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I commend both the regulations and the order to the Committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Adoption and Children Act 2002 (Consequential Amendment to Statutory Adoption Pay) Order 2006.—(Lord Sainsbury of Turville.)

Baroness Morris of Bolton: I am most grateful to the Minister for his detailed introduction to the regulations and the order. The Explanatory Notes to the adoption and children order highlight that the change will close a potential loophole which could have allowed both members of an unmarried couple to receive statutory adoption pay. The order makes provision for unmarried and married adopters to be brought into line and, as such, will make life easier for employers. This is an order of little controversy to which we have no objection.

The maternity and parental leave regulations essentially make welcome changes to the maternity and adoption provisions of the 1999 and 2002 regulations respectively which, as the Minister said, will apply to parents of children expected to be born or placed for adoption on or after 1 April 2007. Among other things, the regulations extend the period of notice that the employee is required to give the employer of her intention to return to work earlier than the end of her additional maternity leave from 28 days to eight weeks. They also increase flexibility by allowing an employee to work for up to 10 days during the statutory maternity leave period without bringing that period to an end as a result of carrying out that work. That is most welcome.

I will not rehearse the debates that we had so recently during the passage of the Work and Families Bill. Suffice it to say that, welcome though these measures are—we genuinely welcome them—we had and still have some concerns regarding the administration and working of the new arrangements, especially with regard to small businesses.

During the passage of the Bill, my noble friend Lady Miller questioned the Government as to why they had seen fit seemingly to back away from agreed proposals with the CBI that, in order to reduce the administrative burden on employers, that function would be returned to the Inland Revenue. I should be most grateful if the Minister could comment on that.

My noble friend also pointed out that 95 per cent of small employers have five employees or fewer. They do not have personnel departments or HR resources and the more regulation we put on them, the more difficult their position becomes. We also raised concerns about the complexity of additional paternity leave that we feel could be open to fraud. Therefore, can the Minister tell us what further discussion the Government have held or what representations they have received on the changes following the passage of the Work and Families Bill and whether they are satisfied that they have addressed any concerns raised?

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As I said, we welcome the changes, but we are conscious of the concerns of various organisations and will take care to keep an eye on the development of these proposals. I very much agree with the Minister that it is essential that we provide families, parents and carers with genuine choice and flexibility, so that they can balance their family life and work commitments as best they possibly can, and, as the Minister said, in a way that allows employers access to the widest pool of talent. But we also need to provide business with legislation that does not tie it up in acres of red tape and does not cost it its competitive edge.

Lord Cotter: I welcome the clear explanation given by the Minister on these new orders. I was supportive in the other place, as my party is and has been, of the importance of giving people in the workplace the opportunity to meet their need for maternity and paternity leave, so it is to be welcomed that that is going forward. I hope it will justify what we on these Benches feel is the importance of work-life balance, which the Minister has referred to. That can only be good.

In the past, I have always referred—as did the noble Baroness a moment ago—to the importance of small businesses. It is important that the guidance is good. The Minister has referred to the fact that there is good guidance to support these regulations. I urge him again to ensure that it is good and clear, because many small firms have such a burden to deal with in terms of bureaucracy and red tape, as it is called, and anything that can be done to help them understand the regulations is to be welcomed. It is satisfactory that the Government have listened to the people who asked, during consultation,that the time for notice be amended.

I support the order. It is extremely importantthat there is clarity and agreement, and I think that that will be the result of this regulation, provided that the information given to all firms is clear and to the point.

Lord Sainsbury of Turville: I thank noble Lords for their general support. I shall deal with the specific points raised.

We dealt in great detail with the question of whether we could pass some of the administrative costs back to the Inland Revenue. We discovered that there were no very significant savings to the employer, and that there would be enormously heavy costs to the Revenue and Customs. We reckoned that that would take up to £75 million in set-up costs and£50 million in annual running costs. That makes perfect sense, because effectively all the information would have to be passed backwards and forwards between the Revenue and the company, which would add a lot of cost to the system and save very little for the individual business.

