Mr Roger Gale (North Thanet, Conservative)

I remind the Committee that with this it will be convenient to take the following: Amendment No. 128, in

clause 6, page 7, line 11, at end insert—

'(c) to seek the views of persons providing services and facilities in relation to which OFCOM have functions on which of these functions should be subject to review.'.

Amendment No. 3, in

clause 6, page 7, line 16, leave out 'and'.

Amendment No. 4, in

clause 6, page 7, line 18, at end insert 'and

(c) whether the procedures for self-regulation offer adequate opportunities for public scrutiny and for reporting on those activities to OFCOM, to the Secretary of State and to Parliament as appropriate.'.

Amendment No. 50, in

clause 6, page 7, line 18, at end insert—

'(c) whether persons with sufficient commercial knowledge of the persons who may be subjected to the procedures are consulted.'.

Amendment No. 122, in

clause 355, page 307, line 7, at end add—

'(4) OFCOM's competition functions should form part of the review of regulatory burdens by OFCOM as described in section 6.'.

New clause 2—Duty to establish and maintain Competition Board

To move the following Clause:—

'(1) It shall be the duty of OFCOM to establish and maintain a committee to be known as ''the Competition Board''.

(2) The Competition Board shall consist of—

(a) a chairman appointed by OFCOM; and

(b) such number of other members appointed by OFCOM as OFCOM may determine.

(3) In appointing a person OFCOM must have regard to the desirability of ensuring that the persons appointed are experts, both users and suppliers of electronic communications, working in the industry who have a commercial knowledge of the market.

(4) Before appointing a person to be chairman or another member of the Competition Board, OFCOM must satisfy themselves that he will not have any direct financial or other interest which

would be likely prejudicially to affect the carrying out by him of any of his functions as chairman or member of the Competition Board.'.

New clause 3—Functions of the Competition Board

To move the following Clause:—

'(1) The functions conferred on the Competition Board must include, to such an extent and subject to such restrictions and approvals as OFCOM may determine, the carrying out on OFCOM's behalf of—

(a) functions in relation to ensuring that there is a constant process of evaluating the level of competition in the market, assessing possible moves to self-regulation, and between ex ante and ex post regulation;

(b) functions in relation to determining the matters to which a regulatory impact assessment should relate; and

(c) functions in relation to addressing and managing the issues of concurrent powers between OFCOM and the Office of Fair Trading.

(2) The power of OFCOM to determine the Competition Board's functions includes power to authorise the Board to establish committees and panels to advise the Board on the carrying out of some or all of the Board's functions.'.

New clause 4—Duty to establish and maintain Economic Panel

To move the following Clause:—

'(1) It shall be the duty of OFCOM, in accordance with the following provisions of this section, to exercise their powers under paragraph 14 of the Schedule to the Office of Communications Act 2002 (c. 11) to establish and maintain a committee to be known as ''the Economic Panel'' to give advice to OFCOM on economic theory and practice in relation to the exercise of their functions under this Act and, in particular, in relation to the following matters—

(a) the nature and operation of markets for electronic networks, electronic communications services and associated facilities;

(b) the interests of providers of such networks, services and facilities as well as those of consumers;

(c) the promotion of competition between such providers; and

(d) economic regulatory policy.

(2) The arrangements made by OFCOM under this section must also secure that the Economic Panel are able, in addition to giving advice on the matters mentioned in subsection (1), to make arrangements for the carrying out of such research relevant to the giving of that advice as they think fit.

(3) It shall be the duty of OFCOM, in the carrying out of their functions, to consider and, to such extent as they think appropriate, to have regard to—

(a) any advice given to OFCOM by the Economic Panel; and

(b) any results notified to OFCOM of any research undertaken by that Panel.'.

New clause 7—Industry consultation

To move the following Clause:—

'(1) It shall be the duty of OFCOM to establish and maintain effective arrangements for consultation about the carrying out of their functions with—

(a) suppliers in the markets for the services and facilities in relation to which OFCOM have functions;

(b) suppliers in the markets for apparatus used in connection with any such services or facilities.

(2) The arrangements must include the establishment and maintenance of a panel of persons (in this Act referred to as ''the Industry Consultative Panel'') with the function of advising OFCOM.

