Office of Communications Bill [Lords]

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Dr. Howells: I assume that the interest rates will be similar to those that apply when grants and loans are given on a normal day-to-day basis by any Government Department, but I will find out for the hon. Gentleman what rates are envisaged.

The House will be able to consider the provisions on funding in due course. In the meantime, I hope that my explanation of the principles governing the funding of Ofcom will persuade the hon. Member for Vale of York to withdraw her amendment.

4.45 pm

Miss McIntosh: Unfortunately, the reverse is true. I am deeply alarmed by what the Minister has recounted, especially in response to the additional questioning by my hon. Friend the Member for Lichfield (Michael Fabricant).

There is concern about the lack of clarity in the Bill, and the Minister has contradicted himself slightly. Paragraph 9 states that grants may be extended as the Secretary of State thinks fit, to enable Ofcom

    to incur or meet liabilities in respect of capital and revenue expenditure.

It continues:

    Grants under this paragraph shall be paid out of money provided by Parliament.

Paragraph 10 states:

    The Secretary of State may make advances to OFCOM out of money provided by Parliament.

Moreover, those sums are to be repaid to the Secretary of State at such times as he directs.

Orange has said that the merging of five regulatory bodies into one should create significant operational cost-saving synergies for the communications

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industries. In its view, the Bill is insufficiently clear in that respect. How will staffing be administered? I do not remember hearing the Minister say how many members of staff are envisaged. The Bill suggests how many board members are envisaged. Will the Minister provide clarification?

Dr. Howells: There are currently 1,111 employees among the five regulators, and the total cost is £118 million.

Miss McIntosh: In the circumstances, I wish to press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 12.

Division No. 4]

Fabricant, Michael Harvey, Nick McIntosh, Miss Anne
Robertson, Mr. Laurence Watkinson, Angela

Bailey, Mr. Adrian Bryant, Mr. Chris Grogan, Mr. John Howells, Dr. Kim Jackson, Glenda Kemp, Mr. Fraser
Linton, Martin Miller, Mr. Andrew Pearson, Mr. Ian Picking, Anne Rammell, Mr. Bill White, Brian

Question accordingly negatived.

Miss McIntosh: I beg to move amendment No. 23, in page 11, line 18, at end insert—


    (c) the Public Accounts Committee of the House of Commons.'.

The Chairman: With this it will be convenient to discuss amendment No. 24, in page 11, line 34, at end insert—

    'which shall be referred to the relevant Select Committee or Select Committees of each House and debated by each House of Parliament.'.

Miss McIntosh: The amendments are rather more meaty than those we have just considered. Mr. Stevenson, were the amendments pressed, could they both be put to a vote, or must I wait?

The Chairman: I shall call the vote as per usual, which means calling the amendment. Hon. Members will vote accordingly should the vote be given.

Miss McIntosh: I am grateful for that clarification. The lead amendment would ensure that every statement of accounts is sent not only to those envisaged in the Bill, but to the Public Accounts Committee of the House of Commons. That struck a chord with those who made representations and were consulted during the White Paper process. When considering a public agency, albeit an independent one, it is important that the relevant Select Committee has the opportunity to scrutinise accounts.

Amendment No. 24 asks that Ofcom's annual reports be referred to the relevant Select Committee or Committees of each House and be debated there. The reason why I have encompassed in the amendment a reference to two Select Committees is because two Departments are creating the Bill and will create and consider the future communications Bill. If there is to be an annual report of Ofcom, it should

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therefore be referred to, debated and voted on by a full sitting of the House.

There are two relevant Select Committees, on Culture, Media and Sport and on Trade and Industry. I pray in aid the excellent Select Committee report to which my hon. Friend the Member for Lichfield and other distinguished hon. Members contributed. Over lunch, I had the opportunity to discuss it at some length with the right hon. Member for Manchester, Gorton (Mr. Kaufman). The report categorically recommended that an annual report be referred to the Select Committees. It states:

    We consider that close scrutiny of the establishment of the new regulator and its work will be a crucial task for the relevant select committee or select committees of the House of Commons in the next Parliament.

