Oral evidence: Fake News, and other policy issues connected with the work of the Department, HC 363

Oral evidence, 14 March 2018.

Chair

Secretary of State, welcome to the Select Committee and your first appearance since your promotion to your new position. Today we have asked you to give evidence as part of our Fake News Inquiry and we are going to ask questions about that first. Then, for the second half of the session we will turn to discussing some other topics of recent interest to the Committee. It would probably seem appropriate, given the Prime Minister’s statement, to ask your view on the state of RT and in particular whether Ofcom should conduct a fit and proper person test on the owners of RT as it is financed by the Russian Federation. In a statement yesterday Ofcom said that “should the UK investigating authorities determine that there was an unlawful use of force by the Russian State against the UK we will consider this relevant to our ongoing duty to be satisfied that RT is fit and proper”. So in the light of the Prime Minister’s statement do you think that condition has now been met?

Matt Hancock

As the Prime Minister made clear, we believe that the Russian State is culpable for the attempted murders and, therefore, there was an unlawful use of force by the Russian State against the UK, as in the words of the Ofcom statement from yesterday. As I have no doubt we will get into this in more detail, I strongly believe that the regulation of these matters should not be for politicians and it is right that Ofcom make the judgments in this area, but I can confirm the question around the unlawful use of force that Ofcom referred to in their statement yesterday.

Chair

So as far as you are concerned it is a matter for Ofcom as to whether they—they obviously conduct this review; it is down to them.

Matt Hancock

It is very important that it is a matter for Ofcom because it is legally a matter for Ofcom. That is the structure of regulation that was put in place and it has strong cross-party support. One of the other things the Prime Minister said was that we must respond to this threat from Russia in a way appropriate to our values, and one of our values is that politicians and the Government do not interfere and we have a settled view, a settled position, for Parliament on how these things are regulated. Therefore, I am taking extra care to ensure that this is a question purely for Ofcom.

Chair

So I am clear on what you said at the beginning—you feel that, based on Ofcom’s own statement, the criteria they applied for initiating such a review would have been met because the UK investigatory authorities believe that the Russian State is culpable for the Salisbury incident.

Matt Hancock

They said that should the UK authorities determine that there was unlawful use of force, they would consider this relevant to their ongoing duty to be satisfied that RT is fit and proper. What I am saying is that we do consider that there was an unlawful use of force by the Russian State against the UK. It is a question for Ofcom as to how to react to that being the UK Government’s position.

Chair

Indeed, but you feel that if that is Ofcom’s criteria for doing it then that has been met by the statement of the Prime Minister.

Matt Hancock

That is their stated criteria. The criteria and the interpretation of that is a matter for them, but obviously I have seen their statement yesterday and the next step is a matter for Ofcom.

Chair

The Prime Minister, in her statement, talked about “hostile state activity” in general. Do you see disinformation emanating from the Russian State, be that through the distribution of fake news or incidents where Russian State broadcasters have breached the broadcasting code? Do you see communications as part of that package of hostile state actions coming from Russia?

Matt Hancock

Yes. We have clearly seen activity from Russia directed at all western democracies, or many western democracies, and that includes here in the UK. I know that the Committee has done excellent work in ensuring that we get to the bottom of the quantum of that. There is clearly intent, and how we address that is part of the wider work on disinformation and fake news because that is one element of disinformation. Commercially minded fake news and disinformation is also an important factor. We have to look at all of these things.

Chair

As far as you are concerned, as you say quite rightly, understanding the concern is still something that is a matter of ongoing investigations, but the intent of the Russian State has been to use disinformation and to target it at western countries like the UK.

Matt Hancock

To target it at western countries. What I would say is that in the UK we have not seen any successful impact of that. For instance, when it comes to the referendum there is no evidence that the outcome of the referendum was affected. If you look at the scale of the activity on the evidence that we have so far seen, there is no evidence of an impact on the overall result, not least because the margin was over 1 million votes and the scale of the impact that we have evidence for at the moment is much smaller. We have not seen any successful interference in the UK, but we are vigilant about it, and indeed I have commissioned research into the effects of disinformation. If I may, there is something I wanted to say more broadly on this, which is that I think that the work that you have been doing as a Committee has been incredibly important on this question. You have gone out of your way to conduct a thorough investigation. You have travelled to America. I have been following it closely and we have had exchanges in the Commons. I have also been urging the tech companies to engage properly with you. I think this is the right way to do it. We are a parliamentary democracy and I think that you conducting the initial investigation with the support of the Government, not directly but with our strong backing, and that has been the right way to do it. No doubt you will produce a report on that. I hope it is a cross-party report, which represents Parliament’s opinion through this Select Committee and then it is for the Government to respond to that. I think given the sensitivities around news and how we regulate the media it is much better that this comes from Parliament to Government. Obviously it is a problem we care a lot about. We have already instigated our own research but we will then respond to your report on this. I think the way that you have carried this out has been exemplary.

Chair

This may be the only time I will say it today, but the Committee should thank you as well for your support for the inquiry, and for writing to the tech companies to encourage them to support the inquiry and making clear that it was the wish of the Government that they should do that, because certainly the tech companies were reluctant to do so. We are grateful for that. On this point, I do not want to labour the point on Russia but to be clear, as Secretary of State, what do you think is going on? Would you regard the Internet Research Agency as an agency of the Russian Government?

Matt Hancock

I am reluctant to add more than is already in the public domain on that. Clearly, tackling disinformation and fake news is incredibly important to safeguarding our democracy. You know how much I care about that. I think that is the No. 1 issue faced by our media. I think that having a healthy and high quality democratic discourse is incredibly important to this country and has been important to democracies throughout the ages. That may sound like a big picture statement but I think it is incredibly important. There are multiple threats to that through business models, through commercial fake news, through state-sponsored disinformation and, indeed, through the domestic disinformation of people with a particular agenda. Tackling all of these is important. I am glad to say that I think in the UK, on the evidence that we have seen, this has not had an impact on the outcome of elections and referenda but we have to be vigilant. We have to make sure we work now to ensure that it does not have such an impact in the future. It is one of the reasons that I made the decision I did around Leveson, which I have a funny feeling we might come on to. It is at the core of why we have set up the Sustainability Review, the Cairncross Review, to make sure that the business models of high quality journalism are sustainable. I would stress that the foreign state element of that is just one strand of a much broader picture.

Chair

That is understood and certainly in our inquiry we have tried to look at those different strands. To be clear, with regards to Russia I think the evidence we have received would certainly say that the Russian States and Russian agencies have been involved in directing disinformation at other countries, and the UK is one of those countries and you would agree with that.

Matt Hancock

Yes, I would agree with that.

Chair

I agree with you but to what extent that has achieved anything in terms of swaying the opinion of the British public on issues is not proven at all. Nevertheless, the intent has been there to at least direct disinformation at people in this country.

Matt Hancock

I agree with that statement, yes.

Simon Hart

Quickly on that point: you seem very certain that there has been no interference to the extent that it has altered the outcome of elections or referenda, but if it was being done well we would not necessarily know. My question is—you have talked about commissioning research—when will that be available? When we were taking evidence I got the distinct impression that they were telling us, “This has probably been going on for years but you just have not been looking in the right places”.

Matt Hancock

I entirely accept the premise of the question. Of course, good disinformation you do not know is happening and you do not know that it is state sponsored, if it is, and this is part of the problem.

Simon Hart

Or that it is disinformation.

Matt Hancock

If it is really good. Of course, it is a complicated matter. We have commissioned the research. We want to follow on from your report so we will not be publishing research before you have reported. We then want to take your report incredibly seriously. I know that it is normal for a Secretary of State to say that they take the reports of a Select Committee very seriously but in this case we have—

Chair

Some more than others.

Matt Hancock

In this case we are actively waiting for your report because we think that you are the best people to start off this process, and that is constitutionally a good thing to start with coming from Parliament and then us picking it up and taking it on. We should also not rule out legislative options to insist on the transparency of platforms in this area. That is not somewhere that we have yet concluded is necessary, and I hope in some ways that it is not because if they will come to the table—they can come to the table voluntarily much quicker than it will take to legislate, but of course we are prepared to do that. I would say that over the past six months or so the level of engagement from the big social media companies has improved noticeably, markedly. I think even from you announcing your report to the publications that they made when you went to the States the level of engagement has improved. The clarity of the rhetoric at the top of the companies—this is a problem that needs sorting out—has changed dramatically in the last year and a half, from an initial denial that it was anything to do with them to now realising that it is a problem that needs to be fixed. They are clearly on a journey. I would say they are growing up to their responsibilities but there is a lot more to do and people need to have the confidence that what is going on with these platforms is as published by the social media platforms. Also I would make this point: the big improvements we have seen have come from Facebook, Google, Twitter and Snapchat. There are lots of other social media companies and some of them may say that they do not have a problem and some of them may not have a problem but, partly because the degree of advertising that has gone on with Facebook and Google over the last couple of years, they have become the focus of this, but it is broader. The big action has been taken by the companies that are in the public eye, but we have to make sure this happens right across the board.

