Communications Bill

Public Bill Committee, 10 December 2002.

Standing Committee E

Communications Bill

Roger Gale (Conservative, North Thanet)

Good morning. Welcome to what I am sure will be a fairly lengthy but harmonious and productive series of debates. Before we commence, I shall mention a few housekeeping matters. So long as I am in the Chair, hon. Members have permission to remove their jackets, if they wish to do so in this weather. On accommodation, I am advised that no other Room is available this morning, but we are negotiating to move to a slightly larger Room. The Chairman does not address the Public Gallery because we do not recognise it, but hon. Members may wish to inform friends and guests that we hope that we will be able to accommodate more people in future.

I should like formally to tell the Committee that the Programming Sub-Committee met last night and came up with the programme motion before us. I made it plain at the meeting—and I have discussed the matter with Mr. Atkinson—that, should it be necessary, I will reconvene the sub-committee as its Chairman. That may not prove necessary, but hon. Members on both sides of the House have agreed that we should have that level of flexibility.

Kim Howells (Labour, Pontypridd)

I beg to move,

That—

(1) during proceedings on the Communications Bill (in addition to its first meeting at half-past Ten o'clock on Tuesday 10th December 2002) the Standing Committee do meet—

(a) on Tuesday 10th December 2002 at half-past Four o'clock;

(b) on Thursday 12th December 2002 at five minutes to Nine o'clock and at half-past Two o'clock;

(c) on Tuesday 17th December 2002 at half past Ten o'clock and at half-past Four o'clock;

(d) on Thursday 19th December 2002 at five minutes to Nine o'clock;

(e) on Tuesday 7th January 2003 at half-past Four o'clock; and

(f) thereafter on Tuesdays and Thursdays at five minutes to Nine o'clock and at half-past Two o'clock;

(2) the proceedings to be taken on the sittings shall be as shown in the second column of the Table below and shall be taken in the order so shown;

(3) the proceedings which under paragraph (2) are to be taken on any sitting shall (so far as not previously concluded) be brought to a conclusion at the time specified in the third column of the Table;

(4) paragraph (2) does not prevent proceedings being taken (in the order shown in the second column of the Table) at any earlier sitting than that provided for under paragraph (2) if previous proceedings have already been concluded.

TABLE SittingProceedings Time for conclusion of proceedings 1st Clauses 1 and 2, Schedule 1, Clauses 3 to 26, Schedule 2 and Clause 27 — 2nd 1 and 2, Schedule 1, Clauses 3 to 26, Schedule 2 and Clause 27 (so far as not previously concluded) — 3rd 1 and 2, Schedule 1, Clauses 3 to 26, Schedule 2 and Clause 27 (so far as not previously concluded) 11.25 am 4th 28 to 59 and Clauses 61 to 68 — 5th 28 to 59 and Clauses 61 to 68 (so far as not previously concluded) 1 pm 6th 69 and 70, Clauses 73 to 102, Schedule 3, Clauses 103 to 114, Schedule 4 and Clauses 115 to 146 — 7th 69 and 70, Clauses 73 to 102, Schedule 3, Clauses 103 to 114, Schedule 4 and Clauses 115 to 146 (so far as not previously concluded) — 8th 69 and 70, Clauses 73 to 102, Schedule 3, Clauses 103 to 114, Schedule 4 and Clauses 115 to 146 (so far as not previously concluded) 7 pm 9th 147 to 152, Clause 154, Schedule 5, Clauses 155 to 157, Clauses 159 to 169, Clauses 173 to 175, Schedule 6, Clauses 176 and 177, Schedule 7, Clauses 178 to 187, Schedule 8 and Clauses 188 to 192 — 10th 147 to 152, Clause 154, Schedule 5, Clauses 155 to 157, Clauses 159 to 169, Clauses 173 to 175, Schedule 6, Clauses 176 and 177, Schedule 7, Clauses 178 to 187, Schedule 8 and Clauses 188 to 192 (so far as not previously concluded) 5 pm 11th 193 and 194, Schedule 9, Clauses 195 to 214, Schedule 10, Clauses 215 to 237, Clause 153, Clauses 170 to 172 and Clause 238 — 12th 193 and 194, Schedule 9, Clauses 195 to 214, Schedule 10, Clauses 215 to 237, Clause 153, Clauses 170 to 172 and Clause 238 (so far as not previously concluded) — 13th 193 and 194, Schedule 9, Clauses 195 to 214, Schedule 10, Clauses 215 to 237, Clause 153, Clauses 170 to 172 and Clause 238 (so far as not previously concluded) 11.25 am 14th 239 to 263, Clause 60, Clauses 71 and 72, Clauses 264 to 275 — 15th 239 to 263, Clause 60, Clauses 71 and 72, Clauses 264 to 275 (so far as not previously concluded) — 16th 239 to 263, Clause 60, Clauses 71 and 72, Clauses 264 to 275 (so far as not previously concluded) 5 pm 17th 276 to 284, Schedule 11, Clauses 285 to 326, Schedule 12, Clauses 327 to 333, Schedule 13 and Clause 334 — 18th 276 to 284, Schedule 11, Clauses 285 to 326, Schedule 12, Clauses 327 to 333, Schedule 13 and Clause 334 (so far as not previously concluded) — 19th 276 to 284, Schedule 11, Clauses 285 to 326, Schedule 12, Clauses 327 to 333, Schedule 13 and Clause 334 (so far as not previously concluded) 11.25 am 20th 335 to 337, Schedule 14, Clauses 338 to 346, Schedule 15, Clauses 347 to 354 — 21st 335 to 337, Schedule 14, Clauses 338 to 346, Schedule 15, Clauses 347 to 354 (so far as not previously concluded) — 22nd 335 to 337, Schedule 14, Clauses 338 to 346, Schedule 15, Clauses 347 to 354 (so far as not previously concluded) 5 pm 23rd 355 to 375 and Schedule 16 — 24th 355 to 375 and Schedule 16 (so far as not previously concluded) 25th 376 to 386, Clause 158, Clauses 387 to 391, Schedules 17 to 19, Clauses 392 to 395, New Clauses, New Schedules and remaining proceedings on the Bill — 26th 376 to 386, Clause 158, Clauses 387 to 391, Schedules 17 to 19, Clauses 392 to 395, New Clauses, New Schedules and remaining proceedings on the Bill (so far as not previously concluded)

Thank you, Mr. Gale. I welcome you and your co-Chairman, Mr. Atkinson, to the Committee. I am grateful for the opportunity to debate the Bill with Committee members. I hope that it will be useful, and I am sure that hon. Members will make constructive progress. However, if we do not, I know from previous experience that you can be firm to the point of ruthlessness in driving debates forward, Mr. Gale. I welcome that.

The proposed programme motion was discussed at the Programming Sub-Committee yesterday, and I am pleased to say that there was general agreement on it at that meeting. The end date of 6 February will allow us 26 sittings to consider the Bill and any new clauses or schedules that might be proposed by amendment. The Government will table several amendments but will aim to give the Committee good notice of them. We will provide a written explanation of the nature and effect of each amendment when it has been tabled.

The 26 sittings should provide more than enough time for proper scrutiny of the Bill. We will, of course, work hard to examine the Bill thoroughly and carefully. I hope that we will be focused and consensual in our work, and I am sure that we will be extremely constructive in our approach, and will therefore make your job easy, Mr. Gale. The programme motion proposes that the provisions of the Bill be considered in order, with a few exceptions for reasons of sense that have been agreed by the Programming Sub-Committee. I hope that Committee members will agree that the proposals constitute a sensible and reasonable way in which to proceed, and I ask them to support the resolution.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I join the Minister in welcoming you to the Chair, Mr. Gale. The imminent prospect of Christmas pales into insignificance compared with the anticipation that Conservative Members feel at the prospect spending the next seven to eight weeks considering the Bill under your chairmanship and that of Mr. Atkinson.

It is a particular pleasure that you and Mr. Atkinson should be in the Chair, not because both of you are political colleagues of mine—I realise that that is entirely put to one side while you are occupying that Chair, Mr. Gale—but because the two of you are veterans of the last time that we debated some of the issues raised in the Bill, when we considered the Broadcasting Act 1996. Many might regret that you and Mr. Atkinson are in the Chair for this Committee, because you will not be able to express any views on the contents of the Bill. However, there are perhaps one or two organisations that are relieved that you, Mr. Gale, are not able to express observations on the contents of the Bill. However, in the case of the organisation that I am especially thinking of, it may be

that you and Mr. Atkinson effectively cancel each other out.

I am sure that every Committee member will agree that this is an enormous Bill in many respects. Its sheer physical size—running to two volumes, 395 clauses, and any number of schedules—is an indication that it has vast scope and covers an enormous part of our economy. Its consequences are likely to be profound and long term. It is six years since we last examined these issues and, even then, many of us felt that we would need to return to them. The pace of technological change is such that developments in these sectors happen quickly and there is a real danger that legislation becomes rapidly out of date.

For that reason, it is extremely important that we get the Bill right. We should try to ensure that it is sufficiently flexible to take account of change. I suspect that, back in 1996, none of us imagined what the broadcasting environment or the telecommunications sector would look like today. Most of the 1996 Bill was concerned with establishing digital terrestrial television, which has come and not quite gone. It has not gone, but it is certainly very different from the type of project for which we created the conditions in 1996. That demonstrates how hard it is to predict how the sector will develop, which is why we must try to ensure that the Bill will, at least, create a framework that is capable of taking account of unforeseen developments.

Clearly, the Bill has already been subject to a lot of scrutiny. It has been through several different stages. We had a communications White Paper that the Government published and to which organisations and individuals responded, and, in the last session we had the paving Bill to establish Ofcom—the Office of Communications. Some aspects of that Bill will be covered again in our consideration of this one. The House has already had a chance to debate the bringing together of the regulators into a single umbrella regulator and some of the issues that arise from that.

In the last Session, the Government published a draft Bill that was scrutinised by the Joint Committee on the Draft Communications Bill, which I am sure that we all welcome as a useful exercise that has saved us time. Undoubtedly, it cleared up one or two points and improved the Bill by making it more technically coherent. Although the Government did not accept the Joint Committee's recommendations in some key areas, in large part, the recommendations were accepted. Therefore, I am sure that all of us welcome the exercise and hope that the Government undertake similar ones for other Bills that could be improved with draft scrutiny. The other Bill for which the Minister is responsible is the Licensing Bill, which we look forward to receiving later this year. I suspect that that might also have been improved had it undergone the same pre-legislative scrutiny process.

Dr. Howells indicated assent.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am glad that the Minister agrees.

There have also been several outside seminars with a variety of organisations—I spoke at one arranged by the Westminster Media Forum. The process has meant that the Bill's key issues have already received scrutiny

and debate. Some people have suggested that because of all that has taken place, there is less need for this Committee to consider the Bill and scrutinise each clause in detail. I profoundly disagree. I was slightly surprised that the Chairman of the Select Committee on Trade and Industry, the hon. Member for Ochil (Mr. O'Neill), made that observation on Second Reading. Although his Committee performs many valuable functions, I do not believe that it is a substitute for a Standing Committee scrutinising a parliamentary Bill. Therefore, he was wrong on that point.

Although the Joint Committee was very beneficial, it was subject to certain limitations. No votes were held and although the Government were able to respond to recommendations, they could simply accept or reject them. There was limited representation on the Committee. My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) did a valiant job for the Conservative party, but we had no Front-Bench representation because of the Committee's nature. There was no opportunity for amendments to be tabled and there was no real debate. There was an opportunity to question witnesses, which was undoubtedly useful, but the exercise in that Committee was different from that in this Committee. Government Ministers were not required to justify their decisions or actions in the Joint Committee and requiring that is one of the principle roles that this Committee must undertake. It is perhaps realistic to accept that Opposition Members are unlikely to defeat the Government.

Brian White (Labour, North East Milton Keynes)

The civil service Bill team played a key role during the pre-legislative scrutiny. The Joint Committee was able to question that team on specific points, which was one of that Committee's key benefits.

John Whittingdale (Conservative, Maldon and East Chelmsford)

That is undoubtedly right. There is no doubt that that process has added a dimension to the scrutiny of legislation that is lacking in this forum. The two Committees are complementary and one is no substitute for the other.

Trying to defeat the Government in Committee is not one of the Opposition's key purposes, although we shall press amendments if we think that the Government are wrong. As I have said before, we think that the main thrust of the Bill is correct. However, there are many detailed issues on which organisations that are likely to be affected by the Bill are seeking clarification and more justification of the Government's position from the Minister. It is part of the Opposition's purpose to give such organisations the opportunity to raise issues through us in order to get the Government to respond to their genuine concerns. The many amendments tabled by myself and other Conservative Members are an attempt to achieve that. We want organisations outside the House to receive a response to their concerns from the Minister.

There is a reason for that because it always comes as a shock to me that the records of our Committee proceedings are read carefully by lawyers and by those

who are charged with implementing the legislation that we pass. I sometimes suspect that they might be a little appalled by one or two of the diversions that occasionally happen in Committee, although that will certainly not happen in this Committee under your watchful eye, Mr. Gale. The fact that what Ministers, in particular, say in Committee is read and sometimes taken into account is a part of the legislative process. That is a further important reason why we must draw out the Government on several of the Bill's provisions.

We have limited time in which to do that. The Minister said that there would be 26 sittings, which takes us to 6 February. He said that he was confident that that would be ample time in which to cover the ground. I do not wholly share his confidence. I draw the Committee's attention to a comparison with previous Committees that have considered similar legislation. Such a Committee considered the Broadcasting Bill in 1990, which consisted of 4 clauses and 22 schedules. It was therefore just over half the size of the Bill that we are presently considering. However, the 1990 Bill was discussed in 38 sittings in Committee and the debate continued for 101 hours and six minutes.

Kim Howells (Labour, Pontypridd)

It sounds like hell.

John Whittingdale (Conservative, Maldon and East Chelmsford)

Sadly, I was not able to participate in it but I know that a number of hon. Members in this room are veterans of that Bill. They will perhaps tell us later whether it was hell or not. I hope that the Minister will acknowledge that the 1990 Bill received a great deal of scrutiny, as is evidenced by the number of sittings and the amount of time that was spent on it.

The Broadcasting Bill 1996, which I was involved in, had only 150 clauses and 11 schedules. It was therefore about one third of the size of this Bill. However, for that Bill there were 17 sittings, taking 52 hours and 20 minutes.

It is not really proper to use the Broadcasting Bill 1996 and the Broadcasting Bill 1990 as comparisons, because those Bills focused only on the broadcasting sector. The Communications Bill does not focus only on broadcasting—although, from some past debates, hon. Members might think that it did. We are keen that this Committee should consider in detail the provisions on the telecommunications sector. In some ways, they will be even more important for the future development of our economy than the provisions on broadcasting. It is essential that we get them right. The scope of this Bill is far wider than that of the two earlier Bills and yet it is proposed that only 26 sittings be allowed to debate 395 clauses.

My hon. Friend the Member for Fareham (Mr. Hoban) has examined this matter in some detail. If we were to give this Bill the same consideration, based on the number of its clauses, as was given to the Broadcasting Bill 1990, we would have not 26 sittings but 76 sittings. Some of us would welcome the opportunity to spend more time on this Bill.

Kim Howells (Labour, Pontypridd)

Does the hon. Gentleman agree that, if he goes on giving us history lessons, we will certainly need more than 26 sittings?

John Whittingdale (Conservative, Maldon and East Chelmsford)

This is an important point. If this Committee is to do its job properly, we will need to scrutinise in detail each of those 395 clauses. The amount of time that has been allowed for that is limited; it is certainly considerably less than was available to our predecessor Committees, which were considering similar legislation.

There are one or two other problems to do with the period during which the Committee will sit. It will be helpful, Mr. Gale, to have your guidance. Although the Committee will sit during a period of around two months, Christmas is in the middle of that period. I am perfectly happy to spend a large part of my Christmas break reading the Communications Bill and considering amendments to it—although that may not go down well with family. However, I seek clarification from you, Mr. Gale, on a practical point. This Committee will be sitting on the day on which the House rises for the Christmas break, and will be sitting again on the day on which the House returns. Therefore, in order to table amendments for the day on which we return in January, we will have to table them before the House rises before Christmas. Even though there is a long period between those two sittings of the Committee, it will be necessary to table amendments before that period because the House is not sitting.

Roger Gale (Conservative, North Thanet)

I may be able to assist the hon. Gentleman and the Committee. It is clear that there are difficulties but, happily, the hon. Gentleman and other Committee members can table amendments on the last two days of the recess, and the selection will be made shortly before the first sitting of the new year. Therefore, Committee members will be able to prepare their amendments during the Christmas break.

John Whittingdale (Conservative, Maldon and East Chelmsford)

That is hugely helpful, and Conservative Committee members are very grateful. The Christmas break will be even more enjoyable than usual, as we will be able to consider the amendments that we will wish to debate immediately upon our return.

That relieves a little bit of the pressure that is on us in the period before we rise. However, that pressure is still considerable. It has been caused in part by the new hours. We now start at 9 o'clock on Thursdays, and after Christmas we will also start at that time on Tuesdays. That means that we have a very limited time to prepare for debates. It is a fact of life that Committee members are always racing to keep up, but the new hours will not help.

It has come as a bit of surprise to several of the groups outside this place who have an interest in the Bill to discover how quickly it has moved into Committee, and how little time has been available to table amendments. That is already reflected in the Amendment Paper, as one or two amendments will have to be starred. The time might come when we will appeal to you, Mr. Gale, to accept starred amendments—for instance, if a matter arises late in the day that it is important for the Committee to

consider. All of this is uncharted water, because of the new hours. We will have to see how things develop.

I am also grateful to you, Mr. Gale, for the indication that you gave that it might be possible to reconvene the Programming Sub-Committee if we are unable to give proper consideration to important areas of the Bill before the knives fall in the places where they are currently intended to fall. We will need to watch that.

There are two specific issues that I wish to raise about the consideration of the Bill and the timing of our debates. The Bill has evolved from a huge number of different consultations, publications, reviews and reports. Most of them have now been taken into account, and their recommendations have finally surfaced in the Bill, but the Independent Television Commission's review of the programme supply market has only just come out. It deals with an important issue: how we should encourage and help independent producers to create a viable, thriving, independent production industry.

Most people feel that the ITC review has done a valuable job and come up with some helpful recommendations. My discussions with people in the industry have revealed that there is already recognition that the ITC's recommendations will be valuable. I hope that the Government intend to table amendments to implement some of them, but if that is going to be the case we should be given ample notice, so that we can examine them and talk to the industries that will be affected by them. If we were to be given only two days or so to consider those amendments and the provisions in the Bill, that would be insufficient. Therefore, I hope that the officials in the Department for Culture, Media and Sport will also be working over the Christmas break—and before it—to get those amendments done.

I hope that information on another area of the Bill will also be made available to the Committee before we reach it. It relates to the radio spectrum, and it is the part of the Bill that makes my head spin the most. It is a hugely complicated and technical area. I have no doubt that hon. Members will require several wet towels to be wrapped around their heads before we come to debate it. We will be helped in our consideration of those provisions by the report of the Select Committee on Trade and Industry, which is currently taking evidence on the issue. I hope that the Trade and Industry Committee will try to complete its deliberations in time for us to have its report before we reach that section of the Bill, although I fully accept that that is not entirely within the Government's control.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to my hon. Friend for making that point. The Trade and Industry Committee intends to achieve that—I speak as a member of it—but it has a number of other items on its plate at present. There can be no guarantee that that Committee will be able to agree on a report before the recess. A report would need to be published by then if there is to be any possibility of tabling amendments in this Committee that reflect the Select Committee's conclusions. The relevant clauses will be considered on 9 January, according to the

sittings motion. My hon. Friend has put his finger on a relevant point and there is no reason why the whole spectrum section could not be taken as a discrete part of the Bill because, in a sense, it flows from other parts and could be considered later.

John Whittingdale (Conservative, Maldon and East Chelmsford)

That is an alternative way to address the problem. I am disappointed to hear my hon. Friend say that there is no strong chance of the report coming out before the recess. It seems unfortunate that the Trade and Industry Committee will produce recommendations on a part of the Bill that will already been considered, and approved or rejected, by this Committee.

There will, perhaps, be an opportunity to return to some of the relevant issues on Report and that will certainly be possible when the Bill is considered in the House of Lords. Nevertheless, it would be helpful, since we will debate the issues, to have the Trade and Industry Committee's views beforehand. Perhaps the Minister and the Committee could consider that matter before we finally approve the programme motion.

Andrew Robathan (Conservative, Blaby)

I understand that the good civil servants, the so-called Bill team, who are doing an excellent job, believe that they have just about got it right and that they have the perfect Bill. Does my hon. Friend consider the Bill to be perfect? Does he consider it likely that the Government might introduce amendments that could take up much of the Committee's time later on?

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am sure that it is a matter of pride for the Bill team to try to minimise the number of necessary amendments. The Minister has already indicated that the Government might wish to introduce amendments and he helpfully told us that he would produce explanatory notes to ensure that we fully comprehend what they wanted to amend. The hon. Gentleman has, to some extent, already solved that problem. We anticipate that there are bound to be amendments and it is absolutely essential that some be made in the area of the ITC review if the relevant recommendations are to be put into effect.

I do not want to spend much longer on the matter. The programme motion raises serious issues. You will point out, Mr. Gale, that the programme motion was originally approved by the House of Commons on Second Reading. There was, however, no opportunity to debate it at that time, so this is the first opportunity for us to put some of our concerns on the record. The Opposition voted against the programme motion and it is important that we set out our reasons for doing that. On a similar point, the programming Sub-Committee met yesterday in private, so there has been no opportunity to raise our concerns about that and put them on the record.

The Bill is hugely important. The Committee will find it hard to give the Bill the proper scrutiny that it requires. We will do our best, but previous experience of programme motions has demonstrated that Bills often pass through the Committee stage with large sections that have never been debated. That makes for

bad law. Because the Bill is so far reaching and because its effects will be so great, it is all the more important that it should receive proper scrutiny. The Opposition will attempt to give it that within the confines of the programme and sittings motions. I hope that if we are not able to give the Bill that degree of scrutiny in certain areas, that that will be taken into account when it goes to the House of Lords and that the other place will carry on that exercise.

John Greenway (Conservative, Ryedale)

I do not intend to repeat all that my hon. Friend said about the programme motion, but I wish to welcome you to the Chair, Mr. Gale. My hon. Friend referred to the Standing Committee that considered the Broadcasting Bill 1990—a happy experience that you and I shared. Prior to that, we worked together on the Home Affairs Committee on a valuable report in the run-up to that legislation, which was extremely helpful. It has certainly served us in good stead as we have considered these issues over the years.

