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Lord Avebury: My Lords, the Minister has said that we are moving away from a system of subsidising food production. Are subsidies to be reduced also in relation to tobacco production?

Lord Whitty: No, my Lords. The position on tobacco, sugar and various other commodities was not covered by this package because the timescale of review of those changes is different. We are expecting further proposals from the Commission on sugar, tobacco and other products later this year. I expect that the same principles will begin to apply in those sectors as well.

Lord Dubs: My Lords, I join in the congratulations to the Government on having achieved a prize which, until recently, seemed almost entirely beyond reach. What will be the effect of the proposals on the budget? Can my noble friend say a little more about the effect that they will have on the situation when 10 new countries join the EU?

Lord Whitty: My Lords, clearly those two questions are connected. The negotiations redistribute, rather than alter, the ceiling on the CAP budget, although there is a small element of degressivity built in to the direct payments. Of course, that budget will have to

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apply to 25 countries, rather than to 15. Therefore, the cost of the budgets per country will be significantly less as a result of that. This, of itself, does not alter the total financial perspective because the ceiling was set at the end of last year in Brussels.

Lord Clark of Windermere: My Lords, I welcome the deal and join in the congratulations. It is a major step forward. As someone who has spent 30 years on the Labour Benches arguing that we need to move subsidies to farmers from production to environmental and other friendly matters, this is perhaps a red-letter day. First, what does this mean for the consumer? Secondly—I declare an interest as chair of the Forestry Commission—does part of the deal relating to the second pillar mean that farm woodland support will be eligible for support under the CAP?

Lord Whitty: My Lords, on the second question, woodland support in certain forms is available under the current Pillar 2 system. This significantly increases the total amount of funds under the Pillar 2 system; therefore, that and other schemes under the system would potentially benefit.

On the benefit to the consumer, that will mean that the European farmer—the British farmer in particular—will produce what the consumers want and not what the subsidy provides for. That should mean that the value to consumers and the ability of consumers to choose high value products that are also profitable to the farmer will significantly increase and the trading applications also mean that in the longer run the cost for any given value should also decrease. Of course, consumers are also taxpayers, so taxpayers will pay for something that is beneficial and not for something that leads to distorted production. Therefore, in many ways consumers will benefit.

Communications Bill

4.34 p.m.

Consideration of amendments on Report resumed.

Clause 101 [Civil liability for breach of conditions or enforcement notification]:

Baroness Buscombe moved Amendment No. 65:

    Page 97, line 1, leave out paragraph (a).

The noble Baroness said: My Lords, when the Bill was first published, the UK mobile phone operators had two objections to Clause 101(1)(a), which gives third parties the right to sue for breaches of general conditions regardless of any ruling by Ofcom: first, that this right undermines the authority of Ofcom and UK regulatory policy could be developed through case law rather than through Ofcom's own channels for policy development, including consultation with consumers and industry; and secondly, that the right opens up an unnecessary source of regulatory risk (and therefore cost) for the communications providers, a cost that tends to get passed on to consumers.

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At Report stage in the House of Commons, the Government brought forward an amendment to the Bill (now part of the Bill in Clause 101(4) and (5)) that provides that a third party will need the consent of Ofcom prior to the bringing of proceedings. That may address the first objection and we therefore welcome the development. It may be that the amendment will, in practice, deal with the second objection too but it still does not entirely eliminate the possibility of being sued for breaching Ofcom's rules without the regulator intervening in the process.

At Committee stage in your Lordships' House, the Government argued against the amendment using, in our view, an incorrect argument. In col. 710 of Hansard on 20th May, the Government stated that a third party had no right of redress against a first breach, even when Oftel had confirmed that a breach had taken place and that that effectively gave an operator a free strike. That is not the case. The third party can sue for damages on the first occasion after Oftel's determination.

It is not expected that this power will be widely used, particularly as complainants have the option of having a complaint resolved by Ofcom (or for small claims some other independent resolution procedure such as the Ombudsman) for free. The main concern is that a very large multinational company may use this right to ride a coach and horses through the carefully drafted policies of Ofcom by going straight to a court, albeit with Ofcom's consent.

