Communications Bill

---

[back to previous text]

Mr. Lansley: I wish to speak to amendment No. 5, which stands in my name and that of the hon. Member for North Devon (Nick Harvey). I shall not detain the Committee with a lengthy discussion about regulatory impact assessments, but shall point out that in subsections (4) and (5), the form that a regulatory impact assessment will take is established in rather flexible terms. In the first instance, Ofcom would be allowed to do what was deemed appropriate. Under subsection (5), however, that would be done by general guidance. The Committee might be aware, from some other context, of the way in which that guidance has developed in recent years to encompass a risk assessment, the presentation of options, including the option to do nothing, the inclusion of a competition assessment and small business impacts. However, general Government guidance on the subject of regulatory impact assessments that is promulgated by the Cabinet Office, or some other responsible body, does not, so far as I am aware, relate to the responsibilities of individual regulators, particularly utility regulators, or to Ofcom, which is a kind of converged market regulator.

Ofcom is required to consider a pattern of general duties that includes the principle duties under clause 3(3), which it could take into account and set out, under its permissive power in subsection (4). It would not, however, necessarily do that. We have discussed the necessity of considering the general duties, particularly in the early stages, and the necessity of understanding the basis on which Ofcom would reconcile conflicts between those general duties and the benefits of transparency in the market place if it does act in that way.

The regulatory impact assessment was published alongside the draft Bill in order to show the benefits to industry of the introduction of a single regulator. That documents refers, for example, to the benefits of the reduction in capital costs through a reduction in regulatory risk, which would be derived directly from greater transparency about how the regulator does its job. If we can require Ofcom to be more transparent about its general duties, and if we find out how those duties would impact on decisions, or vice versa, and how that can be reconciled through the RIA, that will make for decision making which is better and is much more transparent. Amendment No. 5 would achieve that objective. It might otherwise be achieved by

Column Number: 137

Ofcom, but it would be a matter for regret if Ofcom did not use powers under subsection (4) to achieve it. It is better for it to be specified.

The Chairman: Before I proceed, I would say, and I intended to inform the Committee earlier about this, that the amendments largely brace the entire content of the clause. I shall not, therefore, be minded to permit a clause stand part debate. Hon. Members might wish to contribute at this point.

Mr. Simon Thomas (Ceredigion): I am interested in what the official Opposition and what the hon. Member for North Devon have explored through the amendments. Those matters are worthy of exploration. I have two points to put to the Minister. First, in moving his amendment the hon. Member for South Cambridgeshire couched his remarks in terms of a RIA. My understanding of clause 7 is that Ofcom is empowered to make wider impact assessments than simply RIAs across the whole range of their functions that would relate to the wider discussions that we have had, not just to its regulatory function.

Will the Minister say more about how the impact assessment system might work? When we discussed amendment No. 176 earlier, which related to clause 7, the Minister said that he did not want to see Ofcom delay any impact assessments by consulting with, for example, the National Assembly for Wales. These amendments seek to establish another kind of consultation through the impact assessment process with significant telecommunications users and industry interests. That is important and perhaps the Minister could take this opportunity to explain that further. If there is to be a proper impact assessment, surely there must be consultation and discussion with the parties that are involved, whether it is an industry body or another body such as the National Assembly for Wales or the Scottish Parliament and involves territorial issues. Whichever way we look at the clause, it gives considerable power to Ofcom to review the impact of its work on particular areas, both geographical and sectoral. The amendments would give us an opportunity to see how such a measure pans out in reality and how the Minister sees it working. We must ensure that Ofcom's work on an impact assessment is not done in the dark and launched on an unsuspecting public or industry. I hope that the hon. Gentleman will explain the process.

Dr. Howells: I will come to the points made by the hon. Member for Ceredigion (Mr. Thomas) in a moment, if I may. I wish first, however, to deal with amendment No. 5, tabled by the hon. Member for South Cambridgeshire and the hon. Member for North Devon. It would require Ofcom to include in any impact assessment that it carries out an assessment of the impact of the proposals on Ofcom's general duties, in particular the furthering of the interests of consumers through competition. I fear that that would invert the relationship between clauses 3 and 7.

Clause 3 imposes duties to be complied with by Ofcom in carrying out all of its functions. That includes those functions that may lead to the need for an impact assessment under clause 7. Thus, anything that Ofcom proposes to do that leads it to carry out an impact assessment is subject to its duties

Column Number: 138

under clause 3 and could not have an impact upon them. In any event, subsection (2)(c) requires Ofcom to carry out an assessment if it would have a significant impact on the general public, which includes members of the public as consumers.

The hon. Member for Ryedale (Mr. Greenway) spoke to amendment No. 52. Clause 7(2)(b) is aimed at the providers of services, facilities and apparatus within the industry. The amendment would include the users of those services within the subsection. Although we agree that it is appropriate to highlight directly those most affected by regulation, such as the users of the services and facilities likely to be affected by the implementation of any proposals, they are already covered under subsection (2)(c) and any significant impact on them will be dealt with by Ofcom accordingly.

