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Lord Phillips of Sudbury: As my name appears against Amendments Nos. 3 and 4, I rise briefly to support all that has been said by the noble Baroness, Lady Howe, and other speakers. I congratulate in particular the noble Lord, Lord Puttnam, on his opening remarks. He struck at the heart of the inadequacy of a Bill that, in many respects, is well judged and well framed, but Amendment No. 1 refers to a mighty and gaping void.
I confess to a little confusion in trying to equate the noble Lord's remarks generally about Clause 3 with Amendment No. 4, which would put the promotion of competition back into Clause 3. The noble Lord seeks to remove competition from Clause 3(1)(a) and to restore it in Clause 3(1)(b). I must be honest and say that I do not see the logic of that, especially in light of the noble Lord's remarks when moving Amendment No. 1.
Lord Puttnam: The key word is "principal". The intention of the three amendments is to establish a clear hierarchy. The principal objectives are those of the citizen and the consumer but we are not pretending for one second that the interests of competition are non-existent. They have a legitimate place within the hierarchy, but a subsidiary place.
Lord Phillips of Sudbury: I thank the noble Lord very much for that clarification. The problem is, that would leave the provision in the key or foundation clause, in terms of the tenor of the Bill. I urge the noble Lord to consider Clause 3(3)(a), which gives him exactly what he wants—a reference to competition but in a clearly subsidiary place. It refers to Ofcom's duties as being
- "the desirability of promoting competition in relevant markets".
Lord Fowler: If I may say so, I rather hope that the noble Lord, Lord Puttnam, does not take the noble Lord's advice. He has well applied the logic of what he has been saying in the Bill. The Bill gives Ofcom a number of functions and duties. As my noble friend Lord Crickhowell said, that list goes on for about two pages. In the words of Dr Howells in another place:
- "The duties form a hierarchy, which is designed to assist regulators in resolving potentially conflicting regulatory objectives".—[Official Report, Commons Standing Committee A, 29/2/00; col. 234.]
The point that the noble Lord, Lord Puttnam, correctly addressed is this: what are the principal aims, duties and obligations? Then one goes on to some of the others, which are important but not the overwhelming ones. For all the reasons that he and others have advanced, the fact is that the public interest—that of the consumer, the ordinary man in the street—must be the paramount, overwhelming and principal interest so far as the duties placed on Ofcom are concerned. I was also very struck by the words of Nick Lovegrove of McKinsey's—it is not renowned as some curious left-wing organisation—who says that Ofcom will need to remind itself of its primary objective to protect the interests of citizens and consumers, and that that will require constant vigilance. As the noble Lord said, that is not a plaintive voice from the consumer lobby, but hard-edged practical advice.
Basically, I agree entirely with what the noble Lord, Lord Puttnam, said. The public interest is paramount. His proposal is sensible. It clarifies the position so far as Ofcom and the public are concerned, and conceivably so far as the courts are concerned if there is any challenge of that kind. I very much hope that the Government will listen to what he said.
4 p.m.
Baroness Buscombe: The Bill grants extensive powers to Ofcom, so it is of paramount importance to try to get the general duties of Ofcom right from the start. I therefore entirely agree with the noble Lord, Lord Puttnam, that any ambiguity should be dealt with now. To that end, although it is key for Ofcom to further the interests of consumers, sometimes the market comes up against the wider interests of citizens. The general duties of Ofcom should, we agree, take account of that as a priority.
With regard to Amendments Nos. 1, 2 and 4, I believe that in practice any court would find that the duties as a whole set out in Clause 3 were by definition "principal", because Clause 3 sets the scene and everything flows from that. I note what, for example, the noble Lord, Lord Alli, said in relation to judicial review. It is important to negate so far as we can at this stage any question of ambiguity. I therefore see that it would be preferable for the Bill to ensure—it would assist not only lawyers, but all of us and the board of Ofcom in particular—that Ofcom has a clear steer in its remit that "effective competition" should not simply be considered in the round, but qualified to ensure a clear focus on specific national, regional and local communications markets throughout the UK.
Serious questions and points have been raised by Members of the Committee from all parties for the Minister to answer. Given that much of the sentiment and principle behind what they have said today was set out in their speeches at Second Reading, it is hoped that the Minister is ready to answer them this afternoon.
