Office of Communications Bill [H.L.]

HL Deb 22 November 2001 vol 628 cc1246-305

Report received.

Clause 1 [The Office of Communications]:.

The Minister of State, Department for Culture, Media and Sport (Baroness Blackstone): moved Amendment No. 1: Page 1, line 11, leave out "staff— and insert "executive".

The noble Baroness said: My Lords, in moving Amendment No. 1, I shall speak also to Amendments Nos. 2 to 6, 32, 34, 36, 37, 39, 40, 42 to 73, 76, 77, 80 to 83, 85, 87 and 88. I apologise for that mouthful. I also apologise for my voice and for the voice of my noble friend Lord McIntosh of Haringey. We have both succumbed to the same dreaded lurgy. We shall be playing for sympathy this afternoon and shall speak quite briefly to ensure that we can continue to speak until the end of this Report stage.

In Committee I indicated that we would be prepared to reconsider the terms "staff member" and "non-staff member" used in the Bill. The series of amendments tabled by the Government changes the terminology throughout the Bill from "staff member" to "executive member" and from "non-staff member" to "non-executive member".

As I said in Committee, the use of the term "director" was not considered appropriate for a body such as Ofcom, where the organisation is embodied by its membership. Therefore, we have retained the use of the term "member", but we have distinguished between those members who are employees of Ofcom and those who are not by using the more familiar terms "executive member" and "non-executive member" respectively. I beg to move.

The Earl of Northesk

My Lords, I rise to thank the noble Baroness for bringing forward this change to the Bill. It is flattering, even embarrassing, that my gentle probing of the matter in Committee has prompted such largesse. I make it a full pack of cards, excluding jokers—52 amendments. I am most grateful and I hope that the noble Baroness shakes off her lurgy as soon as possible.

On Question, amendment agreed to.

Baroness Blackstone moved Amendments Nos. 2 to 6: Page 1, line 12, leave out "staff" and insert "executive Page 1. line 18, leave out "staff" and insert "executive Page 2, line 1 leave out -staff' and insert "executive Page 2, line 5, leave out "staff" and insert "executive Page 2, line 7. leave out -staff" and insert "executive".

On Question, amendments agreed to.

Clause 2 [Initial function of OFCOM]:

Baroness Anelay of St Johns moved Amendment No. 7: Page 2, line 32, leave out "both".

The noble Baroness said: In moving Amendment No. 7, I shall speak also to Amendments Nos. 8, 9, 17, 18, 26 and 28 standing in my name. This group is not quite such a formidable battery of amendments as the previous group, but the objective behind it is simple. That objective is to keep our options open in relation to the communications Bill on whether the BBC should be regulated by Ofcom wholly or merely in part.

The practical effect of the amendments is that they place a duty upon the BBC to prepare plans for the regulatory functions of the Board of Governors to be brought wholly within Ofcom. They also put a duty on Ofcom to co-operate with the BBC for the same purpose. Without these amendments there is no mention of the BBC in this paving Bill.

Clause 2(1) gives Ofcom the function to do just about anything that it considers appropriate for implementing or modifying proposals covering regulation. But the definition in Clause 5 of "existing regulator" makes no mention of the regulatory function of the BBC governors.

I want to make it clear from the start that I do not want to abolish the BBC Board of Governors—far from it. It has and, in the future, it will continue to have a valuable role to play if Parliament decides that BBC regulation should come wholly within Ofcom. The amendments do not change the status of the BBC Board of Governors. They do not threaten the independence of the BBC.

Whether it is right to bring the BBC fully within Ofcom, of course, cannot be decided today. That will be determined when we debate the provisions of the communications Bill itself. However, Parliament's opportunity to make that decision will be impaired unless we take steps, in this Bill, to ensure that the BBC is ready to join up fully to Ofcom.

If the BBC is left out of the loop now, I believe that, when we deal with the communications Bill, it will be too late to bring the BBC fully within Ofcom if that is Parliament's wish. Ofcom's working culture will be established in its transitionary phase without the benefit of full BBC input.

The Government have tried to rebut my arguments by adopting what appear to be two rather contradictory positions. At Second Reading the noble Lord, Lord McIntosh, said that the provisions of Clause 2(3)(a) allowed the Secretary of State to bring the BBC within Ofcom at some later unspecified date if she so wished. But that is not an adequate answer to this problem. It creates an uncertainty that I believe is unacceptable. When will the Government decide to bring the BBC fully within the fold? This year, next year, sometime, perhaps never?

We do not know when the draft Bill will be published, let alone the real communications Bill. The transitional Ofcom may well be into maturity by the time Parliament has the opportunity to consider the BBC's position in the communications Bill The indications given so far by the Government are that they will not even consider that until charter review, if then.

The second, slightly different position was explained by the noble Baroness, Lady Blackstone, in Committee. The Minister argued that my amendment should not be pursued because the Government have already made a clear statement in the White Paper as to why they would not allow the BBC to be fully within Ofcom. So, in essence, it appeared that I was wasting my time because by the time we get to the communications Bill the Government will already have made up their mind on behalf of Parliament on this matter.

I remain convinced that the shadow Ofcom, this paving Ofcom, should not be set up in such a way that it becomes difficult, if not impossible, for Parliament to bring the BBC wholly within Ofcom in two or three years' time or whenever the communications Bill is implemented. The culture of Ofcom will have been set without the full input of the BBC and the problem will be even worse if we are forced to wait until charter review to make that change. The debate needs to start now.

It is illogical to establish a single converged regulator and then to exclude from its remit services that represent a major part of broadcast radio and television. The Government have often said that their aim is to create a single regulator for the communications sector. But in reality, as the Bill stands, there will continue to be two broadcasting regulators—Ofcom and the BBC Board of Governors. The National Consumer Council points out that, retaining two disconnected streams of regulation is not in the consumer interest". That could lead to messy turf wars between Ofcom and the BBC governors which would lead to chaos and confusion.

I was interested to note that support for bringing the BBC's regulation wholly within Ofcom recently came from an unexpected source. In a Question to the Government in another place on 5th November the former Secretary of State for Culture, Media and Sport, the right honourable Chris Smith, tried to encourage the Government to look favourably at this issue. I welcome his conversion.

At Second Reading some noble Lords argued that the BBC is different from other broadcasters and therefore should be left alone. The noble Baroness, Lady Young of Old Scone, put the matter in a nutshell when she said that, the BBC is different … from … [other] broadcasters because its sole role is public service [broadcasting]".—[Official Report, 15/10/01; col. 442.] I recognise that there is a difference from other broadcasters in the constitution and remit of the BBC. Therefore, I have always treated it differently in my amendments. But the BBC does not always act differently. Therein lies a problem of its own creation. Its determination to chase ratings often makes it look too much like other broadcasters to members of the public.

An illuminating example is some good broadcasting carried out by the BBC last Christmas. I thoroughly enjoyed it. BBC radio decided to broadcast non-stop a Harry Potter book. Before it could do that, it had to buy the company—Cover to Cover—which owned the rights to the audio tapes. That was a good example of successful, aggressive commercialism. But it makes one wonder how the BBC differentiates itself from other commercial broadcasters.

Some noble Lords have questioned whether or not Ofcom is competent to take over all the regulatory functions from the BBC governors. One asks: why not? Surely, Ofcom must have the necessary expertise to take the decisions required, bearing in mind the different needs and status of different service providers. If it does not have that competence, it will not be competent to regulate other public service broadcasters, such as Channel 4 and those outside public service broadcasting altogether.

Either the Secretary of State has confidence in Ofcom or she does not. If she does not, why is she going to the trouble of bringing forward this piece of legislation? If she does have confidence in Ofcom to do the job properly, surely the suspicion must be that she wants to control the political direction of the BBC to a greater level than would be achievable via an independent regulatory body.

I shall briefly run through the technical effect of each amendment. Amendments No. 7, 8 and 9 seek to amend Clause 2 so that the BBC is named as one of the organisations with which Ofcom shall cooperate. Amendments Nos. 17 and 18 seek to amend Clause 3 to impose a duty on the BBC to co-operate with Ofcom to develop proposals for the transfer of the BBC governors' regulatory functions to Ofcom. Amendments Nos. 27 and 28 should be described as consequential.

My amendments offer a simple, fair and practical way to ensure that this paving Bill does not leave the BBC behind—half in and half out of Ofcom. It will ensure that Parliament can make its decisions about the BBC in the communications Bill unfettered. It is a matter of keeping our options open. I beg to move.

3.45 p.m.

Viscount Falkland

My Lords, we have a certain amount of sympathy with some of the sentiments behind the amendment, but we cannot support it. We cannot support it because it takes us far too far down the road. The Bill is not the right place to make decisions of this kind. I do not seek to criticise the Bill. It is called a paving Bill. That is an anomaly in itself as it is not a real paving Bill. The Bill sets out a structure. The noble Baroness seeks to put the BBC and the Government in a position in which neither of them wants to be nor should be. When we are further down the road after the normal periods of consultation—they will be long periods of consultation—we may change our view.

On these Benches our view is that the BBC is in a particular position. One may express irritation at the BBC as one does at many large and unwieldy institutions. But, nevertheless, it is the template of quality broadcasting in this country. It is different from the commercial broadcasters. Its regulation is and always has been different in character. That difference is likely to continue for some length of time. To what measure will become clear after consultation.

Having said that, although we sympathise with what is, in essence, a sensible suggestion that the BBC should make preparations, that should not be on the face of the Bill. If the BBC has any sense it will be making preparations. We shall be in the middle of the discussions to find out whether or not there is merit in the BBC becoming part of this larger regulatory body.

Lord Gordon of Strathblane

My Lords, before the Minister replies, she may find it helpful to accept Amendment No. 27 standing in my name. The amendment is policy neutral. Unlike the amendment moved by the noble Baroness, it does not commit the BBC to doing things at this stage. It simply lists the BBC Board of Governors as one of the regulators. It does not take the Government any further than they have said they will go at the moment. On the other hand, if the Government change their mind, as T believe they will, and bring the BBC more fully under Ofcom, it will make the change less apparent in that a step will have already been taken.

I use the word "apparent" advisedly. In previous debates the Minister and my noble friend Lord McIntosh have pointed out that the White Paper provides for the BBC to be "fully under Ofcom" as regards tier one, "virtually fully under Ofcom" as regards tier two with the single and, in my view, wholly inappropriate exception of impartiality. The idea that the Secretary of State of a government should be the backstop in deciding whether the BBC is impartial strikes me as ludicrous. Anyway, it is broadly under Ofcom. Even under Clause 3, Ofcom will comment on the public service statements of all the public service broadcasters, including the BBC.

It would do a great deal to remove the misapprehension that the BBC somehow lies wholly outwith Ofcom if the Minister were able to accept my amendment which simply lists the BBC as one of the regulators in the Bill.

Lord Crickhowell

My Lords, I declare an interest, as I did on the previous occasion when we debated the Bill, as chairman of HTV. The immediate answer to the noble Viscount, Lord Falkland, is that the Bill deals with the setting up of an organisation that is preparing the way to be a regulator of commercial activities. There is a serious danger that if it does not expect to regulate the BBC that that structure will initially be prepared in an inadequate way.

Like my noble friend, I am not in any way attempting to abolish the BBC Board of Governors. I am conscious of the fact that to alter the existing arrangements and to change the BBC Charter before the year 2006 would be in any case an impossible task. I am one of those who has no great desire to see the new body interfere with the content of programmes. I am a believer in light regulation. We must maintain certain basic standards as the ITC has done successfully in the commercial sector. But I am horrified at the thought that there may be a "contents" board, encouraged by a number of Members of Parliament, in contact with correspondents and constituents, wanting to manage programmes. I am not dealing with those matters. My concern is primarily about the BBC's involvement in commercial activities.

We have seen elsewhere that regulators can take actions which often have devastating consequences for the organisations they regulate. We hear much talk about level playing fields. In the sense that the playing fields are not bumpy, regulators achieve that. But they seem often to tip up the playing field so that those on it have to climb steeply uphill and struggle to survive. That may be all right when dealing with only one organisation. However, if two commercial organisations are operating on parallel playing fields, one walking along a level surface and the other having to put on climbing boots, one is likely to create a massively unfair situation. I note the remarks in the useful paper prepared by the Consumers' Association—my noble friend referred to it—about the lack of transparency in the present arrangements for the governance of the BBC. The paper refers to the unaccountable and opaque way in which the BBC is governed. It expresses concern that that is particularly unfortunate when the BBC is involved in commercial activities and the development of digital services.

The issue has also been examined by ITN. Many noble Lords will have read the useful article by Stewart Purvis in the Parliamentary Monitor, who makes clear his concern about the problems associated with accountability and transparency in the BBC's commercial and publicly funded operations. We have seen a remarkable expansion of the BBC's activities across a range of new digital services. From two TV channels and five radio stations, the BBC is now present on almost every conceivable media platform and is about to launch a series of new publicly funded digital services. It is true that the process under which these new digital TV and radio services were examined was considerably more transparent than in the past but there is much that is less than clear. We need an organisation which will open up the issue so that there is clarity.

On the basis of public funding, the BBC's power to compete with the independent sector is enormous. It does so in a range of ways which may or may not be fair. It can produce resources into programming—in bidding for sporting activities, for example—which in these times it may be difficult for others to match. But in setting up commercial operations there needs to be fair and open regulation. If publicly funded services are combined with commercial services in a way that is not completely open, we face the charge that we are creating unfair competition.

We hear that the BBC is to merge the BBC World Service and BBC World. It maintains that those are kept completely separate. We need an organisation such as Ofcom to look at the structures to ensure that they are kept completely independent and open.

In this increasingly complex and competitive world, we cannot allow a situation in which a publicly funded body can compete unfairly with the commercial world and use its public sector funding to undercut or even destroy other services. In the past it has been argued that it is the job of the BBC to fill gaps which the private sector is unable to fill. That may be fine. But when the public sector destroys services by its competition and creates a gap into which it then steps, that is not fine. Ofcom should be preparing a structure and organisation so that when the promised legislation is implemented it is enabled to grasp those matters with a sense of urgency. These are not future threats; they exist at present. Those competitive operations are already under way. Ofcom must be in position to act quickly. I strongly support the amendment.

Lord Thomson of Monifieth

My Lords, I begin with my customary declaration of interest in any matter relating to the BBC. I have a daughter who is an executive of the BBC. I shall move later an amendment relating to the problems of ITV. I make my declaration of interest that I am a pensioner of the former Independent Broadcasting Authority which regulates these matters in commercial broadcasting.

We discussed these issues thoroughly in Committee. I noted a change of emphasis in the views of the Conservative Front Bench. The noble Baroness, Lady Anelay, made a seductive speech proposing an innocent looking half-way house. However, she was at great pains to say that she did not wish to abolish the governors of the BBC. By curious coincidence, this was echoed immediately by the noble Lord, Lord Crickhowell. If the Official Opposition do not seek to abolish the governors of the BBC but to do what the amendment provides, they propose to turn the governors of the BBC into what in the past they have occasionally been criticised as being; distinguished men and women who accept being a governor of the BBC as almost the equivalent of appearing in the New Year Honours List rather than undertaking a serious public working responsibility.

My view about preserving the BBC, at least for the time being, is not uncritical. I share some of the views expressed by the noble Lord, Lord Crickhowell, about the transparency of some of the BBC's commercial activities. I also read with interest the proposal that the BBC World Service should now be combined in an integrated information service with BBC Worldwide and with the BBC's general news services which we all greatly admire. That produces considerable difficulties about transparency and Chinese walls. In this case, services will be funded from three separate quarters: from the licence fee we all pay; from the Foreign and Commonwealth Office vote; and from the commercial revenue that the BBC may earn. A high degree of transparency is required. I have raised the matter before. It is important that the BBC should make progress in producing transparency beyond doubt. We are living in very troubled times internationally, but there are not that many institutions in which the rest of the world regards the United Kingdom as playing a leading role. The BBC is such an institution, even with its warts and all, as I have said on many occasions, and I am cautious about disturbing it unduly.

The Government made a strong and sensible case in arguing how Ofcom will regulate the BBC in important and significant ways. To go to the heart of the BBC and turn the Board of Governors into a decorative institution is extremely dangerous. The BBC has been through many different changes in its long life. Ofcom is an entirely new institution. Indeed, it is an extraordinary new regulatory institution in many ways and one of the most massive forms of regulatory mechanism that has been produced by government in recent years. I carefully avoided the alliteration of saying that it was a monstrous mechanism, but it is a massive regulatory body, which will have a painful and difficult settling-in period.

We shall have some interesting debates on the main Bill, and Ofcom will have a considerable and long settling-in period. There are strong arguments for integration over wide areas in telecommunications, but we should give Ofcom time to settle. We should examine the role of the BBC very carefully when the charter comes up for renewal. It is my profound hope that the Government will resist this amendment as robustly as they resisted the proposals suggested at earlier stages of our consideration.

