HL Deb 29 October 2001 vol 627 cc1262-88

8.42 p.m.

House again in Committee on Clause 2.

Baroness Miller of Hendon moved Amendment No. 14:

Page 2, line 36, at end insert—

  1. "(c) harmonises regulation between the existing regulatory regimes;
    2. 1263
  2. (d) reduces sectorial regulation to the minimum; and
  3. (e) promotes the efficient use of resources by taking clue notice of—
    1. (i) areas where duplication of activities by existing regulators enables economies to be made; and
    2. (ii) current activities of existing regulators which may be discontinued or pursued with fewer resources as a result of the increase in competition in the telecommunications and broadcasting industries."

The noble Baroness said: Again, this is a probing amendment. We are seeing in this Bill the amalgamation of the functions of five regulators, each supervising a major segment of the communications industry. Furthermore, competition between telecommunications and broadcasting is increasing. It is not merely competition. In many respects they are beginning to overlap, and the distinctions between them are beginning to blur.

People can send e-mails, order goods, do their banking and pay bills via their television sets, and it is possible to receive television broadcasts down land lines to a desk top computer or even to a mobile phone.

This amendment seeks to ensure that in setting itself up Ofcom reduces the overlap between its separate divisions. No less important, it ensures that whatever differences of approach and emphasis may exist at present, in the new super regulator that we are creating the same rules should apply to all segments of the industry.

The proposed new paragraph (e)(ii) enables Ofcom's board to ensure that it forbears from enforcing conflicting rules as a prelude to their removal or harmonisation under the new regime. At present, regulators have a duty to enforce their powers, even obsolete ones. This paragraph may also encourage the use of the general competition law wherever possible.

The Towers Perrin report, which was commissioned by the five regulators being replaced by Ofcom, identified very little scope for reducing headcount or expenditure. Perhaps that is not surprising. Without impugning in any way this excellent report, it would have been surprising if the authors had come down in favour of those commissioning it looking at ways to downsize themselves. An image of turkeys and Christmas comes to mind.

Nevertheless, it is the responsibility of Parliament to instruct the new regulator that it is his responsibility to take advantage of the new harmonisation of functions which should be accompanied by a reduction in size and a reduction in the resources required to perform the amalagamated functions of the five regulators. That inevitably happens in the commercial world when there are mergers. There is absolutely no reason why a well-run and efficient new regulator should not be able to do the same.

As I said at the beginning, this is a probing amendment. I shall listen with great interest to what the Minister has to say. I beg to move.

8.45 p.m.

Lord McIntosh of Haringey

I have very good news for the noble Baroness, Lady Miller. I begin by saying that we are entirely in sympathy with the objectives of the amendment. But the good news I have is that it is already happening. The noble Baroness referred to the Towers Perrin report and was kind enough to say that it is excellent. But that report exists because it was commissioned, as she said, by the five regulators. They have been working very closely together. My noble friend Lord Dubs is not with us at present. As chairman of the Broadcasting Standards Commission, he knows from first hand experience. Indeed, he said earlier today that a group that has been meeting for many months is making the preparations for which this amendment calls. Each member has signed a memorandum of understanding to share information and, where there are common interests, to develop policy issues together, including those of competition and convergence. The group has also resolved to establish mechanisms to ensure that complaints a re handled in order to avoid double jeopardy wherever possible.

During this transitional phase it is important that the existing regulators are able to carry on with their current duties without interference from Ofcom. That is the purpose behind the provision of Clause 2(2)(b) which will prevent Ofcom from interfering with the effective carrying out by the existing regulators of their current functions. However, in taking the practical steps which are necessary to set up Ofcom, we will expect it and the existing regulators to examine activities which may no longer be necessary and where savings may be achieved.

The noble Baroness is entirely right in saying that the Towers Perrin report has not identified very large areas of savings in money or headcount. But I believe that as the five regulators work together in assessing the report and its implications it may well be that there will be opportunities which have not yet been identified. I believe and hope that the provisions in the Bill and the memorandum of understanding which I have referred to are preferable to putting obligations of this kind on the face of the Bill. On that basis I hope that the amendment will not be pressed.

Baroness Miller of Hendon

I thank the Minister for that very helpful, comforting and reassuring reply. Under the circumstances I am pleased to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 15:

Page 2, line 36, at end insert—

"( ) In fulfilment of the functions 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 considerations and access to communications services."

The noble Baroness said: One of the central planks of the White Paper was to make the United Kingdom home to the most dynamic and competitive communications and media market in the world. Indeed, when introducing the Bill on 15th October, the Minister used those very words. She went on to tell your Lordships that it would, ensure universal access to a choice of diverse, high quality services and proper safeguards to protect the interests of citizens and consumers".".—[Official Report, 16/10/01: col. 597.]

That is a great mission statement for a regulator in the 21st century and one with which we wholeheartedly concur and support.

It is a clear target and an achievable aim, and something which the new regulator and his organisation can be proud to have as their objective. It should be at the heart of the role of the regulator and should be the criteria against which every one of his actions and decisions should be judged.

Some communications companies have been concerned about the balance between content and economic regulation. The amendment, by giving equal weight to paragraphs (a) and (b), strikes the right balance. It enshrines the ambition of the Government as a key function of the new regulator and should be welcomed by all those who are involved with the communications industry, whether as operators, stakeholders or consumers. The White Paper said that the objective was to protect the interests of consumers in terms of choice, price, quality of service and value for money by, in particular, promoting open and competitive markets.

Members of the Committee know that the Government have said much about safeguarding the interests of citizens and consumers but, sadly, nothing to that effect appears in the paving Bill. This Bill is, after all, the blueprint of the substantive operative Bill, which will eventually be published. It is also strange that the premium rate services regulator, which is known by the acronym ICSTIS—the Independent Committee for the Supervision of Telephone Information Services—has been left out of the Bill. In terms of strengths, it is a valuable test of the way in which content regulation might be applied. We should welcome clarification from the Minister on that and on whether Ofcom will be able to act when a question is raised about the regulation of entertainment services that are delivered down the telephone at premium rates.

I shall summarise the amendment's purpose. If the regulator is being charged with the responsibility of protecting the welfare of consumers in the communications sector, that duty should be enshrined in the definition of his principal role and functions. I beg to move.

Lord McIntosh of Haringey

I am grateful to the noble Baroness for moving the amendment. I am rather relieved that attention is being paid to the communications side; so much of the emphasis in our debate has been on the broadcasting side, and it is refreshing that the noble Baroness has paid attention to the communications aspect of regulation, which will, in the fullness of time, become the responsibility of Ofcom. The White Paper runs very much on the same lines as the amendment; the amendment could almost have been taken from the White Paper.

The White Paper made it clear that promoting effective competition and protecting the interests of consumers in terms of choice, price, quality of service and value for money will be part of Ofcom's central regulatory objectives.