For the avoidance of doubt, I remind the Committee that, for most of the 1990s, I was a consultant to various ITV companies, a position that I relinquished on 1 February 2000 when I was appointed Opposition spokesman on DCMS matters. I doubt that that experience will mean that any speeches I make, if I am fortunate enough to catch your eye, Mr. Gale, during our proceedings will be slanted, but I have been provided with a huge wealth of experience of what has been happening in the broadcasting world. I believe that it is important to place that on the record.

Roger Gale (Conservative, North Thanet)

Order. The hon. Gentleman will have to let us have the benefit of his experience later, because the motion under discussion is time limited.

It being half an hour after the commencement of proceedings on the motion, The Chairman, put the Question, pursuant to paragraph (9) of Sessional Order C relating to Programming Sub-Committees [29th October 2002].

Question put and agreed to.

Roger Gale (Conservative, North Thanet)

I remind the Committee that there is a money resolution and a ways and means resolution in connection with the Bill, copies of which are available on the Table. In light of the remarks made by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) who is leading for the Opposition, I remind members of the Committee that adequate notice should be given of amendments. As a general rule, Mr. Atkinson and I do not intend to call starred amendments, including any that may be reached during an afternoon sitting of the Committee.

A further piece of housekeeping advice concerns the conduct of the Committee during our debates. It has been my custom and practice to permit a reasonable debate at the start of our discussions on a clause or group of amendments, or a stand-part debate, but not both. In complex Bills, we have recognised that sometimes it is to the advantage of the Committee and for its convenience to have a fairly lengthy debate at the beginning of a clause. Members of the

Committee can have one stand-part debate, not two, and it is up to them to determine which they require. That being said, clause 1 has no amendments tabled to it and will be subject to a stand-part debate.

Clause 1 - Functions and general powers of OFCOM

John Whittingdale (Conservative, Maldon and East Chelmsford)

I had not anticipated leaping to my feet quite so soon but, unfortunately, we have already seen a demonstration of the effects of knives in our being unable to complete our debate on the sittings motion.

Given that clause 1 sets the scene for the establishment of Ofcom, it would be useful to make a few general observations about the regulation of utilities and public limited companies and, in particular, the challenges facing Ofcom as a newly established regulator covering a considerable variety of industries. As members of the Committee will be aware, Ofcom will take on the functions of five regulators that currently perform different functions. There is some overlap between the Independent Television Commission and the Broadcasting Standards Commission and one or two other areas that are currently divided up among the five regulators, but in the main the embrace of Ofcom will take in all the activities covered by those regulators and, in some cases, extend a little further. Ofcom will also take on responsibility for some of the work of the Office of Fair Trading.

It is instructive to consider that Oftel was the first of the five regulators to be set up, as a result of the Conservative Government's privatisation of British Telecom. Oftel was to some extent a trailblazer among the utility regulators. Some might think that it has been less successful than other regulators. Certainly, if one considers the state of the market that Oftel regulates, its prime objective of encouraging and promote competitive markets—

Andrew Lansley (Conservative, South Cambridgeshire)

Will my hon. Friend give way?

John Whittingdale (Conservative, Maldon and East Chelmsford)

Yes.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend was involved in these matters at an early stage, so he will recall that Oftel did not have a prime duty to promote competition. It had a range of duties, one of which was the promotion of competition. I make that point because it will be salient later.

John Whittingdale (Conservative, Maldon and East Chelmsford)

My hon. Friend is entirely right, and I stand corrected. That is an important distinction, which we will examine when we consider the first group of amendments. One reason why Oftel has been slightly less successful in achieving competition might be that that objective was not given sufficient priority. My hon. Friend the Member for Ryedale (Mr. Greenway) and I were involved in such matters in a previous life, and we might be able to draw on our experiences when we come to debate the subject.

Oftel has to some extent been overtaken in achieving competitive markets by one or two of the

regulators that have been set up since. I should like to focus on that.

Michael Fabricant (Conservative, Lichfield)

Does my hon. Friend give Oftel at least some credit for announcing this morning that a competitive system of directory inquiry telephone lines will be introduced? My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) points out that there was no prime directive to introduce competition, but Oftel has introduced it to some degree, although perhaps not as much as the Independent Television Commission or the Radio Authority.

Roger Gale (Conservative, North Thanet)

Order. May I suggest before we stray that we do not do so?

John Whittingdale (Conservative, Maldon and East Chelmsford)

My hon. Friend the Member for Lichfield (Michael Fabricant) makes an important point, because it is clearly a prime function of Ofcom, as the successor to Oftel, to carry on its work in promoting competitive markets. His example demonstrates that some progress has been made, but it is some 10 years since Oftel came into existence.

Andrew Lansley (Conservative, South Cambridgeshire)

I shall try to restrain myself, Mr. Gale, but should like to complete my point. My recollection is that Oftel said on about 1 July that, notwithstanding the fact that the Telecommunications Act 1984 imposed a range of duties, it would treat the promotion of competition in telecommunications markets as its principal objective. That is one reason why the transition from Oftel to Ofcom will be smoother.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I do not want to anticipate our debates on amendments that stand in my hon. Friend's name, because they will address the crux of that matter and whether we should put the promotion of competition into the Bill, but I agree entirely that that is perhaps the most important duty of a regulator.

Ofcom is a huge body. Its scope is so vast and its powers so great that it is extremely important that proper checks and balances are built into the Bill to ensure that there are safeguards and rights of appeal, that the regulatory principles are given proper prominence, that Ofcom will work to strictly defined criteria, and that it is properly accountable. The industry was once in public ownership and was therefore subject to regulation from Ministers, who had the power to issue directions, set prices and instruct management. Although we have left that behind through privatisation, there is a danger that we have merely substituted ministerial regulation with regulation by an independent body, which is a system of less accountability than the original system under which Ministers operated. That has not necessarily happened, but it is a danger that should be borne in mind. We must build in measures to ensure proper accountability.

It is legitimate to ask the question now, because it is difficult to foresee another stage at which it could be asked. Do we need to strengthen the powers of Parliament to scrutinise decisions made by Ofcom? That issue has been raised in many of the debates so far—on the paving Bill and in the White Paper and the Joint Committee. Should a stand-alone Select Committee of the House have the role of monitoring

Ofcom and act as a body to adjudicate on or consider complaints against Ofcom? We must be sure that there is proper accountability of Ofcom, because it will be an enormously powerful body.

When regulators have been set up in the past, a separate consumer body has often been established—bodies such as Energywatch, which was set up to represent the interests of energy consumers and which works alongside the regulator, Ofgem. Similarly, Postwatch was set up to consider the interests of postal users and works alongside Postcomm. No equivalent body is being suggested under this Bill. We will consider the role of the consumer panel, but that is a different entity built into the process of Ofcom. No separate organisation is charged with fulfilling the same sort of tasks as Energywatch and Postwatch. We should bear that in mind.

The principal duty of a regulator is to work towards its own destruction. If a regulator is truly successful it will create conditions in which there is no longer any need for regulation. However, that will never be fully possible in the telecommunications sector, because it is highly unlikely that we will ever achieve competing infrastructure networks. I am not even sure that that would be desirable, because it would be a hugely expensive, and not wholly necessary, operation. It is possible to achieve great competition using only one network if the regulatory principles are properly in place. There will, however, be a need for regulation of telecommunications as long as we have a single infrastructure under single ownership.

That is not to say that the regulator should not work towards withdrawing from other parts of the market. Although it is not an exact parallel, it is worth considering the example of Ofgem, which has been successful in creating a competitive market in electricity supply and has now withdrawn almost entirely from trying to regulate prices in the area of supply. Although it continues to regulate prices in the monopoly area—infrastructure—there is now a competitive market for supply, with several companies offering supply contracts. That in itself has created problems, but I will not spend time on those today.

The example is instructive because the problems were not caused by the actions of the regulator. The regulator has been highly successful in carrying out precisely what was required in the original legislation. It was told to work towards creating a competitive market and to bring down prices for the consumer, and there is no doubt that electricity prices have come down. Ofgem was not told to give equal priority to maintaining diversity of supply, and, as a result, we now have one or two problems in the nuclear sector and the renewables sector. My hon. Friend the Member for Blaby (Mr. Robathan) is a renowned expert in combined heat and power, in which I take a close interest. CHP is suffering greatly. It is important to set out precisely what a regulator is expected to do.

Eric Joyce (Labour, Falkirk West)

That is in clause 3.

John Whittingdale (Conservative, Maldon and East Chelmsford)

The hon. Gentleman is right, and we want to spend a lot of time going through each of the objectives in clause 3 to ensure that they set the proper priorities and that all considerations are properly covered. From our experience of utilities that are now subject to great regulation, we know how essential it is to get the legislation governing their operation right if we are to avoid subsequent problems, such as those that we are now seeing in the energy sector.

The next thing that it is essential to get right is the people who will carry out the task—in other words, the people who are appointed to Ofcom. The board is already in place. The individuals on that board each bring their own strengths and experience, which will no doubt be valuable. I accept that the board should be kept small, although I am sure that in the not-too-distant future we will spend some time considering representation from different parts of the kingdom and considering whether certain sectors should have stronger representation than others. I am not sure that every sector and every part of the kingdom can be covered, but we will come on to that argument.

It is important that we get the personnel right. Undoubtedly the most important appointment is that of the chairman of Ofcom—Professor David Currie. When he was first appointed, it was suggested that he was another Labour crony. It was a matter of some criticism that, once again, someone with well-established links to the Labour party was being appointed to a key position. Professor Currie has a distinguished record and immense knowledge and experience in this area. I will come on to one or two of his observations on how he sees his task as chairman of Ofcom.

Chris Bryant (Labour, Rhondda)

Will the hon. Gentleman clarify where in clause 1 the chairman of Ofcom is mentioned?

Roger Gale (Conservative, North Thanet)

Order. I have listened to the hon. Gentleman's efforts to intervene from a sedentary position too often already. It is the Chairman who will decide what is in order and what is not. I have made it abundantly plain and I will do so once more, but only once more. During the opening stages of discussion of a Bill, I am prepared to allow reasonable rein, providing that that facilitates discussion.

I also say to the hon. Member for Maldon and East Chelmsford that Professor Currie is Professor Lord Currie. We should give people their proper titles.

John Whittingdale (Conservative, Maldon and East Chelmsford)

Mr. Gale, you are of course entirely right and I stand duly corrected. I would say to the hon. Member for Rhondda (Mr. Bryant) that it is extraordinary to suggest that, in debating the functions and general powers of Ofcom, as covered by clause 1, we should not consider the experience of the chairman who will carry out those functions. It will be crucial to the future operation of Ofcom that the chairman should be someone with the right experience and qualifications to undertake the task.

I certainly think that Professor Lord Currie has qualifications that make him an admirable candidate.

However, I merely say now, as I did when his appointment was first announced, that because there has been much comment about his political activities—although I am sure that they are entirely separate—he will have to work hard to avoid any suspicion that his decisions have been in any way politically influenced. I am sure that they will not be, but there is a danger. Various appointments, such as the head of the Audit Commission, the chairman of the BBC, the director-general of the BBC, and now the chairman of Ofcom, have been of people with close ties to the Labour Government. That inevitably gives rise to suspicions that politics was involved in the appointments. I am sure that Professor Lord Currie is aware of that and that he will bear it in mind when he carries out his duties.

I draw the Committee's attention to a paper that Professor Lord Currie wrote, although I do not think that he was Professor Lord Currie when he wrote it—I am not sure when he was elevated to the peerage. The paper was written in May 2002 and is entitled ''Regulatory Creep and Regulatory Withdrawal: Why Regulatory Withdrawal is Feasible and Necessary''. I strongly recommend the paper to all members of the Committee because it makes salient points about the purpose of regulation, how regulators should function and, especially, the duties and functions of Ofcom. I imagine that the paper was written before Professor Lord Currie had any inkling that he might suddenly begin the task of carrying out those duties and functions. That makes it all the more interesting to read how he, as an academic, saw the job.

Professor Lord Currie is clear that competition should be the main priority for Ofcom or any regulator. He states:

''Where competition is reasonably robust or where it can develop to be so, it is usually better for sector regulation to withdraw and reliance placed on competition policy.''

He then flags up the danger of regulation, pointing out that price-cap regulation can discourage investment and innovation and that regulators

''may be tempted to rely on licence conditions as an easier way to regulate''.

However, he says that the prime duty of a regulator should be to try to encourage competition because that is of greater long-term benefit for the consumer than reliance on statutory intervention and regulation. I think that that principle is absolutely right.

Professor Lord Currie goes on to draw attention to a very real danger that the Bill takes account of, to an extent: regulatory creep. That has already happened in respect of several existing utility regulators. That may happen if part of market is regulated because a monopoly exists or there is a dominant player, and it is felt that all new entrants to that part of the market should be regulated similarly. Additionally, it might happen because the regulator has a tendency to extend the scope of regulation beyond the narrowly defined area in which there is clearly a public interest because a monopoly is positioned in two areas, even though there is competition and there is no public-interest need.

Brian White (Labour, North East Milton Keynes)

Is not one of the issues that individual regulators have been prone to make their own interpretations? Ofcom has a board comprising several people, so the problems about which the hon. Gentleman is concerned should be avoided. The fact that Ofcom has been set up with a board addresses several of the issues that he mentioned.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I hope that that is correct. Ofcom brings together a board, which represents a slightly different model from existing regulators, but I am not convinced that that alone will be sufficient. It is almost classic public choice theory. We understand from the newspapers that Ofcom will employ not 1,100 people, which is the total number employed by the existing bodies, but 900 people, which is still a lot of people. Ofcom has a big task so I do not necessarily suggest that it should not employ those people, but 900 people will want to extend the scope of their employment and to justify their existence. Classic public choice theory highlights the likelihood that they will seek to extend into other areas. That would be dangerous and we must guard against it. Regulation has already extended into areas where it can be shown that doing so may damage, not assist, the promotion of the public interest.

It is worth considering the issue that justifies regulation. Let us consider Professor Lord Currie's own view of why it is necessary to have a regulator and the limitations that need to be placed on that regulator. A short passage from his paper, which is relevant to Ofcom and its functions, states:

''Many see the justification for government intervention or regulation as market failure. But it is not. There are two criteria: the presence of a market failure and the absence of government failure. Since government intervention is often ill-targeted and ineffective, the second of these criteria rules out a great deal of would-be intervention. Intervention is justified only when the market failure is considerable, so that blunt government intervention can be helpful; or if the intervention is very well targeted. Well-targeted intervention is especially difficult in fast moving, innovative sectors such as telecoms.

Failure to recognise this point can readily lead to regulatory creep.''

That is an important warning and I am delighted that the person who delivered it is the person who is now in charge of the regulator. I hope that he will genuinely continue to bear it in mind, because it recognises the limitations of regulation and a warning of what can go wrong if regulators attempt to intervene. Professor Lord Currie pointed out that each individual intervention in the market may address a specific problem, but taken together they can have a cumulative effect. He says that

''overlaying too many interventions stifles the operation of the market and generates unforeseen interaction effects between the various interventions. The result can well be incoherence and stagnation.''

Even though Ofcom will have a powerful role, I hope that such prescient warnings are borne in mind.

I draw attention to two specific areas that Ofcom will have to address and about which Professor Lord Currie has expressed views. It is important that the Minister says whether those views played a part in the decision to appoint Professor Lord Currie as chairman of Ofcom. The two matters are relevant and topical,

and the first relates to the structure of industries that the regulator will oversee. Professor Lord Currie said:

''The withdrawal of regulation is only possible with the right industrial structure. The withdrawal from price cap regulation that we have observed in gas and electricity in the UK''—

a point to which I have already referred—

''was feasible only because of the separation of distribution from supply.''

At the time, Professor Lord Currie did not realise that he was to become the regulator and goes on to say specifically:

''It is for that reason that we believe that the fastest and best route to regulatory withdrawal in telecoms is for BT to separate its distribution business from its business of supplying services. That would make it much harder for Oftel to defend its current regime of regulatory intervention, which is in danger of spilling over into regulatory micro-management.''

Professor Lord Currie goes on throughout his paper to make the case that the best and most effective way in which to promote competition in the area where it is possible to achieve competition, while regulating the monopoly area of activity, is through separation. I am not advocating separation, but the fact that the person who has been chosen by the Government to chair Ofcom is himself on record as advocating a separation is something that people with an interest in such matters will note. The Government may wish to say whether the decision to appoint Lord Currie as the chairman was influenced in any way by his statement on the record that he believed that the most effective way to achieve competition in telecoms was to separate BT's ownership of the infrastructure from the services that it provides.

Chris Bryant (Labour, Rhondda)

Does the hon. Gentleman therefore think that there would be any read across into the vertically integrated market in digital satellite television?

John Whittingdale (Conservative, Maldon and East Chelmsford)

No. That is an entirely different area, but I am happy to debate it, and I am certain that we will do so at length.

Roger Gale (Conservative, North Thanet)

Order. Yes, but not now.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I take your warning on board, Mr. Gale. The hon. Gentleman's question is interesting, and he was right to raise it: it will feature in our discussions of several clauses.

So far, I have deliberately focused my comments on the role of Ofcom as a telecoms regulator because that is what the beginning of the Bill deals with and, as I have said, not enough attention has been paid to that part of Ofcom's role—especially in comparison with the enormous amount that has been spoken and written about Ofcom's work in terms of regulating or setting the rules that govern the ownership and content of television and radio broadcasting. I keenly look forward to debating that during our consideration of the Bill.

Lord Currie's paper addresses another interesting matter that also gives an indication of his thinking—and I would be interested to know whether his views are shared by the Minister and the Government.

Mobile telephony is one part of the telecommunications market that already has a functioning competitive market, and therefore Ofcom has much less justification to intervene in that area of it than it does in others. Lord Currie stated:

''In our judgement, the mobile communications sector corresponds to the case described above. It is subject to rapid technological change and competition is effective. In these circumstances, regulation needs to be light-handed to avoid slowing innovation and investment and the dispersion of new technologies. Regulation to cap prices to avoid excessive profits, of the kind familiar in the slower moving fixed-line sector, may well be highly counterproductive and work to the severe detriment of customers and to the overall competitiveness of the UK economy.''

That is a very topical issue. The mobile telephony sector is currently complaining to the OFT about Oftel's intervention in its market; it is arguing that it is a properly functioning, competitive market.

Professor Currie's paper does not suggest that there should be no regulation, but he makes the point that mobile telephony has already achieved a state where there are four players in the market that each have a roughly equal share of it: of course, there is a market leader and a market trailer but each of them has a sizeable chunk of the market, and there is about to be a fifth entrant into it when and if 3G is launched. There is also considerable churn between customers; they transfer between mobile suppliers.

Theoretically, those characteristics are among the tests for whether a competitive market exists. Therefore, we can say that there is already much more competition in mobile telephony than there is in fixed line provision. For that reason alone, as Lord Currie has suggested—and as I proposed on Second Reading—Ofcom should focus its attention more on trying to encourage competition in the fixed line sector, where we have not made as much progress as we should have, than on spending a lot of time examining mobile telephony. It faces huge challenges in other regards that are all to do with the enormous sums of money that it has had to commit to 3G and the fact that it will have to commit more to establish its infrastructure.

The mobile telephony market is already under severe pressure and there is a considerable amount of competition in it and yet, to date, Oftel has felt it necessary to micromanage, to scrutinise individual tariffs and to intervene. It seems to me that its attention would have been better focused on areas in which a great deal more progress would be necessary to achieve a competitive market. The reason why I raise those arguments is, first, because they are strong and, secondly, because they were made by the chairman of Ofcom. It is incumbent on the Government who decided to appoint Professor Lord Currie as the chairman of Ofcom to show whether they agree with some of the views that he set out in his excellent paper.

I felt that this was an opportunity to raise big, general questions before we consider the amendments, which will focus on narrower aspects of the Bill.

Simon Thomas (Plaid Cymru, Ceredigion)

I welcome you to the Chair, Mr. Gale. I served under you in Committee on the Office of Communications Bill. You got us

through that much shorter Bill in good time, and I look forward to getting through this longer Bill in good time, too.

I welcome the fact that the Bill gives a commitment to establish Ofcom offices in Wales, Scotland, England and Northern Ireland. That is an important matter, and one that I raised with the Minister when we were considering the Office of Communications Bill. He gave a commitment that such offices would be established, and I am pleased that the provision is in the Bill. However, an office is one thing, but whether it is properly staffed, its resources, and how it works in its territories is another. I suppose that, so far as those matters go, we will wait and see. I want to explore such issues to find out to what extent Ofcom will relate to Wales, Scotland and Northern Ireland, and to not just broadcasting but other important measures, such as access to broadbrand and the regulation of the radio spectrum. Those are vital issues for the economy, particularly that of Wales and other rural areas. Having Ofcom representation and an Ofcom office will be important in such areas.

So far, the Bill does not require an office in, say, Cardiff to contact the National Assembly, which may be 500 yd down the road. There would be no relationship between that office and the National Assembly for Wales. Likewise, there would be no relationship between offices in Scotland and Northern Ireland and their devolved Administrations. Ofcom will have to consider that carefully. I hope that we can amend to Bill to give Ofcom a duty in that respect, but if we cannot, I hope that the Minister will say something about how he expects Ofcom will relate to the devolved Administrations through the offices established in those countries.

Chris Bryant (Labour, Rhondda)

The hon. Gentleman might be interested to know that Lord Currie said last night that he had been in Cardiff only two days previously in order to do precisely what the hon. Gentleman suggests.

Simon Thomas (Plaid Cymru, Ceredigion)

That is an encouraging start, and it brings me neatly to my next point, which is to ask whether Ofcom, as well as having offices in the nations of the United Kingdom, will also hold meetings in those nations. I should not like Ofcom to become a London-bound body. An important ITC report on regionalisation had the working title ''Beyond the M25.'' It is important that Ofcom takes its work out of London to not only Cardiff, but Bangor and Caernarfon, which are important centres of broadcasting in Wales, and into Scotland and Northern Ireland, too. People would then know what Ofcom was doing on their behalf.

The hon. Member for Maldon and East Chelmsford has already mentioned how powerful Ofcom will be. Ofcom will affect not only what people see and hear on the television and radio but what they do daily, whether they can get the mobile phone service or broadband service that they want, and whether their business can get on to the web fast enough to establish itself in a rural area, for example. Ofcom would be a poor body if it located itself in the metropolis and did not consider how it rolled out and maintained its activities in different regions. It is good that the Bill

says that Ofcom is establishing offices, but it remains to be seen how the offices will relate to the people in those nations. I look forward to hearing the Minister's views on that.

