Lord Leong (Lab)

I thank all noble Lords, especially my noble friend Lord Stevenson, the noble Baroness, Lady Humphreys, and the noble Viscount, Lord Camrose, for their valuable contributions to this debate. The noble Viscount, Lord Camrose, should be really proud of his legacy in taking the Online Safety Act through Parliament. It is due to him that we are now implementing these regulations. I shall now respond to the various questions raised by noble Lords and to the Secondary Legislation Scrutiny Committee in its report on this instrument. The total amount of fees collected must not exceed the annual cost of Ofcom’s exercise of its online safety regulation functions. The cost may vary from year to year. Ofcom’s expected annual costs for online safety services for 2025-26 are close to £92 million, which includes regulatory activities and what Ofcom calls common costs, which are its running costs, allocated to all sectors that it regulates. Ofcom’s annual costs will vary depending on the level of regulatory activity undertaken in any given year, and those for online safety for 2026-27 will be published in the 2027 tables. Ofcom’s duties under the Act are extensive, and this will allow it to deliver effectively. Service providers whose qualifying worldwide revenue is at or above a revenue threshold that we are discussing, and which these regulations will allow Ofcom to consult on and set, will need to pay approximately 0.02% to 0.03% of their qualifying worldwide revenue in fees. The Secretary of State will determine the threshold figure, having taken advice from Ofcom, which recommends a threshold of £250 million. If implemented, that means that only the largest companies will be in scope of fee paying. For example, a company with a qualifying worldwide revenue of £250 million can expect fees to constitute something like £50,000 to £75,000, using the formula of 0.02% to 0.03%. Ofcom has robust enforcement powers available to use against companies that fail to fulfil their duties and will be able to issue enforcement decisions. That is in response to a question posed by my noble friend Lord Stevenson. This includes non-payment of fees, which is explicitly covered under Section 141 of the Online Safety Act. Ofcom’s authority to collect fees is set up, as I said earlier, under Section 84 of the Act. Its authority to collect penalties is also set up under Schedule 13. If a provider of a regulated service does not pay its fee to Ofcom in full, Ofcom may give the provider a penalty notice specifying the outstanding sum and a date on which it must be paid. It may also bring legal proceedings for the recovery of the whole or part of the amount due. I will write to my noble friend Lord Stevenson on the issue of Ofcom’s future receipts being lower than its costs.