My only qualification involves what I shall call "the dusty answer", and which I shall use now and on future occasions. The dusty answer is that the sole responsibility of Ofcom, as that is set out in the Bill, is preparation for regulation when the substantive Bill has been enacted. The only function that this Bill will confer on Ofcom is that of preparing itself to take on other functions at a later date. Thank goodness the noble Lord, Lord Peyton, is not here—he cannot explode with rage at that definition! However, that is what the Bill has been about from the very beginning. The truth is that Ofcom will not exercise any regulatory functions at this stage, and it will not be in a position to ensure competition or to protect consumers—desirable as those aims will be—when it is carrying out regulation.

The noble Baroness raised a couple of specific points, the first of which was about emergency services and entertainment services being fed down telephone lines. Those matters will be covered broadly to the same extent as is done under the existing system. The detail of the way in which that should be done will be in the main Bill—that has been the procedure in relation to many other matters.

The noble Baroness asked about ICSTIS. I may have to write to her on that point but I assure her, from personal experience, that ICSTIS is having discussions with the existing regulators, although that is not covered by the Bill. Nothing is being done without consultation with it, when that is appropriate.

I have given, I am afraid, a dusty answer about the amendment's effect and relevance. However, in view of the fact that we have a great deal of sympathy about its objectives, I hope that the noble Baroness will not press it.

Lord Borrie

I hope that the Minister will forgive me for intervening after he has spoken. I point out that in Clause 2(1), the only initial function of Ofcom is given as, to do such things as they consider appropriate for facilitating the implementation of … any relevant proposals about the regulation of communications". I know that the Minister was trying to be helpful but he is also being consistent in his answers by pointing out that this is only a paving Bill that merely assists with the implementation that will come later. I am bound to say that the reference in Clause 2(1) to "relevant" proposals about the regulation of communications is singularly unhelpful; it does not even say—either in the terms that the noble Baroness, Lady Miller, mentioned, or, so far as I can see, anywhere else in the Bill—that, in due course, those proposals will be put forward to regulate communications in the interests of, to put it briefly, competition and the consumer. One would have thought at the very least that the Minister might be able to say somewhere in the Bill that the ultimate purpose of assisting consumers and competition exists. Without that, we merely have the extremely vague and unhelpful phrases in Clause 2(1).

In other words, I am saying that I have every sympathy with what the noble Baroness is trying to do. I wonder whether, perhaps at Third Reading, something—it could be phrased in even the most general terms—could be added to the Bill to say what the ultimate objectives are that we are paving the way for.

Lord McIntosh of Haringey

That is an interesting philosophical point, is it not? Much of the time that we have been considering this Bill has been spent defending the paving Bill against those who are afraid that we are in that Bill committing ourselves in the longer term to things to which we do not want to commit ourselves until the communications Bill has been presented to and debated by Parliament. My noble friend Lord Borrie suggested quite the opposite; he said that in the Bill we should express the objectives that will constitute the main thrust of the final Bill. I do not see how we can do that. I do not see how legislation that is debated in October 2001 can say what legislation in 2002 or 2003 will be. It is much better for us to rely on the modest objectives of what the noble Baroness, Lady Miller, called "this little Bill" and to allow for the fact that, by establishing this organisation in advance of the final legislation, we are saving much time and money and enabling the wishes of Parliament to be carried out more effectively than they would otherwise be.

The White Paper states which topics will be given to Ofcom if government proposals are approved by Parliament; but they are not, of course, being approved by Parliament in the course of this legislation. The main Bill will set out the general duties of Ofcom. I confirm—there is no difficulty about this—that they will include competition, consumer protection, universal access and so on. However, that is not in this Bill.

Baroness Miller of Hendon

I thank the Minister for his answer and the noble Lord, Lord Borrie, for his support. The amendment raises one of the Bill's real dilemmas. The Government clearly want to restrict our debate to the paving Bill. Out of curiosity on all sides of the Committee we want to know what we are paving the way for. We are trying now and then to get some information from either of the Ministers about that. I am acting with quite a lot of restraint; it seems that the nicer the answers, the easier it is on this side of the Committee to withdraw an amendment and say, "Oh well, that sounds all right". We cannot push the amendment further. It would have been nice if we had a little more information but we are clearly not going to get it.

The Minister said that he was pleased that I had talked about the communications side instead of merely the broadcasting side. On a previous occasion I pointed out that in the White Paper telecommunications is mentioned on 78 occasions whereas broadcasting is mentioned on 592 occasions. A quick read of the White Paper suggests that it is concerned only with broadcasting. It clearly is not. Obviously we have much more to do. Given the kindness and the gentleness of my nature this evening, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 16 and 17 not moved.]

9 p.m.

Baroness Anelay of St Johns moved Amendment No. 18:

Page 2, line 42, leave out "whether"

The noble Baroness said: In moving Amendment No. 18, I shall speak to Amendments Nos. 19, 20, 26, 27, 41 and 44.

We have returned to broadcasting, but we shall shortly be discussing telecommunication matters again. As my noble friend Lady Miller said, the world converges and it is sometimes difficult to tell the difference between broadcasting and telecommunications.

The purpose of the amendments is to place a duty on the BBC to prepare plans by which the regulatory functions of the board of governors might be transferred to Ofcom if that is what is decided in the communications Bill. They would also put a duty on Ofcom to work with the BBC for the same purpose. The question of whether it is right or not to bring the BBC fully within Ofcom cannot of course be decided tonight. It will be determined when we debate the communications Bill.

However, Parliament's opportunity to make that decision will be fettered unless we take steps in this Bill to ensure that the BBC is as ready to join up to Ofcom as any other regulator.

Clause 2(1) gives Ofcom the function to do just about anything that it considers appropriate for implementing or modifying proposals covering regulation. It is limited by subsection (2) to working only with the Secretary of State and existing regulators. There is no mention in the Clause 5 definition of existing regulators of the regulatory function of the BBC governors.

I strongly believe that if the BBC is left out of the loop now, it will be too late when we come to the communications Bill to bring it fully within Ofcom. if that is then Parliament's wish. Ofcom will have worked throughout the transitionary period without building up a relationship with the BBC. The noble Lord, Lord McIntosh, in the debate on the previous amendment, referred to the fact that the whole point of a paving Bill is to save time and money by setting up an organisation that is ready for the off as soon as the communications Bill has been passed. That is a laudable objective. I would argue that that laudable objective will be compromised unless the BBC is also ready, willing and able to join the same escalator as the other regulators are currently on.

On 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. That seems to me like a case of this year, next year, some time, never. It is an unacceptable uncertainty.

The transitional Ofcom may well be into maturity by the time that Parliament has the opportunity to consider the BBC's position with regard to the Bill. It may not have its regulatory powers, but it will have already taken on its own culture. The shadow Ofcom should not be set up in such a way that it becomes difficult, if not impossible for Parliament to bring it wholly within Ofcom in two or three years time, or when the Bill is passed.

Although we are not deciding tonight whether BBC regulatory functions should come fully within Ofcom, I anticipate that Members of the Committee may wish to express their views, as some did on Second Reading. They legitimately form a back-cloth to our debate on the amendments. It is illogical to establish a single converged regulator and then exclude from its remit those services that represent a major part of broadcast television and radio.

The Government often say 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 BBC governors. As the National Consumer Council said, that would be retaining two disconnected streams of regulation, which would not be in the consumer's interest. That could lead to messy turf wars between the governors and Ofcom, which could further lead to chaos and confusion.