My second and final point is on what sort of functions and powers Ofcom is taking on. We know from clauses 1 and 2 and the schedule that Ofcom is taking on the regulatory functions of five current regulators, some of which have clear representational roles. For example, the Radio Authority and the ITC both have territorial representational roles. Regarding Ofcom's functions, I am concerned that there is no mention, either in the clause or anywhere else in the Bill, of two vital issues. The first is access to broadband and the second is the digital signal and switching off the analogue signal. If the five current regulators, whose functions Ofcom is taking on, have a regulatory function, but no obligation to achieve their aims, Ofcom is in danger of continuing the current situation.

Andrew Robathan (Conservative, Blaby)

Given that the point about digital switch-off was made by a Liberal Member for the north of Scotland, does the hon. Gentleman not think that it is a pity that no Liberal has cared to attend the Committee?

Roger Gale (Conservative, North Thanet)

Order. I nearly put this on the record earlier on and I now feel obliged to do so. The hon. Member for North Devon (Nick Harvey) was present earlier and sent a note to the Chairman indicating courteously that he had other business that detained him this morning.

Simon Thomas (Plaid Cymru, Ceredigion)

That certainly answered the intervention, Mr. Gale. I am, of course, aware that there is another Liberal Member on the Committee.

I am concerned about two issues. First, how can we be sure that the Government's commitment that the analogue signal will not be turned off until 95 per cent. of the population have access to a proper digital signal will be transferred as a function and duty of Ofcom? If the Government want that to happen, it must be achieved by Ofcom. Secondly, how will Ofcom deliver the Government's general promise that there should be equality and parity of access to broadband throughout the country? I am concerned that that is not written into the Bill as one of the powers and obligations of Ofcom. That allows Ofcom open to interpret the Bill very literally.

The hon. Member for Maldon and East Chelmsford mentioned how Ofgem has, perhaps, wandered away from what the House thought that it was passing in the Utilities Act 2000. He was right to do that. We were only able to bring Ofgem back on track when the Government saw fit to bring forward the social and environmental guidance for that body, which provides a much wider context for that regulator. I do not think that we will have the time or the energy to return to the Bill in future, so it is, therefore, important that we consider some of the facets that are missing from the duties and powers of Ofcom.

How are we to control the digital-analogue switch-off, or switch on—how an hon. Member might regard that matter would depends on whether he was a pessimist or an optimist—and how we are to control

the parity of access to broadband services in all areas of the United Kingdom? Those aspects are currently missing from the functions of Ofcom.

That is all I want to say about the clause. I hope that the Minister will reply to some of my points.

John Greenway (Conservative, Ryedale)

My hon. Friend the Member for Maldon and East Chelmsford has raised the fact that Ofcom will be extremely powerful. However, in clause 1 stand part debate we need to be clear how the various mechanisms relating to Ofcom's powers work.

As I understand it, and as the hon. Member for Ceredigion (Mr. Thomas) has pointed out, clauses 1 and 2 and schedule 1 restrict Ofcom's responsibility to those functions that are currently carried out by the five existing regulators. Although clause 1(3) appears to give Ofcom the power to do almost anything it likes in respect of those functions, which makes it powerful, it is still restricted in terms of pursuing its functions. Other powers will be granted to Ofcom as we proceed through the Bill. It would be helpful if the Minister could endeavour to explain to what extent he believes that Ofcom will have the flexibility that it needs in regulating and developing a future market in telecommunications and the media. In the original sittings motion debate, I was about to refer back to the experience that you, Mr. Gale, and I had in 1990. The ink had barely dried on the Bill and Royal Assent had been granted, but some of its provisions were already out of date.

The issue is important for the industry. I rather hope that, by the time our proceedings have finished and the Bill has been to another place—presumably in the summer—we will all be satisfied that we have a Bill that creates a new regulator, notwithstanding its huge powers, to which my hon. Friend the Member for Maldon and East Chelmsford referred. The regulator must have the flexibility within the framework that we have set to adapt to the changes that will undoubtedly take place in the marketplace.

If we are lucky enough to catch your eye, Mr. Gale, we will concentrate on teasing out precisely what Ofcom's duties will be, especially whether it will have, for example, powers to further the cause of deregulation, which, judging by what my hon. Friend said, is something in which the chairman, Lord Currie, deeply believes. We also want to examine the extent to which Ofcom can encourage self-regulation in areas where that is not the order of the day. It is vital that the Minister deals with the issue in the stand part debate and we are clear about the precise powers that Ofcom will have in relation to particular functions, and how limited those functions may be.

For the first time, another regulator will have powers over the BBC. I understand that there is to be a revised version of the BBC agreement. When will that be published? Some promise has been made that it would be done by the time we reached the relevant clauses, and some indication of when it would appear was discussed by the Joint Committee. I am sure that this Committee would find it helpful to know.

Several hon. Members rose—

Roger Gale (Conservative, North Thanet)

Order. I was about to say that, because the hon. Member for Ryedale has raised the issue, I would permit the Minister to respond if he wished to do so. Otherwise, the matters he mentioned refer to clause 193, so there is time for the Minister to gather his thoughts.

Michael Fabricant (Conservative, Lichfield)

It is a pleasure to serve under your chairmanship, Mr. Gale. I note that the Bill refers to previous Acts, some of which are on the Table. One Act that is not there—perhaps because the Bill does not refer to it—is the Marine, &c., Broadcasting (Offences) Act 1967, which curtailed both our careers, Mr. Gale, at an early stage.

Clause 1 sets the terms of the Bill. My hon. Friend the Member for Maldon and East Chelmsford—to whom, with your permission, Mr. Gale, and his, I will henceforth refer as my hon. Friend the Member for Maldon—has already said that the clause mentions many things relating to functions and general powers, but does not address sufficiently the promotion of competition.

One of the things that I welcomed about the Radio Authority and the Broadcasting Act 1996 was talk of a light touch. My hon. Friend referred to regulatory creep and there might be a considerable danger of that occurring if it were not for the views of Lord Currie. Regulatory creep must be avoided at all costs. Provisions on the promotion of markets should have been included in the clause. When we served—

Roger Gale (Conservative, North Thanet)

Order. I am sorry to interrupt the hon. Gentleman so early in his speech, but he will find that such markets issues are covered fairly comprehensively in clause 3.

Michael Fabricant (Conservative, Lichfield)

Thank you for that advice, Mr. Gale. I was looking earlier at provisions on the general duties of Ofcom and I wondered whether my remarks would be in order. I felt—maybe I am wrong—that the promotion of markets should have been referred to in clause 1 and perhaps repeated in clause 3. References to the general power and philosophy of Ofcom are made in clause 1, although they are addressed in greater detail in clause 3.

Roger Gale (Conservative, North Thanet)

Order. I pointed out to the hon. Gentleman that the provisions might well have been included in clause 1, but they were not.

Michael Fabricant (Conservative, Lichfield)

As the provisions are not included, it would be out of order to discuss them. If only they were included. There is a need to discuss the promotion of certain markets, although we will do that when we reach clause 3. I am concerned about that because of the penetration of broadband, but I shall discuss that in more detail when we reach clause 3.

The most important thing is that it is accepted that the market is currently under extreme pressure, as my hon. Friend the Member for Maldon pointed out. I could refer to the telecommunications industry or, as my hon. Friend did, to the independent television industry but I shall not. I shall save time by referring to the state of the radio industry because radio, like television, has experienced a major fall in the amount of advertising that it carries.

It is interesting to look at the share values of two or three radio groups to see how they have changed during the past year. Capital Radio's 52-week high share price was 867.50p; it is now about 535p. The Chrysalis group, which operates the Galaxy radio stations, among others, had a high of 287p, but has fallen to 153p. GWR, which is well known to many hon. Members, had a 52-week high share price of 289p; the price has fallen to 121p. There is a great need for a regulator who will promote in the broadest possible way not only television, but radio and competition in areas such as telecommunications generally.

I have a specific micropoint for the Minister. I was confused by the explanatory note because clause 1—maybe it was clause 3—mentions the spectrum. Anyway, my hon. Friend the Member for Maldon mentioned the frequency spectrum. Pages 4 and 5 of the explanatory notes include mention of pre-commencement regulators. The notes say:

''Those regulators are the Broadcasting Standards Commission, the Director General of Telecommunications, the Independent Television Commission and the Radio Authority.''

However, the notes continue:

''The expression does not include the Radiocommunications Agency, as the Agency is an executive agency of the Department of Trade and Industry and acts in the name of the Secretary of State, and although functions of the Secretary of State are transferred to OFCOM by the Bill, the office of the Secretary of State will not cease to exist, unlike the other four regulators.''

I am not sure what that means in practice. If there is to be promotion and correct and optimal use of the spectrum, the agency primarily involved with that will be the Radiocommunications Agency. How will Ofcom be able to function if that agency acts completely separately from Ofcom?

One reason for setting up Ofcom is that it is recognised that, even if we do not have joined-up government, at least we have joined-up technology. Digital bits are digital bits whether they are used to broadcast television or radio or to carry thousands of telephone conversations down one fibreoptic line. If the Radiocommunications Agency is to be excluded from Ofcom's ambit, that is a major error that must be adjusted. When I saw a note being passed to the Minister, I hoped that an answer might be forthcoming. Perhaps one will arrive later, but if it does not, we must return to the matter.

My hon. Friend the Member for Maldon mentioned the introduction of 3G. That will be an interesting time. It will not be in great use with radiotelephony—telephone calls.

Andrew Lansley (Conservative, South Cambridgeshire)

Let me attempt to answer my hon. Friend's question. Clause 1 gives effect to the transfer of functions in clause 2, which includes those of the pre-commencement regulators and the relevant functions of the Secretary of State. Clause 390 defines the pre-commencement regulator as the four regulators referred to but not the Secretary of State. Only those functions of the Secretary of State specified in the Act under the Secretary of State's powers are to be transferred to Ofcom.

Michael Fabricant (Conservative, Lichfield)

I am grateful to my hon. Friend. In a way, I feel that he has a greater grasp of the Bill

than the Minister or even the civil servants, but perhaps I am being unkind and uncharitable. However, although my hon. Friend has explained the meaning of the explanatory notes, he has not explained the mechanism whereby Ofcom will be able to optimise use of the frequency spectrum as well as it might do were the Radiocommunications Agency not an integral part of Ofcom.

Andrew Lansley (Conservative, South Cambridgeshire)

There is nothing in clause 1 that suggests that the powers and functions currently exercised by the Secretary of State through the executive agency—the Radiocommunications Agency—will not be transferred to Ofcom. Subsequent parts of the Bill will show how those powers are to be transferred to Ofcom. There is no deficiency in the powers available to Ofcom on spectrum management.

Roger Gale (Conservative, North Thanet)

Order. I am permitting this fascinating duologue to continue in the hope that we may obviate the necessity to return to the subject later.

Michael Fabricant (Conservative, Lichfield)

Thank you, Mr. Gale. I had better move on quickly to another topic in the hope that I may be allowed to return to the subject later.

Some hon. Members have been contacted by the Communication Workers Union, which suggests that there should be greater accountability in the Bill. The union says that

''In our view, regulators should be the instrument of policy and not the determinant of it.''

I wholeheartedly disagree. As I said on Second Reading, the whole point of the Bill is to meet the need for a flexible architecture—the very point made by my hon. Friend the Member for Maldon. He said that when the 1990 Broadcasting Bill was enacted—

John Greenway (Conservative, Ryedale)

No, that was me.

Michael Fabricant (Conservative, Lichfield)

Oh, I apologise. It was my even more honourable Friend the Member for Ryedale.

Andrew Lansley (Conservative, South Cambridgeshire)

Equally honourable, perhaps?

Michael Fabricant (Conservative, Lichfield)

No, no. More honourable.

My hon. Friend the Member for Ryedale made the powerful and eloquent point that the 1990 Act became almost obsolete within a year because of changes to technology. The Communication Workers Union suggests the slight change that Ofcom should make an annual statement, although I believe that that will happen anyway. My hon. Friend the Member for South Cambridgeshire, who has disappeared, might be able to point out where in the Bill that will apply.

I do not intend to speak at length about any of the clauses. The Office of Communications Bill was small, but this Bill is very large, and my hon. Friend the Member for Maldon has said that we need more time to debate all the clauses. I wish to pick out a few more key points from clause 1 and ask the Minister some specific questions.

Subsection (2) states:

''OFCOM shall also have any functions in relation to telephone numbers that are conferred on them by the law of the Isle of Man or any of the Channel Islands.''

Will the Minister tell us precisely what that means? Is there no standardised system in that area, such as the use of 07 numbers for mobile telephony, and why is the provision required in the clause?

I welcome subsection (5)(b), which says that Ofcom shall have

''power to promote the carrying out of such research and development by others, or otherwise to arrange for it to be carried out by others''.

I am reminded of the old Independent Broadcasting Authority's major engineering research facility at Crawley Court near Winchester, which was subsequently sold off and became NTL. That facility was a major force in developing compression technology for the transmission of television over a narrow digital bandwidth spectrum. That tremendously important work was done with the BBC at its research centre in Surrey, and it has been paramount to Freeview's operation. Thirty-two radio and television channels are now available, which would not have been possible if the research had not been undertaken. I welcome the fact that Ofcom will have the power to commission such research.

Subsection (8) states:

''In this section 'telephone numbers' has the same meaning as in Chapter 1 of Part 2.''

I have looked through chapter 1 of part 2, especially clause 28, which details definitions, but I saw no definition of a telephone number. We need to know what that is if the Minister is to answer the question about telephone numbers in the Isle of Man and the Channel Islands.

Kim Howells (Labour, Pontypridd)

What a fascinating debate.

The Office of Communications Act received Royal Assent in March 2002. Some members of the Committee will remember the process, which was a long drawn out affair even though the Bill was short. That legislation allowed us to start the work of establishing Ofcom. The Act gave Ofcom a single function: preparing itself to take on its regulatory functions at a later stage, when the provisions in the Communications Bill come into force.

Clause 1 sets out the functions that Ofcom will receive. By virtue of subsection (1), they will comprise the functions transferred from the existing regulators and any other functions conferred on Ofcom under the Bill or other legislation. Under subsection (2), Ofcom's functions will include any conferred on it by the laws of the Isle of Man or any of the Channel Islands in relation to telephone numbering—the hon. Member for Lichfield wanted to know about that. That is because telephone numbers in those islands are part of the United Kingdom system, which will be administered by Ofcom, but the authority to do things in the islands must be confirmed by their own laws. Although clause 395(5) makes provision for this legislation to be extended to the islands, they may prefer to have, as they do now, their own legislation on networks and services.

Subsections (3) and (4) allow Ofcom to do anything that might be incidental or conducive to carrying out

its functions. That includes the power for Ofcom to borrow money, which no hon. Members have mentioned. I thought that someone would, which is why it is in my brief—[Laughter.] However, let me make it clear that should Ofcom wish to borrow money, it can do so only with the consent of the Secretary of State or in accordance with a general authorisation that she has given them in that regard.

Under subsection (5), Ofcom will be able to undertake research and development work in relation to any of its functions and arrange for others to carry out research.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I do not want to take the Minister back too far, but he expressed some regret that we had not looked properly at whether Ofcom will be able to borrow money.

Kim Howells (Labour, Pontypridd)

It was not regret.

John Whittingdale (Conservative, Maldon and East Chelmsford)

Well, I do not want the Minister to feel that his brief was wasted. He said that borrowing will require the Secretary of State's consent. Is it the Government's view that borrowing by Ofcom will count towards the public sector borrowing requirement?

Kim Howells (Labour, Pontypridd)

Borrowing must certainly be controlled, and I can imagine that there will be some very adult conversations at the Treasury about it. There will be times, as the hon. Gentleman knows, when the income flows to Ofcom, especially from licence fees, will vary. Ofcom may well need to make use of borrowing power sometimes, to smooth out cash flow over a period of time. I emphasise that Ofcom will need approval or authorisation from the Secretary of State before undertaking any borrowing.

We have previously given clear commitments that Ofcom will have a presence in the different nations of the United Kingdom, and we have agreed to the recommendation of the Joint Committee, which scrutinised the Bill, that there should be a requirement to underscore that commitment. I am glad that the hon. Member for Ceredigion welcomes the fact that that is in the Bill. However, I must tell him that I should not want to tie Ofcom down to meeting in Bangor, or even in Aberystwyth, before it meets in Pontypridd. It is a very pertinent point that Ofcom should not be seen as bound by the M25, or as a creature of the metropolis. It should have a vibrant working relationship with all parts of Britain. I am glad that the hon. Gentleman made that point.

We intend that, where appropriate, Ofcom should be able to contract out its functions to third parties. That is already the case with the Radiocommunications Agency, which contracts out certain functions to private companies. It is reasonable that Ofcom, too, should be able to do so. Subsection (7) provides for Part II of the Deregulation and Contracting Out Act 1994 to apply to functions conferred on Ofcom. Under that provision, the Secretary of State will be able to make an order to enable functions of Ofcom to be contracted to a third party. Under subsection (7)(b), those functions will include Ofcom's powers to make subordinate legislation except where exercisable by statutory instrument. That provision will allow Ofcom to

contract out, for example, the development of codes and standards. I hope that the Committee welcomes that.

I shall deal briefly with some points that have been made, especially the issue raised by the hon. Member for Maldon and East Chelmsford—it is important that we get East Chelmsford into the Committee record—in relation to the appointment of Lord Currie and the board of Ofcom. Lord Currie's appointment as chairman of Ofcom and the appointments of non-executive members of the board were made fully in line with the Nolan procedures for public appointments. Under that process, appointments are open and are made on merit. I hope that the hon. Gentleman accepts that.

I shall address another matter raised by the hon. Member for Whittingdale—[Laughter.] Did I say Whittingdale? I am sorry—the hon. Member for Maldon and East Chelmsford. Whittingdale is probably a village just outside East Chelmsford. The hon. Gentleman asked about the case for regulating mobile telephony and quoted Lord Currie's paper. As I am sure the hon. Gentleman is aware, Oftel's proposals for the revision of existing controls on mobile termination charges have been referred to the Competition Commission. I would like to answer his question, but it would be inappropriate of me to comment on the matter at this stage. I do not want him to think that I have missed the point he made, because it is important.

The issue of broadband was raised by the hon. Member for Ceredigion and others. There is no specific mention of broadband because the Bill is technologically neutral. We are committed to the roll-out of broadband across the United Kingdom, but we do not feel that it requires a specific mention in the Bill. The Bill is designed to put in place a framework that can respond flexibly to developments in technology, but it is not about one technology rather than another. However, I know how vital broadband is to constituencies such as that of the hon. Member for Ceredigion and, indeed, that of every other member of the Committee.

The hon. Member for Ryedale asked whether clause 1 gives Ofcom sufficient flexibility to deal with changing circumstances. We have endeavoured to make the Bill as technologically neutral as possible, which is why there is no express mention of either broadband or analogue switch-off. Clause 6 is directed towards self-regulation and allowing Ofcom to respond to changing circumstances. Clause 1, however, is written in the broadest possible terms, and any possible limitations on what Ofcom can do are best addressed when we come to the specific clause on the subject. That is a point that the hon. Gentleman made himself.

The Government have made a commitment to adhere to the criteria for analogue switch-off that were announced by my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), then Secretary of State for Culture, Media and Sport, in September 1999. They remain in place, and we continue to believe that switching off analogue

terrestrial transmission could start as early as 2006 and be completed by 2010.

We believe that a successful alliance between Government, industry and consumers within the framework detailed by the action plan will enable the United Kingdom to meet the criteria for switch-over laid down by my right hon. Friend in 1999. The Government made a commitment to adhering to those criteria. Switch-over is a complex and long-term process. I believe that a decision as important as that must lie with the Government, and they must be accountable to Parliament for making it. The hon. Member for Ceredigion makes an interesting point, but I hope that Parliament will see fit to debate the subject fully.

Simon Thomas (Plaid Cymru, Ceredigion)

I thank the Minister for those comments. Is he saying that Ofcom, as the regulator, will not involve itself in deciding when an analogue switch-off should take place, and that only the Government will decide that? Could he also use as much leeway as you will allow him, Mr. Gale, to say a little more about how the Government will work with Ofcom, as the main regulator, to ensure that that does not penalise any part of the United Kingdom?

Kim Howells (Labour, Pontypridd)

My right hon. Friends the Secretaries of State for Trade and Industry and for Culture, Media and Sport will discuss those issues with Ofcom, and I am sure that during the course of those deliberations they will receive good advice. However, I do not want to commit either the Secretaries of State or the Government as a whole to saying that they will take a nod—or otherwise—from Ofcom on such an important matter. It is a broad subject that should be debated on the Floor of the House.

Andrew Robathan (Conservative, Blaby)

I wish to make a genuine request. The Minister has twice referred to making the Bill technologically neutral, which relates to article 8 of the framework directive. I know that that is in the Bill, but I cannot find it. Will he tell me where it is stated?

Kim Howells (Labour, Pontypridd)

The hon. Gentleman can look for himself.

As ever, the hon. Member for Lichfield made a fascinating contribution. I wish to supplement the brilliant answer—from which I learned a great deal—given to him by his hon. Friend the Member for South Cambridgeshire. The functions of the Secretary of State, exercised through the Radiocommunications Agency, will be transferred to Ofcom. The agency will cease to exist, but the Bill does not provide for it to cease to exist because it is not a statutory body. The hon. Gentleman made the same point in his intervention—I think.

Clause 1 provides a worthy description of what we intend to do, and I want it to stand part of the Bill.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am mildly disappointed in the Minister's contribution. In answer to the points I made about the appointment of Lord Currie, he said that the Nolan principles had been followed. I never doubted that they had been and, as I said, I think that Lord Currie is well qualified to take on the post to which he has been appointed. However, it is the case that the

Government have chosen to appoint as chairman of the regulator someone who expressed quite controversial views on the function of the regulator only a few months before he was appointed. That is a serious matter.

Chris Bryant (Labour, Rhondda)

Has not the hon. Gentleman already answered his own point? This is a deregulatory Bill and the gentleman in question is a deregulatory gentleman, as his comments have made clear, therefore his appointment is a perfect fit.