Giles Watling

A very quick question—by the way, thank you very much, Secretary of State for being here today. You say that the attitude of the leaders of platforms such as Facebook and Twitter has improved over the last 18 months. The impression I got when we were interviewing particularly Twitter, was that we had a bunch of people who were very bright people who have created these wonderful platforms, and who had been dragged sort of blinking into the sunlight realising what their platforms could be used for. They still are not up to speed with that. They were claiming that they just provide the platforms and the first amendment, free speech, is what they could fall back on. They do not realise the power of this thing and if you get, for instance, the Russian bot farms, the Venezuelan bot farms, falling in on the back of a Twitter storm suddenly you can be incredibly influential. As you said with the referendum there was a difference of 1 million or so people. It sounds like a lot of people but it was only 4% of the vote and if you can persuade 4% of them this is incredibly powerful. I feel, and I mentioned it once before—I wonder what your view is on this—that perhaps the websites that are open for free speech should come with a warning like you have on a cigarette carton that says, “What you read here is not necessarily the truth. Please check your facts. Look behind the headlines.” What are your views on that?

Matt Hancock

It is such an important question. I do think that these platforms have moved. Twitter, in terms of the rhetoric from the founders and top people has moved more lately, and there was a Twitter stream from Jack, the founder of Twitter, only about 10 days ago that showed the same sort of recognition of the impact to Twitter that we saw over Christmas from the founder of Facebook. That came after your oral evidence sessions, rather than before. I do think they have—I now put them in the category of a social media company that gets that there is a problem to fix and it has a role in fixing the problem. There is a broader philosophical change that is in the middle of taking place, away from this first amendment libertarian attitude: “Connect the world and everything will be a better place. Governments just get in the way and we should just let it all hang loose.” That sort of libertarian attitude was at the foundation of the internet and it has brought great freedom and great improvement in the way that we live our lives. However, but we need to move from that libertarian approach to what I call “liberal values” on the internet, which is supporting and cherishing the freedom but not the freedom to harm others. Fortunately there is a blueprint for how to do this because 300 or 400 years’ worth of political philosophy has been written by greater men than I to say, “This is the sort of way that you can tackle these problems”. How do you balance freedom and the need for security? We have been doing it offline for generations so we need to do it online as well. Finally, the penny seems to be dropping among the leaders of the social media platforms that they have a responsibility too and, boy, do they have a responsibility because otherwise we will impose that responsibility on them. I do not, for a moment, buy this idea that just because the internet is global therefore nation states do not have a say in it. We are responsible. We collectively, Parliament is responsible, for the statutory rules where our society lives.

Giles Watling

Also a health warning.

Matt Hancock

A health warning is an interesting idea that we could put in—I had not heard of it before. We do use it in lots of different areas, don’t we, like public health and smoking and what have you? We will consider that as part of the Internet Safety Strategy.

Julie Elliott

Welcome to your first appearance of Secretary of State here. I am not sure how enjoyable you will find the hearing today but never mind.

Matt Hancock

It has been very enjoyable so far so maybe we can carry on like this.

Julie Elliott

I have to note the comment you made about the constitutionally important role and seriousness with which you take Select Committee’s reports and comments in light of your—within hours—comments to the press about our pre-appointment hearing of the Chair of the Charity Commission, but I am not asking you a question on that.

Matt Hancock

I am very happy to talk about that later.

Julie Elliott

I am sure somebody else will. The Fake News Inquiry has been very—it is fascinating and where we thought we started out at is probably not where we are now because it is a constant revelation. One of the issues we have had throughout the inquiry is that we found the three major social media platforms, Google, Facebook and Twitter, are very unwilling to share information with us, to a greater or lesser degree. What is the Government’s experience of dealing with these platforms?

Matt Hancock

Similar in that it has been very difficult, but it has been better of late. I have spoken about those three and other platforms directly, but overall the attitude of some of the big companies more broadly, the big tech companies, has matured over the last couple of years.

Julie Elliott

Do you think they will look for solutions to the questions we are asking or do you think they try to just give us as little information as they can? What would be your personal opinion?

Matt Hancock

I would say—look, I am an optimist. I am a glass half-full person. I think that they have—they started in your latter position of giving as little as possible, and they are now moving into the former position. You have to think about it like this: the founders of these companies did not start these companies to do bad things. They started them to make life better and they genuinely feel strongly that they make life better and you can point to endless examples of where the social media companies have done great things, from being able to communicate with people more easily, or keeping in contact with people who you would not be able to contact before, or publishing press releases more easily as local politicians. I am a big fan of the concept of social media. I think it is a great force for good. I think they just did not look enough to—they spent so much time fighting off people who did not think that social media was a good idea that they did not realise that there were serious and genuine harms being done in this area. For quite a long time they have been working with us on serious harms in other areas. One of the reasons that it is obvious to me that they are not a passive host in that debate, which I am sure we will come on to, is that they have always been taking down child pornography. They have worked hard to take down child pornography and we have pushed them to take it down faster. They have responded and they have put more resources in, and now they are getting their AI to work on it and that has been a real partnership. They need to do the same in the area of news and the democratic discourse as well.

Julie Elliott

Is their business model, with funding from adverts in lots of cases, preventing them from tackling the real issue of fake news?

Matt Hancock

Yes. I think that there is a real tension within these companies. We think of them in the same way that we think of other countries that we deal with in that there are some people inside each organisation who are essentially on the side of the angels and want the social media to be a force for good, and there are others who say, “But hold on, we have to justify our extremely high share price, therefore we need as much ad revenue as possible”. There is a tension. We saw it when Mark Zuckerberg announced that they were downgrading the quantity of the news feed within Facebook in January. Their share price took a hit. So there is a genuine and direct internal debate about that. That then leads you to question whether they, themselves, will get the balance right or whether there needs to be a more formal framework. If you take into account the fact that many of the founders started with very profound noble principles about making the world a better place by connecting people; I want them to bring to bear that impulse in solving some of the problems that have been created by social media.

Julie Elliott

You have talked a little bit already in your answers about the extent of foreign interference in elections. What more do you think social media platforms should be doing to stop this?

Matt Hancock

I think there is more that can be done. I pay tribute to Twitter for having—it has started to remove bots, and the other social media companies are starting to spot when—

Julie Elliott

Can I interrupt you there? That is fair enough but Twitter cannot trace who has the Twitter accounts. We took that in evidence when we were in America. So if they cannot trace who—they might be able to trace bots but if they cannot trace who is behind an account how effective is that?

Matt Hancock

It is a very good question and I think that there are some ways that we have tackled that. Some using the law and some not. For instance, by not using the law when Daesh were using Twitter very aggressively we set up UK Against Daesh and a series of Twitter accounts, which made the argument in the opposite direction and that campaign was very successful. It was run by the MoD. That is the sort of non-legislative way of doing it where Government can and have acted.

Julie Elliott

Do you think it is a problem, the traceability of Twitter, Facebook, all of these accounts?

Matt Hancock

I do think it is an issue. Let me give you an example where we have done something about it in terms of liability. The Defamation Act 2013 states that if you are defamed by somebody on social media and you cannot trace where that came from and therefore who is liable for that as a publication then the liability rests with the platform. That is quite a big step but—

Julie Elliott

How could somebody, an individual, afford to pursue that if that happened to them?

Matt Hancock

How could they afford—

Julie Elliott

To pursue an action under the Defamation Act.

Matt Hancock

Lots of people pursue defamation action all the time. We can have a whole hearing on access to justice and how you can have a—but that is the legal system in the UK.

Julie Elliott

You do not think that is a problem to ordinary people.

