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Standing Committee E
Tuesday 29 January 2002
(Morning)
[Miss Ann Widdecombe in the Chair]
Schedule
Further provision about OFCOM
Amendment proposed [24 January]: No. 28, in page 7, line 8, at end insert—
', and shall have regard to the principles of public life set out at page 14 of the First Report of the Committee on Standards in Public Life (Cm 2850-I).'.—[Miss McIntosh.]
10.30 am
Question again proposed, That the amendment be made.
The Chairman: I remind the Committee that with this we are taking the following amendments: No. 31, in page 9, line 18, at end insert—
'(1A) In appointing the Chief Executive and other executive members, the Chairman and other non-executive members shall have regard to the principles of public life set out at page 14 of the First Report of the Committee on Standards in Public Life (Cm 2850-I).'.
No. 37, in page 7, line 11, at end insert—
'(2A) The Chairman and other non-executive members of OFCOM shall declare their financial and pecuniary interests in full in a publicly accessible Register of Interests.'.
No. 38, in page 9, line 18, at end insert—
'(1AA) The chief executive and other executive members of OFCOM shall declare their financial and pecuniary interests in full in a publicly accessible Register of Interests.'.
I point out to the Committee that amendments Nos. 28 and 31 refer to page 14 of the first report of the Committee on Standards in Public Life, copies of which are now available in the Room.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Dr. Kim Howells): Amendment No. 28 would require the Secretary of State to have regard to the principles of public life set out by the Committee on Standards in Public Life before appointing the chairman and non-executives members of Ofcom.
The seven principles to which the amendment refers are relevant to all holders of public office, and the Government endorse them. In our previous sitting, we had difficulty remembering what the seven principles were, so for the benefit of the Committee, I shall read them out. They are selflessness, integrity, objectivity, accountability, openness, honesty and leadership. Those are the principles of all politicians, and they are relevant to all holders of public office.
The principles of public life are general in their scope and do not apply only to the making of appointments. In carrying out her duties, the Secretary of State must have regard to the principles of various pieces of guidance and codes—including ministerial codes—relating to the making of appointments. Guidance from the Commissioner for Public Appointments is also important. It would be
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incumbent on the Secretary of State to have regard to all relevant guidance and principles when making appointments to the Office of Communications. However, we do not propose to set out in the Bill what each of those pieces of guidance might be.
Miss Anne McIntosh (Vale of York): We have had a good debate, and I thank the Minister for his response, but this group of amendments covers two topics. The first is that appointments should be made with regard to the Nolan rules. It was helpful to be reminded of the seven principles, but I hoped that the hon. Gentleman would see fit to enshrine them in the Bill, so I am disappointed that he does not feel able to do so.
I do not think that the Minister has responded fully to the second topic raised by the amendments.
Dr. Howells: I shall, and I apologise for not doing so previously—it is because of the interregnum.
Amendments Nos. 37 and 38 would have a similar effect. They call for all members of Ofcom, whether executive or non-executive, to declare any financial interests in a public register. We are happy to agree with that principle—indeed, I believe that the Bill already provides for it. Clause 3 requires that Ofcom should have regard to guidance on the management of the affairs of public bodies. Current Cabinet Office guidance requires such bodies both to keep a register of the relevant interests of members, and to make the information publicly available. I expect Ofcom to comply with that requirement, but I do not believe that we need to go further and insert into the Bill a specific requirement for a register of members' interests.
Miss McIntosh: I am grateful for that reply, but the Minister seems to have missed the point. Representations have been made to us by various organisations, not only those that will be replaced by Ofcom, about potential conflicts of interests. We tried to plug that gap with the amendments. Nevertheless, given that we may pursue the matter at a later stage, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Miss McIntosh: I beg to move amendment No. 20, in page 7, line 22, at end insert—
'(aa) a member of the BBC Board of Governors'.
The Chairman: With this we may discuss the following amendments: No. 13, in clause 2, page 3, line 2, at end insert—
No. 18, in clause 6, page 5, line 28, at end insert—
'(aa) the BBC Board of Governors.'.
Miss McIntosh: The amendments deal with some of the most significant provisions that we have yet reached, so I shall devote some time to explaining the reasons behind them.
Amendment No. 20 would bring the BBC within Ofcom's structure and remit and include members of the BBC board of governors in the schedule's provisions. The BBC should be brought within Ofcom's remit, and using the schedule to do that
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may be justified. Amendment No. 13 would include in clause 2 a proposal that the Secretary of State should bring the board of governors within Ofcom's remit, while amendment No. 18 would include the board of governors in the definition of existing regulators.
We make these proposals because the Bill is silent about Ofcom's remit in respect of the board of governors. Only five of the current regulators are to be embraced and replaced by Ofcom and, in the fullness of time, subject to the main communications Bill. The Government have, however, made an even greater omission. We have an opportunity to consider where the BBC fits into the long-term scheme of things.