John Whittingdale (Conservative, Maldon and East Chelmsford)

It may well be a perfect fit, and I am sympathetic to many of the views that Lord Currie has expressed, but I am not the chairman of Ofcom. The Government knew his views, which refer to very important public policy issues, when they chose to appoint him to the post. I recognise that, to some extent, these matters fall under the responsibility not of the Minister but of his colleague, the Minister for E-Commerce and Competitiveness, so I am disappointed that that Minister is not present to respond to some of the points that have been made.

Observers of this process, and those who wish to see how Ofcom will operate in the future, would be interested to know whether the Government appointed Lord Currie because they were sympathetic to his ideas. Are they sympathetic to the notion that there should be intervention to separate infrastructure, ownership and service provision in British Telecom, or did Lord Currie assure them that he had looked at that matter again and decided against such intervention? Do the Government have any views on an extremely important issue that affects the entire telecommunications sector?

Kim Howells (Labour, Pontypridd)

As a notorious deregulator and free marketeer, I was very pleased that Lord Currie was appointed as the chair of Ofcom.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 2 - Transfer of functions of

Andrew Lansley (Conservative, South Cambridgeshire)

I add my appreciation of the opportunity to serve on a Committee under your chairmanship, Mr. Gale. With the benefit of experience, I can say that as long as I stay in order it will be a pleasure.

I shall detain the Committee for a minute in order to ask the Minister a number of questions. As will be a refrain in at least some parts of our discussions, I will be speaking in part about the questions and recommendations made by the Joint Committee and the Government's response. In some cases, however, there are loose ends and in others there are clearly differences of opinion. In this particular instance, I am pulling at loose ends.

The Joint Committee discussed the transfer of functions, powers and liabilities between the pre-commencement regulators and Ofcom. There is clearly provision for a transfer scheme for property and liabilities. At the time, however, we could not go into the provision to be made for the staff of the pre-commencement regulators, or indeed Radiocommunications Agency staff, who were to be transferred to Ofcom. We were led to believe that additional clauses would be added to the Bill, as indicated in paragraphs 3.7.1 to 3.7.3 of the Government's policy document. I am not aware that such clauses have been included in the Bill, and I wonder whether the Minister would indicate whether such clauses are likely to be added at a later stage.

The process of relating the structure of activity inside the pre-commencement regulators directly to the views of Ofcom can begin now that Ofcom has, to some extent, been appointed. It will allow the pre-commencement regulators to structure themselves, and the prospective Ofcom, in ways in which Ofcom would prefer. In that respect—this is a personal view, which was supported to some extent by other members of the Joint Committee—the Towers Perrin report was not wholly helpful. In particular, in so far as Towers Perrin looked at whether Ofcom should have clear, functional, outcome-related structures—for example, the function of an economic regulator as distinct from a content regulator, which is now reflected perfectly sensibly in the structure of the legislation—it discounted them in an unwarranted fashion in the way in which it structured its report.

We had to escape from the curious addition of a separate radio section to Ofcom in the Towers Perrin proposal, which treated radio as though it were not part of economic and content regulation and the concept of a converged regulator did not apply to it. The Joint Committee said that that was perverse, and the Government happily agreed. It is important that the pre-commencement regulators should not be constrained by the presence of a consultant, and I wonder whether the Minister will confirm that they are escaping from some of the constraints with which they started.

That brings me to my principal question, which relates to the use of powers in the Office of Communications Act to try to secure the most advantageous introduction for Ofcom. As one can see in clause 2, Ofcom will clearly take over functions where the events that it will be regulating will predate its assumption of those functions. So far as we can achieve it, those who are regulated should both recognise that Ofcom is a distinctly new regulator with a new approach and culture and, in so far as they have been operating under the prior regulatory regime, know the basis on which they are being regulated. The pre-commencement regulators have their own pre-existing cultures and there will be big shift to the new culture, but some of Ofcom's regulatory actions will have to relate to that prior period, which is a curious combination. The key is to be found in section 2 of the Office of Communications Act on Ofcom's initial function, to which the Minister referred, which is about making statements on its intentions in relation

to its use of its powers. Section 4 places upon the pre-commencement regulators a duty to carry out their functions in a manner that appears to them to secure that Ofcom will be able effectively to carry out its functions—its initial function and the functions that will be given them under the Bill and other proposals.

It is interesting that the Government, when responding to the Joint Committee report recommendation that those powers should be strengthened, made clear their view that there was nothing to prevent Ofcom publishing such statements of intention. That is fine; that answers the question perfectly well. However, the Government's response went on to say:

''so there is no impediment under the provisions of section 4 of the Act to the existing regulators having regard to any such statement OFCOM may make in fulfilling their functions before they are transferred to OFCOM.''

My point is what is the extent of the obligation on the pre-commencement regulators? If Ofcom makes a statement about its future intentions under section 2 of the Office of Communications Act, and many of us would wish it to do that at an early stage, is it not the case that under section 4 the pre-commencement regulators have a duty to follow that through and to try to secure that Ofcom's intentions are carried into effect by using their existing powers before Ofcom takes over—to the extent that they are legally able to do so within their existing statutory obligations?

It seems to me that there being no impediment to the regulators having regard to Ofcom's statement is not good enough. We should make it clear that we would encourage Ofcom to make such statements as early as possible and that the pre-commencement regulators, within their statutory limitations, have a duty to act in accordance with those statements of intention. Otherwise, we will have a period of confusion; it may last a matter of months only, but it is perfectly clear that although the legislation may be passed in June or July next year Ofcom may not be able to take up all those principal functions until the later part of 2003.

John Whittingdale (Conservative, Maldon and East Chelmsford)

May I add to what my hon. Friend says? He flags up a genuine concern. It relates to a fairly limited time scale. The pre-commencement regulators will continue to operate, but with the prospect of Ofcom being already established and with a board already in place sitting and waiting to take over. We have already seen that some of the pre-commencement regulators have started to be influenced by the knowledge that their lifespan is coming to an end. In one case at least that I know of, that has caused them to say that they will not consider any more franchise applications because Ofcom will be taking over that responsibility before too long. In other cases, decisions may be taken by pre-commencement regulators when it is perfectly clear that Ofcom may reach different decisions soon afterwards. It would help if the Minister could say a little about the timing, and when he envisages Ofcom coming into effect and taking those powers.

I note that clause 2 provides that the Secretary of State may appoint different dates for the different purposes of Ofcom. I am not entirely sure why that

should be the case. What particular examples can the Minister provide of why one particular function might come into effect earlier or later than another. Will he clarify those points?

Kim Howells (Labour, Pontypridd)

Since it was established earlier this year, Ofcom has been making preparations to assume its regulatory functions once the Bill's provisions come into force. That is why we passed a paving Bill, and I think that it was right and proper to do that.

Clause 2 will cause the functions that are currently carried out by the existing regulators to be transferred to Ofcom. Those functions are set out in schedule 1 and relate to wireless telegraphy, the licensing of television and radio services, the Channel 4 corporation, Gaelic broadcasting, which we have not mentioned so far, the national television archive, and the prescription of foreign satellite services.

The schedule includes functions that relate to entering and searching premises to enforce broadcasting licence provisions, the variation of existing licenses for Channel 3 and Channel 5, reviewing digital television broadcasting, the reservation of digital capacity to the BBC, listed events and fairness and privacy in broadcasting. Taken together, clause 2(1) and Clause 395(2) enable the Secretary of State to determine a date on which the functions to which the clause relates should be transferred to Ofcom. Under clause 395 the Secretary of State can set different dates for different purposes. That matter was raised by the hon. Member for Maldon and East Chelmsford. Those provisions would allow different functions, or even different aspects of the same functions, to be transferred to Ofcom at different times.

As a consequence of clause 2(2), references that are made in current legislation to the existing regulators should be read as if they referred to Ofcom. Subsection (3) will allow Ofcom to exercise the functions that are transferred to it in respect of incidents, such as a breach of a licence condition, that occur before those functions are transferred. Subsection (4) provides that the functions that are transferred to Ofcom include any modifications made by Bill.

The hon. Member for South Cambridgeshire asked a sensible question—what will happen to the staff? That is an important issue, because if there is doubt and uncertainty, staff might drift away. Many people on the staff are very skilled and vital. Subsection (2)(b) will apply via an order under the Employment Relations Act 1999, which has been published in draft and is in the House of Commons Library. As we are using existing powers to deem subsection (2)(b) to apply, staff will transfer to Ofcom with their existing terms and conditions under a section 38 regulation of the 1999 Act, rather than through a transfer scheme under the clause. I am sure that the Committee will welcome the protection for staff and their employment rights on transfer.

Michael Fabricant (Conservative, Lichfield)

The Minister has raised an interesting issue. I know that there is huge uncertainty among Radio Authority staff about

whether they should be seeking other jobs. The Minister has, to some extent, addressed that, but will he clarify whether all employees of the various agencies that will be encompassed in Ofcom—the RA, ITC, Oftel and so forth—will automatically be employed by that body?

Kim Howells (Labour, Pontypridd)

No. They may make applications for jobs and some would not, I am sure, want to transfer. We cannot tie Ofcom to saying that it will be exactly the same size as all the existing agencies combined. It is important that the new organisation should be a new creature and should address the matter of regulation in a fast-changing environment. The hon. Gentleman often made that point during the passage of the Ofcom Bill. The answer is no.

To return to the issues that were raised by the hon. Member for South Cambridgeshire, copies of the executive summary of the Towers Perrin report have been deposited in the Library of the House of Commons. That contains recommendations only, and it will be for the Ofcom board to make its own decisions on matters such as staffing.

The hon. Gentleman also asked whether existing regulators should be under a duty to act in accordance with Ofcom's statement of intention. Clause 27(1) provides for the pre-commencement regulators to take steps to enable Ofcom to carry out the functions transferred to it under the Bill.

The hon. Member for Maldon and East Chelmsford asked about different dates. As hon. Members will be aware, detailed planning currently under way between Ofcom and the existing regulators means that we must implement telecom directives by 25 July. Ofcom may take a lead in that ahead of other powers, but that is a matter for detailed planning. I hope that he will accept that point.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Schedule 1 agreed to.

Clause 3 - General duties of OFCOM

Andrew Lansley (Conservative, South Cambridgeshire)

I beg to move amendment No. 1, in

clause 3, page 3, line 3, leave out subsection (1) and insert—

'(1) It shall be the principal duty of OFCOM to further the interests of consumers in relevant markets, where appropriate by promoting competition.

(1A) It shall further be the duty of OFCOM, in carrying out their functions—

(a) to secure the optimal use for wireless telegraphy of the electro-magnetic spectrum;

(b) to secure the availability throughout the United Kingdom of a range of television and radio services which (taken as a whole) are of high quality, sufficient to appeal to a variety of tastes and interests, and of a plurality of views sufficient to meet the diverse interests of citizens; and

(c) to secure that standards falling with subsection (2) are applied in the case of all television and radio services.'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to take the following:

Amendment No. 150, in

clause 3, page 3, line 3, at beginning insert—

'( ) It shall be the principal duty of OFCOM to promote and further the interests of consumers and citizens.'.

Amendment No. 195, in

clause 3, page 3, line 3, leave out subsection (1) and insert—

'(1) It shall be the principal duty of OFCOM in carrying out their functions—

(a) to further the long-term interests of all citizens—

(i) by ensuring the availability of a diversity and plurality of high quality content in television and radio;

(ii) to secure that standards falling within subsection (2) are applied in the case of all television and radio services;

(iii) to secure the optimal use of wireless telegraphy of the electromagnetic spectrum; and

(b) to further the long-term interests of consumers by promoting the efficiency of electronic communications networks and services, and broadcasting

and to do so wherever possible by promoting effective competition in national, regional and local communications markets throughout the United Kingdom.'.

Amendment No. 151, in

clause 3, page 3, line 3, after 'the', insert 'further'.

Amendment No. 130, in

clause 3, page 3, leave out lines 4 to 13 and insert 'to further the interests of consumers and citizens—

(a) wherever possible by promoting effective competition;

(b) by securing the optimal use for wireless telegraphy of the electromagnetic spectrum;

(c) by securing the universal availability of a wide range of diverse and high quality communications services throughout the United Kingdom; and

(d) by securing standards falling within subsection (2) which are applied in the case of all television and radio services.'.

Amendment No. 29, in

clause 3, page 3, line 4, leave out 'where appropriate by promoting competition'.

Amendment No. 124, in

clause 3, page 3, line 13, at end insert—

'(e) to secure, so far as practicable and in the manner that best takes account of the need to protect personal data, in order to protect copyrighted content, and to empower parents to protect children from harmful content, that open standards for technological security systems are established and implemented.'.

Amendment No. 127, in

clause 3, page 3, line 13, at end insert—

'(e) to protect and promote the interest of citizens.'.

Amendment No. 27, in

clause 3, page 3, line 13, at end insert 'and in carrying out their functions, OFCOM shall have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed'.

Amendment No. 196, in

clause 3, page 3, line 20, at end insert—

'(2A) In performing their duties under subsection (1), OFCOM must observe the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.'.

Amendment No. 48, in

clause 3, page 3, leave out lines 21 to 23 and insert—

'(3) It shall also be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1), to comply with the principles of good regulation, namely that regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.

(3A) Subject to subsection (3), it shall be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1), to have regard in particular to such of the following as appear to them to be relevant in the circumstances—'.

Amendment No. 153, in

clause 3, page 3, leave out lines 21 to 23 and insert—

'(3) It shall also be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1), to comply, except where issues of national security preclude compliance, with the principles of good regulation, namely that regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.

(3A) Subject to subsection (3), it shall be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1) to have regard in particular to such of the following as appear to them to be relevant in the circumstances—.'.

Amendment No. 46, in

clause 3, page 3, line 24 after 'promoting', insert 'long-term and sustainable'.

Amendment No. 152, in

clause 3, page 3, line 24, at end insert—

'(aa) the rights of the citizen to access services which inform, educate and entertain;'.

Amendment No. 28, in

clause 3, page 3, line 25, leave out paragraph (b).

Amendment No. 47, in

clause 3, page 3, line 32, after 'encouraging', insert 'long-term and sustainable'.

Amendment No. 125, in

clause 3, page 4, line 3, at end insert—

'(n) the desirability of open standards for technological security systems to prevent unauthorised use of personal data and copyrighted content.'.

Amendment No. 131, in

clause 3, page 4, line 6, leave out 'and value for money' and insert 'value for money, universal access, fairness, information and redress'.

Amendment No. 34, in

clause 10, page 10, line 30, at end insert 'and'.

Amendment No. 35, in

clause 10, page 10, line 34, leave out from 'put' to end of line 37.

I reiterate that I am quite prepared to have a comprehensive debate at the start of discussion on the clause, but if so there will not be a stand part debate.

Andrew Lansley (Conservative, South Cambridgeshire)

As I said a moment ago, part of my purpose will be to suggest to the Committee some issues that were not properly resolved by the Government's response to the joint scrutiny committee. Among those, perhaps the most important is the question of the structure of general duties. The Minister knows how important that is. During the proceedings of the Committee that considered the then Utilities Bill, he said that general duties lie at the heart of the regulatory process. They set the framework in which regulators exercise their functions under the Acts. That is clearly true in

relation to the Bill as much as it was to that legislation. My hon. Friend the Member for Maldon and East Chelmsford rightly referred to the questions that have arisen over the years about how regulators have interpreted their general duties, or felt obliged to do so in order to secure their objectives most effectively.

A principal difficulty that Ofcom faces is the breadth and complexity of the duties placed on the regulator. Not only is a range of duties set out in clause 3(1) and (2), but a range of factors to which regard has to be shown is set out in clause 3(3), some of which take the character of additions to the duties rather than factors as such. We will go on to debate the extent to which they should be characterised as duties rather than matters to which Ofcom must have regard. In practice, they add to the complexity of the range of objectives that Ofcom needs to meet.

The duties do not stop there. I will not go on about it at length, but clause 4 gives a range of duties related to Community legislation, some of which stand in a prior position, so Ofcom has a requirement to meet those above and beyond any other duties. When we get into subsequent parts of the Bill, there will be duties in relation to the wireless telegraphy spectrum, which amplify on the optimal use issue, and so on. The complexity of Ofcom's duties is a characteristic of the regulatory issue, and, if anything, goes substantially beyond most other regulatory Acts or the establishment of regulators seen in recent years.

It has been clear that one of the ways in which one can deal with the issue is to ensure not only that those duties are as clear as one can make them, but that, wherever possible, Parliament states its intentions as to the manner in which those duties are to be considered, one against another.

Michael Fabricant (Conservative, Lichfield)

I follow where my hon. Friend is going, but I want to question him. He says that the primary purpose of the amendment is to promote competition, from which much will flow. Does he believe, for example, that the Radio Authority is wrong—I do not think that it is—to say that in a given region it seeks diversity, rather than competition? The point applies throughout the United Kingdom, though in the west midlands, for example, where there is a pop radio licence, it might look for, say, a black rock type radio licence—something that is different, but not competing, in order to give diversity. Would not that be in conflict with the new subsection (1) proposed in the amendment?

Andrew Lansley (Conservative, South Cambridgeshire)

I appreciate my hon. Friend's intervention, because it gives me an opportunity to describe the structure of the amendment, in relation to a reasonable example of the way in which it works. By way of clarification, I should say that my objective is not for Ofcom's principal duty to be the promotion of competition, even though that is the first community requirement in relation to telecommunications. The principle duty of Ofcom is to further the interests of consumers. It is simply an observable fact that the best way of promoting the interests of consumers is to allow competition to deliver, in circumstances in which it is appropriate to do so. The best interests of consumers are normally met by the presence of effective competition. To be clear, I do not simply

structure the amendment around a pro-competitive approach.

Chris Bryant (Labour, Rhondda)

This is a matter of quite substantial concern to people who would like to see broadband services delivered across the whole of the United Kingdom, but are frequently told by BT that competition law prevents them from bringing broadband to individual exchanges, until such time that they can prove they are not subsidising them. That means that in some exchanges, 600 people must be registered before broadband can be introduced. Does the hon. Gentleman think either that what BT says might not be true, and that competition law does not force it to do that, or that there are situations in which competition law and the needs of competition might conflict with the needs of consumers?

Andrew Lansley (Conservative, South Cambridgeshire)

I am stacking up a series of examples that I will try to work through. If the Committee will forgive me, I shall try to work with two examples, to illustrate the point of the amendment. In relation to the examples that my hon. Friend the Member for Lichfield and the hon. Member for Rhondda mentioned, it may not necessarily be the case that competition will deliver the desired outcome. Notwithstanding that, however, does one regard competition and furthering the interests of consumers through competition where appropriate in the same light as a duty of Ofcom that may subsequently be specified, or is there a principal duty for Ofcom to promote competition?

On the point made by my hon. Friend the Member for Lichfield, it is true that the amendment takes forward the structure of legislation, which says that one of the objectives—or duties—is to secure a variety of television and radio services is to secure a variety of television and radio services to satisfy a wide range of tastes and interests. I have added

''a plurality of views sufficient to meet the diverse interests of citizens''

because those are not reflected in the present structure of general duties, which implies that there are some specific circumstances in which competition will not necessarily deliver them. If it were true that competition can in all circumstances deliver radio and television services that meet the variety of tastes, or diversity of views, of consumers and citizens, we would not need an additional duty. If competition could deliver that, competitive markets would suffice.

My hon. Friend has already referred to the point that each regulator has to think hard about the manner in which it pursues and achieves objectives—that is true of the Radio Authority today. During the discussion on the draft Bill, one of the continuing themes that the Joint Committee had to address was the extent to which the regulator would deal with an issue by the application of licence conditions, ex ante regulations and, in the case of the Radio Authority, format controls. The regulator might also want to move towards competition. If that were so, we will want to know what competition gives us. Is

competition able to meet the interests of consumers and citizens that we want it to?

The balance between ex ante regulation and competition regulation is at the heart of the Bill. For both telecommunication and broadcasting, the objective of the legislation is to move the new converged regulator towards the pursuit of competition to a far greater extent than was the case for the pre-commencement regulators—including Oftel, until it made its statement four or five months ago. If we want the regulator to take an essentially pro-competition stance to deal with issues relating to emerging markets, and to future-proof the legislation against technology and market changes, let us make that clear in the structure of general duties and leave the set of specifics to flow from that.

I shall respond to the question raised by the hon. Member for Rhondda, because broadband is interesting in this context. We might not discuss the specifics of that later so it is important to consider them now. As the hon. Gentleman said, the use of ex ante regulations versus the use of competition powers is at the heart of one of the issues relating to broadband. As the Joint Committee observed, for two years Oftel pursued the route of ex ante regulation: 37 directions and determinations were given by Oftel to BT to secure local loop unbundling. I might over-characterise the situation, but essentially it did not happen because BT said that things would not work out like that. An aggressive view might suggest that BT was saying that it had failed to control the market with a mechanism by which other competitors were not able to offer broadband services, so it now wanted to move to the other option: cutting prices.

There are two ways in which one can exercise market dominance. One is foreclosure by technology, which is essentially what happened in the first place. The other is foreclosure by market power. Subsidisation of the wholesale offer of broadband by BT will lead to a much greater market penetration of broadband, but not necessarily to competition. It is not satisfactory for the regulator to be constantly nipping at BT's ankles, while BT is deciding for itself at which point it will stop providing services to people by putting in a second telephone line and offering them broadband access. That will not deliver a competitive market. Ofcom will have to pursue the issue through the competitive route—happily, at least today, I do not have to examine precisely how it will do so. That means that the reduction in wholesale costs that BT has offered to broadband is absolutely right, but the extent to which that places BT is in a position of dominance in relation to the retail supply of broadband then becomes a wholly separate issue. If we can reach the point where broadband has not only a low wholesale, but a low retail cost, there is no reason why it should not achieve a much larger penetration.

Kim Howells (Labour, Pontypridd)

The hon. Gentleman gives a brilliant exposition of the dilemma that has faced Oftel and BT. He seems to be describing something that has been carved out of a very peculiar history, and I rise, really, in enthusiasm for his remarks. Through the Bill, we must change history to ensure that those mistakes do

not recur and that we construct a regulatory framework that ensures both competition and the opportunity for new entrants and real entrepreneurial spirits to make an impact on the scene.

