HC Deb 06 March 2002 vol 381 cc372-90 8.45 pm
Miss McIntosh

I beg to move amendment No. 22, in page 11, line 3, at end insert— ', up to a maximum of £10 million in any one financial year.'.

Madam Deputy Speaker (Sylvia Heal)

With this it will be convenient to discuss the following amendments: No. 32, in page 11, line 6, leave out "and at such rates".

No. 21, in page 11, line 7, at end insert— '(3) The rate of interest on any sums advanced under this paragraph shall be the same as the lowest rate determined by the Treasury under section 5 of the National Loans Act 1968 (c. 13) in respect of similar loans made out of the National Loans Fund on the day the advance is made.'.

Miss McIntosh

It gives me great pleasure to speak to these amendments, which arise from a debate that we had late in the day during our happy hours in Committee, to which the Minister has referred. The Government should address several of the issues that arose.

Amendment No. 22 would set a maximum of £10 million of projected expenditure by Ofcom in any one financial year. That is important because it is not guaranteed that the main communications Bill, for which we wait with anticipation, will reach the statute book. We may, therefore, find ourselves in the regrettable situation in which Ofcom may have to be disbanded. The Bill does not make sufficient provision for that. Amendment No. 32 is purely consequential—the Secretary of State would not set such rates because, under amendment No. 22, a maximum of £10 million would have been set.

Amendment No. 21 enshrines what the Minister helpfully set out in a letter for the attention of my hon. Friend the Member for Lichfield (Michael Fabricant) on 8 February 2002 about what the rate of interest on a loan should be. It is our fervent desire that the rate of interest on sums advanced under this paragraph of the schedule should be the same as the lowest rate determined by the Treasury under section 5 of the National Loans Act 1968 in respect of similar loans made from the national loans fund on the day of the advance.

These amendments are important because of the gap left by the helpful comments about clause 5 made in Committee by my hon. Friend the Member for Lichfield. He said: Subsection (6) deals with the procedures that will apply in relation to the shell Ofcom's assets if … it were to be wound up. He continued: Paragraph (b) refers to the power to provide for the property rights and liabilities of Ofcom to be divided between different persons. The Minister responded: have told the Committee on a number of occasions that the only source of funding will be loans made to Ofcom by the Secretary of State on behalf of the Department for Culture, Media and Sport. At column 249, my hon. Friend the Member for Lichfield said that the end of the story is that it will be a loan that must be repaid. He went on to point out that clause 5 makes absolutely no reference to who will repay the loan that will undoubtedly arise from the operating costs of Ofcom. He added: How are the operating costs to be dealt with? The assets and liabilities are dealt with in detail, but the operating costs are not. He finally asked: Why not, and who will be liable? The point is that, in giving his explanation to the House, the Minister raised more questions than the Bill answers. At column 250, he claimed that Clause 5 will provide precisely what Opposition Members were arguing for

" and gives the Secretary of State the power to wind up Ofcom. He also said: Other provisions allow property, other assets and liabilities to be transferred to the Secretary of State from Ofcom, the existing regulators or other specified persons."—[Official Report, Standing Committee E, 5 February 2002; c. 248–50.] In my view, those provisions are not at all clear, which is why I tabled the amendments.

Dr. Howells

We debated in some detail in Committee how it is proposed that Ofcom should be funded. It may help the House—and, I hope, the hon. Member for Vale of York (Miss McIntosh)—if I set out again what those arrangements will be.

As hon. Members will know, the general approach for sectoral regulators is that the cost should be borne by the sector concerned. Indeed, industry recognises that that is part of the cost of doing business and is generally content with that. That arrangement applies to the existing broadcasting and telecommunications regulators, although, in the case of the Broadcasting Standards Commission, half the costs are met by grant from the Department for Culture, Media and Sport.

At the start, when Ofcom is preparing to take on its later functions, it will have no fee income from industry. It is the Government's view that the extra cost associated with creating Ofcom should be borne by the sector, but it makes sense for the businesses that are in the sector once the new regime comes into force to finance that cost rather than those which are in the sector today. We therefore envisage that all—or virtually all—of the cost of transition should be financed by a loan to Ofcom made by the Secretary of State. It is intended that that loan will eventually be repaid by Ofcom out of the fee income that it will start to receive when it takes on its regulatory functions.

I do not believe that a limit should be set in primary legislation on the maximum amount that the Secretary of State can advance to Ofcom, as amendment No. 22 suggests. At this early stage, there is too much uncertainty about how long Ofcom's preparatory stage might last and what practical steps it will need to take to prepare to receive its regulatory functions. Obviously, we all want the transition to the new regulatory regime to be as smooth as possible for all concerned, but it is only when the Ofcom board is in place later this year that it will be able to take decisions on the practical steps.

It is not necessary to set out in the Bill the level of interest payment on any advance that might be made to Ofcom—the subject of amendments Nos. 32 and 21. As I explained in Committee, in answer to a question from the hon. Member for Lichfield (Michael Fabricant), to which the hon. Member for Vale of York referred, the level of interest charged on any advance made by the Secretary of State to Ofcom would be made on the presumption that it should reflect the cost to the Government of borrowing. I therefore oppose the amendments.

Miss McIntosh

I am grateful to the Minister for clarifying the position. Although I resist his arguments, I believe that we may be able to explore the matter at a later stage. My hon. Friends and I believed that this was the best opportunity to consider the provisions in question, but as the Government are not minded to accept my temptations and agree to the amendments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Miss McIntosh

I beg to move amendment No. 12, in page 12, line 25, at end insert— 'Consumer Panel

  1. 14A(1) It shall be the duty of OFCOM to establish a Consumer Panel of 10 members, comprising persons who are neither members nor employees of OFCOM.
  2. (2) Members will be appointed for four year terms and shall serve a maximum of two consecutive terms.
  3. (3) Paragraphs 17, 18, and 19 of the Schedule shall apply to the proceedings of the Consumer Panel, but paragraphs 15 and 16 shall not apply and the Consumer Panel shall make other such arrangements for regulating their own procedure as they think tit.
  4. (4) The Consumer Panel shall—
    1. (a) research consumers' views and concerns on issues relating to OFCOM's functions,
    2. (b) publish its advice, conclusions and reports to OFCOM, and
    3. (c) take due account in its work of the views of consumers with special needs, including those on low incomes or with disabilities.
  5. (5) The Consumer Panel shall be funded by means of grants from OFCOM.
  6. (6) The Consumer Panel shall make an annual report of its proceedings and financial position to each House of Parliament.'.

