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Mr. Yeo: My hon. Friend makes an important point. Exactly the sort of phrase that he has quoted reinforces the anxieties of many in the industry.

I believe that we have reached something of a threshold. We have an opportunity to see Britain and our media industry continue to flourish, but that will occur only if we do not fall into the trap to which my hon. Friend has rightly referred. We must not allow too heavy a hand to be used, and too bureaucratic a burden to be placed on businesses that must be extremely flexible and entrepreneurial.

Opposition Members do not object to Ofcom in principle, but we do want to know a great deal more about how it will work—certainly more than can be learned from even the most minute study of the Bill, whose seven clauses seem to be mostly concerned with matters of administration such as arrangements for the appointment of members.

Given the amount of discretion that the Bill gives the Secretary of State, I wonder why the Government are bothering with a Bill at all. As the Minister himself pointed out, the Bill contains provisions giving the Secretary of State power to overturn those very same provisions. It sets a minimum and a maximum number of members for Ofcom, and then specifically empowers the Secretary of State to increase the number at will.

The Bill does not address quite a number of urgent issues: for example, the rules relating to media and cross-media ownership. Since Parliament last considered primary legislation dealing with broadcasting, huge changes have taken place. Millions of households have access to hundreds of television channels, compared with only three 20 years ago. A similar expansion has taken place in radio.

One consequence of that wider consumer choice is that the special regime imposing onerous restrictions on who can own what in the media industry is no longer needed or justified. The Government's consultation paper published last November was another timid document. It set out the options but gave little lead. The industry should be governed by the same competition rules that apply to other industries. Existing competition laws are a sufficient safeguard against excessive concentration of ownership.

Mr. Kaufman: I agree with the hon. Gentleman that the current legislative framework for restricting media ownership is out of date. When the right hon. Member for South-West Surrey (Virginia Bottomley) introduced the Broadcasting Bill in 1996, I told her that it was out of date even before it was enacted. Is the hon. Gentleman disowning the parts of the 1996 Act that contain the restrictions that he now denounces?

Mr. Yeo: The right hon. Gentleman will be delighted to know that I am certainly not going to defend that

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legislation. We are here to debate the Office of Communications Bill, which saw the light of day in 2001. With his great expertise on this subject, the right hon. Gentleman would at least acknowledge that the situation today, five and a half years later, is very different. As I say, the proliferation of radio and television channels now available to consumers means that some of the concerns that were properly felt at the time of the 1996 Act no longer apply.

I stress that sweeping away the regime that imposes special ownership restrictions on the industry does not mean that the content of radio and television programmes should suddenly become completely unregulated. Licensing procedures should remain. The authorities should continue to scrutinise content through their codes and duty to promote diversity and choice, but it is disappointing that the Government are moving so slowly on the issue of ownership; the earliest date on which the substantive Bill can receive Royal Assent is the middle of 2003. Given the history of the five years since the commitments to introduce legislation were first made by Labour, there must be a risk that that timetable will slip still further.

Miss Julie Kirkbride (Bromsgrove): My hon. Friend lists some of the important features that the Bill needs to clarify. I hope that he will look at the role of the BBC and the lack of a level playing field that we uniquely have in Great Britain because of the BBC's role and the fact that it provides services for free that free-marketeer companies have to provide out of their own pockets.

Mr. Yeo: My hon. Friend is right. I will come to the BBC in a moment, because it is an important omission from the Bill. Before doing so, I shall say a word about ITV. I will shortly publish a very brief Bill to allow at least one relaxation of the present ownership rules so that they would no longer prevent ITV from being owned by a single company. I do not pretend that that change is a magic wand that would solve all the difficulties to which my hon. Friend the Member for Lichfield (Michael Fabricant) referred, but it would be a common-sense move to give the companies a little more freedom of manoeuvre as they decide how to respond to current market trends.

I invite the Government to support my Bill. If they do not do so, I trust that they will explain why they oppose it. After that Bill, I intend to bring forward further deregulatory proposals to ensure that other parts of the industry enjoy the same freedoms.