At Second Reading, the noble Baroness, Lady Young of Old Scone, wanted to leave the BBC half in and half out of Ofcom. She argued that the BBC is different from other broadcasters, that its sole role is public service broadcasting.

I recognise that there is a difference between the BBC and other broadcasters in its constitution and remit, and I have treated the others somewhat differently in my amendments. The difficulty is that the BBC does not always act differently. Therein lies the problem. In its determination to chase ratings, the BBC has often appeared too much like every other broadcaster. Last Christmas, it broadcast a whole Harry Potter book non-stop. That was fine. I thoroughly enjoy Harry Potter books—I have read them all. It is like going back to childhood and enjoying it all over again. The BBC could chase ratings over Christmas simply because BBC Worldwide had bought the company—Cover to Cover—that owned the rights to the audio tapes. That is fine in itself and a good example of successful, aggressive commercialism. But how does that make the BBC different from commercial broadcasters?

Could we argue that Ofcom simply will not be competent to deal with BBC regulation? If that is so, why not? Surely it will have to have the expertise that is necessary to take decisions, bearing in mind the different needs and status of different service providers. If Ofcom does not have that competence, it will not be competent to regulate other public service broadcasters such as Channel 4—or, indeed, those which are not public service broadcasters. Either the Secretary of State has confidence in Ofcom, or she does not. If not, why is she taking the trouble to introduce this legislation? If she does have confidence in Ofcom, surely the suspicion must be that she wishes to control the political direction of the BBC to a greater level than would be achievable via an independent regulatory body. I hope that we shall be told that that is not the case.

I will not take time at this late stage in the evening going through the technology of each of my amendments. I have not followed the route chosen by the noble Lord, Lord Gordon of Strathblane. That is not because I disagree with him; I do not; I support his objectives. But my amendments may offer a more appropriate way of achieving the same objective. They are simple, fair and practical as a way of ensuring that this paving Bill does not leave the BBC behind, half in, half out of Ofcom. It will also ensure that Parliament can make its decisions in regard to the BBC in the communications Bill unfettered. It is all a matter of keeping our options open. I beg to move.

Baroness Blackstone

Taken together, these amendments would make the BBC an existing regulator for certain purposes in the Bill, alongside the other regulators. Ofcom would have certain duties to ensure co-operation between itself and the BBC, and the BBC would have new functions for facilitating the implementation of legislative proposals. However, the amendments would impose on the BBC a duty to prepare for the Secretary of State a scheme setting out how any of its objects, powers or duties might be conferred on, or regulated by, Ofcom; how those proposals might be effected, and the property rights and liabilities that it would also be appropriate to transfer to Ofcom for that purpose. They would also allow preparation for the transfer of functions from the Secretary of State.

Amendments Nos. 18 and 19 would mean that there would be no scope for the new functions to be embraced by Ofcom, but I shall explain that point in more detail later.

Let me say at once that, while we are clear about government policy, I fully acknowledge that we must not pre-empt the outcome of parliamentary debate on the main communications Bill. At the end of the Second Reading debate my noble friend Lord McIntosh responded to the important point on this which was made by the noble Baroness, Lady Anelay, and which has been reiterated by her this evening. He sought to assure her. Whether or not she was reassured I cannot say; perhaps not, in view of what she said this evening.

Before I explain in more detail why I do not believe that the provisions introduced by these amendments are necessary, it may be helpful for me to spend a little time going over the relationship that the Government envisage between the BBC and Ofcom as outlined in the White Paper. It would be useful to set the record straight in that regard.

It is a pity that, in the public debate we have had so far on our proposals for regulating the BBC, there has been so much emphasis on how its position differs, and rather little attention paid to the features that are common to all public service broadcasters. Let me start by repeating that the aim is to treat all broadcasters in a similar manner. The White Paper describes a new three-tier structure of regulation which is to be generally deregulatory and, in the interests of fairness, will apply across the board.

The public service programme broadcasters are Channels 3, 4, 5, the BBC and S4C. They cover a broad range—from the BBC, a body established by charter and funded through the licence fee, to Channel 5, a commercial channel with fairly restricted public service obligations.

The White Paper recognises that the new system of regulation will need to take account of those differences. There will therefore remain some differences in regulation between the BBC and others. The position of the governors will be unchanged internally, but will be modified by the new relationship with Ofcom. Broadly speaking, the BBC will be subject 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 overall result will be that the BBC will be subject to greater external regulation than at present. I want to make that clear. Let me emphasise that its position will be brought much closer than it has been to that of other broadcasters. One might put it the other way round: by lightening the burden on other broadcasters, we are bringing their position closer to that of the BBC. There will be three tiers of regulation for television. Tier I will apply to all broadcasters; tiers 2 and 3 will apply to all the public service broadcasters.

Tier I includes such matters as guidelines on the portrayal of sex and violence. Ofcom will develop overarching codes tied to the statutory principles, which will bind all broadcasters. Those will also apply to the BBC. The governors will be responsible for developing more detailed guidelines building on the overarching codes and applying those standards to BBC services. There will be one specific exception for the BBC: regulation of the impartiality requirements will remain with the board of governors because that is so closely bound up with their overriding role of ensuring the BBC's editorial independence.

Tiers 2 and 3 will apply to public service television broadcasters only. Tier 2 provides for consistent regulation by Ofcom of quantifiable elements for which quotas or targets can be set such as quotas or targets for regional production and output and the requirement for news/current affairs to be broadcast in peak time. The same system of quotas will apply to all. The White Paper says specifically that Ofcom will be responsible in future for both agreeing and monitoring the BBC's compliance with the regional production targets, and that there will be no requirement on the BBC for the first time to provide news and current affairs in peak time.

Tier 3 relates to the qualitative obligations on all public service television broadcasters, including the BBC. It is about the content of broadcasting, and the aim is to give other broadcasters a freedom similar to that enjoyed by the BBC. A system of self-regulation will operate. All the public service broadcasters, including the BBC, will still be required to provide a mixed and high quality range of programmes. They will also be required to develop statements of programme policy and self-regulatory mechanisms. Those statements will be updated annually.

This is an opportunity for all public service broadcasters to demonstrate that their obligations can be better delivered and monitored through self-regulation. The White Paper states: The BBC Governors must equally demonstrate that they are regulating the BBC effectively. In the run-up to the Charter Review in 2006, they must demonstrate not only that the BBC continues to reach the vast majority of the audience, but that it also fulfils its public service remit.… OFCOM will report periodically on the key cross industry issues of public service broadcasting and we would expect OFCOM's advice to be published. The BBC's Board of Governors will want to consider observations made by OFCOM in drawing up the BBC's annual statement and all other broadcasters will be expected to undertake a similar and formal process". Should there be a major failure by any of the broadcasters, Ofcom will have a restricted power to intervene. For the BBC those backstop powers will be subject to charter review involving the Secretary of State for Culture, Media and Sport, and Parliament. The Secretary of State will also retain the power to approve new BBC licence-fee funded services and material changes to existing services. The regulator will, however, give formal advice to the Secretary of State on the often important market impact of both proposals for new BBC public services and for material changes to existing ones, before she reaches a decision. The BBC will also continue to be subject to economic regulation, in future principally by Ofcom instead of the OFT. Like other broadcasters, it will be subject to the normal competition laws.

