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Mr. Simon Thomas (Ceredigion): The hon. Gentleman is right about the overriding duty of the other regulators to promote competition. Does he accept that the other regulators, such as Ofgem, have strong, independent consumer watchdogs, whereas Ofcom will not? Ofcom will appoint its own consumer watchdog in the consumer panel. Surely that is a material difference that means that, in the Bill, we cannot put commercial or competition duties above all else. The Bill will have to recognise the needs of citizens and consumers. Mr. Lansley: I do not concur with the hon. Gentleman. If, in order to ensure competition, it were necessary to have a powerful consumer watchdog, we should have such a watchdog. Energywatch and Postwatch are doing their jobs well—especially Postwatch, which deals with what is, in essence, a monopoly. However, if one seeks to promote competition, one should accept that the interests of consumers are integral to the nature of the competitive market. It does not necessarily follow that a consumer watchdog is needed to ensure effective competition. The retail industry does not require a lot of consumer watchdog activity in order to be effective. The National Consumer Council and the Consumers Association operate at the margins, but they are not integral to the market. The consumer panel will not necessarily be toothless. We will discuss that later. We may be able to make the consumer panel a little more independent of Ofcom, which would help. However, such considerations should not change the general duties that go in the Bill. That would be the tail wagging the dog. I hope that I have explained amendment No. 1. However, I want to explain why it takes a particular form, which differs from that of similar amendments. Amendment No. 195 was tabled by the hon. Member for Milton Keynes, North-East (Brian White). I agree that it is important that Ofcom's principal duty should be set out as having different characteristics from all the other duties, and that Ofcom should have regard to that principal duty in all its work. However, amendment No. 195 contains two phrases that make it different from amendment No. 1. It refers to ''the long-term interests'' of consumers. The Joint Committee sought the inclusion of a reference to the Column Number: 5 desirability of encouraging investment and innovation, which the Government subsequently inserted into clause 3(3). However, the ''long-term interests'' of consumers are distinct from the interests of consumers generally. It seems inherently dangerous to use the qualification ''long-term'' with ''citizens'', as it encourages the regulator to think that it has a greater knowledge of the interests of consumers than that which would be disclosed through the operations of markets. I did not use the words ''long-term'', although the Joint Committee did.Michael Fabricant (Lichfield): Is there not a further danger that the use of the phrase ''long-term'' will enable Ofcom to put off more urgent short-term decisions? Mr. Lansley: That risk is run; my hon. Friend is right. One could put off decisions on the basis that the long-term interests of consumers might be better served by not facing up to difficulties straight away. However, that is a difficult matter. We could spend a great deal of time examining particular examples in which that might be the case. The best example is that of energy markets and the new electricity trading arrangements, which are effective in delivering short-term benefits to consumers. The question of long-term investment arises, and it is being addressed in the review of NETA. We do not need to go far down that path. Past experience of regulation has disclosed that the encouraging of investment and innovation is what is most likely to be in the long-term interests of consumers. That would not be reflected if no regard was paid to long-term interests. If that encouragement is there, it seems to me that the need for ''long-term'' is met. Michael Fabricant: My hon. Friend mentioned Ofgem. There is a contradiction about his amendment that makes me uncomfortable. With Ofgem, there could be an infinite number of electricity suppliers, although they would use a common network. With current technology, there cannot be an infinite number of broadcasters in a given area because of the restriction on spectrum. That might change in future, but as I have said, it applies now. For that reason, does my hon. Friend not think that there is an imbalance in the fact that Ofcom cannot be like Ofgem at the moment? Mr. Lansley: As my hon. Friend demonstrates, it would be dangerous for us to regard the two regulators as being parallel to one another. They deal with different markets, technologies and regulatory structures. Clearly, Ofcom will start off with even less competition than Ofgem had at the outset. However, as has been suggested, Ofgem has the ability to move towards the abandonment of price controls and the imposition of conditions. That, in principle, is the direction in which Ofcom should go. I will not disguise my belief that that is where it should direct its efforts. That is true in relation to broadcasters as much as to anyone else. If the interests of consumers in relation to broadcasting cannot be protected by competition, other protection is available under the public service Column Number: 6 remits for channels 3, 4 and 5 in particular. That remit provides protection without necessarily interfering too much with competition or ownership. On digital provision, I think that we are not far from having the multiplicity of suppliers to which my hon. Friend referred in relation to electricity. That was why I did not include a reference to the ''long-term'' interests of consumers.We will start dancing on the head of a pin if we are not careful, but there is also the matter of the use of the word ''appropriate'' rather than ''possible''. Amendment No. 1 uses the phrase:
I do not think that the purpose of Ofcom is to pursue competition wherever that is possible, but rather when it makes sense to do so. I am always distrustful of the word ''appropriate'', because it is an official way of getting out of defining what is really meant. Given that we are dealing with relevant market and the phrase ''where appropriate'', the matter of when to pursue competition is a judgment that Ofcom will have to make. However, if there is a duty to promote competition ''wherever possible'', there is a risk that the judge standing at the shoulder of Ofcom will entertain more applications to review Ofcom's decisions than ought to take off. There needs to be that degree of discretion. If we cannot trust Ofcom to be a pro-competition regulator, the Bill will not work. We must give Ofcom the tools to do the job. Its primary duty is to promote competition. If that is not clearly stated, the opportunities for judicial review to constrain the pressure for promoting competition by reference to other duties would make it difficult for Ofcom to deliver. However, if we were to say that competition should be promoted ''wherever possible'', that might constrain Ofcom sometimes to go further than would be desirable.
4.45 pmI turn to proposed subsection (1A)(b). I have borrowed much of the Government's phraseology. I agree with them that Ofcom's duties should be
However, I have added,
It is interesting to read the Government's documentation about the purposes of the legislation because their references to broadcasting often highlight the desirability of securing a plurality of broadcasting services. If that is to be one of the principal objectives of the legislation, why do we include ''plurality'' here? In this context, does it mean simply a variety of services to meet people's tastes and interests, or does it mean something more than that? The following point came through forcefully during the course of the Joint Committee's discussions: the interests of the public as consumers as they are disclosed by their activity in markets—by what they are willing to buy and what is commercially sustainable—are substantively different from the Column Number: 7 interests of the public as citizens. To some extent, the difference between those interests highlights the whole point of public service broadcasting—serving the interests of the public as citizens is what that is all about—and that point must be reflected in the definition of the general duties of Ofcom.As we will discover when we address later parts of the legislation, the desirability of there being a plurality of views in the media in general currently applies to newspaper mergers, so it is not confined to public service broadcasters. If Committee members were to agree with me in subsequent discussions, it would also relate to broadcasting mergers—and not only to public service broadcasting. If plurality is a basic principle—if the interests of the citizen should be served by airing a broader range of views than they would simply buy on their own account—then that should be stated as one of Ofcom's general duties with regard to broadcasting. That is what we are discussing. This subsection is, in effect, the starting point for the definition of the general duties of Ofcom in relation to broadcasting—except in relation to promoting competition. If we all agree—as I suspect we will—during the course of our debates on this legislation that, in the foreseeable future, we should not get to the point where the whole of broadcasting is essentially determined only by the operation of competition because there is an additional aspect of broadcasting—public service broadcasting—that is unlikely to change given the nature of our democratic society, then that must be reflected in the definition of Ofcom's general duties. That is why I have added those words to subsection (b), and taken it to that further point.
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| ©Parliamentary copyright 2002 | Prepared 10 December 2002 |