Andrew Lansley (Conservative, South Cambridgeshire)

Rewriting history is not given to us to do, but we can write a new kind of pro-competitive opportunity for the future. I am grateful for the Minister's comments, but I shall not follow him too far in criticising the past. I speak as someone who was involved in the Telecommunications Act 1984 and BT privatisation as an official at the Department of Trade and Industry. If we had only realised what competitive opportunities existed, we would perhaps have gone much further, but it seemed bold at the time. The idea of RPI minus one seemed bold to BT. We put RPI minus three into the original formulation, and I think that we got as far as RPI minus 12. We put Mercury alongside BT as a competitor, but perhaps we should have been much bolder at an early stage and thought in terms of a range of competitors. As my hon. Friend the Member for Maldon and East Chelmsford said, there was probably a point, perhaps in the mid–1990s, when the market, technology and opportunities to introduce competition existed, but they were not taken. Instead of allowing Mercury to lose its competitive position against BT, we should have created opportunities for new entrants to the market. Now, that will happen anyway, because of the presence of mobile phones. Plenty of people have given up on BT's fixed line system and use only mobiles. We shall arrive at some pretty competitive circumstances in any case, but we want a regulator who will promote that rather than otherwise. The hon. Member for Rhondda asked how it would do that. The answer is that I do not know. I do not know the extent to which broadband will be available to people merely as a consequence of the application of competition. I do know, however, that we will get quite a long way down that path, and that if there is a residual issue—as there always was with fixed telephony—there may one day be a need for universal service obligations for broadband.

Chris Bryant (Labour, Rhondda)

The issue concerns people in many constituencies. I am worried that moving away from the universal service obligation—the oldest form of ex ante rule—to rely solely on competition law may disadvantage the most disadvantaged areas of the country as regards broadband. That is a difficult Gordian knot to cut through.

Andrew Lansley (Conservative, South Cambridgeshire)

The hon. Gentleman is right—it is difficult. I do not dispute that by its nature Ofcom will have to consider the extent to which competition is able to deliver the needs of consumers, but it will not be able wholly to do so. That is implied by the structure of Community legislation, the first requirement of which, as reflected in clause 4, is the promotion of competition. It is stated rather more baldly there than it is in my amendment. The structure of Community legislation entirely accepts that where competition cannot deliver, conditions will be applied. That includes the structure of conditions under the universal service directive. The promotion of competition and universal service obligations are not

mutually contradictory. It is a question of where one strikes the balance between the two.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I have a brief observation. My hon. Friend the Member for South Cambridgeshire began his remarks by saying by raising one of the most important issues that we face. He was not sure if he would have another opportunity to do so. If it appeals to you, Mr. Gale, when you look at the amendments, the reason that we have drafted an amendment concerning the universal service obligation to consider broadband is not because we think that that is the answer—I am not persuaded that it is—but it is essential that we should have a proper debate about broadband.

My hon. Friend made the observation that there is growing competition from the mobiles to fixed line telephony. That is correct for voice messaging. However, on the crucial issue of data I hope that we will get to the position when mobile technology can offer fast downloading of data. That depends on 3G, which I hope will happen, but does not seem to be an immediate prospect. For the moment, fixed line systems will be the main providers.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to my hon. Friend. I think that I have talked enough about broadband, which I used as an example to illustrate the purpose of the amendment. If there are substantial issues relating to broadband, there may be later and better opportunities to raise them.

I will explain the structure of amendment No. 1. I propose to speak to that amendment only because none of the other amendments are in my name—although I support some of them. Amendment No. 1 is not set out precisely in the terms of the recommendation of the Joint Committee. Amendment No. 195 is in those terms, but although I regard with affection the consensus reached by the Joint Committee, that does not mean that it wholly reflected my view in every circumstance. It always seemed to me—if the hon. Member for Milton Keynes, North-East (Brian White) will forgive me—that the defect of amendment No. 195 is that it represents a range of duties as the principle duty of Ofcom. To that extent, it does not present the hierarchy of duties to a sufficiently desirable extent. I am essentially looking to understand, and reflect in the general duties clause, the primacy of competition as a means of delivering benefits, while recognising that there are a range of specifics that act as constraints, which we must deliver if competition is not competent to do so.

Michael Fabricant (Conservative, Lichfield)

My hon. Friend said earlier that he was seeking to ''future-proof'' the Bill through the amendment, but does he accept that he is being a little too forward looking? In order to allow competition to achieve the consumer benefits that he wants, the means by which the services are delivered should be various and include broadband, radio or whatever. Does he think that he is being a bit too futuristic when there are only limited channels—I use the word channel in the broadest meaning of the word—in seeking to allow competition, whether it be in broadband, radio, television or other market segments in any given area?

Roger Gale (Conservative, North Thanet)

Order. We have now had two rather lengthy interventions. Can I say to the Committee that interventions are exactly that, not speeches? We must try and keep them brief.

Andrew Lansley (Conservative, South Cambridgeshire)

Thank you, Mr. Gale.

The short answer to my hon. Friend is no. I do not think that I am being too futuristic. In all of the markets with which we are dealing, competition is present to a greater or lesser extent. In most of them, the possibilities of arriving at a much more efficient competition solution are already there. As we shall discuss later, it would be better if we were to pursue a competition solution, even in relation to many of the media markets, rather than the application of prior controls and rules on media ownership.

The purpose of setting out the principal duty in new subsection (1) is to set out the hierarchy of duties and to make the first such duty the furtherance of interests of consumers through competition. That would not remove any of the other duties.

Roger Gale (Conservative, North Thanet)

Order. The Committee will sit again at 4.30 in Committee Room 14, with Mr. Atkinson in the Chair.

It being One o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

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

Standing Committee E

Communications Bill

Peter Atkinson (Conservative, Hexham)

I share my co-Chairman's ruling about jackets. Members of the Committee are welcome to take them off without asking the Chair.

Andrew Lansley (Conservative, South Cambridgeshire)

On a point of order, Mr. Atkinson. May I interrupt myself, as it were? This morning we were discussing the clauses on the use of the radio spectrum as well as the current inquiry and pre-legislative scrutiny of the Select Committee on Trade and Industry of those clauses. May I secure your agreement to tell this Committee that the Select Committee intends to report its findings next week? Any issues arising from it can be discussed on 9 January and amendments that may be considered appropriate can be tabled and debated at that sitting.

Peter Atkinson (Conservative, Hexham)

Thank you. That was not a point of order for the Chair, but I am sure that the Committee is grateful for such information.Clause 3 General duties of Ofcom

Clause 3 - General duties of Ofcom

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to take the following:

Amendment No. 150, in

clause 3, page 3, line 3, at beginning insert—

'( ) It shall be the principal duty of OFCOM to promote and further the interests of consumers and citizens.'.

Amendment No. 195, in

clause 3, page 3, line 3, leave out subsection (1) and insert—

'(1) It shall be the principal duty of OFCOM in carrying out their functions—

(a) to further the long-term interests of all citizens—

(i) by ensuring the availability of a diversity and plurality of high quality content in television and radio;

(ii) to secure that standards falling within subsection (2) are applied in the case of all television and radio services;

(iii) to secure the optimal use of wireless telegraphy of the electromagnetic spectrum; and {**12**}

(b) to further the long-term interests of consumers by promoting the efficiency of electronic communications networks and services, and broadcasting and to do so wherever possible by promoting effective competition in national, regional and local communications markets throughout the United Kingdom.'.

Amendment No. 151, in

clause 3, page 3, line 3, after 'the', insert 'further'.

Amendment No. 130, in

clause 3, page 3, leave out lines 4 to 13 and insert 'to further the interests of consumers and citizens—

(a) wherever possible by promoting effective competition;

(b) by securing the optimal use for wireless telegraphy of the electromagnetic spectrum;

(c) by securing the universal availability of a wide range of diverse and high quality communications services throughout the United Kingdom; and

(d) by securing standards falling within subsection (2) which are applied in the case of all television and radio services.'.

Amendment No. 29, in

clause 3, page 3, line 4, leave out 'where appropriate by promoting competition'.

Amendment No. 124, in

clause 3, page 3, line 13, at end insert—

'(e) to secure, so far as practicable and in the manner that best takes account of the need to protect personal data, in order to protect copyrighted content, and to empower parents to protect children from harmful content, that open standards for technological security systems are established and implemented.'.

Amendment No. 127, in

clause 3, page 3, line 13, at end insert—

'(e) to protect and promote the interest of citizens.'.

Amendment No. 27, in

clause 3, page 3, line 13, at end insert 'and in carrying out their functions, OFCOM shall have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed'.

Amendment No. 196, in

clause 3, page 3, line 20, at end insert—

'(2A) In performing their duties under subsection (1), OFCOM must observe the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.'.

Amendment No. 48, in

clause 3, page 3, leave out lines 21 to 23 and insert—

'(3) It shall also be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1), to comply with the principles of good regulation, namely that regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.

(3A) Subject to subsection (3), it shall be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1), to have regard in particular to such of the following as appear to them to be relevant in the circumstances—'.

Amendment No. 153, in

clause 3, page 3, leave out lines 21 to 23 and insert—

'(3) It shall also be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1), to comply, except where issues of national security preclude compliance, with the principles of good regulation, namely that regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.

(3A) Subject to subsection (3), it shall be the duty of OFCOM in carrying out their functions, and in the performance of their duties under subsection (1) to have regard in particular to such of the following as appear to them to be relevant in the circumstances—.'.

Amendment No. 46, in

clause 3, page 3, line 24 after 'promoting', insert 'long-term and sustainable'.

Amendment No. 152, in

clause 3, page 3, line 24, at end insert—

'(aa) the rights of the citizen to access services which inform, educate and entertain;'.

Amendment No. 28, in

clause 3, page 3, line 25, leave out paragraph (b).

Amendment No. 47, in

clause 3, page 3, line 32, after 'encouraging', insert 'long-term and sustainable'.

Amendment No. 125, in

clause 3, page 4, line 3, at end insert—

'(n) the desirability of open standards for technological security systems to prevent unauthorised use of personal data and copyrighted content.'.

Amendment No. 131, in

clause 3, page 4, line 6, leave out 'and value for money' and insert 'value for money, universal access, fairness, information and redress'.

Amendment No. 34, in

clause 10, page 10, line 30, at end insert 'and'.

Amendment No. 35, in

clause 10, page 10, line 34, leave out from 'put' to end of line 37.

Andrew Lansley (Conservative, South Cambridgeshire)

Before I interrupted myself, I was saying at our earlier sitting that the Government's response to the Joint Committee was that they did not wish to attach greater weight to Ofcom's duty to further the interests of consumers through competition. The Government said:

''We are sure that the Committee will recognise how important it is that the duties properly reflect the breadth of all OFCOM's responsibilities, both economic and cultural''.

Indeed, there is no dissent on my part or anyone's part that the duties need to reflect the breadth of responsibility. The Government continue:

''and follow the proposition set out in the White Paper that each duty is of equal weight.''

My proposition is not that the duties have different weight, but that their structure should reflect the structure under which Ofcom should discharge its responsibilities. For example, its duty to protect the public against unwarranted infringements of privacy is no less important than its duty to further the interests of consumers, although some may argue that it is. My argument is that the duty to secure against unwarranted infringements of privacy does not represent the primary duty of Ofcom, but is a specific qualification to be set against the manner in which the regulator should approach the tasks. Listing the duties together would not necessarily mean that Ofcom would assume that it should attach exactly the same weight to the task of protecting the public against unwarranted infringements of privacy as it would to the task of promoting competition. That

would be ridiculous because promoting competition in markets is a predominant activity for Ofcom. In practice, even though the legislation treats those duties as being of equal value, Ofcom will recognise that its principal objective is to promote competition in order to further the interests of consumers.

Oftel has gone down that path. It has considered its duties under the Telecommunications Act 1984 and has concluded that, in current circumstances, it should treat the promotion of competition as its primary duty. Similarly, in the gas and electricity markets, Ofgem treats competition as its primary duty—but that does not mean that it has no other responsibilities. For example, Ofgem has to take its statutory environmental responsibilities into account. I want the Bill to reflect the way in which Ofcom will have to undertake its tasks.

Simon Thomas (Plaid Cymru, Ceredigion)

The hon. Gentleman is right about the overriding duty of the other regulators to promote competition. Does he accept that the other regulators, such as Ofgem, have strong, independent consumer watchdogs, whereas Ofcom will not? Ofcom will appoint its own consumer watchdog in the consumer panel. Surely that is a material difference that means that, in the Bill, we cannot put commercial or competition duties above all else. The Bill will have to recognise the needs of citizens and consumers.

Andrew Lansley (Conservative, South Cambridgeshire)

I do not concur with the hon. Gentleman. If, in order to ensure competition, it were necessary to have a powerful consumer watchdog, we should have such a watchdog. Energywatch and Postwatch are doing their jobs well—especially Postwatch, which deals with what is, in essence, a monopoly. However, if one seeks to promote competition, one should accept that the interests of consumers are integral to the nature of the competitive market. It does not necessarily follow that a consumer watchdog is needed to ensure effective competition. The retail industry does not require a lot of consumer watchdog activity in order to be effective. The National Consumer Council and the Consumers Association operate at the margins, but they are not integral to the market.

The consumer panel will not necessarily be toothless. We will discuss that later. We may be able to make the consumer panel a little more independent of Ofcom, which would help. However, such considerations should not change the general duties that go in the Bill. That would be the tail wagging the dog.

I hope that I have explained amendment No. 1. However, I want to explain why it takes a particular form, which differs from that of similar amendments. Amendment No. 195 was tabled by the hon. Member for Milton Keynes, North-East (Brian White). I agree that it is important that Ofcom's principal duty should be set out as having different characteristics from all the other duties, and that Ofcom should have regard to that principal duty in all its work. However, amendment No. 195 contains two phrases that make it different from amendment No. 1. It refers to ''the long-term interests'' of consumers. The Joint Committee sought the inclusion of a reference to the

desirability of encouraging investment and innovation, which the Government subsequently inserted into clause 3(3). However, the ''long-term interests'' of consumers are distinct from the interests of consumers generally. It seems inherently dangerous to use the qualification ''long-term'' with ''citizens'', as it encourages the regulator to think that it has a greater knowledge of the interests of consumers than that which would be disclosed through the operations of markets. I did not use the words ''long-term'', although the Joint Committee did.

Michael Fabricant (Conservative, Lichfield)

Is there not a further danger that the use of the phrase ''long-term'' will enable Ofcom to put off more urgent short-term decisions?

Andrew Lansley (Conservative, South Cambridgeshire)

That risk is run; my hon. Friend is right. One could put off decisions on the basis that the long-term interests of consumers might be better served by not facing up to difficulties straight away. However, that is a difficult matter. We could spend a great deal of time examining particular examples in which that might be the case. The best example is that of energy markets and the new electricity trading arrangements, which are effective in delivering short-term benefits to consumers. The question of long-term investment arises, and it is being addressed in the review of NETA. We do not need to go far down that path.

Past experience of regulation has disclosed that the encouraging of investment and innovation is what is most likely to be in the long-term interests of consumers. That would not be reflected if no regard was paid to long-term interests. If that encouragement is there, it seems to me that the need for ''long-term'' is met.

Michael Fabricant (Conservative, Lichfield)

My hon. Friend mentioned Ofgem. There is a contradiction about his amendment that makes me uncomfortable. With Ofgem, there could be an infinite number of electricity suppliers, although they would use a common network. With current technology, there cannot be an infinite number of broadcasters in a given area because of the restriction on spectrum. That might change in future, but as I have said, it applies now. For that reason, does my hon. Friend not think that there is an imbalance in the fact that Ofcom cannot be like Ofgem at the moment?

Andrew Lansley (Conservative, South Cambridgeshire)

As my hon. Friend demonstrates, it would be dangerous for us to regard the two regulators as being parallel to one another. They deal with different markets, technologies and regulatory structures. Clearly, Ofcom will start off with even less competition than Ofgem had at the outset. However, as has been suggested, Ofgem has the ability to move towards the abandonment of price controls and the imposition of conditions. That, in principle, is the direction in which Ofcom should go. I will not disguise my belief that that is where it should direct its efforts. That is true in relation to broadcasters as much as to anyone else.

If the interests of consumers in relation to broadcasting cannot be protected by competition, other protection is available under the public service

remits for channels 3, 4 and 5 in particular. That remit provides protection without necessarily interfering too much with competition or ownership. On digital provision, I think that we are not far from having the multiplicity of suppliers to which my hon. Friend referred in relation to electricity. That was why I did not include a reference to the ''long-term'' interests of consumers.

We will start dancing on the head of a pin if we are not careful, but there is also the matter of the use of the word ''appropriate'' rather than ''possible''. Amendment No. 1 uses the phrase:

''where appropriate by promoting competition'',

I do not think that the purpose of Ofcom is to pursue competition wherever that is possible, but rather when it makes sense to do so. I am always distrustful of the word ''appropriate'', because it is an official way of getting out of defining what is really meant. Given that we are dealing with relevant market and the phrase ''where appropriate'', the matter of when to pursue competition is a judgment that Ofcom will have to make.

However, if there is a duty to promote competition ''wherever possible'', there is a risk that the judge standing at the shoulder of Ofcom will entertain more applications to review Ofcom's decisions than ought to take off. There needs to be that degree of discretion. If we cannot trust Ofcom to be a pro-competition regulator, the Bill will not work. We must give Ofcom the tools to do the job. Its primary duty is to promote competition. If that is not clearly stated, the opportunities for judicial review to constrain the pressure for promoting competition by reference to other duties would make it difficult for Ofcom to deliver. However, if we were to say that competition should be promoted ''wherever possible'', that might constrain Ofcom sometimes to go further than would be desirable.

I turn to proposed subsection (1A)(b). I have borrowed much of the Government's phraseology. I agree with them that Ofcom's duties should be

''to secure the availability throughout the United Kingdom of a range of television and radio services which (taken as a whole) are of high quality, sufficient to appeal to a variety of tastes and interests''.

However, I have added,

''and of a plurality of views sufficient to meet the diverse interests of citizens''.

It is interesting to read the Government's documentation about the purposes of the legislation because their references to broadcasting often highlight the desirability of securing a plurality of broadcasting services. If that is to be one of the principal objectives of the legislation, why do we include ''plurality'' here? In this context, does it mean simply a variety of services to meet people's tastes and interests, or does it mean something more than that? The following point came through forcefully during the course of the Joint Committee's discussions: the interests of the public as consumers as they are disclosed by their activity in markets—by what they are willing to buy and what is commercially sustainable—are substantively different from the

interests of the public as citizens. To some extent, the difference between those interests highlights the whole point of public service broadcasting—serving the interests of the public as citizens is what that is all about—and that point must be reflected in the definition of the general duties of Ofcom.

As we will discover when we address later parts of the legislation, the desirability of there being a plurality of views in the media in general currently applies to newspaper mergers, so it is not confined to public service broadcasters. If Committee members were to agree with me in subsequent discussions, it would also relate to broadcasting mergers—and not only to public service broadcasting. If plurality is a basic principle—if the interests of the citizen should be served by airing a broader range of views than they would simply buy on their own account—then that should be stated as one of Ofcom's general duties with regard to broadcasting.

That is what we are discussing. This subsection is, in effect, the starting point for the definition of the general duties of Ofcom in relation to broadcasting—except in relation to promoting competition. If we all agree—as I suspect we will—during the course of our debates on this legislation that, in the foreseeable future, we should not get to the point where the whole of broadcasting is essentially determined only by the operation of competition because there is an additional aspect of broadcasting—public service broadcasting—that is unlikely to change given the nature of our democratic society, then that must be reflected in the definition of Ofcom's general duties. That is why I have added those words to subsection (b), and taken it to that further point.

Michael Fabricant (Conservative, Lichfield)

Has not my hon. Friend highlighted a conundrum? When we were discussing competition this morning, I asked whether he agreed with the Radio Authority that in a given region diversity should be fostered by awarding licences to different types of radio station—rather than to all the same type—so that they may compete. I apologise for keeping on repeating this but there is a limited spectrum, so there is no possibility of having an infinite number of radio stations. How can we have competition and

''meet the diverse interests of citizens''

unless we decide that each radio or television station becomes a jack-of-all-trades and a master of none?

Andrew Lansley (Conservative, South Cambridgeshire)

We are running the risk of anticipating later debates on this subject.

My hon. Friend is right that we cannot be sure that competition under circumstances of constrained spectrum availability and a limited number of licences will deliver precisely what is intended. However, if competition cannot deliver, there should definitely be an additional duty. The structure of the general duties should be designed to see what competition can deliver, in the first instance, and to set other duties that must be fulfilled alongside them, which would justify regulatory intervention by Ofcom,

rather than elevating duties to enable intervention to try to dictate the shape of markets.

Clearly, in this context, an important additional duty must be balanced against the outcome of competition. The outcome of competition might be to secure

''a range of television and radio services . . . of high quality''

that appeals to a range of tastes and interests, and it might not be necessary for Ofcom to intervene. However, although competition might deliver that, it might not deliver a

''plurality of views sufficient to meet the diverse interests of citizens''.

The general duties should go a step further in order to ensure not only that we meet consumer's interests and the desired diversity of broadcasting output, but that there is recognition, from the general duties onwards, that the citizens of a democratic society require a plurality of views. If that were in a general duty, it would inform the subsequent responsibilities of Ofcom.

I apologise for the time that I have taken, but as the Minister told the House two and a half years ago, if the general duties are right, one can rely on the rest of the Bill flowing from that in broadly the right direction.

Brian White (Labour, North East Milton Keynes)

Before I start, may I declare an interest? I chair an organisation called the European Information Society Group—EURIM—which has had an input on the Bill since the early days when the Bill team and representatives of the industry were brought together. The organisation has held many discussions, although I have not been involved personally in many. The organisation exists to bring parliamentarians and representatives of the industry together.

Like the hon. Member for South Cambridgeshire (Mr. Lansley), I was a member of the Joint Committee. The way in which the Bill team supported the Committee and brought the Bill to this point deserves praise. The team also deserves a lot of credit for listening to the industry and for accommodating many of its concerns and the concerns of several groups. The Bill's progress has been characterised by mature debate rather than the usual tribalism associated with the House of Commons. I hope that this Committee continues in such a way—there is always hope.

The hon. Member for South Cambridgeshire highlighted several issues that I wanted to mention, but I shall not repeat them. He said that the Joint Committee proposed a set of words for the general duties and emphasised the need for a principal duty. The Government's response included a criticism that the Joint Committee had left out a bit that they thought should be included. Amendment No. 195 proposes the Joint Committee's wording but allows for the Government's criticism of that wording. It differs from the amendment tabled by the hon. Gentleman, although they probably stem from similar discussions and views on the way in which Ofcom should operate.

I looked back at the White Paper, which proposed that Ofcom should have three central regulatory objectives:

''protecting the interests of consumers in terms of choice, price, quality of service and value for money, in particular through promoting open and competitive markets; . . . maintaining high quality of content, a wide range of programming, and plurality of public expression; . . . protecting the interests of citizens by maintaining accepted community standards in content, balancing freedom of speech''

and so on. We need to highlight those three key roles for Ofcom; simply to include them in a list of duties would cause problems. The Minister's words on the need for a hierarchy have been quoted, and it is important that we stress that this is not just about consumers, but about citizens. Amendment No. 195 seeks to do that.

