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Lord McIntosh of Haringey: My Lords, in Committee I offered to write to the noble Baroness. I am afraid that I did not. That may be one reason why the amendment is in the form that it is today.
It may be convenient if I explain the background to our plans for financing Ofcom before it is able to raise revenue from the communications sector. There is an element of misunderstanding here. The amendment places a limit on borrowing from the Secretary of State. It is better not to set out a limit in primary legislation. There is too much uncertainty about how long the preparatory stage will last and what practical steps Ofcom will need to take to prepare to receive the regulatory functions.
I am certain, having heard the noble Baroness, Lady Miller, that there is a confusion between the additional cost over and above the cost to the existing regulators of establishing Ofcom, which is the £5 million referred to in the Explanatory Notes, and the money it will need to borrow to implement its plans, which is the figure in the amendment. During this preparatory stage, almost all the money will come from the Secretary of State. It is possible that existing regulators may give money to Ofcom. If that happens it will be on a relatively small scale.
We want the transition to the new regulatory regime to be as smooth as possible. Ofcom will only be able to take decisions on the practical steps when it is in place next summer. It will be necessary for Ofcom to commission new IT systems, to take on buildings and possibly to give up existing buildings and a host of similar measures. We have not estimated what the costs of such activity may be or how much of it will need to be financed before the transfer of functions takes place.
There will also be the pay, accommodation and other costs for the Ofcom board and its small skeleton staff. We cannot be certain when—this is the most important point—the new main Bill will receive Royal Assent or how soon after that that the regulatory functions will be transferred.
I have described the costs falling on Ofcom. Most—perhaps all—of which will require a loan. But this is a different coverage from the £6 million figure. That covers, as I said, the extra costs of establishing Ofcom. Some of those costs have already been incurred by the two departments and the existing regulators; for example, on the Towers Perrin report. There will be further costs for head-hunters and consultancy before Ofcom is able to undertake any expenditure. So the £5 million figure in the amendment in Committee, and the more generous £6 million figure before us today, are not really relevant to Ofcom's borrowing requirement.
I turn to the point to which the noble Lord, Lord Crickhowell, added extra force—the question of financial controls. The Secretary of State will be best placed to decide how much to lend Ofcom. She certainly will not want to lend any more than she has to. But the National Audit Office will also be responsible. It will be able to look at the loan. The Bill provides for the National Audit Office also to look at Ofcom's finances.
In addition, in Committee we undertook to make regular reports to Parliament on progress with Ofcom. I am sure that these reports should and will cover expenditure. In the light of that explanation, I hope that the noble Baroness will not press the amendment.
Baroness Miller of Hendon: Well, my Lords, that was a very interesting and full reply. I am disappointed that the Minister was not able to give me a guesstimate of what the figure might be. I need to read carefully what he said so the noble Lord can be somewhat relaxed. I confess I was tempted to divide the House and test its feeling. The noble Lord made some very interesting points. He said that Ofcom may need more money because it may be a long time before the substantive Bill comes before Parliament. We shall be able to talk about that interesting matter later. In view of the response from the Minister, I shall do what he says and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blackstone moved Amendment No. 16:
- After Clause 2, insert the following new clause—
The noble Baroness said: My Lords, in moving Amendment No. 16, I shall speak also to Amendments Nos. 25, 29, 74 to 75 and 86. We had some discussion in Committee about the desirability of Ofcom complying with generally accepted principles of good governance. I indicated that the Government were sympathetic to this suggestion. Amendment No. 16 places such a requirement on Ofcom.
I should emphasise that when we refer to good governance we are thinking of the commercial principles of good corporate governance, in so far as they are relevant to a statutory corporation such as Ofcom but also, and perhaps more importantly, of guidance on the conduct of public bodies, again in so far as it is relevant to Ofcom. In fact, the guidance on the management of public bodies is more likely to be relevant to Ofcom. Hence it takes precedence in the proposed amendment.
