Office of Communications Bill [Lords]

Public Bill Committee, 31 January 2002.

Standing Committee E

Clause 2 - Initial function of OFCOM

Anne McIntosh (Conservative, Vale of York)

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.'.

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;'.

Anne McIntosh (Conservative, Vale of York)

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—

Chris Bryant (Labour, Rhondda)

You wish.

Anne McIntosh (Conservative, Vale of York)

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.

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?

Anne McIntosh (Conservative, Vale of York)

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.

Kim Howells (Labour, Pontypridd)

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.

Anne McIntosh (Conservative, Vale of York)

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

Kim Howells (Labour, Pontypridd)

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

Anne McIntosh (Conservative, Vale of York)

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

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.

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).

Ian Taylor (Conservative, Esher and Walton)

Thank you, Mr. Stevenson.

Anne McIntosh (Conservative, Vale of York)

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.

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.

Anne McIntosh (Conservative, Vale of York)

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.

Paul Farrelly (Labour, Newcastle-under-Lyme)

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?

Anne McIntosh (Conservative, Vale of York)

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.

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?

Anne McIntosh (Conservative, Vale of York)

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?

Kim Howells (Labour, Pontypridd)

Yes.

Anne McIntosh (Conservative, Vale of York)

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.

Simon Thomas (Plaid Cymru, Ceredigion)

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?

Anne McIntosh (Conservative, Vale of York)

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.

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.

Anne McIntosh (Conservative, Vale of York)

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.

Nick Harvey (Liberal Democrat, North Devon)

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?

Anne McIntosh (Conservative, Vale of York)

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.

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?

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.

Anne McIntosh (Conservative, Vale of York)

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.

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?

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.

Simon Thomas (Plaid Cymru, Ceredigion)

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.

Kim Howells (Labour, Pontypridd)

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.

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.

Anne McIntosh (Conservative, Vale of York)

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.

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?

Anne McIntosh (Conservative, Vale of York)

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.

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.

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.

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.

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.

Brian White (Labour, North East Milton Keynes)

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

Angela Watkinson (Conservative, Upminster)

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.

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?

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.

Chris Bryant (Labour, Rhondda)

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

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.

Nick Harvey (Liberal Democrat, North Devon)

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.

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.

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?

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.

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.

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?

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.

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.

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.

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?

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.

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.

Laurence Robertson (Conservative, Tewkesbury)

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.

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.

Laurence Robertson (Conservative, Tewkesbury)

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.

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.

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.

Laurence Robertson (Conservative, Tewkesbury)

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.

Kim Howells (Labour, Pontypridd)

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.

Ian Taylor (Conservative, Esher and Walton)

I do not. [Laughter.]

Kim Howells (Labour, Pontypridd)

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.

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?

Kim Howells (Labour, Pontypridd)

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.

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.

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.

Kim Howells (Labour, Pontypridd)

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.

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.

Kim Howells (Labour, Pontypridd)

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.

Laurence Robertson (Conservative, Tewkesbury)

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.

Kim Howells (Labour, Pontypridd)

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.

Laurence Robertson (Conservative, Tewkesbury)

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.

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.

Laurence Robertson (Conservative, Tewkesbury)

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'.

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.'.

Laurence Robertson (Conservative, Tewkesbury)

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.

Anne McIntosh (Conservative, Vale of York)

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.

Laurence Robertson (Conservative, Tewkesbury)

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.

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.

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.

Michael Fabricant (Conservative, Lichfield)

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

Ian Taylor (Conservative, Esher and Walton)

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

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.

Anne McIntosh (Conservative, Vale of York)

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.

Kim Howells (Labour, Pontypridd)

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.

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.

Laurence Robertson (Conservative, Tewkesbury)

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

George Stevenson (Labour, Stoke-on-Trent South)

That is not a point of order.

Anne McIntosh (Conservative, Vale of York)

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.

Michael Fabricant (Conservative, Lichfield)

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.

Anne McIntosh (Conservative, Vale of York)

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.

Laurence Robertson (Conservative, Tewkesbury)

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.

Anne McIntosh (Conservative, Vale of York)

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.

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.

Anne McIntosh (Conservative, Vale of York)

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.

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.

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.

Anne McIntosh (Conservative, Vale of York)

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.

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.

Anne McIntosh (Conservative, Vale of York)

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.

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.

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.

Anne McIntosh (Conservative, Vale of York)

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?

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.

Anne McIntosh (Conservative, Vale of York)

I shall proceed.

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?

Anne McIntosh (Conservative, Vale of York)

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

Ian Pearson (Labour, Dudley South)

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.

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.

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?

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.

Standing Committee E

Office of Communications Bill [Lords]

Roger Gale (Conservative, North Thanet)

I understand that the Committee had an interesting ramble around the frequencies and the airwaves this morning, and that you got a lot out of your system. As a result, I confidently expect that we shall make rapid progress this afternoon.Clause 2 Initial function of OFCOM

Clause 2 - Initial function of OFCOM

Roger Gale (Conservative, North Thanet)

I remind the Committee that with this we are taking the following: New clause 2—Duration—

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

Anne McIntosh (Conservative, Vale of York)

Concluding the discussion on amendment No. 14, the Minister was about to explain the difference between quick and brief. I am being brief and he is being quick. We expect a commitment from the Government that the transitional period—I want a precise answer—will not last more than one year. To give the Minister his due, that would be quick. Anything more than that would be deeply regrettable. New clause 2 states that the Act should cease to have effect after one year, which links to amendment No. 14. I want the whole Bill, not least clause 2(1), to qualify for sunset clauses similar to those previously specified.

I am grateful to the Minister for drawing my attention to the Towers Perrin report and the regulators' steering group. It is appropriate to consider the clauses that should be subject to sunset provisions. The Towers Perrin report sets out several transitional principles. On page 40, paragraph 10.6, it specifies:

In a merger of this kind, when the outcome is to create a new organisation, it is important to define the principles by which the transition will be managed. This will provide consistency to the thinking and will give positive early signals to employees about the future management style of OFCOM.

I would go further than that: it would give positive early signals not only to employees of Ofcom, but to the industry as a whole, which Ofcom will regulate.

The report states that

The principles have been developed in consultation with the Regulators' Steering Group and drawing from our own experience of best practice.

They are described as statements of intent. Assuming that the new clause is accepted and that the Bill will cease to have effect one year after its commencement, we shall judge its success according to how the statements of intent measure up against best practice.

The existing organisations will be merged during the transitional period to create, we are told, ''a world-class regulator''—the Government have held that out as the pearl in the heart of the oyster—subject to the advent of the communications Bill. If we create one regulator to replace five, the one should be a world-class regulator that will carry out a truly integrated regulatory role beyond that conducted by the existing organisations. It is appropriate that we specify precisely what the Bill is to achieve during the transitional period; if the Government fail to achieve those intentions, the legislation should fall. That is the purpose of new clause 2.

There is also a need, as the Towers Perrin report states categorically, to deliver ''business as usual'' in parallel with delivering a new Ofcom. That is why it is extremely important Tthat the legislation should be in force for only one year. For reasons that we stated at some length this morning, we should not be creating a sixth regulator. The aim is to achieve one regulator—a merged regulator, not a mega-regulator or behemoth. Within one year of the Bill receiving Royal Assent and reaching the statute book, it should have been replaced by the communications Bill. The explanatory notes say that the substantive Bill should receive Royal Assent and reach the statute book by mid–2003.

That is a tall order, but I believe that that statement of intent goes to the heart of new clause 2. The legislation before us must have the objective of delivering business as usual and of delivering the new Ofcom by the end of one year after its commencement. I hope that the Minister can put our minds at rest that that is the timetable and the objective towards which the Government are working. It would be totally unacceptable for the legislation to remain in situ and on the statute book for longer than one year if that meant that Ofcom existed in parallel with the original five regulators for longer than one year. It is necessary to recognise the need to deliver business as usual.

Ofcom must also be required to communicate frequently, consistently, openly and honestly, sharing information with the present regulators when possible. I am concerned that the Bill makes no reference to how the existing regulators will communicate with the new regulator. The report says that, as a principle for the transitional period, it is desirable that all employees of the existing regulators be treated with respect and dignity, and that recognition be given to the difficulties presented by the length of the transition period. That is a key point. We all sincerely hope that the transitional period will be short.

