Clause 2 - Initial function of OFCOM

Office of Communications Bill [Lords] – in a Public Bill Committee at 9:30 am on 31st January 2002.

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Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport) 9:30 am, 31st January 2002

I beg to move amendment No. 11, in page 2, line 22, leave out from first 'for' to end of line 24 and insert—

'the purpose of making institutional arrangements required to facilitate the future implementation of, or for securing the modification of, any relevant proposals about the regulation of communications, and to identify opportunities for achieving cost savings arising from any relevant proposal; and in particular to reflect standards of good taste and decency.'.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

With this it will be convenient to take the following amendments: No. 44, in page 2, line 22, leave out from 'of' to 'any' in line 23.

No. 58, in page 2, line 30, at end insert—

'11(aa) Will identify opportunities for achieving cost savings arising from any relevant proposals and do such things as may be necessary to secure that any costs savings are implemented;'.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

It might be helpful to tell the Committee that I have shares in BT. You are now aware, Mr. Stevenson, that most of my portfolio of shares is in the transport sector, which we have occasionally discussed elsewhere. I do not have enough BT shares to declare them in the Register of Members' Interests or for them to influence my approach to the Bill, but I thought that the Committee should have that information.

Clause 2 is pivotal to the Bill. I shall speak at length on this group of amendments. I preface my comments on amendment No. 11 with a reference to the explanatory notes, which set out the purpose of the Bill. They state:

The Office of Communications Bill would make it possible for the Secretary of State to create OFCOM before the main Communications Bill achieved Royal Assent, which should enable regulatory functions to be transferred to OFCOM more quickly thereafter.

The Government aim to clarify what Ofcom will do between enactment of the Office of Communications Bill and Royal Assent to the communications Bill, which will give the new regulator powers. The paving Bill enables the Government to establish Ofcom so that practical steps can be taken to prepare the regulator to receive the functions that the communications Bill will confer on it.

The explanatory notes make it clear that the single function of Ofcom under the Bill before us is to prepare to assume functions at a later date. They state:

Establishing OFCOM, planning and managing the practical transition from the existing five regulators will be a complex task, which will take much time and effort to complete. The Office of Communications Bill would make it possible for the Secretary of State to create OFCOM before the main Communications Bill

achieved Royal Assent, which should enable regulatory functions to be transferred to OFCOM more quickly thereafter.

During our proceedings we have lamented the separation of the paving Bill from the meat in the main Bill. I emphasise that that separation is unfortunate for the full consideration of the structure and function of Ofcom.

Paragraph 7 of the explanatory notes states:

The Office of Communications Bill . . . enables Government to establish OFCOM, so that practical steps can be taken to get the regulator ready to receive the functions a Communications Bill would confer upon it. The Bill should enable a more orderly transition.

In fact the Office of Communications Bill will, perversely, lead to a more disorderly transition and, I fear, to absolute confusion. The explanatory notes state that the purpose of the Bill is threefold: to

establish the Office of Communications; give OFCOM a preparatory function; and place the existing regulators under a duty to assist OFCOM to prepare.

That is similar to the role of the Opposition in preparing for Government—

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

Yes, we do, most fervently. It is a task that we take seriously. Clause 2 sets out Ofcom's single function of preparing to assume functions at a later stage. Again, that can be likened to the role of the Opposition: the first stage is preparing the structure, and the second is preparing the policies. The Bill was made for us.

The explanatory notes state that clause 2 sets out that

OFCOM will be involved in making transitional arrangements. These might include setting up the structures of OFCOM and making ready for the transfers of staff, property and other rights and liabilities when the Communications Bill comes into force.

We are hampered by the Minister's failure to tell us on Tuesday precisely how many members of staff Ofcom is intended to have. Perhaps that failure is due to the fact that the Government want to leave the power of decision entirely to the chairman and members of the Ofcom board, but in selling the Bill to Parliament and a wider public and in preparing for the communications Bill, it is incumbent on the Minister to take the opportunity he missed on Tuesday and tell the Committee how many staff Ofcom will need, not only for the transition stage, but in the long term.

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

Has my hon. Friend reflected on the possibility of redundancies? Will she seek an assurance that the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply to the terms and conditions of employment of those working for the existing regulators during the transfer to the new umbrella body?

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

My hon. Friend raises an important point—that we may consider later at some length. The Minister has been given notice that we want to raise it, so he and his Department will have time to reflect and respond.

The Government assure us that Ofcom will not be given powers to exercise any regulatory functions that relate to the communications sector. Those functions

will be set out in the communications Bill. However, I am not entirely sure what Ofcom will be doing if it is to share, to a certain extent, regulatory functions by taking in some board members on secondment from the existing regulators.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

I have informed the Committee on many occasions, and it is included in the Bill, that we are creating a creature that will take on no regulatory functions nor remove functions from any existing regulator until Royal Assent has been given to the substantive communications Bill. I hope that the hon. Lady understands that.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

That makes matters worse. Rather than lose five regulators, we are to gain a sixth body.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

I repeat: the creature that we are setting up will not regulate. I hope that the hon. Lady heard me say that.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

That brings me neatly to amendment No. 11, which would replace clause 2(1).

Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

I am slightly puzzled by the Minister's intervention. I understand the thrust of what he is saying, but clause 1 states:

or for securing the modification of, any relevant proposals.

That is an intriguing active role, which might imply that regulations are to be promoted or changed during the setting up stage.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

May I clarify this point, because there appears to be a little confusion? The hon. Gentleman just referred to clause 1. He means clause 2(1).

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I am grateful for that clarification, Mr. Stevenson.

Clause 2(2) states:

It shall be the duty of OFCOM to carry out their function under subsection (1),

whereas clause 1—sorry, I mean subsection (1)—states that that is

securing the modification of, any relevant proposals about the regulation of communications.

It will be clearer if I stick to what I prepared yesterday.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. I do not want to jump up and down, but the debate would be much clearer for me if we referred to parts of the Bill correctly.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

Amendment No. 11 would replace the text from line 22 with a clearer wording. The amendment recognises the need to make

institutional arrangements required to facilitate the future implementation of, or for securing the modification of, any relevant proposals about the regulation of communications.

Those arrangements should ensure

cost savings arising from any relevant proposal

and

reflect standards of good taste and decency.

The original wording of subsection (1) implies that Ofcom may have a wider role than establishing a shell organisation prior to the enactment of the main communications Bill. I alluded to that wider role earlier. That role is deemed by many to be inappropriate, and I have sympathy with that view. The explanatory notes show that the Government did not intend such a purpose under the clause. Our amendments are proposed in the interests of clarity, and I am sure that the Government will find amendment No. 11 helpful.

Chapter 8 of the Government's communications White Paper sets out the Government's outline for the structure of Ofcom. Page 78 describes how, by amalgamating the five existing communications regulators, the Government seek to

greatly simplify the regulatory framework.

However, the Bill would do precisely the opposite, because the paving Bill is separate from the contents of the main communications Bill.