The White Paper refers to the need for amendments to the agreement between the Secretary of State and the BBC. The agreement and any amendments are presented to Parliament and it is through amendments that the Government intend to set out the relationship between the BBC and Ofcom. The amendments will work alongside the statutory duties and powers that Ofcom will hold. Draft amendments will be available for discussion when the main Bill is published next spring.

That route fits the constitutional position, which was briefly reviewed at the time of the licence fee review in 1999. It will be fully reviewed again in the run-up to 2006 when the charter will expire. We do not see the need for another review at this time and by using amendments to the agreement we can establish the relationship between the BBC and Ofcom without jeopardising the lines of accountability to Parliament.

Having set out how the Government intend that the new system should work, perhaps I may now explain why we see the amendments as unnecessary. Clause 2 of the Bill, without the amendments, gives Ofcom the power it needs to facilitate or secure the modification of any proposals concerning the BBC. Under Clause 2(1) Ofcom has the power to do whatever is appropriate for that task. The BBC's charter will allow the BBC to prepare for implementing these proposals.

The phrase, whether by transfers from the existing regulators or otherwise has been included in Clause 2(3). That means that Ofcom's power is not limited to transfers from existing regulators but can also include transfers from the BBC.

Furthermore, the phrase has a wider purpose, which Amendments Nos. 18 and 19 would remove. The amendments would delete words so that the phrase reads simply, by transfers from the existing regulators". That change would prevent Ofcom taking on new functions which are not currently being carried out by the existing regulators, including any new functions arising in relation to the BBC. So if these amendments are carried without the other amendments in this group, their effect will be to exclude the BBC entirely because it is not an existing regulator under the terms of the Bill.

I am satisfied that the powers in the Bill are sufficient to cover the points that we are debating. They will allow Ofcom and the BBC to make preparations for implementing the new regulatory regime. Therefore, there is no question of pre-empting your Lordships' right to debate more fully the exact relationship between Ofcom and the BBC, when the communications Bill is debated in this House.

In the light of what I have said, I hope that the noble Baroness, Lady Anelay, will feel able to withdraw her amendment.

9.15 p.m.

Lord Thomson of Monifieth

I begin as I did at Second Reading, with a declaration of interest. I have a daughter who is employed by the BBC. I hope that the two noble Baronesses who have spoken will not regard the following remark as politically incorrect. We have had a most impressive dialogue between the two noble Baronesses. I congratulate the noble Baroness, Lady Anelay, on the thoughtful way in which she has moved her amendments and the ingenious way in which they have been drafted. The Minister has performed a useful service to all noble Lords by setting out clearly and fully—more fully than was possible at Second Reading—exactly what the Government have in mind for the relationship between the BBC and Ofcom under this Bill and the major Bill that is to follow.

My view is that the BBC, within the British broadcasting scene, including the contemporary broadcasting scene with all the revolutionary changes that have taken place, remains unique, with unique characteristics. It is uniquely financed and it has a unique remit. Therefore, I believe that one is entitled, when shaping a major telecommunications and broadcasting Bill, to seek some special arrangement that reflects the need for a unique degree of regulation of the BBC. The BBC, for all its faults, is a great British institution with an international reputation, with which one should tamper only with very great care. Having some experience of both sides of broadcasting—of independent, commercial broadcasting and of the BBC—perhaps I may say that the Government have achieved the right balance in their current legislative proposals on the relationship between the BBC and Ofcom.

Having said that, there remains a heavy responsibility on the BBC to adapt itself to the situation. I noted the words that the noble Baroness quoted from the White Paper, recognising the special responsibilities of the BBC. In a curious way, in the new broadcasting scene, the relationship between the BBC's governors and their broadcasters has become comparable to the relationship between the old Independent Broadcasting Authority, of which I was chairman for some years, and the television companies. We had an arm's-length relationship with the television companies, as the broadcasters, but it was a close relationship. In that relationship we used our regulatory skills, such as they were, to encourage the highest public service quality out of what were commercial organisations that had sometimes conflicting duties to shareholders. In the contemporary situation I believe that the BBC should try to invent a comparable relationship with its broadcasters. Something more of an arm's-length relationship than it has had in the past is required.

I thought that the noble Baroness, Lady Jay, in her speech at Second Reading—and I am sorry that she is not now in her place to speak for herself on these matters—produced some very interesting and constructive ideas about how the BBC governors, as that part of the institution, should reform some of its internal arrangements to give itself a better relationship, at a little distance from the broadcasters whom it has the responsibility of regulating. I think that these ideas ought to be pursued and explored.

There are two other remarks to be made about the responsibility—the new responsibility, in a sense—of the BBC governors in a new situation. One is that they ought to recognise the limits on their public service remit. They should get out of the mood that is deep in the BBC tradition, that wherever there is any new development of any kind in broadcasting the BBC must, by definition, be there and spending its resources on it. Some more discriminatory approach to that limitation would be helpful.

Equally, they have to recognise the limits that ought to be imposed on them as to how far they compete commercially for audience and ratings in the rather overlapping field of some of the BBC's commercial activities. There I say—and I have said this many times in the debates in this Chamber on these broadcasting matters—that the BBC would benefit if it had the courage to go for total transparency in its commercial operations, a transparency audited and invigilated independently of the BBC itself. These are some of the ways in which the BBC governors—now in a very special position in our debates—could adapt themselves to this changing situation.

As the noble Baroness has said, there is in relation to the BBC a laid-down timescale. It has its Royal Charter; it has a limit. The noble Baroness mentioned the date of 2006, which perhaps seems a long way ahead. As these things go, however, it is not. The preparation for such a review has to take place at a very much earlier date.

The debate that the noble Baroness, Lady Anelay, has initiated regarding the future relationships of the BBC within the overall broadcasting scene, and the new regulatory arrangements of Ofcom, will be an ongoing debate. It has now begun and it will not stop. The right timetable, however, in terms of looking at the way the BBC adapts itself to these changes, is the review of the charter in 2006.

Lord Bernstein of Craigweil

I need to declare an interest. Until five years ago, I was a chairman of the Granada Group, which is the parent company of Granada Television. I am still a shareholder in the company, and I am crucially dependent on my pension to continue to live in the style to which I have become accustomed.

I was going to support Amendment No. 27, to ensure that the BBC was more fully brought within the ambit of Ofcom, but my noble friend Lady Blackstone has convinced me that the balance she has adopted is one which is suitable both to the unique characteristics of the BBC, as the noble Lord, Lord Thomson, has said, and which will also involve at least some degree of control by Ofcom.

The noble Lord, Lord Thomson, with the experience of having been chairman of the Independent. Broadcasting Authority, said that there is a slightly more distant connection between the authority and the companies than the BBC governors and the management have. I can support that. I recall that in the past we had some very interesting and intriguing skirmishes between the IBA and Granada. It has been a benefit to public service broadcasting to have had the IBA with that relationship. I would also agree with the noble Lord, Lord Thomson, that the BBC needs to look at its governance afresh.