Michael Fabricant (Conservative, Lichfield)

My hon. Friend knows that I know some of the regulators personally. One very senior regulator in one of the organisations to be included in Ofcom says that because of the uncertainty, he does not think that he will stay in the industry. If the Department for Culture, Media and Sport knew of that individual's intentions, it would be very concerned.

Anne McIntosh (Conservative, Vale of York)

I am most grateful to my hon. Friend for that appropriate intervention. I, too, have met a number of the current regulators, but they are not leaving the scene; they hope to become part of the new regulator. It would be inappropriate for me to support their application at this stage, and I am sure that the Minister would not want me to make representations on their behalf in Committee.

That strengthens the argument for new clause 2. The Minister has not yet provided the Committee with the timetable for the transition. I am sure that he has had a good lunch and has not had enough time to consider the matter, but we must have a commitment from the Government that the transition period will be time limited. The 1,111 current employees will be deeply concerned about their future. It is incumbent on the Committee to recognise the uncertainty facing the industry, those employees and the regulators. I therefore seek the Minister's approval for the new clause.

The Towers Perrin report—the Minister can see that I am warming to my theme—goes on to say that the plan for the transition period, which we say should last one year, should plan for implementation from the start of the design phase. He may not accept the amendment or new clause 2 because the Government do not have the time they need in the space of one year. He has given us no indication of, for example, where the new Ofcom is to be housed—although I might have missed something in debate. We are on the third day of our sittings and our proceedings have moved rapidly; it may be that I have not been alert, as Miss Widdecombe would have said. However, the Government will not be alert enough and competent enough to reach the timetable of best practice commissioned by the regulators' steering group in the Towers Perrin report.

Moving on rapidly, the transition principle to which that report refers is that the existing regulators want to ensure that the way in which Ofcom is built and designed sends clear signals and gives people positive experiences of Ofcom's future ways of working. To enable the Minister to find a quick response to these questions, pages 40 and 41 of the report are relevant. It will be apparent to the Committee that this is a probing amendment that provides an opportunity for the Minister to state the extent to which the Government are prepared on matters such as where Ofcom is to be housed.

Michael Fabricant (Conservative, Lichfield)

My hon. Friend's question about where Ofcom should be housed is prescient given that we heard in a previous sitting that 1,111 people are likely to be employed. The size of the building presents a serious problem, and contradicts the Minister's assurances that this will be a light-touch regulator.

Roger Gale (Conservative, North Thanet)

Order. That might be of interest to estate agents, but it has nothing to do with the amendment.

Anne McIntosh (Conservative, Vale of York)

Mr. Gale, may I respond to that intervention?

Roger Gale (Conservative, North Thanet)

No, because I have just ruled it out of order as it has nothing to do with the amendment.

Anne McIntosh (Conservative, Vale of York)

Then let me elaborate on the amendment. The purpose of the transition is to identify Ofcom's size, its staff and where it should be located. Both the Bill and the Minister are silent on that point. If the transition phase is to be successful and staff morale boosted, good management principles, such as those in pages 40 and 41 of the Towers Perrin report, must be observed.

With the Bill, Government seek to empower Ofcom to act as sole regulator. It is therefore important that during the course of the year after the Bill is enacted, the public, the industry and viewers and listeners can see that the new regulator is making good progress towards fitting itself for the functions that the Bill bestows upon it. Were the communications Bill not to be brought before the House before the spring of this year and to achieve Royal Assent before mid–2003, it would be totally unacceptable for Office of Communications Act, as it will be, to remain on the statute book in its present form or amended. If the Government fail to act and do not introduce the communications Bill in Parliament within one year, the paving legislation should fall. Anything less than that would be totally unacceptable.

Kim Howells (Labour, Pontypridd)

First, let me deal with amendment No. 14. I can see no purpose in the functions that the Bill confers upon Ofcom expiring one year after commencement. The communications Bill, when enacted, will confer functions on Ofcom that supersede those in the Bill. However, with the best will in the world, I cannot imagine that the communications Bill will be in a position to achieve Royal Assent—

Sitting suspended for a Division in the House.

On resuming—

Kim Howells (Labour, Pontypridd)

I was saying that with the best will in the world I cannot imagine that the communications Bill will achieve Royal Assent within one year of the commencement of the paving Bill. The hon. Member for Vale of York (Miss McIntosh) said that she has not even started yet, but if we ever get off this group of amendments, Ofcom will exist by summer 2002—this year. If the Opposition are reasonable when the main Bill is discussed, it should receive Royal Assent by summer 2003 at the earliest.

Ian Taylor (Conservative, Esher and Walton)

The timetabling of a Bill is often related to the skill of the draftsmanship, not just the Opposition. I hope that the Minister will keep a close eye on the drafting of the main Bill.

Kim Howells (Labour, Pontypridd)

Yes. I see that the hon. Gentleman still bears the scars.

If all goes well, Ofcom will be regulating by the end of 2003, less than six months after Royal Assent to the main Bill. The total time taken will be approximately 18 months. The communications Bill will be larger and more complex than this small paving Bill, but even if

parliamentary time is found for it early in the next Session, it will be far from surprising if it takes less than the best part of the parliamentary Session to pass through Parliament.

With a paving Bill we recognise the danger that the substantive proposals might, for unforeseen reasons, not be introduced. That is covered by clause 5, which gives the Secretary of State the power to wind up Ofcom if it seems to her that its continued existence is no longer necessary—God forbid. She will retain the duty to do so in such circumstances at any time after the end of 2003. That provides a clear cut-off date if no substantive proposals have been introduced

Michael Fabricant (Conservative, Lichfield)

Will the Minister give way?

Kim Howells (Labour, Pontypridd)

No—while providing the flexibility necessary when dealing with parliamentary timetables. I shall not give way because the hon. Gentleman was not here at the start of my substantive contribution, so he does not know what I am talking about.

The proposed new clause presents wider problems. The timing implications that I mentioned apply, but there are additional reasons why I am not inclined to consider the new clause. The Bill sets out the basic structure of Ofcom. Our intention is that it will remain in place even when the communications Bill is in force.

Anne McIntosh (Conservative, Vale of York)

We now understand that ''quick'' means about 18 months. Can the Minister state that, if his scenario is correct, Ofcom will have regard to the transitional principles and sunset provisions, as adopted in his party's manifesto for the last election?

Kim Howells (Labour, Pontypridd)

We would not have included them had we not been aware of them or had we not wanted them to have meaning. Of course we do not want any delays in transition. The entire period in question is 18 months, six months of which are after Royal Assent to the communications Bill. That is a short time. We could re-enact the relevant provisions in the communications Bill, but I wonder whether that would be good use of Parliament's time when we are spending so much effort considering them now. For that reason, I oppose the amendments.

Laurence Robertson (Conservative, Tewkesbury)

My hon. Friend the Member for Lichfield (Michael Fabricant) was accused of not knowing what the Minister was talking about. That could be applied to all of us, because although the Minister started to specify time scales, they still seem uncertain.

I gave an analogy when Mr. Stevenson was in the Chair, which I hope you will allow me to repeat, Mr. Gale. I declared an interest in the horse racing industry. The former Home Secretary, the right hon. Member for Blackburn (Mr. Straw), gave an assurance two or three years ago that the status of the Tote and the levy system would be changed. Responsibilities have been transferred to the Department for Culture, Media and Sport and the industry still awaits legislation, even though we are now in a different Parliament.

That industry has been thrown into chaos because of delay. The last thing we want is the communications industry to be thrown into similar chaos. The Minister said that that will depend on the parliamentary

timetable, but we have been told that matters raised by Opposition Members are irrelevant because they will be in the main Bill, which will begin in spring—a debate followed about what spring meant. I am not entirely satisfied by the Minister's considerate response so I will press the amendment to a Division.

Question put, That the amendment be made.

The Committee divided: Ayes 5, Noes 11.