4 p.m.

Lord Pilkington of Oxenford

My Lords, the BBC is regulated by the Broadcasting Standards Commission. It is worth reminding your Lordships that it was regulated because the Annan commission found that the BBC behaved in a cavalier fashion towards complaints about infringement of privacy and unfairness. As a result, a statutory body was set up to deal with those issues, so the position was not as good as has been described by noble Lords. The Annan commission thought that the governors had failed in their duty.

The noble Lord, Lord Thomson of Monifieth, speaks with greater knowledge, but I am a former chairman of the Broadcasting Complaints Commission, the predecessor of the Broadcasting Standards Commission. The paving Bill will remove a regulation that was imposed on the BBC a couple of decades ago. I hope that when the Minister replies she will assure us that the little regulation that was imposed on the BBC by the Broadcasting Standards Commission will not be abolished. That would negate the long study of the Annan commission.

I remember from my time on the Broadcasting Complaints Commission that complainants felt that the tribunal set up by the BBC did not give adequate hearings to complaints. I shall discuss this in a later amendment, so I shall not burden your Lordships now, but attention should be given to the position of the BBC.

Lord Lipsey

My Lords, I first declare an interest as I chair a government consultancy of which the chairman of the BBC is the major shareholder. I hasten to add that what I say are in no way his views.

Like the noble Viscount, Lord Falkland, I have some sympathy with the amendment, but I do not support it. The position expressed by the former Secretary of State in another place may have been misunderstood. In the context in which the noble Baroness, Lady Anelay, mentioned him, it sounded as if he had come out as a supporter of full Ofcom regulation of the BBC. But that is not what I understand from his words which I read carefully. He wants a back-stop role for Ofcom in relation to regulation of the BBC, and I have much sympathy with that position.

Whatever view one takes of the ultimate correct responsibility of Ofcom, relative to the BBC, we are a long way short of the time when we need to make up our minds. I have sat through the debates on this Bill and note that the understanding in this House of the exact position of the BBC under the Government's proposals has moved forward greatly. When we debated the proposals with the noble Lord, Lord Gordon, back in February, there was a feeling that Ofcom should have no role relative to the BBC. I even thought that myself for a while until I was put right by reading the document produced by the noble Baroness's department.

We have moved forward in understanding, but not far enough in analysis. I take the point made by the noble Lord, Lord Thomson, that when dealing with an institution of such importance and with such a world-wide reputation one does not want to rush changes through without careful thought.

I believe that the right way forward is to continue to debate the matter. It should not be referred to in this Bill. The big Ofcom Bill—as one might call it—should enable the Government to take power to alter the role of Ofcom relative to the BBC, but it need not specify what those powers should be. In the meantime, the BBC should bring forward proposals, in particular proposals that will strengthen the independence of the governors. The way in which the governors are served by employees of the BBC who may go on to other roles within the BBC is problematic. That was the conclusion of the Davies panel on the future of the BBC licensing fee, of which I was proud to be a member.

Debates on the BBC's proposals and the final Bill with full powers should be followed by discussions on charter renewal, which is when we shall have the true debate on whether to move further towards ensuring the accountability of the BBC. That debate must take place and the matter must be resolved. If it means that there is a consensus in favour of full Ofcom regulation, that will be perfectly all right. But I stress that when dealing with an institution of such importance, we must not rush it. We must get it right, and the procedure that I have suggested would be a way of getting it right.

Lord Dubs

My Lords, first, I declare an interest as I am chairman of the Broadcasting Standards Commission. I have enormous respect for the BBC as an institution. It has done a tremendous job and has set an example to the rest of the world as to what broadcasting should be.

Having said that, I sympathise with the thrust of the amendments. I should not have spoken had we not been taken into a debate that will be more appropriate when we come to the full Ofcom Bill. We are merely testing the water rather than, I hope, pushing it all the way.

It is important that Ofcom is open and transparent so that everyone can see what the decisions are. Some will be commercially confidential but others should be open and transparent. I fear that the history of the BBC shows that the governors have not been open and transparent. I have certainly never known what goes on. I have friends who are governors who have hinted at what happens occasionally, but there is no openness or transparency. That is because of the conflict of the role of BBC governors. They seem to act partly as non-executive directors with responsibility for the good management of the BBC—if I am wrong, I am sure that I shall be interrupted—and, on the other hand, they are supposed to protect the interests of the public on the issues that we have been discussing. I do not believe that the same group of people can do both. It is unreasonable to expect that they could. That is why I am surprised that the Liberal Democrats have not said that the full Bill should provide for the BBC to be totally under Ofcom.

Perhaps I may say a word about public service broadcasting, without going through the tortuous process of trying to define it. Wherever there is intervention in a free market, as with ITV, Channel 4, Channel 5 and so on, one seeks to impose certain standards which represent public service broadcasting. It is not only the BBC that does it. The BBC has done it for longer and may believe that it does a little more of it, but we have accepted the concept of public service broadcasting and the use of the regulatory system to intervene in what would otherwise be a free market. It is, surely, that which makes clear that this is not just for the BBC but goes across the board. That is why there is an argument that similar standards should be applied. I happily give way to the noble Lord.

Lord Thomson of Monifieth

My Lords, I am obliged to the noble Lord, but he tempts me. Has he never sat in front of a television screen with his zapper and looked at the variety of channels that can be viewed on cable or satellite? Some channels are publicly regulated but not even by the greatest act of imagination can they be called public service broadcasting. The BBC is still the fount of standards in that regard, and I believe that we should be rather careful about that.

Lord Dubs

My Lords, the BBC produces world-class programmes and represents the best in the concept of public service broadcasting. But if some day the noble Lord cares to join me in front of a television set I can show him material broadcast by the BBC which is absolute rubbish and is as bad as an thing that can be seen anywhere. This is not a matter of my own prejudices. The chairman of the BBC spoke to some of us a few weeks ago and said that the BBC was not just for the likes of politicians who view life in a certain way. Many people in this country are also entitled to high standards and to view programmes which are different from those that we would choose. We are a bit skewed in that we watch "Newsnight", listen to Radio 4 and so on. That does not necessarily mean that we represent overall public taste. I am sure the noble Lord agrees that there arc times when the BBC produces rubbish. I shall be content to discuss that with him later and reach agreement on it.

That is a digression from where we should be at the moment. All I say is that public service broadcasting as a concept goes across the board at least to all the terrestrial channels, if not further; it is not simply the prerogative of the BBC. Unfortunately, if the governors have the sole regulatory responsibilities for those aspects that do not fall under Ofcom, that will also lead to the BBC becoming involved in arguments with the Government. In the end, it is likely that for the BBC the Secretary of State may be the regulator of last resort. That is not a happy position for the BBC to be in. I hope that in arguing for the independence of the BBC—a view that we all share—when the day comes I can persuade the noble Lord that it may be right to move amendments to the main Bill to bring the BBC fully under Ofcom.

Baroness Blackstone

My Lords, in responding to the debate I shall not comment on the technical effects of the individual amendments in this group which have been clearly set out by the noble Baroness, Lady Anelay. I do not believe that the amendments relating to the BBC and Ofcom tabled at Committee stage were significantly different from those tabled today. I explained then that although I understood the reasons for debating the relationship between the BBC and Ofcom this was not the right time for such debate, as the noble Viscount, Lord Falkland, rightly said. Other noble Lords have conceded that point, including the noble Baroness herself.

The communications Bill will provide a very much more appropriate opportunity to debate fully the exact relationship. The paving Bill is there to set up Ofcom and its initial functions—no more and no less— but it will allow Ofcom and the BBC to make preparations to implement the new regulatory regime, whatever Parliament may decide. I should reinforce the point made by the noble Viscount that there is nothing here to prevent the BBC from making the preparations that it needs to make for the new regime.

I do not want to be drawn into an extensive debate about the BBC; for example, about the quality of its programmes in public service broadcasting. I do not rise to the bait dangled by my noble friend Lord Dubs, except to say that I accept entirely that Ofcom should be open and transparent in how it operates.

The noble Lord, Lord Crickhowell, referred to the commercial activities of the BBC in which it has been involved for many years. That was so when I was chairman of the General Advisory Council a long time ago. As I said in Committee, the BBC will continue to be subject to economic regulation in future, principally by Ofcom instead of by the OFT. Like other broadcasters, it will be subject to the normal competition rules. That is a matter on which the noble Lord, Lord Thomson of Monifieth, touched. The commercial broadcasting of the BBC is already fully regulated by the Independent Television Commission.

In Committee I set out in detail the relationship as envisaged by the Government between the BBC and Ofcom. That was outlined in the White Paper. There will be a new three-tier structure of regulation which will generally be deregulatory and will apply to all broadcasters. The BBC will be subject largely to the same degree of standard-setting and monitoring as all other public service broadcasters for each of the three tiers regulated by Ofcom. The third tier is about the content of broadcasting. The aim is to give other public service broadcasters a freedom similar to that already enjoyed by the BBC.

I shall not respond to the point raised by the noble Lord, Lord Pilkington. My noble friend Lord McIntosh of Haringey will deal with that in responding to the debate on the next amendment. As stated in the White Paper, equally the BBC governors must demonstrate that they are regulating the BBC effectively. Although the governors have a regulatory role in relation to the BBC, I do not agree that this means that they must be mentioned in the Bill. I must disappoint my noble friend Lord Gordon of Strathblane. I do not believe that it would be appropriate to accept his amendment for the reasons given by my noble friend Lord Lipsey. Let us suppose for a moment that the BBC was fully subject to regulation by Ofcom. What would that imply by way of preparing for transferring powers and staff? The existing regulators will need to transfer every piece of their property to Ofcom. However, that does not apply to the BBC.

The BBC is a broadcaster and the governors act only as regulators for the BBC alone. Unlike regulators such as the ITC, the BBC's functions will not all be subsumed into Ofcom. Almost all the things that it does now will continue. The BBC will still need a board and staff to service it. There would be no property to transfer because the board would still need a room in which to meet. Most importantly, the BBC would also still need staff to deal with such matters as complaints.

Clearly, it would be unacceptable for the BBC to abrogate entirely responsibility for considering matters such as complaints.

It is difficult to see what can be transferred to Ofcom other than the regulatory powers themselves, which I believe all noble Lords agree—my noble friend Lord Lipsey put it very well—are not for debate at this time in relation to this Bill. We are jumping the gun in attempting to consider those questions.

Ofcom has the power to prepare for the transfer of powers. The power of the BBC to co-operate with Ofcom is sufficient for what is proposed but, as I explained previously, it is our intention to bring forward draft amendments to the agreement between the Secretary of State and the BBC when the main Bill is published. At that point, plenty of time will be made available for noble Lords to consider all those issues.

Finally, perhaps I may say to the noble Baroness, Lady Anelay, that the Government do have confidence in Ofcom. This legislation is being brought forward so that we can get on with the job of setting up the organisation and working with the existing regulators. In the light of those words, I hope very much that the noble Baroness will agree to withdraw her amendment.

Baroness Anelay of St Johns

My Lords, I am grateful to all noble Lords who have spoken and who have given us the benefit of their great experience in these matters. Perhaps I may begin by remarking that when the Minister thought that I might have confessed that I thought that my amendments were not appropriate to the Bill, the concession I made was that amendments would not have been appropriate to make a transfer of regulatory powers under the Bill. My amendments certainly do not seek to do that.

Of course I am disappointed by the view expressed by the noble Viscount, Lord Falkland, but I hope that I shall not be disappointed by him in the future. He pointed out that he felt that it was not the right time or place to table my amendments. I have to disagree with him on that point. To that end, I am grateful to my noble friend Lord Crickhowell for his response when he said that if Ofcom does not expect fully to regulate the BBC now, it simply will not organise itself in such a way that it will be able to undertake those tasks effectively.

In courtesy, at this point I should refer briefly to the amendment tabled by the noble Lord, Lord Gordon of Strathblane. I deliberately did not refer to it in the course of my opening remarks in order to give the Minister an opportunity to respond before I added any comment of my own. I certainly support the objective behind the noble Lord's amendment. I did not choose the same route because I felt that in so doing I would be sending a signal that I was seeking to try to wind up the Board of Governors of the BBC. I felt that if I put the board on the same basis as the definition in the clause, it might appear that I expected to see the board come to an end once the communications Bill makes the transfer of regulations. That is certainly not the case as regards the BBC Board of Governors.

I believe that Ofcom will be at the forefront of developing regulatory policy across the entire media sector. For that reason, given that the BBC is one of our national champions, it simply cannot afford to sit outside Ofcom; that is, affected by its decisions but without having a chance to take part fully in that process. I think that Ofcom needs to work with the BBC from now on, and that that should be made clear to the organisation. The Minister has attempted, most charmingly, to reassure me on this point, but I fear that her words will simply have reassured the BBC that in the future no change will be made to the Government's position as a result of the conclusions of the White Paper. Thus there really is no incentive for the BBC to work towards a position where it could be fully regulated by Ofcom, if that proves to be Parliament's wish in the main Bill.

I remain convinced that unless the amendments I have tabled are put on to the face of the Bill, Parliament's ability to act freely and in an unimpaired way in the communications Bill will be a problem. I do not believe that I am jumping the gun with my amendment. I simply do not want us to shoot Ofcom in the foot. I wish to test the opinion of the House.

4.24 p.m.

On Question, Whether the said amendment (No. 7) shall be agreed to?

Their Lordships divided: Contents, 73; Not-Contents, 144.

Division No. 1
CONTENTS
Alexander of Weedon, L.	Hayhoe, L.
Ampthill, L.	Henley, L.
Anelay of St Johns, B.	Hodgson of Astley Abbotts, L.
Biffen.L.	Hooper, B.
Blackwell, L.	Howe, E.
Bowness, L.	Howe of Aberavon, L.
Bridgeman, V.	Howell of Guildford, L.
Brooke of Sutton Mandeville, L.	Hunt of Wirral, L.
Brougham and Vaux, L.	Hurd of Westwell, L.
Byford, B.	Luke, L.
Caithness, E.	McColl of Dulwich, L.
Campbell of Alloway, L.	Marlesford, L.
Campbell of Croy, L.	Mayhew of Twysden, L.
Carlisle of Bucklow, L.	Miller of Hendon, B.
Carnegy of Lour, B.	Molyneaux of Killead, L.
Clark of Kempston, L.	Mowbray and Stourton, L.
Colwyn, L.	Moynihan, L.
Cope of Berkeley, L. [Teller]	Murton of Lindisfarne, L.
Cox, B.	Noakes, B.
Crickhowell, L.	Northesk, E.
Dundee, E.	Oxfuird, V.
Eden of Winton, L.	Park of Monmouth, B.
Elles, B.	Pearson of Rannoch, L.
Elliott of Morpeth, L.	Pilkington of Oxenford, L.
Elton, L.	Plummer of St. Marylebone, L.
Ferrers, E.	Rawlings, B.
Eraser of Carmyllie, L.	Renton, L.
Gardner of Parkes, B.	Renton of Mount Harry, L.
Hanham, B.	Roberts of Conwy, L.
Haslam, L.	Rotherwick, L.

St John of Fawsley, L.	Strathclyde, L.
Saltoun of Abernethy, Ly.	Taylor of Warwick, L.
Seccombe, B. [Teller]	Thomas of Gwydir, L.
	Vivian, L.
Selsdon, L.	Wakeham, L.
Skelmersdale, L.	Warnock, B.
Soulsby of Swaffham Prior, L.	Wilcox, B.