Madam Deputy Speaker

With this it will be convenient to discuss the following amendments: No. 13, in page 12, line 25, at end insert— 'Radio Committee 14B It shall be a duty of OFCOM to establish a Radio Committee to provide advice to OFCOM about, and carry out functions in relation to, the radio sector.'. No. 20, in page 12, line 25, at end insert— Deregulation Committee 14C It shall be a duty of OFCOM to establish a Deregulation Committee to provide advice to OFCOM about how relevant proposals about the regulation of communications could be modified to deregulate the communications industry.'.

Miss McIntosh

I am grateful for the opportunity to speak to this group of amendments, particularly amendment No. 12, which relates to the role and constitution of a consumer panel. We wish to see Ofcom establish a consumer panel of 10 members, who would not be members or employees of Ofcom, and who would serve for a maximum of two consecutive four-year terms. In our view, Ofcom should have a duty to have regard to the work of such a panel. The fact that the panel would provide an annual report of its proceedings and financial position to each House of Parliament would ensure its accountability to Parliament.

Under the provisions of the amendment, the consumer panel would be funded by grants from Ofcom, and would research consumers' views and concerns on issues relating to Ofcom's functions. The panel would publish its advice, conclusions and reports to Ofcom, and its work would take account of the views of consumers with special needs, including those on low incomes or with disabilities. I regret that the amendment on disabilities tabled by the hon. Member for Ceredigion (Mr. Thomas) met with such a lack of response from the Government. In light of that amendment's failure, this amendment takes on additional importance. It would be the rightful role of the consumer panel to have regard to those with special needs and, in particular, those with disabilities. The Select Committee on Culture, Media and Sport supported such a move in its report on the White Paper on communications.

The White Paper refers to Ofcom's consumer protection role in paragraph 7.4 on page 72, which states: Ofcom will have a principal duty to protect the interests of consumers and will have powers to take action if the industry does not develop an effective consumer protection regime. The White Paper makes many other references to consumer protection, and I must ask the Minister why the Bill makes no mention of a consultative panel.

I also want to speak briefly to amendment No. 13, which invites Ofcom to establish a radio committee to provide advice to Ofcom and to raise issues and problems that are very different from those of television, having regard to the fact that, as my hon. Friend the Member for Lichfield (Michael Fabricant) so eloquently pointed out in Committee and in the House today, the radio sector is of huge importance to the communications and broadcasting industry. A radio committee established under the auspices of Ofcom would he able to consider and advise on all those issues.

On amendment No. 20, it is the wish of the official Opposition to see a deregulation committee established. Such a committee would advise Ofcom about how the regulation of communications could be modified so as to deregulate the communications industry. If Ofcom is to achieve anything, it must deregulate. It is to replace five existing regulators, if we include the BBC—we would like it to replace six—and will, therefore, be essentially deregulatory in nature. We believe that placing a duty on Ofcom to establish such a deregulation committee is the best possible way to monitor Ofcom's deregulatory activities.

Michael Fabricant

I welcome all the amendments, but especially the one that deals with radio. As my hon. Friend the Member for Vale of York (Miss McIntosh) and others will know, I have the gravest concern about the possibility of our reverting to the position that obtained in the days of the Independent Broadcasting Authority when the radio division was confined to a few bleak offices in the Brompton road.

It being Nine o'clock, MADAM DEPUTY SPEAKER, pursuant to Order [14 January] put forthwith the Question already proposed from the Chair.

Amendment negatived.

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Dr. Howells.]

9 pm

Miss McIntosh

I feel a certain sadness at this stage. As the Minister said, we have spent many happy hours debating the Bill in Committee and this evening. Despite the sad conclusion that those happy hours have reached, I welcomed the opportunity to consider its remaining stages. Obviously, Opposition Members are disappointed by our failure to carry any of our amendments. We shall have opportunities to return to some of the issues involved but others need to be raised now.

I remind the House that I have a pecuniary interest in BT, albeit a small one.

The composition of Ofcom should represent all forms of the media and communications. That applies to board members, officials and staff. We think that appointments should be approved by a parliamentary Committee such as that chaired by the right hon. Member for Manchester, Gorton (Mr. Kaufman), or alternatively by the Joint Committee that the Government intend to request the House to set up.

For the reasons given by my hon. Friend the Member for South Suffolk (Mr. Yeo), our fervent desire—eloquently expressed by many Members on both sides of the House: I think it struck a chord with certain Labour Back Benchers—was that the BBC's board of governors should have been included in every respect. As my hon. Friend said, it is important that we recognise the public service broadcasting obligations of the BBC's board of governors. It is a bizarre omission that, as we speak, the BBC has no parliamentary accountability. I am sorry that the opportunity offered by the Bill for discussion of that was turned down.

As I have said, we believe that Ofcom should be a deregulatory organisation with a light touch. We shall monitor developments over the next month, especially in view of the Minister's promise of a communications Bill in the spring. No doubt the pre-legislative scrutiny Committee will work carefully to ensure that the organisation has a light touch and a deregulatory mandate.

We shall also take the opportunity to ensure that consideration is given to the needs of those with special requirements and disabilities—the deaf, the blind and many others—and to precisely how the commitment in the White Paper to liaison with the Scottish Parliament and the Welsh Assembly will be achieved.