Anne McIntosh (Conservative, Vale of York)

I beg to move amendment No. 12, in page 2, line 36, at end insert—

'(2A) In carrying out its functions under this section, OFCOM shall take into account the need to ensure continued effective ITV regional programming and news editions.'.

The amendment speaks for itself. I shall refer to the Government's response to the excellent report on the communications White Paper by the Select Committee on Culture, Media and Sport. Paragraph 34 of the report recommends that:

notwithstanding the proposed removal of specific legislative bias to further ITV consolidation above and beyond the general provisions of competition law, separate licences should be retained for each ITV region, including provisions relating to regional production and the contribution of each region to network programming. We further recommend that there be a legislative obligation upon the new regulator to maintain a network of offices in the nations—

that may be of interest to the hon. Member for Ceredigion (Mr. Thomas)—

and regions of the United Kingdom to facilitate effective monitoring of compliance with regional obligations by broadcasters.

The Government's response is illuminating. Paragraph (viii) states:

The retention and strengthening of the regional dimension to public service broadcasting is an important strand of White Paper policy . . . and the Government does not propose to alter the present statutory requirement for Channel 3 services to be separately licensed on a regional basis.

Requirements for regional programming and production by public service broadcasters will be included in tier two of the proposed new regulatory structure and we agree with the Committee that effective monitoring of compliance with regional obligations by OFCOM will be important. The detailed organisational and administrative arrangements to achieve this will, however, be a matter for OFCOM to determine.

My disappointment with the Bill in its present form is that, despite the amendment that we tried so hard to get on to the amendment paper, paragraph 7 of the schedule makes no reference to the presence on the Ofcom board of a member who has knowledge of and expertise in regional television.

Kim Howells (Labour, Pontypridd)

Will the hon. Lady tell the Committee whether she considers that one person on the board should be responsible for the regions of England,

Scotland, Wales and Northern Ireland, or should each have a representative?

Anne McIntosh (Conservative, Vale of York)

I do not want to go over the ground that was covered extensively and eloquently by the hon. Member for Ceredigion, but that is a moot point that we could debate at some length. One of the reasons why he felt moved to table the amendment, which we debated fully, is because the Bill is silent on the matter, even though the White Paper specifically stated that there was to be some relationship between Ofcom and Committees of the devolved assemblies.

Given the backdrop of that enthusiastic and positive Government response, it is deeply regrettable that the Bill fails to deal with regional programming. I am particularly disappointed because ITV is under huge pressure. As we learned yesterday in our discussions with Carlton Television, that company faces great uncertainty. Its chief executive, Mr. Clive Jones, said that this is the worst and the deepest recession that he can recall. The Committee will be aware of the extensive interest that Carlton Television—

Glenda Jackson (Labour, Hampstead and Highgate)

I am concerned that someone who holds such an important job is so unaware of when the deepest recessions occurred. Where was he during the terms of Conservative Government?

Anne McIntosh (Conservative, Vale of York)

It just goes to show that the recessions under the Conservative Government were nothing like the one under the current Labour Government. In the confines of the Tea Room or the Cafeteria, the hon. Lady and I could discuss that at greater length than is possible within the confines of the amendment.

Glenda Jackson (Labour, Hampstead and Highgate)

Maybe the hon. Lady's memory has lapsed too.

Anne McIntosh (Conservative, Vale of York)

My memory has not lapsed. I recall that the previous recessions turned the corner quickly. This is a deep and long recession and, in his view, the worst that Mr. Jones can remember. I shall advise him to contact the hon. Lady directly, to ensure that she is equally aware—[Interruption.]

Roger Gale (Conservative, North Thanet)

Order. If hon. Members want to have private conversations, would they kindly do so outside?

Anne McIntosh (Conservative, Vale of York)

Thank you, Mr. Gale. The noise is very distracting—it makes me lose my trail, and I have to go over the same points again.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

Notwithstanding the general climate for ITV stations, I am trying to understand the amendment. As Ofcom functions in its shadow form, the Independent Television Commission will still be responsible for ITV. In its shadow form, Ofcom will not have powers to do anything about ITV regional programming, even if it wanted to.

Anne McIntosh (Conservative, Vale of York)

I am grateful to the hon. Gentleman for allowing me to explain that the

function of the Bill is to prepare Ofcom for its functions, which is why it is so important to get it right.

Ian Taylor (Conservative, Esher and Walton)

To some extent the moment has passed, but recession is relevant to the discussion. The problem for companies such as Carlton is that the diffusion of different distribution platforms has diluted their ability to attract advertising. Regional television may attract more localised advertising which will assist them to continue broadcasting.

Anne McIntosh (Conservative, Vale of York)

I am most grateful to my hon. Friend, who puts the point more eloquently and accurately than I did. Perhaps I may use that as a building block. I tried, in my humble and inimitable way, to make a point about the current deep recession, about which many of us agree. I did so precisely because of the point made by my hon. Friend. Independent stations' revenue from advertising and other commercial ventures has fallen considerably.

The fall in advertising revenue is causing the greatest problem. Curiously, the impact of 11 September has a bearing on that fall. I declare an interest because my husband is sales director for an American company, Delta Air Lines. Airlines and television companies are suffering from a common problem. At this time of year—31 January—most of the advertising revenue on television and other media should come from holiday advertising. It speaks volumes that that market has collapsed so dramatically.

Simon Thomas (Plaid Cymru, Ceredigion)

Will the hon. Lady join me in welcoming the new Wales Tourist Board campaign, which is pumping money into the television companies and attracting tourists to Wales.

Anne McIntosh (Conservative, Vale of York)

Not only will I join the hon. Gentleman, but I will express a tinge of envy. If the English Tourism Council had even a modest marketing role, it might advertise north Yorkshire in that way.

Advertising revenue has fallen in this quarter; from January to March, revenues will simply not be the same as usual. The main British Airways advert being carried at the moment simply asks people to go and do the business by travelling to get the business. It is a very powerful advert.

Against the background of falling advertising revenues, independent television stations face unprecedented competition. That is true of radio stations too, but the amendment refers specifically to independent regional programming and news editions. I pay tribute to Independent Radio News, which covers London. For hon. Members who might not know about it, it is a great alternative to BBC Radio 5. The unprecedented collapse of advertising revenue and falling audience shares because of unprecedented competition, especially from such alternatives as BBC News 24 and satellite television, have exerted pressures that we must acknowledge. Bearing in mind that the Bill is preparatory to the main communications Bill, we must recognise that a function of Ofcom at this stage should be to ensure continued effective ITV regional programming and news editions.

I pay tribute, Mr. Gale, to your many years' experience in broadcasting and media, on which we in the Committee are hoping to draw. When you speak to your local broadcast media, as I am sure all Committee members do regularly, you will hear the deep concern at the impact such problems are having, and not only on regional programming. We do not only want to see more ''Countdown'' and ''Coronation Street''—now the subject of an all-party parliamentary group; we want to see ITV take regional programming seriously, especially regional news editions. We are all interested in accessing through regional television news broadcasts the wider audience that we could not meet, for example, by standing on Thirsk marketplace on the two days a week that the market meets.

ITV performs public service broadcasting extremely well. It must take its regional programming and news editions seriously against the background of intense competition from the BBC and others, and falling advertising revenue. I commend the amendment to the Committee, against the background of the Government response that was enthusiastic and eloquent about regional television programming and news editions. I recognise that Ministers other than the Under-Secretary of State might have been responsible for that—I accept that the appointment of the Secretary of State and Ministers in each Department is in the Prime Minister's gift. However, as the response is dated November 2001, the Under-Secretary of State might have been responsible for the reply. I hope that he will see fit to support the amendment.

Michael Fabricant (Conservative, Lichfield)

Surprisingly, I support the amendment, which is well thought out and appropriate. My hon. Friend the Member for Vale of York was jeered by Government Members when she talked about the strains being suffered by independent television. I was shocked that the Minister seemed to find it amusing when she quoted figures from Carlton Television. I will not quote such figures, because I do not want to be jeered, but perhaps the Minister will take more seriously figures from the Independent Television Commission—after all, it reports directly to him.