Matt Hancock

I think that there is a practical problem about the value. If somebody has tweeted something and only a couple of thousand people have seen it, the value of the recompense is an issue given that the numbers of who have seen it would be much smaller. Therefore there would be a question of the degree to which the court would decide that it brought harm, but that is a matter for the court’s interpretation in the libel system. I was trying to explain the principle, which is there in English law.

Julie Elliott

How many cases have—

Matt Hancock

There are none that I know of.

Julie Elliott

I want to quickly move on. It has been suggested that individuals exposed to foreign propaganda should be informed of each incident. Do you think that is a proportionate response?

Matt Hancock

I think it is worth considering. It is a tricky question because it depends how—it may well depend on the circumstances. I do think it is worth considering. I have not come across that proposal before.

Julie Elliott

Should that be the responsibility of the social media platforms, do you think?

Matt Hancock

That is a very good question that is worth looking at.

Julie Elliott

Who should monitor this and how should infractions be dealt with, do you think?

Matt Hancock

At the moment it is all dealt with by the social media companies but often they do not even police their own terms of reference. For instance, I have been talking in public about making sure that social companies have age appropriate design and age appropriate designed websites. At the moment they do not follow their own terms of conditions in terms of ensuring they are age appropriate and age ratification takes place properly. In this case it is a question of them—

Julie Elliott

Would you say at the minute there is not a proper mechanism there to deal with infractions?

Matt Hancock

I would say that at the moment this is an area that is unregulated.

Rebecca Pow

Welcome, Secretary of State. Very nice to see you at our Select Committee. On that very note, and from your answers, Secretary of State, it would seem as if Government are a very long way from being in control of what the social media companies are in fact doing. Are you on the case, Minister?

Matt Hancock

Yes, we are on the case. I think this is new policy area. This is one of the reasons this is—excuse me, there is a squeak. One of the reasons this is such an interesting policy area is because it is new.

Rebecca Pow

Would you say it is frightening? From some of the evidence we gathered in the States, particularly from Twitter, when they said that “It was not in their remit” to worry about what the truth was— in fact they took no responsibility whatsoever for what was being posted. Is that not deeply concerning for what is happening to our society?

Matt Hancock

This is why we are putting an awful lot of work into getting to the right place and it is a judgment for society. My view is that society’s judgment is legitimately expressed by Parliament. That is why I am glad that you are doing the review and that is why we are going to take your report so seriously.

Rebecca Pow

Good. I think you will find a lot of very interesting things have come to light in it. On that note we are legislators. Do you think Government might think about legislating for these big huge companies, Facebook, Twitter and Google, to prevent them from doing things, just as they have done in Germany already quite successfully with Facebook? Do you think we could follow that model?

Matt Hancock

We do not rule out legislation so the first part of your question I agree with. I was going to say yes then you said, “Should we do it the same as in Germany?”

Rebecca Pow

It was just an example of how it is possible to do something.

Matt Hancock

I am not a fan of doing it exactly as they have done in Germany. I think that when a regulator gets to the position where they are policing the publications of politicians then you are into tricky territory but the—

Rebecca Pow

They have passed hate speech legislation basically.

Matt Hancock

Yes. I think we take a different approach in Britain. I think that our—partly due to our history and our culture we have a different approach but should we have legislation that is appropriate to us and written by the British Parliament; we do not rule that out.

Rebecca Pow

Another aspect of that is that these social media platforms—it seems they are massive data harvesters and they are gathering loads of data about all of us. Should they be brought to account if they are selling that data or passing it on? Surely that is something that we have to also bring under the microscope.

Matt Hancock

Absolutely. The Data Protection Bill currently in Committee on this corridor will have a big impact on how the social media companies operate and they must live under it like everybody else. So I hope that the Data Protection Bill and the GDPR that it incorporates will be the right way to solve that, yes.

Rebecca Pow

We also, in our inquiry, have come across this issue where social media platforms—they call themselves platforms, but are they in fact publishers?

Matt Hancock

This is a very important question and the Prime Minister has opened it up and she has asked this question. They are clearly not simply conduits of information. They already take a view over what is on their platforms. So they already curate the platform. If you give them the full liability of a publisher then I cannot see how they can operate. We are all extremely sensible people around this table. I cannot see how, say, Twitter would be able to allow us to tweet if they had to take full legal liability for everything and I think that the whole model would collapse. I have an App for my constituents. I cannot be liable for what they publish otherwise I would not be able to allow them to publish it because I can only be liable for what “I” publish. That is the argument against full publisher status. Nevertheless, the current law is that they are mere conduits and that law was put in place to stop the people who were responsible for the wiring being responsible for what went over the wiring. It was designed with open reach in mind and then there was a legal case when it was decided that it applied to the platforms as well. In the US there was an Act of Congress that gave them safe harbour. I think that they already act to curate their platforms more than is required by law. We have talked about some examples already. At the moment the debate takes place between these two with—are they one extreme or are they another, and there are very good arguments to say that they are neither one extreme nor the other.

Rebecca Pow

Do you think there should be a new definition then of what they are?

Matt Hancock

I think there is a very strong argument for a new definition, which takes into account—that is more subtle. Ultimately this is about updating regulation to take into account changes in technology, which is what we have to do in this place all the time.

Rebecca Pow

The point is you seem to be justifying the fact that they do not take account of what is published on there and yet we expect newspapers to. We take them to court if they publish things that are incorrect. Surely we need a whole new framework and I believe you mentioned this in a recent speech at the Oxford Media Convention. When might you think such a framework might come forward?

Matt Hancock

A couple of things in response to that. The first is that currently the e-commerce directive of the European Union says that they are a mere conduit. We are going to leave the European Union and so this may be an opportunity to write a set of laws that are absolutely right for the modern times, which allow for the innovation and the use of social media but get this balance right at the same time. At the moment, without changing the e-commerce directive, you cannot do that. So there is an opportunity for Brexit, in terms of timing. Secondly, we want to hear what you have to say before we publish details on what we are thinking. This is part of the consultation on the Internet Safety Strategy. We have opened up the question because we think it is very important to answer. What I say is the answer is likely to be more nuanced than the binary debate, the either/or. You also asked about—sorry, there were so many parts to the question. You also asked about the newspapers. Platforms are different from newspapers. A newspaper checks every word that it prints and that is different to what happens on a platform.

Rebecca Pow

Finally, shall I round up with the—do you think that social media companies are in effect behaving as monopolies and as such should the whole issue be referred to the Competition Markets Authority?

Matt Hancock

That is a really interesting question. The way that competition law was first designed, over 100 years ago, and used to break up the big American railroad monopolies was that there was, essentially, a percentage of the market test and if you were bigger than a proportion of the market, whether that was a quarter or a third, you were deemed to be a monopoly. That was because you would have an impact on the market as a whole, but also because you would have very strong political impact. Over time the theory behind our competition policy shifted to the question of consumer detriment. How much do consumers lose because monopolies can charge more? This change, which happened over the 1950s, 1960s, 1970s is now entrenched in European competition law. The problem with the consumer detriment concept of competition policy is that in many of these cases, the fact they are a monopoly leads to a consumer advantage. They come up with free products. The fact that you use Google Maps and I use Google Maps means that the timing ETA thing on the Google Maps is more accurate, not less, so people benefit from the fact that there are monopolistic tendencies. On the modern consumer detriment question of whether such bodies are competitive, they are highly competitive because they deliver benefits to consumers and they have competition between them. Anybody who has looked at the behaviour of Facebook when it responds to an insurgent like Snapchat can see that they are highly competitive and they respond to the market. The whole question of the concept of how we run competition policy in an era where many goods and many of the new innovations have zero marginal costs and are free, is intellectually difficult. At the moment European competition law is framed in a completely different way based on a world of widgets. The European competition law has had some positive impact on Google, but by picking off particular areas of obvious detriment—for instance, when they come in to bat against a small website by asking the website and giving the impression that they are interested in an acquisition, and then inventing the product themselves. Again, with Brexit, we have an opportunity to shape our own competition policy because although the competition authorities here execute on competition policy they do not design it. It is all done within the European framework. So there is another opportunity from Brexit to have a big look at how we run competition policy in the UK in the light of the changing technology and the fact that many of the innovations of our time have zero marginal cost.

Chair

I think Jo Stevens wants to come in on this point as well.

Jo Stevens

I might come in on another point as that has already been dealt with if that is okay, Chair. I wanted to ask you about the National Security Capability Review and the National Security Communications Unit. The objective of the first review is to ensure that the UK’s investment in national security capabilities is as effective as possible. How does that work, link in, with the Prime Minister’s newly established National Security Communications Unit that has been tasked with tackling fake news?