(3) It shall be the duty of OFCOM, in the carrying out of their functions, to consider and, to such extent as they think appropriate, to have regard to the views given to OFCOM by the Industry Consultative Panel.

(4) The members of the Industry Panel shall be appointed by OFCOM and shall comprise a chairman and such other members as OFCOM may determine.'.

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

I was about to try to answer the question put by the hon. Member for South Cambridgeshire (Mr. Lansley). He asked whether the Deregulation and Contracting Out Act 1994 posed an obstacle to amendment No. 4. It does not pose an obstacle because the amendment deals with clause 6, which is about self-regulation, and that is not the same as contracting out in the terms of that Act. Ofcom will be able to contract out under clause 1(7). I am grateful to the hon. Gentleman for asking that question because I also know the answer to that now.

Amendment No. 122 seeks to ensure that Ofcom's competition functions will fall within the scope of clause 6. That is not necessary because the Bill already achieves that. The competition functions are excluded from the general duties by clause 3, which ensures that those functions that can be exercised by Ofcom or the Office of Fair Trading are exercised within a consistent framework, irrespective of which body acts. The exclusion of the duties is set out in clause 356(11). However, that applies only to clause 3 duties, and there is no such exclusion for clause 6. That is why this amendment is unnecessary.

I turn to new clauses 2, 3, 4 and 7. New clause 2 would place Ofcom under a duty to establish a competition board. That matter was fully examined by the Joint Committee, which concluded that there was no rationale for an economic or competition board with executive functions. New clauses 2 and 3 do not make it entirely clear whether it is intended that the proposed competition board would have executive functions—as opposed to, for instance, a purely advisory role.

New clauses 4 and 7 apparently envisage a largely advisory role for the economic panel, and an industry panel. However, I assume that a key aim of new clauses 2 and 3 is to ensure that Ofcom gives due priority to competition and to proportionate regulation in its decisions on policy and individual cases, and that it has access to expert advice from people with relevant industry and commercial knowledge. The hon. Member for Blaby (Mr. Robathan) asked me specifically about that. I agree that Ofcom must have constant and ongoing discussions of that kind, and I fully expect it to do so. If that happens, the arrangements that we have laid down in the Bill, and the steps that have been taken so far to create Ofcom, already make satisfactory provision for that without adding unnecessary complication to the structure and operation of Ofcom by the creation of several other boards and panels.

It is important to bear in mind that Ofcom will not be limited to internal sources of advice and expertise, significant though those are. On the contrary, it can obtain and will be offered views and advice from a wide range of sources in industry, commerce, the academic, technical and legal worlds, and the general

public. Ofcom will not go about its work in secret. The Bill obliges it to consult widely on all significant proposals—not only the general principles, but the detailed content and, especially, the impact on business. Additionally, the clause requires Ofcom to publish regular statements setting out plans for the continuous review of regulatory burdens, including proposals to remove or reduce existing regulations or to replace them by self-regulation.

We hope and expect that a wide range of industry groups and individual firms will contribute fully to all the consultations, as happens at present.

Mr Brian White (North East Milton Keynes, Labour)

Does my hon. Friend accept the point made this morning that the work forces in the different areas have a key role to play and should form part of the consultations in which Ofcom indulges?

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

Yes. I believe that the hon. Member for Blaby made the point, and probably in a different way than I will, that the work forces should do that. It has been one of the great weaknesses of British industry for a long time—I will not go on about this because we could talk about it for ever—that there is often a terrible schism between so-called top layers of management and everybody else, which sometimes includes senior managers but not the very top layers of management. It is important to try to tap the potential, skills and visions of people who are not necessarily chairmen or chief executives. I hope that we can work out ways of gathering such expertise and vision to enhance the information that Ofcom will receive about all sectors. It is an important issue.

In telecoms, for example, BT and other operators already feed important comments and views, either independently or through bodies such as the Operators Group, into the various regulators that we will combine into Ofcom. Under the Office of Communications Act 2002, Ofcom has the power to appoint both executive and advisory committees, if that is considered to be appropriate. If it considers that it is necessary to have additional and more formal structures in the light of experience, it can create them.

These mechanisms will be much more effective in ensuring that Ofcom receives the benefit of up-to-date specialist, commercial and industrial advice on competition, deregulation and the carrying out of its functions than specific boards and panels. That will allow Ofcom's board and staff to carry out their functions more flexibly and to respond to developments more quickly than if they were bound by statute to maintain such bodies.