I presume that the ITC reported to him that between 1994 and 2000 the annual growth in net advertising receipts was 8.6 per cent. I point out to those, including the hon. Member for Hampstead and Highgate (Glenda Jackson), who are oblivious to the reality of the world, the ITC's report that independent television—that is the whole of the network, not just Carlton Television—suffered losses in net advertising receipts that were larger than the average loss for the whole industry. Moreover Carlton Television's advertising revenues were down by 13 per cent. and Granada's by 12 per cent. for the year ending September 2001—

Roger Gale (Conservative, North Thanet)

Order. I have now listened carefully to that argument on several occasions. This Chairman happens to know a little about broadcasting, and unless the hon. Gentleman is suggesting that Ofcom should take responsibility for advertising sales, which I

do not think he is suggesting, I fail to see that his remarks have anything to do with the amendment.

Michael Fabricant (Conservative, Lichfield)

I take your direction, Mr. Gale. My point is that this is a difficult time for broadcasters. Of course, Ofcom's role will not be that of an advertising sales house, but it is important to recognise that economic pressures will tempt broadcasters to centralise.

In a previous sitting the hon. Member for Milton Keynes, North-East (Brian White) pointed out that the ownership of independent television is unimportant as far as the provision of its contract is concerned. What is important is its current contract, which is with the ITC. Although in recent years we have seen consolidation in ownership in independent television, we have also seen a broadening of independent television's regional presence. There are now 48 regional news broadcasts going out simultaneously from the ITV network throughout the United Kingdom, which is a major expansion.

You will know, Mr. Gale, that thanks to changes in technology such as the introduction of electronic newsgathering, large numbers of staff are no longer necessary. Nevertheless, the Bill will have an economic impact on independent television companies at, as my hon. Friend the Member for Vale of York pointed out, a financially stressful time for independent television.

Although the ITC can be commended on ensuring that independent television, and the other organisations to which it applies, maintain their regional structures, that may not be the case with Ofcom—all bets are off. The Minister has said that he wants to see a light regulatory touch, for which I applaud him, but how light will that touch be? Will we see the end of regional broadcasting in the United Kingdom?

Anne McIntosh (Conservative, Vale of York)

Was that not precisely the plea that Mr. Clive Jones made to us yesterday on the need for clause 12? In the uncertain period in which we have only a paving Bill, it is important to get the commitment to the consideration of regional television, news programming and regional programming.

Michael Fabricant (Conservative, Lichfield)

As ever, my hon. Friend is absolutely right. I do not know whether she will press the amendment to a vote, but this is an issue that must be discussed. The Minister, rather than reading the information given to him by his officials, should respond properly to the debate. What is the Government's commitment to ensure that Ofcom will carry on the regional broadcasting tradition currently managed by the ITC? I shall happily give way to the hon. Member for Ceredigion.

Simon Thomas (Plaid Cymru, Ceredigion)

I thank the hon. Member for Lichfield for giving way—it is a delight that Ceredigion is being pronounced correctly after several sittings of this Committee. I do not doubt his sincerity about regional broadcasting and the amendment, but I am at a loss to understand why the amendment is only about broadcasting, given that Ofcom is about much more than broadcasting. The internet carries a plethora of news sites relating to Wales, Scotland and all the different parts of England, and the BBC

investing heavily in regional internet provision. Surely the amendment should be wider. Is it not flawed because it does not address those issues?

Michael Fabricant (Conservative, Lichfield)

The hon. Gentleman is absolutely right to say that the amendment could be wider. However, the capital required to set up an internet site is considerably less than that required to provide regional television. The Welsh Development Agency—I shall probably now receive a letter from it—maintains an excellent site at no huge cost as a percentage of its overall budget. If it received a new remit to set up some sort of independent television station or to provide local news, it would face a high cost. I think that that was in the mind of my hon. Friend the Member for Vale of York when she tabled the amendment. There must be a clear commitment from Government that regional television will be maintained under Ofcom.

I know that the Minister will read out his response that Ofcom is only a shell organisation. However, he said at the very opening of the Committee that the reason for establishing that shell is to maintain liaison with the existing regulators and to form the structure of the future Ofcom. We need to discuss and understand now the very spirit of where the Government are coming from, and to hear their commitment to regional television.

Glenda Jackson (Labour, Hampstead and Highgate)

The hon. Gentleman and his colleague the hon. Member for Vale of York have argued for the amendment on the basis that independent television regional companies are not only losing revenue from advertising, but losing audiences. Would it be Conservative party policy to subsidise such regional broadcasting?

Michael Fabricant (Conservative, Lichfield)

I do not speak on behalf of the Government or of the Opposition—but, equally, the hon. Lady, who sneers at me from a sedentary position, is not in a position to commit the Government, given that she was clearly unable to maintain her position on the Government Front Bench. She knows the rules. I cannot commit my party. Personally, I do not think that we should subsidise commercial broadcasters; however, the Committee should establish a framework that demonstrates that there is to be a continued commitment. I am not asking for any more than that Ofcom continues the existing commitment provided by the ITC.

Anne McIntosh (Conservative, Vale of York)

We are not here to discuss Conservative party policy, but the current Government's proposals.

Michael Fabricant (Conservative, Lichfield)

My hon. Friend, as ever, hits the nail firmly on the head.

The Independent Television Companies Association also argues for the continuance of regional television. My hon. Friend mentioned ''Coronation Street'', although I am not sure whether that can be regarded as regional television. I think—in a way I look to you on this, Mr. Gale—that

in the United Kingdom there are something like four or five major television production centres owned by ITV companies. We have also seen growth in independent television production houses. As I mentioned earlier, just as there have been technological changes in newsgathering, there have been many changes in television programme production. Although successful programmes such as ''Inspector Morse'' have used traditional filming on Super–16 and 35 mm, programmes such as ''The Bill'' use videotape production. It does that on a regional basis, because it is based in London.

The Government must say that Ofcom should have a responsibility to promote regional broadcasting, or to use the terms of amendment No. 12:

OFCOM shall take into account the need to ensure continued effective ITV regional programming and news editions.

Without that commitment, I am not sure that the new organisation with the light regulatory touch—and 1,111 employees in a building that does not exist but might be the millennium dome—will ensure that programmes such as ''The Bill'', ''Inspector Morse'' and ITV news bulletins continue.

Hon. Members will recall the debate when Carlton Television acquired Central Television, and when Granada acquired Meridian Television. Lord Hollick lost Meridian when he pulled out of ITV. After that takeover, many in the Meridian region feared that regional news programming would end. It has not: it has burgeoned. When the original ITV franchise began in 1958, the first franchisee was Southern Television, which later became TVS and then Meridian. Originally, it had two regional centres, one based in Northam in Southampton and the other in Maidstone. Today, there are more regional centres, including Brighton, because of new technology. It is cheaper and easier to present regional news programming in smaller areas. The ITC and NTL, which provide ITV transmission facilities, have co-operated in localising the transmission of ITV news. Programmes originate in smaller regions and transmit from them, too.

Angela Watkinson (Conservative, Upminster)

Does my hon. Friend agree that regional broadcasting could be enhanced by a commitment to more local transmissions? I refer particularly to the London borough of Havering, which has a schizophrenic attitude about the region to which it belongs. Some elements in the community believe that they belong to London, whereas others believe that they ought to belong to Essex. That would be fertile ground for local programming.

Michael Fabricant (Conservative, Lichfield)

My hon. Friend raises an interesting point. There is currently only one regional news service for London; it is based not far from here, on the other side of the Thames. That is because there is only one London transmitter, which is in Croydon. Because transmission technology is also changing, ITV companies could have regional news for north, south, east or west London—or, indeed, for Havering. Will they be encouraged to do so, or will Ofcom take a neutral stance? Will it be such a light regulator that it is content to allow consolidation in both ownership and programming?

I will not be too upset if instead of reading his script the Minister responds with some original thought and disagrees with the clause because it is redundant. However, he might want to assure us that Ofcom's commitment to regional broadcasting will be as strong as the ITC's existing commitment.

Paul Farrelly (Labour, Newcastle-under-Lyme)

Will the hon. Gentleman please let the Minister do exactly that?

