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Mr. Lansley: In an earlier intervention on the Minister, the right hon. Gentleman correctly said that the BBC governors have a regulatory responsibility. The answer that the Minister should have given him is that there is no need for additional statutory change for the board of governors of the BBC to assist Ofcom in the transfer of responsibilities to that body, if the Government and Parliament should provide for that. The issue is whether the BBC will be prepared to co-operate with Ofcom under the Bill to prepare for such a transfer. Does the right hon. Gentleman agree that discussions should have taken place to ensure that the BBC is compliant in talking to Ofcom and preparing for the transfer of responsibilities?
Mr. Kaufman: That is why I should like to see in Committee an amendment to clause 6, which the hon. Member for Lichfield mentioned, to include the BBC board of governors. It is irritating that the BBC is always ready to take the money but is not always willing then to conform to public policy. That was demonstrated when Sir Christopher Bland was asked about something that my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith)—then Secretary of State for Culture, Media and Sport—had said. Sir Christopher said that the Secretary of State was just another licence payer. I hesitate to say so because I had a lovely Christmas card from Sir Christopher, but that is the sort of arrogance to which BBC chairmen are only too prone.
When I ask for the BBC to be included within the remit of Ofcom, I am not simply pursuing what people seem to regard—most inexplicably—as a vendetta that I conduct against the BBC. The National Consumer Council submitted evidence to the Culture, Media and Sport Committee last year in which it said:
- "We are disappointed that the White Paper does not present an over-arching framework . . . including the BBC . . . It is illogical."
It is time that the Government tackled the problem, because they will have to do so soon anyway. Before the end of this Parliament, the Government and the Committee will have to consider whether there should be another BBC charter, because it expires on 30 June 2006. The period of the present charter has more than half gone. In my view, the days for a charter are gone, whether the BBC continues in its present form or not, and it should be governed by statute. Whatever view the Government reach, they will have to consider the BBC's future definitively before the end of this Parliament. I hope that the Government will take into account the views of the Select Committee.
The members of the Committee and I feel a certain amount of exuberance that the Bill has been introduced as a consequence of a recommendation that we made. We look forward to the major Bill and we hope that the Government will be able to provide us with legislation that will move forward this country's technology, employment, profitability and exports during the 21st century.
6.44 pm
Dr. Vincent Cable (Twickenham): I broadly welcome the Bill, which is uncontroversial in many respects. It is a paving Bill and we support it with many of the same qualifications outlined by the hon. Member for South Suffolk (Mr. Yeo). For instance, I question the speed with which the Government are approaching the issue. We had a slight advantage over the Minister in that we were reading his speech in advance. I do not know whether he knew—or whether his officials had told him—that he was reading verbatim large extracts from Baroness Blackstone's speech in the House of Lords, even including at one point a split infinitive. However, there was one revealing absence in the Minister's speech compared with Baroness Blackstone's version. The sentence omitted said:
- "The Government remain committed to the target of having Ofcom operational by the end of 2003."—[Official Report, House of Lords, 15 October 2001; Vol. 1849, c. 353.]
We have apprehensions about the pace of reform and the Government's commitment to the legislation. It has been said several times already that we are not dealing with the substance of the main Bill; we are considering the harness rather than the horse. However, in order to talk sensibly about the harness one needs to talk a little about the horse.
Since I entered the House in 1997 I have been involved in the establishment of two major regulators—the Monetary Policy Committee of the Bank of England and the Financial Services Authority. In both cases, but especially that of the MPC—which I regard as a great success story—the shape, structure, governance and accountability of the bodies were heavily influenced by the clarity of the objectives. Those objectives must be discussed alongside the structure, otherwise the structure will make no sense. That is why we attached some importance to Baroness Blackstone's remarks in the other place that the Government would this spring establish a Joint Committee to review the main Bill. I hope that we shall hear more from the Government about how that Joint Committee will work.
I participated in the Joint Committee on the FSA Bill, which was a great success and a big step forward for parliamentary accountability. The Joint Committee undertook a deep examination of the Bill and managed to avoid many of the pitfalls that the Government might otherwise have encountered. We would welcome some explanation of how the process will work and an assurance that it will cover the wide range of expertise that the two Houses contain.
