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Baroness Buscombe: My Lords, I thank the Minister for his response. He has worked hard today and on previous occasions to allay industry fears. The Minister said that the wording we seek to remove was introduced to give certainty on government policy. Unfortunately, it has done the opposite.

We have talked ad infinitum to the industry during each stage of the Bill. The advertising industry, in particular, but also content providers remain deeply concerned. As I said on Report, which the Minister was kind enough to repeat, this industry has proved entirely capable of successful self-regulation. We believe that it deserves our whole-hearted support, a matter referred to by the noble Lord, Lord Thomson. I am very grateful to him for his support.

This is an important issue and one that is causing great concern. It is true that we have been around the course before, but there is still uncertainty and we remain dissatisfied on the matter. Therefore, I wish to test the opinion of the House.

8 Jul 2003 : Column 176

5.40 p.m.

On Question, Whether the said amendment (No. 8) shall be agreed to?

Their Lordships divided: Contents, 158; Not-Contents, 141.

Division No. 2


Aberdare, L.
Addington, L.
Alderdice, L.
Allenby of Megiddo, V.
Alton of Liverpool, L.
Anelay of St Johns, B.
Ashcroft, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Barker, B.
Beaumont of Whitley, L.
Biffen, L.
Blaker, L.
Blatch, B.
Bowness, L.
Bradshaw, L.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Burnham, L.
Buscombe, B.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Carlisle of Bucklow, L.
Carnegy of Lour, B.
Chan, L.
Colwyn, L.
Cope of Berkeley, L.
Cox, B.
Craig of Radley, L.
Craigavon, V.
Crathorne, L.
Crickhowell, L.
Dahrendorf, L.
Dholakia, L.
Dixon-Smith, L.
Dundee, E.
Elliott of Morpeth, L.
Elton, L.
Falkland, V.
Ferrers, E.
Fowler, L.
Freeman, L.
Gardner of Parkes, B.
Glentoran, L.
Goodhart, L.
Gray of Contin, L.
Greaves, L.
Griffiths of Fforestfach, L.
Hamwee, B.
Hanham, B.
Hanningfield, L.
Harris of Richmond, B.
Henley, L.
Higgins, L.
Hodgson of Astley Abbotts, L.
Hooper, B.
Hooson, L.
Howe, E.
Howe of Aberavon, L.
Howell of Guildford, L.
Hunt of Wirral, L.
Jenkin of Roding, L.
Jopling, L.
Kimball, L.
King of Bridgwater, L.
Knight of Collingtree, B.
Laird, L.
Lamont of Lerwick, L.
Lane of Horsell, L.
Lester of Herne Hill, L.
Lindsay, E.
Linklater of Butterstone, B.
Liverpool, E.
Lucas, L.
Ludford, B.
Luke, L.
Lyell, L.
MacGregor of Pulham Market, L.
Mackie of Benshie, L.
McNally, L.
Maddock, B.
Maginnis of Drumglass, L.
Mancroft, L.
Mar and Kellie, E.
Masham of Ilton, B.
Mayhew of Twysden, L.
Methuen, L.
Michie of Gallanach, B.
Miller of Chilthorne Domer, B.
Miller of Hendon, B.
Monro of Langholm, L.
Monson, L.
Montrose, D.
Mowbray and Stourton, L.
Moynihan, L.
Murton of Lindisfarne, L.
Newby, L.
Noakes, B.
Northesk, E.
Northover, B.
Norton of Louth, L.
Oakeshott of Seagrove Bay, L.
O'Cathain, B.
Oppenheim-Barnes, B.
Perry of Walton, L.
Peyton of Yeovil, L.
Phillips of Sudbury, L.
Plummer of St. Marylebone, L.
Rawlings, B.
Razzall, L.
Reay, L.
Redesdale, L.
Renfrew of Kaimsthorn, L.
Rennard, L.
Renton, L.
Roberts of Conwy, L.
Rodgers of Quarry Bank, L.
Russell, E.
Saatchi, L.
Saltoun of Abernethy, Ly.
Sandberg, L.
Sanderson of Bowden, L.
Sandwich, E.
Scott of Needham Market, B.
Seccombe, B. [Teller]
Selborne, E.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Shutt of Greetland, L.
Skelmersdale, L.
Smith of Clifton, L.
Stewartby, L.
Stoddart of Swindon, L.
Strathclyde, L.
Swinfen, L.
Tebbit, L.
Thomas of Gwydir, L.
Thomas of Swynnerton, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Tope, L.
Tordoff, L.
Trumpington, B.
Vinson, L.
Vivian, L. [Teller]
Waddington, L.
Wakeham, L.
Wallace of Saltaire, L.
Walmsley, B.
Watson of Richmond, L.
Wilcox, B.
Williams of Crosby, B.
Windlesham, L.