Several outside bodies, particularly Orange, support that view and believe that the merging of the regulators should create significant operational cost-saving synergies for the communications industries. In their view, an increase in the long-term cost of regulation may result in increased licence fees, which would not be in the interests of consumers. Orange recommends that an initial function of Ofcom should be to examine potential operational cost-saving opportunities resulting from the amalgamation. That is not too much to ask of the Government at this stage. The amendments area designed to improve and strengthen this part of the Bill, which should not affect the need to recruit highly qualified experts and to pay them well, but should lead to a greatly simplified regulatory framework with the object of reducing the overall cost of regulation as well as the overall regulatory burden.

We learned on Tuesday that the total number of staff of the existing five regulators is 1,111—a good figure because it is easy to remember—and that the Radio Authority employs the fewest. The Minister most helpfully, albeit unwittingly so, referred to a document that I had not come across before—the Towers Perrin report, which was commissioned by the regulators steering group. It was also mentioned by the hon. Member for Ceredigion (Mr. Thomas). The report sets out a helpful structure in relation to staff and cost savings. In addition to a board and a number of board committees and advisory committees, it envisages a radio group to consider broadcast radio licensing, broadcast radio ownership, tier 2 format regulations, tier 1 BBC radio regulations, and access radio. Even though my pleas have not gained much credibility with or support from the Government, I seem to have struck a chord with the Towers Perrin report.

In seeking the official Opposition's support for the Bill, the Government have to convince us not only that one regulator is better than five, but that cost savings will be made through streamlining the organisations, reducing the number of staff in the short and the long

term, and significantly reducing expenditure. The Minister did not give us satisfaction—he seemed to be wriggling away from making that commitment.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme 9:45 am, 31st January 2002

In referring to cost savings, the hon. Lady appears to mean purely organisational costs. Are those the only type of cost savings covered by amendment? Does she agree that the clause as drafted applies cost savings to any regulatory proposal, come what may? Does she also agree that when deciding on the future regulation of an industry, if one opts for the cheapest of all the proposals, one will not always get the best?

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

That is a gross misreading of the amendment. Perhaps the hon. Gentleman can help, but my understanding is that we can talk only about the organisation and structure of Ofcom. We cannot talk about cost savings through the delivery of policy, because that will be considered under the main Bill. I think that you would rule me out of order, Mr. Stevenson, were I to go down that path. I would tread it with trepidation.

Paragraph 27 of the explanatory notes supports the contention in our amendment, stating:

The current cost of regulating the communications sector is in the region of £118 million.

I have not had time to analyse that against the figure that the Minister last gave us, but I find it quite shocking. That cost is currently borne by the industry because the regulators charge and those being regulated reimburse that charge. We have learned that, if I understand the Minister correctly, although the Government are prepared to pay half the setting-up costs in the transitional period, half will be recovered as an extra charge on the industry. The industry will face a double whammy, which is unacceptable at a time when independent broadcasters have lost huge amounts of advertising revenue.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I am not sure that the hon. Lady's amendments would achieve cost savings. If she wants to set standards of good taste and decency, that would be an extra burden of regulation for Ofcom. Is she convinced that the provisions she proposes sit side by side and would work together?

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I think that the hon. Gentleman means to help me and I am most grateful for that. I am expressing our hope that Ofcom will replace the five regulators. We shall discuss a sunset clause—at some length, I hope—later. In my view, if the Government fail to introduce a communications Bill by April, June or even September this year, they will have failed in their duty and misled the industry. The present Bill will fail in its task if the communications Bill has not come before the House by then. That would be totally unacceptable because it would lead to the addition of a sixth regulator; the industry would be asked to pay the costs of that additional regulator, including costs of staff and use of office space and facilities. That is what these amendments tackle.

The Government envisage that

the initial planning costs of establishing OFCOM so that it can prepare to receive its functions will be of the order of £5 million spread over the period of transition.

I would like to pause there for a moment—[Interruption.] Perhaps the hon. Member for Rhondda (Mr. Bryant) is free to engage more enthusiastically in the debate now that he has turned off his mobile phone. The figure for the initial running cost of Ofcom that the Government envisage is in the explanatory notes. Paragraph 27 also states:

Once fully operational, the Government would expect the costs of OFCOM to be met almost entirely from those it regulates.

I understand that the costs of the current regulators are recovered. Is that correct?

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

The notes continue:

However, as is common with setting up new statutory bodies—

Ofcom falls into that category—

the Government will share with industry the cost of initial establishment, in the form of an advance or an initial grant in aid.

That was the subject of previous amendments. The notes continue:

It is intended that subsequent repayment of any advance would be met out of the powers that OFCOM would have to charge fees to the sector under the subsequent Communications Bill.

That is the key to the amendment. I repeat, the Government envisage

that the initial planning costs—

not running costs, operational costs, functional costs or managerial costs—

of establishing Ofcom so that it can prepare to receive its functions will be of the order of £5 million spread over the period of transition.

I commend those who drafted that because they have a literary gift for language of which Robert Louis Stevenson and Sir Walter Scott, who, like me, were members of the Faculty of Advocates in Scotland, would be proud.

How long a period of transition do Government imagine being required before the communications Bill comes into effect? Will the Minister confirm that the Government intend the transitional period to last no longer than one year? The explanatory notes state that the communications Bill will not reach the statute book before mid-2003, when it should receive Royal Assent, which would entail that Bill passing through the House in one year. The Bill before us is only the baby Bill, and it has almost taken six months for it to go through the House of Commons because we take our powers and the opportunity to scrutinise legislation seriously. It would help the Committee if the Minister were to confirm that he envisages the transition period lasting only one year.

Against that background I must say that if the operational costs of the five regulators are in the region of £118 million, £5 million spread over the period of transition, assumed to be one year, is unacceptably high. Rather than making savings, the Bill is increasing the cost of regulation, and all of us would like to see less regulation and less cost. If the initial planning costs of establishing Ofcom to receive its functions are to be of the order of £5 million spread over the one-year period of transition, will the

Minister confirm that that is in addition to the £118 million? Alternatively, will there be a saving on the £118 million?

We must know this morning what opportunities there will be for achieving cost savings, even during the transitional phase. We must know what Ofcom's operational and running costs will be, and what proposals for costs savings there are when Ofcom is up and running and has replaced the five existing regulators. I hope that the Minister will share with us his views on what these cost savings might be and on ways in which they might be achieved.

Amendment No. 11 states that Ofcom must have regard to

standards of good taste and decency.

That might seem a curious provision in this amendment, but it is important that in seeking to save money and reduce the cost of regulation we do not compromise the high standards of good taste and decency that viewers, listeners and users of the communications industry legitimately expect. It would be totally unacceptable if those standards were compromised.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion 10:00 am, 31st January 2002

I am not entirely convinced by the amendment. Does the hon. Lady seek to impose standards higher than those that currently apply—to increase good taste and decency beyond the standards currently maintained by the five regulators—or does she merely want Ofcom to carry on their work?