In Committee, we had a number of discussions about the appropriate method of recording and monitoring the interests of members of Ofcom. I shall not be bringing forward a specific amendment in relation to that as it is sufficiently covered by the new clause. The guidance on the running of public bodies, to which Ofcom will have to have regard, requires such bodies both to keep a register of the relevant interests of Members and to make them publicly available. I would certainly expect Ofcom to ensure that it complies with this requirement. I hope that that will
We indicated in Committee that we would be willing to consider a requirement that Ofcom should publish its regulations and procedures. Amendment No. 74 requires Ofcom to do that under paragraph 15 of the schedule. We believe that this provides a more precise requirement and will meet the concerns expressed.
Finally, Amendments Nos. 75 and 86 relate to record keeping and transparency and again follow on from our discussions in Committee. Amendment No. 75 requires Ofcom to record decisions whether made by Ofcom, its committees or its employees acting with delegated authority. By applying the provisions of the Public Records Act to Ofcom, Amendment No. 86 places obligations on Ofcom in respect of maintenance and safekeeping of records. We believe that the Public Records Act is the right vehicle to use to place an obligation of this kind on Ofcom.
On a related matter, noble Lords will recall that in Committee there was discussion of whether it was appropriate to apply the negative resolution procedure to decisions made by the Secretary of State to vary the size of Ofcom. I promised then to write to the Delegated Powers and Regulatory Reform Committee and ask it to reconsider its previous advice that the negative procedure was acceptable. I am pleased to be able to confirm today that the Delegated Powers and Regulatory Reform Committee has considered the issues raised and has stated that it does not wish to change its recommendation. I hope that that will reassure noble Lords that appropriate procedures are being followed and that, as the noble Baroness, Lady Anelay, said in Committee the views of the Delegated Powers and Regulatory Reform Committee can be taken as definitive. I beg to move.
Baroness Anelay of St Johns: My Lords, I welcome the amendments moved today in response to concerns I expressed in Committee. I acknowledge that they meet fully the precise concerns identified by the Minister.
I thank the noble Baroness for writing to me in advance of Report stage with an explanation of why the Government have chosen this route for the amendments. I am grateful to her today for putting on the record her commitment with regard to the Register of Financial Interests. That indeed troubled me.
The Minister referred to the order-making power about which I tabled an amendment in Committee and which she referred back to the Delegated Powers and Regulatory Reform Committee. That committee was so swift—it discussed the matter yesterday—that I was able to receive a letter on the Front Bench today. I was, therefore, aware of the decision. I have already been able to indicate to the chairman of the committee that I fully accept its decision and have no intention of returning to the matter at Third Reading.
On Question, amendment agreed to.
Clause 3 [Functions of existing regulators]:
[Amendments Nos. 17 and 18 not moved.]
Lord Lipsey moved Amendment No. 19:
The noble Lord said: My Lords, I have banged on about the case for a Joint Committee of both Houses until the House has been driven to distraction. Were the Minister a less patient person she, too, would have been driven to distraction. Instead she has listened with close attention and has promised to consider the matter. I think that it will be for the convenience of the House if we now hear what the noble Baroness is able to tell us.
"MANAGEMENT OF OFCOM
OFCOM shall, in managing their affairs, have regard—
(a) to such general guidance concerning the management of the affairs of public bodies as OFCOM consider appropriate; and
(b) subject to any such guidance and only to the extent that they may reasonably be regarded as applicable in relation to a statutory corporation, to generally accepted principles of good corporate governance."
6.15 p.m.
After Clause 3, insert the following new clause—
"IMPLEMENTATION OF PROPOSALS
(1) The Secretary of State shall ensure that any bill containing provisions relating to the implementation of any relevant proposals within the meaning of section 2(3) is—
(a) published in draft; and
(b) subject to consultation.
(2) The period for consultation shall be such as to allow scrutiny of any draft bill by a joint committee of both Houses of Parliament."
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