Standing Committee E
Tuesday 5 February 2002
[Mr. Roger Gale in the Chair]
The Chairman: I remind the Committee that this Chairman takes the view that we can have a stand part debate at the beginning of a clause's consideration or at the end, but not both. If I judge that the clause has been satisfactorily debated during discussion of the amendment, I shall not permit a stand part debate.
Winding up of OFCOM on abandonment etc.
Amendment moved [this day]: No. 59, in page 4, line 34, at end insert—
'after consultation with and consideration by a Joint Committee of both Houses of Parliament.'.—[Miss McIntosh.]
Miss Anne McIntosh (Vale of York): Good afternoon, Mr. Gale, and welcome back to the Committee.
We tried to keep the debate on amendment No. 59 brief to allow a short debate on the clause and I was about to sum up on the amendment when the Committee was adjourned.
The purpose of the amendment is to ensure that it is not just the Secretary of State who decides whether Ofcom is no longer necessary and that its winding up and dissolution comes before Parliament in primary legislation. My hon. Friend the Member for Tewkesbury (Mr. Robertson) and I tabled the amendment because it is more appropriate to have consultation with and consideration by a Joint Committee of both Houses of Parliament, rather than allowing the Secretary of State to make that decision alone. A Joint Committee is more appropriate than a Select Committee of this House, of the other place or of both.
Michael Fabricant (Lichfield): I support the amendment because it would help to bring accountability back to the House of Commons. The explanatory notes to the Bill state that clause 5 allows the Secretary of State to wind up Ofcom at any time, but if that happens after 2003, she has a duty to lay a draft order before Parliament. We have heard that there is doubt about the extent and powers of the shell organisation of Ofcom and that people will be seconded to it from the existing regulators, but we do not know how long the shell Ofcom will exist because it is not clear when the communications Bill will receive Royal Assent. For that reason, I suggest that ''the end of 2003'' is an arbitrary date. In any event, there should be full consideration by a Committee, as the Select Committee on Culture, Media and Sport recommended.
I do not know whether my hon. Friend the Member for Vale of York (Miss McIntosh) will press amendment No. 59 to a Division, but it is right and proper that it should at least be discussed as a probing
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amendment. I shall be interested to hear, yet again, what the Minister says. He will be aware of the Select Committee's recommendation that there should be full accountability to Parliament. However, I shall speak at greater length on this when we come to the debate on clause stand part.
Mr. Laurence Robertson (Tewkesbury): I, too, would prefer to speak on clause stand part if you allowed that, Mr. Gale, so my comments now will be brief.
Under the Bill, it will be quicker and easier to wind up Ofcom than to set it up. My concern is the possibility that other regulations may not be in place when that occurs, which would cause confusion and mayhem to regulation of the industry. For that reason, the winding up of Ofcom deserves more than just an order before the House. I shall expand on those words if we have a stand part debate.
Dr. Howells: As we made clear previously, the Government do not anticipate the need to use the provisions to wind up Ofcom. They are there purely as a safeguard and an assurance. The Government remain committed to having Ofcom operational by the end of 2003.
Should the Secretary of State reach the conclusion that it is no longer necessary for Ofcom to continue to exist, clause 5(3) of the Bill already makes provision for any order made by her to wind up Ofcom to be laid in draft before Parliament and approved by resolution of each House. That provision was made at the behest of the Delegated Powers and Regulatory Reform Committee of another place. In its report, the Committee said that it considered it important for there to be sufficient opportunities for Parliament to discuss the fate of Ofcom before any order was made to abolish it and that it
considers the affirmative procedure would be appropriate for this power.
I agree. In the unlikely event that the Secretary of State were ever to need to use the power to wind up Ofcom, existing provisions in the Bill would allow Parliament adequate opportunity to consider whether that was reasonable. That is why the Government oppose amendment No. 59.