NOT-CONTENTS
Addington, L.	Hunt of Kings Heath, L.
Ahmed, L.	Irvine of Lairg, L. (Lord
Alderdice, L.	Chancellor)
Allenby of Megiddo, V.	Janner of Braunstone, L.
Alli, L.	Jones, L.
Andrews, B.	Lea of Crondall, L.
Ashley of Stoke, L.	Lester of Heme Hill, L.
Ashton of Upholland, B.	Levy, L.
Bach, L.	Lipsey, L.
Barker, B.	Lockwood, B.
Bassam of Brighton, L.	Macdonald of Tradeston, L.
Bernstein of Craigweil, L.	Mcintosh of Haringey, L
Bhatia, L.	[Teller]
Billingham, B.	MacKenzie of Culkein, L
Blackstone, B.	Maclennan of Rogart, L.
Borrie, L.	McNally, L.
Boston of Faversham, L.	Maddock, B.
Bradshaw, L.	Mallalieu, B.
Bragg, L.	Methuen, L.
Brett, L.	Miller of Chilthome Domer, B.
Brooke of Alverthorpe, L.	Milner of Leeds, L.
Brookman, L.	Mishcon, L.
Bruce of Donington, L.	Mitchell, L.
Burlison, L.	Morgan, L.
Campbell-Savours, L.	Morris of Manchester. L
Carter, L.[Teller]	Moser, L.
Clarke of Hampstead, L.	Murray of Epping Forest. L.
Clement-Jones, L.	Newby, L.
Cohen of Pimlico, B.	Nicol, B.
Corbett of Castle Vale, L.	Northbourne, L.
Craig of Radley, L.	Northover, B.
Crawley, B.	O'Neill of Bengarve, B.
Currie of Marylebone, L.	Oakeshott of Seagrove Bay, L.
David, B.	Paul, L.
Davies of Oldham, L.	Pendry, L.
Donoughue, L.	Phillips of Sudbury, L.
Dormand of Easington, L.	Pitkeathley, B.
Dubs, L.	Plant of Highfield, L.
Elder, L.	Prys-Davies, L.
Evans of Watford, L.	Ramsay of Cartvale, B.
Falkland, V.	Randall of St. Budeaux, L.
Farrington of Ribbleton, B.	Rea, L.
Filkin, L.	Redesdale, L.
Fitt, L.	Richard, L.
Gale, B.	Rodgers of Quarry Bank, L.
Gibson of Market Rasen, B.	Rooker, L.
Gladwin of Clee, L.	Roper, L.
Golding, B.	Russell, E.
Goldsmith, L.	Sainsbury of Turville, L.
Goodhart, L.	Sawyer, L.
Goudie, B.	Scotland of Asthal, B.
Gould of Pottemewton, B.	Sewel, L.
Graham of Edmonton, L.	Sharman, L.
Greaves, L.	Sharp of Guildford, B.
Grenfell, L.	Sheldon, L.
Grocott, L.	Shutt of Greetland, L.
Habgood, L.	Simon, V.
Hardy of Wath, L.	Smith of Clifton, L.
Harrison, L.	Smith of Gilmorehill, B.
Haskel, L.	Stallard, L.
Hayman, B.	Stone of Blackheath, L.
Hilton of Eggardon, B.	Strabolgi, L.
Hollis of Heigham, B.	Symons of Vernham Dean, B.
Howells of St. Davids, B.	Taverne, L.
Howie of Troon, L.	Temple-Morris, L.
Hughes of Woodside, L.	Thomas of Gresford. L.

Thomas of Walliswood, B.	Weatherill, L.
Thomson of Monifieth, L.	Whitty, L.
Tomlinson, L.	Wigoder, L.
Turner of Camden, B.	Williams of Crosby, B.
	Williams of Elvel, L.
Wallace of Saltaire, L.	Williams of Mostyn, L. (Lord
Walmsley, B.	Privy Seat)
Warwick of Undercliffe, B.	Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.36 p.m.

Lord Pilkington of Oxenford moved Amendment No. 10:

Page 2, line 38, at end insert— "( ) In fulfilment of the function relating to relevant proposals about regulation set out in subsection (1), OFCOM shall have regard to the need to establish an independent communications ombudsman service for investigating complaints by members of the public about invasion of their privacy or unfair treatment by any body or individual which it is proposed will be regulated by OFCOM."

The noble Lord said: My Lords, I begin by apologising for bringing forward this amendment at a late stage. When your Lordships reached this stage of the Bill in Committee, I had a medical appointment, and nowadays one does not surrender a medical appointment even to speak in your Lordships' House.

It may seem to many noble Lords a narrow point, but complaints regarding unfairness and infringement of privacy arouse a great deal of passion and can have considerable effects on the individuals or companies concerned. Such complaints were considered by the Broadcasting Complaints Commission, of which I was the chairman for four years, and subsequently from 1996 by the Broadcasting Standards Council.

In hearing complaints, both the Broadcasting Complaints Commission and the Broadcasting Standards Council acted in a quasi-judicial capacity—a very important point to note—and were therefore subject to judicial review. Broadcasters and complainants often regarded their appearance before those bodies as an alternative or even a prelude to legal remedies in the courts, such as, for example, a libel action. During my time—

The Deputy Speaker (The Viscount of Oxfuird)

My Lords, I apologise to the House. I have not properly called Amendments Nos. 8 and 9.

[Amendments Nos. 8 and 9 not moved.]

The Deputy Speaker

I apologise to the noble Lord, Lord Pilkington.

Lord Pilkington of Oxenford

My Lords, during my time as chairman of the commission, we were the subject of three or four judicial reviews and in one case were taken to the Court of Appeal. Complainants, and more particularly broadcasters, often appeared before us represented by very distinguished and rather frightening lawyers of some distinction and skill. Mere former schoolmasters at times found that quite worrying.

The point that I make is that the members of the body considering those cases needed skills that would stand up to a judicial review or to a challenge in the Court of Appeal. They had to take care in asking questions and even more care in the writing of a judgment following consideration of a case. In addition, it was enormously time consuming. For example, when we considered a case involving Shell in Nigeria, the piles of papers would almost have filled the bench in front of me. Therefore, the members who considered that case had to be prepared to devote a great deal of time to the task in hand. Because its decisions were subject to judicial review, the body had essentially to be regarded as independent. If its independence was in any way doubted, its judgment could be overturned by the courts.

As your Lordships will realise, Ofcom will have a wide variety of functions, such as, for example, the award and withdrawal of licences. If it awarded a licence to a broadcaster and then had to decide whether or not to uphold a complaint regarding unfairness or infringement of privacy, there could theoretically be a conflict in relation to its independence, which lawyers representing a complainant would question in the courts if the judgment went against that complainant.

My amendment proposes for the Ofcom organisation what I would describe as an ombudsman type of role. I do not specify the details—I shall leave it to the Government to define them—but, however they are defined, the body or individuals must be independent of the functions of the whole of Ofcom. The body's independence must be clear and the walls surrounding it must be very obvious. The ombudsmen must have dedication to the task in hand, and have the time and experience to so conduct cases that their judgments will be upheld without any measure of doubt.

That is the essence of my amendment. I hope that the Minister will show sympathy towards the ideas behind the amendment as important issues are involved. I realise that this is a paving Bill, but this is a crucial issue—particularly for the individuals and companies involved. I hope that the Minister will be able to give me some reassurance that, within Ofcom, the functions performed by the old Broadcasting Complaints Commission and the Broadcasting Standards Commission will be, to some extent, guaranteed and even, as I said previously, be applied to the BBC. It is not the most glamorous issue, but to the individuals or groups concerned it is important. The matter of natural justice is also concerned in this. I beg to move.

Lord Borrie

My Lords, there is merit in the amendment moved by the noble Lord, Lord Pilkington. I say that because it is not necessarily a good idea for a regulatory body, with the punitive powers of removal of licences and matters of that kind, itself to handle complaints against the particular behaviour of particular licence holders and to decide whether redress should be provided.

As my noble friend the Minister and many of your Lordships will know, there has been a recent precedent in the Financial Services and Markets Act 2000. In that Act, Part 16—which all noble Lords will remember is hugely long—and Schedule 17 provide for the establishment by the Financial Services and Markets Authority of a body corporate, which has to be independent, to administer the resolution of disputes with the minimum of formality by an independent panel of ombudsmen. There is a statutory reference in the Act to the need for securing the independence of the body corporate, and it in turn is meant to uphold the independence of the individual ombudsmen who will hear a particular complaint.

Noble Lords will be familiar with the creation of ombudsmen to settle disputes of various kinds in the public sector and, more recently, in the private sector. It started in the public sector with the Parliamentary Commissioner Act 1967, and in the private sector during the 1980s, when it seemed that almost every year, if not every month, an industry—pensions, insurance, banking and so on—determined to set up, albeit on a voluntary basis in some cases, an ombudsman to determine disputes.

The scheme's merit of avoiding lawyers, its informality and cheapness has been well acknowledged across many fields, and it would be odd if one did not at least contemplate such a scheme in the field of communications. With the statutory precedents so well known to my noble friend the Minister, this is something on which he may ponder and find merit. I rather doubt that it is appropriate for the amendment to be incorporated into this paving Bill, but I have no doubt that it deserves consideration in the future.

4.45 p.m.

Baroness Howe of Idlicote

My Lords, I am glad to support the amendment moved by the noble Lord, Lord Pilkington. To my mind, it seeks to give substance to the point on which I have troubled your Lordships previously.

The amendment focuses very clearly on the need to make express provision for a visible independent and objective agency to consider citizens' complaints about unfairness or infringement of privacy. However, I wish to make two points about the way in which the noble Lord has formulated his proposals.

The amendment calls for the investigation of complaints, which the noble Lord has described very well. So far so good. But we need to be clear what that should involve. Three matters strike me as important. First, the need for a hearing where there is a substantial complaint. I declare an interest as a previous chairman of the Broadcasting Standards Commission, where we dealt with both fairness and privacy and taste and decency complaints. Over time, we managed to refine the way in which such complaints were dealt with so that they did not take days and days to resolve. The need for a hearing where there is a substantial complaint certainly remains.

Secondly, following the hearing, the complainant should receive a ruling on each complaint, and the adjudication should be published, whether it goes one way or the other. Thirdly, there is a need for the body to have sufficient power to do the job properly—for example, to make programme makers answerable and, in appropriate cases, to require the broadcast of its decision on the appropriate channel.

The second point on which I should like to focus—I do not think there is any difference between myself and the noble Lord, Lord Pilkington—concerns the phrase "ombudsman service". The phrase recognises the need that the service should be more than a one man or one woman agency. If the service is to command confidence, ideally it should be comprised of a small group of people of varying expertise and experience; it should not be drawn solely from those with experience in the broadcasting industry.

Turning away from the wording, perhaps I may suggest two ways in which the amendment could be enlarged. First, it does not address the issue of taste and decency complaints when a "satisfactory answer", to use the words of the White Paper, has not been forthcoming from the broadcaster concerned. The noble Lord, Lord Pilkington, may have a somewhat less positive view on these kinds of citizens' complaints than I, but many people share my view that there will continue to be a need for those kinds of complaints—as well as fairness and privacy complaints—to be resolved by just such a visibly independent body. Could not this role also be taken on by the ombudsmen service proposed in the amendment?

Secondly, there is a need for research. In order to do the job properly, an ombudsmen service would certainly need a budget for the kind of independent research which is now undertaken—and very effectively used and made publicly available—by the Broadcasting Standards Commission. It is no exaggeration to say that the BSC, with its need to keep constantly in touch with citizens' and viewers' concerns and attitudes, simply could not have been an authoritative voice when dealing with complaints or drawing up statutory codes of guidance for broadcasters without this absolutely vital resource.

No doubt the Minister will, once again, be inclined to give a "dusty" answer to some of the ideas suggested. However, I make no apology for reminding the Minister of the importance of these issues. We are bound to return to them when the main Bill comes before your Lordships' House.

Viscount Falkland

My Lords, we on these Benches find a great deal that is attractive in the amendment, and in the way in which it was presented. I recall going with a number of my noble friends—in response to an invitation by the noble Baroness, Lady Howe, who just spoke so authoritatively on the subject—to spend the morning (and to have an excellent lunch, I might add) viewing various clips of film and to judge various complaints made by viewers and listeners.

We all came away with the impression that many of the complaints relating to bad language, to explicit sex or anything approaching it, and even to violence, required subjective judgment. However, we were taken away from our natural disposition to be against any kind of censorship when we saw examples of intrusions into people's privacy. We were struck by the fact that television producers can overstep the bounds of what is acceptable, either by mischievous design—which unfortunately happens from time to time—or, through pure pressure of work, by cutting corners. Whichever it is, it can result in extreme distress for individuals or for a number of people, and can involve a whole family when modern technologies are used to take pictures of people entering houses when they are not aware of the presence of a camera; and there are more grave examples.

On questions of content, any regulatory body will be concerned about changes in standards, about shifting fashions and so on. In terms of what is considered decent or indecent on television, standards have changed markedly, particularly in the past few years. A regulatory body will have to take account, still further, as we move towards what is clearly pornography, of what is acceptable and what is not.

Again, subjective judgments are involved. However, the noble Baroness, Lady Howe, used the key word "objective". In terms of what is suggested in the amendment, we must have objective standards. I do not know whether an ombudsman and his staff are the right people to do such work. Perhaps the Minister who is to reply will give us the Government's view. I imagine that this is merely a probing amendment and I look forward to some enlightenment from the Minister. By and large, we are sympathetic to the philosophy behind the amendment.

Lord Dubs

My Lords, there is a good case for setting up an independent procedure for dealing with complaints, whether about fairness and privacy or about standards. That is indisputable.

However, if I understand the amendment correctly, it is clearly not for the Bill that is before the House, but for the forthcoming communications Bill. So it must be a probing amendment. The amendment refers to an "independent communications ombudsman service". Presumably that can only mean a service that is independent of Ofcom. The suggestion is that the functions which three of the existing regulators presently have—namely, the Radio Authority, the ITC and the BSC—should stay in the main independent of Ofcom. So in a sense this drives a coach and horses through the whole concept of Ofcom.

I understand that it is on the way to being accepted that Ofcom should have within its structure a content committee consisting in the main of lay persons who would carry on these functions in the way described by the noble Lord, Lord Pilkington, and the noble Baroness, Lady Howe. The committee would examine these matters and apply the mind of lay people, either in its quasi-judicial sense of dealing with fairness and privacy or in the slightly less quasi-judicial sense of dealing with standards. If that principle is embedded in the new Ofcom, it would achieve all the aims that the noble Lord has put forward in his amendment, without setting up a separate body.

The problem with separate bodies is that citizens and consumers will be confused as to where to take a complaint. We need absolute clarity as to what are the tasks of the new Ofcom, so that those with complaints know where to go. I fear that the amendment introduces a confusion factor that will not be helpful. I hope the noble Lord will accept that point. I hope that he will accept also that, provided that the new Ofcom has a content committee with lay members, we shall be achieving what he wants to achieve through a different, less clear structure.

Lord Brooke of Sutton Mandeville

My Lords, I declare an interest, as I did yesterday in the debate on the financial services, as chairman of the building societies' ombudsman council. I concur with the remarks of the noble Lord, Lord Borrie, about the role of ombudsmen in that industry.

I support my noble friend Lord Pilkington in bringing this matter forward at this particular juncture in the legislative proceedings. I appreciate that the Government may say, as the noble Lord, Lord Dubs, has, that this is a matter for the subsequent Bill. I am aware that Sam Rayburn—Speaker of the House of Representatives when Lyndon Johnson, his great Texan ally, was president—said that the three wisest words in the English language were, "Wait a minute". However, it is a British characteristic always to think of reasons for delaying doing something. Therefore, it is worth occasionally examining whether delay is sensible.

The issue raised by my noble friend seems to me to be entirely free-standing. It seems capable of being considered on its own merits. Yesterday, I said that, as and when the financial ombudsman service comes into force on 1st December, it will be extremely important for ombudsmen to remain ombudsmen and not become regulators. In the context of remarks by the noble Lord, Lord Dubs, and the fact that the ombudsman service was set up under the Financial Services and Markets Act—it was not a free-standing issue—it is sensible to examine the matter independently and make it less likely that regulation will creep in to the ombudsman role. If conventional wisdom regards this as a probing amendment—my noble friend is the best judge, since none of us can know what is in the minds of others—then so be it. But I would remark gently that a paving Bill is sometimes no bad place to have a paving argument.

Baroness Anelay of St Johns

My Lords, I thank my noble friend for giving us the opportunity to consider this matter. I very much hope that he will table amendments to the main communications Bill next year to give effect to the objective behind his amendment. However, I echo the sentiments expressed by my noble friend Lord Brooke. A paving Bill is no mean place for a paving argument.

My noble friend's amendment allows us to return to the heart of so many of the debates that we had in Committee. The paving Bill is not quite the "inoffensive skeleton" that the Government present to us. It sets up a body which as yet has no regulatory powers; and we all accept that. So there is currently no work that an ombudsman may do. But we simply do not know how long the stage one embryonic Ofcom will operate before it develops into stage two, when the chairman and chief executive will be appointed, and into stage three, when powers are transferred to it under the main communications Bill. This is an organic structure beginning from day one when the Bill leaves another place.

I appreciate, like my noble friend and the noble Baroness, Lady Howe, that the Minister may give a rather dusty answer and say that the amendment is more suited to the communications Bill than to this one. However, I wonder whether that is the case. There is a sound argument for my noble friend bringing forward the amendment at this stage and I support it.

5 p.m.

Lord McIntosh of Haringey

My Lords, I shall indeed give a dusty answer. Having given dusty answers so often during our proceedings, I reread Meredith's Modern Love, whence the phrase "dusty answer" came. I found that the phrase was preceded by the line: That fatal knife, deep questioning, which probes to endless dole". I suspect that we are suffering from that fatal knife, deep questioning.