An obvious point, but one that is often overlooked, is the fact that although we may talk enthusiastically about regulation, it is only a small part of what happens in the industry. For example, we had a statement from the Secretary of State for Transport, Local Government and the Regions earlier about the state of the railways. However, the establishment of a Rail Regulator has done nothing for long-term strategic investment in the railway system. The same is true in telecommunications and the media. We have a splendid example in this country, because Britain pioneered independent regulation of telecommunications through Oftel. However, a decade and a half later, we have largely failed in that area.
The European Commissioner, Mr. Liikanen, who is responsible for implementing the Lisbon summit recommendations on telecommunications, reckons that Britain has relegated itself from the premier league of European telecoms regulations to the relegation zone of the second division, and I am sure that many people in the industry here would agree.Oftel singularly failed to grasp sufficiently early the problems associated with the need for unmetered access, local loop deregulation and so on. The whole process of the evolution of broadband access was severely retarded because Oftel did not perform its functions satisfactorily. Changing Oftel's nature and placing it within the new regulator will not solve such problems. Regulation creates a structure, but it does not solve the technical problems associated with the industry.
The essential argument is whether we should have an integrated regulator. The two arguments that have been put forward are basically sound. The first is that the nature of the technology is changing rapidly in the direction of convergence. That is apparent through the mergers that have taken place. The AOL-Time Warner merger was a classic example of how the industry is developing. We should not get too carried away, because the share price of Time Warner has fallen by 33 per cent. since the original decision, which is more than the rest of the media industry, so that merger might have taken place ahead of the game. BT has announced its intention of moving into the media business, and Bill Gates has expressed his wish to use his technology and proprietary ideas in the media business. Clearly, we have an integrated business and an integrated technology, and the regulator must reflect that.
The other reason for bringing the two things together is that although it is neat in theory to put economic regulation on one side and content regulation on the other, they have major implications for each other. The classic example is that changes in sporting rights or sporting programming have major implications for the advertising revenue of the channel concerned and its competitors. Content has major implications for the economics of regulation.
Conversely, an issue of particular concern to Liberal Democrats is regional programming, particularly regional news. That issue, which is looming up, arises from the switch from analogue to digital. It was hinted at in the contribution of the right hon. Member for Manchester, Gorton (Mr. Kaufman). The phase-out of analogue television will mean that the price of analogue will rise, making it uneconomic for independent television companies to provide regional television news. We see that happening in the decline of regional programming. That is the kind of issue with which the new regulator is designed to grapple. However, it cannot do so if each of the regulators continues to live under the same roof but they do not co-operate. Working together is an essential challenge, but there is nothing in the structure to predetermine that.
As our job is to be critical, we must spell out some of the dangers of a mega-regulator. By being aware of the dangers, we can perhaps head them off. The regulator could become overly preoccupied with the concerns of the big interests, while some of the smaller, specialised concerns get overlooked. A classic example is radio, which is enormously popular. It has changed a great deal since I was a kid; as we did not have television in the home, the family used to gather round to listen to
"Journey into Space", "Family Favourites" and the like. Many of us who spend a lot of time on the road spend more time listening to radio channels—Classic FM, in my case—than looking at television output.Radio is important; it has special problems, but as the smallest and most specialised of the regulators in Ofcom, there is a danger that it will not be represented on the board and its special concerns will not be taken into account. Indeed, the submission on the Bill shows that the radio industry in particular felt that it had not been properly consulted. That is one danger.
Another danger is that in practice the Government will not respect the regulator's independence. That may not matter with a small regulator, but if one bonds together all the different regulators and the body's political independence is compromised, the consequences will be serious. That is why the Bill should contain an independent mechanism for the appointment of the chairman and the board members.
I commend to Ministers the experience of the Bank of England. I sat on the Select Committee on the Treasury when the Monetary Policy Committee was being set up. There is an excellent mechanism whereby the chairman and the Chancellor's individual nominees are grilled, and painfully so. If they fail the test they either stand down or are reprimanded. There is real parliamentary accountability and independence in the choice of the members of the board. I hope that when designing the structure, some of those lessons will be learned and applied to this aspect of the Bill.
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