Matt Hancock

Clearly, we have a cross-Government approach to tackling this question. We have the resources to deal with it. There is a combination of a foreign policy question, which is a Foreign Office lead. There is an overarching national security lead in the Cabinet Office, which the review in the unit that you mentioned sits under, and then domestic disinformation and the role of digital and digital policy, and policy towards the big digital companies and the lead for interactions with those, sit under DCMS.

Jo Stevens

Should your department not be taking the lead on fake news across Government?

Matt Hancock

Yes, we do but there is a broad—

Jo Stevens

So what are you doing?

Matt Hancock

There is a broad series of actors. We take the lead on digital and on communications but there are also links to wider national security measures—as I mentioned, UK Against Daesh is an MoD lead. There is a broad range of actors across Whitehall, which are, in my experience, very well co-ordinated.

Jo Stevens

I am glad you raised that Twitter account because I have to say I had never heard of UK Against Daesh. I have just had a look at it. You have described it as being very successful. It has just over 26,000 followers. Your Opposition counterpart in the Commons, Tom Watson, has 243,000 followers on Twitter. What are you using as a success measure for this UK Against Daesh account?

Matt Hancock

I was using it as one example of tackling, in that case, a clear adversary that uses social media—or certainly it used social media. It does that less so today but it is still active to try to encourage people. So it is one part of a response.

Jo Stevens

Sorry, what is the measure? How are you measuring the success? You said it has been very successful. What is the success?

Matt Hancock

By the measuring the—what I was trying to say is that there are lots of different actions that have been taken against Daesh, which is one part of it, but one of the things that we have seen is a serious degradation in the amount that Daesh is dominating social media, partly because we are responding in kind.

Jo Stevens

Right, okay. Going back to the communication service providers, do you think they should be invited or compelled by law to share their information about disinformation or fake news at an intergovernmental level with Governments, NGOs and academics? This came up in our inquiry. It is something that we want to see.

Matt Hancock

Yes. I certainly think they should be invited. Indeed, I wrote to them to say that we expected them to and we do not rule out legislating on transparency if necessary.

Chair

To go back over a couple of things. You accept that the tech platforms already have some liability for the content that is on their sites even though they are not the publishers of it. I think so far the action of the companies against child pornography is a good example of the liability they have to act in a responsible way.

Matt Hancock

They take responsibility for ensuring that their platforms do not have illegal content. Certainly in that case, yes.

Chair

Do you think there are grounds here and is something we could do, as an EU member state not thinking beyond Brexit, is if the companies are failing to meet what would be considered to be their social obligations, to take down harmful content? Could they be open to some liability for that, for failing to act in a responsible way?

Matt Hancock

The limits of the extent that we could legislate in that space are defined by the E-Commerce Directive.

Chair

In the case of Germany the companies do have a liability for failing to act against hate speech. That is enshrined in German legislation to prevent the distribution of nasty slogans and so on and they can be fined heavily. So they are within an EU member state, they have a clear legal liability and there is a clear sanction if they do not act in the same way.

Matt Hancock

Yes. That is right. There are things that can be done. My point on Brexit is that outside of the EU we could attempt, as this country is quite good at in lots of different areas, to write forward looking legislation that supports the innovation and the freedom that these social media platforms bring, but also ensure that they mitigate better against the harms. That is an option. We have not committed to doing that but we are actively open about discussing that. In this debate it is very easy to focus on the harms—I spend most of my time, when thinking about social media, thinking about the harms, but we also should not throw out the baby with the bath water. Social media has a great powerful force for good and it can solve problems and improve people’s lives and their ability to communicate. If you were asking about our role in tackling loneliness, which Tracey Crouch leads on, social media has a big role to play in solving those problems. Naturally we will park that because that is the great bit and it is going fine and thanks very much, but it is very important that we do not throw out that baby with the bath water.

Chair

I think that is understood but it is a bit like saying if, 20 or 30 years ago, you were Transport Minister and we were having this debate and whether we should have seatbelts in cars. We would not be doing it because we are anti-car. You recognise it as a—

Matt Hancock

It is a very good analogy, yes.

Chair

So in this case do you feel that in terms of the scope of what the Government might consider in this regard, the Internet Safety Strategy takes us in a direction of identifying harmful content but it is listing what harmful content is. If the tech company is in a position where, for example, a user has contacted Facebook saying, “I have seen on your platform this harmful content and I think you should take it down because it is harmful, it might be illegal, and it certainly breaches your community guidelines” and they then failed to do so. In that case do you think they would leave themselves open to some—would they be liable in some ways for their failure to act against that harmful content when it had been brought to their attention?

Matt Hancock

I think that is interesting and worth considering.

Chair

The Home Affairs Committee heard yesterday repeated examples of harmful content on YouTube—content that was illegal, which could incite people to commit atrocities and illegal acts. Do you think there, again, a company like YouTube should have some liability for its failure to act against harmful content? It had either been referred to it or it could easily, through technology, have identified it itself?

Matt Hancock

I think that a useful concept here is the duty of care. So social media companies have a duty of care especially to children but also to all of their users. A decent duty of care is written into many of their terms of reference but then I worry that they then do not police those terms of reference.

Chair

If those worries persisted, is this an area where the Government might say, “If you cannot convince us that you are being effective in policing your duty of care to your users that we will create a legal framework that makes you liable for your failure to do so”?

Matt Hancock

I am very interested hearing the argument that Tim Berners-Lee recently made. Tim Berners-Lee famously invented the World Wide Web and he said, “This is for everyone”. He was a very strong proponent of the argument that by connecting people you make the world a better place and I have huge respect for him and his work. He now argues that you cannot then just rely on the individual social media companies to do the right thing, not least because when they are sat on these chairs they feel the pressure—I know what it feels like. They may well respond and it is interesting that the ones that you have called in are the ones that have responded more vocally. Look at some of the others, like Kick and music.ly and ask what are they doing and what were they doing before there was public scrutiny of some of the worst problems on those sites. Then you ask, “If we are going to have a successful market and we are going to try to ensure that there is less monopolistic activity”—for instance, within GDPR you can request to take all of your data from one site and put it on to another. I think that sort of contestability is going to drive competition among the platforms. Then do you not need a level playing field? All these things operate within frameworks. It is a matter of getting the frameworks right, and the combination of rules and norms in order to solve these problems. Freedom exists within a framework. We as a society live within a framework of the rule of law and the protection of property rights and protections of individuals, and we have developed them over centuries. Now there is a whole new online world, and where such things can be best done through norms of practice that is great and often simpler. One good example of norms and individual action was when we got all of the big search engines around the table and we said to then, “It is unacceptable that pirated music is at the top of the search returns” and after two years of roundtables they changed their algorithms, not just here but globally, to put up music whose rights had been paid to the top of the search returns. That was a good action that happened without legislation, and where British leadership has changed for the better the way that this operates the world over. Sometimes norms are the best way of doing it. Sometimes it is going to take rules, and teasing all that out is a massive job. As Rebecca was saying, there is a big job to do. Nobody has yet gone down this path properly and I think Britain is uniquely well placed to lead.

Chair

The question I was trying to sort of get you to answer was—

Matt Hancock

Sorry, did I answer a different question?

Chair

Although your response was very interesting. Okay, are we at the point there within that framework at which, if the Government are not going to regulate YouTube, they are going to say, “You have obligations to your users, some you define for yourself and others, as a society, Parliament will define for you. If you fail to meet those obligations there is a sanction that is applied”. It is not just public criticism; it is saying “Your user could take legal action against you or you might be fined in some way”.

Matt Hancock

There are two examples. I have used the Defamation Act 2013 although, as you rightly asked, I know of no cases against it, which surprised me when I asked that question and got that answer. In the Digital Economy Act last year we legislated to ensure that there is age verification required, so children cannot look at adult material, and that is going to be in force by the end of this year. The sanction there is takedown. So if you are a porn site and you do not have age verification, it would be taken down. Incidentally, many porn sites are changing their systems globally, again in response to UK legislation, which shows this lie that because the internet is global therefore we have no say. It turns out in some cases that they change their global systems in response to what we do here in the UK. There are different ways. There are different sanctions. GDPR on data protection has 4% of global turnover; a potential fine. So whether you use fines or takedowns or you have non-statutory sanctions there are lots of different ways to skin this cat, but the area of challenge is so big that there may well be different sanctions in different places.