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I thank the hon. Gentleman for making that point, which gives me an opportunity to elaborate more fully than I might otherwise have done. I simply wanted to commend the high standards of taste and decency that are currently set by the five regulators. The ultimate focus of amendment No. 11 is the implications for cost savings, but it is important to put down a marker that we do not want current high standards to be compromised. We want to set a benchmark. The new regulator should equally and always have regard to good taste and decency. The amendment reflects my desire to incorporate the Mary Whitehouse effect at the inception of Ofcom.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I am sorry to rise to that, but in most of her lengthy contributions the hon. Lady has said that we need light-touch regulation, whereas now she seems to be arguing for heavier regulation. She must make up her mind or stop this nonsense.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I am pleased that I have provoked a reaction from a Government Member—obviously the ringing of his mobile phone caused the hon. Gentleman to spring into action. I welcome the opportunity to reassure him and other members of the Committee that I do not seek to impose a higher level of regulation. I merely want to put down a marker to the effect that in saving costs, especially in the transitional phase, we must not compromise standards of good taste and decency.

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Culture, Media and Sport)

With each group of amendments she speaks to, the hon. Lady expresses

disappointment that the Bill does not set out what Ofcom is to do and that that is to be set out in the communications Bill. Given that the Bill only empowers Ofcom to set up an office and hire some staff, does she accept that it is an unnecessary burden to ask it to do so with due taste and decency?

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I am sure that the hon. Gentleman accepts that £5 million is a large sum of money with which to observe standards of good taste and decency.

Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

Would my hon. Friend extend her concept of taste and decency in spending millions of pounds to that exercised by the Lord Chancellor?

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. That is an interesting observation, but I am sure that the hon. Gentleman does not intend to tempt the Committee to debate the Lord Chancellor's office.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

Unless, Mr. Stevenson, it was to be televised, in which case it would be in the poorest of taste and lacking in decency.

Amendment No. 58 would charge Ofcom with a duty to

identify opportunities for achieving cost savings arising from any relevant proposals and do such things as may be necessary to secure that any costs savings are implemented.

Amendment No. 11 mentions the identification of potential cost savings; amendment No. 58 deals with their implementation. I have already mentioned those points quite fulsomely.

Amendment No. 44 would remove the power given to the shadow Ofcom to lobby for changes to the regulatory regime proposed by the Secretary of State. It seems quite unprecedented and unsatisfactory to allow the Secretary of State to establish a public body—the shadow Ofcom—funded by public money, which has an explicit function of challenging proposals to be made by the Secretary of State. Can the Minister assure me that the phrase that the amendment would remove is not intended to have that effect? That is how it appears on first reading, and I humbly submit that it would be inappropriate.

Giving the shadow Ofcom the power to lobby for changes to the regulatory regime that the Secretary of State proposes is, to me, mildly controversial. Ofcom will be made up of people who are, I suppose, seconded from the existing regulators. It will not be a product of convergence, but comprise bits of the old regulatory system bolted together. If Ofcom is allowed a large role in shaping the regulatory regime for the communications industry, there is a real danger that its approach will reflect existing structures and practices rather than be genuinely radical. I believe that it is the wish of the Committee, the industry and the current regulators that a radical approach be adopted to enable the industry to thrive.

I hope that the Government will take the opportunity to confirm that Ofcom will have not only the function of regulation of communications, but an explicit function to promote investment in communications infrastructure. That confirmation would be extremely helpful to the Committee and the industry. The Government must surely want to meet their own stated objectives of broadband roll-out

and making Britain a leader in the telecommunications field once again. I have explained the amendments to the best of my ability and as clearly and concisely as possible. I hope that the Committee and the Government will support them.

Photo of Mr Brian White Mr Brian White Labour, North East Milton Keynes

I have two questions for the Minister. Clause 2 says that Ofcom shall carry out its functions in such a way as to facilitate the implementation of proposals about regulation that the Government make. If, as I have suggested to my hon. Friend, we want Ofcom to use digital signatures and electronic communications, will he confirm whether, given that this Bill does not facilitate them, he wants to introduce secondary legislation for that purpose under this Bill, under the proposed communications Bill or under e-commerce legislation?

European Union framework legislation about electronic communications states that from February 2002 to mid-2003 quite a bit of work will take place on the whole range of communications. The framework document states:

During this period between date of entry into force and date of application, both the Commission and the National Authorities will be occupied with the creation of co-operative mechanisms foreseen in the new package, eg, the new Communications Committee, the new Spectrum Policy Committee, the creation of a group of national regulatory authorities.

Given that that will be the kernel of Ofcom's future role, will the Minister say whether in the transition period the existing regulators alone will represent Britain in those discussions, or whether Ofcom will be able to participate in them?

It seems to me that Ofcom has a vital role to play in the discussions, given that it is to be the body that ultimately deals with those issues. It is likely that Ofcom will be at the forefront of the way in which the newly liberalised European markets will operate; it will set the trend for the rest of Europe. It should have a key role in the setting up of the new Europe-wide mechanisms. Will the Minister confirm that the Bill does not prevent Ofcom from playing that key role alongside the existing regulators?

Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

I am glad to follow the hon. Gentleman because he and I are both involved in EURIM—the European Informatics Market group—which is the parliamentary body that keeps in contact with industry. He made two important points. I was involved in the Government Bill, now an Act, that dealt with digital signatures, which I hope can be extended into all areas of legislation. I endorse the hon. Gentleman's comments about the European Union. All sorts of regulatory interests at Europe level will grow as communications convergence occurs throughout the EU. I hope that the Government are clear about how the emerging Ofcom will play an active role in that during the period of establishment.

In the digital dark ages, prior to 1997, I was Minister for Science and Technology. The original thought that there might be an Ofcom occurred to us even in those days, so it is intriguing to be sitting on this Committee in 2002. Mr. Stevenson, you and the Committee will be glad to know that my remarks relate to clause 2(1). I was immensely enlightened by

my hon. Friend the Member for Vale of York (Miss McIntosh) who gave a stellar performance explaining what the amendments actually meant. I am now properly briefed on the proposal.

I am intrigued by the Mary Whitehouse memorial amendment, No. 11, with its phrase

to reflect standards of good taste and decency.

It is right that that was tabled, because the Opposition are here to probe. Will the Minister reflect on how, in the Ofcom era, standards of good taste and decency, which are subject to variation according to the age, and the related matter of public service are to be protected, and on whether they should be protected in the increasingly competitive world of media distribution and content? It is certainly right that the Opposition have raised that subject.

The essence of amendment No. 44 is to find out what the words,

or for securing the modification of, any relevant proposals

will mean during the period in which Ofcom becomes established. I am intrigued by that phase, because I am not sure what it implies in the context of the paving period in which the new body is established. Does it imply that the agencies should themselves contribute to a debate about modification of regulation, or that the people who are initially assigned to Ofcom should promote that debate? What status will they have before Ofcom is formally established? Should they to some extent anticipate the contents of the main communications Bill, which we await with bated breath; or should they try to influence its contents if it is delayed beyond its expected spring publication date?

As a Minister, I was responsible for the Office of Telecommunications and for the Radiocommunications Agency, which is not one of the nominated regulatory bodies that are dealt with separately in this context, although it will ultimately fall within Ofcom's remit. In the next few months crucial debates will take place about how Oftel will, for example, promote further competition. Only yesterday the director general made an announcement about pricing and BT. There is continual, healthy debate about competition policy between the regulators and the Competition Commission, and competition matters are increasingly replacing regulation.

