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Baroness Miller of Hendon moved Amendment No. 28:

The noble Baroness said: As we have constantly been reminded, this is a paving Bill to set up Ofcom in preparation for it assuming the functions to be set out in the substantive Bill. The existing regulators have a duty to assist Ofcom, to liaise with it and to give guidance and advice with regard to the proposed structure and the future operation of the new super-regulator. They will need to discuss with Ofcom the

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best way to implement the new regulatory regime which it is expected that the substantive Bill will produce.

We are also concerned, as is my noble friend Lord Crickhowell—he mentioned the point on the first day of the Committee stage—about the role of the seconded staff. Perhaps the Minister can tell the Committee how Ofcom will deal with the competing issues of which staff are to be seconded from which regulatory body to carry out whichever function.

We are concerned that during the setting up of Ofcom money will be requested from the existing regulators, while at the same time they will be expected to continue to perform their function unabated. During that interim period, Ofcom will not be operational and will not take over any of the functions of existing regulators, so it can be assumed that any money provided will result in extra costs to the communications industry. The existing regulators would in effect be asked to pay for a shadow regulator that may never come into existence, if the substantive Bill is not passed. I remind the Committee that paragraph 24 of the Explanatory Notes states that the extra transitional costs of establishing Ofcom will be of the order of £5 million. There is no justification for the sort of creative accounting that the provision authorises to subsidise that figure—for subsidy it surely is. It is like asking a condemned man to pay the hangman for the rope.

Indeed, the Explanatory Notes admit that that is the object of the provision. They state:

    "By adding to the existing regulators' statutory functions, the Bill will allow the existing regulators to recover a proportion of the establishment cost from the communications sector. These powers will mean that the net cost to public expenditure will be significantly less than the overall gross cost of the practical transition".

In other words, we have the hands of the Treasury trying to get something for nothing. Although the transitional costs will be kept from public expenditure, because we cannot get anything for nothing, it will be the communications industry that has to pay—twice. It will have to pay once for the existing regulators' current function and once for the duplication of function during the transitional period.

I shall read a final quotation from the Explanatory Notes:

    "In the long term this Bill and the subsequent Communications Bill is expected to have little impact on net public expenditure, but will be more fully assessed in the draft Explanatory Notes which will accompany the draft Communications Bill".

In other words, "Trust us. We are the Government and we know what we are doing". Since a communications Bill was promised in the 1997 manifesto, all that the Government have done is dither. We certainly do not yet have the Bill. There is no real evidence of what is to happen, but we are told that all will become clear when we have the real communications Bill and the real Ofcom—not the virtual Ofcom with which we are being presented. We do not want to give Ofcom a blank cheque or carte blanche to tax the existing regulators and, through them, the communications

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industry and consumers. That could be detrimental to the existing regulators who are at present fulfilling their functions. I beg to move.

Baroness Blackstone: The power provided to existing regulators in Clause 3(3)is a general one, to enable them to do such things as appear to them to be conducive to the duty placed on them by the Bill to help Ofcom to prepare itself. The provision sets out some examples of the type of things existing regulators might do under that power—for example, making payments to Ofcom, seconding staff and providing information.

It may help the Committee if I provide some examples of where the existing regulators might make use of the provision. They might make payments to Ofcom to help with the costs of obtaining specialist advice. Relevant information might be provided—perhaps on holders of particular types of licences—to enable Ofcom to prepare for the smooth transfer of responsibilities. They might second staff to Ofcom who have a particular expertise—in information technology procurement, for example—that would be needed by Ofcom during the transition.

To answer the question posed by the noble Baroness about how such decisions will be made, that will be a matter for the embryonic Ofcom that the Bill will set up, working with the existing regulators—after all, that is the whole purpose of the Bill—to decide what makes sense and where such secondments are useful. There will be sensible discussion about what is needed in the transitional period. Such decisions will be for Ofcom, along with the existing regulators.

The list in Clause 3(3) is not, of course, all-inclusive. Removing the references would not prevent the existing regulators from deciding to do such things. However, retaining the provision makes clear the type of thing that they could do, should they so decide. It may be helpful if I set out in writing for the noble Baroness greater detail of how the finances will work, so I shall do so, in so far as we are clear about it.

Baroness Miller of Hendon: I thank the noble Baroness for her explanation, and look forward to receiving her written explanation in due course. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 29 not moved.]

Clause 3 agreed to.

[Amendment No. 30 not moved.]

3.15 p.m.

