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Baroness Buscombe: My Lords, I thank the Minister for his comprehensive and thorough response. These are complicated issues, but they are tremendously important. I am grateful that the noble Lord has taken the time that is necessary to respond to the concerns that I have raised today. I do not want to detain your Lordships' House. There is much to consider, and I want to re-read what the Minister said in Hansard. I extend my grateful thanks for his agreement to reconsider the scope of Ofcom's powers, which addressed our concerns expressed in Amendments No. 75 and 76. I beg leave to withdraw the amendment.

Lord Avebury: My Lords, the noble Baroness was in fact intervening before the Minister concluded. I moved the amendment and the noble Baroness was speaking to it. It is unfortunate that although the vast majority of amendments in this grouping were in the name of the noble Baroness, I must withdraw the amendment, which I will be happy to do in a moment.

The Minister made only one concession in his lengthy exposition, although that was quite useful. He acknowledged that the unfettered power to impose restrictions on the grants of RSA might need to be modified and that he might come back to noble Lords with suggestions that would replace those that the noble Baroness made in Amendments Nos. 75 and 76. That concession was useful.

The whole complicated question of RSA has not been thoroughly explored. Part of the reason for that involves the nature of the process that we undergo between successive stages of the Bill. I went into the Library to ask for copies of all of the letters that the Minister had sent to various speakers on different amendments. They threw up their hands in horror and said that no fewer than 60 such letters had been lodged in the Library and, presumably, in the Printed Paper

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Office. The problem is that the advisers helping us with the amendments do not necessarily see those letters because, unless we remember to send them out—

Lord McIntosh of Haringey: My Lords, that is the noble Lord's job.

Lord Avebury: My Lords, the noble Lord says that but he has vast resources in his department. Unfortunately, I have only me. People sometimes ring me up and say, "Could I speak to Lord Avebury's private secretary or his research assistant?", and I always have to tell them that that there is me and no one else.

With great respect, there is another solution to this matter, which is of more general interest than simply the amendment. Is there any reason why important letters such as the one that the noble Lord sent us about RSA—which was put in the Printed Paper Office and the Libraries of the two Houses—should not be put on the department's website? I am glad to see the noble Lord nodding at that suggestion. That would enable people in the industry to see what was happening in discussions between the Government and noble Lords, and it would help them to advise us more cogently between Committee and Report stages.

Lord McIntosh of Haringey: My Lords, there is no reason at all why that should not go on the website. However, I can make a suggestion that is perhaps rather unorthodox: the noble Lord could tell us who his advisers are and we will send them copies of the letters.

Lord Avebury: My Lords, that might be almost as much trouble as making copies and sending them out. We do not always know who in the industry would benefit from knowing what the noble Lord said in a lengthy five-page letter about the various aspects of RSA that we discussed in Committee. I leave that thought with the Minister.

After discussions between the noble Baroness, Lady Buscombe, and ourselves, there may be some issues to which we may wish to return at a later stage. On that understanding, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 73C not moved.]

Clause 156 [Grant of recognised spectrum access]:

[Amendments Nos. 74 and 75 not moved.]

Schedule 5 [Procedure for grants of recognised spectrum access]:

[Amendments Nos. 76 to 84 not moved.]

Clause 158 [Charges in respect of grants of recognised spectrum access]:

[Amendment No. 85 not moved.]

Clause 159 [Conversion into and from wireless telegraphy licences]:

[Amendment No. 85A not moved.]

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Clause 161 [Limitations on authorised spectrum use]:

[Amendments Nos. 86 to 91 not moved.]

Clause 165 [Spectrum trading]:

[Amendments Nos. 92 to 99 not moved.]

Clause 195 [Functions of OFCOM in relation to the BBC]:

6 p.m.