We are especially keen for the particular needs and interests of the radio sector to be reflected through a radio committee. We had a good discussion in Committee about the needs and concerns of religious broadcasters, although we did not have an opportunity to discuss them this evening. A greater range of frequencies would enable greater choice in religious broadcasting, which both sides of the House would welcome. Other media and forms of communication—such as mobile phones, broadband technology and the internet—should properly have been referred to. Those who represent Ofcom should have regard to those special interests.

On financing, loans should be set at the interest rate referred to by the Minister in his letter to my hon. Friend the Member for Lichfield (Michael Fabricant), and the Secretary of State should set a limit on the expenditure that Ofcom can incur. The Minister should also offer a commitment that, if the main Bill never appears and Ofcom is wound up, the somewhat complicated procedure that he set out in Committee will be simplified so that even hon. Members can readily understand it and explain it to all concerned outside this House.

I consider the BBC one of the finest British institutions. It holds a special place of affection in the hearts and minds of the British people, including me. However, as I have said, it is our fervent desire that, if one regulator is to replace existing regulators, it should replace all six, including the BBC board of governors. As my hon. Friend the Member for South Suffolk said, initially the board of governors will monitor all first and second-tier responsibilities. However, in the light of its public service obligations, there should be one rule and a one-size-fits-all regulator. For that reason, the BBC should be included.

I make a special plea for the ongoing delivery of regional programming and news editions by the BBC, ITV and other companies. As Members of this House, we are keen that such programming be improved, and that the high standards that we enjoy across the United Kingdom be maintained. I recognise only too clearly that we are in the midst of perhaps the longest and deepest recession for some time. Advertising revenues are down, which has put especial pressure on the delivery of regional programming and news editions.

As we have said at various stages in the Bill's consideration, it is the fervent desire of all Opposition Members that parliamentary accountability be paramount. Ofcom's committees, its annual report and the preparation and presentation of its annual accounts should be considered by the relevant body of each House of Parliament. Its annual accounts should be considered by the Public Accounts Committee, and its annual report should be considered by the relevant Select Committees.

Mindful of a possible Government reshuffle this Easter, may I take this opportunity to wish the Minister a fair wind? Perhaps he will be transported to another Department, or to a more elevated position.

In its lengthy, considerable and interesting deliberations, the Culture, Media and Sport Committee's report on the communications White Paper raised the question of merging the Department for Culture, Media and Sport and the Department of Trade and Industry. There are many merits in that argument, and I could think of many people who were less fit for that position than the Minister.

I hope that the Minister will take account of our plea for the Ofcom committees to meet in public when possible and for us to he able to deliberate on their work and recommendations.

There was a glaring omission in our debate and we were unfortunately unable to reach the amendment that dealt with it. We failed to consider the measure's competition aspects and their implications for the communications sector. Consequently, there will be two competition authorities: Ofcom and the Office of Fair Trading. I fervently believe that the Bill should declare that, in cases of any doubt about which body should be the ultimate arbiter on competition matters, the OFT is the right body to rule on them.

Nick Harvey

We all agree with the hon. Lady that Ofcom should be a light-touch regulator. However, she is keen for the regulation of the BBC—a complex task—to be transferred to Ofcom and, if a competition issue arises, for Ofcom to defer to the OFT. In the world that she envisages, the BBC would barely be regulated and, if it deigned to do anything in competition terms that was deemed to conflict with anyone else, the case would simply be rolled over to the OFT.

Miss McIntosh

Those comments are interesting, but believe that the hon. Gentleman confuses two matters. By "competition aspects", I mean, for example, media ownership. I served an apprenticeship in the part of the Commission in Brussels that deals with competition, and I am therefore mindful of the means that competition lawyers will employ if they believe that an uncompetitive practice is occurring. The hon. Gentleman confuses a true competition aspect, which the OFT should tackle, with my earlier comments about the BBC's public sector broadcasting obligations. I apologise to him if I did not make myself sufficiently clear.

We have had the opportunity this evening to consider many points in some depth. It therefore gives me great pleasure to support the Bill, with the proviso that I am disappointed that many of the issues that we wanted to include remain open for discussion when we consider the main communications Bill.

9.13 pm
Brian White

I am pleased that the Bill is receiving a Third Reading and that it will move us forward. However, a lot of nonsense was talked on Second Reading, in Committee and again tonight. That does not move the debate forward.

As was said earlier, changes are happening all the time. Indeed, British Telecom's announcement on broadband wholesale prices shows that change has occurred since the end of our deliberations in Committee. I plead with the Minister to publish the communications Bill by the end of April or the beginning of May, even if all the i's have not been dotted. It is important to get it into the public

domain and have a debate, even if Ministers have not made every decision. It is more important for the pre-legislative scrutiny Committee to be up and running than for Ministers to do everything that they normally achieve before presenting a Bill to the House. There is a need to consider regulations, the EU framework and the work of the existing regulators and their relationship to the shadow Ofcom, and how that develops during the pre-legislative scrutiny of the communications Bill. Those are real issues.

There is also a serious issue about the BBC. We must debate the BBC, its licence fee and its relationship to Ofcom. There is also a need to debate cross-media ownership, but these matters must not be confused and, in the communications Bill, must be tackled separately.

I conclude with two heresies. There has been an awful lot of talk about convergence. Things are converging technically, but socially and in the way that people use technology, they are not. It is important that we understand how people use, or do not use, technology. We should not just assume that because it is technically possible to converge technologies, it will automatically happen. There is a danger that the policy assumptions of the Bill and the communications Bill are not solid in terms of the way in which people use technologies. I urge the Minister to understand what is happening in the real world, and not just the whizz-bang technological stuff.

The second heresy concerns the role of regulators and whether existing models can cope in a world that is changing so fast. The economy is speeding up and changing. Ofcom will need to be adaptable, flexible and quick in its decision making, which is why the Minister was right in regard to the composition of the board. Things will need to be done quickly and, in setting up Ofcom, such imperatives will need to be recognised. The Minister recognises that it is important that when Ofcom is set up, the right people are chosen and that they understand the issues.

