Office of Communications Bill [Lords]

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Mr. Ian Taylor (Esher and Walton): For the Minister's benefit, I should declare a lack of interest—a lack of interest in me by Carlton. I was not invited to its lunch. There is nothing like being an ex-Minister: not only does the Mondeo stop, but lunches cease as well. I give that gentle warning so that he will ensure that he gives birth to a splendid Ofcom.

My hon. Friend the Member for Vale of York (Miss McIntosh) has excelled herself this morning. She has gone well beyond a normal probing speech and has thrown shafts of enlightenment on to the possible

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management of Ofcom. The Committee should be grateful to her for the opportunity to explore one or two questions relating to the impending management.

The opening phrase of the clause is striking. It reads:

    ''OFCOM shall, in managing their affairs'',

although, as the Minister said , there will be no affairs in one sense until the communications Bill receives Royal Assent later this year, or next year. We are in a strange world. Clearly, the paving Bill for the ultimate Ofcom envisages affairs, but we are not to know what those will be until we have the substantive Bill later in the year.

That is an intriguing dilemma. None the less, it is right that affairs, whatever they are, are properly managed according to the right principles. Perhaps a more important question is what the culture will be. Will pulling together the existing agencies be merely a bolt-together job, with each retaining departments and offices, or will the culture of Ofcom be genuinely radical, in which case the whole culture of management and attitude will change?

Much of the Committee's time has been spent on broadcasting, but communications in their broader sense are more intriguing. What we consider to be ''broadcasting'' in the context of television is merely part of the content of communications these days. Soon, one will be able to receive video streams and get audiovisual reception via mobile phones, television sets and many other platforms. That will require a different culture, rather than merely requiring people to come from a discrete agency into a new, enlarged body, Ofcom.

There have been some differences between the agencies in the past, and I am worried that they will not gel under radical thinking. There are also some technical differences. The Radiocommunications Agency is on a separate path because it comes under the Secretary of State for Trade and Industry and is a next steps agency; that means that Ministers have more direct responsibility for it than for the ITC or the Radio Authority.

I was never a Minister in the higher echelons—or any other part—of the Department for Culture, Media and Sport, so I do not know its culture but, as the Minister said, Department of Trade and Industry Ministers have always attempted to have a good relationship with that Department. For the Minister's benefit, I stress the word ''attempted.''

Some key decisions will have to be taken when forming the management to tackle Ofcom's affairs, and I hope that the Minister ensures that the challenge is met, because I would not want Ofcom to be created as a bolting-together exercise. Unless we seize the opportunity for a radical new approach, incorporating responsibilities and seeking new opportunities to stimulate competition in communications, we shall not make the right advances, and the forthcoming communications Bill will be undermined.

Mr. Simon Thomas (Ceredigion): I am trying to understand how the present regulators fit into Ofcom and how we shall ensure answerability in the intervening period before the communications Bill

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comes into force. When hon. Members table questions about the management of Ofcom in that intervening period, will the Minister reply or will their questions be passed on to Ofcom?

Mr. Taylor: That is an extremely astute question, and I suspect that no one knows the answer to it.

Dr. Howells: Let me assure the hon. Members for Esher and Walton and for Ceredigion (Mr. Thomas) that I will get lumbered with answering those questions.

Mr. Taylor: That is not the answer. The Minister may be called to account at the Dispatch Box, but agency status means that a body can engage in direct communication with Members of Parliament—unless the Minister is going to tell us that the rules have changed since I was a Minister. That is why it was such a shrewd question. The Director General of Telecommunications would not have expected me to answer for him in the House of Commons, even though I had overall responsibility for competition policy in telecommunications. That is an important distinction—[Interruption.] The Minister is nodding, although I do not know whether he is nodding at me. That interesting intervention has allowed us to clarify an important line of communication and ministerial responsibility, so I am grateful to both hon. Gentlemen.