Regarding further discussions with the industry, we have listened to the concerns of business. We have recently completed a public consultation on the details of the scheme. A government response to that will be issued in due course, which will lead to the development of further regulations. The regulations

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show that we have carefully consulted industry throughout on the easiest way to do this, and we will continue to do so.

I agree with the noble Lord that guidance and clarity are essential. We will ensure that small businesses have all the information and guidance they need so there is a clear statement of what maternity rights, and so on, are. We have always sought to balance the giving of further rights with spending a lot of time thinking how we can reduce the cost of that to business. Noble Lords can see from the notification periods that we have taken that very seriously. On that basis, I commend these regulations.

On Question, Motion agreed to.

Maternity and Parental Leave etc. and the Paternity and Adoption Leave (Amendment) Regulations 2006

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): I have already spoken to these regulations. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Maternity and Parental Leave etc. and the Paternity and Adoption Leave (Amendment) Regulations 2006—(Lord Sainsbury of Turville.)

On Question, Motion agreed to.

Television Licensable Content Services Order 2006

5 pm

Lord Davies of Oldham rose to move, That the Grand Committee do report to the House that it has considered the Television Licensable Content Services Order 2006.

The noble Lord said: The world of broadcasting is changing at a rapid pace. Over the past few years, the growth of the creative industries has been meteoric. The opportunities brought about by technological advances have revolutionised the way we look at, listen to and—crucially—interact with broadcast content. We need to keep adapting our rules to enable these opportunities to be realised, both for the growth of the industry and for the UK economy in general. If we want the UK to continue to be at the forefront of creativity, we need to ensure that the frameworks we rightly put in place can be flexible enough to adapt to these changes.

Currently, a radio multiplex is distinguished by two key restrictions. It can carry only digital radio and use no more than 20 per cent of its total capacity for data services. It cannot carry television. The aim is to ensure that capacity is reserved for radio and not sacrificed for television.

The orders amend both these key characteristics. First, the draft Television Licensable Content Services Order 2006 proposes to redefine the type of content that digital radio multiplexes can carry. This change

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will permit TV, as well as radio, to be carried. Secondly, the draft Radio Multiplex Services (Required Percentage of Digital Capacity) Order 2006 will increase the existing limit on data services from 20 per cent to30 per cent. Taken together, the orders will enable digital radio multiplex operators to offer consumers a combined package of television and DAB radio, making best use of valuable spectrum and utilising the most recent technology developments.

Historically, legislation has sought to protect digital radio by preventing TV from being carried on radio multiplexes. This has protected the spectrum for digital radio that could otherwise have been sacrificed for TV services. However, we do not now believe that it is in the consumers’ interest that this limitation should continue. Technological advances in compression techniques and a reduction in the amount of capacity that is needed to carry a service have meant that TV can co-exist with, rather than replace, radio. We believe that rather than protecting spectrum for digital radio, the legislation is now preventing the development of innovative new services which will make digital radio more accessible and appealing by allowing it to combine with other services.

The potential of a mobile TV and DAB package will further increase the attractiveness and demand for digital radio; this was tested in last year’s pilot by BT Movio, a subsidiary of BT. The pilot allowed more than 1,000 mobile phone users with specially designed phones to access three live television services and more than 50 digital radio stations. The trial, which was the largest of its kind in Europe, showed that even with the additional services, consumers listened to more DAB radio than they watched television. Additionally, more than 73 per cent of users said they would be prepared to pay for the service on their network.

Evidence from the BT Movio pilot showed that only 11 per cent of users would be happy with fewer than five TV services. Consequently, BT Movio has stated that it cannot sustain a business model with fewer than five services. That is why we propose to increase the maximum data limit to 30 per cent. That will allow for five TV stations in addition to the existing DAB radio services.