While acknowledging that the need to obtain Ofcom's consent reduces the risk that regulatory policy could develop independently of Ofcom, the new wording in the Bill raises some other issues. First, there is no indication of the basis on which Ofcom would decide whether to consent to such proceedings or the procedures the regulator would follow in taking such a decision, for example, allowing the litigants to make representations. Secondly, if Ofcom had not previously investigated the matter, it might feel compelled to conduct a full investigation before deciding whether to consent. However, if the breach complained about is in the past, then that would be just a waste of Ofcom's resources. Thirdly, if Ofcom gives its consent to the action being brought, could that actually prejudice a defendant's position? The implication of Ofcom's consent would be, rightly or wrongly, that Ofcom considers a licence breach to have occurred, or at least that it is happy for the court to conclude that such a breach occurred. It would therefore be preferable to delete Clause 101(1)(a) as the amendment seeks to do. I beg to move.

Lord Avebury: My Lords, we agree entirely with the argument that has been advanced by the noble Baroness, Lady Buscombe. I shall not repeat what she has said about the remarks of the noble Lord, Lord McIntosh, in Committee, except to say that we entirely agree with her analysis. The Minister got it wrong when he said that a third party could not sue for damages on the basis of the harm caused by the breach

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that led to Oftel's determination. As the noble Baroness said, that was said on 20th May at col. 710 of Hansard.

I have one point to add to what the noble Baroness has said. We see this provision as being a new departure in the regulation of communications networks and that there is no requirement in the new directive for it. There is no evidence of harm being caused by the lack of the provisions in the existing regime. So we support entirely what the noble Baroness has said.

Lord McIntosh of Haringey: My Lords, although this is exactly the same amendment as in Committee the arguments now being advanced for it are rather different. Virtually the only point of contact which the noble Lord, Lord Avebury, in particular brought forward last time is the right of third parties to sue on the first occasion.

In the light of the fact that I have only just heard the arguments from the noble Baroness, Lady Buscombe, and some of the arguments from the noble Lord, Lord Avebury, I will take the matter away and discuss it further with both of them before Third Reading. I would wish the amendment to be withdrawn, but I do not wish to resist it on the same basis as last time.

Baroness Buscombe: My Lords, I am very grateful to the Minister for his response. Perhaps I have taken him a little by surprise with my arguments today. I am extremely grateful to him for the opportunity and I am sure the noble Lord, Lord Avebury, would concur that we would be grateful for that meeting and discussion. On that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 103 [Application of the electronic communications code]:

Lord Avebury moved Amendment No. 66:

    Page 98, line 41, at end insert—

"( ) In this section persons to whom the electronic communications code may be applied shall not be restricted to telecommunications operators."

The noble Lord said: My Lords, since we discussed the matter in Committee, the noble Lord, Lord Evans, has written to me, drawing attention to the consultation paper, The Granting of the Electronic Communications Code by Oftel, issued by the Director General of Telecommunications on 2nd April. In particular, he drew attention to paragraph 1.12, which states:

    "the Telecommunications Code applies only to telecommunications system providers. The Electronic Communications Code will apply to all electronic communication network providers, including broadcast transmission providers".

The noble Lord says that he does not think anything could be clearer than that. It is true that the intention is plain, but I suggest to your Lordships that words in a consultation document do not have the force of law, which I pointed out on the previous occasion. I quoted paragraphs 2.12 and 2.13 of the consultation paper and I said that the words gave encouragement to the

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owners of towers and masts, whose efforts have already led to extensive sharing of facilities, reducing the number of sites needed.

Annex A, which deals with the criteria for granting code powers, implies at paragraph 7 that broadcast transmission providers will not receive them automatically. Our amendment is modest and only embodies the sense of Annex A in the Bill, so we hope that it will commend itself to the Government. I beg to move.

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