Substantial principles are involved in the Government's execution of the agenda that they set for themselves whereby all Government services should be online by 2005—that is an EU ambition under the Lisbon agenda. At the same time, the Government are one of the most crucial drivers of change as customer and catalyst. I have reread the interesting press release that the broadband stakeholders group issued a couple of months ago, which said:

Government's role as a customer is even more important than Government's role as a regulator.

I agree. However, if the new Ofcom is to try to modify regulation, will it take an interest in the Government's process of stimulating roll-out? For example, might it

say to the Chancellor of the Exchequer, ''We want a few fiscal incentives for infrastructure development''? Those are not trivial matters, because behind this Bill lies a substantive Bill to come. As we do not know what the next Bill will contain, it is right that we probe what might happen in the interim.

I know that the Minister, whom I hold in high regard, will not go to sleep on the job while tables and chairs are assembled in some office—perhaps with fancy wallpaper. He will want to ensure that Ofcom comes together in a way that makes credible the future regulation of one of our most crucial industries, and that it takes a radical approach instead of merely bolting together existing agencies. As a Minister, I had responsibility for two of those agencies. The Broadcasting Act 1996 involved me in technological delivery mechanisms, including electronic programming guides and conditional access; they were the most interesting aspects of that Act. Most of the media focused on the front end of the process, but it was the back end that was crucial to the way in which the industry developed and was invested in.

Will the Minister clarify what is meant by the phrase:

securing the modification of, any relevant proposals about the regulation of communications?

The Committee would be much enlightened. Moreover, it would help those in the industry to understand where they should start to apply the pressure that they want to apply; how they should envisage the interaction of the various agencies in the interim—companies are increasingly interested in the radio spectrum as well as in television and telecommunications in the more traditional cable and copper pipe form; and how broadband access will continue to be stimulated while the Bill is being enacted and we wait for the main Bill.

Although the amendment appears small, its consequences would be fairly significant. I shall be attentive to the Minister's response.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion 10:15 am, 31st January 2002

The hon. Member for Esher and Walton (Mr. Taylor) has put his finger on a significant aspect of the Bill.

The amendments tabled by the hon. Member for Vale of York are important, but I am inclined to resist them. They do not deal appropriately with the matter at hand, although they serve to bring it to the fore so that we can debate it. It should not be part of Ofcom's job to achieve cost savings. Regulation is much too important a job to put such restrictions on its activities.

I have a little more sympathy with the question relating to clause 2(1) about how Ofcom will work on the modification and implementation of proposals on the regulation of communications. Will the Minister respond to that in the context of our previous debates? For example, on Tuesday, when unfortunately I could not be here, the Committee considered establishing consumer panels and advisory panels. He resisted amendments in that respect, leaving us with the worrying prospect that in its early stages Ofcom

might be a body of minimal size, not yet having reached the slightly larger size that he accepts that it might eventually reach through the making of statutory instruments.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

The hon. Gentleman is right to ask about the size of Ofcom, but our previous debates were about the size of the Ofcom board, not the regulatory office that may be created as a consequence of Royal Assent being given to the substantive communications Bill.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I accept that. I am trying to focus on how Ofcom—which will, in effect, be the board advised by its staff—will comment on the contents of the communications Bill. If it is to have a wider role than the one the Minister initially suggested, in terms of making recommendations to Government about how communications should be regulated, and if it is not to have advisory bodies and consumer panels, it might have too narrow a focus.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

We were the poorer for the hon. Gentleman's absence on Tuesday.

As the Minister said, the previous amendments dealt only with the size of the board in relation to its membership and, to some extent, with its chief executive. This is a key amendment, because we have not yet had the opportunity to probe the Minister on the size of Ofcom's staff. If it is to be big even in the transitional period, that is unacceptable.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I accept the hon. Lady's point, but it does not resonate with me. Although she was right to have tabled the amendments, which deal with an important aspect of Ofcom's activities in its first year or so—the next group of Opposition amendments, proposing a sunset clause, is also important—they do not quite work. However, they give the Minister the opportunity to say more about the initial Ofcom board, which will be giving important advice to Government and influencing debates. Clause 2 states that the regulatory bodies will have to give way to Ofcom, and respect what it says. They know that their lives are coming to an end, and that Ofcom will take over. Ofcom will be the big player, not the existing regulatory bodies.

The hon. Member for Esher and Walton made a point about broadband access. On Friday, I met my local authority to discuss that matter. We in west Wales have established an exciting joint venture between Powys, Carmarthenshire, Pembrokeshire and Ceredigion county councils; The MARAN project will allow broadband access in rural areas. Making the last jump has proved difficult. We have provided broadband access for the public sector, but the National Assembly has demanded that all schools have broadband access, which it has provided funding for. How does one connect broadband access in Aberystwyth to Ponterwyd, 15 miles up a rural valley? That last jump is extremely costly. The school cannot pay for it, and rural businesses that would like to use broadband cannot pay for it. Will Ofcom address that in the public sector, or through a public-private partnership?

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I was aware of how disappointed the hon. Gentleman was that his amendments on

setting up a Welsh office were not carried. Has he considered the implications? Will there be dedicated members of staff to keep in touch with the devolved Assembly? He has an opportunity to probe the Minister on that point.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

That is a good point, although the Minister has said that there will be an office or staff dedicated to Wales and the devolved Administration.

Photo of Andrew Miller Andrew Miller Labour, Ellesmere Port and Neston

I know that it is not usual for someone in my position to intervene, but I rise to offer guidance to the hon. Gentleman, who has raised an important point. Much work is being carried out on the aggregation of rural services in rural areas, and many countries are examining what we are doing because it is a worldwide problem. Some of the experiments conducted in Cornwall and other rural communities will help to solve the hon. Gentleman's problems.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I hope that the hon. Gentleman's optimism will be justified. Those matters may be peripheral, but they are central to our success in providing access to everyone, so I would like to see them reflected in Ofcom's initial work.

Clause 2(1) is crucial. Ofcom will be carrying out important work and influencing legislation. Will the Minister explain how that work will be carried out, how he will ensure that everyone's views are heard, and how we can be sure that the first Ofcom does not become domineering? Respect must be given to the views of the current regulators and the devolved Administrations. The amendments have allowed us to debate the issues, but I will not support them if they are pressed to a vote.

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

My hon. Friend the Member for Vale of York referred to ''taste and decency''. It is important that there is provision in the substructure of the Ofcom board to ensure that good taste and decency are not compromised. I am tempted to say ''not compromised further''. She referred to existing high standards, but I am tempted to challenge whether standards are as high as they used to be.

Photo of Mr Brian White Mr Brian White Labour, North East Milton Keynes

Will the hon. Lady explain how she would regulate taste and decency on the internet?

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster 10:30 am, 31st January 2002

My first thoughts were of television and radio. I am deeply sceptical about the ability to regulate the internet and world wide web. As far as television and radio are concerned, which is where I concentrate my remarks, I am not aware that I have lived an unusually sheltered life, but I view some things on television with surprise—''Eurotrash'' springs to mind. I shall not stray into the realms of censorship and the possible conflict between the freedom of a competitive industry, but it is important that the customer is protected.