Chair

So I am clear from what you said, the idea of the principle that maybe through legislation there could be a liability established in law for companies failing to act against harmful content when they reasonably could have done is something—it is within the scope of what could be legislated on. I appreciate what you said throughout the hearing this afternoon that you are not in a position to make a decision on those things yet.

Matt Hancock

Exactly, but we are open to it and I have personally legislated for it in some areas.

Chair

When the Home Secretary visited California recently, she demonstrated a tool that the Home Office had commissioned from a British company, which with, I think, 99.95% accuracy can identify Jihadi films on YouTube. I would imagine one of the reasons that this piece of work was commissioned was not because the Home Office want to get into this business but to demonstrate that if they can commission a company to do it then YouTube could do it themselves. Do you think that there should be more pressure on them to create the tools and to use AI in particular to police what is on the site?

Matt Hancock

Yes. I would say that it is a question of keeping the pressure up. I would say on this the big companies have moved a lot. They have put a lot of resources firstly into human checking but latterly into AI. They are now taking down a huge proportion of harmful material before anybody sees it. They have changed a principled approach, which is important. Instead of saying, “We cannot get our AI to take it down because we might have false positives. We might have perfectly reasonable pieces of content that we then take down by computer and so people cannot post and that is a problem with freedom of speech”—that use to be their approach, but longer. They now say, “We’ll take it down by AI and then we will have an appeal process ultimately to a human being and if somebody does not like the fact their thing has been taken down they can ask us to put it back up again. After a period of time we will have a look at it and it can go back up”. I think that is the correct approach, which is the precaution principle. I would say that we have to keep the pressure up but they have done a lot.

Chair

I would go back to my previous question on this question of liability. You can say that failing to act could come with user referral. I have certainly seen an investigation that was done by the BBC about a year ago where they found sexualised images of children on Facebook. They were not illegal but they were certainly in breach of Facebook community guidelines. They had been referred to them. Facebook had not taken them down and they only took them down when it was revealed to them this was a BBC investigation at that point. So there is that point. There is user referral and whether there should be a liability for failure to act there. Do you think that could be extended to say that if you have not deployed technology that is easily within your grasp to identify this material, and if you could have acted in a way to prevent people seeing it, that that is a harmful act as well?

Matt Hancock

Potentially. I think the concept of duty of care is the way to think about this and then a lot of things flow from that in different areas.

Chair

A number of colleagues are quickly going to come in on this so I will bring them in the order people pointed to me. Simon first.

Simon Hart

First, on what you said about duty of care particularly towards children. One thing I think we have learnt on this particular voyage is that the value of these companies is heavily dependent on not necessarily the number of people who visit them and who are online, but on the length of time they are online. That means that there is an incentive for the social media companies to somehow deploy addictive techniques in order to keep people—and one would argue, particularly vulnerable people—on their platforms for as long as possible. That would seem to me quite difficult to square with a duty of care towards children if their share value is purely dependent on—well, largely dependent on that. Point two is about where the distinction lies between social media platforms, as we have been sort of generalising this afternoon, and huge newspaper online presences. Take, for example, the Daily Mail. It has 10 million online users, and it invites and encourages lots of people to comment on the articles that they are putting online, so suddenly they become sites where people exchange views that are often offensive, inaccurate, intolerant and in some cases dangerous enough to compromise cases, which people may be involved in in the courts. I am not sure if it is a case of saying, “The newspapers have one set of rules over here and the social media companies have several rules over here”. That is getting quite blurred.

Matt Hancock

Yes, of course it is.

Simon Hart

I was wondering how you would wend your way through that.

Matt Hancock

Okay. On that second part; of course our media regulation broadly falls into three buckets. Broadcasting is regulated by Ofcom. Newspapers, 95% of which are regulated by IPSO. A small number, in terms of readership, are regulated by IMPRESS and then the unregulated internet. There is a blur between these three. There is a video by a broadcaster on internet on-demand services regulated by Ofcom, but the same video on The Telegraph website is regulated by IPSO, but if you published the same video on the internet it would not be regulated at all other than by the law. There would not be media regulation over it. So there is a blurring and I think that some of the distinctions and the brickbats between the three sectors are not as subtly defined as reality.

Simon Hart

The first question. Did you want to—

Matt Hancock

Remind me of the first.

Simon Hart

How such media companies can fulfil a duty of care particularly to children at the same time as being entirely dependent on length of traffic.

Matt Hancock

This is it, isn’t it? This comes back to the financial incentive on the one hand and the incentive to do good things.

Simon Hart

It was the fact that Twitter said to us in America, “It is not our job to be arbiters of the truth”. I thought that we are a long way away from a duty of care being anything like effective if these people do not give us the impression that they are particularly concerned about what the impact of their presence may be. If they could just sit there and say, “What does the truth matter? That is not our problem.” That is what they were saying. Surely the truth does matter.

Matt Hancock

Yes, it does. An objective reality does exist and the fact that we have to assert that is a sign of the times. The response to that, I think, is that the need for trusted brands in terms of “the media” mediating information, ploughing through the endless news and views on the internet and turning it into high quality journalism. That is yet more valuable than it has ever been, and that is true whether it is in broadcasting or in print or indeed online. The broad range of the need across the piece for high-quality trusted journalism is incredibly high. This is the big focus of what needs to be fixed in the space of the media.

Jo Stevens

Very quickly, on duty on care, this is legally meaningless in the context of social media platforms because there is no legislative framework. There is no legislation and definition that sets out what their duty of care is. They are deciding what their duty of care is and as we know from what we have seen and what we have heard throughout this inquiry that they do not treat it in any way seriously. Would you agree with that?

Matt Hancock

You are right that there is not an overarching legislative definition.

Jo Stevens

There is not any.

Matt Hancock

There are pieces of legislation. There is legislation that we have brought in with respect to children looking at adult material and there is legislation currently before the House in the Data Protection Bill with respect to age-appropriate design for data protection standards on websites for children. There are pieces of legislation but you are right, there is not an overarching piece of legislation.

Jo Stevens

Do you think there should be?

Matt Hancock

It is not off the table. We are considering that as part of the Internet Safety Strategy. In the consultation document we publish in October, we raise that. “Does there need to be?” question, and we are looking forward to your report.

Ian C. Lucas

Another piece of legislation derives from the EU Data Protection Directive, which is current law, and it says that any company that processes information cannot do so on the basis of racial or ethnic origin, political opinion or religious or philosophical beliefs. Any of that type of collection of information and processing of information is currently unlawful. How at the moment do you ensure that that piece of legislation is complied with?

Matt Hancock

The description that you give is of sensitive data.

Ian C. Lucas

Yes.

Matt Hancock

It is lawful to process sensitive data but only under a certain set of conditions, either if you have consent or if you have one of the many exemptions that exist, for instance for journalism. There is a public interest test in some cases within that. This is all being strengthened in the Data Protection Act and in GDPR, which is going to come into force on 25 May. All of that is policed by the Information Commissioner. At the moment the Information Commissioner has small powers to fine but she is about to get very big powers to fine with fines up to 4% of global turnover. The Data Protection Bill is an incredibly important piece of legislation in this space.

Ian C. Lucas

I agree entirely with that. We heard from the Information Commissioner last week and she does not feel that she has adequate powers at the present time. If I can just be completely straightforward with you about why I am interested in this particular issue, as one of my colleagues said earlier, this has been a journey of revelation for many of us, and one of the revelations that I have received is about Facebook on this journey. I have learned that targeting in political campaigns via Facebook—you are a very Conservative political animal and I am a very Labour political animal and we are both very interested in this—

Matt Hancock

I would say that I am moderately Conservative and you are moderately Labour, but there you go.

Ian C. Lucas

Okay. I am not sure if that is a compliment or not. As you will know from recent elections that we have both been involved in, the targeting of political campaigning with Facebook has been extremely important and, I would say, may even have had a pivotal impact on elections that have already happened. I think that much of the targeting that has happened in the past has fallen foul of this Directive. What do you think?

Matt Hancock

I have not seen evidence of that. I do think that the use of Facebook in particular in political campaigning has had a big impact. Quite a lot of the social media platforms have. In a different way of course Twitter has as well, because the President of the United States uses it to make announcements.

Ian C. Lucas

We agree it has had a big impact. What I want to know is whether it has had a lawful impact. What concerns me is that we cannot find out about this activity because we cannot get access to the information that Facebook have about the personal data that they hold.