The amendment also seeks to emphasise the importance of long-term decisions. If short-term decisions were made now, based on the current state of the market, Ofcom could make particular judgments. For example, because of problems with broadband, it could make decisions that may not be in the long-term economic interests of the industry. Ofcom will have to balance long-term and short-term decisions.

In America, the Federal Communications Commission has issued an instruction that, from 2005 or 2006, televisions will have to be digitally enabled. It has therefore made a decision on the need to assist the analogue switch-off. It is not for us to say whether that decision is right or wrong, but it is interesting that the FCC has made the decision based on a long-term assumption of the way that the market will go.

Michael Fabricant (Conservative, Lichfield)

The hon. Gentleman should not get carried away with the FCC instruction. It is not talking about integrated digital televisions, which I believe would be wrong, but is simply talking about having a glorified SCART socket—something that we have had for years in this country—with an external box.

Brian White (Labour, North East Milton Keynes)

I can assure the hon. Gentleman that I am not getting carried away by the FCC; I have a number of criticisms of it. However, what it has done is an example of the kind of issues that Ofcom will have to consider.

The Minister and I are both refugees from the Utilities Bill. The general duties of Ofgem were mentioned a number of times this morning; during the passage of the Utilities Bill, I tabled a number of amendments to ensure that combined heat and power, renewable energy and environmental considerations were taken into account by the regulator. Those amendments may or may not have helped to alleviate the current situation. However, the point is that, if we do not get the duties right, we will pay the price two or three years down the line. I take the point made by the hon. Member for South Cambridgeshire that if we get this clause right, discussions on the rest of the Bill will allow us to deal with the issues, but if we get the clause wrong, we will have problems no matter how good the rest of the Bill is. Setting priorities and considering

issues to do with consumer and citizen interest have to be given much more thought.

Another factor—on the role of regulators—that makes this Bill different from previous Bills is that we will shortly be operating under the regime of the Enterprise Act 2002. That Act confers a number of significant powers and it will change the landscape. We have to consider everything in this Bill in the context of that new landscape. Debates about competition and ex ante powers will also take place in the context of the Enterprise Act.

Amendment No. 196, my second amendment, follows on from discussions in the Joint Committee. It takes up the Better Regulation Task Force's key recommendations on good regulation and highlights them. Putting them in a list is important, but they ought to be highlighted. There ought to be instructions from Parliament to the regulator to say what we believe.

In the Joint Committee, we were lucky to have Bryan Carsberg as an adviser. Something that he said struck home to me. He said that what the Parliament puts into the words of the Act will determine the way in which the regulator will operate. It will determine the ethos and culture of the organisation. I urge the Minister to take this point away and reconsider: if we set out the key tests in a separate clause and say clearly, ''This is the way we expect you to operate,'' Parliament would be sending a strong message to the regulator. I have no doubt that the current chairman of Ofcom would want to adhere to such tests; in fact, he is one of the people who has advocated such ways of operating.

Those key tests should be highlighted. My amendment also proposes that Ofcom should be expected to observe them, not only have regard to them, which emphasises their importance.

I welcome the fact that the Government removed the light touch because it is also important that Ofcom takes tough action where appropriate. Had I thought about the issue raised by the hon. Member for South Cambridgeshire about the difference between possible and appropriate in my previous amendment, I would probably have chosen the ''appropriate'' route. I hold my hands up on that one. The Joint Committee used ''possible'', so I repeated it.

Had I got my act together, I would have tabled another amendment to ensure that a need to promote the growth of community media, whether television or radio, was included in the general list of duties. Perhaps we will return to that matter when we debate clause 10.

We have had 20 years' experience of regulators, some good, some bad. Much has been determined by the idiosyncrasies of individual regulators and how they interpret their principal duties. I do not suggest that either was wrong, but Oftel under Don Cruikshank was a very different beast from Oftel under Dave Edmonds. That demonstrates the importance of getting the clause right. It is time that Parliament set out what the priority should be.

We are giving widespread duties to Ofcom, which raises many issues. I hope that Ofcom takes on board methods such as accredited self-regulation, not only self-regulation. The Minister should reflect that we have not got the balance right between consumer and citizen. The issue concerns making Ofcom's duties principal ones. We must give Ofcom a clear steer on the need to follow the Better Regulation Task Force rules. My amendment would strengthen the clause. The culture, ethos and way in which Ofcom operates would also be strengthened.

Simon Thomas (Plaid Cymru, Ceredigion)

First, I put on record my thanks to the hon. Member for South Cambridgeshire for his speech, especially this morning, when he gave a good and clear explanation of the two conflicting interests in the Bill: encouraging economic competition and protecting the needs of consumers and citizens. I will certainly re-read the hon. Gentleman's comments, because I do not believe that the Minister, with all his persuasive skills, could have put the argument better himself.

The debate has been interesting. One reason why I supported the hon. Gentleman's amendment was so that we could have the debate at this stage. As he said when he concluded his remarks, it is getting the key general duties of Ofcom right now that will determine the whole tenor of how Ofcom works and how it relates to citizens and the wider public.

Although the hon. Gentleman's diagnosis was excellent, I began to deviate from his prescription towards the end of his remarks, when he faced an obvious dilemma about how to deal with the issue. Amendment No. 1 tries to deal with the problem by saying that in terms of broadcasting there should be

''a plurality of views sufficient to meet the diverse needs of citizens''.

It is revealing that the duality is mentioned in the amendment.

At one stage, we discussed the principal duty of Ofcom as being to

''further the interests of consumers''

When we discussed markets, we talked about consumers. However, the hon. Gentleman recognises that sometimes the market comes up against the wider interests of citizens. At that stage, he sees the need for public broadcasting to put in a safeguard to protect the needs of citizens. In his winding-up speech, he recognised the circumstances in which that would be necessary.

I divert from the hon. Gentleman because I do not regard wider citizenship requirements as beginning or ending with broadcasting, although they pervade the Bill. I support the amendment tabled by the hon. Member for North Devon because it would ensure that the interests of consumers and citizens were covered. Indeed, I had intended to table a similar amendment until I saw the one tabled by the hon. Gentleman had taken such action. It is important to recognise that there is a broader issue to the Bill than

that relating only to the relationship between citizens and broadcasters. Citizens will have an active relationship with the legislation. It is obvious that they will become involved; they will complain that there is not enough or too much bad language or sex and so on, and take matters up with the broadcasters.

Citizens will not become so involved, however, in the wider issues covered by the Bill. For example, will they be able to question the availability of mobile signals or ask where broadband is or is not available? What will be their role in respect of an analogue-digital switchover? I welcome what the Minister said this morning about Parliament's role. It is a way in which to express the role of citizens. There is a clear need to put citizenship more firmly at the top of the agenda.

There are two conflicting interests: the policy of economic deregulation—the main thrust of the Bill—and the protection of citizens' interests. They could be on an even keel if it were not for the fact that there are powerful media interests behind economic deregulation. We have only to think about future debates about Channel Five, cross-media ownership and who can own which newspaper to understand that such provisions will not create a level playing field, but one that is balanced against the individual citizen. He or she will need to know from the Bill and from us, as the protectorate in the House of the interests of citizens, what will be done to protect citizens' interest and their access to wider communications and the plurality of broadcasting and communication.

It would be easy to design a Bill that delivered commercially some level of communications, from digital broadcasting to mobile phones, broadband, radio and the whole spectrum. Even though this Bill is somewhat flawed, it recognises the wider interests and refers to a consumer panel and a content board, which was why the hon. Member for South Cambridgeshire tabled his amendment on broadcasting. Public service broadcasting is protected under the Bill by numerous schedules and clauses. Should we not make it a primary duty of Ofcom to have better recognition of the interests of citizenship?

Unfortunately, the Government have departed from their welcome position in the White Paper—that the interests of citizens and consumers would be protected. Lord McIntosh said that they had acknowledged that those two sets of interests were not the same. How can they be reconciled under the Bill? The key solution is to make it the principal duty of Ofcom to further the interests of citizens. As the hon. Member for Milton Keynes, North-East said, that would enable Ofcom to have some idea of the ethos that the Government wish it to employ. His amendment would put citizens at the top of the list of Ofcom's duties.

At present, the general duties of Ofcom do not include the protection of citizens' interests. They provide for a consumer panel, but that will be chosen by Ofcom. Further amendments will be tabled to improve on that position because such a panel will not be sufficient. As I said to the hon. Member for South Cambridgeshire, other regulators, whether Ofwat, Postwatch or Ofgem, have a strong regulatory framework, but they also need a strong citizens' watchdog. We know what Energywatch and

PostWatch do and we also have a watchdog for the water industry. Those bodies act as a counterbalance. That element is missing from Ofcom. In that sense, we are departing from the recent history of debating such issues in the House. As there is no way to improve the Bill as it stands and to set up an independent watchdog, two elements should certainly be included. They are set out in the amendments, which relate to citizens and their needs and to the choice and selection of the members of a consumer panel.

Ofcom will also represent citizens' interests through the content board. One would expect that board to have a real relationship with the wider interests of citizens and with various viewer organisations and lobbies. A range of issues relating to that will be forthcoming during the next few weeks and months, such as whether people with disabilities are properly represented in the media, the role of community media and how to achieve the right representation for the different nations of the United Kingdom. Those issues will be considered by the content board.

In Wales, we had an interesting experience regarding that comments that were made by Anne Robinson. That issue went to the BBC board of governors. I am not sure whether those comments would be dealt with under tier 1, tier 2 or tier 3. Because we have had that experience, we know that citizens, viewers and listeners will want to get involved with the work of a content board. People will want their complaints to be listened to and debated and they will want to know what has been done. Ofcom has appointed a content board and, worse than that, it will also decide on the duties and functions of that board. It is up to us, not Ofcom, to decide such things. The Bill should address citizens' needs.

Regarding some of the finer aspects of the regulation of public broadcasting and how we can take things forward, statements will be made about programme policy, regional programme making and guidance relating to those matters will be issued by Ofcom. Guidance will be issued that relates to broadband access and to performance failure considered against the public service remit. In Wales we are interested especially in the Welsh language and S4C's role. Such matters demand that a clearer statement about citizens' needs be included in the Bill. That would be a useful way in which the Government could ensure that the field does not slope too much towards the powerful interests of the large multimedia stakeholders. I accept that they exist to make a profit and to provide a service, but they must operate in the context of the regulation that we decide, as Members of Parliament who are elected by United Kingdom citizens.

We will debate such issues as community media, which was mentioned by the hon. Member for Milton Keynes, North-East, the awarding of licences, or whether a radio spectrum in an area reflects plurality and diversity, which the hon. Member for Lichfield (Michael Fabricant) has mentioned on several occasions. In Wales, such a spectrum would include the English and Welsh languages and in the midlands that might include ethnic minority stations. We have to accept that such decisions are not purely

commercial decisions, or ones that are made in the interests of consumers. Those should be taken in the interests of the wider citizenship. It is, therefore, incumbent on the Government to explain how that will be achieved, given the current wording of the Bill, and I hope that the Minister will take this opportunity to explain that. Large multimedia interests and some large corporations will be able to drive a coach and horses through the many loopholes that exist in the Bill. Such organisations will not, of course, say that they wish to do that.

In making the amendments, particularly No. 150 and, to some extent, No. 195, we will hold the Government to their White Paper promises. The amendments accord with the recommendations of the Joint Committee, which considered the issue and wanted a better balance. If the amendments are included, a better balance will be achieved between the communications industry and the interests of citizens. Ultimately, that will help to strengthen public service broadcasting. The hon. Member for South Cambridgeshire also made that point.

I hope that the Government will accept the amendments, or will introduce their own amendments. They should, at least, explain how the current wording would protect those wider citizenship needs that are in danger of being overridden in certain circumstances. I accept that that is not what the Government are out to achieve, but the wording of the Bill is too weak to allow Ofcom to defend citizens' interests as Members of Parliament would want it to—and as we will wish that it did when, in two or three years, our electors complain to us about some of the activities of Ofcom.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

On a point of order, Mr. Atkinson. Before my hon. Friend the Member for North Devon speaks to the amendments, I wish to seek your guidance on a practical issue relating to the use of portable computing devices in Committee. The Bill has attracted a lot of attention, and there is a great amount of information relating to the large group of amendments under discussion that I have stored on my portable computing device. It would be convenient to have it available in Committee. I seek your ruling on whether it would be permissible to have a silent portable computing device available in Committee in order to read briefing notes relevant to the Committee's business, Mr. Atkinson.

Peter Atkinson (Conservative, Hexham)

The answer is no.

Nick Harvey (Liberal Democrat, North Devon)

I should like to speak in support of amendment No. 1, and should also like to refer to amendments Nos. 150, 153 and 152.

Amendment No. 1, which was moved by the hon. Member for South Cambridgeshire, is based on a recommendation made by the Joint Committee. I regret that the Government did not accept the view put forward by that Committee. We heard from the hon. Member for Milton Keynes, North-East that Sir Bryan Carsberg acted as advisor to the Joint Committee. I found Sir Bryan's oral advice on the

issue that the amendment addresses to be quite telling. His concern was that if a number of main duties enjoyed equal status, when a regulator made a ruling, leaning on one of those main duties, cunning lawyers for the aggrieved party might appear at a judicial review pointing to one of the other main duties and saying that it should have taken the regulator in a completely different direction. If four main duties enjoy equal status, there surely might be cases in which one of the duties would take the regulator in one direction, and a second duty would take it in another.

Sir Bryan, with his experience at both Oftel and the Office of Fair Trading, thought that the regulator would be in a much stronger position if one duty, clearly mentioned in the Bill and described by Parliament, enjoyed dominance over the others. If the regulator founded its decision on that duty, it would be in a stronger position in the hypothetical judicial review to fend off the well-heeled lawyers who appeared on behalf of the aggrieved party to a decision. I encourage the Minister to give further thought to the matter.

Kim Howells (Labour, Pontypridd)

That is a fascinating prospect. Is the hon. Gentleman seriously saying that those monster well-heeled lawyers might not adopt a different tactic, using anything that might appear as a core or general purpose of any Bill?

Nick Harvey (Liberal Democrat, North Devon)

I am sure that there is no end to the cunning of well-heeled lawyers, and I am sure that they would come up with something or other. Sir Bryan's point of view was simply that it would be rather helpful to the regulator in defending its position if it had been given clarity from the outset.

Chris Bryant (Labour, Rhondda)

The hon. Gentleman says that he is supporting amendment No. 1 and that it was proposed by the Joint Committee. I do not think that that is true. Is it?

Nick Harvey (Liberal Democrat, North Devon)

I think that the amendment is extremely close to what the Joint Committee recommended. There may be some subtle difference, but broadly it is in the spirit of what that Committee recommended. We debated at length the fact that there should be one pre-eminent duty and, as I read it, that was the objective of amendment No. 1.

I shall refer to some of the other amendments in the group. The hon. Member for Ceredigion (Mr. Thomas) spoke about citizenship, which amendment No. 150, standing in both our names, is about. I thought that he made some extremely telling points, as, indeed, did the hon. Member for South Cambridgeshire. I am glad that the Government accepted the point made by the Joint Committee about the difference between a customer and a consumer, but I am sorry that they did not address some of the points made about a citizen, which is something subtly different for reasons that have been spelled out.

Citizenship depends on the availability of high quality information, knowledge and understanding of the world in which we live. It is vital to citizens and

communities that that information is available to them. That information comes mainly, although not exclusively, through public service broadcasting. The interests of different sectors have to be balanced in the way described by the hon. Member for Ceredigion. Citizenship has not really been given proper weight in the Bill. The general duties are absolutely vital in mapping out what the Bill is all about. They need to provide some protection of citizens' interests, for many of the reasons that have been outlined.

The new regulator will have enormous powers and great discretion. It will have to balance a variety of different factors when making decisions. Broadly speaking, I do not have any difficulty with that, but I think that the rights of citizens need to be brought into that balance, and they can only be brought in adequately if citizens are explicitly mentioned in clause 3.

Mark Hoban (Conservative, Fareham)

The hon. Gentleman refers to bringing in citizens to balance other interests, but his amendment No. 150 says that looking after citizens and consumers is the ''principle duty'' of Ofcom. Is not that principle duty to look after those interests rather at odds with keeping things in balance?

Nick Harvey (Liberal Democrat, North Devon)

Citizens are also consumers, but people have wider interests as citizens than as consumers.

Mark Hoban (Conservative, Fareham)

My argument was that although the hon. Gentleman referred to the importance of bringing balance into the duties of Ofcom, amendment No. 150 says that

''It shall be the principal duty of OFCOM to promote and further the interests of consumers and citizens.''

That is not about balance; that says that one duty has primacy over all others.

Nick Harvey (Liberal Democrat, North Devon)

I fail to understand the hon. Gentleman's point. Amendment No. 150 says exactly what I want it to say, and I am doing my best to explain it. I think that the Bill would be improved no end if it were adopted. Be that as it may, the hon. Members for South Cambridgeshire and for Ceredigion and I made the point that the rights of citizens to information in a free society is important and should be encoded in the Bill. I believe that amendment No. 150, or some of the equivalent ones elsewhere, would do that adequately.

Andrew Robathan (Conservative, Blaby)

I am slightly confused, because the hon. Gentleman said that citizens are also consumers. I thought that consumers were citizens, but not all citizens were consumers. One does not have to be a consumer to be a good citizen, but a consumer is almost bound to be a citizen unless they come from abroad.

Nick Harvey (Liberal Democrat, North Devon)

Again, I am losing the point of the hon. Gentleman's argument. I think that he is simply making semantic distinctions. The interests of citizens can be wider than those of consumers. I am trying to say that that wider interest should be recognised in the Bill, and my amendment endeavours so to do. I remain completely lost as to the argument of the two Conservative Members.

I come to amendment No. 153, which stands in my name. It relates to the point made by the hon. Member for Milton Keynes, North-East about the duty that Ofcom will have regarding better regulation. At the moment, Ofcom is to ''have regard . . . to'' a list of factors that

''appear to them to be relevant''.

That includes the principles of good regulation: transparency, accountability, proportionality, consistency and targeting—they were laid down by the Government's Better Regulation Task Force. However, that gives the principles too little prominence. The Bill rightly gives Ofcom considerable discretion in many areas. However, that is why it is essential that Ofcom should embrace, adopt and fulfil the principles of the Better Regulation Task Force as it uses its discretion over a wide front. Ofcom should be required to comply with the principles rather than simply having general regard for them.

Either the Government believe in and support their Better Regulation Task Force or they do not. The previous chair, and the current chair, of the body have given up time to do their work and they set about it with considerable vigour. I know that the Government suggested that when considering such matters as national security it would be impossible to adhere to the Better Regulation Task Force principles. If so, fair enough. Ofcom should be required to comply with the principles except for specific reasons such as national security. That could be spelled out in the Bill.

Amendment No. 152 is the only amendment in the group that specifically addresses access, which is a very important issue for many consumers. It is a glaring omission that that is not specifically and explicitly recognised in the general duties under clause 3. The clause makes no mention of the regulator working toward equal access to communications services for groups such as disabled people or older people. Given the number of people involved and the current extent of exclusion, that is a great omission. Disabled people, older people and people on low incomes often do not enjoy acceptable access to basic communications services. For example, some 2 million blind and partially sighted people face exclusion from digital television and radio because screen-based technologies fail to build in the ability to manipulate text or to get speech output in order to produce information. People with dexterity problems cannot manipulate remote controls or mobile phones with ease. Deaf-blind people have great difficulty in accessing basic telecommunication services and they require expensive equipment. Users of hearing aids have difficulty using digital mobile and cordless phones because they interfere with many hearing aids. A reference in the Bill to Ofcom having regard to disabled people's needs is meaningless unless those needs are defined. Adding a reference to the goal of equal or equivalent access for disabled people would strengthen the clause. The amendment, which mentions access explicitly, would allow that to happen.

Chris Bryant (Labour, Rhondda)

I hope that the hon. Gentleman can help me. He referred to amendment No. 152, which bears no reference to that at all. However, clause 3(3)(i) does.

Nick Harvey (Liberal Democrat, North Devon)

I do not agree. The right of access is absolutely fundamental for the reasons that I outlined. It is a glaring omission that providing access is not part of Ofcom's general duties. It is a glaring omission from the point of view of the many users who I described. The amendment would include access in the framework of the general duties, which would be extremely helpful to the groups.

Simon Thomas (Plaid Cymru, Ceredigion)

Surely the difficulty with the clause is that subsection (3)(i) simply allows Ofcom to decide itself what is appropriate for people with disabilities. As there is no person representing people with disabilities on the board of Ofcom, the Bill must be strengthened in the way that the hon. Gentleman has suggested, so that people with disabilities can have a bigger say in what Ofcom decides on their behalf, either through the consumer panel or the content board or—importantly—through the right of parity of access.

Nick Harvey (Liberal Democrat, North Devon)

The hon. Gentleman is right, and we will broach some of the more specific parts of that point when we discuss the next group of amendments. The principle of access must be written into the Bill in one form or another, and this would be a simple and straightforward way of doing that.

I endorse the comments of the hon. Member for Ceredigion about the consumer panel. One of the lessons that can be learned from the example of other industries where we have set up regulators and consumer representative bodies is that the more independence those consumer bodies have, the more effective they are. That has been my experience in my role as a constituency Member of Parliament.

Peter Atkinson (Conservative, Hexham)

Order. I remind the hon. Gentleman that we will discuss the consumer panel later. I would like him to bear that in mind.

Nick Harvey (Liberal Democrat, North Devon)

I am grateful to you, Mr. Atkinson, for reminding me of that. We will address detailed points about the consumer panel later, but we are looking at citizenship and how some of the wider issues are going to be pursued within Ofcom, and the shortcomings of the panel are relevant to that. I was simply seeking to endorse the observations of the hon. Member for Ceredigion, because they are connected to my concern that the definition of Ofcom's general duties does not describe its role in terms of a broader vision.

John Whittingdale (Conservative, Maldon and East Chelmsford)

Clause 3 goes to the heart of the operation of Ofcom, so it is unsurprising that we are covering lots of different pieces of ground during the course of this debate. Even within this grouping, the clause has become a Christmas tree on which to hang a lot of different amendments.

