Office of Communications Bill [Lords]

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The Chairman: Order. The amendments are about audit and annual reports. I am a little worried that we are stretching the debate wide of the amendments, so if we could return to those issues, I should be grateful.

Nick Harvey: I am sorry, Mr. Stevenson, but my view is that the only opportunity for Parliament to have any further involvement in some of the key decisions made during the interim period until the communications Bill becomes an Act and the body begins to take its long-term shape is for the Select Committees to receive Ofcom's annual report. I cannot think of any mechanism other than having Ofcom come before a Select Committee of the House to report on the early decisions that it is taking, so that Parliament has an opportunity to comment on them.

Mr. Laurence Robertson (Tewkesbury): Whether or not the last amendment was made, surely the sum going to Ofcom is open ended? It is open ended in the clause. Either way, is not the need for the Public Accounts Committee to consider the issue proved? If I may put a second point briefly, we keep hearing Government Members say that there should be light regulatory control—but has not yet been established, because we have not heard from Ministers what Ofcom will do.

Nick Harvey: I will not be drawn on the second point, save to say that the Government's response is likely to be that the matter will be dealt with in the communications Bill. That is right. I am not particularly sympathetic to the endeavours of the hon. Gentleman and some of his hon. Friends to introduce matters that should be in the communications Bill into this paving Bill. However, I believe that during the interim period it would be useful for Parliament to retain an ability to comment on some of the initial administrative decisions. An annual report and oversight by the Public Accounts Committee would be the best way to do that.

Michael Fabricant: As I did this morning, I rise to support this group of amendments a little half-heartedly—or perhaps I should say three quarters-heartedly, because, although I support amendment No. 23 fully, I support only a part of amendment No. 24, on a technical notion that I shall point out shortly.

As hon. Members have said, there must be a mechanism by which the shell Ofcom can be monitored, and perhaps the most effective mechanism would be the Select Committee. We had an interesting debate last Thursday about the possible role of Select Committees in the selection of the chairman, deputy chairman and other commissioners.

It is most important that the Select Committee on Culture, Media and Sport, together with the Select Committee on Trade and Industry's Select Committee, should have an opportunity to look at the Ofcom committees' workings when Ofcom has been

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established. However, it quite often happens that the Culture, Media and Sport Committee produces a report—as it did on the provisions of the White Paper—and then receives an appalling response from the Department. Indeed, a former Culture, Media and Sport Minister commented that the Department was dysfunctional. Were it were not for the Select Committee, it would not do half as good a job as it does at present. Some would say that it is doing half a bad job, but that is beside the point. Therefore, I certainly support amendment No. 23, which would ensure that reports are given regularly to the Public Accounts Committee.

It may be argued that even the shell organisation will have to be funded by those whom it will in due course regulate, because, as we now learn, it will have to pay back the loan from the Secretary of State at an interest rate that we do not know. The shell organisation is a Government agency, and it is right and proper that the Public Accounts Committee has access to it.

Angela Watkinson (Upminster): I thank my hon. Friend for giving way. Is he aware of the concerns of the ITV network about Ofcom resourcing? It feels that

    OFCOM should have sufficient resources—

a rather unqualified term in this context—

    to recruit and retain the very best staff with expertise across all necessary fields. However, OFCOM should also be required to produce—

The Chairman: Order. I would be grateful if the hon. Lady kept her interventions as short as possible. If she wants to make a contribution, she must catch my eye.

Angela Watkinson: I just wanted to draw my hon. Friend's attention to ITV's concern about the production of clear costings and budgets from the regulated industries.

Michael Fabricant: My hon. Friend makes a powerful and cogent point. She is absolutely right: the regulators should be regulated, in part, by the House.

For too long, Governments have washed their hands of agencies saying ''not me, guv''. We have had five years of that. The Select Committee and the Public Accounts Committee should have an opportunity to review the work of Ofcom.

I disagree to some extent with amendment No. 24, although some might ask why I disagree with my charming and my hon. Friend the Member for Vale of York. I might seek your advice on this point, Mr. Stevenson. The amendment, which is clearly in order or it would not have been tabled or selected by you, states that the issues shall be debated by each House of Parliament. However, I wonder whether an Act of Parliament can bind the House of Commons in its work. If the amendment were passed, it would bind the House to debate the reports issued by Ofcom. That would be a gross breach of the legislature. I would welcome an intervention to clarify that.