Transparency and public awareness of the decision-making process will be of interest not only to the companies involved, but to the wider public. A point was made earlier about salaries and costs. I do not want to make a public expenditure commitment, but I hope that we understand that it is best to have the best people in the regulator for the communications industry, rather than those who have not cut it in their professional or media-driven lives. Salaries will have to be commensurate with the degree of ability that we want to attract.

It will be important to have a free flow of new talent into Ofcom, rather than simply transferring staff from the existing agencies. After all, the new body will be regulating a fast-moving industry, and technical skills will be as necessary as an understanding of regulatory skills. I am not overly concerned with the size of the board—size is not everything. I am more interested in the culture and entrepreneurial spirit.

Light-touch regulation can be defined in different ways, depending on which part of the spectrum one comes from. My understanding is that it means ensuring that regulation and competition policy gel. We never really applied the competition elements of articles 85 and 86—if I am wrong about those numbers, I am sure that everyone knows which ones I mean—of the treaty of Rome to United Kingdom competition law, because we were slightly worried about the European connotations. I lost all the arguments in favour of doing so when I was at the Department of Trade and Industry. Nevertheless, the Labour Government have introduced them.

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A stable competitive environment ensures that people are able to make investment decisions without finding that the regulator is trying to uplift them. It also ensures that the regulator, in its management approach, tries to stimulate investment instead of indulging in short-termist apparent protection of the consumer. For example, it will be interesting to see how Oftel reacts to any announcement that BT might make about ADSL pricing and rollout. That is a key question if we are to achieve some of the objectives of the broadband stakeholders group. I know that the Government are well aware that as a country we are slipping behind in meeting our broadband targets.

Those are interesting matters for the Minister to mull over. Will there be a real change in management culture?

Michael Fabricant (Lichfield): I have been following my hon. Friend's discourse with considerable interest. As he will know, I have just come from a hearing of the Select Committee on Culture, Media and Sport, which has been interviewing representatives of BT. At the interview, Sir Christopher Bland, the chairman of BT, said that he felt that Ofcom would be helped if it were responsible to just one Minister, and that the division of responsibilities between the Department of Trade and Industry was a hindrance. In light of my hon. Friend's earlier remarks that broadcasting is a part of communication and not the other way round, what is his view on the matter?

Mr. Taylor: I happen to share Sir Christopher Bland's view. It is interesting that the portfolio that I held during the previous Conservative Government, if we can throw our minds back that far, was subsequently divided into three. That created further problems. As I hinted earlier, responsibilities for key areas have always been split between the Department of Trade and Industry and what was, in my day, the Department of National Heritage. It was a mistake that music, of which I was in charge at the DTI, was subsequently transferred to the DCMS. We could have a debate on that, but you would certainly not allow it, Miss Widdecombe. However, I hope that you will allow me to take an intervention from the Minister.

Dr. Howells: I rise on a point of information. [Interruption.] However, I am told that we do not do that in Committee. I shall sit down.

Mr. Taylor: I am open-mouthed with astonishment. I thought that the Minister was going to give me some information.

Dr. Howells: The DTI still retains responsibility for intellectual property rights, and the DCMS is responsible for music. The terrible splits that occurred under the previous Administration are still here.

Mr. Taylor: As a former DTI Minister, the hon. Gentleman will know that most DTI Ministers firmly believe that they hold all intellectual property. They are also responsible for it.

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As evidenced by the intervention of my hon. Friend the Member for Lichfield (Michael Fabricant), and as I outlined in what I said about culture, in a changing world one cannot split things off and have different lines of command. Intellectual property is vital to safeguarding investment in content. Without that investment, insufficient numbers of consumers will be attracted. People will not invest in something that they feel is not secure.

It is not just a matter of ensuring stability in this country. I know that the Minister has been fighting hard through the WTO to defend intellectual property in countries that have been less than good at defending it, such as Italy, the Czech Republic, India and. until now—hopefully—China.

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