The BBC, which quite a number of my hon. Friends have mentioned, is excluded from Ofcom's remit. Nothing that we have heard today and nothing that I found in studying the debates on the Bill in another place, explained why that anomalous position has been proposed. The chance for primary legislation does not arise often. The statutory framework that this Bill and the substantive Bill will create will remain in place long after the current BBC charter expires in 2006. In an increasingly competitive marketplace, it is essential that the BBC, which is a powerful player and which enjoys a uniquely privileged funding base and controls a widely recognised and respected brand name, is treated in the same way as the rest of the industry.

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Michael Fabricant: Is my hon. Friend aware that the BBC is arguing that Ofcom will not be a suitable organisation to control the BBC? I quote from a BBC briefing:

Does he not think that that is the ultimate in sanctimony and is being patronising?

Mr. Yeo: My hon. Friend makes his point powerfully, but there is a further confusion in the Government's mind. They talk about the three tiers of regulation. It appears that, when it comes to the BBC, Ofcom is entrusted with the first two tiers but not the third. It seems that the arguments are completely contradictory. Either Ofcom is suitable to regulate all three tiers or it is not suitable to regulate at all, perhaps for the reasons alleged in the briefing from which my hon. Friend has quoted.

I hope that the omission of the BBC will be rectified during the Bill's passage. If it is not, I hope that Ministers will give a more convincing explanation of why they think that that unlevel playing field should be enshrined in primary legislation for the foreseeable future.

Another serious concern is the power that the Secretary of State will exercise. The Secretary of State has the power to increase at will the size of Ofcom's membership. Given the Prime Minister's fondness for filling every public body in sight with his cronies, there are obvious worries about the scope for abuse that that power entails. A regulator must be independent and seen to be independent of Government. There seems no reason why the maximum size of Ofcom's membership should not realistically be fixed in advance in the Bill. That is one of the amendments that we shall seek to introduce in Committee.

A number of questions arise from the Bill. The seriousness of the Government's intentions is already called into doubt by the extraordinary inclusion of clause 5, which provides for the possibility of a U-turn on the policy. Will the Government confirm that, if the proposal is abandoned, no cost will be borne by the industry? I understand that it is intended that the taxpayer should not bear Ofcom's running costs but that there will be setting-up costs. I should be grateful if the Minister would give us an assurance that if for any reason the proposal did not go ahead, those costs would not fall on the industry.

Can the Secretary of State say a little about the way in which the chairman will be appointed? What criteria will be used to select that person, particularly since the appointment will be made before we have even seen the substantive Bill in draft form? It would be reassuring to know what qualifications the Government will seek for that important post, beyond perhaps the inclusion of someone who is known to be a supporter of the Labour party.

I would like to ask many other detailed questions, but time does not permit. I hope that the Minister will find an opportunity to explain what role Ofcom may have in such matters as deciding the future of the radio points system, in relation to which the Government said in the White Paper they were considering changes.

This is a disappointing Bill but the Opposition do not wish to do anything to delay progress towards a substantive measure. For that reason, we will not vote against it this evening.

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6.19 pm

Mr. Gerald Kaufman (Manchester, Gorton): I congratulate my hon. Friend the Minister for E-Commerce and Competitiveness on the crisp and clear way in which he introduced what is a necessary paving Bill towards the major communications Bill that we are looking forward to later this year. He introduced the Bill in the best possible way; that was somewhat of a contrast with the mini-tirade in which the Opposition spokesman, the hon. Member for South Suffolk (Mr. Yeo), indulged. He reminded me very much of my own performances on that Front Bench when we were in opposition.

The hon. Gentleman's situation was summed up by Abba Eban, the former Israeli Foreign Minister, when his party was thrown out after many years in office. He was asked what was the difference between being in government and not being in government any more. Mr. Eban said that when someone is in government, they get up in the morning saying, "What shall I do today?" In opposition, they get up and say, "What shall I say today?" Unfortunately, that is the quandary in which the shadow spokesman is placed today. Since I went through it for 18 years, I sympathise with him. He will have rather more than 18 years to get used to it.

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