Matt Hancock

I have seen no evidence of activity in this space that is not legal and it is a matter for the Information Commissioner as the enforcement arm.

Ian C. Lucas

Let me tell you, you see no evidence because the only people with the evidence are Facebook. Facebook have no obligation to give that evidence to the Information Commissioner and she has no powers at the present time to demand it.

Matt Hancock

As I say, she is getting more powers in the Data Protection Bill.

Ian C. Lucas

Do you think she needs to have those powers in order to gain access to this politically sensitive information?

Matt Hancock

The power to fine up to 4% of global turnover will ensure that she can get what she needs.

Ian C. Lucas

I do not mean fining, I mean in the first instance to require access to the information. Do you think that is a power she should have?

Matt Hancock

The powers that she should have, which are strengthened, are set out in the Bill. The Bill is what we should put through—it has cross-party support—in order to make sure that she has these extra powers.

Ian C. Lucas

Can I be clear? Sorry, I did not quite get that. Do you agree that the Information Commissioner should have powers to access information held by Facebook to target individuals politically?

Matt Hancock

Her ability to fine in very large scale will enable her to be able to require that information.

Ian C. Lucas

I am still not clear that you have answered the question. I am talking about access to information.

Matt Hancock

I know, and I am saying—

Ian C. Lucas

I am not concerned about fines at the present time. I am concerned about access to information.

Matt Hancock

I understand that and what I am saying is that when you have the power to levy these massive fines you can therefore require people to be constructive because otherwise they know what is going to happen.

Chair

I take it from your answer that you disagree that the Information Commissioner should have the power not to fine but to just obtain the information that she has asked for.

Matt Hancock

I have not been approached by the Information Commissioner, other than her support for the Data Protection Bill as it is before the House now.

Chair

The briefing note produced by the Information Commissioner for Parliament states quite clearly that she feels that she should have the power not just to fine but to gain access to the data that she has requested. The company should not be able to deny that to her.

Matt Hancock

Okay. She has not asked me.

Chair

I think she said when she gave evidence to the Committee that she was raising this with Ministers and your Department and that there had been conversations about this.

Matt Hancock

My door is always open. We have a very good relationship and we have proceeded with the Bill on the grounds that the Commissioner and the Department have gone along side by side. I am very happy to have that conversation. I am afraid I did not see her evidence before the Committee.

Chair

It may be that she has spoken to one of your ministerial colleagues but she certainly told us that those conversations had been had. It is no secret that the view they have expressed is that they should have this power.

Matt Hancock

We have been very broadly consultative and engaging with amendments from people all across the House, including in the Lords. We accepted amendments from Cross-Benchers and from Labour Party Peers as well as engaging with Conservative Peers. One of the great strengths of the Data Protection Act 1998 was that it had very strong consensus behind it and very strong cross-party support. I am delighted that the Data Protection Act currently before the House was voted through unanimously on Second Reading. That is a really important part of getting these structures in place. I am completely open to that.

Chair

Would you be able to write to the Committee—I think that would be very helpful because this is quite an important issue for us—to set out what discussions the Department have had with the Information Commissioner and if you have reached a view on those discussions?

Matt Hancock

Yes, of course. I understand that Margot, the Minister, was having a conversation with the Information Commissioner this morning and I have not have a readout of that conversation. It may be that it has happened but I just have not been made aware of it. I hope you can see from my tone that we have designed the current system with the support of the Information Commissioner so that the fines would be able to be used as a stick to require companies to do what was asked of them by the Information Commissioner. If she has updated her view due to what has changed during the passage of the Bill and has changed that view, then I am open to that conversation. There would then be a process question as to what you do at this late stage when something like that is raised. I am completely open-minded on it.

Chair

Without wishing to put words in Elizabeth Denham’s mouth, from what she said to the Committee I think this has come out of her frustrations with the current investigation they are running and the difficulty of obtaining the data they have asked for from companies, and therefore whether the threat of fines is enough.

Matt Hancock

Yes, that is absolutely right and if we think back to the autumn when there was the Uber data breach you will recall that in my first statement to the House I could not say how many people had been affected because the first number given to us by Uber was clearly completely inaccurate. Even not having seen any of the systems I knew when I was given the number that it was woefully inaccurate and indeed two weeks later they updated it to a figure in the millions. I entirely understand the impulse behind it and I am very open-minded.

Chair

Yes. Do you think that it is not just a process question about the Bill but also a point of principle here as well to ask whether there should be an agency—in this case the Information Commissioner—that has the power to go behind the curtain, to go into companies that have closed systems and are under no obligation to share data? They say it would be wrong and dangerous for that data to be opened up in any way because of bad actors in their work, but should someone have the power on behalf of Parliament and Government to do that—to go in and actually to check whether they are complying, whether the evidence and the information they are supplying is correct, and whether they are complying with the data protection laws?

Matt Hancock

I would be reluctant to bring in an unfettered power but in certain circumstances where it is required that is reasonable.

Chair

Well, maybe they could demonstrate some grounds that they had for believing that there was—

Matt Hancock

Exactly. Exactly, yes.

Chair

Perhaps they were unsatisfied with the information they had been given or there was an overwhelming public interest.

Matt Hancock

Yes.

Chair

As a point of principle, how do we know that Facebook is complying with the GDPR?

Matt Hancock

Indeed, absolutely. Part of the complication of acting in this whole space is that the execution, by its nature, has to be done with the companies. We have to bring the companies themselves to bear on the solutions to this, because due to the nature of social media, you cannot just go and look at it all. That does make it very complicated.

Chair

The Committee has also had representations regarding Provision 171 in the Data Protection Bill and about the issue of data laundering—whether someone who has acquired someone’s data, and that person has made a request for their information back, should be able to hold on to it. The powers in the Bill do not necessarily go far enough to help people secure all of their data back. An example could be where with Facebook you have data held by Facebook and other data being harvested by Facebook but held by developers and so on.

Matt Hancock

The law is framed as it is because it essentially requires companies to delete that data where it is reasonable. The nature of the internet is that to completely delete everything is very difficult. We take a basis of reasonableness in the approach to that.

Chair

Okay. Unless anyone wishes to come in on any other points on this section we will move on.

Paul Farrelly

I apologise for being late, Chair. I have one question that has not been asked. Clearly the data protection legislation is now going through to implement what has come out of the Directive in Europe. What thought have you given to how compliant we will be in the future with those Directives once we leave the European Union?

Matt Hancock

Yes. We are going to implement GDPR in full. That is what this Bill is all about, to ensure that we have a full-spectrum data protection system consistent with GDPR. The elements that are governed directly by GDPR that are an EU competence will slot in through the Withdrawal Bill procedure, and the Data Protection Bill puts in place the broader framework for data that is not an EU competence. Then we will have a GDPR-compliant system and our intention is to be compliant. One Parliament cannot bind its successor but we intend to fully align to GDPR.

Paul Farrelly

You do not see any reasons at present for any divergence in the future?

Matt Hancock

On the contrary, I think there are huge advantages to being aligned.

Rebecca Pow

Can I ask one very quick question? It is completely off on a tangent but it relates to what one of my colleagues said earlier about whether you should have warnings on social media. Given that this Government are acutely aware of the concerns of loneliness in the community, and also about increasing obesity in young children and our drive to improve mental health and wellbeing—I am talking particularly of children—should that be taken into account when we look at social media? You will use the evidence of our inquiry as well. Should we think about the kinds of warnings that we ought to be highlighting, just as we do with cigarettes, in particular for our young people regarding how they use social media, for how long, and what it is going to do to them?

Matt Hancock

It is all worth looking at.

Chair

Can I ask finally on this part of the session: do you share the concerns raised by the advertising industry and big marketing companies about the lack of clear information and data? Digital advertising is now a bigger part of the advertising market than TV. The numbers on the audience base are generated entirely by the companies themselves and we have no way of validating whether they are true or not.

Matt Hancock

Yes, I do. Here I think the case for legislation is weaker, first because advertising is entirely self-regulated—I think that is a good thing—and secondly because the advertisers are spending a lot of money with these companies and, as you say, they want to ask the question of what they are getting in return. That is a perfectly reasonable contractual question to ask.

