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Lord Thomson of Monifieth: Before the Minister sits down, is he really telling the Committee that in this major Bill, which sets out the long-term future through the 21st century for our broadcasting and

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telecommunications industry, the kind of financial risks that it will undoubtedly face are to be dealt with on a begging-bowl basis for the contingency fund of the Government after the accidents have happened? Is no provision to be made for proper state backing for safeguarding our national interests in these matters?

Lord McIntosh of Haringey: The noble Lord, Lord Thomson, has been in government and has long experience. He knows that where we have contingent liabilities we make provision for them. Where there is no event anticipated which would give rise to a contingent liability, it is impossible to make provision. I say this time after time at Starred Questions in response to the noble Lord, Lord Saatchi. We are very transparent about our contingent liabilities. We provide a statement every year of contingent liabilities, even when they are unquantifiable. But those are risks for which there is some trigger. The risks of losing a legal action can apply to any part of government and no government can, or should, provide in legislation for how those risks will be covered. They are the responsibility of government. They do not need to be reflected in individual legislation.

Lord Puttnam: I thank the noble Lord for his response. I am hugely encouraged. He will understand that it would have helped me enormously if we could have had that kind of response a month or two ago. I failed my maths O-level and it has really tested everything that I have learned since to get to grips with these clauses.

I should like to make two points. I am slightly puzzled. The Minister raised the analogy of the Iraq war. He would agree that it would have been a poor incentive to Saddam Hussein to back off if he believed for one second that the Exchequer was not prepared to fund the costs of the military. It is not a great analogy, but it serves.

In a much earlier speech in Committee, my noble friend Lord Alli made a very good point. He said, "I come from that tough business. I am a producer. I know how to look after myself". He said to the Government, "Don't tempt me to test you". I suppose that what I am hoping to hear at Report is that the level of determination of the Government not to be, to use the phrase of the noble Lord, Lord Thomson, out-gunned by a tough global company is something which I am not suggesting necessarily should be on the face of the Bill, but that the Government must make it absolutely evident that they will back Ofcom to the hilt. If they find themselves head-to-head with one of the big beasts in the jungle, that big beast can assume that our pockets are, if anything, deeper than its. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 88 to 90 not moved.]

Clause 26 agreed to.

[Amendment No. 91 not moved.]

Clause 27 agreed to.

Schedule 2 agreed to.

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Clause 28 [Transitional functions and abolition of pre-commencement regulators]:

Lord Avebury moved Amendment No. 92:

    Page 26, line 31, at end insert—

"( ) Where under contractual arrangements in place prior to the commencement of the Act liability is established for payment of charges levied by pre-commencement regulators such arrangements shall continue to have effect after the abolition of the pre-commencement regulators as if they applied to charges levied by OFCOM."

The noble Lord said: Amendment No. 92 deals with transitional functions in Clause 28 and Amendment No. 320 concerns transitional provisions in Schedule 18. These amendments deal with the transitional arrangements for charges made by pre-commencement regulators for terrestrial-shared network infrastructure facilities. The effectiveness of these commercially managed and owned national network services is reflected in the fact that the UK is currently the acknowledged world leader in matters of terrestrial broadcasting networks and the introduction of new technologies and services.

The providers played a key role in the development of the UK's terrestrial radio and television and they also licence antenna space to mobile and fixed wireless operators in the United Kingdom, thus reducing the number of mast and tower sites that are needed. Most of the sites are potentially suitable for sharing by mobile operators, subject to planning permission and to obtaining third party consent—for example, from the landlord—and they can provide the mobile telephone industry with a significant proportion of its network site requirements in the United Kingdom.

Under present arrangements, the owners of the masts and towers enter into contracts for the provision of sharing arrangements with mobile operators, and these may include charges to recover the costs imposed by the existing regulator. The Bill provides Ofcom with the power to define what kind of communication providers are to be subject to charges and to fix the charges to be paid by those providers. It does not, however, specify the basis on which the charges would be levied. In essence, as it appears to fix charges, it is not clear whether costs associated with providing the services can continue to be passed on under the new arrangements. It would be unfair if new financial burdens were to be imposed on those providers in respect of existing contractual arrangements.

I cannot believe that that is the Government's intention. To make that clear, the amendments seek to ensure that existing contractual arrangements continue to have effect as if any new charges levied by Ofcom were, for the purposes of those contracts, charges made by the previous regulator. I beg to move.

6 p.m.

Lord McIntosh of Haringey: I do not wish to pre-empt further debate but there is a very simple answer to the amendments. Clause 27 of the Bill and Schedule 2 associated with it—which we have already passed—contain provisions for the transfer of the property, rights and liabilities of the existing regulators to Ofcom. These provisions give the Secretary of State

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power to direct the existing regulators to make schemes to transfer their property, rights and liabilities to Ofcom. This includes liabilities of the kind to which the amendments relate.

Schedule 2 specifies the property, rights and liabilities that are capable of being transferred and specifically, at paragraph 2, includes provision the effect of which would be to ensure that references in any agreement, document, process or instrument of any description to the pre-commencement regulator would be treated as references to Ofcom once the scheme has come into force. The Bill already contains adequate provision.

Lord Avebury: That sounds very convincing. I wonder how it was that in the discussions between the Government and the proprietors of the masts and towers that was not made clear so that they did not feel it necessary to raise the matter with us and cause us to table the amendments.

Lord McIntosh of Haringey: I do not know. I shall write to the noble Lord, Lord Avebury.

Lord Avebury: I am grateful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 28 agreed to.

[Amendment No. 93 not moved.]

Clauses 29 to 34 agreed to.

Clause 35 [Fixing of charges]:

Lord Evans of Temple Guiting moved Amendment No. 94:

    Page 35, line 32, leave out from "charges" to end of line 36 and insert "for a particular case includes—

(a) power to provide that the charges in that case are to be equal to the amounts produced by a computation made in the manner, and by reference to the factors, specified by them;
(b) power to provide for different charges to be imposed in that case on different descriptions of persons; and
(c) power to provide for particular descriptions of persons falling within subsection (2)(d) to (f) to be excluded from the liability to pay charges in that case."

The noble Lord said: The amendment gives clarification of the scope of the existing provisions. It adds nothing new to the Bill. A question was raised whether the existing wording was entirely consistent with the possibility that Ofcom might wish to levy administrative charges on a basis related to turnover. There was a suggestion that Ofcom might, on the contrary, be obliged to levy flat-rate charges—that is to say, that the charge should be the same for every person, or every person of a particular description, irrespective of the size of the business.

It is not the intention of the Bill to set out a particular charging system or systems to be used by Ofcom. There may be cases or categories for which flat-rate charges would be appropriate. Equally, there will certainly be categories for which other charging bases—perhaps relating to turnover—would be more

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appropriate. The amendment removes any possible implication that Ofcom is limited to flat-rate charges. I am sure that it is a right change to make. I beg to move.

Baroness Buscombe: I am grateful for the Minister's explanation, both now and earlier in a letter that he kindly sent to me, a copy of which was placed in the Library. I entirely understand the purpose of the amendment and agree with it.

On Question, amendment agreed to.

Clause 35, as amended, agreed to.

Clauses 36 to 41 agreed to.

Clause 42 [Power of OFCOM to set conditions]:

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