During Tuesday's debate, my hon. Friend the Member for Tewkesbury (Mr. Robertson) said that he did not want gratuitous violence, sex and swearing on programmes that his family watch. There is a question about the timing of broadcasts, and about warning customers of the content of programmes so they know what they will see and will be able to make

a judgment on whether it is suitable for their viewing or listening. We have star ratings for films, which range from ''boring'' to ''unmissable'', so we could consider a similar system.

Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

The question of how taste and decency can be regulated in a multi-channel world, which includes the internet and mobile phones on which television pictures are increasingly conveyed, would take longer to decide than the Committee has. Most of it would have to be done voluntarily. Does my hon. Friend agree that technology that can block out access to programmes not considered suitable can provide answers, so that the individual can make choices about what he or she watches, or parents can make choices about what their children watch?

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

My hon. Friend makes an important point, particularly about the internet and children, which is a worry for parents as so many children have computers in their bedrooms.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I am a little lost. I am not sure to which amendment the hon. Lady refers.

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

Perhaps I can assist the hon. Gentleman. It is amendment No. 11, and I direct him to the last line that refers to

standards of good taste and decency.

I had strayed somewhat from my original point and I apologise. I was referring to the importance of enabling customers to be warned of the content of programmes, particularly on television and radio, so that they can make a choice.

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Culture, Media and Sport)

The amendment was referred to, I think by the hon. Member for Vale of York, as the Mary Whitehouse memorial amendment. Does the hon. Lady accept that in Mary Whitehouse's prime, there were only one or two stations so detailed scrutiny of content was possible? In an era of 300, 400 or 500 stations, it will not be possible for any authority to do what the hon. Lady suggests, and certainly not if we want to keep the number of staff employed down to levels that people would want.

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

I am suggesting that some sort of code would enable customers to judge what they are going to see. Smaller stations often target the audience that they want, and that could be incorporated in a star rating or code.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

Does the hon. Lady agree that what I prefer to call the Kenny Everett memorial amendment—it is all in the best possible taste—would make for heavy-touch regulation?

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. I get the impression that the important points about good taste and decency has been well rehearsed. We are talking about that principle being incorporated in the Bill, which is perfectly in order because it is part of the amendment, but I hope that hon. Members will take my comments to heart.

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

I appreciate that we have moved on considerably since the days of Mary Whitehouse, but the same principle can be applied to modern technology, and to viewing and listening. The protection of customers so that they know what they will see and hear should be part of the system.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

The hon. Lady mentioned ''Eurotrash''. She is arguing for signals to tell people what they are about to see, but the programme is called ''Eurotrash'' and is on after 10 o'clock at night on Channel 4. Is that not plenty of notice that the programme is unlikely to be one that the hon. Lady would want to watch?

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

The hon. Gentleman makes a frivolous point; the programme could have been about waste management in Europe. [Laughter.] There is a serious point about customer protection and warning.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

The television channel that does most of what the hon. Lady suggests as regards voluntary warnings is Channel 5; warnings are often shown to announce the unsuitability of the programme to come. It is also the channel that probably has the most programmes that the hon. Lady would find unacceptable. Were she to suggest a voluntary code of warning, it need not be in the Bill because Ofcom could address it in voluntary discussions with broadcasters.

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

I regret that the delights of Channel 5 are unknown to me because they come across as a snowstorm on my television. I live in a small valley and reception is poor.

Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

Purely for my education, will my hon. Friend explain whether ''Eurotrash'' is a party political broadcast by the United Kingdom Independence party?

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. I perceive that the purpose of the amendment is to get the principle of good taste and decency across in debate. If we start down the line of itemising individual and subjective judgments about which programmes fit into which category, we shall be here all day. I plead with hon. Members to get back to the principle of the amendment.

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

Thank you for that guidance, Mr. Stevenson. I return to my point that, through the substructure of Ofcom, it should be possible to have regard to public taste and decency and to ensure that, within the structure, there is a responsibility to give notice.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons)

I rise briefly to address points that may already have been covered. I want to return to a point that I made earlier, but I will not test hon. Members' patience. I can make my point at Third Reading if I catch the Speaker's eye.

I have expressed concern that there are two Bills, when everything could have been put into one. Ofcom could have been set up on 1 March, with its regulatory powers to be taken on 1 August. That would have been better and clearer. However, Ofcom is being set up without anyone knowing what it will do, or what powers it will assume. My hon. Friend the Member for Esher and Walton touched on some important issues when he said that clause 2(1) referred to the regulation of communications and

the implementation of, or for securing the modification of, any relevant proposals about the regulation of communications.

That leaves the role of Ofcom potentially wide, and certainly vague.

Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

I am glad that my hon. Friend raises that point. Has he seen the article in a recent issue of The House Magazine concerning the Federation of the Electronics Industries? The article states:

Ofcom must ensure that long-term infrastructure is not stifled by unbalanced consumer-driven legislation.

During the period of setting Ofcom up, what consideration will be given to that? No guidance has been given with regard to the main Bill in terms of directing the coverage of the wider sphere for which Ofcom will be responsible.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons)

I had not seen that article, but my hon. Friend raises a good point. We are uncertain as to the role of Ofcom, because we do not know what will be in the main Bill. Although the White Paper is an interesting and comprehensive document, it does not make up the main Bill; nor does it go into detail about what the Bill will state.

My hon. Friend the Member for Vale of York, who has had to leave the Committee for a few minutes to attend a Select Committee, referred to uncertainty about staffing. The Committee has accepted that it is important for Ofcom to attract the best staff—every organisation wants to do so—and it may expect to attract the best staff from existing regulators. However, there is uncertainty because we do not know what Ofcom will do. I do not know whether my hon. Friends share my concern, but it seems uncertain whether staff would be persuaded to leave existing regulators to join a body when they do not know what that body will be doing.

My hon. Friend also referred to costs. The amendments would require Ofcom to identify opportunities for cost savings, and it is fair to put that in the Bill.

We have heard a lot about taste and decency—you would call me to order, Mr. Stevenson—if I went too far into that, but the matter concerns me. I fully accept that, with the proliferation of channels and the advent of the internet, it is difficult to control what is available. In addition, what is decent is a matter of opinion; what is tasteful is even more a matter of opinion. We have a duty to protect young people and children, particularly.

We do not live in a totally libertarian society. I believe in a free society in which individual freedom is important, but I do not believe in total libertarianism in which, for example, people take drugs. I do not accept that drug-taking should be part of society, even when it is people's personal choice, because they can become caught up in a culture that is undesirable. People can be unduly influenced by what they see on television. Many believe that what they see on television is real life; that ''Coronation Street'' exists and that they can go to the Rover's Return. Although it is difficult, we should make an attempt to control bad taste and indecency on television screens.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I accept the hon. Gentleman's broad point that free-to-air television channels should be more heavily regulated and that programming that is put out to consumers should be more heavily regulated than material that consumers must pull down. However, I am confused by the amendment, which

calls for cost savings and heavier regulation. It is impossible to do both at the same time, because they are surely mutually exclusive.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. I understand that this amendment is important, as I said earlier, but I am becoming concerned about the repetitious arguments. I ask hon. Members to resist the temptation.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons)

Thank you for your guidance, Mr. Stevenson. I am grateful for the helpful intervention from the hon. Member for Rhondda and for his sympathy with the broad thrust of my comments.

