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House of Lords

Thursday, 15th May 2003.

The House met at eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers—Read by the Lord Bishop of Portsmouth.

Communications Bill

The Minister of State, Department for Culture, Media and Sport (Baroness Blackstone): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Baroness Blackstone.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 8 [Duty to publish and meet promptness standards]:

Baroness Buscombe moved Amendment No. 35:

    Page 9, line 31, after "publish" insert ", and on an annual basis review,"

The noble Baroness said: In moving Amendment No. 35, I shall speak also to Amendments Nos. 36 and 37. These amendments relate to Clause 8, which concerns the duty to publish and meet promptness standards. The clause requires that Ofcom sets out its policy, keeps the fulfilment of any objectives under review and publishes its success. The intention behind our amendments is to strengthen those requirements so that expectations of Ofcom are clear and there is no room for doubt.

Ofcom is an immensely powerful regulator and accountability will be vital to its success, particularly to its relationship with those supplying or using communications services. Ofcom's reputation as a fair and effective regulator will depend on its ability to be responsive to developments in the industry. Ofcom's expectation that industry stakeholders provide information accurately and promptly is reciprocal. We have all heard examples of problems with regulators taking inordinate amounts of time to process information and reach decisions.

I do not want to appear to be asking too much of Ofcom, hence the words in Amendment No. 36:

    "unless exceptional circumstances prevent this".

I simply wish to see on the face of the Bill the requirement that Ofcom does its utmost to comply with its own standards rather than simply "have regard to" them. I beg to move.

Lord McNally: This clause contains some of the matters referred to by me and my colleagues. I see that the noble Lord, Lord Crickhowell, is also eager to

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enter the ranks. I merely draw the attention of the Committee to paragraph 85 of the Puttnam report which states:

    "Patricia Hewitt thought it was best for OFCOM to set its own promptness standards, after consultation. We do not believe this is an adequate discipline".

It is that thought which is behind these amendments. We hope the Government will reconsider the matter.

As the noble Baroness, Lady Buscombe, indicated, a great deal of Ofcom's credibility as a regulator will be in its capacity—the noble Lord, Lord Crickhowell, will later deal with these matters—and resources to match the massive advisory power of the various vested interests with which it will have to deal, and the speed with which it is able to deliver satisfactory judgments. Justice delayed is justice denied.

Evidence was given to our committee from those with experience of other regulators of the skills of various vested interests to spin out inquiries. Because regulators were under-resourced that in the end became justice denied. We really want to see the noble Lord, Lord Currie, and his assembled regulators as a kind of Elliott Ness and the Untouchables; people who will strike fear into the hearts of wrongdoers in this sector. We believe that these amendments will give them the necessary discipline so to do.

Lord Crickhowell: Like the noble Lord, Lord McNally, I shall speak to Amendments Nos. 38, 103 and 144, for the reasons he gave. Like my noble friend Lady Buscombe, I believe that this is an important set of amendments. I agree with what she had to say. We in the joint committee thought it was important because of the evidence that we heard from many witnesses about the delays that had taken place before existing regulators. Some telecommunications operators considered that Oftel's decision making is still so slow that there is often no point in complaining to the regulators at all. We were not terribly impressed when we presented these arguments to David Edmonds in the joint committee on 27th May 2002. We asked him whether the provisions of Clause 6, as it then was, would affect his work at Oftel and at paragraph 84 he replied,

    "Promptness would not. I have tough targets already. We meet those targets. . . . I think the promptness clause is important underpinning but in terms of how I operate at the moment it would not make a difference".

The committee felt that we should have a clause that did make a difference. It was for that reason that we made the recommendations to which the noble Lord, Lord McNally, referred.

In choosing the words of this clause—we did not draft them out of the blue—we thought that the Government had given us a good precedent because they are based on almost identical words in the Competition Act 1998. It is true that the relevant clause in the Competition Act 1998 has never been introduced by the Government. Perhaps one of the questions we should again put to them, as it was put in Committee in another place, is "Why not?" Clearly, there is nothing wrong with the drafting and that clause stands as a guide.

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I shall make a couple of references in this context to the debate in Committee in another place on 12th December. The Minister, Dr Howells, in commenting not on this particular amendment but on one in the group dealing with the same point, made this remark about Ofcom:

    "Ofcom will understand far better than the Government or, indeed, hon. Members. It will be able to set its standards with an understanding of its resources, the urgency of each matter and the impact of not acting in a timely manner".—[Official Report, Commons Standing Committee E, 12/12/02; col. 143.]

I pick up on the words "its resources" because they raise alarm bells with me. They carry us forward to a debate that is likely to take place later today on the financing of Ofcom and "its resources". The noble Lord, Lord McNally, said that I would be speaking on that. Sadly, I cannot be in the Chamber on that occasion. However, I have had discussions with the noble Lord, Lord Puttnam. He will be saying very much what I would say and probably with greater force and effect. But this is an important issue because if delay is caused by lack of resources we shall be in a considerable mess. So I point the way forward to that debate.

The Minister in replying in another place said that it would be a great mistake to have time limits for Ofcom because unless analogous time limits were imposed on stakeholders, Ofcom would be in a mess. That is not a happy argument. Yes, of course major stakeholders do from time to time deliberately delay things, but that should not be the reason that lets Ofcom off the hook. Indeed, it is almost an invitation to stakeholders to delay things in the comfortable knowledge that if they do so Ofcom will say, "Well, it's not our fault. It's all those beastly stakeholders who aren't producing their evidence". So I think that is a poor argument.

