Office of Communications Bill [Lords]

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Brian White: I am fascinated by the hon. Lady's views. She is obviously aware that these matters were debated in relation to the Financial Services Authority and Ofgem, both of which work reasonably well in slightly different ways. Why does she think that her proposal is better?

Miss McIntosh: I would be delighted to speak at greater length, but I fear, Mr. Stevenson, that you would rule me out of order if I diverted to consider utilities, which are not within this Committee's remit.

Given the persuasive contribution that the National Consumer Council made to the debate on the consumer panel, and the fact that the Government's own White Paper devoted a whole chapter to it and gained the support of the Select Committee, I do not beg, but plead—seduce, even—the Minister to reverse the omission and accept the amendments.

Nick Harvey: I support the aims of the amendments, because there is a distinct role for a body of opinion representing the consumer interest. Much of our debate is founded on the assumption that we are talking only about television, but I shall give a slightly different example.

Oftel has been determined that the introduction of broadband internet in this country should happen in a perfectly competitive way. It is slavishly obsessed with the idea that it must follow a textbook model of competition theory. I sometimes feel that it would purr contentedly if only 100 people in the entire country were connected, so long as it was through five suppliers, each with 20 per cent. of the market. The consumer interest can, however, be quite different. It is the consumer interest to get far more people connected to broadband.

5.30 pm

Ofcom is being given two objectives: to look at competition issues and to look at consumer issues. Those may benefit from having an independent consumer voice, and I strongly support the hon. Lady's aim. She asks whether this is the point to achieve it, and, seeing that the Bill considers Ofcom's structures, says, ''Yes, it is.'' There is a logic to that. However, a case could equally be made that we do not desperately need a consumer panel during the interim phase when Ofcom will function as a shadow authority. The Minister may say that that can be looked at later, and I hope that he will.

Miss McIntosh: Does the hon. Gentleman agree that, such is the purpose of the Bill, we cannot discuss the policy, role or functions of the new regulator? We can rightly discuss the structure and mechanism of Ofcom. It is a gross omission not to introduce a

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consumer consultative panel in a whole chapter devoted to the role of consumer protection. We will be ruled out of order by you, Mr. Stevenson, or by whomever the Chairman is, if we raise that under the communications Bill.

Nick Harvey: It would be perfectly possible for the Government to include in the communications Bill some amendments covering the way in which Ofcom is set up, and to add a consumer voice to its organisational apparatus at that time, should they wish. However, I hope that the reason why that is omitted from this Bill is that the consumer voice does not necessarily need to be part of Ofcom.

Let us look at other regulatory apparatus set up over time. In one of the first privatisations, a separate, self-standing Gas Consumers Council was set up. Later regulators had consumer panels of the sort that the hon. Lady now proposes within the regulatory bodies, such as the customer services committee in the Office of Water Services. There was similar representation in the Office of Electricity Regulation, the old electricity regulator. In my view, those were far less effective than the Gas Consumers Council as a self-standing body. I hope that the Minister will tell us that the reason for what the hon. Lady calls an ''omission'' is that a different model will be introduced.

Dr. Howells: I can set the hon. Gentleman's mind at rest. The panel will not be a committee of Ofcom. It will not take decisions on Ofcom's behalf, but will be independent of it. The main Bill is the proper place to address that, as the hon. Gentleman said.

Nick Harvey: I am grateful to the Minister for that intervention, which is what I wanted to hear. On that basis, I shall withdraw my support for the amendments.

Michael Fabricant: My hon. Friend the Member for Vale of York has certainly seduced me, because I can support the amendments wholeheartedly. I believe that, despite the comments of the hon. Member for North Devon and the Minister, this is the right place to include such provision in the Bill.

The Government made a clear commitment in their White Paper and should be held to their promises. Some may argue, and the Minister certainly will, that this is not the place to include the provision, because this is just a shell organisation. However, he said on Thursday that the shape of Ofcom will be largely determined by the shell Ofcom. Having no consumer interest would be damaging. It is not often that one sees total agreement between the National Consumer Council and the Consumers Association. However, they both argue that the provisions should be included in the Bill.