It is incumbent on any organisation to ensure that its services provide good value for money, which is what we are driving at in the amendment. We are also concerned with taste and decency. We live in a free society and I would always argue for the retention of that, but we must always be concerned about the way in which people are influenced by the media. I suggest that that influence is increasing. With more channels and the internet, there is greater potential influence over people by the communications industry. I accept that regulation is difficult, but that is no reason to shy away from it. Most of the things that are worth achieving in life are difficult to achieve. We are worried about the vagueness of clause 2, which seems to be open-ended without specifying what Ofcom should do. The amendment, whether perfectly drafted or not, seeks to bring a little more discipline to Ofcom. I hope that when the Minister responds, he will respond not just to my comments, but to those of my hon. Friend the Member for Vale of York.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport 10:45 am, 31st January 2002

I shall address the questions that have been raised during our long debate. Clause 2 confers a single function on Ofcom; to assume functions at a later stage. Ofcom will do that by preparing transitional arrangements for the transfer of staff, property and other assets and liabilities from the existing regulators and the Secretary of State. The hon. Member for Esher and Walton was right to refer to the Radiocommunications Agency. It is part of the Department of Trade and Industry, which is why it is not listed, and the Secretary of State for Trade and Industry has responsibility for that.

The transfer of staff, assets and liabilities will take place only when the communications Bill comes into force. Ofcom will have no other powers, regulatory or otherwise. All it can do is prepare. It will not be able to become involved in any other activities. My hon. Friend the Member for Milton Keynes, North-East (Brian White) asked about international negotiations. Ofcom will have no formal role in international negotiations until it assumes its regulatory functions. However, on spectrum management, for example, I would expect informal discussions between the shell Ofcom and the Radiocommunications Agency, if that were helpful to the agency; I imagine that the agency would find that helpful.

Turning to the points raised by the hon. Member for Esher—and Walton. I always forget about Walton.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

The hon. Gentleman asked what Ofcom will do to influence the Bill, which is another aspect of the question asked by my hon. Friend the Member for Milton Keynes, North-East. Ofcom will not be formed until the summer or autumn of this year, by which time the draft Bill will have been published. The hon. Member for Esher and Walton has a long history as a Minister and knows that spring can sometimes be endless, but I am determined that the Bill will be published in what most of us know as the spring, when it becomes warmer and the flowers come out.

Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

To titillate the Committee, will the Minister confirm that relations between his Department and the Department of Trade and Industry are wonderful and constructive, and that everyone is talking to one another?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

Relations could not be warmer. The hon. Gentleman knows that I was a trade Minister before moving to new pastures in the Department for Culture, Media and Sport.

Ofcom will be able to offer views on the draft Bill when it has been published and on the outcome of the public consultation and pre-legislative scrutiny. That input will help the Government to finalise the Bill and, more formally, Ofcom will be able to comment on the Government's proposals for its role. That is sensible. I shall come to the points raised by the hon. Member for Ceredigion in a moment because they are important.

The second element of amendment No. 11 concerns cost savings. Amendment No. 58 seeks something similar, and that Ofcom should secure the implementation of any savings identified. I shall try to deal with those two proposals together. I see no sense in Ofcom being the five existing regulators bolted together, and if we do that, it will fail. The hon. Member for Esher and Walton is right to say that we must aim to be radical in creating the creature.

As my hon. Friend the Member for Milton Keynes, North-East has pointed out on many occasions, the discussions in Committee, on the Floor of the House and in the other place have been obsessed with broadcasting. However, as the hon. Member for Ceredigion has pointed out, the implementation of everyone's dreams and schemes about broadband could hold the future of our economy in its thrall. If we do not manage to do all the things that the Government and previous Governments have dreamt of in terms of wiring up the country, we could be in big trouble. Although I would not underrate the importance of taste and decency, if we do not get broadband right, we shall have problems with our economic future, in which Ofcom has an important role to play.

Work has already begun on ways in which Ofcom might be structured to bring together the existing regulators' responsibilities together in the most effective way. My Department and the Department of Trade and Industry are part of a steering group that has been established with the existing regulators to examine the transition process and the most efficient way in which to bring it about. Government and Opposition Members have raised the issue of the way

in which transition will work and the length of time that it will take. I envisage the transition period as being relatively short. I hope that the costs associated with transition will be modest. I am sorry that it is impossible for the hon. Member for Vale of York to be with us because she raised that matter on several occasions. I am keen to keep down the costs of transition, which include the cost of the formation of Ofcom and the costs of the transition.

Members of the Committee will know that the Secretary of State will be responsible for making any loans to Ofcom, and will be best placed to decide how much will be appropriate. The Secretary of State in my Department will not want to lend more than she has to. With Ministers such as me nagging her for money for other projects, she will want to ensure that bills are as low as possible. In addition, the National Audit Office will be able to examine the loan, and the Bill provides for the NAO also to consider Ofcom's finances. That set of measures will ensure that waste or profligacy will not be an option, and it will not be necessary to add those references to the Bill.

The inclusion of the wording that Ofcom should reflect standards of good taste of decency goes beyond what we are trying to achieve with the Bill. We have specifically included provisions to prevent Ofcom from interfering in the work of existing regulators. Hon. Members have raised that matter because it is good to have a bite at such issues at any stage in the reform of our regulatory system, but, as far as the Bill is concerned, we want to keep the body as lean as possible to allow the transition to take place. Taste and decency are separate matters that will be considered in the main communications Bill; I have had premonitions of the debates that will take place on that Bill. My hon. Friend the Member for Dudley, South (Mr. Pearson) told me that I would be wise to apply for a transfer, but I shall not do so in these days of uncertainty.

Turning to the issues raised by the hon. Member for Upminster (Angela Watkinson), the communications Bill will set out the role that we envisage for Ofcom in terms of safeguarding standards, and that will go beyond taste and decency. She will be aware—many hon. Members have made this clear—that we will have all sorts of platforms for presenting material that many of us would find offensive, which means that we shall have to examine other forms of regulation that we currently cannot begin to envisage.

Photo of Angela Watkinson Angela Watkinson Conservative, Upminster

One point that I did not raise earlier concerns the vast audiences gained by a few programmes such as the soaps, which have the highest ratings on television, and ''The Archers'' on the radio. Those large audiences provide opportunities for political interference and social comment.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. I hesitate to interject on the hon. Lady, but if we are not careful we shall get back to subjective judgments, rather than the issue.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

The hon. Lady will make those points many times in the debates on the communications Bill.

Amendment No. 44 would remove Ofcom's capacity to secure the modification of any relevant proposals for the regulation of communications. Allowing Ofcom to secure the modification of relevant proposals will be vital in ensuring that an effective new regulatory regime can be put in place quickly and smoothly. Clause 2(3) describes relevant proposals, which are any proposals by the Secretary of State for conferring on Ofcom any functions relating to telecommunications, wireless telegraphy, broadcasting, radio and television services or other activities connected with the communications industry. Those functions are, for the most part, carried out by the existing regulators.

