amendment understandably aims to provide transparency, accountability and ongoing evaluation of the legislative framework that underpins digital deployment in the UK. As the noble Baroness knows, I fully appreciate the sentiment behind it, and I commend noble Lords in all parts of the House for their efforts to improve connectivity. I am grateful for the time given by the noble Baroness and others yesterday to discuss this ahead of our debate today. It is clear that we share the same goal, although our opinions in some instances differ about how to achieve it.

Your Lordships will have seen that the reason given by another place for disagreeing to the inclusion of this amendment is that it would give rise to a new head of public expenditure. This is certainly true, and the financial privilege of the Commons must be respected. However, this is not the only, nor the primary, reason why the Government do not accept the amendment. We believe that the amendment is unnecessary for a number of reasons, which I will set out briefly.

The amendment would seek to impose obligations to review and report on progress towards government connectivity targets and on competition in the market. However, monitoring of these is already in place, and the Government are committed to keeping a very close eye on the impact of the legislation in the future. I will give some examples. Ofcom’s annual Connected Nations report already gives a snapshot of mobile coverage and broadband availability across the United Kingdom. BDUK also publishes quarterly updates on the progress of Project Gigabit, with the latest coverage information available on thinkbroadband. Government connectivity targets and the success of government interventions to increase our connectivity, including through this Bill, can therefore be measured against regular existing reports.

DCMS will continue its engagement with all interested parties once the Bill receives Royal Assent. That will, among other things, help inform a robust implementation strategy, which I know landowner representatives in particular are keen to be involved in. The department will also continue its involvement in regular workshops, attended not only by industry representatives but by members of landowner organisations, including the CLA, NFU and CAAV. These are not just talking-shops; they are producing practical tools, including agreement templates, as well as a pilot communications framework. I will gladly talk a bit more about the great collaboration they are encouraging, and they are also an invaluable insight into how the market is functioning.

I recognise your Lordships’ keenness to see a report on the impacts of the legislation. I hope that noble Lords will be reassured to hear that the findings from this engagement and monitoring will be reflected in an update on how the changes made by this Bill have worked in practice. In line with our existing commitments, the Government will submit this to the relevant Select Committee of Parliament. If that update highlights anything which has a significant impact on delivery or connectivity, the Government will of course see what action can be taken to address this to ensure that our crucial connectivity goals are met. I know that noble Lords will rightly hold us to account on them.

Let me say a little more about why we believe this amendment would not be a better way of going about this. The Government have frequently set out the opinion that the market is settling and that operators and site providers are working together in an increasingly collaborative manner. Though I am grateful to them for their time and their conversations with me and officials at the department, I know that some noble Lords remained unconvinced about this. However, over the last two years, the department has chaired the regular workshops I have just mentioned. One aim of these workshops is to encourage greater collaboration between stakeholders, and they are open to everyone across the industry. As I have said, these workshops provide valuable insights into how the code is working in practice, while supporting better ways of working for everybody in relation to the code.

I emphasise that the Government fully expect tele- communications operators in particular to recognise the contribution made by those whose land is used to host apparatus. Operators have a responsibility to show fairness, to behave co-operatively and, above all, to treat landowners with respect if real connectivity is to happen. One of the key outcomes has been the creation of a national connectivity alliance, which will officially be launched later this week. That is not a government initiative but has been created by representatives from across the industry. It is an independent body, which will be led by a steering group comprising an equal number of operators and landowner representatives. It will co-ordinate working groups to examine and make recommendations on a wide range of issues of mutual interest, including Ofcom’s code of practice. The alliance’s aim is for these working groups to produce best practice guidelines which can then be used across the industry.

The Government strongly support the creation of this body and believe it can do much to build on the improvements we have already seen in relations between operators and site providers, as encouraged by the work- shops, which in turn will help to speed up connectivity. This improved collaboration is reflected in the number of agreements being concluded, which is increasing year on year. For example, in 2018 only 39 renewal agreements were completed, but by 2021 this figure had increased to 1,015. If the market were not settling, we would not be seeing increases such as this.

The Government are concerned that imposing a time-bound statutory review requirement would not only undo much of the progress that has been achieved since 2017 but would, in fact, lead to market stagnation and increased litigation. The prospect of a further review into the code would make landowners understandably reluctant to enter into agreements until the outcome of the review was published, which would leave operators with little choice but to take legal action to obtain the rights needed to improve and expand their networks. This would inevitably slow down deployment generally, and the hardest-hit places are likely to be those where deployment is already commercially unattractive, such as rural areas, with operators likely to focus their attention elsewhere. I am thinking in particular of the shared rural network programme, which aims to deliver 4G connectivity to 95% of the UK’s land mass by June 2025.

For the reasons I have set out, therefore, the Government firmly believe that the proposals contained in this amendment, although undoubtedly well-intentioned, are unnecessary and risk being a hindrance to the better connectivity and delivery that I know the noble Baroness wants to see. I therefore hope that your Lordships will agree that it should not remain in the Bill.

My Lords, I welcome Amendment 17, which had not even made it to the internet section of the Bill when I looked an hour ago. I also welcome the Minister’s mention of the national connectivity alliance as a good co-operation between site providers and operators.

The reforms in the Digital Economy Act 2017 have resulted in lengthy legal disputes, causing significant delays to rollout. Small businesses and local sports clubs, many of which host telecoms infrastructure on their land, have lost thousands of pounds in income, with no commensurate boost to digital connectivity. This was foreseen by the current Prime Minister during the debate on the Digital Economy Bill in 2016, when he warned:

“Interfering with property rights, as the code does, is a major step for this House to endorse. I therefore urge the Government to ensure that the Bill benefits not just the network operators’ balance sheets, but the public interest.”—[Official Report, Commons, 13/9/16; col. 828.]

Overall, I am disappointed at the lack of compromise elsewhere by the Government and the absence of rigorous evidence for the Bill. It appears that its policy development has been entirely reliant on the telecoms operators. It is vital that the Government use all the tools still at their disposal to limit the most egregious effects of this legislation, including through the use of transitional arrangements.

On preventing backdated payments, the Bill as drafted will allow the courts to impose lower rents on site providers—I meant to declare an interest as a site provider—and this can be dated to years before the court issues its order. This will have the effect of courts imposing backdated payments of thousands of pounds on site providers, despite those rent levels having been agreed between partners in good faith. The Government have promised to consider addressing this issue through transitional provisions, and it is vital that they do so and consult properly with affected parties to ensure that their measures are effective.

First, I thank the Minister and his officials for corresponding and meeting with me to discuss the Bill. That said, it is a shame that the Government in Motion A have set their face against Amendment 17, which is seeking a review of the Bill within three months, particularly as the festering problem at the heart of the Bill is the valuation method, which was not even a subject of consultation in preparing the Bill.

This legislation legalises extortion. It allows operators to strip site owners of their property rights and to confiscate their incomes, in some cases even retrospectively clawing back site rents paid under legally binding agreements. The Digital Economy Act 2017 has not led to the market being “settled down”, as the Government claim; it has, in fact, produced a steep rise in long and expensive tribunal cases. That rise would be far steeper but for the inequality of rights and resources between telecoms companies and the site owners, meaning that very few can afford to fight their cases. The Government’s claims that agreements are consensual, or can be solved by voluntary alternative dispute resolution, ring hollow when the law is so one-sided and the site owner is threatened by operators throughout any so-called negotiation with expensive court action. The fact is that the pendulum of power has swung way too far in favour of the operators.