Chair

We may not be at this point yet but you might say in other media there is work that is done to verify what audiences are and the nature of the audience. I am sure you will have seen the Sunday Times piece where they sought to buy advertising on Facebook for 18 to 34-year-olds and were quoted a Facebook audience in the UK of 17 million people. According to the national census there are only 12.5 million people of that age group in the country. Even allowing for a little bit of slippage, those figures are clearly way off. In another walk of life that would be seen as straightforward mis-selling and you would be bringing in the Competition and Markets Authority to investigate mis-selling. Do you feel there does need to be more work done here?

Matt Hancock

I do think it is a problem, yes, and it is a problem that, as advertising budgets are increasingly moving online, the advertisers are waking up to.

Chair

Yes. I know it is different from the point we discussed earlier in regards to breaches in data protection law, but there is no one who has the authority to go into a company like that and say, “We are concerned about this. We want to check what you are doing. Can you show us how you monitor these accounts and make sure that they are real?”

Matt Hancock

That is right.

Chair

Okay. Right. We will move on to other topics now. We are going to start on press regulation.

Matt Hancock

I thought we had covered that.

Ian C. Lucas

We have not even started, Secretary of State. When the Government corresponded with Sir Brian Leveson in December of last year they indicated in a letter dated 21 December that, and I quote, “We are not convinced the second part of the Inquiry is necessary”[1]. In response to that letter of 21 December Sir Brian Leveson wrote back and, to quote Sir Brian Leveson, he said, “I fundamentally disagree with that conclusion”. Why did you not tell the House of Commons that?

Matt Hancock

We published the letter on the same day that I announced the conclusion of the consultation.

Ian C. Lucas

What you did, Secretary of State, was make a statement in the House of Commons. What you said, and I quote from Hansard, is, “Sir Brian, whom I thank for his service, agrees that the inquiry should not proceed under the current terms of reference but believes that it should continue in amended form”.

Matt Hancock

That is right.

Ian C. Lucas

You did not say that Sir Brian Leveson disagreed with the conclusion that the Government had reached.

Matt Hancock

Implicitly I did because I said, as you read out, that he believes that it should continue in an amended form. That is his position as he sets it out in the letter.

Ian C. Lucas

What Sir Brian Leveson said was that he fundamentally disagreed with the Government’s conclusion and when you made the statement to the Commons on 1 March you did not tell the Commons that, did you?

Matt Hancock

I said that he believed that it should continue and that was his position. Obviously he disagreed with my conclusion, which is that initiating Leveson 2 is not what is needed and not in the national interest now.

Ian C. Lucas

He disagreed with you?

Matt Hancock

Yes, he did, and he wrote that to me.

Ian C. Lucas

What you told the Commons when you made your statement was that he agreed with you.

Matt Hancock

No, I said that he agrees that the inquiry should not proceed under the current terms of reference, which is true, and he said that he believes that it should continue in an amended form, which is also true. I think by saying it in the way that I did I explained his position. I did not use his words but I explained his position.

Ian C. Lucas

Secretary of State, I was in the Chamber for that statement and I was very concerned about what Sir Brian Leveson’s position was on this matter. When I listened to you my understanding was that his position was exactly the opposite of what you are now saying it was.

Matt Hancock

I know there has been a point of order on this and the Labour Front Bench has mentioned it in the UQ, but all I can do is refer you to my original words, in which I explained that Sir Brian believed that the inquiry should continue. I said that in my statement when I explained that my judgment was that it should not. I was setting out his position.

Ian C. Lucas

You did not set out his position because you knew that I, like every Member of the House of Commons, had not seen the correspondence when you gave your statement.

Matt Hancock

I published it that day.

Ian C. Lucas

Would it not have been straightforward for you to quote Sir Brian Leveson when he said, and I quote, “I fundamentally disagree with the Government’s conclusion”?

Matt Hancock

I explained Sir Brian’s position in a way that is—I thought was straightforward.

Ian C. Lucas

Why did you not quote him? Why did you not quote him when he said, in response to the Government’s position—he said so in his letter—“I fundamentally disagree with the Government’s conclusion”? Why did you not quote him?

Matt Hancock

He wrote a long letter. I could not read out the whole letter.

Ian C. Lucas

You could have said, “I fundamentally disagree with the Government’s conclusion”. That is what Sir Brian’s position was.

Matt Hancock

I do not think it changes anything. What I did was I set out Sir Brian’s position at the Dispatch Box.

Ian C. Lucas

You did not set out Sir Brian’s position at the Dispatch Box. You referred to a point of order, did you not, that happened on 5 March? In response to the point of order you said, “I very clearly and carefully described my position and Sir Brian’s”. That is a matter of opinion. You then said, “Now that his letter is in the public domain I think it is all very straightforward”. Does that mean that when his letter was not in the public domain it was not straightforward what his position was?

Matt Hancock

No, because I set it out in the statement.

Ian C. Lucas

You did not set out his position in the statement.

Matt Hancock

I am sorry but we are not going to come to an agreement on this. You have accurately and faithfully read out the statement that I made, which I have here as well. The statement that I made was accurate. I think Sir Brian Leveson did a good job, I think the impact of his inquiry has changed the way that the press operates, I think that he undertook it with great thoroughness and I think that now, given that the events that were covered were a long time ago and given all of the enormous pressures on the media that we have discussed at length already today, what is needed for the country and the national interest is to look forward and to look into the sustainability of the press. The fact that you would rather my speech had been written slightly differently, I do not think has a material impact.

Ian C. Lucas

Can I tell you why this is important? We have tried to proceed on a basis of consensus thus far on an important area of policy. You are a new Secretary of State and you stood up in the House of Commons and you represented Sir Brian Leveson’s position. I think you misrepresented his position and I have told you why. Sir Brian Leveson fundamentally disagreed with the Government’s conclusion. Those are not my words, those are Sir Brian Leveson’s words. Why should I believe you today?

Matt Hancock

Because everything I said then was accurate and I represented the position of his letter as a whole, that he believed that the inquiry should continue. I was standing up to explain that I thought that taking everything into account, all the changes since the Leveson Inquiry—all the changes in law, the fact that IPSO now exists—I decided that the best thing is not to have a backward-looking inquiry but a forward-looking inquiry.

Ian C. Lucas

I know what your position is. What I am saying to you is that you misrepresented Sir Brian Leveson’s position to the Commons on that day.

Matt Hancock

That is your view. We are not going to come to an agreement on it. I think I have faithfully represented it, as you read out. I can see that you would rather I had done differently.

Ian C. Lucas

No, what I would rather is that you had been straightforward. I am a lawyer; I know when particular words are drafted for particular purposes, and I think your words were drafted to mislead. That is what I think.

Matt Hancock

All I can say—

Ian C. Lucas

What I would have preferred would be if you quoted Sir Brian Leveson when he said that he fundamentally disagreed with the conclusion that the Government had reached.

Matt Hancock

I can see that that is your preference. I wrote my speech in order to describe his position and that is that.

Ian C. Lucas

My preference, Secretary of State, is for honesty and straightforward evidence. I would welcome that from you.

Matt Hancock

Noted.

Julie Elliott

My interpretation of what you said was certainly in the way that my colleague described, not what you have sat there today and said. The inference of what you said in the statement on 1 March to everybody sitting in the Chamber who had not had sight of the letter was absolutely that Sir Brian Leveson agreed with you, but I want to talk about consultation.

Matt Hancock

Can I say something else about that? The approach that I have and that I hope I can try to bring to this job is to be straightforward and also to look at the national interest now and in the future, and to be cross-party wherever possible. That is important in these matters. I regret that this particular issue has become a point of cross-party contention because it would be better if we could proceed on the basis of the sustainability question on a cross-party basis, and also to take a view about what is in the national interest now and to tackle that with vigour. That is how I want to proceed. As you know from working in the past, there are lots of areas where I work on a cross-party basis and so it is a regret that whether we should continue with Leveson 2 has become a great point of party contention. I am very firm in my view but I take on board the point because—

Julie Elliott

I have to say, listening to that—and I want to talk about the consultation, which is what I am going to ask you questions on—I find that an astonishing statement, Secretary of State. The whole of the issue to do with the Leveson Inquiry, where we got to with Part 1 and Part 2 and the Royal Charter, was done entirely on a cross-party basis. Agreement was reached on a cross-party basis and it was voted through the House overwhelmingly by all sides of the House, yourself included, and you have torn that up. I am going to get on to the questions I want to ask, but that is a matter of fact. That is not a matter of judgment, that is a matter of fact.

Matt Hancock

The fact that the world has changed is also a matter of fact.