Lord Gordon of Strathblane moved Amendment No. 100:

    Page 175, line 11, leave out from "OFCOM" to end of line 15 and insert—

"(a) to approve or amend all BBC Statements of Programme Policy and to satisfy themselves that the Governors of the BBC have ensured adherence to them;
(b) to advise the Secretary of State as to whether the BBC should be permitted to introduce new television or radio services, alter the character of existing services or cease to provide them;
(c) to satisfy themselves that the BBC has followed best practice in its expenditure of funds raised by the licence fee and from other sources;
(d) to ensure that any cross promotion by the BBC does not unduly distort any market; and
(e) "

The noble Lord said: My Lords, this subject was raised in Committee, albeit at a very late hour, on 20th May. I am sure that noble Lords will be grateful to me at least for being brief on this matter tonight and for giving my argument in bullet-point form rather than rehearsing the whole issue.

If we are to have a Bill which brings together broadcasting and telecommunications, it would appear to the man on the street somewhat strange to leave out the principal player in both television and radio. For that reason, I believe that the onus is firmly on the Government to prove that it is a good idea rather than for people such as me to prove our side of the case.

My argument is, first, that having the BBC fully under Ofcom would improve the public service broadcasting regulatory role of Ofcom. It would strengthen that aspect of Ofcom against the simple competition regulation. I suspect that many noble Lords will at least agree with that point, although I suspect that they will disagree with some other points that I make.

Another point is that if the BBC does not come under Ofcom, there is the danger of a rival regulator in the key area of subjective assessment where the public service broadcasting objectives are being discharged. There is a danger of conflict and chaos, and that will strengthen the argument of people who say, "This regulation is just chaotic. Leave it to the market because they can't make up their own minds whether it is a good idea or a bad one". An independent producer could take a programme to the BBC, which the BBC screens and regards as acceptable. It might then transpire that Ofcom had ruled it unacceptable in the independent sector, or vice versa. That does not make sense.

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My other argument for putting the BBC under Ofcom is not that that would take power away from the BBC governors; it would impose a buffer authority between the BBC governors and the Secretary of State. I shall not quote it in full but noble Lords may recall that on Second Reading I quoted the somewhat disingenuous brief from the DCMS saying that this is being fair to all in that it puts everyone on the same footing, where everyone is self-regulatory, at tier 3.

As the Secretary of State pointed out, the fact is that if the independent sector does not live up to its obligations, Ofcom can intervene. But the Secretary of State went on to insist that if the BBC does not live up to its obligations, we want politicians to intervene. I do not like politicians interfering in broadcasting; I like the British tradition of buffer authorities. I believe that the BBC is better off with a buffer authority between it and a Secretary of State rather than a Secretary of State being the judge on matters of impartiality and everything else and where, frankly, he is frequently parti pris.

The third argument is: in future, how can a Secretary of State decide whether the BBC should introduce new services if he cannot be given advice from a single source on what the broadcasting ecology is looking like at that moment? If the BBC remains outside Ofcom, presumably it will have to turn to the DCMS for advice on the BBC and to Ofcom for advice on everything else. Advice is required from a single source looking at the whole broadcasting landscape.

I address my third point, in particular, to my noble friend Lord Sheldon, who spoke eloquently and passionately about the role of the BBC governors. I concede that there have been great governors of the BBC. I simply remind them that they are human beings appointed by politicians, as is the board of Ofcom. If politicians can get the appointment of governors of the BBC right, the assumption must be that they will get right the appointment of the board of Ofcom.

Lord Sheldon: My Lords, which would my noble friend sooner be—a governor of the BBC or on the board of Ofcom? I do not believe there is any doubt that any Member of this House would say that being a governor is a great position to hold, with its long tradition and its great certainties during the long period that the post is occupied. Does it compare with being on the board of Ofcom?

Lord Gordon of Strathblane: My Lords, once Ofcom is up and running, I would argue that the answer is yes. But, in the light of his remarks in Committee, I should have expected my noble friend to make that point, and I understand where he is coming from on it.