I finish, as indeed did honourable Members in another place, and Mr Lansley in particular, by referring to the part of the 1998 Act, asking why it has not been implemented and suggesting that it is entirely appropriate that it should apply to the Bill.

11.15 a.m.

The Lord Bishop of Manchester: I intervene briefly to support Amendment No. 35. It is not a good idea for Ofcom to have an objective placed upon it that would be difficult to meet because of its imprecision. It does not meet all the requirements of being what these days is often referred to as "smart"—that is, while it is specific, measurable and perhaps even achievable, it is not realistically time-based. Ofcom is asked to set promptness standards. It is permitted to review them, but it is not told how often that review should take place. Even a minimum or maximum timescale is omitted.

I suggest that the provision, as it stands, is open to abuse and that that is corrected by the amendment of the noble Baroness, Lady Buscombe.

Viscount Astor: I support Amendment No. 38 about undue delay, spoken to by my noble friend Lord Crickhowell, It is extremely important in the

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broadcasting industry—and indeed in any industry—that undue delay is not caused by the decisions of regulators. Sadly, in the past few years, because of the complexities and with different regulators being responsible for different parts of broadcasting, there has been undue delay in the industry. There has been undue delay in decisions by the ITC. However, by far the worst offender has been the OFT. It has taken an enormously long time to make some decisions. Indeed, in one case it took a year to decide that it was not able to make a decision. Surely, it should have been able to do so faster than that. I am sure it would not have taken so long in the days when the noble Lord, Lord Borrie, was in charge.

It is important that the regulators have the power and the capability to come to quick decisions. There is nothing worse for the industry than not knowing where it is.

Lord Evans of Temple Guiting: My noble friend Lord Davies is in hospital having a small nose operation. I am sure all noble Lords will join with me in wishing him a speedy recovery.

We have always said that we expect Ofcom to be a good regulator. We know that the industry will judge some of Ofcom's success, at least, on its ability to act promptly. We feel that to be tarred with the brush of other regulators which have not been successful is an unfair assertion for this brand new body with its very good chairman and staff.

Clause 8 gives Ofcom a duty to publish and meet promptness standards. Read alongside Clause 9, which we added to the Bill in response to concerns expressed by the Joint Scrutiny Committee, our policy intention is clear— Ofcom will be set promptness standards for carrying out is functions and business and meeting them.

I am more than aware that there are calls that the clause is not strong enough. Amendment No. 36 seeks to toughen it. The underlying assumption of the amendment is that the words in the Bill that Ofcom must "have regard" to the standards is a woolly concept with no legal effect. That is not the case. If Ofcom does not organise itself so as to be able to meet its promptness standards whenever possible, it exposes itself to legal proceedings. Amendment No. 36 would not give any greater legal force to the obligation which has already been placed on Ofcom.

I turn to Amendment No. 38. It follows similar provisions in the Competition Act 1998 for dealing with notifications. Ofcom's promptness standards will cover all its functions and business related to those functions. Delays in missing some deadlines may not be very important but Amendment No. 38 would apply regardless. The equivalent of Amendment No. 38 is specific in the Competition Act. Its application here is not and for that reason, I am not at all comfortable in accepting it.

I am not sure what additional benefit would be derived from Amendment No. 37, as subsection (7) of Clause 8 requires Ofcom to include in its annual report a summary of its compliance with the promptness

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standards. A dedicated report would be enormous and bureaucratic; the cost of its production would greatly outweigh its benefit.

Amendment No. 35 would require Ofcom to review its promptness standards annually. We should not include such a review in the Bill. Let Ofcom consider how it will manage the setting and review of its standards. There is always the spur of the Secretary of State's power in Clause 9 to keep it up to scratch.

Amendment No. 103, which would place a time limit on the process of market analysis, at first sight seems attractive, but it does not take into account all the steps involved in the process, which would have to be telescoped into those four months. I know that the amendment would start the time limit running only after the markets had been identified, but it would still require Ofcom to shoehorn into four months the analysis of the markets identified and the making of any determination.

A significant slice of the timeline is devoted to collecting information from stakeholders, responding and consulting. Consultation by Oftel is for 10 weeks—a period requested by stakeholders after Oftel had originally proposed six weeks. Moreover, Clause 78 requires certain proposals to be sent to the European Commission. In specific circumstances, the European Commission can within one month demand an extra two months to review the proposal. So four months could not possibly be made the maximum time in all cases.

Finally, I turn to Amendment No. 144. Of course we recognise the concerns raised about the risks of delay in the resolution of appeals, which may be systematically used by powerful interests to obstruct decisions that are not to their liking. We agree that the appeal process should be as speedy as is reconcilable with the interests of justice. However, we explained in our reply to the Joint Committee's report that it would be impractical to set statutory time limits for the consideration of issues that may be raised by the parties in proceedings before a court of law, because the court must ultimately have sufficient flexibility to give consideration to issues raised by any of the parties at any stage.

It is still our view that that consideration rules out binding deadlines. The amendment does not seem to dissent from that view, because it does not in reality impose binding deadlines. It provides significant flexibility to depart from the four-month deadline, which thus becomes something more like a target.

The tribunal has a good record on prompt decision making in the discharge of its existing responsibilities, and I am confident that it will be equally effective in respect of the new responsibilities proposed by the Bill. The amendment would not have any material effect in speeding those processes. Having heard my remarks on the amendments, I hope that they will not be pressed.

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