Clause 2 - Transfer of functions of
Communications Bill
12:15 pm
Mr Andrew Lansley (South Cambridgeshire, Conservative)
I add my appreciation of the opportunity to serve on a Committee under your chairmanship, Mr. Gale. With the benefit of experience, I can say that as long as I stay in order it will be a pleasure.
I shall detain the Committee for a minute in order to ask the Minister a number of questions. As will be a refrain in at least some parts of our discussions, I will be speaking in part about the questions and recommendations made by the Joint Committee and the Government's response. In some cases, however, there are loose ends and in others there are clearly differences of opinion. In this particular instance, I am pulling at loose ends.
The Joint Committee discussed the transfer of functions, powers and liabilities between the pre-commencement regulators and Ofcom. There is clearly provision for a transfer scheme for property and liabilities. At the time, however, we could not go into the provision to be made for the staff of the pre-commencement regulators, or indeed Radiocommunications Agency staff, who were to be transferred to Ofcom. We were led to believe that additional clauses would be added to the Bill, as indicated in paragraphs 3.7.1 to 3.7.3 of the Government's policy document. I am not aware that such clauses have been included in the Bill, and I wonder whether the Minister would indicate whether such clauses are likely to be added at a later stage.
The process of relating the structure of activity inside the pre-commencement regulators directly to the views of Ofcom can begin now that Ofcom has, to some extent, been appointed. It will allow the pre-commencement regulators to structure themselves, and the prospective Ofcom, in ways in which Ofcom would prefer. In that respect—this is a personal view, which was supported to some extent by other members of the Joint Committee—the Towers Perrin report was not wholly helpful. In particular, in so far as Towers Perrin looked at whether Ofcom should have clear, functional, outcome-related structures—for example, the function of an economic regulator as distinct from a content regulator, which is now reflected perfectly sensibly in the structure of the legislation—it discounted them in an unwarranted fashion in the way in which it structured its report.
We had to escape from the curious addition of a separate radio section to Ofcom in the Towers Perrin proposal, which treated radio as though it were not part of economic and content regulation and the concept of a converged regulator did not apply to it. The Joint Committee said that that was perverse, and the Government happily agreed. It is important that the pre-commencement regulators should not be constrained by the presence of a consultant, and I wonder whether the Minister will confirm that they are escaping from some of the constraints with which they started.
That brings me to my principal question, which relates to the use of powers in the Office of Communications Act to try to secure the most advantageous introduction for Ofcom. As one can see in clause 2, Ofcom will clearly take over functions where the events that it will be regulating will predate its assumption of those functions. So far as we can achieve it, those who are regulated should both recognise that Ofcom is a distinctly new regulator with a new approach and culture and, in so far as they have been operating under the prior regulatory regime, know the basis on which they are being regulated. The pre-commencement regulators have their own pre-existing cultures and there will be big shift to the new culture, but some of Ofcom's regulatory actions will have to relate to that prior period, which is a curious combination. The key is to be found in section 2 of the Office of Communications Act on Ofcom's initial function, to which the Minister referred, which is about making statements on its intentions in relation
to its use of its powers. Section 4 places upon the pre-commencement regulators a duty to carry out their functions in a manner that appears to them to secure that Ofcom will be able effectively to carry out its functions—its initial function and the functions that will be given them under the Bill and other proposals.
It is interesting that the Government, when responding to the Joint Committee report recommendation that those powers should be strengthened, made clear their view that there was nothing to prevent Ofcom publishing such statements of intention. That is fine; that answers the question perfectly well. However, the Government's response went on to say:
''so there is no impediment under the provisions of section 4 of the Act to the existing regulators having regard to any such statement OFCOM may make in fulfilling their functions before they are transferred to OFCOM.''
My point is what is the extent of the obligation on the pre-commencement regulators? If Ofcom makes a statement about its future intentions under section 2 of the Office of Communications Act, and many of us would wish it to do that at an early stage, is it not the case that under section 4 the pre-commencement regulators have a duty to follow that through and to try to secure that Ofcom's intentions are carried into effect by using their existing powers before Ofcom takes over—to the extent that they are legally able to do so within their existing statutory obligations?
It seems to me that there being no impediment to the regulators having regard to Ofcom's statement is not good enough. We should make it clear that we would encourage Ofcom to make such statements as early as possible and that the pre-commencement regulators, within their statutory limitations, have a duty to act in accordance with those statements of intention. Otherwise, we will have a period of confusion; it may last a matter of months only, but it is perfectly clear that although the legislation may be passed in June or July next year Ofcom may not be able to take up all those principal functions until the later part of 2003.