There may be anxiety that this represents an unfair advantage for BT when others will have to pay for valuable spectrum for this purpose. However, I emphasise that there is nothing to prevent other people from developing similar services on local multiplexes or on the proposed new national multiplex. It is important to note that the BT Movio proposals are as a wholesale content provider and that its services will be open to other phone operators.

We all know that the pace of technological change is increasing. Both the Broadcasting Act 1996 and the Communications Act 2003 recognised this and anticipated that the technological changes in broadcasting would need us to revisit the regulatory regime. We believe that these orders will make possible innovative, converged services which can increase the take-up and listening to of DAB services. Not only will more people listen to DAB on new devices but, having got used to these services, they may want all their listening to be on

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DAB. We hope that this is the case. We at least want the consumer to decide. That is why we are introducing these orders. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Television Licensable Content Services Order 2006.—(Lord Davies of Oldham.)

Viscount Astor: I thank the Minister for his explanation of the order. This is a somewhat complex area but we agree with the order because it makes sense that the radio multiplexes are also used to carry television and other data services. This seems to be a sensible use of multiplex as there are a limited number for both radio and television. It will allow both radio and data to be loaded on to people’s mobile telephones and so on. A new technology is coming in and we support the order.

I have one question: what impact will this have on analogue switch-off and the move to digital? I presume that it will help further that process. If the Minister could explain, I would be grateful.

Lord Clement-Jones: I, too, thank the Minister for his demonstration of speech compression. It was not perhaps digital but it certainly worked for me. I am grateful for the care with which both Ofcom and the Government have analysed this problem and for the way in which they consulted with considerable care.

I am a great fan of DAB radio—I think the way it has added to the quality of listening is fantastic—and, therefore, anything which would affect that adversely would be a retrograde step. It is quite clear that the multiplexes can be shared and, as we know, convergence is taking place at a rapid rate. On our mobile telephones we will soon have mp3, mobile television and DAB radio—quite apart from telephony services. I think this is a positive step. It may not be all the way to mobile television but it certainly will enable providers to assess the demand for elements of mobile television, and to that extent it is extremely useful.

A key point made in the regulatory impact assessment concerned the benefits to UK technology. If we are ahead of the game, that gives our technology manufacturers a head start, which is highly desirable.

My questions relate to the issue of charging. I assume that the current multiplexes will provide this as part of, if you like, a free addition to their services; that there will not be additional charges for the commercial multiplex and the BBC multiplex; and that the licensing of the third national multiplex will simply take place in the normal way—that there will not be a notional additional expense as a result of the multiplex being able to be used for mobile television and so on. I am not entirely sure about that.

We welcome the proposal to have a further commercial multiplex. That can only be a demonstration of the success of DAB and of a kind of mobile television. Frankly, neither I nor my party is particularly concerned about the BT Movio issue. It is to be welcomed that it had the sense to take the risk and develop a new service which will be available to service providers on a wholesale basis. It is a pioneering service which is leading the way. We unreservedly welcome these two orders.

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Lord Davies of Oldham: I am grateful to the two noble Lords who have contributed so positively to the debate. Unanimity between us is a rare experience and all the more to be welcomed for that.

I should emphasise that although we regard DAB in the UK as a success story, it is not a runaway success; take-up rates are good but not exceptional. I share the enthusiasm of the noble Lord, Lord Clement-Jones, for DAB radio, although whenever the time signal comes through a fraction late I think of the noble Lord, Lord Tanlaw, who makes my life a misery in the Chamber by constantly challenging me on the BBC time signal.

However, having said that, like the noble Lord I appreciate the virtues of DAB radio. We share that appreciation with 3 million of our fellow citizens—or perhaps I should say there are 3 million sets in use. That compares with between 110 million and120 million analogue radio sets in the UK, so we still have a considerable way to go before full enhancement occurs. The industry, of course, is looking at ways of making DAB a more compelling proposition, and these orders will help to do that.