Miss McIntosh: I am grateful for the contributions made by my hon. Friends and by the Minister. In view of the fact that we shall, I hope, consider the procedures that, in the Minister's view, are more appropriate, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Miss McIntosh: In the very timely debate that we have just had, my hon. Friend the Member for Lichfield (Michael Fabricant) raised a point that was very supportive of the earlier argument that I made on what the transitional period should be. He helpfully referred to the end of 2003 and I agree that that should be the cut-off. I hope that we can obtain the Minister's agreement that that time scale will be strictly adhered to. I have some hesitation in accepting clause 5 as it
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stands. I tabled an earlier amendment, which would have meant that the Bill would fall after one year, but the Minister felt unable to accept it and it failed. As he and the Committee will recall, he said that a period of one year from the date of the Bill being enacted was insufficient time.
I imagine that this Bill will reach the statute books in a matter of weeks but, speaking realistically, the main communications Bill might not do so until, say, June 2003. I do not think it unreasonable for my hon. Friends to seek a commitment from the Minister that, after the end of 2003, should the main communications Bill not have been introduced or should it have reached some insurmountable hurdle, he will seek to apply the draft order.
Dr. Howells: Perhaps the hon. Lady will explain to me why, having failed in her first attempt to impose a time limit, she is now so insistent in trying to impose another. What would happen if a terrible disaster like the events of 11 September were to occur and the House were preoccupied with legislation that we cannot even envisage right now?
Miss McIntosh: With the greatest respect, I am only trying to help the Minister. It is his Bill that imposes a time scale, unless I am reading clause 5(2) incorrectly. It clearly states:
If . . . it appears to the Secretary of State at any time after the end of 2003.
I would prefer it to say that it should be soon after the end of 2003. However, that point has been well made and I do not wish to be repetitive. There are other issues that we wish to discuss on this final day of our proceedings.
Will the Minister clarify the affirmative procedure? I understand that to exercise any objection to an affirmative resolution, one has to enter a prayer against it within a very short time scale.
I hope that the Minister will accept those few comments in the spirit of helpfulness in which they were made.
Michael Fabricant: Of course I support the inclusion of clause 5. A mechanism to wind up Ofcom will be required if the communications Bill, which has not yet been published, receives Royal Assent. However, it is also right and proper to consider what would happen in the unlikely event of it not receiving Royal Assent. As the Minister said, unanticipated circumstances could arise—heaven forbid—that not only delayed its introduction, but prevented it from receiving Royal Assent.
Conservative Members support the establishment of a communications agency for all the reasons set out in the White Paper, which was preceded by the report of the Select Committee on Culture, Media and Sport. However, I want to pick up on a couple of points and raise a new point about clause 5. I agree with my hon. Friend the Member for Vale of York that
at any time after the end of 2003
should be rephrased. The word ''by'' should have been used. Whether 2003 is the date is another matter—it
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could be 2004 or 2005—but there must be a sunset clause to provide some limitation. That is not in order to constrain us here in the House of Commons, but to give some reassurance to people in the industry that the Government have set themselves a realistic target for the establishment of the communications agency.
Everything that has come out of the Committee so far suggests that the Government are unclear about their timetable, about how Ofcom will be funded during the transitional stage and about how the regulatory bodies will be funded in terms of their providing people to be seconded to the shell Ofcom and of the extra work that will be required, which we discussed under clause 4.
Subsection (6) deals with the procedures that will apply in relation to the shell Ofcom's assets if—I accept that it is unlikely—it were to be wound up. Subsection 6(a) refers to the
power to provide for the transfer of property, rights and liabilities of OFCOM to the Secretary of State, to any of the existing regulators or to any other such person as may be specified in the order.
Who will be the arbiter where there is a dispute? If assets are owned by the shell Ofcom organisation, a dispute may arise from the ITC, the Department for Culture, Media and Sport or from the Department that is not represented here in Committee; the Department of Trade and Industry. Who will be the arbiter of where the liquidated assets are disposed? It is important that the Minister clarifies that.
Paragraph (b) refers to the power to provide for the property, rights and liabilities of Ofcom to be divided between different persons. There might be arguments from regulators, who could say that they will not accept liability. Who will be the arbiter? Similar questions relate to paragraph (c).
The part of the Bill that makes no attempt to address a particular problem—I wonder why, because it could have been anticipated—concerns compensation for the operating costs of Ofcom. I shall clarify what I mean. Earlier in Committee, it was established that Ofcom, in its shell form, would initially be funded either by the Treasury or by the Department of State.