Michael Fabricant (Conservative, Lichfield)

I shall invite him to do so. The amendment refers to the continuation of effective ITV regional programming and news editions. We are not asking for anything more than the ITC currently enforces, but a clear steer is needed not only for the Committee, but for ITV companies, for those who will might work for Ofcom, for those who are currently working for the ITC, and for those who might join Ofcom from the ITC—even though, as I said earlier, some individual regulators are saying that the process is taking so long they would rather retire now and not join Ofcom.

Although a steering group of regulators is currently meeting, they are disturbed that, yet again, this ''dysfunctional'' Department—that was said a couple of months ago by a former Culture, Media and Sport Minister—does not appear, even at this late stage in the game, to know precisely what Ofcom will do. The regulators are saying that about the Department and its Ministers—the Minister is right to look down with furrowed brow. I hope that he will respond, otherwise we shall witness another wholesale slaughter of the innocents by the Prime Minister, as happened a few months ago.

As I approach my conclusion I emphasise that Ofcom is to deal with changes in ownership rules for the media in general, which will be exciting. If I can attract the attention of the Whips, I look forward to being on the Committee that considers the main communications Bill—I hope that you will be its Chairman, Mr. Gale—because ownership of the media, including print media, is an interesting subject. It goes hand in hand with the individual contracts that broadcasting providers—the ITV companies with which we are specifically dealing in amendment No. 12—will have with the regulator.

ITV must plan ahead, Carlton Television must plan ahead, Granada Television must plan ahead and even—it is no longer Harlech Television; I cannot remember what it is called now—

Kim Howells (Labour, Pontypridd)

HTV.

Michael Fabricant (Conservative, Lichfield)

I thank the Minister for his helpful remark. Those companies must plan ahead—they must have a business plan. The hon. Member for Hampstead and Highgate has never run a business, but I tell her that people must plan ahead. Indeed, Government Departments must plan ahead. There must be certainty.

If there is to be certainty, ITV companies need to know whether Ofcom will make the same demands of them as the ITC makes. I hope that it will. The companies are not getting a steer from the Department for Culture, Media and Sport and its joint steering

group, so I hope that the Minister will stand up and say whether the Government will commit themselves to regional television in this country. If he simply spouts the standard line from his officials and says that the provision need not apply in this instance because the Bill creates only a shell organisation, he will be doing a grave disservice to broadcasting in this country in general and independent television in particular.

I hope that we shall have an opportunity to discuss whether the British Broadcasting Corporation comes under the Bill and under tier 3, in which case it will need a similar steer from the Government. Now, there is nothing but vacuum.

Ian Taylor (Conservative, Esher and Walton)

I am delighted to participate in this enthralling debate, and, as always, I am grateful to my hon. Friend the Member for Vale of York for explaining what the amendment means. It would be helpful if the Committee understood what is intended for the embryonic Ofcom committee that is being set up for regional television.

I shall put a slightly different twist on the amendment. The emerging Ofcom should consider not only regional television's concerns, but how it might safeguard national programming. In a multi-platform, multi-network environment, we shall not expect or want to see a particular national programme at any given moment.

Indeed, digital television does not need a particular schedule, and that will transform the pattern of television. The Minister should ask the emerging Ofcom whether the extended public service concept is relevant to the way in which it establishes itself. The details will come in the communications Bill when it is brought forward for consideration. I have been struck for some years by the thought that a traditional understanding of television—for example, that there is national news followed by regional news—is no longer the order of the day, and that television will not necessarily be the distribution mechanism.

If that is the case, will Ofcom be charged with responsibilities relating to regional television? The amendment urges that it should, but I shall ask the question in reverse; what do the Government think Ofcom's likely responsibility will be, subject to the substantive Bill, in extending the public service concept to demanding that a multiplicity of channels should have a regional content? How would Ofcom deliver that? It would be easy to do, and localised—the word ''regional'' is too large—television and internet distribution would be an effective way in which to increase audience interest.

For example, in the cable industry, it is already possible—and not technologically difficult—to split advertising so that it relates to a particular street. That might not be a good basis for a particular advertisement, but the local fish and chip shop might decide to advertise within one square mile of its premises. With satellite, which seems to have a big footprint, it is possible, through the access system, to take a particular stream that is not necessarily the stream that is taken by everyone else. The signal will

give one a breakout advertisement because of where one lives or because of one's choice of programmes to which one wants to be alerted. The same is true of push technology on the internet. I raised those technical questions because they go to the heart of some things that we should consider when we are setting up Ofcom. I am confident that the Minister has those things at the forefront of his mind in the drafting of the substantive Bill.

The remit of the embryonic Ofcom must be thought through carefully. If it is to be light regulation, does that mean that the public service concepts of a certain number of hours of a particular type of programming should be maintained? In this context, we cannot discuss the BBC, but it is not irrelevant. If that programming is to be set out, is it to be on any particular channel? For example, ITV Digital is now taking programmes that may not be available on ITV1. Is that an acceptable matter for the consideration of Ofcom and the current ITC as it turns itself into Ofcom as part of the regulatory process?

The amendment is timely and was well put forward by my hon. Friend the Member for Vale of York, and I seek to look at it from a different angle. What are the technological implications of what Ofcom will deal with in a multiplatform-convergent environment? And how can what has traditionally been seen as a Government interest in encouraging regional broadcasting and programming be maintained in that context, where the public have a multiplicity of choice not only of channels, but of delivery mechanisms: cable; cellphones, as we move to third generation video streaming; satellite; and digital terrestrial television, on the assumption that analogue will be switched off sooner rather than later.

Laurence Robertson (Conservative, Tewkesbury)

By no means could I attempt to speak as eloquently or in as much detail as my hon. Friend the Member for Esher and Walton (Mr. Taylor), who has taught me an awful lot in the space of just a few minutes.

I want to emphasise the importance to television of the independent sector. Thinking back to when I was young, I remember all sorts of programmes being broadcast through that sector in different regions. ''Emmerdale'', ''Coronation Street'' and ''EastEnders''; they are all household names. Despite my earlier comments about good taste and decency, it is important that at least some of those programmes continue.

I am concerned about the future of the independent sector in the sense that it seems that the BBC will be regulated somewhat differently from ITV. We have heard a great deal from my hon. Friends about the difficulties faced by independent companies. We must remember that they are not funded by the anonymous taxpayer; they have to generate their own income, which puts them on a very different footing. That is a serious consideration in terms of regulation.

The White Paper contains a great deal about the future of independent broadcasting. On the one hand,

that makes me feel confident about its future. On the other, it seems a little woolly and vague. Will the Minister add a little more certainty?

My hon. Friend the Member for Lichfield made his points far more colourfully than I could hope to do. If I am in a position to do so, I shall ensure that he serves on the Committee that considers the main communications Bill, because it would not be the same without him. I am sure that members of the Committee will agree about that, if nothing else.

Independent companies need to be able to plan ahead, but the White Paper has a lot to say about the ownership of different media in the future. For that ragbag of reasons, I support the amendment.

Kim Howells (Labour, Pontypridd)

As the hon. Member for Esher and Walton said in his speech, which was interesting, mercifully brief and—

Glenda Jackson (Labour, Hampstead and Highgate)

Intelligent.

Kim Howells (Labour, Pontypridd)

''Intelligent'', as my hon. Friend says; that is such a joy. The hon. Gentleman raised matters that will properly be discussed and dealt with in the drafting of the substantive communications Bill. But we are not discussing that Bill and I want to return to the business in hand.

If I hear another account of this lavish lunch at which poverty-stricken Mr. Clive Jones and poverty-stricken Carlton Communications brainwashed poor vulnerable Conservative Members, I might throw up.

I doubt whether a single member of the Committee does not share a desire to ensure that high-quality regional programming, including news, continues to be an important part of ITV's public service offering. The White Paper outlined our commitment to retaining and strengthening the regional dimension of public service broadcasting, and to ensure that it continues to meet the needs of different communities and cultural interests. I reaffirm that aim now.

Those matters are not relevant to the single function that is conferred by the Bill on Ofcom; to prepare itself to take on other functions at a later date. As Ofcom will not be exercising regulatory functions at this stage, it will not be in a position to ensure continued, effective ITV regional programming, so it will remain the responsibility of the ITC. The communications Bill will set out the detail of Ofcom's central regulatory objectives, and no more. I oppose the amendments.