My noble friend Lady Jay made some interesting points about the role of the governors and their relationship with management. There is a danger that the BBC is moving away a little from its public service broadcasting traditions and it is up to the governors to ensure that that no longer happens.

The idea that in the next year, in the run-up to the main Bill, the BBC should be involved in a dialogue with the DCMS and with the public about its role in the future is excellent.

9.30 p.m.

Baroness Blackstone

I want to make a couple of brief remarks. However, before doing so perhaps I may correct something that I said earlier in a slip of the tongue. I suggested that there will be no requirement on the BBC to provide news and current affairs programmes in peak time. I should of course have said that there will be a requirement and I apologise for that.

The noble Lord, Lord Thomson, made many wise remarks, most of which are for the BBC governors. I hope that they read what he said and take it seriously. I am sure that they will.

As regards the particular point about transparency, the BBC introduced more transparent procedures following the 1999 review and perhaps we should acknowledge that. They were separately audited with the fair trading audit, published in this year's annual report. The BBC has been given a clean bill of health in that respect.

I am delighted that I was able to convince my noble friend Lord Bernstein that we have the balance about right. But of course as regards this issue we need to continue to think and talk to the BBC, and that we shall certainly do. I hope that the noble Baroness, Lady Anelay, will be convinced that when we debate the main Bill nothing we are doing in this Bill will pre-empt further consideration of the issues she raised.

Baroness Anelay of St Johns

I do not intend to test the opinion of the Committee on this matter tonight. In my earlier attempt to be brief, I omitted to explain to the Committee that Amendments Nos. 18 and 19 were paving amendments only. They were tabled simply to inquire what the Government might have up their sleeve with regard to other bodies in addition to the existing regulators. There are matters relating to other bodies to which we might want to return on Report.

As regards matters relating to the BBC, I listened to the thoughtful contribution of the noble Lord, Lord Thomson of Monifieth, based on his long experience in the sector. I am sure that we shall continue to disagree about when it is right to implement any changes for the BBC. I have as yet seen no willingness from it to co-operate immediately Ofcom is in its transitional stage in order to be in the same position of readiness as the other regulators. Therefore, at this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 19 to 21 not moved.]

Baroness Miller of Hendon moved Amendment No. 22:

Page 3, line 5. at end insert—

"( ) In particular. OFCOM shall develop appeal procedures ensuring a parity of rights of appeal between economic decisions taken pursuant to the Competition Act 1980 (c. 21) and relevant decisions regarding the regulation of communications."

The noble Baroness said: This is a drafting amendment to cure what we believe might be a potential anomaly under which any decision of Ofcom under the Competition Act would be subject to full appeal rights, whereas those under the projected communications Bill, so far as we can divine its contents, would, according to the White Paper, be limited to matters of procedure, law and fact, and would not include appeals on the merits of any decision.

In order to explain what I mean, perhaps I may paraphrase paragraph 8.10.3 of the White Paper. It states that the regulatory structure must embody a transparent and effective appeals procedure. So far, that is good. In line with draft EC directives, this will give the courts explicit scope to review errors of fact as well as errors of law and procedure. That is still very good, and I agree with it so far.

The White Paper states that where there is a need for appeals against regulatory decisions on content that will be met by appropriate appeals within the regulator—for example to a specific panel—backed by final resort to the High Court. That will probably be all right as long as the courts are told that they must accept such appeals and not refuse to interfere in the decisions of Ofcom unless it errs in law. But why is there no provision for internal appeals on fact and law and on the merits of a decision before the aggrieved party is compelled to go to the expense and incur the delay of resorting to the courts? This amendment ensures that the appeals procedure is consistent whether its decisions are under the Competition Act or the intended communications Bill, whenever that becomes law.

In any case, we cannot have a public body whose far-reaching decisions are apparently immune from challenge by way of appeal, even an internal one. Once again, the absence of flesh on the bones of the new Ofcom, and the as yet unpublished definitive communications Bill, is a problem. I look forward to an assurance that perhaps the Minister can give the Committee today that the new regulator will not be all-powerful and that its mere word as regards those whom it regulates will not be the final law. I beg to move.

Lord McIntosh of Haringey

I can certainly give the noble Baroness, Lady Miller, the assurance that she seeks. When Ofcom—this is my qualification—comes to deal with the economic issues and make decisions of the kind referred to in the amendment it will not do so without having an adequate appeals procedure in force. We come back to "dusty answer" time. This is a matter for the main communications Bill when it comes, not this Bill. I entirely share the desire to ensure that there are no contradictions between the appeals processes for comparable situations. We do not want inconsistency and unfairness and companies engaging in regulatory arbitrage. But Ofcom as established by this Bill will not take any decisions on economic issues until authorised to do so by the communications Bill. Therefore, there is no need for a provision in this Bill for appeals against these decisions.

Before we come to the main Bill the draft legislation will contain detailed provisions on the appeals procedures relating to Ofcom's future regulatory activities. I am sure that Parliament as a whole will want to scrutinise these proposals in detail when they are published. In the White Paper we have given some indication of our thinking. We have indicated that Ofcom will have concurrent powers with the Office of Fair Trading under the Competition Act 1998 and the Fair Trading Act 1973. I referred to that in my closing speech at Second Reading. I said that, as is normal in cases of concurrent jurisdiction, Ofcom and the OFT will decide which of them is best placed to deal with specific issues or concerns in which both may have reason to be involved. What I did not say and could have said is that this is an arrangement that already works perfectly well between the OFT and Oftel. Therefore, it is not purely theoretical.

The noble Baroness referred to the proposed new communications directives. It is true that one of the provisions in those measures requires appeals against regulatory provisions to an independent court or tribunal. As drafted, it does not require reconsideration of the merits of decisions; it goes no further than the existing telecommunications directives, existing UK law and what is so far proposed in the main communications Bill. I can, therefore, safely confirm that the present situation is that there is no potential for conflict between the EC directive and what is proposed here. I return to the dusty answer: it is for the main Bill.

Baroness Miller of Hendon

This evening we have become used to listening to dusty answers, as the Minister describes them. However, the fact remains that we are pleased that this paving Bill provides us with an opportunity to raise questions. The response of the Minister to the effect that those points will be covered in the main communications Bill is comforting. Passing legislation in the dark, without knowing the detail, is dangerous. I should say that, despite the fact that Members on these Benches have been asked to restrict their points to matters covered in the paving Bill, we are glad that both Ministers have been receptive to our inquiries. They have taken the opportunity to explain how matters will be perfectly safe when later they arise.

Under the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 23:

Page 3, line 18, at end insert—

"( ) Borrowings under subsection (6) shall not exceed £5 million until legislative effect has been given to the proposals about the regulation of communications referred to in subsection (3)."

The noble Baroness said: In moving Amendment No. 23, I shall speak also to Amendments Nos. 58, 59, 60 and 61. All the amendments in this grouping are probing amendments and relate to the financing of Ofcom. We need to learn more about this aspect of the Bill than is available in the sparse information provided so far. Amendment No. 23 seeks to put a cap on the borrowing power of Ofcom.