Clause 4 [Winding up of OFCOM on abandonment etc of proposals]:

Baroness Miller of Hendon moved Amendment No. 31:

    Page 4, line 24, leave out paragraph (b).

The noble Baroness said: In moving Amendment No. 31, I shall speak also to Amendment No. 35, which is purely consequential to it.

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Clause 4 deals with the winding-up of Ofcom in certain circumstances. It is paradoxical to find in a paving Bill setting up a body provisions to wind it up before it even begins to operate. Why should the Government need the power to wind up Ofcom merely because they have modified their proposals to regulate the communications industry? Either a communications Bill will be proposed, pursuant to Clause 2(3), or it will not. If not, Ofcom will be wound up in any case.

Subsection (1)(b) is therefore unnecessary. Perhaps the Minister will explain in what circumstances it could become effective. I beg to move.

Baroness Blackstone: I had thought that including the subsection would help the Committee, rather than the reverse. I remind the Committee that the Government hope that the powers in the clause will never have to be used. We do not intend to have to use them. They are included in the Bill simply to reassure the Committee that we have a sensible way of dealing with a situation in which the whole project of regulating the sector through Ofcom had, for some completely unforeseen reason, to be dropped. I cannot give the noble Baroness a list of such reasons, because I am optimistic that we will never be in such a situation. The clause provides reassurance.

Amendment No. 31 would confine the use of the power to a case in which at least one proposal to confer powers on Ofcom had been abandoned. While it is difficult to discuss the matter in the abstract, there could also be a case in which a series of proposals to confer functions had been watered down to the point at which the Secretary of State decided that there was no longer value in proceeding with Ofcom. It would be appropriate to be able to wind up Ofcom in such a situation.

As I believe this to be a probing amendment, what I have said may be of no great significance.

Baroness Miller of Hendon: I thank the Minister for her explanation. She is right that the amendment is a probing amendment, because I could not think of any circumstances in which Clause 4(1)(b) would be necessary. Either a Bill will come forward or it will not; if it does not, Ofcom will be unnecessary, so I could not see the need for the subsection. However, given the Minister's brave attempt to give some kind of explanation, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Anelay of St Johns moved Amendment No. 32:

    Page 4, line 24, at end insert "or

(c) the switching-off of all forms of terrestrial analogue communication,"

The noble Baroness said: Clause 4(1) lays down the conditions under which Ofcom may be wound up by

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the Secretary of State. The two conditions mentioned in the Bill are,

    "the abandonment of any relevant proposals about the regulation of communications"


    "the modification of any such proposals".

Presumably they have been included in the Bill because there will be such important changes in the communications environment that the Government expect Parliament to agree that it would be right to dismantle Ofcom.

Another dramatic change is on the cards for the communications industry and it might have the effect of requiring the Secretary of State to consider the position of Ofcom as it is constituted in the Bill. I have tabled the amendment because I want to probe the Government on how the implications of analogue switch-off might impact on Ofcom.

Everything we are discussing in the paving Bill is set on the presumption that we are moving inexorably to the full implementation of the digital age. We all assume that it is not a question of if but of when. Can the Government give the Committee guidance on when they will take the step which is eagerly awaited by the communications industry? The industry is concerned that if the Government do not set a date, there will be no impetus for consumers to switch to digital.

In the meantime, consumers carry on buying new analogue television sets and a huge proportion of the television sets sold last Christmas were analogue, not digital. Consumers are buying analogue sets which may soon become useless. But, rightly, consumers want to be assured that before they take the gamble of switching en masse to digital it will be both affordable and available, regardless of where they live. They also want to be assured that they will be able to receive a digital signal on all their television sets. I am sure that Members of the Committee are among general members of the public who, when buying a new television set, relegate the existing one to a study or bedroom. I understand that in this country there is now an average of four television sets per household. What will happen at switch-off when people have not changed to digital perhaps because they cannot afford it or because they own more than one set?

The take-up of digital television is steady and slow but it is by no means overwhelming. There are therefore serious problems about the if and the when of analogue switch-off. So far the Government have indicated that it might take place between 2006 and 2010, although some members of the industry have predicted that it could be as late as 2018. I notice that yesterday in another place the relevant Minister, Dr. Howells, repeated the dates 2006 to 2010 as being possible.

We are all aware that the recent problems surrounding the sale of the 3G licenses have given the industry and the Government worries about what may happen when analogue is sold off by the Treasury. Analogue switch-off will be a dramatic change in the

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communications environment and I therefore believe that it should be a reason for the Secretary of State, under Clause 4, to consider winding up Ofcom. As I said earlier, this is a probing amendment. I beg to move.

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