Julie Elliott

It has not in reference to this. I am going to ask you, as I am sure you knew, about things to do with Leveson. I want to talk about the consultation on Section 40 and Leveson 2 and the Government’s response, which you brought to Parliament on 1 March. Everything I am asking about is to do with the consultation. When you were deciding on the Government’s response to the consultation, how much weight did you give to the idea that Section 40 and arbitration would lead to local newspapers closing down?

Matt Hancock

The implementation of Section 40 would put at risk local newspapers because of the impact of those who are not members of a PRP-regulated regulator—

Julie Elliott

That is not what I am asking you. I am asking about the weight that you gave to that.

Matt Hancock

I considered all facts in front of me and made the judgment.

Julie Elliott

How much weight did you give to the idea that Section 40 would lead to local newspapers closing down?

Matt Hancock

It was a consideration, as I set out in my statement.

Julie Elliott

It was a consideration but I am asking how much weight you gave to that. Was it a 10% weighting? A 50% weighting? An 80% weighting?

Matt Hancock

I cannot put a figure on it.

Julie Elliott

You did not weight your evidence?

Matt Hancock

I considered all of the evidence.

Julie Elliott

Okay. What evidence was provided to support the idea that papers would close down?

Matt Hancock

There was significant evidence, not least from local newspapers, into the cost pressures that they face and the additional cost pressures that they would potentially face under Section 40.

Julie Elliott

What was that? What additional cost pressure would that bring?

Matt Hancock

The fact that—as under Section 40—if costs are awarded to the newspaper, whether an accusation had any truth in it or not, then upon the publication of anything that mentioned anybody in any substance, that person could complain and have the cost of a court case set against the newspaper, even if the story was true. That would either require the newspaper not to publish anything unless the person they were publishing it about was in agreement with that publication, or to have a risk on costs.

Julie Elliott

Was that evidence that was given to you or was that your interpretation of what was happening?

Matt Hancock

No, the evidence for this was clear.

Julie Elliott

That was given in response to the consultation?

Matt Hancock

There was a whole series of evidence given in response to the consultation.

Julie Elliott

The consultation asked this exact question. You asked lawyers in the industry for evidence of the financial impacts of Section 40. It was Question 2 in the consultation. You have described your view of it but what actual evidence did you receive? Did you receive actual evidence of that, not a view but evidence?

Matt Hancock

I can write to you with the exact statement of the evidence.

Julie Elliott

Lovely. How did you analyse the consultation submission from the News Media Association, which I will quote from, that said, “Figures provided by our members indicate that Section 40 would cost the national newspaper sector around £52 million a year in additional legal costs. The cost to regional and local press would be around £48 million a year”? How did you test that?

Matt Hancock

You can take consideration of all evidence, including that which is put before you. When taking that consideration it is also important to consider both who is providing the evidence and what they might have for it, and also how easy it is to come to an exact figure when something is in the future and the behavioural response is unknowable. That is one consideration, but one among many.

Julie Elliott

Do you have a rational basis for believing that Section 40 would cost the newspaper industry £100 million a year?

Matt Hancock

I have a rational reason for believing that the risk of impact on local newspapers was significant. If they were to—

Julie Elliott

I am not asking about local newspapers, I am asking about £100 million a year to the whole industry, local and national. Do you have a rational reason for believing that is true?

Matt Hancock

Yes, I have a rational reason for considering that as part of the evidence base.

Julie Elliott

What independent analysis did you apply to that figure?

Matt Hancock

We clearly considered all of this evidence in terms of the potential impact that it might have.

Julie Elliott

That is considering, it is not independent analysis. I am talking about testing the actual figures that the News Media Association came up with.

Matt Hancock

In the Department we looked at all of the very considerable evidence on an objective basis.

Julie Elliott

Could you provide written evidence to the Committee on what independent analysis you made of those figures?

Matt Hancock

As I said, we considered all of this within the Department. That is how you go about responding to one of these consultations.

Julie Elliott

Would you provide written evidence on that? You are not answering the question, Secretary of State, and if you did apply scrutiny and independent analysis surely you can provide the Committee with what that was.

Matt Hancock

What I have said is that we considered it within the Department. That is what you do.

Julie Elliott

Will you provide written evidence on that?

Matt Hancock

In terms of how we considered the evidence? Absolutely. I am very happy to.

Julie Elliott

Thank you. The Government’s view in the consultation response is that Section 40, and I am quoting again, would make newspapers “vulnerable to spurious legal cases where they would be forced to pay regardless of the merit of the claim”.

Matt Hancock

Yes, as I have stated.

Julie Elliott

What rational basis did you have for saying that?

Matt Hancock

The effect of Section 40 would be to require the publisher to pay for the legal costs no matter what the basis of the claim.

Julie Elliott

Okay. Did you know that this Committee asked the newspaper industry for evidence of these costs and large numbers of claims and they were unable to give us any satisfactory evidence? Did you consider that? Did you know that was evidence that had happened in front of this Committee?

Matt Hancock

I had not seen that evidence. However, Section 40 is not on the statute books and I do not see how it is possible to ask for evidence of the impact of something that has not yet been enacted. If you are asking for examples of when Section 40 has been brought—

Julie Elliott

That is the whole argument, that it is going to have this impact.

Matt Hancock

No. It is a very important point. The whole argument is that there is a potential impact from Section 40, not that Section 40 has already had an impact because it is not in force.

Julie Elliott

The newspaper industry could not give us any evidence that that was going to be the case. Were you aware that that evidence had been given to the Committee?

Matt Hancock

I am sorry, there is a really important point here in terms of the evidence of the impact of Section 40, which as written is intended to allow future costs to be awarded against newspapers whatever the merits of the case. Of course we do not yet know how many people would bring those cases because it is not yet in law. You are asking for evidence of the impact—evidence of something that has not happened yet, and saying, “Nobody can say that this has happened”. Well, of course it has not happened because it is not law.

Julie Elliott

There are a couple of things I want to say to you. The PRP, the independent overseer of press regulation, said about this very thing that, “Incentives are needed to encourage publishers to join a recognised regulator”. Then, “The concern regarding Section 40 is unfounded because Section 40 would in fact support investigative journalism and protect relevant publishers that are members of approved regulators, their journalists and the public”. Were you aware that that had been said?

Matt Hancock

Yes. I disagree.

Julie Elliott

You disagree?

Matt Hancock

I do, yes.

Julie Elliott

Thank you. Before you agreed with this idea, did you know that when Sir Brian Leveson came to this Committee in October 2013—I was not a member of the Committee at the time—he dismissed the idea that there would be this tsunami of legal actions because any actions would have to have a case in law, and there was no reason why there should be more cases than there have been in recent years? Were you aware of what Sir Brian Leveson had said to this Committee?

Matt Hancock

I am aware of that argument.

Julie Elliott

Were you aware of that before you took the decision?

Matt Hancock

Yes.

Julie Elliott

Can you give your view of the obvious flaw in the newspaper claims that Section 40 would put them out of business because of the financial pressures they say they are under? We disagree about the evidential base but that is a statement of views. The same newspapers have signed up to IPSO, which has the power to levy fines of up to £1 million. Why are the fines of £1 million no problem to these organisations but arbitration costs of a few thousand pounds or legal costs of tens of thousands of pounds are a threat to their existence?

Matt Hancock

The basis on which those fines would be levied is different. The point is that anybody would be able to bring a case under Section 40 against a newspaper whatever the merits of the case. Sir Brian and others have made the argument that the legal costs if the case had no merit may be low but they would not be nil and those costs, whatever the merit of the case, would go against the newspaper. That is different from when IPSO has looked into a case.

Julie Elliott

IPSO are not regulated either.

Matt Hancock

IPSO are an independent regulator.

Julie Elliott

They are not compliant.

Matt Hancock

They have chosen not to register with the—

Julie Elliott

They are not compliant under Leveson.

Matt Hancock

They have chosen not to seek recognition by the PRP.

Julie Elliott

Can I ask why you voted for the implementation of Section 40?

Matt Hancock

At the time, I thought that it was the right thing to do. Things have changed. The amount that has changed since then is very significant. Not least, at the time nobody, including me, foresaw that IPSO would exist.

Julie Elliott

IPSO is not compliant so it is irrelevant, really.

Matt Hancock

No, IPSO is very relevant because it is a fully functioning independent press regulator.

Julie Elliott

No, it is not.