Anne McIntosh (Conservative, Vale of York)

I thank and congratulate all hon. Members who contributed to the debate. I hear what the Minister says, but it is not an adequate response because we are finding it difficult to divorce the function of Ofcom and the content of the communications Bill from its setting up. The one purpose of Ofcom, and of our being here, is to enable Ofcom to prepare for functions about which we know not.

My hon. Friend the Member for Lichfield was helpful, given his vast knowledge of Radio Caroline and other stations. Yesterday, I discovered that I might have been listening to that station when he was performing, although not under the name of Mickey Fab; I would have remembered that.

Michael Fabricant (Conservative, Lichfield)

I believe that my hon. Friend was brought up in Scotland, so she may have been listening to somebody else in this Committee who was a regular broadcaster on Radio Scotland.

Anne McIntosh (Conservative, Vale of York)

I am afraid that although I was born in Scotland, I went to Harrogate ladies college. We were not supposed to have radios in our dormitories—it was a boarding school—after hours. I hate to say this on record, but I brought a radio in and listened to it, although I did so quietly, so as not to disturb other residents. So far as I recall, it was Radio Caroline, not Radio Scotland.

Reference has been made to the problems that face ITV programming and news editions. The Committee will be delighted, or appalled, to learn that when my husband took me out for our wedding anniversary two years ago, I was accosted upon leaving the restaurant by someone who thought I was the star of ''The Bill''. I do not know how I might have been confused with the main players of ''The Bill'', but I am grateful to Tyne Tees Television and Yorkshire Television for giving me such coverage. The amendment is necessary because if the Government do not accept it, I may not get such exposure in future.

Importantly, my hon. Friend the Member for Lichfield has put on record the pressures that individual programme makers and news editors are under; we have benefited from that. In my introductory remarks, I said that all hon. Members—whether Front Benchers or Back Benchers—benefit almost disproportionately more from regional news programmes than from national news programmes. The importance of using every opportunity here or in constituency must be close to your heart, Mr. Gale. What a shame that the Committee is not being recorded and broadcast.

I am grateful to my hon. Friend the Member for Esher and Walton who has Front-Bench experience of the kind that none of us elected in 1997 has yet tasted. He was not simply driven away in a ministerial car; he carried home the red box each night and did the business. As the Minister said, my hon. Friend still bears the scars, as I am sure he would agree. Posing the question in reverse, as my hon. Friend did, was helpful. The Minister must respond to his plea and say what would happen if Ofcom had no role in preserving regional programming. My hon. Friend was almost apologetic in explaining that he was raising technical points. We must accept that it is a joint departmental responsibility.

We are the poorer in the Committee for not having a Minister or a Front Bench spokesman from the Department of Trade and Industry present. We are focusing exclusively on the Department for Culture, Media and Sport aspects. Many of the issues that we will consider fall under the remit of the DTI.

However, I am mindful of the Minister's comments, and I may return to the subject later. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Anne McIntosh (Conservative, Vale of York)

I beg to move amendment No. 39, in page 2, line 45, after 'industry;', insert—

'(aa) any proposals for the conferring on OFCOM of any functions relating to the regulation of the financial and pecuniary interests of the employees of the media;'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following amendments: No. 61, in page 2, line 45, after 'industry;', insert—

'(ab) any proposals by the Secretary of State for the conferring on OFCOM of any functions relating to the promotion of open and competitive markets'.

No. 62, in page 3, line 5, at end insert

', including co-operating with the Office of Fair Trading on matters relating to the promotion of open and competitive markets'.

Anne McIntosh (Conservative, Vale of York)

I start by referring quickly to amendment No. 39, which would add a beneficial proposal regarding those appointed to the board and those regulated by it. The steering group considered that in a limited way in the Towers Perrin report. We may consider it at a later stage. Employees of the present regulatory authorities are concerned about the transfer of assets, pension rights, and their financial and pecuniary interests. The Minister may consider that in his response.

I hope that we can discuss, and then move formally, amendments Nos. 61 and 62. The Select Committee report refers briefly to competition, access and economic regulation. Paragraph 27 of the report recommends that

the new regulator be given distinct objectives relating to consumer protection and to the promotion of open and competitive markets. We further recommend that the Government prepare policy guidelines for the new regulator on matters affecting the priority of its different objectives to be debated as part of the legislation giving effect to the proposals in the White Paper.

I am sure that my hon. Friend the Member for Lichfield will remember the deliberations only too clearly and may even be able to say whether the Select Committee has had time to consider the Government response.

Responding to that recommendation and to paragraph 27, the Government say that they agree that

the consumer protection and the promotion of competition deserve to be stated as distinct objectives and the Communications Bill will provide for that. These and the other objectives set out in the White Paper will all be important for OFCOM, however, and we do not consider that it would help OFCOM to strike the right balance between them if one objective were to be given priority over the others.

The key point is:

Where there is a conflict between them, it will be for OFCOM to resolve it case by case.

That is on page 3 of the Government's response.

Therein lies the problem. Perhaps this is the most worrying aspect of all the deliberations that we have so far had on the Bill. The Government's response has confirmed—perhaps the Minister will do so again—that they intend Ofcom to have a role as a competition authority. We alluded to that under an earlier amendment that I moved unsuccessfully. The problem is that that will not be a unique role. It is fully intended—unless the Government's position has changed, in which case today is an opportunity to inform us of that—that Ofcom will have a joint role in

competition matters as a competition authority with the Office of Fair Trading.

I find that an impossible situation. I earlier rehearsed my interest in competition matters and referred to the brief period that I spent in DG IV as an administrative trainee, otherwise known as a stagiaire. That is a traineeship. It is called a practikophold in Danish. I then went on to practise in two separate law firms, one before and one after I was admitted to the Faculty of Advocates. On the basis of that, I decided that I would like to be a competition lawyer. I sat the concours, the open examination. I then sat—this is quite an admission, especially with my hon. Friend the Member for Tewkesbury, the Whip, present—the open competition as a British lawyer for the European Commission, although I forget in which year.

I passed the competition but, regrettably, and to my utmost disappointment, the invigilating authorities wrote to me saying that they had raised the pass mark. That was a scandal for which I believe I could have successfully prosecuted them before the European Court of Justice, but I assumed that I was destined for other things. I had obtained 51.05 per cent. on the written paper, but they raised the pass mark to 55 per cent. halfway through. They then had the gall to say that I would not be invited to the next stage; that is why I am here today. I thank the Committee for its interest in my background in competition affairs. The point is that many failed and thwarted competition lawyers may end up as Members of Parliament. There is a moral there.

I assume that I am not the only person to have had several representations from outside bodies. Perhaps the most pertinent came from NTL, which examined Ofcom's role as a competition authority. It shares my concern that if there are to be two competition authorities, a joint responsibility between Ofcom and the OFT, this Bill should say what the relationship between them will be and which will have the ultimate word and be the ultimate arbiter. It is intended that Ofcom will inherit the concurrent powers granted to Oftel under the Competition Act 1998, and that those powers will be extended to cover the entire communications waterfront, ecology or whatever we want to call it. At present, cases involving broadcasting would be considered by the OFT, not the ITC. Ofcom may therefore end up handling some of the most strategically important competition cases in the UK, not only in telecoms, but in broadcasting.

Kim Howells (Labour, Pontypridd)

I have listened fascinated to the hon. Lady's life story. I wonder what she had for lunch on the day that she failed her exams.

There is no change to the White Paper proposals. The OFT and Ofcom will both have powers and individual cases will be handled by one or the other, which is what happens in every single regulatory regime. There will be administrative arrangements to ensure that the best-placed authority handles a case, as there are now between the OFT and Oftel. I hope that that resolves the hon. Lady's dilemma.

Anne McIntosh (Conservative, Vale of York)

No, it does not. I imagine that by Tuesday I will have a plethora of further correspondence on this matter. When the Competition Act 1998 was passed, many hon. Members expressed concern about the granting of concurrent powers. I am not sure whether the Minister is saying that the position that he described arose as a result of the 1998 Act, because one of its purposes was to inscribe and introduce into UK law articles 85 and 86 and others of the treaty of Rome. Many hon. Members were concerned about the granting of concurrent powers in terms of whether the sector regulators were equipped to apply the powers and of the dangers of fragmentation of interpretation.