In order to ensure that Ofcom can fully prepare for the implementation of the Secretary of State's proposals regarding such functions, it should be given an opportunity to express its views and, where it considers it to be appropriate, to seek to secure their modification. Amendment No. 44 would prevent Ofcom from doing that, and clause 2(1) should remain as it is.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

On that point, will the Minister elaborate on the meaning of ''securing modifications''? Will the shell Ofcom have the last word on those modifications? Surely the last word will lie with the Secretary of State.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

Indeed; I am happy to confirm that the last word will lie with the Secretary of State. That is linked to the point that the hon. Gentleman raised earlier about whether Ofcom will dominate.

During the preparatory stage we expect Ofcom to have not only a small board, but a small staff. The existing regulators will have larger staffs to maintain because they will retain their regulatory powers until Parliament says otherwise. Many outside bodies will offer views, as will Parliament. For example, the hon. Member for Upminster will want to raise her views about how taste and decency might best be regulated or monitored in the future. After the publication of the draft communications Bill, I hope that there will be a vigorous debate during the consultative period about the substantive nature of what Ofcom should do, and on the system itself. That returns us to the point raised by the hon. Member for Tewkesbury about cost and size.

At the moment, the number of employees we are talking about is 1,111, which leads to a big bill; £118 million. The hon. Member for Esher and Walton did much to liberalise and lighten the touch of regulations, and that is my aim also.

I do not want a bolted-together model of existing regulators. That would be a great tragedy and a missed opportunity. As my hon. Friend the Member for Milton Keynes, North-East and the hon. Member for Ceredigion pointed out, it would prevent us from creating the flexibility to accommodate technological change. That will be a necessity in the future.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons) 11:00 am, 31st January 2002

I do not mean to trip the Minister up, but he and his hon. Friends talk about a lighter regulatory touch. He was kind enough to say that he

agreed with me, and with my hon. Friend the Member for Upminster, about the promotion of decency and good taste. How will those objectives be achieved? They seem to be slightly contradictory.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

The regulators currently do a very good job when one considers the avalanche of new platforms; the broadcasting channels and the internet services. We must learn from best practice and ensure that Ofcom understands why the best parts of the existing system work so well, and we must apply them in the best possible way to ensure that those areas are properly regulated. The Government will resist the amendments.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons)

I am grateful to the Minister for explaining his position. He will forgive me if I suggest that he was slightly vague on some areas, particularly on the point that I raised a moment ago. I would also have liked to hear him detail the size of staff that he envisages Ofcom having in its shell form. I have some concerns about the transfer of staff from the existing regulators to Ofcom. He seemed to suggest that the setting up of Ofcom and the publication of the draft Bill might be synchronised. Would there be a gradual or a sudden transfer of staff or duties?

We have given these matters a strong airing. I beg to ask leave to withdraw the amendment.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Unfortunately, the hon. Gentleman is not entitled to do that. He did not move the amendment and the hon. Member for Vale of York, who did, is not in her place.

Amendment negatived.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons)

I beg to move amendment No. 14, in page 2, line 24, at end insert—

'(1A) The functions conferred upon OFCOM under this section shall have effect only for a period of one year following its commencement'.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

With this it will be convenient to discuss New clause 2—Duration—

'The Act shall cease to have effect at the end of a period of one year after its commencement.'.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons)

I must apologise for my hon. Friend the Member for Vale of York, whose absence is unavoidable due to her Select Committee duties. I envisage her return soon, so I do not intend to speak for long. We are concerned about how long Ofcom is likely to exist in its present form. The Government gave a commitment that there would be some form of sunset clause so that Ofcom could not run on for ever.

The Minister has mentioned the new communications Bill, and there has been some debate about when spring actually is. My hon. Friend the Member for Vale of York said that sometimes spring does not arrive in North Yorkshire till August whereas, in some parts of the country, it arrives a little earlier. We are very vague and unsure about when the new Bill will be introduced. The Minister said a moment ago that he might not wish to work on the main Bill. I hope that he does; he deserves it. I hope that I, too, will be fortunate enough to retain my position and be on the main Bill, because I have greatly enjoyed our debates on this Bill, of which there are more to come.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I apologise for momentarily disappearing. I hope that my hon. Friend, who is in a position of some influence, will ensure that I, too, serve on the main Bill.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons)

Perhaps it will benefit the Committee if I say that the power and influence of the Whips Office is not what it is assumed to be, nor what it was.

As there are no guarantees about costs or staff size, we want to ensure that the shell Ofcom does not run on for too long and that it does not become confused about its role. As earlier debates made clear, we are not sure whether it is to have any regulatory role. We know that it will not regulate, but clause 2(1) suggests that it will have some involvement in regulation, especially in discussing modification of proposals. How long will that run on for? As my hon. Friend said, we have five regulators at the moment and it might be said that, when the Bill is enacted, we will have six. We have proposed a sunset clause to ensure that spring does not extend beyond this spring or, indeed, spring next year. I do not want to say any more about the amendment. I am sure that my hon. Friends and other hon. Members will have a lot to say.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

I apologise for not being able to be present in the Committee first thing this morning. Along with the hon. Member for Sheffield, Hallam (Mr. Allan), I was along the Corridor, fighting for the rights of Select Committees in the Liaison Committee. I was torn between being here and being there.

I support the amendment. I recall the Government's proposals on freedom of information, which had been long promised by the Government and took three or four years to appear, rather like the opposite of a premature baby. Would that be a posture baby? Anyway, it was a long time before that overdue baby finally emerged. I fear that the communications Bill will be very complex. Can the Minister guide us on whether the draft Bill will appear on time? I can see that he is very keen to comment on that.

The Minister should have no concern whatsoever about the amendment because he has told the Committee time and time again that not only should the draft Bill appear in the spring, but that the main Bill should appear a few months later. If that is the case, in effect it makes the amendment, in that the provision that Ofcom would collapse one year after the Bill was enacted would not apply were the main Bill already going through Parliament.

Of course, the Minister might say, ''Hang on, because of the length of time it might take to debate the communications Bill, we need a little more time.'' It might be reasonable for him to suggest that the period be extended to 18 months. However, if he opposes the idea of a sunset clause as a matter of principle, serious questions must be asked. We must ask, as we did with the freedom of information proposals, whether this is yet another example of two or three factions within Government being at each other's throats, their jugular veins exposed and blood pouring out.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. The hon. Gentleman can ask as many questions as he wishes, provided that he concentrates on the amendment.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

They were rhetorical questions, but I am grateful to you, Mr. Stevenson, for your guidance.

Photo of Ian Taylor Ian Taylor Conservative, Esher and Walton

Would my hon. Friend at all times observe taste and decency?

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

With respect to taste and decency, I note that the Broadcasting Standards Commission would be included in Ofcom.

If the Minister were to say, ''We disagree with the clause because of its length and detail, and with the question of whether it should be 18 months or two years'' it would be a reasonable response. However, as I said, if the Minister says, ''No, we object to the sunset clause in principle'', we must ask what his motives are.

