My Lords, I am grateful to noble Lords for the points they raised in the debate today. I will try to respond to the questions that they have asked. I understand your Lordships’ desire to ensure that the Government are held accountable, as we should be, for the legislation that we enact, and that we are taking appropriate steps to monitor its impact. I would certainly not disagree with that sentiment.
I will start with the comments on the valuation regime, raised particularly by the noble Lord, Lord Cromwell. This, of course, has been debated at length throughout the passage of the Bill, both in your Lordships’ House and in another place. I am grateful to the noble Lord and others for their time to discuss this in more detail, but we are now reaching the point where we are at risk of repeating ourselves. There are no new points to be added at length. I ask noble Lords to bear in mind that the valuation regime was introduced through the Digital Economy Act 2017. In the intervening period, the public interest in access to digital services
has only increased—a fact underlined, of course, by our reliance on those services during the Covid-19 pandemic. The case for a framework which encourages investment has, therefore, never been stronger, and we think the statutory valuation regime is an important part of that framework.
My noble friend Lord Northbrook and others mentioned our scepticism about the CEBR report. This is not to denigrate the CEBR itself, and I will not expand on the points contained in the note that he and other noble Lords have seen, to which he referred. I underline, however, that it was commissioned by the campaign group Protect and Connect, as the noble Lord, Lord Clement-Jones, acknowledged, and there are certain campaigning groups that have been, throughout the passage of this Bill, seeking to influence the debate, which have vested interests in the matter. They are perfectly at liberty to make their points in the way that they wish, but it should be borne in mind that the organisation funding this campaign stands to make significant financial gains if the changes to the 2017 valuation framework are reversed.
I hope I can give greater reassurance to my noble friend Lord Northbrook on the point he raised about transitional measures. The Government are considering the implementation strategy for this Bill very carefully, including possible transitional provisions. I reassure noble Lords that the implementation of the Bill will be discussed with all interested parties, including those representing the interests of landowners. The Government are committed to ensuring that the Bill is brought into force not only in a timely manner but in a sympathetic and responsible way, taking into account the range of impacts that different approaches may have on different groups.
The noble Earls, Lord Lytton and Lord Devon, the noble Lord, Lord Cromwell, and others flagged the evidence base on which the Government’s conclusions are based. The Government’s position is based on a wide range of information. That includes data on coverage and connectivity, which is collated by Ofcom and which demonstrates that substantial progress has been made since 2017. I repeat my apology to the noble Earl for the delay in sending him the data during our debates on this Bill, partly because of the interruption in service on my part. It is true that we have taken into account data provided by the industry on the number of agreements completed since 2017, but these are data that can be supplied only by the industry. If the valuation framework had stalled the market or slowed down deployment, it would not be in the sector’s interests to try to maintain that framework.
A number of noble Lords talked about the reduction in rent, which we have seen since the 2017 reforms. It sounds as though we might not come to an agreement on the precise figure, but rent is only one element of the financial package that operators may offer to landowners. Within the legislative framework, separate sums can be offered as compensation to cover potential loss and damage; other variations might occur in practice within the market. For example, as part of the financial package, operators might choose to offer an early completion incentive payment. I am concerned that some of the case studies that have been drawn to noble Lords’ attention may ignore the overall package
offered to landowners or fail to acknowledge that figures presented might have been an opening offer, when ultimately very different terms might have been agreed once proper negotiations have taken place. The amount of rent received will, in practice, often depend on the much wider circumstances in which financial offers are made and final terms are agreed.
4.30 pm
The noble Lord, Lord Clement-Jones, mentioned the report in the Times this week about the burden on the courts. It has been suggested, including in that article, that the 2017 reforms have caused courts to be overloaded and that that will delay the rollout of 5G services. If litigation backlogs were having an adverse impact on digital targets, that would certainly be a cause for concern, but we do not agree that is the case. The industry reports year-on-year increases in agreements being completed, and significant progress continues to be made towards the Government’s coverage targets.
Importantly, the figures which the DCMS has received from the Ministry of Justice show that only a fraction of cases commenced go all the way to a final hearing; the vast majority are resolved at a much earlier stage and without the intervention of the courts. This strongly suggests that effective and timely use of the alternative dispute resolution where appropriate can reduce litigation. For example, in the year starting 1 April 2020, 102 Electronic Communications Code court applications were received by the Upper Tribunal but only 11—around 10 %—were determined at a hearing.
The noble Lord, Lord Cromwell, asked whether the cost savings made by operators since 2017 are being passed on to consumers, and he is right to do so. We have always been clear that we do not think it is reasonable to expect the sector to provide pound-for-pound accounting to demonstrate that savings from code agreements translate into network investment or reduced pricing for their consumers. However, since 2016, the Government have set challenging coverage and connectivity targets demanding a level of industry investment which we believe requires us to maintain a legislative framework which makes deployment as cost effective as possible. For example, the shared rural network which I mentioned in my opening remarks will be underpinned by £530 million of industry investment.
As regards passing on savings directly to consumers, the department also works with the industry on measures to ensure that services can be made available to as many families as possible: for example, our work with broadband and mobile providers to bring high-quality, low-cost social tariffs to the market for as little as £10 a month. Available to people claiming universal credit as well as other means-tested benefits, social tariffs are available in 99% of the UK and from a range of providers, including BT, Virgin Media, Sky and Hyperoptic. DCMS continues to work with operators and consumer groups to help increase awareness of these low-cost offers to ensure that support reaches those who need it.
The noble Earl, Lord Devon, asked me to say a bit more on our commitment to report to the Select Committee, which was echoed by the noble Baroness, Lady Merron; I am very happy to do so. The Select Committee to which I referred was the cross-party
Digital, Culture, Media and Sport Committee in another place. Different parts of the Bill will commence at different times, and in order to gain the maximum benefit and insight from the process, it is important that all the provisions are given an opportunity to bed in. It is therefore a little difficult at this stage to say as precisely as I think the noble Earl hopes me to when the report will be prepared and submitted, as it just is not possible to say that for each of the provisions in that detail at this stage. However, the Government are of course aware of the current expectation contained in the Guide to Making Legislation, which is that this will be done between three and five years after commencement. For the same reasons, neither would it be appropriate to pre-empt exactly what the report might contain, but it will provide a preliminary assessment of how the Act has worked in practice, taking into account its objectives and supporting documentation, such as the impact assessment.
The need for faster and more secure connections is constantly growing, making this legislation ever more vital to support the UK’s infrastructure. I am grateful to noble Lords and to Members in another place for their efforts to improve the legislation, as indeed they have done—I have certainly learned more about things such as telegraph poles and internet-connected smart toasters than I could ever have imagined. The Bill is in a fit state to proceed to the statute book. It will help people up and down the country to access the digital services they need and with greater confidence about their cybersecurity. I beg to move.