Is this a step forward? The debate on the communications Bill will show a lot of areas of agreement, but it will also show some fundamental problems and disagreements. I hope that we concentrate on the disagreements and get the bits where we do agree into Ofcom as soon as possible.

9.17 pm
Nick Harvey

On Second Reading, my hon. Friend the Member for Twickenham (Dr. Cable) asked what Ofcom is actually for and what the regulation of the communications industry is supposed to be all about. Do we need to have a specialist regulator for the communications industry, or could it just be regulated by the OFT and the other bodies that regulate industry and competition within industry?

I believe that there is a justification for the communications industry having a specialist regulator and that Ofcom, in the shape proposed, is more or less the right way to go forward and certainly is the basis on which we can debate what this regulatory body ought to be.

It is essential that Ofcom is allowed to take a view on what constitutes the public interest. The OFT is explicitly prevented from introducing into its considerations aspects of what constitutes the public interest. As I understand the Government's reforms, the Secretary of State for Trade and Industry's ability to enter into the chain of decision making in competition issues is forced back. The regulator—set up without a brief to take account of the public interest—makes competition decisions against what I referred to earlier as very dry economic criteria.

If Ofcom, which is obviously going to need technical expertise relevant to this sector—and will also, rightly, have to consider competition issues—is not allowed to go beyond that and consider public interest issues, it will not achieve some of the purposes that are being envisaged for it. It certainly will not be fit to be the sole and total regulator of the BBC. I have misgivings about some of its other anticipated roles.

When the communications Bill is published and we debate what Ofcom is for, we must decide either to give it explicit public interest powers or to retain for Parliament or the Secretary of State some ability to introduce considerations of public interest; otherwise, it would be virtually pointless to set the body up. All that it would add to the existing regulatory framework would be some specialist technical know-how. The question of what the body is for is so fundamental that we have probably expended too much time and endeavour on the paving Bill, which contains just seven clauses and a schedule and merely empowers the setting up of Ofcom and the hiring of offices and staff. The sooner we get on with the real debate, which publication of the draft Bill will begin, the better it will be.

9.20 pm
Angela Watkinson (Upminster)

I, too, was a member of the Standing Committee that met for the many happy hours referred to by my hon. Friend the Member for Vale of York (Miss McIntosh) to discuss the establishment of an Office of Communications. Our debates centred on the size and composition of the new body and its initial functions in preparing for the regulatory duties across the broadcasting and telecommunications sectors that will be imposed on it by the communications Bill soon to come before the House. We also debated the vexed question of the relationship between Ofcom and the BBC, to which I shall return later.

Clause 1 proposes that the membership of Ofcom should be determined by the Secretary of State and should be not fewer than three people and not more than six. Ofcom is to become an umbrella organisation replacing the existing regulators—the Independent Television Commission, the Broadcasting Standards Commission, Oftel, the Radio Authority and the Radiocommunications Agency. Concern remains that a body that may be comprised of as few as three people will be able to ensure that the interests of so many different services, groups and organisations are represented fully. I have received from a wide range of those organisations representations that certainly echo those concerns.

Inclusion of the necessary range of professional expertise and divergence of experience and view will be extremely challenging. The appointment of a chairman and the members of Ofcom will rest with the Secretary of State. There should also be a chief executive and other executive members, but there is a question about that. Clause 1(5) states: It shall be for the members of OFCOM … to determine whether there should be any executive members and to make any appointments". That will be an interesting exercise. Given that the maximum and minimum numbers for membership allow little flexibility, an Ofcom of three members would include a chairman, one member and a chief executive. Even an Ofcom of six members would include only a chairman, between one and four members and a chief executive. Clause 1(7) states: The Secretary of State may by order made by statutory instrument modify the numbers". I hope that that opportunity will be taken.

Much debate in Committee concentrated on whether the Bill should be concerned with Ofcom's future functions—it is, after all, only a paving Bill. I submit that the establishment of Ofcom cannot be readily separated from those functions or from the existing functions of the five regulators that it will replace. Representations have been received from a wide range of interest groups, all expressing individual concerns. For example, the Royal National Institute for the Blind is particularly concerned about the special requirements and circumstances of individuals who are disabled and those of pensionable age. It has requested that an advisory committee be set up for disabled people.

As my own mother was blind, I am aware from personal experience of the importance of both radio and television to blind people. Very few sight-impaired people are totally blind, and they often watch television in the company of sighted people. For those viewers, audio description is an important new technology. It adds to the existing soundtrack and enables blind people to build a better mental picture and understanding of the action. Currently, fewer than 50 people are receiving digital terrestrial television audio description—I apologise for that long title—as part of a trial. I hope that Ofcom will give high priority to supporting the development of that service, to enable a large number of people to benefit.

There are 8.7 million disabled people in the United Kingdom, including 2 million with serious sight problems, who are more dependent on radio and television than most people, and many of whom have unsuitable equipment. That is an area where Ofcom could take the lead and ensure that the future needs of disabled people were met, but it will need specific expertise to do so.

There is currently an obstacle to Christian and other religious broadcasters in applying for a UK broadcasting licence in the same way as their secular competitors. There is a call to remove the ban against religious persons and bodies applying for licences for national and regional analogue and digital terrestrial TV services and national analogue and digital and local digital radio services. I would urge Ofcom to look sympathetically at that area of demand.

Even those already in possession of a licence are not without their problems. Premier Radio, London's Christian radio station, has been given a yellow card by the Radio Authority. That means that if the station does not mend its ways it could lose its licence. Premier Radio had 14 programming complaints and one advertising complaint lodged against it, which is far more than any other station listed. Every single complaint was from the Mysticism and Occultism Federation. Its website states that it has five part-time unpaid volunteers who monitor the media. Irony of ironies, the pretext for the group's monitoring and complaining is in fact pluralism. The group that seems determined to remove Premier Radio from the airwaves claims that it is actually committed to valuing and respecting the beliefs of others.