Baroness Blackstone: The quality and depth of the debate on Ofcom's general duties is a strong indication of their importance to Ofcom, its stakeholders and, of course, the public. The Government have therefore continued to look at the duties to ensure that they are right, and that they give a clear direction to Ofcom and some certainty to its stakeholders. The Government do not accept that what we have ended up with is ambiguous in the way implied by some speakers.
The clause looks different from the one published in draft last year. We have worked very hard to take on board concerns that its drafting did not fully reflect our policy intentions. We have listened and responded. I tell my noble friend Lord Puttnam that that is why we have changed the clause. The Bill in its totality delivers for both consumers and citizens. It reflects our view that the market does not always deliver in the public interest. That has been the underlying position taken by most speakers in the debate. We of course accept it, and the Bill as currently drafted reflects that there are circumstances in which consumer interests are outweighed by the interests of the wider community.
We wanted to be sure that the general duties reflected that more fully, so that Ofcom would be able to make decisions for consumers and for citizens, and would not be open to challenge if, in any particular case, it decided that the interests of people as citizens outweighed those of people as consumers. Clause 3(1) puts that policy intent into legal drafting. Although my noble friend Lord Alli raised the spectre of judicial review, I am not sure of the legal basis for his argument.
It is of no practical significance whether the drafting gives Ofcom a "principal" duty or not. Accepting Amendment No. 1 would make no legal difference whatever. I will resist it, because it would only confuse and not simplify. The clause is complex. Its subsections, particularly subsections (1) and (2), are very closely interwoven. Of course, the provisions need to be seen alongside other specific duties set out throughout the Bill. In some cases, balancing or reconciling the duties will be a difficult task for Ofcom. I accept that entirely, but we should set out the overarching principles and specific objectives and let Ofcom weigh them up as it sees fit in each case.
The noble Lord, Lord Thomson, referred to two cooks in the kitchen. I am tempted to try a pun on the subject of curry, but I will not go down that particular road. I honestly believe that the noble Lord, Lord Currie, and his colleagues will be perfectly able to handle the overarching principles and specific objectives that have been set for them in the Bill.
I think that it would be helpful if I tried to explain briefly how the first three subsections of the clause worked. Subsection (1) sets out the general principles that will apply when Ofcom will carry out its functions. Subsection (2) gives more detailed objectives in the specific areas of Ofcom's responsibility, covering the breadth of the Bill to which the general duties apply. Subsection (3) then lists those other issues to which Ofcom must have regard in performing its duties.
Having set out how the clause is structured, I would like to explain why I feel that I have to resist the other amendments. The noble Baroness, Lady Howe, supported by the noble Lord, Lord Phillips of Sudbury, does not like the formulation of "community as a whole". Amendment No. 3 proposes a different form of words. I am also aware that others believe that the Bill should refer to "citizens", but it would not have been right to do so. In UK law generally, references to "citizen" are invariably bound up with the concept of nationality, as in Clause 4. However, that is not what is meant in Clause 3. We would get into an awful legal confusion if we were to go down that route, because "community as a whole" is right legally. It may appear somewhat dry, but quite often legislation does.
Lord Phillips of Sudbury: Would the Minister accept that the Government have recently legislated and used the word "citizen" time and again in relation to citizenship education, which came into schools last autumn? There is absolutely no confusion as to what "citizen" and "citizenship" mean when used in that legislation.
4.15 p.m.
Baroness Blackstone: I believe that in that legislation, the term "citizenship education" is used as a term of art to describe a particular part of the curriculum. I do not believe that there is particular reference to "citizens" in that legislation. We refer to pupils and students. The noble Lord's intervention does not therefore alter the validity of what I said.
The fact that "community as a whole" may appear somewhat dry does not mean that anything other than an important duty is involved. In practice, it means that Ofcom will be able to consider some of the issues that impact on us as part of a much wider community.
The Bill will deliver in the public interest in terms of, for example, standards and quality, ensuring universal service, maintaining a strong public service tradition and promoting media literacy. All of those are enormously important objectives.