Miss McIntosh: In the interests of clarity and to help my hon. Friend, the schedule currently states that a copy of the statement and the report shall be laid

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before each House of Parliament. Paragraph 12 adds that the Secretary of State shall lay a copy of every annual report before each House. I am surprised by the mischievous line taken by my hon. Friend, given that the Select Committee of which he is a member called for such a procedure.

Michael Fabricant: Allow me to clarify. I welcome the earlier part of amendment No. 24 because it states that information shall be laid before the

    Select Committees of each House.

Nick Harvey: Does the hon. Gentleman recall that the Conservative Government, in buying off the Maastricht rebels, conceded the principle that there had to be an annual debate on the state of the European Union?

The Chairman: Order. I need hon. Members' help if we are to make the Committee a success, as I am sure we will. Maastricht and the European Union are irrelevant to the amendments.

Michael Fabricant: I bow to your wisdom, Mr. Stevenson, because I am sure that former Members of the European Parliament, of whom there are at least two present, would not want us to go down that line.

The Chairman: Order. You are not going down that line. That was the purpose of my intervention.

Michael Fabricant: Thank you, Mr. Stevenson. I understand the point made by the hon. Member for North Devon (Nick Harvey), but I am not sure that the House feels itself to be so bound—I am unsure whether there is a debate every year. If that is the case, it must be said that the provision has no meaning, and I am uncomfortable with amendment No. 24 for that reason.

I support the observation made by the hon. Member for North Devon about the number of people to be employed by Ofcom. Will the Minister indicate to the Committee whether he envisages that Ofcom will employ 1,111 people? If it does, it will be nothing like the Federal Communications Commission, which employs a tiny fraction of that number. He said earlier that the FCC was a good model to follow because it is a light regulator, but if 1,111 people are to be employed, they will want to be employed, and that means they will regulate.

On Thursday the Minister rightly chastised me for accidentally using the word ''regulate''. There is a danger that far from creating a light touch regime, we shall end up with Ofcom becoming a mighty interventionist behemoth.

Dr. Howells: I love that word—behemoth. We sometimes call them ''beer moths''.

I appreciate the intention behind the amendments, but it is a matter of striking a balance between ensuring that Ofcom is able to operate and take decisions without interference from Government or Parliament and ensuring that there is proper scrutiny of its activities. The provisions in the Bill achieve the right balance.

Members of the Committee will recall that the Government have already undertaken in another place to report periodically to Parliament on Ofcom's

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progress. There is nothing to prevent the Culture, Media and Sport Committee inquiring into its progress. The hon. Member for Lichfield who, like some of my hon. Friends, is a member of that Committee will know that its Chairman is never reluctant to call in whomever he thinks fit. My hon. Friend the Member for Ochil (Mr. O'Neill), Chairman of the Trade and Industry Committee, takes a similar approach. Both Chairmen regularly conduct vigorous inquiries. As one who did three and a half years on the Public Accounts Committee, I know that time is regularly set aside for hon. Members to debate on the Floor of the House matters raised by its Chairman. We have seen that the proper route for scrutiny of Ofcom's expenditure is the National Audit Office and the Comptroller and Auditor General.

That process is commonly used. It is similar to that used for the Broadcasting Standards Council, Oftel and the Ofgem—the Office of Gas and Electricity Markets—and it provides Parliament with an opportunity to scrutinise the statement and the Comptroller and Auditor General's report together. The Public Accounts Committee is able to examine any statement of accounts laid before Parliament in that way. Having sat in that Committee on many occasions and seen before it people whom I now regard in a more favourable light than I did when I was in opposition—namely, the poor officials who must appear before the Committee—I know that there are no rules of engagement. I have seen some strong, arrogant characters go down on all fours.

There is no need to specify that in addition to the Secretary of State and the Comptroller and Auditor General, the Public Accounts Committee should be sent a copy of the accounts. For that Committee to receive Ofcom's unaudited accounts would not assist its scrutiny. As the hon. Member for Vale of York said, paragraph 12(3) provides for the Secretary of State to lay copies of the annual report before each House. It is a matter for the relevant Select Committees and Parliament to determine what they want to do once the reports have been laid, and the Bill is certainly not the place to determine that each House must debate the report.

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Prepared 29 January 2002