Mr. Simon Thomas

I have a lot of sympathy with what the hon. Lady is saying. I do not see why the radio frequencies should not be opened up more to a diverse range of stations, as long as they can remain within the law and the regulation that Ofcom might seek to lay down, but that may well lead to the establishment of radio occult. Would the hon. Lady welcome that?

Angela Watkinson

I thank the hon. Member for Ceredigion (Mr. Thomas), if only because it gives me the opportunity to try to pronounce the name of his constituency. I just wonder how large an audience such a station would attract.

One is surprised to learn just how seriously those complaints were taken by the Radio Authority. The authority, or its future incarnation Ofcom, must be kept more accountable by the Secretary of State to expose vexatious complaints. Specific expertise is needed to overcome such problems.

I shall now discuss the future status of the BBC. Currently, the BBC answers only to itself or to the Secretary of State. It would be far better for any future regulatory dispute to be decided between Ofcom and the BBC rather than with an elected politician.

The BBC's public service remit will be largely self-regulation but with back stop powers resting with the Secretary of State. If the governors fail in that task, the Secretary of State may act to remedy the situation. The Secretary of State would also retain the power to approve new BBC licenced fee-funded services and material changes to existing services, although Ofcom will give formal advice on the market impact of such proposals. It is essential that the BBC retains public confidence and credibility in its editorial independence as an impartial public broadcaster, and that role would be more appropriately carried out by an independent Ofcom.

A huge responsibility will rest on Ofcom in having control of the nation's communications—those conveyors of ideas, information and culture. The Orwellian opportunities are obvious. We must ensure that this new all-encompassing regulatory body has a light touch and transparent procedures, which will meet the continuing fast-moving developments and challenges facing the communications sector and take a balanced and fair view across the spectrum of media platforms. To succeed, it will need to be efficient and innovative and have an explicit commitment to providing first-class services to all sections of the viewing, listening and communicating public.

9.30 pm
Mr. Simon Thomas

I, too, served on the Committee that considered the Bill, and its proceedings were very interesting and informative. On the whole, it considered the Bill at a reasonable pace and discussed issues that were worthy of debate. There were one or two examples of certain hon. Members perhaps taking up time in a dilatory way, but on the whole it was a model of how a Committee should work and the right amount of time was devoted to a Bill of this length.

I cannot accept that we have discussed any issue that should not rightly have been considered in Committee or even on Report. It was right and proper for hon. Members to try to explore the Bill's paving element and its less welcome elements. Paving is a useful substance when it is put down to walk on—it opens the way—but it becomes a harrier if it is stacked up. When we started to consider the Bill, we were not quite sure whether we were looking at paving that would provide a nice, flat way forward or at an obstacle, and I am still not convinced which of those this Bill represents.

On the whole, this is a genuine paving Bill, but it has always had a slightly worrying aspect: clause 2, which relates to Ofcom's initial function, states that the function of OFCOM … is to do such things as they consider appropriate for facilitating the implementation of, or for securing the modification of, any relevant proposals about the regulation of communications. That clause gives powers to Ofcom very early in its existence, and we were right to explore in Committee how those powers may be used and to consider Ofcom's membership because it will set the tone for the forthcoming, fully fledged Ofcom, to which we now look forward.

We await with interest the draft communications Bill that the Minister said he would introduce. In Committee, he clearly said that it would come in the spring. When he was pressed to say when spring time was, he said that it was a time of flowers and warm air. I have to tell him that the snowdrops are out, even in Ceredigion; that the daffodils are out in London; and that I saw frogspawn on my walk up the Nedd Fechan in Pontneddfechan on Sunday, so it is important to recognise that spring is on its way.

I agree with the hon. Member for Milton Keynes, North-East (Brian White) that we now need to see that draft communications Bill. It does not matter whether it is complete because we have been promised pre-legislative scrutiny in both Houses, so we shall have plenty of time to consider it. I fear that, if we do not see that Bill early enough to continue some of our arguments, the suspicion will grow that the Government have sought to establish Ofcom as a nice, tidy way to deal with these things while further distancing themselves from accountability and responsibility for them.

The matters of most interest to me are representation not only for Wales and Scotland, to give us a voice in Ofcom in whatever way that is arranged, but for disabled people, as well as the interesting issues raised about the number of people at Ofcom and the length of their service and how the body will be constituted. All those valid and valuable issues were raised in Committee, and, on the whole, the Minister dealt with them reasonably effectively, but one issue remains outstanding.

Plaid Cymru and the Scottish National party are concerned that there is still no representation for Wales or Scotland or a method to consult them, as promised in the White Paper. There is no mention of having a member for Wales. We have extracted a promise that Ofcom will have an office in Wales, but we must be aware that it replaces five regulatory bodies, most of which already have in place a method for representing Wales as well as contacting and consulting the National Assembly on such matters. That is why the Assembly Cabinet made it clear that it wanted to choose a Welsh member of Ofcom. It has long been my party's policy that we should have a regulatory body for communications in Wales—Ofcom Cymru, or Ofcom Wales if hon. Members prefer. I accept that that was never on the agenda and have not pursued it. It is perhaps better addressed in a bigger political fight. Nevertheless, we are extremely disappointed that the Bill has fallen so far short of reflecting Welsh and Scottish needs.

Despite the powers not being devolved to the National Assembly, it has a huge interest in communications, and in broadband in particular, because they do relate to the economic development of Wales. It funds broadband expansion in Wales and is a partner with the European Union in much of what is best in broadband in Wales. That is obvious to anyone who has ever pressed the fourth button on a television in Wales and seen the Welsh language channel, SpedwarC. The Assembly is charged by the Government of Wales Act 1998 to discuss such matters. They do not have to be devolved for it to have an interest and want to have a say.

Unfortunately, it is not clear how discussions in the Assembly or thoughts in Wales on how the communications revolution should continue will be taken up by Ofcom and fed through to the decision-making processes in the Department for Culture, Media and Sport and, to an extent, in the Department of Trade and Industry. That is a disappointing aspect of the Bill. We will of course explore such issues more thoroughly when we debate the communications Bill, and I look forward to advancing the case for Welsh and Scottish communications needs to be taken into account by the Government.

