Clause 97 - Suspending apparatus supply for
Communications Bill
4:30 pm
Mr Andrew Lansley (South Cambridgeshire, Conservative)
Thank you, Mr. Gale. Happy new year to you and the rest of the Committee.
In its way, clause 97 is exactly like clause 96, but applies to apparatus supply rather than the provision of services. As we previously discussed, article 10(5) of the authorisation directive covers clause 96. In line with that, clause 97 allows such a penalty to be imposed in circumstances of persistent contravention of the conditions.
I have a problem with the clause. EC directives are not intended to govern apparatus supply. For reasons
of complementarity, the Government have chosen to extend the structure of industry regulation that applies to services to apparatus supply. As we move through this part of the Bill, we are examining two complementary systems: the EC directives on the one hand and the structure of penalties and competition rules contained in the Competition Act 1998 and the Enterprise Act 2002 on the other. Wherever possible, we have sought to establish a direct parallel between the penalties available under this legislation in relation to the telecommunications industry and those available in other industries for contravention of competition prohibitions under the Competition Act. We are looking at those two regimes side-by-side.
Clearly, the two regimes cannot be directly parallel when the EC directive has a different penalty in mind. The directive goes beyond stating that there should be penalties for contraventions and specifies that there must be a power to require a provider to suspend service under certain circumstances. I understand that we cannot escape from that. However, there is no requirement on us to depart from the structure of the Competition Act penalties to control apparatus supply. The question is whether it is necessary to have a power to require an apparatus supplier simply to suspend its business altogether in order to secure compliance with the conditions.
Nobody has suggested that there should be such a power under the Competition Act. That Act looks to construct penalties in terms of a fine in relation to relevant turnover and exactly the same power is available to Ofcom to secure the compliance of apparatus suppliers with this regime. Why is it necessary for there to be a power that goes beyond what is available even under the Competition Act? We would literally be telling apparatus suppliers that they had to go out of business immediately, for some period of time or indefinitely.
We have discussed a fine of 10 per cent. of turnover, which is intended to be a penalty and, I suspect, is intended to be not only proportionate but to have a deterrent effect. The clause proposes more than that. It would put companies out of business. Why is it necessary to stretch the regime to that extent when the decision to apply penalties is at the Government's discretion?