The amendment would effectively require Ofcom to establish an independent communications ombudsman service. I have emphasised that the Government want to safeguard the interests of citizens and consumers. That includes those who are portrayed in the communications media, where their individual rights may be in question.

The White Paper made it clear that: OFCOM will also consider complaints of unfair treatment or unwarranted infringement of privacy in licensed broadcast services, where no other legal remedy is being pursued. I can assure the noble Baroness, Lady Howe of Idlicote, that the White Paper also covers the need for independent research, to which she referred, and for regulation on grounds of taste and decency.

The amendment is intended to ensure the continuation of an important aspect of the work carried out by the Broadcasting Standards Commission: its role in ensuring that those appearing on electronic media have a proper opportunity to have any complaint of unfair treatment or the unwarranted infringement of their privacy considered by an independent body that can come to an adjudication. That is a valuable function in our society; it has a beneficial effect in encouraging broadcasters generally to behave responsibly when portraying individual members of the public. That has been the role of the Broadcasting Complaints Commission and the Broadcasting Standards Commission, both of which have been represented in the debate.

I can give the noble Lord, Lord Pilkington of Oxenford, the main assurance that he seeks. We propose to bring that function within Ofcom, which will reduce the risk of overlap and confusion about the responsibilities of different regulators, to which the noble Lord, Lord Dubs, referred. It will also ensure—this will be important to the noble Lord in the light of what he said about his experiences—that the greater resources combined under Ofcom can be used to defend its decisions. That will give greater confidence to members of the public unfairly attacked by broadcasters that its decisions can, if necessary, be properly defended in the courts.

The noble Lord, Lord Dubs, raised the issue of conflict of interest, suggesting that it could arise between the regulatory and licensing functions of Ofcom and those that we are now discussing. I agree, that is possible, so in the main communications Bill we shall have to structure Ofcom to guard against such a conflict of interest.

We now come to the dusty answer. The Bill creates a small, focused body without regulatory functions. It will be for the main communications Bill to elaborate the eventual regulatory and other functions of Ofcom, including its role in considering independently of broadcasters any complaints of individual unfairness or unwarranted infringement of privacy, as proposed in the White Paper. That could be done by a content board, as proposed by the Towers Perrin report. It could be done in various ways, but we should not prejudge them now.

I must tell the noble Lord, Lord Brooke of Sutton Mandeville, that we are discussing not delay but doing things in their proper place. This is a skeleton Bill which will set up a body without regulatory functions. It is appropriate for the main Bill, which will cover all the regulatory aspects, to provide for that as well. However, we have the greatest sympathy for the arguments put forward, in particular by the noble Lord, Lord Pilkington of Oxenford.

Lord Pilkington of Oxenford

My Lords, I thank the Minister for that reply. This is a probing amendment, I shall not be taking noble Lords through the Lobby tonight. I thank everyone who has contributed to the debate.

I should like to underline the point made by the noble Lord, Lord Borrie: it is possible to have an independent ombudsman within an overall organisation. We do not have to go the way that the noble Lord, Lord Dubs, suggests and keep the existing regulators.

The Minister said, "where no other legal remedy is being pursued". There may be trouble about that. When the Broadcasting Complaints Commission was set up, it was decided that it could not say that: one cannot deprive a citizen of the right to go to court. If we try to protect Ofcom against people subsequently seeking legal remedies, we may have trouble with the courts and human rights. We must be careful about the wording.

It is crucial that there is independence and no conflict of interest. Therefore, officials must not be involved. There must be either an independent ombudsman—a lawyer-type role—or, as the noble Lord, Lord Dubs, suggests, lay people, although they must be prepared. I do not know what was the streamlining to which the noble Baroness, Lady Howe of Idlicote, referred, but a good deal of work may be involved. Such work certainly governed a large amount of my time.

I agree with the Minister that there will be more resources, which such organisations certainly need. I am grateful for the Minister's reply and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 11:

Page 2, line 38, at end insert "( ) In fulfilment of the function set out in subsection (1), OFCOM shall have regard to the need (subject to subsection (2))—

1. (a) to ensure fair and effective competition in the provision of services provided within the communications industry and those connected with them; and
2. (b) to ensure needs of consumers are protected with regard to both economic consideration and access to communications services."

The noble Baroness said: My Lords, I proposed an identical amendment in Committee, which I withdrew so that I could give proper consideration to the Minister's response. On reading it, I must say that I agree with his description of it as a dusty answer. It is an answer that he has given to previous amendments today. With the greatest respect, a dusty answer is not what is needed to a serious, constructive proposal.

The Bill will set up an all-powerful regulator, if I interpret the White Paper correctly. But this so-called paving Bill requires Ofcom to create its own organisation and to prepare to start functioning only once the definitive Act comes into force. No one suggests that all that it will do is rent an office and buy a few desks and paper clips. It will organise taking over the functions of the existing five regulators. It will have to consider how far those functions are consistent with each other, and how far and in what way any inconsistencies are to be ironed out. It will have to consider how the existing regulators' powers are inadequate for the bewildering rate of change in the technology and hardware, and how the communications industry functions.

The existing regulators and the new Ofcom will not simply sit around waiting for the new definitive Bill. Ofcom will want to hit the ground running once it is commanded to start operating by the Minister. Even if the Government do not intend it or want it to do such preparatory spade work, if Ofcom is to be worth its salt, that is exactly what will happen.

With the best will in the world, and with the cooperation of all parties, the definitive Bill will not be passed until well into next year. Even that assumes that the definitive Bill is ready, which it probably is not. Ofcom's new staff, and the staff who will be moved to it from existing regulators, will not simply sit around for months planning their holiday rotas.

As I mentioned in Committee, the amendment touches on one major aspect of the new regulator's duties: telecommunications, which received only 78 mentions in the White Paper, compared to 592 references to broadcasting. It is in the area of telecommunications—which is now rapidly becoming another form of pure broadcasting reception—that the public will need the most protection by the regulator. There are constant complaints about the confusing array of charging tariffs; complaints about the lack of transparency about rates of charges, even by the same carrier; complaints about allegedly excessive charges for connection from and to overseas and to other mobile telephones; and, as we have come to expect in other industries, complaints that British users get charged more than our European neighbours for precisely the same purposes.

The amendment, especially paragraph (a), makes it clear right from day one—indeed, even from before day one, from the date of Ofcom's conception—where Ofcom's duty lies. The amendment sets out one of the criteria by which Ofcom will be required to act and gives it something to think about while it waits to become operational, although we do not know when that will be. There is no harm in telling it, even prematurely—I am sure the Minister will use those words when he responds to the amendment—one of the key definitions of its duties. The Government can tell it the same again in the definitive Bill, if they wish. In the mail order industry, with which I used to be involved, there was, and still is, a definition of the ideal leaflet, which comprises three parts: tell them what you are going to tell them; tell them; and then tell them what you have told them. I want to see that Ofcom knows from the first day that this Bill becomes an Act exactly where it stands on this vital subject which in my opinion is item number one on its agenda in its most important function; that is, protecting the public.

If, despite the Minister's sympathy for the objective of this moderate, constructive and definitely not over-prescriptive amendment, the Government's response will be to continue to reject it, I believe that that is an entirely wrong message to send out, not only to the new regulator but also, and perhaps even more especially, to those who will be regulated. They will feel that a free-for-all—a continued free-for-all, if only for the time being—is still in order. I beg to move.

Lord Crickhowell

My Lords, I wish to make one brief point. During the debate on the BBC the Minister, and, indeed, several other noble Lords, kept talking about there being plenty of time. Here we are dealing with another aspect of the activities of Ofcom. I do not believe that there is plenty of time even in the broadcasting area because the rate of change is so fast and already competition is having a destructive effect. By the time decisions are taken some commercial activities will have been destroyed unfairly.

The bewildering rate of change to which my noble friend referred is even greater in this area. Recently I have attended a number of meetings with the Bill team and consultative bodies, organisations such as EURIM, PITCOM and others which are considering these issues. They are all desperately concerned about the rate of change and about the need for action and for decisions. I hope that the response on this occasion will indicate that there will be plenty of time available.

I understand that this is a paving Bill and I understand the inhibitions under which we are working. Indeed, I devoted a large part of my first speech in Committee to criticising the fact that we were proceeding down this road in this way. I suggested that there was a better way of doing it and that the real preparation work could have been proceeded with if my suggestion were followed. At least a message must go out that there is not plenty of time available and that those who are preparing to take over whatever may be given them when finally a Bill is passed through this House should be ready to proceed very fast indeed.

5.15 p.m.

Lord McIntosh of Haringey

My Lords, when we discussed this amendment in Committee, the noble Baroness, Lady Miller, expressed wholehearted support for what she called the great "mission statement" we had set for Ofcom to make the UK home to the most dynamic and competitive communications and media market in the world and to ensure universal access to a choice of diverse, high quality services with proper safeguards to protect the interests of citizens and consumers. Let me return the compliment. We, of course, are in sympathy with the terms of the amendment. However, this is a paving Bill.

There is no question about having plenty of time; this Bill aims to save time and to ensure that when Parliament properly considers all the issues involved in the regulation of communications—I do not think that the noble Lord, Lord Crickhowell, would say that we have done so now; certainly I would not say that—its decisions will be able to be put into effect immediately as the skeleton structure of Ofcom will be in place ready to spring into action.

The objectives were set out in the White Paper. They have achieved fairly universal support, with some obvious exceptions. Ofcom will do its preparatory work while Parliament and others comment on the objectives and transform them into legislation. Meanwhile, surely the right thing to do is not to add elements to a definition, however much we may be in sympathy with them. That applies to Amendment No. 11 of the noble Baroness, Lady Miller, and to Amendment No. 12 of the noble Lord, Lord Corbett. Let us stick to the regulation of communications, which is clear enough, relates to the White Paper and will relate to the communications Bill, but let us not start to put pre-judgments of this kind into this paving Bill.

Baroness Miller of Hendon

My Lords, I thank my noble friend for his support. I also thank the Minister for trying to return a compliment I paid earlier in Committee. Apart from that, I am not sure whether his response today was either more or less dusty than on the previous occasion we discussed the matter. However, I am aware that he has worked hard and he is clearly having trouble with his throat. I do not wish to prolong his agony. In view of his kind comments, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Corbett of Castle Vale moved Amendment No. 12: Page 2, line 38, at end insert— ( ) In fulfilment of the functions set out in subsection (1), OFCOM shall have regard to the need to promote the interests of citizens and consumers with regard to communications.

The noble Lord said: My Lords, my noble friend Lord McIntosh was kind enough to acknowledge in Committee that the Government wanted to safeguard the interests of both citizens and consumers in this Bill and the "grown-up" one which will follow. He said:

"We recognise that those interests are not identical. People have interests as both citizens and consumers, and their interests must be expressed in both regards".—[Official Report, 6/11/01; col. 187.]

I return to the issue in the hope of persuading the Minister to make flesh of those shared ambitions by laying a specific duty on Ofcom to promote the interests of citizens and consumers in all that it does and to make that duty as explicit on the face of the Bill as it was in the White Paper. The White Paper said that the interests of citizens and consumers are at the heart of the regulatory framework. That is right, but I invite your Lordships to join in helping to make that crystal clear in the duties we lay upon Ofcom in this paving Bill. We can debate the details in the Bill which will follow.

I wish to mention three reasons why I believe the amendment is necessary and why it is much easier for the Minister to accept it than to dismiss it with a dusty answer. First, it recognises that broadcasting is not mainly about knobs and buttons, as I said in Committee. It is not principally or only about delivery. It is an industry like many others. It makes clear that broadcasting has a vital role in communications in our democracy to inform, educate and involve the citizen. Broadcasting is a two-way street of communication in our democratic process because in unique ways it offers citizens the opportunity to debate and discuss and get involved in their own and wider communities.

Viewers and listeners are not just consumers of broadcast media but also all-round citizens with a need for information, knowledge, education, skills and understanding. In the aftermath of the appalling events of September, that need is probably greater. As responsible and active citizens our ability to access and use information is a matter of the strongest and most overriding self-interest and national interest.

Secondly, the amendment puts a proper duty upon Ofcom to protect and promote the interests of people with disabilities to ensure that they are neither left behind in the digital revolution nor neglected those providing telecommunications services or by broadcasters. The new regulatory framework must ensure equal access and equally affordable access to digital communication services and equipment for people with disabilities.

The Government must constantly remember, now and when we come to the main Bill, that increased competition must also increase choice and access for people with different abilities, those on low incomes and older people. The White Paper refers to Ofcom giving "due weight" to those needs, which is a long way short of guaranteeing that access barriers will be tackled and overcome, as the Royal National Institute for the Blind argues in its helpful brief.

Finally, the White Paper rightly stresses that,

"the democratic importance of public service broadcasting is as great as the economic justification".

If that welcome aim is to be met, the regulatory framework needs from the start to put the separate interests of citizens and consumers at its heart. Otherwise, as Public Voice—a voluntary sector network set up to protect and promote public service broadcasting—argues, the regulatory system will be driven by the market alone, which will mean that the proper interests of citizens and consumers will take second place at best. I am sure that no one in your Lordships' House wants that to happen.

I am grateful for the support of the Voice of the Listener and Viewer and the National Consumer Council on the amendment. The best way in which I can help the Minister to a speedy recovery from his throat trouble is to recommend that he may find it right and helpful to his medical condition simply to say, "Yes, I accept". I beg to move.

Lord Crickhowell

My Lords, I commiserate with the noble Lord, Lord Corbett, that, during the debate on Amendment No. 11, in his lecture on not prejudging anything, the Minister pre-judged the noble Lord's amendment before it had been moved. That seems a bit hard. I hope that we shall now get a slightly fuller response and not simply be told that the Minister has already answered the points during the debate on Amendment No. 11.

Baroness Miller of Hendon

My Lords, we on these Benches are pleased that the noble Lord, Lord Corbett, has brought this amendment forward so that we can have a little more discussion on it. The noble Lord has spoken very well about what he believes to be in the interests of the consumer and the citizen, so I shall restrict my remarks to a few points.

We are delighted that the White Paper referred to a light touch. I agree with my noble friend Lord Crickhowell that Ofcom should not end up involved in content. I say that simply because one of the real problems for many listeners and viewers—and in many cases both—is that if they have any complaints about the BBC, ITV or any commercial broadcasters, they often do not know where to take them. We in this House know, because we are interested in the paving Bill and in the communications Bill, when it comes.

It would be helpful if one of the duties of Ofcom could be to highlight the route for the ordinary listener or viewer—or both—to know where any complaint can be dealt with and, if it is not dealt with suitably, what they can then do. Although existing consumer panels—or whatever they are called—normally reply very quickly, the consumers often get no more than a brush-off. It would be nice to know whether there was anything further that those consumers could do.

The Earl of Sandwich

My Lords, I too support the amendment. I have already spoken on the subject and the Minister and the noble Baroness know my views. I hope that the Minister can go one step further and be even more obliging than he has been.

Lord McIntosh of Haringey

My Lords, my basic reaction to the amendment can be said very briefly: I agree with everything that the noble Lord, Lord Corbett, said. He made a long speech and it was clearly complicated, so I suppose that I ought to protect myself by saying that I shall read it carefully, but in principle I agree with everything that he said. The only thing that I do not agree on is whether the amendment should go into the Bill. He knew that I was going to say that.

There is a particular reason for my disagreement. I spoke about the importance of distinguishing between the interests of citizens and consumers. The amendment does not do that, so it could give rise to the false assumption that the noble Lord, Lord Corbett, and others think that the interests of citizens and those of consumers are unitary, not potentially divided. However, I shall not make much of that point.

My main point was made by the noble Baroness, Lady Miller, who said that it is important that those in need should know where to go. That is the commitment that is made in this paving Bill. The one decision that is taken in advance of the communications Bill is that there shall be a single regulator. Let us leave it to the communications Bill to go into the necessary detail and leave it to Parliament to cover the huge range of issues that are very properly raised by the amendment.

Lord Corbett of Castle Vale

My Lords, I thank those who have taken part in this short debate and express the fond hope that the Minister has not imperilled his recovery by the length and detail of his response.

It is nice to know that there is such agreement around the Chamber for the second day running—there was wide support yesterday for siting the English national football stadium in Birmingham. My noble friend has accepted the spirit of the amendment. I do not want to put any improper duty on him, but all that remains is for him to see that, if not the words, then at least the spirit of what we are after in the amendment is properly and fully reflected in the main Bill. In that fond hope, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 13:

Page 2, line 38, at end insert— "( ) It shall be the duty of OFCOM to work with the Office of Fair Trading to develop proposals for the exercise of concurrent powers under the Competition Act 1998 (c. 41) "

The noble Baroness said: My Lords, during the passage of the Competition Act 1998 there was considerable discussion about the merits of concurrent powers being granted to sector regulators. In the end, concurrent powers were granted, in spite of widespread concern that that should not lead to "forum shopping" or the fragmentation of the overall regime for the enforcement of competition law.