Miss Widdecombe, you will be familiar with the BBC charter established by the last Conservative Government, which currently provides for regulation. It is due to expire at the end of 2006, which means that the Government must produce a successor framework before the next general election. The Government have only three and a half years left in office—thank goodness—and it is unacceptable that they have not taken the opportunity offered by the Bill to discuss future regulation and the framework that governs the BBC.
I put on record my admiration for the BBC as an avid viewer of its programmes. I have said before that, as a Scot living in north Yorkshire, I do not subscribe to a digital service. I shall not be among the first to switch from analogue to digital unless the Government take a clear lead, which they have so far failed to do. I am perhaps a more avid BBC viewer than people who have access to digital or satellite television.
Mr. Richard Allan (Sheffield, Hallam): On a point of information, the BBC's viewing share holds up very well among viewers who take up digital television—indeed, it holds up better than other channels, whose share fragments. The BBC's principal channels—BBC1 and BBC2—hold up well in the digital viewing figures, so the hon. Lady need not worry that she will contribute to the BBC's decline if she gets digital television.
Miss McIntosh: Perhaps I am being prescient and looking to the BBC role in the long-term future, when everything will be digital.
Several representations have persuaded me that there is no reason for continuing to make a special case of the BBC, and the arguments were set out in another place. I hope that that view is uncontroversial and finds some sympathy, and that I can persuade the Minister that the BBC should be brought within Ofcom's remit on economic and content regulation. That is the purpose of the amendments. Without going into too much detail, it is important to realise that the BBC has the advantage of receiving a licence fee, which it uses to pay for some parts of its development. It is also developing an impressive commercial network. I have been privy to briefings on that at the BBC.
I hope that some of the representations that we have received will help to persuade the Minister of the
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force of my arguments. In particular, I want to pray in aid the representations from ITV. It states—I am paraphrasing—that it has consistently argued that in the new convergent media world, which we hope will be set out in the communications Bill, it is essential that a single regulator has responsibility for all broadcasters, including the BBC. ITV goes on to say that it makes no sense to exclude the United Kingdom's largest broadcaster: leaving the BBC governors primarily responsible for establishing remits and monitoring the performance of BBC channels will weaken Ofcom's ability to sustain and promote the whole of the public service broadcasting ecology—ITV's word, not mine.
ITV adds that although the BBC has expressed concern that its independence will be threatened if it is brought fully within Ofcom, ITV does not understand the BBC's concern because the editorial independence of its broadcasters is currently regulated by the Independent Television Commission, and is not in question. ITV also says that the incorporation of the BBC within Ofcom would offer more genuinely independent regulation of the BBC than is currently offered by the board of governors, and that the governors' heavy reliance on BBC staff makes it impossible for them objectively to judge the corporation's activities. I shall spare the blushes of an individual who has been caught in parts of the Palace of Westminster to which he should not have had access, but many of us could relate arguments about how the impartiality of the BBC as upheld by the board of governors has sometimes been in question.
A representation received from the Commercial Radio Companies Association says:
The BBC must be brought under the wing of OFCOM. This will ensure that: the BBC focuses on broadcasting output which needs to be publicly funded; and does not chase ratings or duplicate the output of commercial broadcasters; and there is fair access to digital spectrum.
We all suspect that the BBC might be using some of its income from the licence fee to develop its digital networks. The National Consumer Council made a forceful contribution to the debate, stating that
excluding the BBC from the remit of OFCOM was disappointing and would not prevent the unwanted clash between BBC1 and ITV's main evening news bulletins.
That was stated at the time of the White Paper and I understand that the National Consumer Council stands by that opinion.
The BBC has robustly explained why, in its view, the Bill should not provide for it to be encompassed more fully within Ofcom. It is important to put those arguments on the record and, I hope, to refute them. The BBC argues:
This Bill isn't about OFCOM's regulatory powers. It's simply about setting up the body called OFCOM, ready to assume whatever powers the forthcoming Communications Bill should give it.
We rehearsed last week the concerns of the Committee and of those who have made frequent and lengthy representations to its members about the fact that a vacuum is being created by the paving Bill establishing the framework before the mother of all Bills—the communications Bill—is introduced. If the Committee
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is to serve the refugees from the Utilities Act 2000—we can discuss the part of the Bill that relates to telecommunications under a different set of amendments—well, it is important that we get the structure right.
We have a one-off opportunity to bring the BBC board of governors and the content and economic regulation of the BBC within the framework of the Bill. To fail to consider the matter would be a dereliction of our duty. It would leave serious questions about the future of the BBC that would be of no benefit to it; I am sure that the BBC now welcomes the debate.
10.45 am
The BBC argues that
Nothing in the current Bill as drafted would prevent OFCOM being given more responsibilities over the BBC in the forthcoming Communications Bill.