Many people take the view that concurrent powers are a good idea in theory, and I am sure that the Minister could wax lyrical for hours about that. However, in practice they are good only if they are granted to a body that is established and equipped to act as a competition authority. From what we have heard today, Ofcom is neither equipped nor destined to be primarily a competition authority. It is a regulator in many areas, but competition should not be its primary responsibility. Working within a closely defined legal framework and under the overall strategic direction of the OFT is unacceptable.

Despite the various merits of the structure that is being proposed for Ofcom for other purposes, NTL, for one, has grave doubts about whether it is appropriate as a competition authority. It is also perplexed that the Towers Perrin report does not appear to have considered the basic template, at least in respect Ofcom's economic regulation functions, for the structure of a successful competition authority. It is appropriate to ask some searching questions, and amendments Nos. 61 and 62 are probing amendments about the extent to which, given the proposed structure, concurrent powers are appropriate.

Paul Farrelly (Labour, Newcastle-under-Lyme)

I am sure that the hon. Lady, as an experienced competition lawyer, agrees that there is a great distinction between a duty of promoting a competitive environment and one of deciding specific questions of ownership. When Ofcom is considered in the light of the main communications Bill, I hope that the questions of cross-media ownership will remain with the OFT, so that Ofcom is not burdened or diluted by scoundrels from the print media like myself. That would stray Ofcom from its purpose.

I hope that the hon. Lady will not only make that distinction, but correct the hon. Member for Lichfield, who said that Ofcom would necessarily have responsibility for questions of cross-media ownership. If the hon. Lady will not correct him, perhaps she should send him for correction.

Anne McIntosh (Conservative, Vale of York)

I am not going to intervene on the private grief between two hon. Members.

The first point that the hon. Gentleman made was valid. If I were a competition lawyer, I would not know who was the competition authority: Ofcom or the Office of Fair Trading. I question the extent to which concurrent powers are appropriate for the proposed structure. How will the powers be shared,

and who will have the last word? As a minimum, this paving Bill should create a duty to liaise with the Director General of Fair Trading in order to ensure that a coherent structure to deal with competition law is high on the list of priorities. The Bill will not do that without the amendments.

To be an effective competition authority, Ofcom must work with the OFT to develop proposals for the exercise of concurrent powers under the Competition Act 1998, for the reasons cited by the hon. Member for Newcastle-under-Lyme (Paul Farrelly). During the passage of the 1998 Act, questions were not answered. There was debate on the granting of concurrent powers to sector regulators. Ultimately, those powers were granted, but concern was raised that that should not lead to forum shopping or fragmentation of the regime for enforcing competition law.

Ofcom's primary function should not be that of a competition authority. Of those who will serve on the board, or as chair, deputy chair or chief executive, no one has agreed with our proposal that one of them should be a lawyer or an economist, or should have experience of competition matters. The hon. Gentleman also failed to support the amendment that would ensure that someone should have knowledge of competition policy in relation to media ownership.

Paul Farrelly (Labour, Newcastle-under-Lyme)

Concurrent powers strengthen the hand of competition. Forum shopping is not a necessary result of two bodies having powers. The body best placed to determine a particular question would do so.

Anne McIntosh (Conservative, Vale of York)

I still believe that the Competition Act 1998 will lead to forum shopping. There was general agreement in all parties about that. We are the poorer for not having present a DTI team, who might have had better memories.

Michael Fabricant (Conservative, Lichfield)

I was listening to the interesting remarks made by the hon. Member for Newcastle-under-Lyme, who has already, in his short parliamentary career, made an important impact in Staffordshire and his constituency. He may have misunderstood the intention of the White Paper. From page 41 onwards, it details the role of Ofcom in cross-media ownership. Whether that is part of Ofcom's role is another matter, but the Government clearly feel that it is.

Anne McIntosh (Conservative, Vale of York)

That supports my argument. Competition policy must be clearly recognised as primus inter pares if it is going to be effectively discharged by multiple bodies. That logic is followed by the Competition Act 1998, which reserves key policy-making functions to the Office of Fair Trading. We need to know that the Government have that in mind, that they will specify that Ofcom will be responsible only for certain competition aspects and that others will be remain with the OFT.

My amendments follow that logic, and seek to strengthen the commitment to establishing Ofcom as a viable competition authority in its own right. The Director General of Fair Trading will also be able to put his input and experience into organising the OFT following the introduction of the Competition Act

1998. We cannot let the Ofcom go through as it is without that point taken on board.

Amendment No. 61 refers to

any proposals by the Secretary of State for the conferring on OFCOM of any functions relating to the promotion of open and competitive markets.

That was the wish that was so forcefully expressed by the Select Committee on Culture, Media and Sport, and enthusiastically endorsed by the Government in their official response.

Amendment No. 62 refers to

including co-operating with the Office of Fair Trading on matters relating to the promotion of open and competitive markets.

I have some difficulty in understanding why the Government have backed down on specifying, as I believe they should, where there is a conflict. It should not be Ofcom that resolves things case by case, but the OFT.

Competition policy has the specific aim of preserving the long-term interest of consumers, viewers, citizens and the whole industry. That can be done by promoting open and competitive markets that deliver choice, low prices, quality of service, a wide variety of content and content of good taste and decency. Where competition is not fully effective, adopting appropriate regulatory measures to ensure a high level of consumer protection, competition and a wide variety of content, including content of high quality, should be the preserve of the competition authority. It should also maintain a variety of public expression and maintain accepted community standards and content that balance freedom of speech against the need to protect from harmful or offensive material, and ensuring appropriate protection of fairness and privacy.

The Bill should include a specific task that states that Ofcom's duty is to promote open and competitive markets for broadband services, including broadband access. The Bill should not be allowed to remain silent on the relationship between Ofcom and the OFT, particular on matters that relate to the promotion of open and competitive markets. The Bill cannot remain silent because it is not helpful to competition lawyers and other advisers out there who want to ensure that the industry follows best practice.

Angela Watkinson (Conservative, Upminster)

The Select Committee report states:

Fostering competition is the first step to promoting plurality in the media

and says that there is a continuing need for backstop powers to underpin plurality of ownership, and of views in the media. The essence of the amendment is those backstop powers.

Anne McIntosh (Conservative, Vale of York)

I am most grateful to my hon. Friend. Her comment is extremely helpful, emphasises what we are seeking to do and adds power to the arguments behind the amendments. It shows that there is little daylight between us and the Select Committee with its distinguished Members such as my hon. Friend the Member for Lichfield and the right hon. Member for Manchester, Gorton (Mr. Kaufman). We are all in the same boat, paddling in the same direction

and we are getting no support or prevailing wind from the Government.

In the Towers Perrin report, there is a very helpful example of what competition activities are expected to stop and what are expected to start under Ofcom. Those expected to stop include

Deregulation activity flowing from market and non-market reviews following new EU Communications Directives.

Presumably, that will be a good thing. It is less regulation so will pass the principle of light touch. Examples of activities expected to start under Ofcom are in precisely that area that forms the context for the amendments. The first involves:

Competition Act (and certain sections of Fair Trading Act) concurrent powers extension to broadcasting.

I am not seeking to blame the responsible Department—it might not be the Minister's Department, but the DTI—but there is a gap here that we must plug. The general understanding is that the Bill will introduce concurrent powers that will be extended to broadcasting, and we are informed of that in the report. It cannot do that if we do not know precisely where Ofcom will be applying the Competition Act 1998 and—news to me—certain sections of the Fair Trading Act 1973 and where the OFT will have that responsibility. It is an impossible position in which to place practising lawyers and economic advisors, if the Government do not take the opportunity to advise us of what they intend.

A second example of an activity expected to start under Ofcom is

Competition work associated with spectrum trading operations.

Again, that is a new ball game, a whole new area opening up, and we still do not know precisely how Ofcom and its structure will serve that activity. A third activity expected to start under Ofcom is

Completing implementation of EU Communications Directives and carrying out ongoing regulatory work . . . on market reviews.