We believe that for competition policy to be enforced by multiple bodies, one of them must be primus inter pares. That logic is followed in the Competition Act, which reserves certain key policy-making functions to the OFT alone. The aim of this probing amendment is to secure a commitment to establishing Ofcom as a viable competition in its own right in its own field.

However, we propose that the professional expertise and experience of the Director-General of Fair Trading should be recognised and utilised wherever practical. For example, in the early days of Ofcom, the expertise of the DGFT could assist in the selection of candidates for posts in the parts of Ofcom dealing with competition.

Apart from availing themselves of the DGFT's knowledge of the strengths and weaknesses of particular candidates in an intimate circle of specialised professionals, Ofcom will be able to be aware of any incompatibility between the DGFT and the senior managers discharging competition powers within Ofcom.

I stress that that would not give the DGFT power of veto over appointments. The amendment simply calls for consultation. I imagine that Ofcom, with a choice of candidates from five regulators, will welcome the opportunity of having its cards marked by a knowledgeable outsider.

However, the consultation process called for goes further. There will be input available from the DGFT of his own recent experience in reorganising the Office of Fair Trading following the Competition Act.

The White Paper proposed that Ofcom should have concurrent Competition Act powers with the OFT. At present, although Oftel has such powers, the other four regulators being merged into Ofcom do not. A major task of the new Ofcom, as it complies with the Bill to prepare itself to assume the duties that Parliament will lay on it, will be to make effective plans to exercise its powers in areas where the other four regulators have no experience. The advice and support of the OFT will he invaluable in this area.

However, there is one very important reason why Ofcom should be obliged to work with, or at least to consult with, the OFT. One of the recognised dangers of granting concurrent Competition Act powers to sectoral regulators is that they may apply the Act within their sector in a different way from the OFT and other regulated sectors of the economy. More than that, in the present case, Ofcom may drift into applying the Act in different ways between the converging, but not necessarily homogeneous, industries over which it presides.

The involvement of the OFT in a consultative capacity is essential if Ofcom is to be set up properly to exercise its Competition Act powers from the very inception of its operations. Consultation with the OFT will also prevent multiple and inconsistent ways in which the Competition Act is enforced. I beg to move.

5.30 p.m.

Lord Borrie

My Lord, I intervene briefly to say that the objective of the noble Baroness, Lady Miller, is highly desirable. However, I doubt whether it is necessary to have an amendment of this sort. Although she is quite right to say that only one of the regulators that are to be absorbed in Ofcom has experience of exercising powers under the Competition Act—namely, Oftel—they have had a concordat voluntarily agreed with the OFT, as indeed have other non-communications regulators, such as Ofgem. I imagine that that would almost certainly take place and would be wholly desirable; otherwise, the two types of regulator—the general and the specialised ones—would get out of kilter. There would be different approaches to the enforcement of the Competition Act, which would be wholly undesirable. Therefore, I support the objectives that are mentioned but I doubt the need for the amendment.

Lord McIntosh of Haringey

My Lords, my noble friend is absolutely right. We set out in the White Paper on communications, and I reiterated in Committee, that Ofcom will have concurrent powers with the Office of Fair Trading under the Competition Act 1998. I can reassure the noble Baroness. Lady Miller, that that is not a new or unusual arrangement. Oftel already has those concurrent powers, as do regulators in other sectors. She referred to the relationship between sectoral regulators and the Office of Fair Trading. However, under this Bill Ofcom will have no regulatory powers until they are conferred on it by the main communications Bill.

I am sure that in due course Ofcom, as a regulator, will work closely with the OFT to ensure a mutual understanding of how such concurrent powers will be exercised, and, indeed, will do so before that. The arrangements will undoubtedly be brought within the scope of the relevant regulations made under the Competition Act.

The informal Concurrency Working Party, which brings together regulators that have concurrent powers, has been instrumental in producing joint guidelines from the OFT and the regulators. We have no reason to expect those arrangements to work less well in respect of Ofcom. In any event, Clause 2 requires Ofcom to do such things as it considers appropriate for facilitating the implementation of any relevant proposals about the regulation of communications. I believe that that requirement quite adequately covers the development of the relationship with the OFT which the noble Baroness, Lady Miller, wants and which Ofcom in due course considers necessary.

Baroness Miller of Hendon

My Lords, I thank the noble Lord for his reply. I am also grateful to the noble Lord, Lord Borrie, for explaining to me that he was sure that my amendment was not necessary. I certainly hope that he is right; as his experience is greater than mine, I am sure that he is. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Thomson of Monifieth moved Amendment No. 14:

Page 3, line 5, at end insert "; and (c) any proposals by the Secretary of State for the conferring on OFCOM of functions relating to restrictions on the holding of licences in Schedule 2 to the Broadcasting Act 1990 (c. 42)".

The noble Lord said: My Lords, this amendment raises matters that were not discussed at earlier stages of the Bill. Therefore, perhaps even at this stage, I might be allowed to say a word or two about the background to it.

While we are paving the way for the "big bang" of the real communications Bill later next year, the world of commercially-funded television broadcasting has been facing the worst recession in advertising revenue since records began. The events of 11th September have made a bad situation worse. ITV, in particular, is suffering from the fact that at present we have a paving Bill rather than the main Bill, which originally, I believe, it had been hoped to bring in at the time of the gracious Speech.

Therefore, there is an urgent need to look at ways and means of introducing more flexibility into varying the financial terms of ITV licences to deal with the unpredictable external changes of the type that, for example, the regulator of Ofwat is able to propose. I have the impression—I hope that it is not inaccurate—that the Government are ready to consider that proposal for the main Bill in due course. I hope I can be assured that at least that is so.

My amendment, which had to be drawn rather narrowly within the limits of the purposes of the Bill, deals specifically with the second area for urgent change necessary to give ITV the financial vitality to fulfil its public service responsibilities. I refer to the need for a change in ownership rules which at present prevent consolidation within ITV. Last year's White Paper gave a rather more than cautious green light to this issue. I gather that there may be another White Paper shortly which will carry the matter further and deal with the wider issues of cross-media and competition aspects.

The amendment seeks to allow government to send a clear signal to the City and to financial circles generally that there will be no bar on plurality grounds to ITV consolidation once the main communications Bill goes through. It could also have the practical benefit of giving paving Ofcom the task, together with the OFT—rather along the lines proposed by the noble Baroness in her recent amendment—of preparing the groundwork for the inevitable competition issues which ITV consolidation would raise for the United Kingdom advertising markets and, perhaps in particular, for the London advertising market within the United Kingdom. The OFT and Competition Commission would then have much of the necessary basic material to consider any merger proposal quickly after the communications Bill comes on to the statute book.

In my view, and from my considerable experience of the world of commercial television broadcasting, the present position is disturbing and distorting the ecology of the broadcasting landscape. The ITV and BBC, in their separate and competitive ways, provide the very heartlands of public service television in this country. Given the costs of the digital revolution that is now being undertaken, the capacity of that heartland to preserve the values of public service broadcasting is now under considerable threat from the dominating pressures of satellite and cable.

A financially viable ITV system is as essential to the survival of public service broadcasting as is an efficient and dynamic BBC. Therefore, I hope that, when the Bill goes to another place, further consideration can be given as to whether there are ways and means of expediting the process by which ITV can remain a pillar of public service broadcasting. I beg to move.

Lord Lipsey

My Lords, I support the spirit in which the noble Lord, Lord Thomson of Monifieth, moved his amendment. We rightly spend a tremendous amount of time in this House debating the BBC and rather less—given the kinds of people who we are—debating ITV, although it has important public service obligations. I fear for ITV at the moment because it is squeezed between intense competition from channels that are not subject to those public service obligations and a serious crisis in advertising revenue. That crisis developed not just because of present economic circumstances but because of the developing difficulties associated with a channel that has to deliver the kinds of audiences at the kinds of prices that advertisers want to buy. It is therefore vital to preserve the public service capacity of ITV. There is a shift in the balance of advantage between consolidating and not consolidating the ITV companies. Of course one wants maximum diversity and competition but, in the new circumstances, the arguments are tilting towards consolidation. It is good that we in this House should recognise that by debating the amendment.

Lord Crickhowell

My Lords, I reiterate the interest that I declared earlier today. I am chairman of HTV, although those responsibilities are due to come to an end in about three months. I can therefore speak from personal experience of the pressures that are currently felt in the industry. I am the chairman of a company that, to meet its public service obligation—I was delighted that the noble Lords, Lord Thomson and Lord Lipsey, referred explicitly to that obligation—has to produce more broadcasting hours than any other licence holder. That is because of our dual responsibility for Wales and the west of England. Those are heavy burdens at a time when advertising revenue is collapsing.

I return to an observation that I made in relation to an earlier amendment. I believe that the noble Lord, Lord Thomson, was one of those who said, when considering the BBC, that there is plenty of time and that we must not hurry things. I fully agree with him that on this occasion there is not plenty of time and that the situation is serious. I agree with every word that he said in moving the amendment.

Lord Gordon of Strathblane

My Lords, I, too, endorse the remarks of the noble Lord, Lord Thomson of Monifieth. This is a matter of urgency. We are not debating the matter; we are simply hoping that the Government will take the power unto themselves to do something once the paving Bill has been passed. The proposal is highly desirable.

Lord McNally

My Lords, I have previously argued the case for the BBC. I remember when the noble Lord, Lord Bragg, censured me for not acknowledging the public service role of ITV. I share the concern that has been expressed on all sides of the House. It is not just sweet words that we require from the Minister, although I know that she is very capable of giving them. It is no use having sweet words while the patient bleeds to death. There is a real danger in this context. ITV was working on the assumption that the main Bill would already have been before us and that it would contain powers of consolidation.

Although the noble Lord, Lord Bragg, is not in his place, he will undoubtedly read Hansard. He has promised me a pot of tea while he explains to me the full dimensions of ITV's public service commitment. I shall certainly take him up on the offer. I have always appreciated the fact that, by accident or design, we have in ITV a marvellous addition to our public service broadcasting.

I still think of myself as a child of "Granada-land" and I fully appreciate the regional commitment of our ITV companies. I hope that in consolidation we will retain that amazing richness that ITV brought to broadcasting through the regional network. The noble Lord, Lord Crickhowell, referred to Wales and the West Country. We have all seen the benefit of the ITV network in the regions. However, it now needs consolidation, so that we have strength in our broadcasting ecology. I do not want a level playing field. This is where I differ from the noble Lord, Lord Crickhowell. I want a playing field that allows a strong BBC to retain its public service contribution. I do not want ITV to go. It is as important a part of the commercial competitive side of broadcasting and of public service. I hope that the Minister will give more than sweet words; I hope that she will convey a sense of urgency.

Lord Crickhowell

My Lords, I do not think that anything that I said earlier differs from the argument of the noble Lord. I, too, want a strong BBC with a public service obligation. I want ITV to be able to survive with its public service obligation as well, and I want it to do so on a level playing field.

Lord McNally

My Lords, my noble friend Lord Thomson has united the noble Lord, Lord Crickhowell, and myself. We now only have to persuade the Minister!

5.45 p.m.

Baroness Miller of Hendon

My Lords, noble Lords will be pleased to hear that we, too, support the amendment. I shall do my best not to repeat arguments already used.

Since the passage of the Broadcasting Act 1990 the whole world of broadcasting has been overtaken by major events: first, by the rapid and continuing expansion of satellite broadcasting, as the noble Lord, Lord Thomson, mentioned; and, secondly, by the advent of digital broadcasting, which is intended to displace analogue broadcasting within a relatively short period. That change to digital is actively encouraged by the Government not because they want everybody to enjoy better sound and sharper television pictures but—probably—because they want to sell the analogue bands to commercial users, such as mobile phone operators and taxi firms.

The situation has changed since 1990 because, despite Schedule 2 to the 1990 Act—that provision, along with the Fair Trading Act, was intended to restrict the amount of media ownership getting into one set of hands and to restrict cross-media ownership—neither of those objectives any longer obtains. One merely has to look at the newspaper empire of Mr Rupert Murdoch, combined with his interest in Sky broadcasting, and at other television broadcasters around the world to appreciate what I mean. I make it absolutely clear that I am not in any way criticising Mr Murdoch or his organisation. He has done only what he is allowed to do as a vigorous and forceful businessman. He has done nothing that he is not entitled to do. However, it is not good for the market or for the public interest that commercial television broadcasting should be dominated by one powerful organisation. I make that point because other noble Lords have not raised it.

The independent television companies have contributed to the fact that they have fallen behind with regard to digital broadcasting. The reception of digital signals via an existing aerial as distinct from one of Mr Murdoch's dishes does not represent effective competition. That is another problem.

On the grounds that "Unity is strength"—noble Lords opposite will fully understand that aphorism—the time has now come to allow television companies to merge if it suits their commercial interests. The way in which Mr Murdoch has created his empire positively demands that he should face viable competition that has the funds and resources to match his own with regard to bidding for the right to broadcast sporting events, to acquire the rights to films and so on. That would be good for him.

I anticipate that the Minister will tell us that it is not appropriate to amend Schedule 2 to the 1990 Act in relation to this Bill. I notice that the Minister nods her head. I agree with her, really. The amendment, as the noble Lord, Lord Thomson, pointed out, does not overturn Schedule 2 to the 1990 Act; it merely requires Ofcom to consider, as part of its preparation for its duties under the substantive Act when that becomes law, the implications of relaxing the rules. That way, it would not have to start from scratch perhaps several years from now.

Such advance preparation is anticipated and it is provided for by the wording of the subsection that we are considering which says: references to relevant proposals about the regulation of communications are references to the following proposals (whether or not Parliament has given any approval on which the implementation of the proposals depends)". I ask your Lordships to note the phrase, whether or not Parliament has given any approval". In other words, Ofcom is being given authority to make preparation for activities that, at the early stages of Ofcom's existence, will not yet have been authorised by Parliament. They are presumably activities that it is anticipated will be included in the substantive Act. The Bill, as it stands, gives authority for two types of activity. The amendment of the noble Lord, Lord Thomson, would merely add a third. We are glad to support that proposition.

Baroness Blackstone

My Lords, I am not sure that my words will be sweet enough for the noble Lord, Lord McNally, although they will be quite sweet. The amendment raises an important issue, but I am afraid that it is not one for discussion at the Report stage of this Bill. The noble Baroness, Lady Miller, rightly predicted that that was what I would say.

Media ownership is a matter that will be addressed by the main communications Bill, so I can give the noble Lord, Lord Thomson of Monifieth, an assurance that that will be addressed.

Noble Lords may be aware that my right honourable friend, the Secretary of State for Culture, Media and Sport recently announced that we would consult on the issue of cross-media ownership. She made reference to a White Paper. In fact, it will not be a White Paper, but a consultation paper which will be published shortly. It will set out our principles and will outline some possible options for reform. Noble Lords will understand that I cannot make any commitments today, nor can I reveal any of the details of the paper before it is published, but they will not have to wait long.

Some noble Lords have suggested that certain ownership rules should be formed immediately. I believe that lay behind some contributions. We understand the importance to business of getting ahead with the changes. I have much sympathy with the predicament in which ITV finds itself. I certainly support what has been said about its importance, including the importance of its public service role. However, we must get this matter right so that the legislation stands the test of time in what is likely to be a rapidly changing marketplace and one that will continue to change.

We need to bring forward all our proposals on media ownership in a single, coherent package in the communications Bill. It is not practical, nor is it desirable, to deal with the issue in an ad hoc or piecemeal fashion. We are anxious to get this area of policy right so that the legislation will stand the test of time. The changes that we make have to aid the long-term development of a competitive market, while maintaining pluralism and diversity, as mentioned by the noble Baroness, Lady Miller. We aim to publish proposals in the draft Bill next year. There will be a further period of consultation before any of the rules are finalised.

I conclude by explaining that under Clause 2 Ofcom will be able to facilitate the implementation of any proposals that provide it with functions relating to, broadcasting, radio and television services or other activities connected with the communications industry". Those functions will clearly include functions relating to the regulation of media ownership rules as set out in Schedule 2 to the Broadcasting Act, which do not need to be specified separately.

This amendment will have no practical effect. In the light of what I have said I hope that the noble Lord will agree to withdraw it.

Lord Gordon of Strathblane

My Lords, before the Minister sits down, perhaps I can remind her that the amendment of the noble Lord, Lord Thomson, prejudges nothing. It would simply confer the power on the Secretary of State, presumably after the consultation that is about to be initiated, to confer on Ofcom the power to do something about the matter. Otherwise, we are talking of a delay of something like two years. My concern is not the financial health of ITV, but the development of digital terrestrial broadcasting, which may well be non-existent and may well be totally dependent on satellite for the delivery of the new system to which we all aspire.