It speaks volumes that the Bill that we are debating will be silent unless the amendment is made. If we do not insert reference to the BBC board of governors now, the opportunity will pass. The BBC's argument therefore fails. The BBC continues:
The Government has said that a draft of that Bill—
the communications Bill—
will be published during 2002. There will then be several months of pre-legislative scrutiny and public consultation before the Bill itself is introduced into Parliament.
I am sure that you are as disappointed as the rest of us, Miss Widdecombe, that we have failed to obtain a definitive date for the publication of that Bill. The Minister could take this opportunity to state definitively, for example, whether it will be published before or after the Budget—but he is silent.
If we defer the decision to proceedings on the communications Bill, we will be told that the debate is out of order. If you were fortunate enough to be Chairman of the Committee that will consider that Bill, Miss Widdecombe, and if we were fortunate enough to have you, I am sure that you would rule us out of order for trying to bring the BBC board of governors within its scope. Now is the time and place to introduce amendments such as those in the group under discussion. I am sure that the Minister, who is a lucky man, will not want to let the opportunity slip through his fingers.
The BBC states:
So there's plenty of time and opportunity for further debate (and, if necessary, amendments to that Bill)—
the communications Bill—
about the relationship between OFCOM and the BBC.
I have already refuted that argument. The BBC continues:
It is right that that debate should take place in the context of the entire regulatory framework. The Communications White Paper left a lot of the detail about how OFCOM would exercise its powers unsettled. For example, what sort of role will OFCOM have in policing the 'Statements of Programme Policy' prepared by ITV in place of a detailed remit?
The BBC is wrong to postpone the matter. I humbly argue that now is the time to discuss it, given that the Chairman of the Committee on the forthcoming
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communications Bill would rule us out of order if we discussed it during that Committee.
The BBC's statement continues:
Only when those details are clarified, in the Communications Bill, can we sensibly look at the detail of the regulatory options for the BBC.
That will be too late. I am sure that the Minister will not disappoint—we certainly will not. There will be oodles of matters to discuss when we talk about the policy and remit of Ofcom, but today, we are discussing its structure. Not only five regulatory bodies should be replaced; the BBC board of governors should be replaced as well and brought within both economic and contents regulation.
The BBC states that
it would be bad law-making, as well as inequitable—
presumably it means unfair—
to take the issue of the BBC's governance and attempt to make specific legislative provision for it now, ahead of providing for the treatment of all other broadcasters.
Regulation of all other broadcasters is subject to the Bill, so now is the right moment.
The BBC asks:
Why shouldn't provision be made in the Bill for the BBC's Governors to cooperate with OFCOM to prepare for the transfer of powers?
The Bill is about the practicalities of merging several freestanding public bodies into one new one. It's a bureaucratic measure largely about structures—employment, property, etc—not about regulation.
If we have learned one thing from the better regulation taskforce, it is that if the new regulator is going to regulate properly and with a light touch, as we hope Ofcom will, it will be better if it encompasses completely all six existing regulators. The BBC argues that
The board of governors is not a free-standing body. In legal terms, the board is the BBC. Independent of BBC management, it has no staff, no property, no assets. So there is nothing to be merged into Ofcom.
If there is nothing to be merged, what is the BBC board of governors? Perhaps the Minister would elaborate on that.
The BBC says that
Even if Ofcom were to be given more responsibilities for the BBC, it would not have to physically subsume the existing body called the Board of Governors in order to do so. It would simply be given powers in the forthcoming Communications Bill.
It also says that
adding the board of governors to the list of ''bodies'' which have to prepare for being merged into Ofcom would be misguided—it would serve no practical purpose.
However, I believe that we have sufficient force of argument on our side. It is the wish of the general public, as well as of other regulatory bodies and those who wish to be regulated—I have quoted ITV and the Commercial Radio Companies Association, among others—that a merger should take place. The National Consumer Council has also expressed such a wish. We will discuss in the context of later amendments the role of consumers and the consumer panel.
We have a unique opportunity to do something that is well within the remit of the Bill. A tidy move, it
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would save the Government a lot of hassle and concern in the run-up to a general election in about 2004 or 2005, when in any event they will have to present to the House their proposals for the successor to the BBC charter.
I had some hesitation and some doubt about whether it was right to bring the BBC board of governors within the remit of Ofcom. I was mindful of the fact that it was the last Conservative Government who set up the board of governors and the charter that currently governs the BBC. However, on reflection, and having considered the weight of evidence that has been placed before the Committee, I have no doubt that it is the right thing to do and that this is the opportunity to do it.
We cannot afford to leave the arguments until the debates on the communications Bill; that would not be appropriate. I am sure that you, Miss Widdecombe, would be the first to point that out to the Committee. I humbly submit the amendments to the Minister's consideration. I hope that the force of my arguments will overpower him and he will adopt them.
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