REGULATORS (Hansard, 8 July 1998)

§ Mr. Lansley
I beg to move amendment No. 46, in page 28, line 15, at beginning insert 'Subject to subsections (4) and (5)'.

Mr. Deputy Speaker
With this, it will be convenient to discuss the following amendments: Government amendments Nos. 12 and 13.
No. 47, in page 28, line 18, at end insert—

'(4) A regulator shall not exercise any functions under this Part in respect of any matter until he has consulted—

(a) the Director, and

(b) any other regulator who may have jurisdiction in relation to that matter, and they have jointly determined whether and, if so, the manner in which, any of them are to exercise any functions under this Part in relation to that matter.

(5) In respect of a matter which—

(a) disregarding the concurrent jurisdiction of a Director, is not exclusively within the jurisdiction of one regulator, or

(b) affects or may affect competition outside the jurisdiction of that regulator, any decision within the meaning of section 46 in relation to that matter shall be made jointly by that regulator, the Director and any other regulator who has jurisdiction to a material extent in relation to that matter.

(6) A regulator shall not exercise both—

(a) his functions under this Act, and

(b) his functions under the enactment from which he derives his regulatory jurisdiction, at the same time and in respect of the same matter.'.

No. 60, in schedule 10, page 78, line 7, at end insert 'if, but for those subsections, regard could be had to that general matter.'. Government amendments Nos. 17 to 25, 33 to 37, 39 and 40.

§ Mr. Lansley
May I direct attention to amendments Nos. 47 and 60 in particular? It is helpful to have seen Government amendment No. 13. I recognise that it is, in substantial measure, a response to the issues that were raised in Standing Committee. I welcome the amendment in principle for that reason. Therefore, I will focus just on one important difference between amendment No. 13—which tries to create a structure that enables joint working between the Director General of Fair Trading and the other sector regulators—and amendment No. 47.
Subsection (6) of amendment No. 47 is intended to prevent a regulator, who has both Competition Bill powers and sector statute powers, from acting in relation 1198 to any given matter using powers from both Acts. To put it in a nutshell, it is intended to prevent a regulator from using Competition Bill powers in the first instance, but giving effect to decisions through regulators' powers.
Of course, not only does the director of the utility sector acquire additional powers, not least in relation to investigation and enforcement, through the Competition Bill, but, by using sector statute, he might be able to avoid some of the due processes that are contemplated in relation to the Bill. Therefore, the mixing of the two is an unhappy situation. Using the two together might lead to an unsatisfactory blurring of the distinctions between the exercise of Competition Bill powers and of regulators' powers.
To cut a long argument to a simple point, we all recognise that regulators have competing objectives. In this particular instance, they are often seeking to meet what are essentially structural objectives in relation to the industry: for example, the reduction of market share on the part of an operator within the utility that they regulate. They may pursue that objective through the exercise of regulatory powers, but they may try to use Competition Bill powers in the first instance, or undertake investigations, and so on. It would be undesirable for there to be a blurring between the two things. There may be circumstances where they want to reduce dominance, but in doing so try to assert abuse where abuse does not necessarily exist.
11.30 pm
The intention of that part of amendment No. 47—which I continue to commend to the Government, and which is not really reflected in Government amendment No. 13—is to take away the opportunity to move between the two jurisdictions in relation to the same matter. I welcome the Government's response to that point.
We could tie ourselves up in discussing amendment No. 60, so suffice it to say that, in Committee, the Under-Secretary took the view that the Government amendments were sufficient to bring the powers of the Director General of Telecommunications directly in line with the other utility statutes. However, my view is that, given that the Telecommunications Act 1984 does not operate in precisely the same way as other sector statutes, that would be true only if this further tailpiece was added on to the relevant part of schedule 10. I hope that the Under-Secretary will reflect on whether he has achieved the objective of trying to bring the powers directly into line.
To save time, I will not dwell on any other arguments. Given that the Under-Secretary has been looking for assistance from industry, I was grateful to receive from the electronics industry—to cite just one example—confirmation that it saw benefit in some of my amendments, especially amendment No. 47. It is concerned to ensure that there is clarity in the manner in which the utility sector regulators use their powers.

§ Mr. Nigel Griffiths
At 11.31 pm, I can offer the House my 18-page briefing or the truncated Griffiths two-page version. I hope that the two-page version will cover the key points. In particular, I want to spend a little time on amendments Nos. 47 and 60.
There are Government amendments in this grouping. They would allow regulators to co-ordinate their activities under the Bill in a more effective manner. 1199 They are a response to the concerns voiced by the hon. Member for South Cambridgeshire (Mr. Lansley) in Committee. It was suggested that the present arrangements imposed artificial constraints. The amendments would replace the present inflexible arrangement with a more flexible regulation-making power.
Amendment No. 60 would add clarification to new section 3(3C), which this Bill inserts into the Telecommunications Act 1984. Section 3(3C) deals with the ability to have regard to the subject matter of statutory duties when the duties themselves are disapplied. I assure the House that no amendment is needed, as section 3(3C) achieves its intended effect. It makes specific provision about consideration of the subject matter of statutory duties in the context of the exercise of the Director General of Telecommunications' concurrent functions under the Bill. However, it makes no change to the ability to have regard to the subject matter of statutory duties, where it is relevant, in respect of other functions in the Telecommunications Act where the statutory duties themselves have been disapplied.
As the hon. Member for South Cambridgeshire was generous enough to admit, amendment No. 47 covers the same ground as the Government's amendment in dealing with the consultation and joint determination on who should exercise functions—subsection (4). However, it would also require joint decision making where jurisdictions overlap—subsection (5)—and it would preclude a regulator from exercising Bill functions and sector-specific regulatory functions at the same time in relation to the same matter—subsection (6).
The effect of the third part of amendment No. 47 would seem to be to import uncertainty about the lawfulness of use by a regulator in particular cases of information that he has obtained under Bill powers when subsequently exercising his functions under the regulatory Act. The amendment, by creating a firm division between the two sets of functions, increases the scope for challenge to the original use of the powers—for example, on the grounds that the chances of being able to take any enforcement action under the Bill were so small that the use of Bill powers to gather information was unreasonable.
I believe that amendments Nos. 60 and 47 would—I put it no stronger—weaken the Bill.
I hope that my explanation satisfies the hon. Member for South Cambridgeshire. However, if he would like me to deal with further points, I shall be more than happy to do so from my 18-page briefing.

§ Mr. Lansley
I am grateful to the Minister for the character of his reply. On that basis, I beg to ask leave to withdraw the amendment.