Baroness Blackstone

My Lords, I understand the point made by my noble friend, but I believe that everything that I have said, in relation to the need for proper consultation and the time to get this matter right, stands.

Lord Thomson of Monifieth

My Lords, I am grateful to the noble Lord, Lord Gordon of Strathblane, for the point that he has made more pungently than I did. Terrestrial, commercial television broadcasting is seriously at risk because of the digital challenge that it faces. The matter is one of great urgency. I am grateful to all noble Lords who have spoken in response to my amendment.

At one stage I had a slight hope that the House may arrive at that rare position of total unanimity, but I understand what the Minister has said on behalf of the Government. I did not expect that this matter could be incorporated into the Bill at this stage, but I was anxious to underline the urgent matter of the survival of public service terrestrial broadcasting in this country as we understand it. I hope that the debate has brought that point home to the Minister.

I understand that the Minister was seeking to be as helpful as she could be in the circumstances and I welcome the positive assurance that she has given me about the consultation paper that will soon be published and about the main Bill containing a provision for dealing with the ownership issue. I impress upon the Government the need for the greatest possible urgency and the need for the maximum amount of preparation in advance of being able to achieve that under the new Bill when it comes before us. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 15:

Page 3, line 21, at end insert— "( ) Borrowings under subsection (6) shall not exceed £6 million until legislative effect has been given to the proposals about the regulation of communications referred to in subsection (3)."

The noble Baroness said: My Lords, this amendment is substantially the same as one that I proposed at the previous stage, but which I withdrew so that I could consider the Minister's reply. The difference between this amendment and the previous one is that we now propose that the figure should be £6 million instead of £5 million. The difference is a mere £1 million, which is less than the cost of chartering Concorde for two return trips to the United States of America.

At the previous stage of the Bill, I reminded your Lordships that paragraph 24 of the Explanatory Notes to the Bill said:

"The Government envisages that the extra costs of establishing OFCOM will be of the order of £5 million spread over the period of transition".

As I acknowledged in the debate in Committee, the words, "of the order of" are fairly elastic. As co-operative and as constructive as I always try to be, I told the Minister that I was open to an offer of a slightly higher figure to allow for unforeseen contingencies. In his reply the Minister said that, those who have read the report"— the Towers Perrin report— will agree that it does not give us a basis for saying that £5 million is a magic figure and that the sum will not be £5.1 million or £5.5 million".—[Official Report, 29/10/01; col. 1281.]

The £5 million was not my magic figure; it was not Tower Perrin's magic figure; but it was the Government's magic figure that was in the White Paper. It was not I who plucked the figure of £5 million out of the air, but seemingly, it was the Government. If the figure of £5 million was not a reasonably based estimate, why did the Government insert that figure in the Explanatory Notes? For what purpose did they do that? The Minister went on to say:

"we need that degree of flexibility in the legislation, rather than the rigid figure that would be provided by Amendment No. 23".—[Official Report, 29/10/01; col. 1281.]

It is not Amendment No. 23 today but was on the previous occasion. But it was not my rigid figure; it was the Government's. It was I who offered an opportunity to the Government to be flexible about the figure, but they have not responded by suggesting some additional contingency margin. So it has been up to me in this amendment to propose that margin and that flexibility to increase the Government's own figure by 20 per cent; in other words, by £1 million.

I accept that there is an extension to Parkinson's Law, which says that, expenditure increases to absorb the allocated budget". There is a risk that if we increase the figure from £5 million to £6 million, that is exactly what will be spent. However, the important point is that there must be some cap on expenditure on setting up Ofcom. That body, for the moment, only has the task of preparing for the functions that Parliament may or may not assign to it in a Bill which will be presented to it at some indeterminate time—hopefully, a short time—in the future; a Bill whose contents even the Government are not yet exactly sure of. Otherwise, we would be considering it already rather than having two bites at the cherry.

I repeat that we must have a cap on the amount of seed money that can be spent in advance of the substantive legislation. In the Explanatory Notes to the Bill the Government put a figure on that cap. At the previous stage the Government tried to retreat from that figure, leaving us not with a revised figure but without one at all. The amendment, by seeking to add a generous margin to the Government's estimate, insists that they put the taxpayers' money where the Government's mouth is, or was when the White Paper was written.

Lastly, all the kind and suggestive amendments put forward to give extra jobs for Ofcom to plan for have been turned down on the basis that we cannot burden Ofcom at this stage. Ofcom will just have to get ready to do that. Since it is doing so few things, why can it not stick to at least a figure that is no more than 20 per cent more than the figure arrived at by the Government? I beg to move.

6 p.m.

Lord Crickhowell

My Lords, I rise simply to observe that from my experience of having been chairman of a non-departmental public body, one thing is absolutely certain; that is, whether or not it is in the Bill, the Government will impose a limit of expenditure on the organisation. Therefore, what we are really talking about now is openness and transparency.

The Government tell us that they believe in openness and transparency. So all they have to do is tell us what the limit will be, rather than hide it now and tell the chairman of Ofcom when he is appointed.

Lord McIntosh of Haringey

My Lords, in Committee I offered to write to the noble Baroness. I am afraid that I did not. That may be one reason why the amendment is in the form that it is today.

It may be convenient if I explain the background to our plans for financing Ofcom before it is able to raise revenue from the communications sector. There is an element of misunderstanding here. The amendment places a limit on borrowing from the Secretary of State. It is better not to set out a limit in primary legislation. There is too much uncertainty about how long the preparatory stage will last and what practical steps Ofcom will need to take to prepare to receive the regulatory functions.

I am certain, having heard the noble Baroness, Lady Miller, that there is a confusion between the additional cost over and above the cost to the existing regulators of establishing Ofcom, which is the £5 million referred to in the Explanatory Notes, and the money it will need to borrow to implement its plans, which is the figure in the amendment. During this preparatory stage, almost all the money will come from the Secretary of State. It is possible that existing regulators may give money to Ofcom. If that happens it will be on a relatively small scale.

We want the transition to the new regulatory regime to be as smooth as possible. Ofcom will only be able to take decisions on the practical steps when it is in place next summer. It will be necessary for Ofcom to commission new IT systems, to take on buildings and possibly to give up existing buildings and a host of similar measures. We have not estimated what the costs of such activity may be or how much of it will need to be financed before the transfer of functions takes place.

There will also be the pay, accommodation and other costs for the Ofcom board and its small skeleton staff. We cannot be certain when—this is the most important point—the new main Bill will receive Royal Assent or how soon after that that the regulatory functions will be transferred.

I have described the costs falling on Ofcom. Most—perhaps all—of which will require a loan. But this is a different coverage from the £6 million figure. That covers, as I said, the extra costs of establishing Ofcom. Some of those costs have already been incurred by the two departments and the existing regulators; for example, on the Towers Perrin report. There will be further costs for head-hunters and consultancy before Ofcom is able to undertake any expenditure. So the £5 million figure in the amendment in Committee, and the more generous £6 million figure before us today, are not really relevant to Ofcom's borrowing requirement.

I turn to the point to which the noble Lord, Lord Crickhowell, added extra force—the question of financial controls. The Secretary of State will be best placed to decide how much to lend Ofcom. She certainly will not want to lend any more than she has to. But the National Audit Office will also be responsible. It will be able to look at the loan. The Bill provides for the National Audit Office also to look at Ofcom's finances.

In addition, in Committee we undertook to make regular reports to Parliament on progress with Ofcom. I am sure that these reports should and will cover expenditure. In the light of that explanation, I hope that the noble Baroness will not press the amendment.

Baroness Miller of Hendon

Well, my Lords, that was a very interesting and full reply. I am disappointed that the Minister was not able to give me a guesstimate of what the figure might be. I need to read carefully what he said so the noble Lord can be somewhat relaxed. I confess I was tempted to divide the House and test its feeling. The noble Lord made some very interesting points. He said that Ofcom may need more money because it may be a long time before the substantive Bill comes before Parliament. We shall be able to talk about that interesting matter later. In view of the response from the Minister, I shall do what he says and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blackstone moved Amendment No. 16:

After Clause 2, insert the following new clause—

"MANAGEM ENT OF OFCOM

OFCOM shall. in managing their affairs, have regard—

1. (a) to such general guidance concerning the management of the affairs of public bodies as OFCOM consider appropriate; and
2. (b) subject to any such guidance and only to the extent that they may reasonably be regarded as applicable in relation to a statutory corporation. to generally accepted principles of good corporate governance."

The noble Baroness said: My Lords, in moving Amendment No. 16, I shall speak also to Amendments Nos. 25, 29, 74 to 75 and 86. We had some discussion in Committee about the desirability of Ofcom complying with generally accepted principles of good governance. I indicated that the Government were sympathetic to this suggestion. Amendment No. 16 places such a requirement on Ofcom.

I should emphasise that when we refer to good governance we are thinking of the commercial principles of good corporate governance, in so far as they are relevant to a statutory corporation such as Ofcom but also, and perhaps more importantly, of guidance on the conduct of public bodies, again in so far as it is relevant to Ofcom. In fact, the guidance on the management of public bodies is more likely to be relevant to Ofcom. Hence it takes precedence in the proposed amendment.

In Committee, we had a number of discussions about the appropriate method of recording and monitoring the interests of members of Ofcom. I shall not be bringing forward a specific amendment in relation to that as it is sufficiently covered by the new clause. The guidance on the running of public bodies, to which Ofcom will have to have regard, requires such bodies both to keep a register of the relevant interests of Members and to make them publicly available. I would certainly expect Ofcom to ensure that it complies with this requirement. I hope that that will ensure that the concerns which have been expressed on the issue are fully met. Amendments Nos. 25 and 29 are purely consequential amendments.

We indicated in Committee that we would be willing to consider a requirement that Ofcom should publish its regulations and procedures. Amendment No. 74 requires Ofcom to do that under paragraph 15 of the schedule. We believe that this provides a more precise requirement and will meet the concerns expressed.

Finally, Amendments Nos. 75 and 86 relate to record keeping and transparency and again follow on from our discussions in Committee. Amendment No. 75 requires Ofcom to record decisions whether made by Ofcom, its committees or its employees acting with delegated authority. By applying the provisions of the Public Records Act to Ofcom, Amendment No. 86 places obligations on Ofcom in respect of maintenance and safekeeping of records. We believe that the Public Records Act is the right vehicle to use to place an obligation of this kind on Ofcom.

On a related matter, noble Lords will recall that in Committee there was discussion of whether it was appropriate to apply the negative resolution procedure to decisions made by the Secretary of State to vary the size of Ofcom. I promised then to write to the Delegated Powers and Regulatory Reform Committee and ask it to reconsider its previous advice that the negative procedure was acceptable. I am pleased to be able to confirm today that the Delegated Powers and Regulatory Reform Committee has considered the issues raised and has stated that it does not wish to change its recommendation. I hope that that will reassure noble Lords that appropriate procedures are being followed and that, as the noble Baroness, Lady Anelay, said in Committee the views of the Delegated Powers and Regulatory Reform Committee can be taken as definitive. I beg to move.

Baroness Anelay of St Johns

My Lords, I welcome the amendments moved today in response to concerns I expressed in Committee. I acknowledge that they meet fully the precise concerns identified by the Minister.

I thank the noble Baroness for writing to me in advance of Report stage with an explanation of why the Government have chosen this route for the amendments. I am grateful to her today for putting on the record her commitment with regard to the Register of Financial Interests. That indeed troubled me.

The Minister referred to the order-making power about which I tabled an amendment in Committee and which she referred back to the Delegated Powers and Regulatory Reform Committee. That committee was so swift—it discussed the matter yesterday—that I was able to receive a letter on the Front Bench today. I was, therefore, aware of the decision. I have already been able to indicate to the chairman of the committee that I fully accept its decision and have no intention of returning to the matter at Third Reading.

On Question, amendment agreed to.

Clause 3 [Functions of existing regulators]:

[Amendments Nos. 17 and 18 not moved.]

6.15 p.m.

Lord Lipsey moved Amendment No. 19: After Clause 3, insert the following new clause—

"IMPLEMENTATION OF PROPOSALS

1. (1) The Secretary of State shall ensure that any bill containing provisions relating to the implementation of any relevant proposals within the meaning of section 2(3) is—
1. (a) published in draft; and
2. (b) subject to consultation.
2. (2) The period for consultation shall be such as to allow scrutiny of any draft bill by a joint committee of both flouses of Parliament."

The noble Lord said: My Lords, I have banged on about the case for a Joint Committee of both Houses until the House has been driven to distraction. Were the Minister a less patient person she, too, would have been driven to distraction. Instead she has listened with close attention and has promised to consider the matter. I think that it will be for the convenience of the House if we now hear what the noble Baroness is able to tell us.

Baroness Blackstone

My Lords, my noble friend has made clear his view that we should allow for pre-legislative scrutiny by a Joint Committee of both Houses and I have expressed a good deal of sympathy for that approach. I am extremely grateful to my noble friend for pressing us so hard on this issue.

I am delighted to be able to tell him that the Government are confident that time can be found, if Parliament wishes, for a Joint Committee to undertake this task. Nearer the time we shall invite Parliament to establish such a committee. I hope that on the basis of that assurance my noble friend will feel able to withdraw his amendment.

Baroness Anelay of St Johns

My Lords, as it is Report stage, perhaps I may speak next so that the noble Lord, Lord Lipsey, is able to respond fully to the Minister.

I thank the noble Baroness for listening to the requests made in Committee from all sides of the House that the procedure of a Joint Committee on pre-legislative scrutiny should take place. I appreciate that the Government had to go through certain administrative procedures behind the scenes before they are able to give as near an assurance as any government are able to give on these matters. I welcome the noble Baroness's words today.

Lord McNally

My Lords, before the noble Lord, Lord Lipsey, makes his final comment, perhaps I may say that the House should not underestimate the importance of the Minister's remarks. This is a real, positive step towards good governance. It is an immensely complicated Bill involving a wide range of outside interests. If we had tried to carry it through without the pre-legislative consultation, we should have been seeking in all manner of ways to get points of view across to the House.

We have a real opportunity to invite those outside interests to make their contribution transparently under the scrutiny of Members. It is a really good day for Parliament when the Government concede such an approach on a major and complicated Bill. Let us hope that this example is followed in many more Bills to come.

Lord Lipsey

My Lords, I thank the Minister for her remarks which were more fulsome than many Members of this House might have expected. I thank, too, the many noble Lords who supported the cause, in particular the noble Baroness, Lady Anelay, and the noble Lord, Lord McNally, who have put their names to the amendment.

It is right to say that this does not involve only Members of this House. We are talking about a Joint Committee. Both opposition parties in the Commons wrote to the Minister asking for such a committee; and the All-Party Media Group backed it. Nevertheless, governments have been known to resist such forces in the past. I hope that it will not be felt to be sycophantic if I welcome greatly the announcement that the Government have made.

As is evident, it is goods news for the communications industry and all the interests involved. It is the way to hammer things out. As the noble Lord, Lord McNally, said this is a very good day for Parliament. This is precisely the kind of Bill which deserves such examination in this forum—pre-scrutiny which can be truly effective because it seeks the best possible results rather than scoring any political points. The Government deserve great credit for agreeing to it. I had thought that we were knocking at a semi-open door. The Minister has opened it wide and we all cheerfully crowd through. I thank the Minister and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 [Winding up of OFCOM on abandonment etc. of proposals]:

Lord Brightman moved Amendment No. 20:

Page 4, line 24, after "abandonment" insert "or modification"

The noble and learned Lord said: My Lords, in moving the amendment, I speak also to Amendments Nos. 21 and 23.

Amendment No. 20 is a small drafting amendment. I believe that it is worth bringing it before the House because by adding two words to line 24 on page 4 of the Bill we can eliminate no fewer than three lines of the Bill.

Clause 4(1) states: If, in consequence of—

1. (a) the abandonment of any relevant proposals about the regulation of communications, or
2. (b) the modification of any such proposals, it appears to the Secretary of State that it is no longer necessary … he may by order provide for the winding up and dissolution of OFCOM".

Precisely the same result can be achieved both in legal effect and in clarity of expression by simply adding the words "or modification" after "abandonment" and removing subsection (1)(b). Subsection (1) would thus become four lines rather than seven. We should not make a clause any longer than is necessary. Amendment No. 21 is consequential. My Amendment No. 23 is unnecessary if Amendment No. 22, which has been tabled by the Government, takes effect. I beg to move.

Baroness Blackstone

My Lords, I am extremely grateful to the noble and learned Lord, Lord Brightman, for Amendments Nos. 20, 21 and 23. His expertise in these matters and his eye for detail are remarkable. We are happy to accept Amendments Nos. 20 and 21 as we agree that there is little need to separate the reference to "abandonment" or "modification" of relevant proposals, as the Bill currently does.