In response to the point made by the noble Baroness, Lady Howe, Clause 3(1)(b) gives Ofcom the means to consider the public interest in carrying out its functions. In legislative terms, it makes explicit the commitment to the citizen, as well as to the consumer, that the Government have always considered to be central to the Bill.
That leads me to our concern that the amendment does not adequately express the full range of issues that "community as a whole" does. By explicitly referring to "public, civil and cultural life", it restricts Ofcom to considering only those issues. They may be broad, but they are not necessarily broad enough. We could have a lively and interesting debate about what could be included in such a list and that, I am afraid to say, is where the danger lies.
"Community as a whole" encapsulates the ideas of "public, civil and cultural life", but it is not restricted to those concepts alone. It is about those issues that can impact on society. We will touch on those issues on many
occasions in our discussions of the Bill; I refer, for example, to standards, quality, democratic debate and universal service.We also question the focus of Amendment No. 3, which would require Ofcom to support the communications industry in contributing to public, civil and cultural life. Ofcom's duty under Clause 3(1)(b) is to further the interests of the community as a whole. In doing so, of course, it may require business to do something new, or differently, or to stop doing something altogether. However, business should focus primarily on providing for the market. There may be other means, beyond what business can do, of furthering the interests of the community as a whole.
Amendments Nos. 2 and 4 follow the drafting proposed by the joint scrutiny committee. I hope that your Lordships recognise that we have taken on board if not the words of the joint committee then much of their spirit.
I regret that I have to say to my noble friend Lord Puttnam that we must go our separate ways on the amendment. The Government have underpinned the duty to further the interests of consumers by promoting competition. The two are closely linked. Consumers benefit from fair, open and competitive markets. I am not sure that there is the same link between competition and the community. Indeed, the wording of Amendment No. 4, by referring to "wherever possible" instead of "where appropriate", would give competition a primacy over everything else in furthering not only consumers' but also the community's interest. Sometimes competition may not be in the interests of consumers or the community as a whole and "where appropriate" gives Ofcom the flexibility to consider what is the best approach in each circumstance. "Where possible" does not enable the same freedom of action. It is important that we maintain that flexibility for Ofcom to operate and interpret the legislation effectively.
I say to my noble friends Lord Puttnam and Lord Bragg—and to the noble Lord, Lord Thomson, who partially supported their comments—that I am extremely puzzled by the references of several noble Lords, including both my noble friends, to the term "co-equality". We do not use that phrase in the Bill or refer to it as a concept. Clause 3(1) creates a single general duty to further the interests of "consumers" and of,
- "the community as a whole".
I say to my noble friend Lord Bragg, who quoted extensively from Barry Diller's speech, that I agree that there must be a balance of regulation in the market. There is no question in the substantial Bill of abandoning that balance. We are not the United States. I say to the noble Lord, Lord Crickhowell, who referred to the United States, that we shall hear more about that in relation to the Bill. However, this is not the United States; this is the United Kingdom. Nor does the Bill introduce a United States model to the regulation of United Kingdom communications. I do not believe that he or any other serious commentator would say that the regulatory framework that the Bill will introduce reflects a commitment to unfettered capitalism, to use Mr Diller's
terms to describe some of the developments that have taken place in the United States. More regulation, not less, may be needed in the United States but, fortunately, I am not sitting in Congress defending United States legislation. We must be careful throughout our consideration of the Bill about making direct comparisons that really do not apply.My noble friend Lord Alli is absolutely right that clever executives—indeed, he is one of them—and lawyers will try to challenge the regulator. However, it does not follow that the amendment proposed by my noble friend Lord Puttnam would make the situation any better. Nor do I accept his contention that we have created an equality of interest between consumer and market interests, for reasons that I have already given. Equality of interest is, if anything, between the consumer and the community. That is what Clause 3 states.
I have more or less answered all of the questions that were put to me. I conclude by saying that I do not believe that the effect of the amendment is, as the noble Lord, Lord Puttnam, said, to create a hierarchy in which competition is subordinate. Indeed, the actual effect is the reverse, because Ofcom would be under a duty to discharge its duty to consumers and the community as a whole by promoting competition wherever possible. Although some have argued for that, I do not believe that that is what my noble friend intends. In light of that and of my arguments for the Bill as it stands, I hope that he will withdraw the amendment.
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