The noble Viscount, Lord Astor, expressed anxieties about analogue switch-off. Analogue switch-off, of course, applies to television; there is no proposal to switch off the analogue signal for radio. As the noble Viscount said, the digital service for television fits in with the new developments.

The noble Lord, Lord Clement-Jones, emphasised the advantages that we have in being ahead of the game at present. We need to stay there to maintain the advantages that have accrued to all of us. The noble Lord asked about charges. There will be an optional cost for the TV service. It will not affect DAB radio listeners, but if people wish to take up the enhanced service they will have to pay for it. The providers will, of course, have to invest in the necessary technology. I have ascertained so far that, although no one will be asked to carry around a telephone quite as large as either of these Dispatch Boxes, the machine which will needed to receive the television service will be somewhat larger than the extraordinarily neat versions of the latest mobile phones. For obvious reasons, there will be a change in that regard once a picture is introduced.

Through the removal of these legal restrictions, operators will, for the first time, be able to offer a package of TV and DAB radio to mobile phones. This will give customers, for the first time, the opportunity to experience DAB services via devices which will be both popular and portable. The mobile telephone demonstrated an extraordinary rate of development. Obviously these devices will be more expensive and we do not expect them to produce growth at quite that rate but, nevertheless, one can readily see the advantages to the consumer of these enhanced services. However, the important thing is that it is for consumers to decide whether to avail themselves of the technology once it is made available to them. That is what these orders seek to do. I commend them to the Committee.

On Question, Motion agreed to.

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Radio Multiplex Services (Required Percentage of Digital Capacity) Order 2006

Lord Davies of Oldham: I have already spoken to this order. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Radio Multiplex Services (Required Percentage of Digital Capacity) Order 2006.—(Lord Davies of Oldham.)

On Question, Motion agreed to.

Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2006

5.15 pm

Lord Evans of Temple Guiting rose to move, That the Grand Committee do report to the House that it has considered the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2006.

The noble Lord said: I am moving this order on behalf of my noble friend Lord McKenzie of Luton. I am commending to the Grand Committee the change needed to the Financial Services and MarketsAct 2000 (Regulated Activities) Order 2006 to introduce a new FSA-regulated activity related to pensions. This change specifically relates the issue of the regulation of personal pensions by the FSA.

Members of the Committee may be interested to hear that this measure was so uncontroversial that when debated in the other House, it lasted barely one-third of its allotted time. That is not intended as a challenge to the noble Baroness, Lady Noakes, and the noble Lord, Lord Oakeshott. It probably reflected the overwhelming support for this measure expressed during consultation last year.

Sweeping away the old rules surrounding personal pensions is very much an extension of pension tax simplification and is wholly in line with the deregulation agenda. I should make clear that these changes do not impact on occupational pension schemes, for which there is a separate regulatory framework.

Let me start by saying something about the background to the changes. The pensions market has changed over time and will continue to do so in the future, not least for demographic reasons. Around5 million individuals now contribute to personal or stakeholder pensions. At the same time, the legislative changes the Government have made are reshaping the personal pensions landscape.

While we have changed the pensions tax framework in the face of a fast-changing pensions market, we recognised that the prescribed rules surrounding who can run personal pension schemes have confined it to a small group that potentially limited competition. In the face of such a changing pensions market, we also recognised that elements of personal pensions are beginning to fall outside Financial Service Authority consumer protection.

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A formal consultation was held between September and December last year to explore these issues. It sought views on four proposed options for rule changes on who could run a personal pension scheme, including a “do nothing” option as well as the Government’s preferred option of proposing to create a new regulated activity, overseen by the Financial Services Authority, related to,

from April 2007.

We fully considered all 25 responses in detail and published a formal response on 23 March this year. It set out industry views in detail and announced the proposed policy change; namely, that the Government were proposing to create a new regulated activity related to personal pensions. Financial Services Authority permission would then replace the restricted list of those who could run tax-privileged personal pension schemes.

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