9.37 pm
Michael Fabricant

We have come to the end of a long period of deliberation on what is a fairly small Bill. However, it was right to spend that time establishing the structures and, where possible, to discuss what needs to be put into place when the communications Bill is introduced.

The hon. Member for Milton Keynes, North-East (Brian White) is often right on technological matters. He was certainly right to say that what might be possible technically need not necessarily dictate the future. Studies in the United States show that people operate personal computers differently from the way in which they watch television. Convergence might mean that the PC and the television use the same screen, but in practice, as the hon. Gentleman said, that will probably not be the case because we watch television at a distance and operate a PC close up.

Nevertheless, as I said when I argued that the BBC should be involved in Ofcom, time has moved on. There is greater convergence. Technology means that the BBC's position cannot be sustained. My hon. Friend the Member for Vale of York (Miss McIntosh) rightly explained that we are in a sustained period of recession, certainly as far as advertising revenue is concerned. The Independent Television Commission recently sent me some information. Between 1994 and 2000, the annual growth in independent television net advertising receipts was 8.6 per cent. That is a massive annual growth. Yet during 2001, ITV suffered losses in net advertising revenue that were larger than the average for the industry as a whole. Carlton reported its advertising revenue down by 13 per cent. for the year ending September 2001. Granada posted similar losses of 12 per cent.

Those losses are partly due to the fact that the BBC has shown itself to be an excellent and competitive broadcaster. Since the birth of independent television in 1955, the BBC has managed to capture a larger audience share than ITV. However, the real reason for net advertising receipts falling is the fragility, as people see it, rightly or wrongly, of the economy in the future. That is even more reason to set up an Office of Communications, and that is why my Front-Bench colleagues and I welcome its introduction.

However, we do not want Ofcom at any cost. We do not want a body that is flawed. I am not convinced that the shell organisation set up by the Bill will be flawed: it will exist only until a communications Bill goes through Parliament and is enacted. Incidentally, over the years the Government have promised to introduce legislation in many areas, but the legislation never appeared, so I want to be convinced that a communications Bill will be announced in the next Queen's Speech. It is important for the sake of the industry that a communications authority be established. It is terribly important that we get that right so that the BBC is not seen to be its own judge and jury, as I said earlier. Furthermore, it must be seen to be controlled in the best interests of the viewers and listeners, who after all pay for it.

It is important also for the industry as a whole that we get this right. I do not want news corporations such as Berlusconi or Bertelsmann to take over the media in the United Kingdom and worldwide. Britain has so much to be proud of, including not only the BBC, which is the largest individual producer of radio and television programmes in the world, but stations such as Granada and Carlton, which have sales worldwide. British broadcasting has to be promoted, and we must have a structure that enables us to do that.

The hon. Member for Milton Keynes, North-East would chide us with the fact that this is not only a question of controlling broadcasting bodies: we must also ensure that there is an expansion in digital technology in this country. It is a sad indictment of this Government that despite all the boasts made in the White Paper a year ago and in earlier White Papers, broadband has failed to expand in the UK, to such an extent that we are now 22nd in the world league.

I hope that when the communications body is established it will manage to speed up that expansion; otherwise we will see a digital deficit, not only in regard to disabled people, as I said earlier, but in the nation as a whole, and that will cost us dear. I have no doubt that the will of the Government is to see that everyone becomes computer literate and has access to a PC on a broadband network so that they can apply their literacy. However, that requires a great deal more than the Prime Minister visiting a school and playing on a computer; a structure needs to be established.

My hon. Friend the Member for Ceredigion (Mr. Thomas)—I call him my hon. Friend because we became great allies in Committee—is right to call for interests in Wales, Scotland and Northern Ireland to be represented in Ofcom, and not only because of the question of languages that exists in Wales. Incidentally, I had to smile wryly when he talked about the work of S4C, because while many people enjoy watching S4C, plenty] of other people build tall aerials on their roof so that they can pick up Channel 4 from England—but that is not to say that I want to deprive Welsh viewers of S4C. I would like viewers in Wales to receive both S4C and Channel 4, and that may well be possible in future.

Mr. Simon Thomas

Not only will it be possible in future—it is possible now. The whole point of digitalisation is choice. What is important is getting the whole of Wales switched on to the digital revolution and making sure that there is someone to represent Wales and ensure that it is switched on, rather than relying on general, UK-wide figures. I hope that the hon. Gentleman supports me in that.

Michael Fabricant

The hon. Gentleman is absolutely right. I believe that the aim even of digital terrestrial television is to give people access to S4C and to Channel 4. That is what the Bill is all about—diversity and digital access, not digital disability.

The Minister's position of insisting that the BBC should not be encompassed by Ofcom is unsustainable. If he does not grasp the nettle now, he will have to do it in 2005 or 2006, when the royal charter comes up for renewal—unless there is a general election in the meantime, in which case the task will fall to those who now sit on the Opposition Benches but who will then sit on the other side of the House.

The BBC enjoys a unique position. I have resisted quoting the famous letter from Michael Hastings. It is arrogance in the extreme for the head of the political and parliamentary affairs unit of the BBC, which is a publicly funded body, to write to Members of Parliament saying: An inappropriate level of attention has been focused on the BBC and its regulation through the Second Reading and Committee stages". I almost wonder whether it is a breach of privilege for someone to describe the legislative process as "inappropriate". Can hon. Members imagine civil servants at the Department for Culture, Media and Sport writing to tell me that it was "inappropriate" of me to mention in Committee the comment made by the hon. Member for Vauxhall (Kate Hoey) to the effect that their Department is "dysfunctional"? They probably thought it was inappropriate of me to say so, but they would never write to me about it, because it would be improper.

It is equally improper of the BBC to write to Members of Parliament as Mr. Hastings did, and that is part of the problem. Some cogent points are made in other parts of the letter, but they are ruined by the arrogance that permeates the BBC because it is ultimately answerable to no one—and because it is answerable to no one, it thinks that it can get away with it. As I said, if the BBC fell under the auspices of Ofcom, it would find that Ofcom provided protection.