First, I wish to refer back to Amendment No. 1, which was moved by my hon. Friend the Member for South Cambridgeshire. There is a powerful case to be made in favour of subsection (1) not simply listing four overall duties. The Joint Committee were persuaded that there needs to be some kind of hierarchy so that one of them is given prominence, which my hon. Friend described as a primary duty. If I had to select a

primary duty, I would choose the one that he chose—the duty to promote the interests of consumers

''where appropriate by promoting competition.''

My hon. Friend drew a distinction between ''where appropriate'' and ''where possible'' and he is right that in this case ''where appropriate'' is the right phrase.

That point leads me on to the next issue that I wish to raise, which has been touched on by several hon. Members. Should only the interests of consumers be given primacy or should that be extended further to cover the interests of citizens more generally? There is a lively debate about precisely what that means: when we talk about promoting the interests of citizens, we are essentially talking about the national interest.

The hon. Member for North Devon made an interesting point. He highlighted that it may be in the public interest to have public service broadcasting. We will come on to debate that at length in due course. However, I wish to take this opportunity to agree with the hon. Gentleman: public service broadcasting is a good example of something that is in the national interest, even though there may only be a tiny number of people who wish to consume it—indeed, almost by definition, there will be very few consumers because if there are a vast number of them it would not need to be public service broadcasting. I think that we will want to explore that issue in greater depth in due course.

The role of the BBC in supplying public service broadcasting is at the heart of the justification for having a state-owned and state-funded BBC. I am a supporter of public service broadcasting for exactly the reason that has been given.

Simon Thomas (Plaid Cymru, Ceredigion)

I am interested in what the hon. Gentleman had to say about public service broadcasting, even when a service is enjoyed by ''a tiny number of people''. I do not know whether he would put S4C—Welsh language Channel 4—into that category, but it is certainly a public service broadcaster and it is covered by this Bill. Will the hon. Gentleman take this opportunity to rule out any suggestion that S4C should be privatised?

John Whittingdale (Conservative, Maldon and East Chelmsford)

It was, of course, a Conservative Government that was responsible for the creation of S4C, and I am not absolutely sure that, even if we wished to privatise S4C—

Peter Atkinson (Conservative, Hexham)

Order. I am not absolutely sure that this exchange is in order.

John Whittingdale (Conservative, Maldon and East Chelmsford)

It is tempting, though, Mr. Atkinson. I do not think that we would find many buyers, and I certainly do not intend to promote such a policy this afternoon.

On the question of citizenship, there is a case for at least acknowledging that a public interest may be wider than that simply of consumers. Amendments have been tabled with the intention of broadening Ofcom's duties to include the interests of citizens. That can be done in a number of ways. We have an amendment that would achieve, in essence, the same thing. I acknowledge that sometimes a national

interest goes beyond the interest of the people who enjoy particular services.

I am slightly concerned that it has not been acknowledged that Ofcom should bear in mind the interests of the businesses that supply the services. I hope that the interests of businesses will always be among those that Ofcom has to consider. Our telecommunications and broadcasting sector is largely dependent on the success of private businesses.

Before coming on to the regulatory activities of Ofcom, I want to say a brief word about amendments No. 46 and No. 47, which are in my name and the names of my hon. Friends. The amendments seek to include the words ''long-term and sustainable''. My hon. Friend the Member for South Cambridgeshire explained why he did not think it was appropriate to include the phrase ''long-term'' when considering the interests of consumers. Amendments No. 46 and No. 47 do not insert the phrase ''long-term'' at that particular point; but I suggest that the Bill would be improved if ''long-term and sustainable'' were included at the point that deals with Ofcom's taking account of the desirability of promoting competition. That competition should be for the long term and should be sustainable. The same goes for investment and innovation.

The amendments have been tabled following suggestions from the Confederation of British Industry, so they should at least be considered. Ofcom should be capable of looking to the long term. As we have said before, communications is an area in which technology is developing extremely rapidly. What may be appropriate in the short term may become inappropriate in the long term. That is why we suggest that the Bill be amended to include the phrase ''long-term''. We will be interested to hear the Minister's response to that.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend and I agree on the overwhelming majority of things, and of course we should think seriously about amendments that the CBI suggests. However, I was worried by its example argument—that using RPI minus X as a formula could be to the detriment of the long-term interests of consumers. The overwhelming evidence on the use of such formulae is that they have delivered for consumers and can subsequently be amended to reflect long-term interests. However, if one includes long-term interests at the outset, the chances are that the interests of consumers will be overridden by what would be regarded as the long-term interests of increasing business profitability.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I do not think that that would happen because of the way in which we have drafted the amendments. The amendments relate to subsection (3), which relates to the factors to which Ofcom should have regard, rather than subsection (1), which describes its primary duty. I have sympathy with the point that my hon. Friend makes about RPI minus X, which has been a remarkably successful method of benefiting consumers by achieving lower prices. My hon. Friend and I received the same briefing from the CBI. I deliberately chose not to include its argument about RPI minus X, because that has been a successful

egulatory method of exerting downward pressure on prices and increasing efficiency.

Simon Thomas (Plaid Cymru, Ceredigion)

I agree with the hon. Gentleman and the hon. Member for South Cambridgeshire that RPI minus X delivers benefits to consumers. However, it is precisely the use of such formulae that begs the question of what the wider public interest is. If we examine the exercise of similar formulae within the gas and electricity markets, or the water industry, we see exactly where it starts to break down and where there should be a counter-balance of a wider public interest.

A simple application of a formula such as RPI minus X could lead, for example, to under investment in the infrastructure of the water industry—collapsing sewers and so forth. In the electricity industry, it could lead to things such as the recent fiasco over NETA. We need to consider the wider interest.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I do not want to revisit the debate that we had earlier. However, I agree with the hon. Gentleman about the electricity market, which I mentioned this morning. When the regulator was given the single task of achieving lower prices for the consumer—which has been achieved very successfully—there were other consequences, which we are now seeing in terms of the difficulties faced by particular sectors of the market, especially nuclear and renewable generators. Such consequences should have been thought about earlier, when the legislation was framed.

Amendment No. 27 sets out to achieve the same as amendment No. 196, which was tabled by the hon. Member for Milton Keynes, North-East and amendment No. 153 tabled by the hon. Member for North Devon, so, essentially, we are agreed on this point. The amendments propose an important change to the Bill: to remove paragraph (b) from subsection (3).

Subsection (3) contains a long list of factors to which Ofcom must have regard. We propose that the factor setting out the necessity that

''regulatory activities should be transparent, accountable, proportionate, consistent, and targeted''

should be removed and inserted earlier in the Bill, so that it applies to all activities undertaken by Ofcom. It is not sufficient for it to be one of a host of different factors to which Ofcom must have regard. It must have priority. It should underline everything that Ofcom does.

I spent a year as the Front-Bench spokesman on trade and industry matters and from my discussions with business across the board, the biggest single complaint is the burden of regulation. The hon. Member for North Devon rightly referred to the work of the Government's own Better Regulation Task Force. An article in the Financial Times reports Mr. David Arculus, the new chairman of the task force, warning that civil servants are drowning small businesses in a wave of regulation because they have little understanding of business. He goes on to say something that is particularly relevant to the debate:

''We are knocking on an open door at a high level''.

He continues

''Some of the problem lies with independent regulators, who are keen to make the most of the new powers they have been give,''

The issue is not just about trying to stop Government from pouring out a relentless flow of regulations, with each one placing an additional burden on businesses, it is also about addressing the activities of independent regulators.

It has already been said that the Bill establishes what is possibly the most powerful regulator of them all. Ofcom will be given enormous powers to intervene across a huge swathe of the economy. It is, therefore, essential that that body should have regard to, and adhere to at all times, the principles of better regulation that have been propounded by the Government's Better Regulation Task Force.

Opposition amendment No. 27 is important because it would make clause 3(3)(b) a primary duty. I accept that there are a number of ways of skinning this cat and the other amendments that I have mentioned are designed to achieve the same objective, which is to ensure that in everything it does Ofcom abides by the principles of better regulation. It is instructive that almost all of the businesses throughout the telecoms and broadcasting sector that have made submissions to Committee members have pointed out that it is essential that greater prominence be given to the regulatory principles.

My amendments Nos. 124 and 125 deal with the importance of Ofcom taking account of the need to protect copyright. Ofcom's main activities will not impact on the technologies and methods by which music or television programmes are copied. My purpose is not to suggest that Ofcom should extend its wide embrace to cover new areas, such as the design of electronic apparatus. Having said that, it is difficult for us to envisage how technology will develop, particularly through the use of the internet. The Government have said explicitly that the Bill is not designed to regulate that area, which is sensible, because I am not sure that that is even possible. Nevertheless, technology might develop in such a way as to allow greater access to copyrighted material.

Michael Fabricant rose—

Mr. Bryant rose—

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am besieged. I will give way after I have made my point.

It is instructive that the Government has said

''Ofcom will work alongside industry in developing systems that continue to safeguard children, citizens and business.''

Business is concerned about copyright. Protecting children is a matter to which we will come later; again, the issue is the use of technology to prevent people accessing material that is unsuitable for them.

Michael Fabricant (Conservative, Lichfield)

My hon. Friend makes a powerful point. I remind him that this morning we talked briefly about clause 1(5)(b), which deals with the power to promote research. Valuable research has been carried out by BBC Kingswood Warren and the former IBA engineering division. It has been said that in the past many opportunities for British industry

were lost because certain developments were not copyrighted. Would my hon. Friend's amendment cover that eventuality?

John Whittingdale (Conservative, Maldon and East Chelmsford)

That is not exactly what I had in mind, although my hon. Friend makes a perfectly valid point. I am more concerned about another issue. The Minister will be aware of it, because he has had representations from all the creative industries about it. We in this country have a particular skill and ability in the creative and entertainment industries—our music industry is a world leader: comparing the size of this country's music industry with that in most other countries shows that we are far ahead. That has been the case for many years and it continues to be so, and that is true not only of music, but of films as well.

The music industry is under huge threat from copyright material being made available for free. The industry is grappling with that issue, which is caused in particular by the downloading of music from the internet. Napster used to be the key site from which such downloads were made; it has now gone but other sites, such as Kazaa, have replaced it. My nine-year-old son told me the other day that he would like an MP3 player for Christmas. If we reach the point at which nine-year-olds want to take music off the internet and access sites that make music available without recognising that people deserve to be rewarded for their creative content, that is a huge threat to the industry.

Chris Bryant (Labour, Rhondda)

I am not sure whether the hon. Gentleman is suggesting that his son intends to download material from only illegal sites. The amendment highlights the desirability of open standards for technological security systems. The only way to have open standards is by mandating standards. How does he propose Ofcom should do that, and does he think that Ofcom should mandate standards in other areas, such as set-top boxes?

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am not suggesting that standards should be mandated. We have specifically suggested that they should be promoted and should be a consideration. Ofcom should not be in the business of picking a piece of technology and saying, ''That is the right one; everybody else must adopt it.''

The purpose of the probing amendments is to secure recognition that copyright is hugely important to the creative industries. The music industry is not really covered by the Bill, but broadcast films and broadcast television are. That is the next step. At present, the broadcast industries have not been badly damaged by copyright theft, but there is potential for that to happen. Technology is developing so quickly that it will not be long before people are able to download perfect reproductions of films from internet sites that make the films available without any recognition that payment should be made to those who made them. The amendment requests that the Government at least consider a way of making Ofcom recognise that that is a serious issue for a large part of British industry.

Brian White (Labour, North East Milton Keynes)

One thing that the industry has been good at is getting its self-regulation to work. Does the hon. Gentleman accept that accredited self-regulation would be more appropriate than Ofcom giving statutory requirements that could be out of date in six months?

John Whittingdale (Conservative, Maldon and East Chelmsford)

I do accept that, and I am not suggesting that Ofcom should mandate. However, the affected industries have attempted to find ways of enforcing copyright, such as manufacturing DVDs that are playable only in certain regions. It did not take long for the market to get around that by producing players that played DVDs from all regions. There is, to an extent, a question of encouraging a common standard and agreement throughout the industry on the best means of protecting copyright, which is all that the amendment addresses. I do not intend to press the amendment but I hope that the Minister will say a few words about the issue. I know that he acknowledges that it is terrifically important to a large part of British industry.

Michael Fabricant (Conservative, Lichfield)

Thank you, Mr. Atkinson. May I say what a pleasure it is that you are chairing the Committee.

I wish to focus briefly on amendment No. 130, paragraph (b) of which refers to the

''optimal use for wireless telegraphy of the electromagnetic spectrum''.

Such a provision is mirrored under clause 3(1)(b). I doubt whether there will be a debate on that, so I thought it would be in order to discuss such a tremendously important issue now. I shall soon ask the Minister a question about it, which I hope that he will be able to answer.

The electromagnetic spectrum affects short-range and long-range communications, and short-range local area networks for computers that may not be connected by wire as they are with the parliamentary data and video network. It affects the use of radio microphones, broadcasters and, as been mentioned, the use of 3G telephony for data. A problem has been caused by the BBC sitting on frequencies, action that has prevented independent radio from expanding. For example, when independent national radio started, there could have been an additional frequency modulated network, but that was stopped because the BBC sat on one frequency in use in Essex and deliberately stopped the setting up of a second FM network for independent national radio in this country. More important than that is the fact that access radio, recently introduced by the Radio Authority, is having problems finding FM frequencies, again because the BBC is sitting on frequencies.

I have given the Minister plenty of notice of my question and, if he cannot answer it now, he should be able to do so later when we reach clauses 147 to 152 which deal with the role of Ofcom and the management of the frequency spectrum. Will powers be given to Ofcom to enable it to reallocate frequencies and, if necessary, reassign frequencies from the BBC to the commercial sector? I am not arguing that the BBC should have fewer frequencies, but that frequencies

should be allocated in such a way as to maximise the service provided by independent radio as well as by BBC radio and not have the BBC squatting on frequencies and preventing radio services from being expanded in this country.

Graham Allen (Labour, Nottingham North)

I wish to pick up on some of the points made by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) about amendment No. 125 on open standards, the prevention of the unauthorised use of personal data and copyright content. Amendment No. 152 also deals with the ability to access services. Such matters are important because the clause is phrased around securing the provision of x, y and z. I use the word ''securing'' in a market sense, as in ensuring that services are available. Amendment No. 125 refers to the other important aspect of security—continuity of supply and what happens if something goes wrong.

Such matters raise increasingly important questions. The hon. Member for Maldon and East Chelmsford talked about the internet. Over time, the barrier between the internet and other forms of media will blur as people buy packages of services that can be delivered through satellite, or cables of one type or another—BT cables or cables in the road—or wirelessly. Everything will get mixed up together. We will also become increasingly dependent on those services, which means that security questions are important.

There is still a gap in the legislation about the way in which we phrase security. Who should ultimately be responsible, especially where there is a conflict in standards? That is why it is important that the hon. Gentleman's amendment refers to ''open standards''. If the matter is left entirely to the market, there may be a conflict between the sort of open standards that are likely to secure availability of supply and the market drivers within business.

The case of DVD regional encoding offers an interesting example, but I come at that from a different angle. From a free market standpoint, DVD regional encoding is fundamentally offensive. If I pay a copyright holder for copyright material, who are they to tell me what machine I should play it on? That case is an example of industry seeking to use proprietary standards, perhaps to try to engineer a particular market. Other examples include the satellite encryption wars, where different satellite systems have used different standards.

Amendment No. 125 talks about ''open standards'' as opposed to proprietary standards. Why should I, as a consumer, be required to buy different boxes with different decryption standards in order to satisfy certain market requirements of the supply companies? Ofcom might have to referee a conflict between a supplier, who wants to use a particular standard, and the consumer interest, which is to use an open standard. We must touch on these points.

Michael Fabricant (Conservative, Lichfield)

The hon. Gentleman says, rightly, that the standards—or the methodologies of delivery—are now blurring. I suspect that he agrees with me that eventually the internet—in a very

different form from that which it currently takes—will be the means by which we receive broadcast programming, and that it will enable us to watch movies in real time, regardless of whether they are generated from London or Los Angeles, and to watch transmissions from other broadcasters all over the world in real time. If that is the case, does he also agree that we will not be able to legislate for copyright protection unilaterally, just as we cannot protect ourselves from the internet unilaterally? There will have to be worldwide agreement on such standards.

Graham Allen (Labour, Nottingham North)

The hon. Gentleman makes a relevant point about international regulation. Currently, our copyright law is essentially within an EU framework, which is then negotiated in terms of the World Trade Organisation's debates on copyright. He is right that such steps will become increasingly necessary.

I turn to the key point that I am seeking to make about the amendments. I ask the Minister what consideration has been given to that aspect of securing the availability of supply of services? If one takes an analogy from the financial markets, the financial regulators not only regulate the activities of people who work in the financial markets, but give the customer certain assurances. They offer a security quality stamp, which is a kind of guarantee in all but the few notable cases in which consumers may have been let down—Equitable Life and a couple of other organisations spring to mind.

There is an assumption that the financial regulator has applied a stamp of security, and amendment No. 125 appears to suggest that Ofcom should have a similar role—in particular with regard to the protection of personal data.

Kim Howells (Labour, Pontypridd)

I seek clarification. Is the hon. Gentleman referring to a case such as the collapse of ITV Digital, where customers lost something that they paid for by way of a contract?

Graham Allen (Labour, Nottingham North)

I am sure that the Minister will receive correspondence from hon. Members' constituents in relation to bills for £39.99—or whatever sum—that will be dropping through their doors for pieces of kit that they thought that they had paid for when they signed up.

There may well be a public assumption that a quality assurance is attached to a product such as ONdigital or ITV Digital, which is offered by a licensed broadcaster that comes forward with a proposition—in future they will make proposals to Ofcom—then a license is given and the package is put on the market. One might say that the customer should always read the small print and ensure that they understand what is going on, but they might think that a quality assurance has been given when a licence is given.

I am not suggesting that there is an easy solution—that the Government should pick up the tab for something like that. I am suggesting that the Ofcom terms of reference should contain some clarity about what guarantees or quality assurance on security are offered in respect of the services that are licensed. If that does not happen, there will be other ITV Digitals down the line and the public expectation will exceed

what the Ofcom licence means. We need clarity, just as in the financial markets there are certain expectations that come with being licensed to operate.

On the amendments of the hon. Member for Maldon and East Chelmsford, particularly amendment No. 125, and other amendments on rights of access, if the Government are considering clarifying the definition of the general duties of Ofcom, it would be helpful if they were more explicit about ''quality of service'' issues—issues relating to security of personal data obtained, security of supply, and what happens when things go wrong. I suggest that such issues will be of increasing importance as we become ever more dependent on the sort of services that will be regulated by Ofcom.

Brian White (Labour, North East Milton Keynes)

The hon. Gentleman is talking about copyright, particularly in terms of broadcasting. He will be aware that Hollywood studios have entered into agreements with television manufacturers in the United States about ways of ensuring that mechanisms in television sets and set-top boxes prevent the misuse of copyright. That would circumvent his argument.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

I am aware of the suggestion that there should be hardware protection of copyright. That is a potential point of conflict, and the hon. Gentleman is right to raise it. However, imagine Ofcom being expected to adjudicate on an agreement between broadcasters and television set manufacturers that only some television sets would receive certain signals. How would consumers feel if they were told that they could not use their old television sets any more? The hon. Gentleman has highlighted one of the matters about which we need more clarity. I am not suggesting that there is an easy answer, but such questions will be on the public agenda and it would be helpful to have more clarity about how Ofcom will deal with them.

John Greenway (Conservative, Ryedale)

I said that the debate on the group of amendments has covered many of the issues raised by clause 3. I therefore anticipate that you might not allow a clause stand part debate, Mr. Atkinson, so I should like to mention good regulation, to which some of the amendments refer, and self-regulation. The hon. Member for Milton Keynes, North-East also raised that issue.

We should try to tease out the extent to which self-regulation of television advertising might unintentionally be constrained by the wording of subsections (1)(d) and (2). The Minister will know that the Secretary of State for Culture, Media and Sport said as recently as 13 November that she was receptive to the idea of extending self-regulation to broadcasting advertising. That emphasises the importance of the matter. About a year ago, from where the Clerks of the Committee are now sitting, I proposed a motion in a debating group in favour of self-regulation of television advertising, and I am glad to say that the motion was carried. That idea's time has come. The Secretary of State said:

''it may be that a self-regulatory system can better deliver consistent, comprehensible regulation across the media.''

Given that statement and the support for the concept that has come from Ministers and officials in the Department, it is important that we are clear in our minds that there should not be any unintentional constraint.

As we understand it, accredited self-regulation would involve the delegation of powers to a self-regulator, and the regulatory body would retain backstop powers. That is similar to the function that the Advertising Standards Authority currently enjoys in cases of misleading advertising, in which the Office of Fair Trading acts as the back-stop regulator. The general idea is that Ofcom would retain a residual power by subcontracting the regulatory regime to a new self-regulatory body, which would then refer to Ofcom in the same way as the Advertising Standards Authority refers to the OFT in serious cases of misleading advertising.

As I understand the legal advice given to the Advertising Association, subsections (1)(d) and (2) of clause 3 mean that Ofcom's duty to promote and facilitate self-regulation may relate only to the very limited areas described in subsection (2)—offensive and harmful material, unfair treatment and unwarranted infringements of privacy.

We will discuss clause 6 and, later, the transfer of existing powers to Ofcom. I am sure that the Minister will agree that, if my interpretation is correct, the creation of a self-regulatory body for television advertising would be seriously inhibited. Other than now, there is no opportune moment to raise this issue. The current wording of the Bill is a potential constraint that we should try to overcome.

The Minister might wish to think about the issue and report back to the Committee. Ministers have given the concept of self-regulated television advertising more than a fair wind: they have led people in advertising to believe that Ofcom could develop the idea. Therefore, I am sure that the Minister accepts that it would be a serious setback if the wording of subsection (2) created an inhibition. On the other hand, the Minister might have taken advice and he might believe that the inhibition does not exist.

Ofcom has duties in respect of standards. We are talking about the standards of television services and advertising on television is part of those services. We feel that the inhibition exists and we have to address it either on Report or in the other place.

Mark Hoban (Conservative, Fareham)

Much of the debate on the amendments to clause 3 can be characterised in two ways. The first aspect relates to what the duties of Ofcom should be and the second to what hierarchy or rank should be given to the duties and factors set out in the clause. Amendment No. 150 states:

''It shall be the principal duty of OFCOM to promote and further the interests of consumers and citizens.''