The new clauses are unnecessary and undesirable and I urge the Committee to reject them. However, I repeat—because you were not in the Chair at the time, Mr. Gale—that I accept in principle amendment No. 204. I ask the hon. Member for Ryedale (Mr. Greenway) to withdraw the amendment.

Mr Andrew Lansley (South Cambridgeshire, Conservative)

I am grateful to the Minister for the constructive response that he gave to the question relating to the Deregulation and Contracting Out Act 1994. Although he said that that presents no obstacle to amendment No. 4, he offered no reason why we

should not accept the amendment. Will he enlighten the Committee on why we should not accept the amendment?

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

I think that I made a case against accepting any of the amendments except amendment No. 204, which I accept in principle and shall examine in future.

Mr John Greenway (Ryedale, Conservative)

I am grateful to the Minister because at least he and I agree 100 per cent. on the two issues that I addressed. He, like me, does not think that we should accept amendment No. 4—I apologise to my hon. Friend the Member for South Cambridgeshire for that.

Mr Andrew Lansley (South Cambridgeshire, Conservative)

If my hon. Friend and the Minister are in agreement, perhaps they will enlighten the Committee on the substantive reason why they oppose amendment No. 4.

Mr Andrew Miller (Ellesmere Port & Neston, Labour)

Because you are wrong.

Mr John Greenway (Ryedale, Conservative)

The hon. Member for Ellesmere Port and Neston (Mr. Miller) gives a reason that is not satisfactory to my hon. Friend.

I think that I explained that I accept my hon. Friend's point. We might be able to address later the extent of self-regulatory arrangements on which Parliament and the Government may have oversight. I accept his explanation that it was not intended that the self-regulated bodies themselves should report back to Parliament and the Government, which was my initial impression after reading the amendment. Nonetheless, if we are to move down the road of self-regulation, we should allow the self-regulatory bodies to be formed, established and adopted by Ofcom before we address the extent to which their work should be a matter for parliamentary scrutiny. I hope that that gives my hon. Friend an explanation from a Conservative Member.

Mr. Lansley indicated dissent.

Mr John Greenway (Ryedale, Conservative)

I am sorry that my hon. Friend shakes his head.

We are talking about the future, which is why this is so important. I shall certainly withdraw my amendment although I suspect that my hon. Friend might have views on several others. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr Roger Gale (North Thanet, Conservative)

My understanding is that the amendments and new clauses debated since 10.30 am have covered substantively the matters arising from clause 6. I therefore propose to put the clause to the Committee without further debate.

Mr Andrew Robathan (Blaby, Conservative)

Mr. Gale, welcome back. The Minister and I were in a great deal of agreement and I especially agree with him that the work force has much to offer—

Mr Roger Gale (North Thanet, Conservative)

Order. I thought that that was going to be a point of order. I was about to put the clause to the Committee, unless the hon. Gentleman wishes to make a case for something that has not been debated.

Mr Andrew Robathan (Blaby, Conservative)

We wish to complete the debate on amendment No. 128 because we want to put it to the vote.

Mr Roger Gale (North Thanet, Conservative)

Is the hon. Gentleman saying that he wants a separate Division on amendment No. 128? It would have been helpful if he had indicated that to the Chair previously. I hope that he will be kind enough to do that in the future, but in this instance, and in order to expedite matters, I shall assist him.

Amendment proposed: No. 128, in

clause 6, page 7, line 11, at end insert—

'(c) to seek the views of persons providing services and facilities in relation to which OFCOM have functions on which of these functions should be subject to review.'.—[Mr. Robathan.]

Question put, That the amendment be made:—

The Committee divided: Ayes 7, Noes 13.

Mr Roger Gale (North Thanet, Conservative)

Just before we proceed, I should tell the Committee that I am the most mild-mannered of Chairmen, as everyone knows. I am perfectly prepared to admit a degree of levity within the Committee but it helps the Clerk to ensure that the result is correctly delivered if that levity is not extended during a Division.

The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendments proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 69, That the clause stand part of the Bill.

Question agreed to.

Clause 6 ordered to stand part of the Bill.