However, there is some difficulty in accepting consequential Amendment No. 23 to Clause 4, as this could leave some doubt as to what the Secretary of State would be under a duty to act in consequence of. In order to be entirely clear about what is being referred to, we propose Amendment No. 22 to replace the wording, If, in consequence of anything mentioned in paragraph (a) or (b) of subsection (I) at the start of Clause 4(2), with, If in consequence of the abandonment or modification of any relevant proposals about the regulation of communications". As a result of that change, Amendment No. 24 is also needed to make a minor alteration in Clause 4(2) to the reference to subsection (1).

I hope that the noble and learned Lord, Lord Brightman, is prepared to agree that we should accept Amendment No. 20 and Amendment No. 21, which I hope he will move, and that he should not move Amendment No. 23 but instead agree with our Amendments Nos. 22 and 24.

Amendment No. 84 is a technical, tidying-up amendment to remove superfluous wording that has no effect and should therefore be removed.

On Question, amendment agreed to.

Lord Brightman moved Amendment No. 21:

Page 4, line 26, leave out paragraph (b).

On Question, amendment agreed to.

The Deputy Speaker (Lord Brougham and Vaux): My Lords, if Amendment No. 22 is agreed to I cannot call Amendment No. 23.

Baroness Blackstone moved Amendment No. 22:

Page 4, line 30, leave out from first "of' to first "it" in line 31 and insert "the abandonment or modification of any relevant proposals about the regulation of communications"

On Question, amendment agreed to.

Baroness Blackstone moved Amendments Nos. 24 and 25: Page 4, line 33, leave out "that subsection" and insert "subsection (1) Page 5, line 21, leave out "or 2" and insert ", 2 or (Management 4 OFCOM)

On Question, amendments agreed to.

Clause 5 [Interpretation]:

[Amendment No. 26 not moved.]

Lord Gordon of Strathblane had given notice of his intention to move Amendment No. 27:

Page 5, line 28, at end insert— "(e) the Board of Governors of the BBC;"

The noble Lord said: My Lords, Amendment No. 27 is not moved. It was referred to by myself and the Minister in the debate on Amendment No. 7. In the light of the Minister's reply, it would clearly waste the time of the House to move the amendment tonight. I invite the Minister to look at the clauses in the paving Bill that refer to the phrase "existing regulator". She will find that only one of them refers to a transfer of property. The idea that no property is involved is not a sufficient answer to my amendment. I do not intend to move the amendment.

[Amendment No. 27 not moved.]

[Amendment No. 28 not moved.]

Clause 6 [Short title, commencement and extent]:

Baroness Blackstone moved Amendment No. 29:

Page 6, line 3, leave out "and 2" and insert ", 2 and ( Management of OFCOM)"

On Question, amendment agreed to.

Lord Gordon of Strathblane

had given notice of his intention to move Amendment No. 30: Page 6, line 5. at end insert (2A) No order shall be made under subsection (2)—

1. (a) until a bill to give effect to the proposals referred to in section 2(3) has been introduced into either House of Parliament, and
2. (b) unless, before introduction, a draft of such a bill has been published and is available for scrutiny for at least eight sitting weeks of either House.

(2B) If the conditions specified in subsection (2A) above are not fulfilled, no order shall be made under subsection (2) until a bill to give effect to the proposals referred to in section 2(3) has received a Second Reading in either House. The noble Lord said: My Lords, in light of the Minister's helpful remarks in the debate on the amendment moved by the noble Lord, Lord Lipsey, I should like to study them in detail. I think, although I am not certain, that they meet my objections. I do not move the amendment.

[Amendment No. 30 not moved.]

Baroness Miller of Hendon had given notice of her intention to move Amendment No. 31: Page 6, line 9, at end insert— ( ) Nothing in this Act shall come into force until a bill, draft or otherwise, to give effect to the proposals referred to in section 2(3) is introduced into either House of Parliament.

The noble Baroness said: My Lords, I take the same action as that of the noble Lord, Lord Gordon of Strathblane.

[Amendment No. 31 not moved.]

Schedule [Further provision about OFCOM]:

Baroness Blackstone moved Amendment No. 32: Page 7, line 4, leave out "non-staff" and insert "non-executive

On Question, amendment agreed to.

Baroness Anelay of St Johns moved Amendment No. 33: Page 7. line 7, at end insert ( ) Before appointing a person as a non-staff member of OFCOM, the Secretary of State shall satisfy himself that the appointments panel has taken into account the views of the chairman before making their recommendations as to the appointments to be made.

The noble Baroness said: My Lords, this is a probing amendment. I tabled it to give the Government the opportunity to respond to what I thought was a constructive suggestion put forward by the noble Lord, Lord Dubs, in Committee, at col. 166 on 6th November, on the procedure for appointing non-staff members to Ofcom.

The noble Lord, Lord Dubs, said that the chair of a body such as Ofcom was not usually involved in the Nolan process of selecting members of the board. He suggested that the independent Nolan-type panel should be given the opportunity to have the chair of Ofcom present when making decisions on appointments so that they could ask questions about the detailed requirements of the post rather than having to rely on a written summary and a prepared briefing.

Now that the Minister has had the opportunity to consider that idea, I wonder whether she can put on the record the Government's view. Do they agree that that could be a useful procedure? I beg to move.

Lord Dubs

My Lords, I stick by what I said previously. It represents what would be good practice and I hope that the Government seek to extend it across a range of appointments as a way of making the process more efficient. However, I do not think that it is appropriate for the Bill.

Lord McIntosh of Haringey

My Lords, as the noble Baroness, Lady Anelay said, the amendment concerns the involvement of the chairman of Ofcom in the appointment of non-executive directors. As I said in Committee, the appointment of non-executive members of Ofcom—I am now using the words "non-executive" instead of "non-staff"—will be in line with the guidance issued by the Office of the Commissioner for Public Appointments. The guidance says that departments may seek the views of the chairman of the body concerned on issues such as selection criteria and the balance of the board. Although the guidance says "may", it is an example of when it would be foolish to ignore it.

The chairman will be involved in drawing up the role specifications for a particular board vacancy in putting forward names of potential candidates and considering names suggested by other sources. The aim of the guidance is to keep chairs fully in touch throughout the appointments process and that will be the case for appointments of non-executive members to Ofcom. There is no need to set that out in the Bill.

On the issue of whether the chair should be present, which my noble friend Lord Dubs raised in Committee, that is a BBC procedure that predates the Nolan proposals. We do not propose to introduce it in this case.

6.30 p.m.

Baroness Anelay of St Johns

My Lords, I am grateful to the Minister for putting on record a further explanation. I made it clear that this was a probing amendment. There are some questions of good practice to which we may return. I am grateful to the Minister for saying that this is one kind of good practice that the organisation would be rather foolish to ignore. I am very interested in the comment of the noble Lord, Lord Dubs, that perhaps this is the kind of good practice that should be practised—for want of a better expression—more widely. I shall look at it in further detail, but at this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blackstone moved Amendment No. 34: Page 7, line 9, leave out -non-staff" and insert "non-executive

On Question, amendment agreed to.

Baroness Anelay of St Johns moved Amendment No. 35: Page 7, line 10, at end insert ( ) Before appointing a person to be the chairman, the Secretary of State shall also satisfy himself that the person will have no employment or other commitments or responsibilities as are likely to affect prejudicially his ability to devote sufficient time to the undertaking of his functions as the chairman and as a member of OFCOM.

The noble Baroness said: My Lords, in moving Amendment No. 35 I shall speak also to Amendment No. 41 which is grouped with it. Both are probing amendments which in a sense are tidying-up questions on matters of good practice which I hope will not need to be taken further if we are given an explanation by the Government. Both amendments deal with the Government's expectations with regard to the role of the members and chairman of Ofcom.

I tabled Amendment No. 35 in response to remarks made by the noble Baroness, Lady Blackstone, in Committee in relation to an amendment which examined the reasons why the Secretary of State should, or could, allow a member of Ofcom to remain in post, even though he or she was incapacitated or unfit to carry out functions as a member of the board. On 6th November the Minister argued at col. 163 of the Official Report that the Secretary of State should retain discretion as to whether or not to remove unfit persons on the basis that they may be only temporarily unfit. The Minister gave as an example the scenario where an Ofcom member may have taken a temporary job which was in conflict with his or her remaining a member of Ofcom.

The Minister argued that the Secretary of State should be able to leave that person in office while he or she took a temporary break from the work of Ofcom. Has the Minister had an opportunity to consider further the implications of this for the effective operation of Ofcom? After all, at the moment the Bill provides for a maximum of six members of Ofcom: one of them will be chairman and another chief executive. Even if the size of the board is increased by secondary legislation the Government have made it clear that they intend the board should be as small as possible.

There is no doubt that absences from meetings of the board will compromise the operation of Ofcom. Some absences are unavoidable and will not be the choice of the board member, for example, because of his or her illness. But it is altogether another matter if the board member has accepted an appointment to Ofcom knowing full well what the work and its responsibilities entail and subsequently decides to take on another job which he or she knows will prevent that member from doing his or her duty as an Ofcom board member. If that occurred it would not appear to be responsible action by that individual. Certainly, it would be odd if the Government gave anyone the green light to do that.

The Nolan procedures are both welcome and proper, but we should recognise that it takes a considerable time to make appointments. Once made, the successful appointees must be under no illusion that they should take their role seriously and are not able to opt in and out of the work as it may be convenient to their business careers. Can the Minister explain to the House the Government's further thoughts on these matters? For example, will the Secretary of State take a different view if the temporary job is taken by the chairman rather than one of the members; if it is for six months rather than six days—in other words, whether the length of time matters—or if this is the second or subsequent occasion that a member has decided to opt out of his or her Ofcom work?

I turn briefly to Amendment No. 41 which I tabled as a consequence of the comment by the Minister in Committee that, the chairman is likely to be part-time".—[Official Report, 29/10/01; col. 1228.] We have already been told that the appointment of chairman will be made next year. One hopes and assumes, therefore, that the Government have already made great strides in preparing a job description for that post. Can the Government confirm that? If so, will the Government be able to publish it before the Bill leaves this House?

The proposal to have a part-time chairman raises three questions which I should be grateful if the Minister could address tonight. What will be his or her responsibilities? How part-time is "part-time"? How can the work of four existing heads of regulators and the Secretary of State's duties in relation to radio communications be carried out adequately by one part-time chairman at Ofcom? The Minister may say that one cannot be aware of all this until later, but since she is already on record as saying that the chairman is likely to be part-time one assumes that these matters have been taken into consideration.

The Minister also said, again at col. 1228, that, The chief executive will be a full-time appointee and an expert in matters of regulation". Does that mean that the Government anticipate that the chairman could be inexperienced in such matters? I beg to move.

Lord Borrie

My Lords, towards the end of her remarks on Amendment No. 41 the noble Baroness wondered how the roles of full-time chairmen of five bodies merged into one could possibly be carried out by someone who was only part-time. But, surely, this paving Bill is concerned with the Ofcom that is to be created by the Bill which has a temporary role and the other regulators continue in existence. By Amendment No. 41 the noble Baroness forces the Government from the very beginning to appoint someone who is full time when that may or may not be necessary. I do not know.

Lord Brooke of Sutton Mandeville

My Lords, following the observation of the noble Lord, Lord Borrie, I am very supportive of my noble friend particularly in relation to Amendment No. 41. In no sense am I the spiritual heir of Professor Parkinson, but it is my experience that when Ministers ask individuals to take on jobs which are not necessarily full-time almost always they underestimate the amount of time that those people need to put in to discharge the tasks. Although the Government may be reluctant to see a particular number of hours placed on the face of the Bill, my noble friend introduces an extraordinarily valuable precaution and in that respect I am very supportive of it.

Lord Dubs

My Lords, Amendment No. 35 represents good practice which I am sure takes place anyway. Therefore, there is no point in putting it on the face of the Bill. Amendment No. 41 raises a point of principle. Here I differ from the comments of the noble Lord, Lord Brooke of Sutton Mandeville. To have a chairman of a body work full-time and, therefore, as long as the chief executive, is not totally satisfactory. There may be a conflict of roles and I am not sure that that is a desirable direction in which to proceed. In the end, it may be necessary to have a chairman who is virtually full time, but at this stage to suggest that that is the only way to proceed because five bodies are to be merged weakens the very delicate balance that one seeks to achieve between the chairman and chief executive of an organisation. The more the chairman works full-time the more difficult it is to place the two roles in the right relationship one to the other. I hope that the Government not only reject the amendment but do their best not to have a chairman for as long as five days a week.

Lord McIntosh of Haringey

My Lords, it is true that in Committee we said we expected the chairman of Ofcom to carry out his functions on a part-time basis. We want the chairman and other non-executive members to bring a range of experience relevant to the responsibilities of Ofcom and to keep that body in touch with the outside world. It is not inconceivable that the chairman could have other calls on his or her time, but that does not mean that he could have commitments or interests which affect prejudicially his ability to devote sufficient time to the undertaking, or that they should be of such a nature as would bring them into conflict with his role as chairman. There is nothing wrong with a part-time appointment. The chairmen of the BBC and ITC are part-time appointments. But clearly it is important that there should not be any conflict of interest, and the Secretary of State will ensure that that is the case.

Similarly, if the noble Baroness is worried about the prospect that the chairman might take a leave of absence which could damage the position. the Secretary of State would consider the matter and certainly would not allow a leave of absence that would render the post unoccupied when it needed to be occupied—if I may put it that way. The Bill provides flexibility in this area. If a short period of absence would not be damaging and other members could provide cover for the post, of course that would be acceptable. Otherwise, we would expect the chairman to resign.

All this will be covered by the job description. Although it is not yet ready, we aim to make it available before the Bill leaves Parliament. I hope that that will be helpful. As regards the onerous tasks of the job, I should point out that the chairman will have to assist him the experience of the board, as well as the support of a full-time chief executive and adequate staff. Provision has been made to increase the size of the board if that is considered necessary.

I hope that, on the basis of those reassurances. the amendment will not be pressed.

Baroness Anelay of St Johns

My Lords, I am grateful to those noble Lords who contributed to our brief debate on these matters. I was intrigued by the contribution of the noble Lord, Lord Borrie. He went to the heart of the issue by saying that we appear to be recruiting a person to become the chair of a body which has a limited range of operation, but which later may well evolve into a far more demanding role. However, the person recruited will need the skills of a chameleon to change the way in which he or she operates. That I believe will be a challenge for the Government in terms of advertising the post as well as a challenge for the candidate who seeks to meet the requirements.

I thank my noble friend Lord Brooke of Sutton Mandeville for his support. He was quite right to point out that whoever is appointed may well find, as so often happens, that no matter what is set out in the job description as regards the amount of time needed to carry out the tasks, the postholder finds that he or she has to do a great deal more work than has been provided for in the job description.

The noble Lord, Lord Dubs, made a proper point as regards taking care not to muddle the roles of the chairman and the chief executive. I certainly would not wish to do so and that was not my intention in tabling the amendments.

I am grateful to the Minister for making two points. First, he believes that the Bill already provides sufficient flexibility in these matters. I hope that is the case and I wait to see whether his assurances are borne out in reality. Secondly, I welcome in particular the fact that he has been able to put on the record the Government's intention to make available the job description for the chairman before the Bill leaves Parliament. I wonder if, by that comment, the noble Lord means that it will be published before the Bill leaves another place. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blackstone moved Amendments Nos. 36 and 37: Page 7, line 13, leave out "non-staff" and insert "non-executive Page 7, line 14. leave out "non-staff" and insert "non-executive

On Question, amendments agreed to.

6.45 p.m.

Baroness Miller of Hendon moved Amendment No. 38: Page 7. line 27. at end insert— ( ) Before appointing members of OFCOM the Secretary of State shall ensure that at all times, where possible, at least two members of OFCOM are qualified lawyers or economists and who have appropriate experience and knowledge of competition law and practice. ( ) A lawyer will he qualified for these purposes only if

1. (a) he has a seven year general qualification within the meaning of section 71 of the Courts and Legal Services Act 1990 (c. 41),
2. (b) he is an advocate or solicitor in Scotland of at least seven years' standing, or
3. (c) he is—

1. (i) a member of the Bar of Northern Ireland of at least seven years' standing. Or
2. (ii) a Solicitor of the Supreme Court of Northern Ireland of at least seven years' standing."

The noble Baroness said: My Lords, this probing amendment seeks to drive home the critically important point that Ofcom should be, above all else, an effective competition authority. In particular, it is clear that the Government intend that Ofcom should inherit the concurrent powers under the Competition Act 1998 which at present are held by Oftel. But it also seems likely that concurrent powers will be extended to cover the full, "converged" area of Ofcom's operations, including broadcasting, where at present competition cases are handled by the OFT, not the ITC. Ofcom may therefore end up handling some of the most strategically important competition cases within the United Kingdom, not only in telecoms but also in broadcasting.