The way in which the hon. Member for Ceredigion described that amendment almost moved Ofcom away from being an economic regulator to being a consumer interest group. If the amendment were accepted, Ofcom would develop along that route. We have to decide what Ofcom's most important duty is. That will define its character, which will be important not only

for Committee members but for those who will be tasked with examining Ofcom's future decisions.

We have to understand that the hierarchy will be important for practitioners in the sector. I am not sure that making Ofcom's primary duty simply a duty to promote the interests of consumers and citizens will serve the industry as a whole, or, indeed, the interests of consumers and citizens. We would have a distortion in Ofcom's direction, putting consumer rights above the rights of industry. More importantly, we would be putting consumer rights above getting the balance right between the interests of consumers, the industry and citizens. If we are to make specific reference to citizens and consumers, amendment No. 130, which was tabled by my hon. Friend the Member for Maldon and East Chelmsford and which refers to ''consumers and citizens'' in the opening line before detailing the four duties, provides a more effective method—one that does not distort the balance of Ofcom's duties.

There is a problem surrounding the 13 factors listed in clause 3(3). Clearly, it is difficult for the regulator to determine which factor should have weight at relevant times. For the interests of those being regulated, it is important to ensure that Ofcom has a clear sense of priorities when ranking the factors. That is why clause 3(3)(b), which mentions transparency, accountability, proportionate, consistent and targeted regulatory activities, merits being moved earlier in the Bill.

Those labouring under the regime should have comfort and reassurance about the way in which Ofcom will interpret its duties. The impact on the industry must be thought through properly before Ofcom responds to the outside interests of consumer groups or representing the United Kingdom nations that might seize upon other factors and say, ''This is the most important one.''

Focusing on the hierarchy and advancing what is currently in clause 3(3)(b), ensuring that the duties remain subject to the reference of citizens and consumers, would give the rest of the Bill the structure to which so many hon. Members have referred—one that flows from the general duties. If we start to distort the general duties by talking about the primacy of citizen rather than consumer interests, much of the function of Ofcom would be significantly distorted. It would become equivalent to Postwatch or Energywatch and be a consumer group rather than an economic regulator.

Simon Thomas (Plaid Cymru, Ceredigion)

I am listening to what the hon. Gentleman is saying, but surely, the central point about Ofcom is that there is no separate, independent consumer body, such as Postwatch or Energywatch, in the sector. Therefore, Ofcom must bring together the conflicting needs to which the hon. Gentleman referred in his opening remarks. However, by going down that route and not having a separate consumer watchdog established by Ofcom itself, the primary duty must be at the top of Ofcom's list of duties for consumers and citizens together. We must ensure that the conflicting interests are properly looked after by Ofcom.

Mark Hoban (Conservative, Fareham)

The best way to go about achieving what the hon. Gentleman suggests would be to set up

within the confines of the Bill an equivalent of Postwatch or Energywatch, rather than make Ofcom the consumer interest group, which would distort the purpose of Ofcom. A separate consumer interest group would be far better than suborning this regulator for the purposes of consumer interest.

It is important that we get the general duties right. Any distortion of them will have an impact not only on the Bill, but on its implementation over the course of the next three or four years.

Kim Howells (Labour, Pontypridd)

We have had a high-quality debate. We have heard a lot of sense from all parties as well as much expertise.

The hon. Member for South Cambridgeshire made it clear that clause 3 sits at the heart of Ofcom's activities and is central to its role as regulator of the communications industry. Quite rightly, therefore, it has been the subject of a great deal of discussion. Hon. Members have acknowledged that the clause has changed since we published the draft consultation Bill in May. There has been much discussion about the Government's response to the Joint Committee's report. I remind the Committee and quote from that response:

''The Government shares the Committee's view that OFCOM's duties should be clearly and concisely articulated so as to give certainty to OFCOM and its stakeholders and we welcome the suggested drafting for the clause. We do, however, have concerns about what is proposed by the Committee, in particular that it appears to omit from the principal duty two of the original seven: those relating to protection of the public from offensive and harmful material and to protection of fairness and privacy''—

we have not discussed that a great deal this afternoon. The response continues:

''We are sure that the Committee will recognise how important it is that the duties properly reflect the breadth of all OFCOM's responsibilities, both economic and cultural, and follow the proposition set out in the White Paper that each duty is of equal weight. The Government is reviewing the drafting of the General Duties clause with these principles in mind.''

It would be extremely helpful to go back to first principles.

In the 2000 White Paper, the Government set out Ofcom's proposed regulatory objectives:

''protecting the interests of consumers in terms of choice, price, quality of service and value for money, in particular through promoting open and competitive markets; . . . maintaining high quality of content, a wide range of programming, and plurality of public expression; . . . protecting the interests of citizens by maintaining accepted community standards in content, balancing freedom of speech against the need to protect against potentially offensive or harmful material, and ensuring appropriate protection of fairness and privacy.''

Since the White Paper was written, we have added to that list the need to make optimal use of the radio spectrum. I shall respond to the point that the hon. Member for Lichfield made about that later because it is important.

Clause 3 sets out the objectives but it does that in a way that is right in legislation and in the context of the wider Bill. As we did in the White Paper, we could have made references to ''citizens'' as meaning all those who might have access to broadcast services, which is distinct from consumers and customers. However, we must be more precise in legislation. In United Kingdom law generally, existing references to

''citizen'' are invariably bound up with the concept of nationality. That would not add anything to the Bill and might detract from it.

If we used the word ''citizen'' in the Bill, we would risk confusion because the concept of citizenship imports notions of nationality. We would want to guard against any inference that discriminatory treatment based on nationality would be acceptable. A much better approach is to be as inclusive as possible by using terms such as ''general public'', ''members of the public'' or ''persons.'' The use of the term ''citizen'' would give rise to only confusion and wrangles about how the term would be defined.

The substance of the Bill will deliver for the citizen. That occurs through clause 3 and through the content board, the public service remits, the regional programming quotas and the codes on programme standards. The Bill will deliver for the citizen because it rightly sets the interests of members of the public alongside the interests of consumers. I thought that the way in which the hon. Member for South Cambridgeshire opened the debate was fascinating. He has helped me to make several of my points about the differences.

I argue strongly that we have achieved the substance of amendments Nos. 130, 150 and 195. They would all give Ofcom a principal duty to further the interests of consumers and citizens. Adopting the amendments might look neater, but it would not achieve a great deal in legislative terms.

Subsection (1) relates to consumers and members of the public but it also relates to wider public interest in the radio spectrum and putting broadcasting standards in place. Consumers and the public are at the heart of the Bill and, rightly, at the heart of subsection (1). Amendment No. 127 would add little, if anything, to that provision. I wish to turn for a moment to the point made by the hon. Member for Ceredigion about a specific independent consumer body. I must admit to the hon. Gentleman that I helped to frame two consumer bodies, one for energy—and I cannot remember the other one. It was mentioned earlier—[Hon. Members: Post Office]. Yes, the Post Office. I got a lot of stick for that.

We are dealing with a different creature now. I do not know if it helps the Committee to say that the Financial Services Authority was the genesis for such a provision. We do not want—nor, I think, does the hon. Member for Ceredigion—a shadow regulator with his own bureaucracy second guessing Ofcom. We want instead an organisation that can be a critical friend to Ofcom, a strong voice for consumers that will work closely with Ofcom.

In many ways, the hon. Member for Ceredigion was right. It is a statement of faith on my part to say that, but the provision will work better than the two models with which I was involved—good though they are. I want that on the record; I do not want anyone to get it wrong. They are excellent models—well, I must have some sort of record.

We must remember that the panel will have the right to publish what it wants and will no doubt tell Parliament and others if it feels that its needs are not being met. That is an important consideration.

Simon Thomas (Plaid Cymru, Ceredigion)

I am listening carefully to what the Minister is saying. I accept that the Bill takes forward the concept of the citizen's role in broadcasting. It is weaker in respect of the wider range of the communications industry. The hon. Gentleman referred to the consumer panel, which will deliberate on such matters but, again, but its powers will be invested in it by Ofcom. I am worried about that. I acknowledge that the Government have done their best for public service broadcasting, but we are missing the trick with the wider communication industries. If the Bill is to be technologically neutral, as we have been told time and again, it needs to beef up the citizen's role in emerging new technologies.

Kim Howells (Labour, Pontypridd)

The hon. Gentleman has made a fair point. We shall have plenty of time to discuss it and those matters raised by my hon. Friend the Member for Milton Keynes, North-East and others. We shall see a shading of the medium that we watch and listen to at present. There will be further shading in respect of what those mediums mean to us, and their ability to function as economies. I share much of the hon. Gentleman's trepidation that if we do not have regulation and ensure equality in the spread of those technologies, some communities could lose out. That is at the heart of what we are trying to do, but we can debate the matter further.

Amendment No. 1 suggests that, instead of the balance that we believe is achieved under clause 3, furthering the interests of the consumer should be a principal duty. I am not sure that the hon. Member for South Cambridgeshire conveyed that impression in his speech, nor that I have the right angle and that that is his argument. I am sure that he would agree that, if the Communications Bill were only about consumers, there could be some merit in the amendment. However, as I have explained, and as he has argued in a different context, the Bill is about much more than consumers.

Not everyone who is affected by the duties will be a consumer. Clause 3 applies much more widely to members of the public affected by unfair treatment, say, in a television programme. Do they deserve less attention from Ofcom than a consumer? A balance will have to be struck even among consumers. What sort of decision would Ofcom take when confronted with the management of radio spectrum? If it meant better, higher quality services for mobile telephone consumers, should that take precedence over allocation of the spectrum to the ambulance service, or even, dare I suggest, to radio astronomers? Those are not easy choices to make.

Of course, I recognise that balancing its duties will not be an easy task for Ofcom. However, we have tightened the clause since we published the draft in May. Subsection (1) now contains only four duties, which reflect Ofcom's remit. Ofcom is not purely, or even primarily, an economic regulator. We are giving

it a role that covers telecommunications, broadcasting, media and the spectrum, and are asking it to make judgments about commercial markets as well as broadcasting content.

I strongly believe that we should give a clear signal that no single duty under subsection (1) is more important than another; they are all equally important. I know that that is a bone of contention: the hon. Member for North Devon focused on that point. If the Bill did not include subsection (6), I would accept that what he said could be a risk. Subsection (6) expressly enables Ofcom to resolve the conflict between duties in the way that it believes to be the best. That leaves it in control of the situation. The courts would be extremely unlikely to overturn a reasonable decision taken by Ofcom on how to resolve a conflict between its duties—not that courts would not try to do so.

Brian White (Labour, North East Milton Keynes)

I am concerned about something that my hon. Friend said. The European directive, which the Bill enacts, provides specific economic regulatory powers that are the key feature of what Ofcom will be doing. Is he saying that that is not the case? Or did I mishear him, and the economic role is, in fact, Ofcom's key role?

Kim Howells (Labour, Pontypridd)

On the contrary, I pointed out that Ofcom's role embraces several roles of equal importance. We will discuss the relationship between the Secretaries of State of both relevant Departments and the European community later in our consideration of the Bill, and I hope that we can discuss some of these important issues then. There is the issue of primacy; we must be able to report what we are doing to the satisfaction of the European Commission and the European Parliament.

Andrew Lansley (Conservative, South Cambridgeshire)

Does the Minister recall saying in February 2000 during discussion of the Utilities Bill and the general duties under clause 9 that

''the duties form a hierarchy, which is designed to assist regulators in resolving potentially conflicting regulatory objectives.''—[Official Report, 29 February 2000; Vol. 61, c. 233.]

My worry is that the Minister is escaping from the reality that Ofcom will, in practice, seek to pursue its objectives in the most deregulatory fashion, which, by definition, must be through competition wherever appropriate. If, in practice, competition is the primary mechanism for delivering its objectives, why do we not reflect that in the duties in a way that allows Ofcom to deliver its objectives in a way that is more legally robust?

Kim Howells (Labour, Pontypridd)

There is only scar tissue instead of memory in what is left of my brain when the hon. Gentleman mentions the Utilities Bill. I remember that third sitting when we suddenly realised that we had to rip out half of the Bill.

I strongly believe that putting the focus on consumers and competition will distort rather than clarify Ofcom's decision-making process. The hon. Gentleman is quite right. I am a firm believer that the biggest rewards are brought to consumers through well regulated, good, vigorous competition, and low entry barriers. We do not talk enough about that. We should always aim for such competition.

Competition is crucial to our economy, the communications industry and consumers, but not king. That is an important point. Competition does not always give us what we need. That is why subsection (1)(a) mentions competition, but also includes a phrase that the hon. Member for South Cambridgeshire does not like much, which is ''where appropriate''.

Amendment No. 29, which is consequential, would separate competition from consumer interest. I am not sure that I understand the point of that. We are not saying, ''Competition at all costs.'' We are talking about Ofcom recognising when competition works, but also when it would lead us to results that were not in anyone's best interests, not even consumers'. For example—and I cannot remember who raised the issue—limiting the number of competitors accommodated in a block of spectrum to a lower number might be desirable, because it would give each more spectrum. That happened recently. We could talk all day about whether that example would meet the duty of furthering the interests of consumers. However, it is easier to agree on the right approach when the issues of consumers and competition are ranked alongside the duty to secure the optimal use for radio spectrum.

I shall jump a little and respond to the point made by the hon. Member for Lichfield, in case I miss it later. Ofcom's spectrum powers in respect of the BBC are exactly same as those relating to all other spectrum users. Ofcom will have the same powers to revoke the BBC's spectrum licences—or rather the licences of the company that transmits BBC services—for non-use as it will have in any other case. How the powers are exercised is a matter for Ofcom.

The debate is not academic; it is about decisions that the regulators are already making, and that Ofcom will be asked to make in future. It should be able to do so without the presumption that the interests of consumers or the promotion of competition is principal. Through the clause, the Government have struck a balance that sets a framework under which Ofcom can effectively carry out its functions without limiting its flexibility.

Brian White (Labour, North East Milton Keynes)

One key piece of evidence before the Joint Committee that led us down the route of a hierarchy was Patricia Hodgson from the ITC saying that failure to establish such a hierarchy

''may have a danger of paralysing decision-making''.

Can the Minister outline how that could be avoided in Ofcom?

Kim Howells (Labour, Pontypridd)

Yes. I take the point that the chief executive of the ITC made; it is valid, and I would not argue with it. However, the Government have had to make a decision about what constitutes a list that is too long, confusing, short or restrictive. We have come to an arrangement, but we took cognisance of the valuable information and opinions that we received from the ITC.

Before I move on, I should like to consider amendment No. 131, which would add to the list of matters to which Ofcom should have regard when considering the interests of consumers. We could talk

for a long time about what should be included in the list. We have generally taken the White Paper formulation in what is currently included. The list does not mean that Ofcom cannot consider other matters, but I recognise that we could, without adverse consequences, give more direction to Ofcom. If the hon. Member for Maldon and East Chelmsford, who tabled the amendment, would care to withdraw it, I shall give him an undertaking that I will give the matter further consideration, as I think that it is very interesting.

Amendments Nos. 46 and 47 would insert ''long-term and sustainable'' into clause 3. That is also one of the elements of amendment No. 195, which refers to the ''long-term interests of all citizens''. By focusing on long-term and sustainable competition, investment and innovation, the amendments would restrict Ofcom's capacity to decide what is best in each case. That point has been clarified by some hon. Members this afternoon. We do not believe that we should distinguish between the long-term and short-term effects of Ofcom's decision-making in the Bill. We would expect Ofcom to take a balanced view on the sustainable long-term and short-term positions in any decision that it makes.

Clause 3 is about balance and about how Ofcom will operate. We want Ofcom to provide an example of regulatory good practice. That is why, in clause 3(3)(b), we have stated that Ofcom should have regard to

''the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed.''

That is important.

I move, for a moment, to the important point about copyright that was made by the hon. Member for Maldon and East Chelmsford. As a Minister at the Department of Trade and Industry I tried to deal with that issue for three and a half years, and now I am responsible for sponsoring the creative industries in the Department for Culture, Media and Sport. I regard copyright as a vital, if not the most important, issue that faces the creative industries. The ways of stealing copyright are known by all kinds of terms, including piracy, which implies some kind of glamour, and downloading—as if that is not the same as stealing a CD from a shop. But it is stealing and it is real crime. That crime is destroying our creative industries, which are comprised primarily of small businesses and creative people who have no other source of income. We must take that kind of crime seriously and communicate such concerns to our young people. If we do not do that, we are condoning serious theft and crime and destroying the basis of one of our great industries, which encompasses great variety.

The copyright directive, the implementation of which we are consulting on, does not mandate the use of technological protective measures. The hon. Member for Sheffield, Hallam (Mr. Allan) raised a point about that. The directive does not mandate the use of technological protection measures such as copy limiting devices or electronic rights management

information—RMI—which includes the name of the right owner, licence terms and conditions. The directive provides for legal protection against those who seek to circumvent TPMs, or who provide equipment or services to do that, or who remove or alter RMIs in order to facilitate or conceal copyright infringement. Protection against those who seek to circumvent TPMs, or tamper with RMIs, is clearly important in the internet environment. Both those measures are key to the practical enforcement of copyright on the internet. The directive does not mandate any systems; its emphasis is on encouraging all the parties that are involved—right owners, intermediaries and equipment manufacturers—to reach a voluntary agreement on standards. We are going further than that, but we are doing so with the agreement of all parties.

Last Wednesday morning I went on a raid in Cardiff. We busted a guy who had been making millions from—[Interruption.]

Andrew Robathan (Conservative, Blaby)

Is that one of your duties as a Minister?

Kim Howells (Labour, Pontypridd)

Yes. I only regret that I did not have a huge axe in my hand—someone else wielded it.

We must also bring together the enforcement agencies. I expect Ofcom to be aware of that. We will approach the problem from a number of different angles. I would not like Ofcom to be tied or limited in what it can do, or to have to take a mechanical approach to solving the problem. It is a complicated crime and dealing with it demands imaginative approaches.

Amendments Nos. 124 and 125 would give Ofcom a duty to tackle three issues through the setting of technical standards: intrusion on personal privacy, abuse of copyright and the need for parents to protect children from harmful content on the internet. As I have said, I do not dispute that those issues are of great concern; clearly, they are.

I have problems with the amendments, however, because they would place too great a reliance on mandatory standards, and could duplicate regulatory controls elsewhere and draw Ofcom into areas of regulation that it is not well placed to tackle. The amendments open up the prospect of Ofcom being placed in the position of deciding between different standards—allowing it to dictate network operational parameters. That might give some operators an advantage over others. The effect on smaller or new-entrant operators could be of particular concern, and we should worry about that.

It does not make sense to hint at national steps for mandating technical standards when it is not proven that self-regulatory solutions are ineffective. Some such solutions are very effective, and we are making progress, albeit slowly, in the face of a great avalanche of crime. We must understand what best practice is and try to spread it.

I shall deal briefly with amendment No. 35. I recognise that, in relation to provisions in the draft Bill, concern was expressed that Ofcom should not

become involved in developing systems to support its media literacy duty. However, the drafting has been tightened up in the Bill to make it clear that its role is instead to encourage others to do so. They might be broadcasters, the electronics industry or software designers. We should take that duty seriously.

Amendment No. 152 does not belong here. Clause 3(1)(c) covers availability of quality television and radio services that appeal to a variety of tastes and interests. As they are included in the public service broadcasting remit in clause 256, there is no reason to include them at this point. Ofcom has a duty to report on the fulfilment of the public service remit in any case. The Government have looked long and hard at clause 3, because, like other hon. Members, we recognised that we needed to get it right, and I believe that we have. It covers the breadth of Ofcom's responsibilities and reflects its role as an economic and cultural regulator. I believe that, in respect of the principles on which it is based and its drafting, the clause works for Ofcom and its stakeholders.

Andrew Lansley (Conservative, South Cambridgeshire)

There comes a point in Committee when one feels the need to press an amendment to a vote to demonstrate that one is still convinced of its merits. However, sometimes one does not have to press an amendment because its merits are so great that the Government will in due course have to recognise them. I do not wish the Government to vote against such an amendment at an early stage, so I shall not press my amendment, but I want to make one or two points.

I have not heard a compelling argument against the purpose of amendment No. 1. With respect to the Minister, the argument that the duties are of equal weight will simply not be borne out in practice. It may be said that there are circumstances—for example, the use of radio spectrum for emergency services—in which duties that are not the principal duty of Ofcom would none the less be seen as more important than the duty to promote competition. However, that is not the same as suggesting that the duty to provide radio spectrum for emergency services, for example, should be given the same weight as the duty to further the interests of consumers through competition. The question is what primary mechanism Ofcom will use in practice to deliver its objectives. The answer is the promotion of competition in order to secure effective markets.

The Minister did not refer to the example of Oftel but he could not refer to everything. It was obliged to move beyond a list of duties towards competition being its pre-eminent responsibility. That shows that Ofcom might be required to move in a similar direction in due course. I do not think that the Minister remotely addressed that point. The Government should think about it very hard. Amendment No. 1 is not inconsistent with the Bill's purpose. If anything, it would reinforce the underlying philosophical approach in the Bill.

The Minister said something that made think that the drafting of amendment No. 1 could be wrong, which is another reason not to press it. He discussed

the use of the word ''citizen'' in legislation. I am surprised because one of the purposes of pre-legislative scrutiny is to take us to a point at which we understand the Bill in a way that enables all hon. Members to examine it using well-informed debate. The Joint Committee proposed a form of words, which was unusual because it did not normally set out to do that. The words referred to promoting the interests of citizens but the Government's response made no reference to the undesirability of using the word ''citizen'' in legislation. The Minister has popped a rabbit out of a hat. He said, ''Here you are. You can't talk about citizens now.'' Well, that is fine. If we cannot talk about citizens, let us think about the philosophy of what we are trying to do. We are trying to recognise that there is a difference between meeting a variety of tastes and interests expressed by consumers and meeting the public interest, which we colloquially think of as the citizens' interest. If the amendment requires redrafting so that it refers to a plurality of views sufficient to meet the public interest, that is fine. The Minister cannot tell us that the public interest is not properly defined elsewhere because later in the Bill, a plurality test for newspaper mergers is to be inserted into the Enterprise Act 2002 as a public interest that must be specifically met. I, and others, will move amendments in later sittings that address that point in the same way that we have addressed broadcasting.

The purposes of the amendment are still there. I hope that the Government will return to the issue in a purposeful way on Report or at a later stage, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 27, in

clause 3, page 3, line 13, at end insert 'and in carrying out their functions, OFCOM shall have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed'.—[Mr. Whittingdale.]

Question put, That the amendment be made:—

The Committee divided: Ayes 9, Noes 12.