I turn now to the interesting points raised by the hon. Member for Ceredigion. We did not refer specifically to a regulatory impact assessment. Such a term has no statutory meaning. We have tried to keep the spirit of the IRA—RIA, not IRA! That reminds me of a friend who set up a company and asked me what I thought of its title, Ian Reekie Associates. We have tried to keep the spirit of the regulatory impact assessment, while recognising that, because of the breadth of Ofcom's functions—the point that the hon. Gentleman was making—it would be unlikely that a one-size-fits-all approach would work. To delve into a different area, I certainly expect Ofcom to take a more holistic approach to the way in which it regards the impact of its decisions. Obviously, we are worried about regulatory impact assessments, in particular, and their effect on core businesses.

Guidance and standards change, and good practice evolves. For example, competition assessments are now considered an integral part of an impact assessment, which is a different view from that held 10 years ago. For those reasons, we resist the amendments.

Mr. Greenway: I am not sure that the Minister has entirely answered all our questions, but he said that it is the Government's view that business users are caught by the general public definition under subsection (2)(c). There is plenty of time for us to consult those concerned to determine whether that is satisfactory. However, in the light of what the Minister has said, I seek leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.

Clause 8

Duty to publish and meet promptness standards

3 pm

Mr. Whittingdale: I beg to move amendment No. 57, in

clause 8, page 9, line 9, after 'publish', insert ', and on an annual basis review,'.

The Chairman: With this it will be convenient to take the following: Amendment No. 6, in

clause 8, page 9, line 16, at end insert—

Column Number: 139

'(2A) In relation to market power determinations under sections 75 to 79 or for a review under section 80, OFCOM shall not set a standard for completing such a determination in excess of six months, or a standard for a review in excess of four months.'.

Amendment No. 33, in

clause 8, page 9, line 23, leave out 'have regard to' and insert 'comply with'.

Amendment No. 58, in

clause 8, page 9, line 23, leave out from 'have' to end of line and insert 'due regard to the statement for the time being in force under this section with a view to compliance with the standards contained in it unless exceptional circumstances prevent this'.

Amendment No. 59, in

clause 8, page 9, line 23, at end insert—

'(4A) It shall also be the duty of OFCOM to publish each year, as soon as reasonably practicable after the end of the previous year, a report of their performance during that year in relation to the promptness standards described in the statement under subsection (1).'.

Amendment No. 60, in

clause 8, page 9, line 24, after 'Where', insert ', following a review under subsection (1),'.

Mr. Whittingdale: As we said at the beginning of the debate on this Bill, Ofcom will be an extraordinarily powerful body. It is therefore all the more important that its regulatory functions should be subject to the appropriate checks and balances. It should be required to meet standards and to demonstrate that it is doing so. We therefore welcome clause 8, which lays down a clear requirement on Ofcom to act properly, to set out its policy, to keep the achievement of that policy under review, and to publish its success. All those things are welcome. The purpose of our amendments is to strengthen clause 8 a little further and to clarify it a little more.

The amendments split into two sets. I will first talk about amendments Nos. 57, 59 and 60, which focus on the publication of the promptness standards and the review of that publication. It is fitting that Ofcom should expect timely responses from those that it regulates. It is therefore only fair that Ofcom itself should demonstrate its promptness. Amendment No. 57 would require Ofcom to review annually its statement of promptness standards and, later, to publish regular reports on how it has performed in achieving those standards. I acknowledge that clause 8(7) requires Ofcom to include a statement in its annual report on whether it has achieved its promptness standards. Amendments Nos. 59 and 60 seek to strengthen that subsection a little to provide the reassurance that a number of industries seek.

The second set of amendments in my name and that of my hon. Friends relates to clause 8(4). At the moment, the subsection says that, in carrying out its functions, it shall be the duty of Ofcom to ''have regard to'' the statement of promptness standards. We feel that the words ''have regard to'' are not sufficient. They provide Ofcom with a let-out to fail its promptness standards. The Bill should be strengthened. Amendment No. 33 does that by removing the words ''have regard to'' and inserting

Column Number: 140

the words ''comply with''. The statement therefore becomes much stronger.

The Minister may feel that that is expecting too much. I hope that he does not, but, in case he does, we have given an alternative formulation that makes the same point but in not quite such strong terms. Amendment No. 58 is also intended to tighten up the requirement on Ofcom to comply with its promptness standards. However, it does not impose what some may regard as an impractical obligation to comply. It requires Ofcom to comply with its promptness standards but it includes the words

''unless exceptional circumstances prevent this.''

I offer the Minister those alternatives. Both are designed to achieve the same thing but, if the Minister feels that he cannot go so far as to require Ofcom to comply with its promptness standards, he may, at the very least, consider amendment No. 58, which requires it to comply unless prevented by exceptional circumstances.

 

---

Prepared 12 December 2002