Like most new bodies set up by the Government, Ofcom will have a wide remit and a grand set of objectives. Many of the details regarding those objectives will not be readily apparent because of the Government's practice of introducing paving Bills, such as the legislation before the Committee, or enabling Bills, where the details are set out in subsequent secondary legislation. Such legislation is not subject to the same level of scrutiny by Parliament. In this case, we are glad that primary legislation will be brought forward in due course.

The amendment seeks to ensure that the worthy and diligent individuals who will be charged with the task of setting up Ofcom and making it ready for business do not become so intoxicated with the grandness of the scheme and with the important job that they are going to do for the nation that they choose opulence over prudence. It would ensure that they do not spend more than they need to until they are functioning with their permanent purpose.

The Explanatory Notes to the Bill make two important points. First, I shall paraphrase paragraph 15: Subsection 3 … imposes limits on what Ofcom may do … under the Bill".

More important, paragraph 24 of the Explanatory Notes states that: The Government envisages that the extra costs of establishing OFCOM will be of the order of £5 million spread over the period of transition".

I am not sure how elastic is the phrase, "of the order of", but I am open to the Minister offering a slightly higher figure to allow for minor and unforeseen contingencies. However, for the moment I shall use the Government's own figure and thus seek to ensure that the law says what they say they mean.

The amendment would ensure that neither the taxpayer nor the industry, who between them will foot the bill, are saddled with unnecessary costs, in particular if, for some reason, the substantive Bill is not passed and the whole exercise to set up Ofcom proves to be abortive.

Amendment No. 58 seeks to remove paragraph 8 from the schedule. While we do not disagree in the least with the laudable instruction to Ofcom to ensure that its revenues cover its expenses, as stated in paragraph 8(1), what is objectionable begins with the words, "at least sufficient". Why should Ofcom charge more than sufficient to cover its expenses? Without those words, the sub-paragraph, taken alone, might not have been objectionable and, on a reasonable construction, would have enabled Ofcom to create a contingency fund to cover foreseeable future commitments.

However, the words "at least sufficient" lead ominously to the conclusion that Ofcom could be encouraged to collect in more money than it requires. What will it do with the surplus? Noble Lords will not be surprised to learn that paragraph 8(4) proposes that the surplus should go to the Treasury. In other words, as the Bill stands, whenever the Government so choose, they can ensure that Ofcom raises surplus funds as a means of imposing yet another hidden tax. There is no reason that Ofcom should become a tax gatherer for the Inland Revenue. Any surplus funds should be returned to the industry, and hence indirectly to the consumer. We will obviously be prepared to consider, without any commitment, a provision to be introduced at a later stage by the Government requiring Ofcom to balance its books.

I turn now to Amendments Nos. 59 and 60. Both amendments are proposed on the assumption that the blanket amendment to delete the whole of paragraph 8 of the schedule is not accepted. Amendment No. 59 is purely a paving amendment for Amendment No. 60.

Amendment No. 60 seeks to require Ofcom, in exercising the powers it is to be given, to make the punishment fit the crime and not to use whatever offence has been committed as a means of raising additional revenue for Ofcom or, indeed, for the Treasury. The provision does not prevent Ofcom including in the penalty the reasonable costs of investigating and prosecuting the offending conduct.

Turning to Amendment No. 61, paragraph 10 of the schedule requires Ofcom to pay interest on any amount the Secretary of State may advance to it. We consider that to be perfectly right and proper. However, the Bill does not specify a rate of interest, which means that, as Ofcom is not a government department, the Secretary of State could virtually charge what he likes, thereby swelling the coffers of his department or of the Treasury. As I pointed out earlier, this seems to be an ambition of the Government. This amendment seeks to ensure that Ofcom is charged only a reasonable rate, not in excess of the commercial rate that would be charged in the open market to a concern of Ofcom's status and creditworthiness.

When I introduced this group of amendments with Amendment No. 23 and tried to suggest that it could be necessary to cap the limit of Ofcom's borrowing, I started by saying that it should not be allowed to borrow too much; however, it would be equally fair to limit the interest that Ofcom will have to pay for that same borrowing. That is why I came to my other conclusion towards the end of my remarks. I beg to move.

9.45 p.m.

Lord McIntosh of Haringey

Again I am grateful to the noble Baroness, Lady Miller, for these amendments and for the way in which she has explained them. I am sorry that the noble Viscount, Lord Astor, is not in his place. He raised these matters at the beginning of the Committee stage and we had to refer forward to matters which are much better discussed in their place on the Marshalled List with proper amendments; and these are indeed proper amendments.

Amendment No. 23 seeks to place a strict limit on Ofcom's borrowings. I should make it clear—this is relevant also to later amendments—that Clause 2(6) specifies that borrowings can be only from the Secretary of State. There is no question of Ofcom going out to the market and borrowing for any purposes of its own.

The figure which we have put into the Explanatory Memorandum is indeed of the order of £5 million. It can only at this stage be, "of the order of £5 million"; we cannot make a precise estimate. The actual cost may turn out to be somewhat higher or lower, which is why we cannot accept an amendment that seeks to impose a rigid limit of £5 million. The work to determine what practical steps are needed to make Ofcom operational has begun, but it is only when Ofcom begins to take those steps next year—in other words, when the chairman, chief executive and so on are in post—that we will have a clear idea of what the extra costs of transition are likely to be.

We have some useful guidance from the Towers Perrin report, but those who have read the 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. The Government intend to bring forward the communications Bill as soon as possible, but we do not know exactly when that will be. Therefore, the transitional period is of an indeterminate length. We need to be confident that the transition will be effected smoothly; therefore, we need that degree of flexibility in the legislation, rather than the rigid figure that would be provided by Amendment No. 23.

Amendment No. 58 seeks to remove the whole of paragraph 8 of the schedule. I understand the fears that the noble Baroness, Lady Miller, has in relation to the phrase "at least". "At least" is a precaution. It is not our intention that Ofcom should raise more money than it needs. Obviously, the Secretary of State does not want Ofcom borrowing more than is absolutely necessary, but the figure must inevitably be somewhat imprecise.

For example, there is always the possibility of income to Ofcom from the auction of surplus spectrum. That would affect the figure. It could be affected upwards or downwards. We have included this provision in the Bill to give a clear indication of how we propose that Ofcom's finances should be managed, both when it is first established and in the future when it is carrying out its regulatory functions.

The duty under sub-paragraph (1) will be essential right from the outset. We expect Ofcom to conduct its affairs to ensure that its revenues are enough to meet its obligations. That is just as important when Ofcom is borrowing from the Secretary of State as it is in the later period when it is raising its revenues and charges from the industry through the exercise of its regulatory functions.

The other parts of paragraph 8 may be slightly less relevant during the initial phase, but they have been included in the Bill in order to give Parliament a full picture of how we propose that the revenues of Ofcom will be treated in the future.

As set out in sub-paragraphs (2), (3) and (4), any excess revenues will be applied in such manner as the Secretary of State may direct and include the whole or part of the excess being paid back to the Consolidated Fund. It has come from the Secretary of State; it is only right that any surplus should be returned to the Government. That answers the question of why the money has to be returned if there is a surplus of the kind that has been suggested.