However, I think so highly of the BBC governors that I would give them the whole thing. Why bother with Ofcom? Let us simply put the whole lot under the BBC governors. I suspect that noble Lords will say, "Hold on, but they run the BBC. They would be partial". That is not the theory. The theory is that they are not partial to the BBC but are wholly independent public regulators. It is precisely that duality of role that, in my view, creates an unresolvable conflict for a

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governor of the BBC—one which has been addressed in White Paper after White Paper. How can the top board of a company somehow be independent of that company and stand back in the public interest? I shall not stand back too far in case I topple over.

It is very easy to convince oneself, as politicians do regularly, to do the popular thing before an election on the basis that only if one is in power will one do good. Similarly, the governors of the BBC will decide to make more popular programmes, because as long as they have the licence fee they can continue to provide public service broadcasting. Meanwhile, they go further down the slippery slope, competing against what is—regrettably—increasingly tawdry competition from more and more television channels; and standards continue to fall.

In passing, if the BBC governors are not the top board of the corporation, who are its non-executive directors? What would Mr Higgs have to say about a body with a turnover of 2.5 billion a year, with no non-executive directors at the top? Of course the BBC governors are the top board of the BBC. However, it is very difficult to exercise both roles at once.

The arguments in favour of putting the BBC wholly under Ofcom are conclusive. If we do not do that, we will subject ourselves to two lots of debates each time: parallel debates about Ofcom and the BBC. If noble Lords want to subject themselves to two lots of debates rather than one, by all means keep the BBC outside and presumably we will have these arguments about the BBC as little as one year ahead of the same arguments about Ofcom. It is much more sensible, and much better for both organisations to have the BBC inside from the beginning.

6.7 p.m.

Lord Lipsey: My Lords, although I see the force of the arguments made by my noble friend Lord Gordon, which we discussed for many hours during the Davis inquiry, I think that this is really best considered at Charter renewal, when we can look at the whole spectrum of considerations on the BBC, rather than taken in isolation on this occasion.

My noble friend wants one giant leap, but I want one nudge before then. It is set out in Amendment No. 112; namely that Ofcom should have powers to follow up the BBC's fair trading rules—not the rules themselves, but their implementation in practice.

I moved that amendment in Committee. Indeed, when the first Marshalled List came out, my heart gave a mighty leap, because I found that conjoined with my name was that of the noble Lord, Lord McNally, who when I first moved this had been rather critical of it. However, his name has since disappeared and been replaced by a name of equal quality—that of the noble Baroness, Lady Buscombe. I have not got the ally—indeed, the convert—I originally had, but the argument is as powerful as it ever was.

The basic divide—and why this should be done now—is as to when the BBC is under Ofcom and when it is not; namely, whether it is engaging in commercial or public service activities. Public service is outwith Ofcom, in the province of the governors; commercial activity falls

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under Ofcom's competition responsibilities. Therefore, it seems perfectly sensible that when the fair trading obligations are to be monitored, Ofcom should play a powerful role. I said that at Committee stage.

The amendment is down again today because the noble Lord, Lord McNally, made a much better job of finding problems with it than did the Minister, who gave what I can only describe as a perfunctory and ill-informed reply. We have a different Minister this evening, so I hope for better.

The Minister then referred to the Whish report, not knowing that Professor Whish was actually debarred by his terms of reference from considering what this amendment covers, and what Ministers were exciting him in support of. The Government seemed blissfully happy to allow the BBC to act as referee in the matter, when it is also a player on the field—a principle which rarely applies with great effect in public life.

I hope that the Minister will expand on this. There is an area of doubt in my mind—and for all I know many other noble Lords' minds—and in the minds of those who have to run Ofcom. How strong and far-reaching are the powers of Ofcom with regard to competition law? If they are strong and far-reaching, the amendment may be otiose. It follows from those powers that if in practice the BBC breaks its trading obligations Ofcom can intervene. However, if, as others think, the powers are somewhat weak, then it is not so placed and we are left with the Government refereeing and playing simultaneously—and these days the BBC plays pretty hard and one needs, therefore, a strong referee to keep it under control.

It is a clear and simple case. I hope that we receive a strong and more considered ministerial response than previously; otherwise the temptation to divide the House will be powerful if not irresistible.

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