I was perfectly happy when the Minister said to the hon. Member for North Devon that the consumer panel would operate separately from Ofcom. I do not agree when he says that it should not be included in the shell organisation. The shell organisation will have to liaise with the existing bodies that it is designed to replace. It will discuss the future structure of Ofcom with those 1,111 people. Having made a commitment in the White Paper that consumer interest should be

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taken into account, how can the Government do that if the consumer panel is not in direct communication with the shell office of communications?

I do not know whether my hon. Friend the Member for Vale of York will press the amendment to a Division. I hope that she does, unless the Minister is equally seduced by my hon. Friend's arguments. It is reasonable to expect Ofcom to establish a consumer panel of 10 members. My hon. Friend is right to say that those persons should be neither members nor employees of Ofcom. As the Minister said, the panel must be independent of Ofcom.

There is a neat symmetry in proposed paragraph 14A(2), in which my hon. Friend proposes that the appointment be for four-year terms, and that a maximum of two consecutive terms will be served. I do not want to repeat the arguments I gave this morning about the congressional amendment to the number of terms that the President of the United States can serve. I would go into considerable detail about proposed sub-paragraph (3), but I have not quite followed it.

Proposed sub-paragraph (4) states:

    The Consumer Panel shall—

    (a) research consumers' views and concerns on issues relating to OFCOM's functions.

That would create a consumer panel that is more than a passive body that receives representations from those affected by the organisations regulated by Ofcom. There I go again, using the word ''regulation'', but I fall into that trap with the thought of 1,111 people being employed by Ofcom.

My hon. Friend has proposed wisely and seductively that the panel should undertake research. Part of the reason for incorporating such a change is to establish sufficient resources for the panel to undertake the research. Will that be funded by a loan; if so, what will be the interest rate? I look forward to receiving the Minister's letter on that point. I suggest that he circulate it throughout the Committee. The consumer panel should publish its advice, conclusions and reports to Ofcom. I was going to say that the panel should lay its reports before Parliament, but that is contained in proposed sub-paragraph (6).

Dr. Howells: Has the hon. Gentleman read it fully?

Michael Fabricant: That is interesting. The Minister is right. I have been listening to the arguments and I am not a signatory to the amendment. It could be asked why I wholeheartedly support the amendment. It is because the arguments presented by my hon. Friend the Member for Vale of York were so powerful and so seductively presented. Sub-paragraph (5) says:

    The Consumer Panel shall be funded by means of grants from OFCOM.

That is interesting, particularly with regard to the way in which Ofcom itself will be funded, which sounds to me like a double whammy against ITV and the other organisations that it will regulate.

Amendment No. 27 is most important. At present, even if a consumer panel were established, Ofcom could ignore its findings. Yet amendment No. 27 says that Ofcom must ''have regard'' to its work. Does my

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hon. Friend the Member for Vale of York expect that, if Ofcom has regard, it will have an obligation to comment on the panel's work in its annual report? Therefore, although Ofcom may not accept all the panel's recommendations, it would have to say, before the House, why it does or not do so.

Miss McIntosh: I confirm that that is indeed one of the purposes of the amendment. It was the Select Committee's clearly expressed wish that Ofcom should have an opportunity to do just that.

Michael Fabricant: I am grateful to my hon. Friend for her helpful intervention. She logically argues the case for that position.

I would not be able to understand it if the Minister were to stand up now and say that he rejects the two amendments. If he were to say that, it would be a slap in the face not only for the National Consumer Council and the Consumers Association, but for all those who watch television, listen to the radio or use the internet.

Angela Watkinson: I support the two amendments. I realise that this is not the appropriate place in which to speculate on the possible composition of such a consumer panel, but I hope that the Minister will agree at this sitting to its establishment in principle. I imagine that the possible composition will be a matter of detailed discussion, because radio covers a wide spectrum, quite apart from the other elements of telecommunications and broadcasting. Therefore, I hope that the idea in principle of the panel can be accepted now and the content can be discussed at another time.

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