Amendments Nos. 59 and 60 refer to penalties. There are no penalties. Under the Bill, Ofcom does not have any power to impose penalties. Again, this is a matter for the main Bill.

Finally, Amendment No. 61 seeks to specify the interest rate that the Government are to charge on loans. I am not aware of any legislation that goes into that detail. I hope that the noble Baroness, Lady Miller, does not think that we should be guilty of usury. I hope, therefore, that she will not press the amendment.

Baroness Miller of Hendon

Heaven forbid that I should ever think anything like that of the Government, or indeed of the Minister. I should not dream of it.

The Minister's answers were interesting. To quote my earlier remark, I am open to an offer from the Minister of a slightly higher figure—certainly not £10 million, but we could be talking about £5 million or slightly more. I was trying to make the point that the amount should not be completely unfettered and without any cap whatever.

I am not of a mind to divide the Committee on matters of this kind at present. We shall consider the Minister's remarks carefully. My amendments are quite reasonable. They merely attempt to point the way. I am glad that the Minister agrees. He has agreed with me so much this evening that it makes it so much easier for me to withdraw amendments. I beg leave to withdraw this one.

Amendment, by leave, withdrawn.

Baroness Anelay of St Johns moved Amendment No. 24:

Page 3, line 18, at end insert—

"( ) In managing its affairs, OFCOM must have regard to such generally accepted principles of good corporate governance as it is reasonable to regard as applicable to it."

The noble Baroness said: In moving this amendment, with the leave of the Committee I shall speak also to Amendments Nos. 62, 75 and 76, which are grouped with it. They relate to issues of good corporate governance. I think that they are absolutely on line for a paving Bill. I hope that I am being reasonable, as my noble friend Lady Miller has been. In this instance, I hope that none of the amendments will be said to be relevant only to the later communications Bill. As soon as any appointment is made, Ofcom will have to abide by good corporate governance.

Amendment No. 24 would impose on Ofcom the overriding duty to conduct its affairs in accordance with acknowledged principles of good governance. I hope that the amendment is not controversial. Paragraph 8.6.1 of the communications White Paper says that the members of Ofcom, will operate in accordance with the best principles of corporate governance and better regulation".

The amendment would simply put that commitment into the Bill, reflecting the accepted standards for this statutory duty by reflecting the drafting contained in Section 7 of the Financial Services and Markets Act 2000.

It makes no sense to leave the principle to be addressed in the communications Bill. Even Ofcom's interim function will involve the reconciliation of numerous actual and potentially conflicting interests. That is made explicit in paragraph 1(4) of the schedule to the Bill, which allows the Secretary of State to appoint to Ofcom persons previously involved in the regulation of the sector. It must make sense for those with the most relevant experience to fulfil Ofcom's interim function. On the other hand, that heightens the need to ensure that Ofcom acts beyond reproach in overseeing its own creation.

Amendment No. 62 would require Ofcom to keep and maintain accurate records of its decisions. The keeping of accurate records showing exactly what decisions it has reached and on what basis will be fundamental to the work of Ofcom. It will have to do that from day one, when the first members are appointed. I hope that the drafting is not considered controversial. The draft code of practice produced by the noble and learned Lord the Lord Chancellor on the management of records under the Freedom of Information Act 2000 states at paragraph 8.1: Each operational/business unit in an authority [ie public authority] should have in place an adequate system for documenting its activities. This system should take into account the legislative and regulatory environments in which the authority works".

Ofcom will be subject to the Freedom of Information Act, but most parts of the Act, and the code that I have just referred to, are not in force yet. Until that happens, it must make sense for Ofcom to be beyond doubt in recording its decisions in such a way as to enable them to be scrutinised openly and honestly.

Amendment No. 75 refers to the publication of agendas and minutes of meetings at monthly intervals, together with a reason for the decisions taken by the Ofcom board. The aim of the amendment is simply to ensure transparency around the decision-making of Ofcom.

The Community Media Association briefing supplied to your Lordships says: Government should make a commitment from the start to openness, transparency and accountability in the functioning of Ofcom. This should include the publication of agendas and minutes of meetings, a requirement for public consultation and the publication of reasons for decisions

That is a reasonable request, because if the public and industry cannot have confidence in the openness and accountability of Ofcom's decision-making processes, Ofcom will not be able to function effectively.

I can be even briefer on Amendment No. 76, which would impose a duty on Ofcom to make public the regulations and procedures by which it has chosen to operate. This paving Bill has omitted any requirement for Ofcom to make public its proceedings. As a public body, it has a duty to make details of its proceedings known for public scrutiny and transparency, as well as in the interests of making information generally available to any interested party. I beg to move.

Lord Holme of Cheltenham

I support the amendments, particularly Amendment No 24. As a supporter of what the noble Baroness is trying to achieve, I venture to suggest that it is important that, even in its shadow existence, Ofcom observes the principles of good corporate governance. However, I cannot help feeling that some of the amendments in this group are too detailed for a paving Bill and that the rubric of good corporate governance would include some of the more detailed amendments.

10 p.m.

Lord McIntosh of Haringey

The noble Baroness, Lady Anelay, certainly knows how to touch my sore spots and the Financial Services and Markets Act is a sore spot. She rightly points out that her Amendment No. 24 is comparable to the duty which applies to the Financial Services Authority by virtue of the Financial Services and Markets Act. That has not been included in the Bill as Ofcom is a statutory corporation to which the general law on the conduct of such bodies will apply, whereas the Financial Services Authority is a company limited by guarantee which requires statutory reference to governance if that is Parliament's wish.

However, I am not personally convinced that that is a good enough reason for excluding a requirement for Ofcom to conform to accepted principles of good corporate governance. I am certainly happy to take that away and consider whether there are differences which would make it impossible for us to include a measure of that kind on the face of the Bill.

I appreciate the intentions behind Amendments Nos. 62, 75 and 76 to ensure openness and transparency. We share the desire that Ofcom should be as open and transparent as it cart. But we want Ofcom to have the discretion, in regulating its own procedures and those of any committees it may establish, to establish flexible procedures which will be able to meet different, circumstances and not compromise its operational effectiveness. Maintaining records of decisions and keeping them safe is, as the noble Baroness, Lady Anelay, says, a matter which is included in freedom of information legislation. I should also like to take that issue away and consider whether any additional obligation ought to be placed on Ofcom with regard to record keeping.

I am not so happy with Amendment No. 75 Ofcom will, of course, want to make as much information available as it can in order to maintain the confidence of stakeholders and relevant interests. That might include agendas for meetings or publishing its procedures. However, that may not always be possible. There will be matters of commercial sensitivity or cases involving personal privacy or fairness to individuals where the full disclosure of proceedings could reveal information which could itself breach confidentiality. We went over this issue last week in considering orders made under the Financial Services and Markets Act. I think the Committee will agree that the kind of blanket requirement in Amendment No. 75 could have risks. Therefore, as I say, I am substantially less enthusiastic about that amendment.