We learned earlier that it is the regulated themselves who will ultimately have to pay for the shell Ofcom. The Minister said that his Department or the Treasury would pay to set it up, and that his Department or the Treasury would then have to be repaid with interest—we do not know at what rate, but he promised to write to us about that—for the time in which Ofcom was operating in its shell form. If that goes on for two or three years, a similar time to the delay that occurred in the freedom of information measures, that amount could be very large sum of money. I look forward with considerable interest to the Minister's reasoned reply, although I do not expect him to talk about blood-letting.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I do apologise to the Minister for my absence. I am sure that it will not happen again, but I crave his indulgence.

I wish to add some supplementary remarks about new clause 2 to the excellent and eloquent speech of my hon. Friend the Member for Tewkesbury on amendment No. 14. I would be most grateful if the Minister were to take this opportunity to say how long the transitional period will last. I invited him to tell us during our debate on the previous amendment, but the moment passed without a reply.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

The hon. Lady was unavoidably detained in another place, but I said that I envisaged a quick transition period. I cannot be much more precise than that, nor could any other living being on the face of the earth.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. That is an important point. I know where the hon. Lady was, and other members of the Committee might also have been there, but we have to make a choice. I am sure that the Committee would not want me to allow issues and questions that had been raised and answered while the hon. Lady was absent to be raised again.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons)

On a point of order, Mr. Stevenson. The statement that the Bill will come forward as soon as possible is not particularly precise.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I am most grateful, Mr. Stevenson, but perhaps the Minister will take this opportunity to

tell us what he means by quick. It could be a week, a month or a year. I asked whether it would be one year or two, but that is not quick.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield 11:15 am, 31st January 2002

Would it help my hon. Friend if I said that the amendment teased out the answer to that question, in a way? If ''very quick'' is under a year, there should be no concern about accepting the amendment.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I am most grateful to my hon. Friend for that pertinent comment. The amendment states:

The functions conferred upon OFCOM under this section shall have effect only for a period of one year following its commencement.

That means that the Government, effectively, would be allowed the option to impose a sunset clause. As we considered when discussing the previous amendment, it has been suggested that the period to facilitate and prepare for assuming functions at a later stage will be timetabled. I suggest that only one year be allowed from the date of commencement.

The Government's manifesto at the general election was clearly committed to sunset regulations when appropriate, which was welcomed by the better regulation taskforce. In its view, sunsetting is a way to allow legislation to lapse when it has served its purpose or if, as may happen in this case, the Secretary of State fails to introduce the communications Bill. I pray in aid the conclusions that the staff of the Library have helpfully prepared.

Photo of Laurence Robertson Laurence Robertson Opposition Whip (Commons)

I hope that you will allow me a small analogy, Mr. Stevenson. Is my hon. Friend aware of a promise made to the horse-racing industry that regulations would be introduced on the Tote and the Levy Board? The absence of that legislation has thrown the industry into chaos. The Home Office made the original promise when racing fell under its remit, but it now falls under that of the Department for Culture, Media and Sport.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I should have been more aware of that than I was, so I am grateful to my hon. Friend. He illustrates the chaos that may ensue for industries affected by the Bill. My hon. Friend the Member for Lichfield will recall our enjoyable time with representatives of Carlton yesterday. They were extremely honest with us. Only Conservative Members were present, but I am sure that Labour Members will have an opportunity to be looked after in a similarly hospitable manner. I do not believe that that should be recorded in the Register; I simply throw it in for good measure.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. If the hon. Lady does not want some of her comments to be recorded in Hansard, the guarantee of that is for her not to make them.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I am grateful for that. What I meant, in case I have excited Labour Members, is that I do not believe that the hospitality was of such value that it needed to be added to the Register of Members' Interests. There are clear guidelines on the subject.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

Clive Jones, the chief executive of Carlton, said that he had been through three recessions as a chief executive in television and that the present one was the deepest.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. The hon. Gentleman is stretching my patience to the limit. I know him well, and he knows that my patience is almost endless. It is in my gift whether we get into an economic argument, and we will not do so.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I assure you that that is not my intention, Mr. Stevenson. I want to record the uncertainty felt by the industry, which would end if the Government were minded to let the Committee agree to the amendment.

The Government's manifesto included the sunsetting of legislation. We have an example of the chaos, uncertainty, apprehension and anxiety that can be caused to an industry when legislation does not include a sunset clause or the Government fail to introduce it. I simply remind the Minister of the Government's obligation and invite him to confirm to the Committee that the Government stand by their manifesto commitment.

Indeed, the conclusions of the taskforce, which have been researched formally by the House of Commons Library, suggest that a law is automatically removed after a fixed period unless something happens to keep it in place. In this case, the something that would keep this law in place would be the mother of all Bills, which we look forward to with increasing anticipation. But I am sure that the Minister will agree that if that something does not happen, this Bill should not remain law.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

Does my hon. Friend agree—I do not believe that this has been mentioned so far in Committee—that there has been no indication of the cost of operating the shell Ofcom? That, too, will be of concern to the regulated, in relation to the length of time that Ofcom exists before it becomes the primary body.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

That is a valid point. I was explaining why I believed that the amendment should apply in this case. I pray in aid again the better regulation taskforce, which gives a list of regulations that might have the sunset procedure applied. The list includes reserve powers that may never be used or bodies that are set up but never given powers to do anything. I would have been convinced that Ofcom were such a body, but the report helpfully confirms that it will be until such time as the main Bill is set up. The report also says that appeals to the Secretary of State for the proposals to establish those regulatory functions have been abandoned and that she has a duty to wind Ofcom up.

I understand that this matter is close to the Government's heart and something that they would

perhaps have usually included in the Bill, but for an oversight. This is their opportunity to do so.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

I now understand—I was absent for the reasons I gave earlier—that the Minister said that the cost of the shell organisation would be about £5 million. But surely that depends on the length of time for which the shell organisation is in operation. While people are being paid wages, there will be continuing costs, and I hope that the Minister will clarify what the monthly or annual running costs will be.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. Before the hon. Lady responds, I want to repeat that there has been considerable debate on those issues this morning.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

I will not rehearse them again. I am about to move from amendment No. 40 to a detailed analysis of new clause 2. Would this be a good moment for the Committee to pause?

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Order. If the hon. Lady pauses, I shall assume that she has finished her speech and I shall act accordingly.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

The hon. Lady asked the Minister earlier how quick was quick, but said that she would speak briefly to the amendment. How brief is brief?

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

Brief is briefer than quick. We still look forward to hearing a definition of quick.

Photo of Ian Pearson Ian Pearson Assistant Whip

On a point of order, Mr. Stevenson. During the best part of the past two hours, we have heard some lengthy and repetitious contributions during the debate on amendments to a narrow clause. Bearing that in mind, I wonder whether you would be minded to allow a stand part debate and whether you would communicate your view on that to whoever chairs this afternoon's sitting.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

That is a matter that the Chair will consider, subject to the debate. Whatever consideration the Chair comes to will be communicated to whoever takes the Chair this afternoon.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

On a point of order, Mr. Stevenson. I wonder whether you would clarify something for me. If an hon. Member in the Committee were to be repetitious, would that not be out of order? Would you not have pointed that out and drawn him or her to order?

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Yes. I will clarify that, and then we shall be out of time. I made that very point this morning, while the hon. Gentleman was elsewhere.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.