I wish the Bill a fair wind, but I hope that the main communications Bill will be scrutinised seriously. I hope that during that scrutiny the Government will listen and be prepared to accept amendments to that Bill. They certainly were not willing to do so in the Committee on this one.

9.49 pm
Miss McIntosh

With the leave of the House, I shall sum up for the official Opposition. I would hate to disappoint the Minister, who I am sure wants to keep the dialogue going a wee while longer.

We have heard some interesting speeches on Third Reading. It is always a pleasure to hear the hon. Member for Milton Keynes, North-East (Brian White), who speaks with such authority and high regard for the technological ability of the industry. I regret that the hon. Member for North Devon (Nick Harvey) has again confused the role of the Office of Fair Trading in dealing with competition matters and the BBC, whose public sector responsibilities we want to be brought within Ofcom's remit.

Despite the comments of my hon. Friend the Member for Lichfield (Michael Fabricant), I hope that we have made Mr. Michael Hastings, for whom I have considerable affection, happy this evening, and that we have satisfied his hope that this Wednesday's debate will be more constructive and will give due regard to the central, positive and creative role the BBC plays in the nation's cultural and education life. As I mentioned earlier, I continue to have the highest regard for the BBC, which can only be enhanced when we succeed in bringing its public sector provision, as well as its other provision, within the remit of Ofcom

My hon. Friend the Member for Upminster (Angela Watkinson) spoke eloquently on the role of television and radio for the visually impaired. As the hon. Member for Ceredigion (Mr. Thomas) also said, although this is a paving Bill, it would have been opportune this evening for us to have regard for those with special needs.

In summing up, let me express the clear disappointment felt by more than one party. We should not only have considered the composition of Ofcom but have had the opportunity to consider its functions. It has been extremely difficult in Committee and during the Bill's remaining stages to consider Ofcom's composition and functions separately. Perhaps the Minister could now admit his regret that the Government did not make that possible.

9.52 pm
Dr. Howells

With the leave of the House, Mr. Speaker. I thank the hon. Members for Vale of York (Miss McIntosh), for North Devon (Nick Harvey) and for Ceredigion (Mr. Thomas) for being such courteous and erudite spokespersons for their parties. I agreed with almost nothing that they said, but they said it very nicely. The hon. Member for North Devon is a fount of common sense—most of the time, anyway.

It has been a real joy to watch the warmth and glow of the fraternal friendship that has developed between the Tories and the Welsh and Scottish nationalists. What a ménage   trois! I am only glad that it is after 9 o'clock and the watershed, such has been the passion with which they leapt into each other's arms.

The Bill was introduced in another place, where it was thoroughly scrutinised and debated, in July 2001. That thoroughness has been continued as the Bill has progressed through the House. Discussion of it has covered a wide range of issues and given us a foretaste of some of the variety of topics that are likely to be debated in much greater detail when the communications Bill is published in a few weeks' time. I am grateful to all right hon. and hon. Members who have participated in the debates, and look forward to their future contributions.

The Bill is in excellent shape and I commend it to the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 287, Noes 6.