Amendment No. 76 is perhaps more straightforward. It mentions publishing regulations and procedures. I am sure that that will occur because the principles of the general law on the conduct of such bodies will apply and will make that obligatory. However, just in case there is any doubt about that, that again is a matter I shall consider between now and the next stage.

Baroness Anelay of St Johns

I am grateful to the noble Lord, Lord Holme of Cheltenham, for his partial support for my amendments. I take on board his strictures as regards some of the amendments being too detailed for the Bill. However, I am glad that they elicited from the Minister some further explanation which was most helpful.

I certainly had no intention of touching the Minister's sore spots. They are certainly not too obvious as he always maintains himself with equanimity in the Chamber. However, I am pleased to hear that he is prepared to look again at Amendment No. 24 and the matter of good governance. It would be helpful to include such a measure on the face of the Bill. I was also grateful for his offer to look again at the Freedom of Information Act and its implications with regard to Amendment No. 62. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Lord Holme of Cheltenham moved Amendment No. 25:

After Clause 2, insert the following new clause—

"STATEMENTS TO PARLIAMENT

(1) At least once every six months the Secretary of State shall make a statement to Parliament about OFCOM's activities and its relationship with the existing regulators. (2) The requirement to make a statement to Parliament under subsection ( I ) shall cease when—
  1. (a) legislative effect has been given to the proposals about the regulation of communications referred to in section 2(3); or
  2. (b) OFCOM has been wound up."

The noble Lord said: In rising to move this amendment, I declare an interest as a member of the advisory board of NTL, whose briefing material the noble Baronesses, Lady Miller and Lady Anelay, so kindly referred to earlier. I shall be brief because at Second Reading the noble Lord, Lord McIntosh, gave a positive response to this amendment, and I do not want to detain the Committee at this time of night longer than I need to.

There will be a period—it should not be longer than one year—in which Ofcom co-exists with the five current regulatory bodies. Organisationally that is quite properly intended to be a preparation for a hand-over. Hence, the Bill refers to preparatory functions and to transitional arrangements. Amendment No. 25 is intended to allow Parliament to keep tabs on how that hand-over is going.

There are always dangers when two sets of people are engaged in worrying about the same issues in that one set of people is coming and the other set is going. Earlier the noble Lord, Lord Peyton, expressed concern that the new Ofcom chairman, the non-staff directors and the chief executive would have nothing to do. That is one possible danger. However, assuming that they are all able people, might not the greater danger be that they may choose to be activist and do too much too soon, anticipating their future powers in one way or another.

The time-scale is somewhat uncertain, as the noble Lord, Lord McIntosh, told us so eloquently in reply to his noble friend Lord Lipsey on the issue of a Joint Committee. External events may delay the main Bill, competing legislation may put it back, and its passage may turn out to be even more time-consuming and complex than the Government's managers expect. Judging from the two debates that we have had so far, I believe that that is more than possible. One year could stretch to two. Then we might have two years of coexistence between the five current regulators soldiering on and the shadow regulator converting itself from ectoplasm to a more solid existence.

I certainly want to pay tribute to the constructive and thoughtful way in which the five existing regulators have approached the difficult problems of transition. I see that the noble Lord, Lord Dubs, is in his place. He, of course, is one of them. I believe that the Towers Perrin report is encouraging and that the process is difficult but going well. However, I am concerned to keep the process of change constructive and thoughtful, with minimum confusion, with no turf wars and with no chilling effect of anticipating what the new Ofcom might want. I believe that we must allow the existing regulators to run right through the tapes so long as they are charged with these important responsibilities. That is something in which Parliament has a legitimate interest.

Therefore, my hope is that the periodic report suggested in my amendment will be able to tell us that everything is going well. I believe that the need to report makes that more likely. The Minister was generous in his response at Second Reading, and I hope that he will feel able to be so now. I beg to move.

Lord Lipsey

I rise briefly to support the amendment moved by the noble Lord, Lord Holme. I do so for one or two reasons. First, I am not absolutely certain that the full Bill will dash through the House in the next Session of Parliament. We have heard of the terrorist legislation that may be required. I now fully expect a Bill to commit me to the Tower for dangerously aiding bin Laden in proposing a Joint Committee of both Houses to consider this Bill. Therefore, the legislative process may be obstructed in that way and, on a more serious note, we may yet see more issues of that character.

The Bill is not at all easy to draft. Various attempts at doing so have not yet succeeded in dealing with all the problems involved. There are a number of areas in which we have not reached finality. There is the question of cross-media ownership on which we are now to have a consultation paper from the Government. There is the issue of the BBC which has been very usefully exposed tonight, but we have not yet reached finality. With all these big issues I do not believe that any of us would like to bet our lives that we shall have a Bill which has received the right proposals and had the proper consideration by next autumn.

Inevitably, long run-ins to Bills are difficult. That is why we have this Bill. Reforms of this kind with bodies running in parallel are difficult. I can speak from personal experience as a member of the board of the Personal Investment Authority at the same time as it was running in parallel—it still is—with the Financial Services Authority. The truth was that with every passing month it became more difficult. There was great good will as there is between all the organisations involved in Ofcom. But it became more and more difficult to reconcile the needs of the new organisation with the policies and prejudices of the old organisations. In the end there was a bust up or two. I hope that that will not happen in this case. But it seems to me very sensible, as the noble Lord, Lord Holme, is proposing, that Parliament keeps an eye on it, regularly reviews the matter and considers where we have got to. If we really believe that there will not be a Bill, then Parliament may decide that the time has come to pull the plug on the organisation set up by this Bill. We must keep it under review and I believe that we would be helped in that by this amendment.

Baroness Blackstone

The noble Lord, Lord Holme, said that he was going to be brief. I shall be brief in reply. That is not because it is getting late, but I believe that I can be fairly positive in what I am going to say.

I believe that both he and my noble friend Lord Lipsey were unduly gloomy about the prospects for the main Bill. The Government are more optimistic. I believe that we shall spend time next Session debating it. I agree that it will contain many difficult and complex issues. We may well be debating long into the night. If I am still in my present position I shall certainly look forward to engaging with noble Lords about it.

The new clause tabled by the noble Lord, Lord Holme, requiring a statutory obligation for reports to Parliament to be made on progress every six months is taking matters a little too far. Perhaps I may reassure the noble Lord that the Government will keep Parliament and other interested parties fully informed of the progress which is being made. That is a pledge that I make to Members of the Committee tonight.

We published the Towers Perrin report, which was the first concrete step down this particular road. It did not have to be published, but we believed that it was in the interests of both this House and the other place that we should do so. We will continue to follow an open approach to reporting on the progress made. I am sure that we shall be making reports to Parliament more frequently than the noble Lord has proposed in his amendment.

In the light of that commitment I very much hope that the noble Lord will be able to withdraw his amendment.

Lord Holme of Cheltenham

A pledge from the noble Baroness is not something that anyone would take lightly in this House. I certainly welcome the terms in which she has responded to the amendment. I also welcome the fact that she expects reports to Parliament more frequently than every six months. In a fast changing communications scene, she is probably better advised than I as regards my original amendment. I would like to consider whether to return at a later stage as regards a more concrete pledge, but for the present I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

House resumed.

House adjourned at a quarter past ten o'clock.