In our view it is entirely appropriate to ask the Government to make explicit that they will appoint to the core of Ofcom a number of persons with experience and expertise in that particular area. That does not simply mean appointing those who have general experience either in telecoms or broadcasting circles, but rather people who are expert in the specific field of competition law, in particular as it is applied to telecoms and broadcasting.

As was recognised in the Competition Act, the provisions of the Bill indicate a role for qualified competition lawyers and economists. Indeed, much of the wording of the amendment is lifted directly from the Competition Act—specifically paragraph 26 of Schedule 7—which deals with the qualification of persons for the panel of tribunal chairmen. I beg to move.

Lord Dubs

My Lords, I should like to make a brief intervention. The amendment is interesting in terms of what it reveals about the views of the Conservative Front Bench. The amendment seeks qualified lawyers, but any old economist will do. Noble Lords on the Opposition Front Bench decided not to define, or perhaps could not define, what was meant by suitable economists. A certain weakness lies in the amendment, quite apart from the basic principle being addressed. On second thoughts, I know why the qualifications of the economists were not specified. It could not be done because it was far too difficult. Members on the Conservative Front Bench have left it well alone, thereby exposing a weakness.

More seriously, to define in terms of specialist qualifications what will be required of the members of the Ofcom board is, I believe, to misunderstand the nature of what the Ofcom board ought to be. The legal skills prescribed here strike me as the kind of skills that the board of Ofcom ought to have at its disposal; namely, it describes the kind of advice that should be provided by members of the Ofcom staff. Such expertise should not necessarily be prescribed as skills to be held by individual members of the board. The normal and healthy tradition of government Ministers taking advice from expert civil servants, which acknowledges that the individuals themselves do not have the same level of technical expertise as staff in their departments, serves very well. The same would hold good for Ofcom and similar bodies.

We need individuals for the Ofcom board who prove themselves able to master the technical and skilled advice that they are given, rather than those who are so qualified. After all, many other qualifications could also be listed. I cite, for example, knowledge of broadcasting and of the Internet. Those skills are not listed in the amendment. In fact, the amendment exposes some weaknesses of approach, even though it is only a probing amendment, as the noble Baroness pointed out. Perhaps it has exposed more weaknesses in her thinking than she may have wanted to reveal.

Lord Borrie

My Lords, like my noble friend Lord Dubs I, too, oppose the amendment. I do so for three reasons. The first is rather similar to the points made by my noble friend. Here we are appointing a regulatory body. We are not, apropos the last remarks of the noble Baroness, Lady Miller, appointing a tribunal. Ofcom will be a regulatory body whose members—as distinct from the staff of that body, who no doubt will need to hold this or that qualification—will need to reach decisions. It would be wholly wrong in principle to insist on particular professional qualifications for some, even if not for all, the members of the board.

My second reason for opposing the amendment is that Ofcom will be a body which the noble Baroness, Lady Anelay, stated will start with a minimum membership of three people and a maximum of six. Out of those three to six members, it is being suggested that two should hold very specific qualifications.

The third reason for opposing the amendment is, as I have said, that the qualifications required are extremely specific. I believe that my noble friend on the Front Bench would have some difficulty in locating such experts when fishing for suitable candidates in what will be a small pool of those who are not only lawyers of a certain standing, but who also have experience and knowledge of a discrete area of law—competition law—which most lawyers would not even admit is a separate topic. It forms part of the larger subject of commercial law. It would be extremely difficult to track down suitable candidates to take on those roles. Thus I believe that there are several reasons for opposing the amendment.

Lord Brooke of Sutton Mandeville

My Lords, I have been absorbed by and have understood the points made by the noble Lords, Lord Dubs and Lord Borrie. In particular I admire the first point made by the noble Lord, Lord Dubs. In that context, I think that he has forgotten the episode of the television production, "Yes, Minister", in which my noble friend Lady Thatcher appeared in person on a proposition that economics should be abolished. In those circumstances, my noble friend has been extraordinarily prudent, in terms of the theology of our party, not to ascribe specific qualifications to economists.

Lord McIntosh of Haringey

My Lords, the last thing I want to do is to offend lawyers or economists, since we are surrounded by them in this House. I was once a university Fellow in Economics at an American university, and I must be the only person to get a second-class degree with three gamma minuses, one of which was in the theory of economics. I also remind the House that one can become a Fellow of the Royal Economic Society and place it after your name simply by subscribing to its journal; not many people know that.

We have always said that, so long as it can operate effectively, we want the board of Ofcom to be as small and flexible as possible. It will need the right mix of experience and skills to cover the range of Ofcom's responsibilities. In the initial preparatory stage, the board will consist of between three and six members. Particular skills and experience, perhaps involving change of management or human resources issues, may be of greater relevance to the board in the early stages. We may need to enlarge the board when Ofcom starts to take on its regulatory functions. It may be necessary to have members with direct experience of competition law and practice, but Ofcom may also find that it needs board experience covering other areas of its responsibilities. The needs of the board may change; other types of experience and skills could be required. We cannot make that sort of provision in advance. I am glad that the noble Baroness. Lady Miller, has recognised that this is and should be a probing amendment.

Baroness Miller of Hendon

My Lords, first, I thank my noble friend Lord Brooke for riding to the rescue and giving such a happy and friendly example to your Lordships to demonstrate that the comments made by the noble Lord, Lord Dubs, are quite irrelevant With regard to the way in which the noble Lord, Lord Dubs, suggested that I had no idea how to describe the an economist, I have now learned a good deal from the Minister.

This is a probing amendment. One advantage of a probing amendment is that one can ask questions and find out that one is right or completely wrong in what one says. Having previously received few compliments from the noble Lord, Lord Thomson, and agreement having been expressed with some of the things that I have done, I believe that I can stand up quite bravely and say that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blackstone moved Amendments Nos. 39 and 40: Page 7, line 30, leave out "non-staff" and insert "non-executive Page 7, line 32, leave out -non-staff- and insert "non-executive

On Question, amendments agreed to.

[Amendment No. 41 not moved.]

Baroness Blackstone moved Amendments Nos. 42 to 77: Page 7, line 35, leave out "non-staff' and insert "non-executive Page 7, line 37, leave out "non-staff" and insert "non-executive Page 8, line 11, leave out "non-staff' and insert "non-executive Page 8, line 14, leave out "non-staff" and insert "non-executive Page 8, line 18, leave out "non-staff- and insert "non-executive Page 8, line 24, leave out "non-staff' and insert "non-executive Page 8, line 27, leave out "non-staff" and insert "non-executive Page 8, line 28, leave out "a staff" and insert "an executive Page 8, line 30, leave out "non-staff" and insert "non-executive Page 8, line 31, leave out "staff' and insert "executive Page 8, line 32, leave out "non-staff' and insert "non-executive Page 8, line 34, leave out "non-staff" and insert "non-executive Page 9, line 3, leave out "non-staff" and insert "non-executive Page 9, line 10, leave out "staff' and insert "executive Page 9, line 12, leave out "staff' and insert "executive Page 9, line 13, leave out "staff" and insert "executive Page 9, line 15, leave out "non-staff" and insert "non-executive Page 9, line 17, leave out "non-staff' and insert "non-executive Page 9, line 18, leave out "staff- and insert "executive Page 9. linssse 24, leave out "non-staff" and insert "non-executive Page 9, line 25, leave out "a staff" and insert "an executive Page 9, line 28, leave out "non-staff" and insert "non-executive Page 9, line 30, leave out "non-staff" and insert "non-executive Page 9, line 32, leave out "a staff" and insert "an executive Page 9. line 35, leave out "a staff' and insert "an executive Page 9, line 38, leave out "a staff" and insert "an executive Page 9, line 39, leave out "a staff" and insert "an executive Page 9. line 41, leave out "staff" and insert "executive Page 9. line 45, leave out "staff' and insert "executive Page 10, line 9, leave out "a staff member or a non-staff" and insert "an executive member or a non-executive" Page 12, line 24, leave out -non-staff' and insert "non-executive Page 12, line 26, leave out "non-staff" and insert "non-executive

Page 12, line 28. at end insert— (3A) Ofcom shall publish, in such manner as they consider appropriate, any arrangements which they make under this paragraph.

Page 12. line 29, at end insert— 15A Ofcom shall make arrangements for the keeping of proper records

1. (a) of their proceedings;
2. (b) of the proceedings of any committee established by them;
3. (c) of the proceedings at any meeting of the chairman and other non-executive members of Ofcom; and
4. (d) of anything done by an employee or member of Ofcom under paragraph 17(a)."

Page 12, line 33, leave out "non-staff" and insert "non-executive"

Page 12. line 42, leave out "non-staff' and insert "non-executive"

On Question, amendments agreed to.

The Deputy Speaker (Viscount Simon)

My Lords, as Amendments Nos. 78 and 79 have been marshalled incorrectly, I have to call Amendment No. 79 before calling Amendment No. 78.

Baroness Anelay of St Johns moved Amendment No. 79: Page 13, line 3, at end insert

• "( ) In the case of a resolution made under sub-paragraph (3)(a), Ofcom shall publish within 30 days a statement of the interest and the reasons why it was appropriate to disregard it."

The noble Baroness said: My Lords, for the convenience of the House and to save time, I shall refer to the government amendment that we had thought was Amendment No. 78 at the same time as I speak to Amendment No. 79.

I welcome government Amendment No. 78. It fully meets a concern that I expressed in Committee. The reason that I have tabled Amendment No. 79 is to probe one remaining matter about which I am concerned regarding the way in which financial interests shall be declared by members of the Ofcom board and of Ofcom's committees. We are at the tail end of this Report stage, and I am very aware that my Amendment No. 79 is a tail-end amendment, too. It is a minor matter about which I hope the Government can give an assurance.

Part of my Amendment No. 79 is met by the government's Amendment No. 78. I tabled mine before they tabled theirs. Since it is a probing amendment, I felt that it was not worth taking up your Lordships' time by withdrawing my amendment and retabling something else.

The Government have made some significant improvements to the Bill today with regard to the declaration of financial interests. But, even with the benefit of those amendments and I hope the benefit of the government's Amendment No. 78 when we come to it, the public will not know why the board or committee felt it appropriate to disregard the declaration of interest and then allow the person involved to remain for the decision-making process from which they could possibly obtain financial benefit.

Amendment No. 79 seeks to correct that omission by providing transparency. My amendment would ensure that if someone declared a financial interest and was then allowed to take part in the decision-making process, Ofcom would simply have to publish a statement of the financial interest and the reasons why all the other members agreed to disregard it. It would be given 30 days within which to publish such a statement.

The government's Amendment No. 78 has also given rise to another question which I shall address now in the interests of saving time later. The new clause tabled by the Minister, to which we spoke earlier, gives us the reassurance that the public will be able to gain access to a record of the financial interests of the members of the board. But does that also give them the right to have access to a record of the financial interests of the members of Ofcom's committees, who, of course, need not be members of the board?

If the new clause does not provide that right with regard to committee members' interests, we could find ourselves faced with a position in which a member of a committee who was not a board member was able to benefit financially from a decision taken by the committee that he or she had attended, but the public would have no way of discovering that he or she had participated in that decision in which he or she had a financial interest. It would therefore seem appropriate to extend the provisions of my Amendment No. 79 to the proceedings of committees.

This is a probing amendment at this stage. It may be that the Government can give me some assurance that this problem is covered in another part of the Bill.I should be grateful if the Minister would address that matter. I beg to move.

Baroness Blackstone

My Lords, we agreed in Committee to consider the concerns of the noble Baroness, Lady Anelay, to ensure that serious conflicts of interest do not arise in relation to the committees that Ofcom will be able to establish and, in particular, whether unanimity should be required in the proceedings of its committees before a declaration of interest by a member of one of those committees could be disregarded.

I believe that the noble Baroness accepts that the highest standards should apply to decisions taken by the members of Ofcom itself. As the members of Ofcom will be acting collectively, we consider that unanimity in meetings of Ofcom and between its members would be appropriate before a declaration of a direct or indirect interest should be disregarded.

As I mentioned in Committee, the Secretary of State must satisfy herself before appointing the chairman and other non-executive members that they do not have financial or other interests which would affect them prejudicially in carrying out their functions as members of Ofcom. However, a member of Ofcom having any form of direct or indirect interest in a matter falling to be considered at a meeting will have to declare that interest. It will be for the other members of Ofcom to decide unanimously whether or not the nature of the interest declared was such that it should disqualify the person concerned.

We will expect the committees established by Ofcom to operate to the highest standards. However, in the case of those committees that are purely advisory in nature, many of their members will be chosen because of their experience or because they represent particular interests. We believe that it would be inappropriate to require unanimity to disregard a declaration of interest on those advisory committees, especially as a single dissenting voice could prevent anyone declaring an entirely legitimate interest from participating in discussions in which their experience would be of value. Therefore, in connection with committees of a purely advisory nature, I hope the noble Baroness will agree that a degree of flexibility should be provided to allow Ofcom to authorise the procedure under which declarations should be dealt with.

With regard to those executive committees established by Ofcom to carry out functions on its behalf, we accept that a higher level of propriety should be expected than might be applied just to advisory committees. Again, as it is likely that many members of executive committees will be chosen for their skills, their experience or to represent particular interests, we do not believe it appropriate that a single voice should be able to prevent participation by those declaring legitimate interests.

Amendment No. 78 therefore proposes that a two-thirds majority of those present and eligible to vote should be in favour of allowing a person declaring an interest to continue to participate in a meeting, subject to the number in favour being above that required for a quorum of the committee. It would again be for the members of the committee in question to decide whether any interest declared was of such a nature that the person should be debarred from participating further in the matter under consideration.

Turning to Amendment No. 79, I can appreciate the purpose which lies behind it. As I have said, we expect Ofcom and its committees to operate to the highest standards and they should be as open and transparent in their proceedings as possible. We have accepted changes to the Bill to ensure that Ofcom should follow the principles of good governance applicable to it. While I do not believe that it should be necessary to place the matters covered by the amendment on the face of the Bill, Ofcom should certainly follow its spirit. We would therefore expect Ofcom to be as open as possible about the reasons why declarations of interests made at its meetings were disregarded.

Turning to the noble Baroness's more specific question, as publication of interests is a matter of good governance, there is nothing in the Bill in regard to either the board or committee members. I would expect the same practice of good governance to be applied to both.

In the light of what I have said, I hope that the noble Baroness will accept Amendment No. 78 as an improvement and will agree to withdraw Amendment No. 79.

Baroness Anelay of St Johns

My Lords. I am grateful to the Minister for her explanation. I certainly welcome government Amendment No. 78. It is a curious situation where the Marshalled List is wrong and my later amendment is dealt with first.

The Minister raised an interesting point with regard to the difference in the treatment of executive as opposed to advisory committees. That is something I shall wish to consider further in case there are any other implications. I welcome the response of the Minister to my amendment and I beg leave to withdraw Amendment No. 79.

Amendment, by leave, withdrawn.

Baroness Blackstone moved Amendment No. 78: Page 13, line 3, at end insert— (3A) It shall be the duty of OFCOM, in granting authorisations for the purposes of sub-paragraph (3)(b), to secure that a resolution for those purposes does not allow a person to take part in a discussion or decision at a meeting of a committee established by virtue of paragraph 14(1)(a) unless at least the following requirements are met—

1. (a) the number of other members of the committee in favour of the resolution is not less than two thirds of those who are both present and entitled to vote on the resolution; and
2. (b) the number of other members of the committee in favour of the resolution is not less than its quorum."

On Question, amendment agreed to.

Baroness Blackstone moved Amendments Nos. 80 to 86: Page 13, line 5, leave out "non-staff' and insert "non-executive Page 13, line 12, leave out "non-staff" and insert "non-executive Page 13, line 17, leave out "non-staff' and insert "non-executive Page 13, line 19, leave out "the other non-staff" and insert "other non-executive Page 13, line 42, leave out "Subject to the following provisions of this paragraph," Page 14, line 2, leave out "non-staff" and insert "non-executive Page 14, line 39, at end insert—

"Public records

21A In paragraph 3 of Schedule 1 to the Public Records Act 1958 (c. 51) (administrative and departmental records of certain bodies to be public records), in the Table, in Part 2, at the appropriate place there shall be inserted—

'Office of Communications.'"

On Question, amendments agreed to.

Baroness Blackstone moved Amendments Nos. 87 and 88: Page 15, line 7, leave out ""non-staff" and insert ""non-executive Page 15, line 8, leave out "a staff- and insert "an executive

On Question, amendments agreed to.