Acton, L.
Ahmed, L.
Alli, L.
Ampthill, L.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Bach, L.
Barnett, L.
Bassam of Brighton, L.
Bernstein of Craigweil, L.
Bhatia, L.
Billingham, B.
Blackstone, B.
Bledisloe, V.
Borrie, L.
Bragg, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Campbell-Savours, L.
Carter, L.
Chandos, V.
Chorley, L.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Crawley, B.
Darcy de Knayth, B.
David, B.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Desai, L.
Dixon, L.
Donoughue, L.
Dormand of Easington, L.
Dubs, L.
Elder, L.
Erroll, E.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Evans of Watford, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Finlay of Llandaff, B.
Fyfe of Fairfield, L.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Golding, B.
Goldsmith, L.
Gordon of Strathblane, L.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grocott, L. [Teller]
Hardy of Wath, L.
Harrison, L.
Haskel, L.
Hayman, B.
Hogg of Cumbernauld, L.
Hollick, L.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howe of Idlicote, B.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Irvine of Lairg, L.
Jones, L.
Judd, L.
King of West Bromwich, L.
Kirkhill, L.
Layard, L.
Lea of Crondall, L.
Lipsey, L.
Lockwood, B.
Lofthouse of Pontefract, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Mallalieu, B.
Mar, C.
Marsh, L.
Mason of Barnsley, L.
Massey of Darwen, B.
Mishcon, L.
Mitchell, L.
Morgan, L.
Morris of Manchester, L.
Murray of Epping Forest, L.
Nicol, B.
O'Neill of Bengarve, B.
Orme, L.
Ouseley, L.
Palmer, L.
Parekh, L.
Patel, L.
Patel of Blackburn, L.
Paul, L.
Pendry, L.
Peston, L.
Pitkeathley, B.
Prashar, B.
Prys-Davies, L.
Puttnam, L.
Radice, L.
Ramsay of Cartvale, B.
Randall of St. Budeaux, L.
Rendell of Babergh, B.
Roll of Ipsden, L.
Rooker, L.
Sainsbury of Turville, L.
Sawyer, L.
Scotland of Asthal, B.
Sheldon, L.
Simon, V.
Smith of Gilmorehill, B.
Smith of Leigh, L.
Strange, B.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Temple-Morris, L.
Thornton, B.
Turner of Camden, B.
Walpole, L.
Warner, L.
Whitaker, B.
Whitty, L.
Williams of Elvel, L.
Williams of Mostyn, L. (Lord President of the Council)
Williamson of Horton, L.
Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

8 Jul 2003 : Column 178

5.50 p.m.

Lord Randall of St Budeaux moved Amendment No. 9:

    Page 19, leave out lines 14 to 16 and insert "is not"

The noble Lord said: My Lords, I want to make a short speech because I am dealing with the finance being presented for small to medium enterprises and the telecommunications implications.

I start by bringing in a few introduction notes. First, the current Act provides satisfactory protection and regulation for SMEs. Secondly, the SME performance is vital for economic reform in the United Kingdom.

There is deep concern that the Bill will weaken the protection of SMEs in a very serious way. Also, the proposed case is to retain for SMEs the level of standards for SMEs in the current Act.

I will speak briefly on the perception of SMEs. During the Portuguese presidency of the European Union it was decided that all 15 member states should have a key role in economic reform. The Prime Minister contributed significantly to this, which showed the vital role that SMEs have. Additionally, the DTI has a "think small first" policy and the Better Regulation Task Force. They are very important policies and show the significance of SMEs in the United Kingdom.

In addition, the Minister for SMEs, Nigel Griffiths MP, paid tribute to Britain's 3.7 million SME businesses, which he said are responsible for generating 1 trillion in our economy and employ 12 million people.

The good reputation of SMEs in the United Kingdom is now being recognised by other member states in the European Union. It is worrying that the current Act has worked well for SMEs, but the proposed legislation would undoubtedly weaken SME interests as a whole.

People are asking, why on Earth are we attempting to change the current legislation regarding SMEs when it has worked satisfactorily?

Those in the SME representative bodies are confused as to why the Government are weakening SMEs by means of their legislation when at the same

8 Jul 2003 : Column 179

time the Government have expressed support for SMEs and their important contribution to the UK economy.

I will briefly explain the main concerns that SMEs and their representative organisations have about the Bill.

First, they welcome the Bill's consumer panel, which will promote the interests of consumers. A strong consumer panel should act as an effective counterbalance in the interests of industry, particularly large players, and it should provide useful input into regulatory decision making.

As I have already implied, the proposed consumer panel, which will protect the interests of SMEs, is weaker than the current arrangements in the Act. The Bill describes the consumer panel's role in relation to domestic and small business consumers. In practice, this means that the elements in the relationship between the new consumer panel and SMEs are used in deciding whether SMEs are chosen or rejected when it comes to protection and regulation provided by the consumer panel.

This is a complicated issue but, briefly, the valuation of SMEs' acceptability by the consumer panel will take into account the following definition points. SMEs, as consumers in the market for services or facilities such as computer systems, would be acceptable provided that neither is a communications provider or a person who makes associated facilities available; or a person who is a consumer in the market in respect of an undertaking carried out by him or for which more than 10 individuals work.

The consumer panel is therefore being changed so as to protect the interests of SMEs in this country.

So what are we worried about? This part of the Bill ignores the reality that many SMEs are both consumers—in that they subscribe to a communications provider—and service providers, for example, hardware/software maintenance and retail shops.

What are the consequences? They are that small businesses with 10 or more employees are highly likely to be consumers of communications services. However, if small businesses are also part of the communications industry, they will not be represented by the very important consumer panel, which is a matter of great concern. This is so even if SMEs have legitimate concerns and interests as consumers of communications services that are totally unrelated to their own products or services.

I wonder what estimates the DTI has made about the number of exclusions of SMEs arising from the consumer panel. This is an important question for the various representative bodies not just in the UK but in the European Union. I beg to move.

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