My proposal is that once Ofcom has been established, and even before the main communications Bill—I have called it the mother of all Bills—has secured its passage through Parliament, it is right and proper that the provision on annual reports in paragraph 12 of the schedule encompasses the possibility of a lengthy and full debate in the Select Committees and on the Floor of the House.

In respect of accounts being sent to the Public Accounts Committee, I was alarmed by the Minister's reply to amendment No. 19, so it is extremely important that we consider the cost, value, savings and running costs of Ofcom, and that we are able to compare them with the running costs of the five constituent parts that will be replaced. Many bodies enthusiastically embraced that idea in consultation on and submissions to the White Paper. The Campaign for Press and Broadcasting Freedom said that there should be transparency in Ofcom's operations and accountability for its actions. The amendments will go some way toward enabling the House, through the Select Committee system, to hold Ofcom to account.

I also hope that, especially through the two Select Committees debating the annual report, we will be able to ensure Ofcom's total independence of the two Departments concerned.

Nick Harvey (North Devon): I rise to support the amendments. My colleague the hon. Member for Sheffield, Hallam (Mr. Allan) and I tabled an amendment suggesting that something similar should happen every six months during the interim period. We have some anxieties about setting up the shadow Ofcom without Parliament retaining the ability to comment on its initial decisions.

Much of the politics and many of the key decisions are, rightly, being put off until the communications Bill provides the opportunity for Parliament to debate them in detail. My concern is that some of the decisions that will fashion Ofcom—what it is, what it will become, and how it will operate for some years—will probably be taken during the interim period by the shadow body itself. For that reason, I favour Parliament retaining the ability to comment on and have some say in those decisions in the early days. To bring Ofcom's first appointees before the Culture, Media and Sport Committee would be advantageous. Those people would find that a useful baptism—in

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fact, knowing the character of that Committee, it might be something of a blooding.

The hon. Member for Vale of York questioned the Minister about the size of the new Ofcom, and the Minister replied that the total number of staff in the existing regulators was 1,111. I would be absolutely horrified if Ofcom's long-term staffing levels were to approach that number. In that sense, I found the potential scope of the project quite worrying. I would also be horrified were Ofcom to divide into operating departments along the lines of the existing bodies, as that would defeat the entire purpose of setting it up. It is essential that the new body's employees do not continue to think in their old boxes.

Brian White (Milton Keynes, North-East): Does the hon. Gentleman accept that one of the biggest obstacles to light-touch regulation is the dead hand of the Public Accounts Committee, which restricts innovation? The fears he expresses are precisely the sort of recommendation that might come from that Committee, which would prevent the innovation and light-touch regulation that we demand from Ofcom.

Nick Harvey: I accept that the Public Accounts Committee sometimes has that effect, although I do not think it inevitable. However, the hon. Gentleman makes a useful point. I suppose that I am speaking in favour of the second of the two amendments.

It is important that the shadow body is set up in a joined-up way. It needs an economics and competition department and a technical department. We shall discuss consumer issues later. If it is to have such departments, the early decisions will be critical in fashioning what Ofcom will become.

Dr. Howells: I am sure that the hon. Gentleman agrees that the existing regulators are not halfwits. Of course those sections and departments will be set up, and we can get some notion of how Ofcom will look even from this Bill. However, its final appearance will be set out in the communications Bill. If the hon. Gentleman is so concerned, why did he just vote for an amendment that simply said that

    such grants shall be sufficient to enable OFCOM adequately to fulfil its statutory functions; and to employ sufficient staff for that purpose?

There would be no regulation or control over that whatsoever. If that is not contradictory, I do not know what is.

5 pm

Nick Harvey: It is not contradictory at all. Establishing an adequate staff does not mean that there must be 1,111 members of staff, nor did the amendment say that the grant must pay for all the staff. The previous amendment expected that it would possible to levy the industry, but would have ensured that the grant was capable of supplementing a levy to enable Ofcom to do its task.

I dispute that to enable Ofcom to perform its tasks it is necessary for it to be anywhere near the size of body that would emerge if we simply amalgamated the five existing bodies. I do not believe that we will do

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that, but, to answer the Minister's point, it is not halfwits that I fear. Of course the existing regulators are not halfwits. I fear far more the prospect of people protecting their own turf, protecting their empires, protecting their colleagues, and sticking to their old ways.

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