Division No. 186] [9.53 pm
Abbott, Ms Diane Davidson, Ian
Ainger, Nick Davies, Rt Hon Denzil (Llanelli)
Ainsworth, Bob (Cov'try NE) Davies, Geraint (Croydon C)
Alexander, Douglas Davis, Rt Hon Terry
Allen, Graham (B'ham Hodge H)
Anderson, Janet (Rossendale) Dawson, Hilton
Armstrong, Rt Hon Ms Hilary Dean, Mrs Janet
Atherton, Ms Candy Dhanda, Parmjit
Atkins, Charlotte Dismore, Andrew
Austin, John Dobbin, Jim
Bailey, Adrian Donohoe, Brian H
Baird, Vera Doran, Frank
Barnes, Harry Doughty, Sue
Barrett, John Dowd, Jim
Barron, Kevin Eagle, Angela (Wallasey)
Beard, Nigel Eagle, Maria (L'pool Garston)
Beckett, Rt Hon Margaret Efford, Clive
Bell, Stuart Ellman, Mrs Louise
Benn, Hilary Ennis, Jeff
Bennett, Andrew Fisher, Mark
Benton, Joe Foster, Rt Hon Derek
Berry, Roger Foster, Michael (Worcester)
Blears, Ms Hazel Foster, Michael Jabez (Hastings)
Blizzard, Bob Francis, Dr Hywel
Borrow, David Galloway, George
Bradley, Rt Hon Keith (Withington) Gardiner, Barry
Bradley, Peter (The Wrekin) George, Andrew (St Ives)
Bradshaw, Ben George, Rt Hon Bruce (Walsall S)
Brown, Russell (Dumfries) Gerrard, Neil
Bryant, Chris Gidley, Sandra
Burden, Richard Gilroy, Linda
Burgon, Colin Green, Matthew (Ludlow)
Byers, Rt Hon Stephen Griffiths, Jane (Reading E)
Cairns, David Griffiths, Win (Bridgend)
Calton, Mrs Patsy Grogan, John
Campbell, Alan (Tynemouth) Hall, Mike (Weaver Vale)
Campbell, Mrs Anne (C'bridge) Hall, Patrick (Bedford)
Campbell, Rt Hon Menzies (NE Fife) Hamilton, David (Midlothian)
Hanson, David
Campbell, Ronnie (Blyth V) Harris, Tom (Glasgow Cathcart)
Caplin, Ivor Harvey, Nick
Casale, Roger Henderson, Ivan (Harwich)
Caton, Martin Hendrick, Mark
Cawsey, Ian Hepburn, Stephen
Challen, Colin Heppell, John
Chaytor, David Hermon, Lady
Clark, Mrs Helen (Peterborough) Heyes, David
Clark, Paul (Gillingham) Hill, Keith
Clarke, Rt Hon Tom (Coatbridge) Hinchliffe, David
Clarke, Tony (Northampton S) Hood, Jimmy
Clelland, David Hope, Phil
Coaker, Vernon Hopkins, Kelvin
Coffey, Ms Ann Howarth, Rt Hon Alan (Newport E)
Cohen, Harry Howarth, George (Knowsley N)
Connarty, Michael Howells, Dr Kim
Cook, Rt Hon Robin (Livingston) Hughes, Beverley (Stretford)
Cotter, Brian Humble, Mrs Joan
Cranston, Ross Iddon, Dr Brian
Crausby, David Illsley, Eric
Cryer, John (Hornchurch) Irranca-Davies, Huw
Cummings, John Jackson, Glenda (Hampstead)
Cunningham, Rt Hon Dr Jack (Copeland) Jackson, Helen (Hillsborough)
Jamieson, David
Cunningham, Jim (Cov'try S) Jenkins, Brian
Cunningham, Tony (Workington) Jones, Helen (Warrington N)
Dalyell, Tam Jones, Jon Owen (Cardiff C)
Davey, Valerie (Bristol W) Jones, Kevan (N Durham)
David, Wayne Jones, Lynne (Selly Oak)
Jones, Martyn (Clwyd S) Moore, Michael
Joyce, Eric Moran, Margaret
Keen, Ann (Brentford & Isleworth) Morgan, Julie
Kemp, Fraser Mullin, Chris
Kidney, David Munn, Ms Meg
King, Andy (Rugby & Kenilworth) Murphy, Denis (Wansbeck)
Kirkbride, Miss Julie Murphy, Jim (Eastwood)
Knight, Jim (S Dorset) Murphy, Rt Hon Paul (Torfaen)
Kumar, Dr Ashok Naysmith, Dr Doug
Ladyman, Dr Stephen O'Brien, Bill (Normanton)
Lamb, Norman Olner, Bill
Lammy, David Öpik, Lembit
Lawrence, Mrs Jackie Osborne, Sandra (Ayr)
Laxton, Bob Perham, Linda
Lazarowicz, Mark Picking, Anne
Lepper, David Pickthall, Colin
Leslie, Christopher Pike, Peter
Levitt, Tom Plaskitt, James
Lewis, Ivan (Bury S) Pollard, Kerry
Lewis, Terry (Worsley) Pond, Chris
Liddell, Rt Hon Mrs Helen Pope, Greg
Linton, Martin Prentice, Ms Bridget (Lewisham E)
Lloyd, Tony Prentice, Gordon (Pendle)
Love, Andrew Prescott, Rt Hon John
Lucas, Ian Prosser, Gwyn
Luke, Iain Pugh, Dr John
McAvoy, Thomas Purchase, Ken
McCabe, Stephen Purnell, James
McCafferty, Chris Quin, Rt Hon Joyce
McDonagh, Siobhain Quinn, Lawrie
MacDonald, Calum Rapson, Syd
McDonnell, John Reed, Andy (Loughborough)
MacDougall, John Reid, Alan (Argyll & Bute)
McIsaac, Shona Robertson, John (Glasgow Anniesland)
MacKay, Rt Hon Andrew
McKechin, Ann Roche, Mrs Barbara
McKenna, Rosemary Rooney, Terry
Mactaggart, Fiona Ross, Ernie
McWalter, Tony Roy, Frank
McWilliam, John Ruane, Chris
Mahmood, Khalid Ruddock, Joan
Mahon, Mrs Alice Russell, Bob (Colchester)
Mallaber, Judy Russell, Ms Christine (Chester)
Mann, John Salter, Martin
Marris, Rob Sanders, Adrian
Marshall, Jim (Leicester S) Sawford, Phil
Meacher, Rt Hon Michael Sedgemore, Brian
Merron, Gillian Shaw, Jonathan
Michael, Rt Hon Alun Sheridan, Jim
Milburn, Rt Hon Alan Simon, Siôn
Miliband, David Simpson, Alan (Nottingham S)
Moffatt, Laura Skinner, Dennis
Mole, Chris Smith, Angela (Basildon)
Smith, Rt Hon Chris (Islington S) Tyler, Paul
Smith, Geraldine (Morecambe) Tynan, Bill
Smith, Jacqui (Redditch) Walley, Ms Joan
Smyth, Rev Martin (Belfast S) Ward, Ms Claire
Spellar, Rt Hon John Wareing, Robert N
Squire, Rachel Watson, Tom
Starkey, Dr Phyllis Watts, David
Steinberg, Gerry Webb, Steve
Stewart, David (Inverness E) White, Brian
Stewart, Ian (Eccles) Whitehead, Dr Alan
Stoate, Dr Howard Williams, Mrs Betty (Conwy)
Stringer, Graham Williams, Roger (Brecon)
Sutcliffe, Gerry Willis, Phil
Winnick, David
Tami, Mark Winterton, Ms Rosie (Doncaster C)
Taylor, Rt Hon Ann (Dewsbury) Wood, Mike
Taylor, David (NW Leics) Woodward, Shaun
Thomas, Gareth (Clwyd W) Woolas, Phil
Thomas, Gareth R (Harrow W) Wray, James
Todd, Mark Wright Anthony D (Gt Yarmouth)
Touhig, Don Wright, David (Telford)
Trickett, Jon Wright Tony (Cannock)
Turner, Dennis (Wolverh'ton SE) Wyatt, Derek
Turner, Dr Desmond (Kemptown)
Turner, Neil (Wigan) Tellers for the Ayes:
Twigg, Derek (Halton) Mrs. Anne McGuire and
Twigg, Stephen (Enfield) Dan Norris.
Ewing, Annabelle Williams, Hywel (Caernarfon)
Llwyd, Elfyn
Price, Adam Tellers for the Noes:
Robertson, Angus (Moray) Mr. Simon Thomas and
Weir, Michael Pete Wishart.

Question accordingly agreed to.

Bill read the Third time, and passed.

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