Those three activities are expected to start under Ofcom. We are told that the sole function of this Bill is to prepare Ofcom for those new activities and for its regulatory role, but we are not told what competition role it is to play nor how its structure will equip it to play that role. I believe that we cannot let the Bill go through without accepting amendments Nos. 61 and 62.

I urge the Minister to use this opportunity to confer on Ofcom any functions relating to the promotion of open and competitive markets, as I and various outside bodies have urged him to do. There was a groundswell of support to that effect from both sides of the House when the Competition Act 1998 was enacted. The very distinguished, highly regarded, well-informed, well-respected Select Committee on Culture, Media and Sport also urge that. The gap might be an oversight, but we must plug it. There must be a specific reference to co-operation between Ofcom and the OFT on matters relating to the promotion of open and competitive markets.

Knowing how open-minded, independent-minded and free-spirited this particular Minister is, I see no problem in his acquiescing with my generous invitation to support amendments Nos. 61 and 62, if not amendment No. 39 as well.

Michael Fabricant (Conservative, Lichfield)

Let us remind ourselves precisely why we are engaging in the formation of Ofcom. This is being driven by the emergence of new technologies such as different ways of analogue broadcasting, which still has a life and which we should not write off, and the introduction of digital broadcasting. We can take pride in the United Kingdom that 35 per cent. of homes have access to digital television, which is the highest percentage rate of penetration in any country in the world. It is certainly better than any continental country despite the best efforts of Directorates-General IV, with or without my hon. Friend the Member for Vale of York being a solicitor there.

Anne McIntosh (Conservative, Vale of York)

I should regret it if I misled the Committee. I am not a solicitor. I am a member of the Faculty of Advocates. I am a Scottish advocate, which is different from being a solicitor.

Michael Fabricant (Conservative, Lichfield)

A non-practicing Scottish advocate. Is the word ''lawyer'' appropriate? I think that it is.

Anne McIntosh (Conservative, Vale of York)

Loosely.

Michael Fabricant (Conservative, Lichfield)

Loosely.

The Bill's introduction is due to the emergence of new technologies and the possibilities that they provide. There are several platforms on which digital broadcasting can be provided. There is digital terrestrial television, the ITV box, satellite television and cable television. There are other forms, which are not well used in this country, using microwave links. There are many ways in which to deliver digital television. We still have the more conventional forms such as newsprint, although it is interesting to note that most broadsheets in this country provide excellent and free website access to their newspapers. Again, we see a convergence between the traditional forms of delivery of media and digital television.

It is strange that, in clause 2—the heading of which is ''Initial function of OFCOM''—no recognition is made that the raison d'etre of the Bill comes through the development of new forms of delivery of the internet, broadcasting and the print media through the use of websites. There will be multi-access to those media without having to duplicate in one's home the means by which those media are received. It would be extraordinary if, through lack of control of competition, one found that in order to receive all digital channels, one must have a digital set-top box receiving digital terrestrial broadcasts, a satellite dish and cable. That would be the obvious extension of the argument if there were no controls.

The Government recognise that there must be controls, and these have been covered in depth in a good White Paper, ''A New Future for Communications'', which has a picture of the former Secretary of State for Trade and Industry and the

former Secretary of State for Culture, Media and Sport, who has changed his views on the BBC, and on so many other things, since finding intellectual freedom by joining the Disney Corporation.

The Minister says that the Bill is born out of the White Paper, so it is incongruous that, although the White Paper contains considerable discussion about how cross-media ownership should be regulated, clause 2, entitled ''Initial function of OFCOM'', does not refer to that. Again, surely there should be a clear direction to existing regulators and broadcasters as to the Government's intentions.

The Minister and the hon. Member for Newcastle-under-Lyme correctly pointed out that the concept of two regulators was not unusual. Oftel and the Office of Fair Trading are jointly responsible for competition control in the media. However, the Culture, Media and Sport Committee argues that there should be one communications Ministry, because sharing responsibility between two Departments is not the best way to proceed. Given that argument, surely we can equally argue that having one competition agency, whether Ofcom or the OFT, is more logical than two organisations, even though there are two at present.

Anne McIntosh (Conservative, Vale of York)

Can my hon. Friend help me by saying whether the Competition Act 1998 changed that, or should we wait for the Minister to provide an explanation?

Michael Fabricant (Conservative, Lichfield)

My hon. Friend asks an interesting question, but I do not know the answer. I hope that the Minister will provide an explanation, because the 1998 Act is yet another factor in a complex equation. The question of competition is interesting because technology does not stand still. If we are not careful, we shall end up with an Ofcom Bill—I do not mean the one that we are debating now—that defines structures that will be wholly inappropriate, possibly by the time that it is enacted, and certainly within two, three or four years. The reason is simply the pace of change. We cannot blame the Government for that, because no Government can predict accurately what technological changes might occur, but we can certainly try to make provision for them. One way of doing that is to get people to start thinking about the issues sooner rather than later. To do that, we need to give a steer, which is why I commend my hon. Friend for tabling the amendments. At least we have an opportunity to discuss these matters now.

I hope that the Minister will talk about how the Government intend to address cross-media ownership, but of course that is not the only issue. It is not just a question of balancing the ownership of apples and pears, because the two are very different. How it is argued that one newspaper is equal to two small radio stations or one large television station, I do not know. It is not easy.

I commend the authors of the White Paper, because page 43 gives a brief and interesting analysis of how France, Germany, the Netherlands and my beloved Australia regard cross-media ownership and how they deal with the problem. Surprisingly, the United States, which has particularly interesting ownership rules, is omitted. The Select Committee hopes shortly to visit

the Federal Communications Commission, which governs the ownership of commercial television and commercial radio as well as other media in the USA. That omission is worrying, because there is no clear guidance on the Government's thinking on cross-media ownership for those who hope to be future regulators.

There is another factor. I mentioned the three platforms earlier and it is worth referring to the memorandum submitted by Sky to the Culture, Media and Sport Committee inquiry into the future of communications, which is being undertaken concurrently with this Committee. Sky argues that despite the ''digital dividend'' from broadcasting on satellite, ITV withheld ITV1 from the Sky platform for three years in order to boost the take up of ONdigital, which is now ITV Digital; the pay TV operator that is jointly owned by Carlton and Granada. Those issues are addressed by amendment No. 62, which talks about the promotion of open and competitive markets. The market primarily involves not only the viewers and the listeners; it is also the platform to enable those programmes to be delivered.

Amendment No. 61 also refers to the need of the Secretary of State to make proposals conferring on Ofcom any functions relating to the promotion of open and competitive markets. That applies not only to the market, as in those who will listen to, view or operate the internet, but the market to transmit these programmes, which brings us to the issues of having free and open access to all three digital platforms by programme providers. There is a problem with digital terrestrial television in that the number of channels available is limited by the frequency spectrum. That is less the case with satellite and cable. It is beholden on owners of satellite and cable networks to provide that access at a market rate.

At the moment, the rules are in place and they are controlled primarily by the ITC and the OFT. But there is confusion in the industry about whether Ofcom will continue to maintain those rules. The Minister says—I welcome it—that Ofcom will be a light-touch regulator, yet he gives no clear guidance as to whether the rules currently maintained by the ITC will be maintained by Ofcom. Indeed, some Labour Members—including the hon. Member for Newcastle-under-Lyme, who made some intelligent remarks—questioned whether it should be the role of Ofcom to set those rules.

That is a valid point. First, it is dangerous when two organisations have overlapping responsibilities for competition policy. Secondly, if the OFT has a remit to ensure that cross-media ownership does not create monopolies or that monopolies do not deny programme producers access to any particular digital platform, why do we need Ofcom to have that function? That point was put so well by the hon. Member for Newcastle-under-Lyme.

Paul Farrelly (Labour, Newcastle-under-Lyme)

Perhaps the hon. Gentleman would do us another service by explaining the meaning of amendment No. 39, which conjures up images of Slickergate and dodgy dealings by financial journalists. Does he agree with the suggestion to bring some

aspects of the Press Complaints Commission's activities under Ofcom?

The rest of the debate is in Hansard.