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Lord Thomson of Monifieth: I would like to support the comments of the noble Baroness, especially the part about the concerns of the Advertising Association with the regulatory framework that the Bill is creating. I shall expand a little on the points that she made in the second half of her remarks.

I speak with a degree of expertise in this matter, if I may say so immodestly, since in a previous life I was chairman of the Advertising Standards Authority, regulating print advertising and associated things, before going on to be chairman of the Independent Broadcasting Authority, which regulated advertising on television. The measures in the Bill, and the creation of Ofcom in particular, show the need for a revised regulatory structure that prevents the kind of overlap to which the noble Baroness referred.

At yesterday's annual luncheon of the Advertising Association, where the noble Baroness was a fellow guest, the new chairman of Ofcom sought to describe that wider framework that we seek. It would be helpful to have the Government's reaction to those ideas. My own experience—which is interesting, given that I come from a background of a working politician—in general led me to believe that self-regulation is much better than statutory regulation, all things being equal. The trouble is that things are rarely totally equal, and this matter is a prize example of the overlap that can occur.

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In yesterday's interesting address, the noble Lord, Lord Currie, spoke about the very useful task force that he helped to set up with other interested parties, and referred to a system that he called "co-regulation". That co-regulation existed, in a sense, in the situation to which the noble Baroness referred, in the relationship that Oftel had with ICSTIS in the area of premium rate telecommunications. However, the matter should be seen in a wider context, and I hope that by the time we reach Report stage we shall have a clearer picture of a wider system of regulation in this field.

From the remarks made by the noble Lord, Lord Currie, I understand that the task force has made some eminently sensible institutional proposals for such a scheme of co-regulation between the Advertising Standards Authority and the new arrangements set up for Ofcom. I am happy to see in his place my distinguished successor but two as chairman of ASA, the noble Lord, Lord Borrie. The proposals that are now under active discussion build on the widely acknowledged strengths and reputation of the ASA, but in a way that keeps the broadcast scheme wholly separate from the ASA's traditional role and arrangements in relation to non-broadcast advertising. Of course, that is a necessary separation to achieve.

It is hoped that the further details of those arrangements will be revealed shortly, as a result of further consultations during the summer, according to the noble Lord, Lord Currie.

I confine my final remarks to saying that we have had before us for a couple of years the provisions of this major reorganisation of the world of telecommunications and broadcasting. In a sense, this is the third legislative discussion of these matters, so it is strange that it is at the tail-end of this process and in your Lordships' House that we have to press the Government for some clarity. I hope that we shall hear from the Government on this amendment, which addresses the question of premium rate telephone calls but is the tip of a much wider issue. Perhaps they will tell us how they propose to respond to the proposals put forward by the noble Lord, Lord Currie.

4.30 p.m.

Lord Baker of Dorking: I express support for the general tenor of the regulation envisaged in these clauses, and the regulation that we debated earlier—the general powers of Ofcom—as they are all interrelated. I should declare an interest in that I am chairman of an ISP that provides Internet services to small and medium-sized companies, and of a company that provides mobile services, some of whose revenue is drawn from premium rate services.

Because I have experience of those industries, I am convinced that the regulation envisaged in the Bill is necessary and appropriate. I bring a certain amount of experience to this debate. It fell to me in the 1980s to introduce the original legislation establishing Oftel, and to privatise BT and Cable & Wireless. It was the first time that we had had to grapple with the concept of the regulation of a major industry.

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I think it is generally recognised that Oftel was the most successful of all the regulators of privatised utilities. It was lucky in having three outstanding directors-general: Professor Carlsberg, Donald Cruickshank and David Edmonds. They created the possibility of growth in a very competitive and huge industry. The services referred to in Clauses 29 to 145 represent billions of pounds a year. In the clauses on premium rate the figure is 1 billion a year. It is rather ironic—and it rather spells the fate of Ofcom—that these clauses are being taken at full gallop. I was present on Thursday afternoon to make a contribution; I slipped out to do a half-hour radio interview, and when I returned 30 clauses had been added to the Bill. There are the inevitable sexy debates on television, radio and newspaper mergers—for all of which I once had ministerial responsibility, and I know how sexy they are—but the clauses that we are now debating affect the economic well-being of hundreds of thousands, if not millions, of people in our country. So I strongly support what the Government are doing.

The clauses on premium rate services were not in the original Act in 1984, because premium rate services were not then offered. They were not offered until the 1990s. That indicates the strength of the developing nature of this market. I only hope that the Government have built in to their provision some flexibility in terms of definition.

The next group of amendments seek to amend the Bill before it becomes a statute because some loopholes have been discovered. Other loopholes will emerge in the course of the next five or 10 years as new services come about. I only hope that somewhere in the Bill there is a mechanism for adapting to that without having to change legislation on the face of the Bill.

I turn specifically to the responsibilities of ICSTIS. Until I was involved in this industry I did not know very much about ICSTIS—it was not a regulatory body which I had established or for which I was responsible. It is a very effective body. As the noble Lord, Lord Thomson, said, the most effective regulation is self-regulation. I certainly support his observation from considerable experience. ICSTIS is a very good example of an industry that is regulating itself. The point was made previously by the noble Lord, Lord McIntosh, that quite a lot of the regulatory powers for which Ofcom is the umbrella will be exercised by bodies funded by the industries that they will regulate. That is a very effective way of operating.

ICSTIS has considerable powers. It deals with some rogue companies, where the consumer can be exploited, particularly the young consumer. It has quite severe powers. It can stop such a company operating; or it can issue a fine of up to 50,000. When I inquired of ICSTIS what was the statutory backing for the fines, I discovered that there was none—so here was a body issuing fines with no statutory backing. I suppose that it has been given some statutory backing in the Bill.

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However, I commend its method of operation very strongly indeed. I should have thought that the Press Complaints Commission—another body of self-regulation—could effectively look at ICSTIS. ICSTIS not only has "bark", it has "bite"; the Press Complaints Commission has a great deal of bark, but not very much bite. This is not the occasion on which to debate this matter—there will be an opportunity later in the Bill—but I should have thought that those of us who would like to see a strengthened Press Complaints Commission could look at the practices that have been developed by ICSTIS.

I am very glad, therefore, that under these four clauses in the Bill the operations of ICSTIS have been brought within the umbrella of Ofcom. I commend to the Committee the effectiveness with which I have seen ICSTIS operating. It is a very effective regulator, and is a good example of how the industry has to develop. I am sure that the Minister will be able to give the assurances sought by my noble friend on the Front Bench. There may be some degree of overlap with the ASA. I was not particularly aware of that. The Minister will probably say that ICSTIS has powers to affect not only the nature of advertisements but the way in which companies operate. So I am generally supportive of what the Government are doing in these matters.

Lord Borrie: It is extremely interesting to hear both the general and the particular remarks of the noble Lord, Lord Baker of Dorking. I do not know whether Ministers will reflect on the general attitude he has expressed to chunks of the Bill going through unamended and without too much discussion. Ministers have said on several occasions in Committee that, if we continue in the way in which we dealt with Clause 3, we shall be here for an incredible length of time. But the noble Lord, Lord Baker, made some useful points.

The noble Lord commended the way in which ICSTIS operates, under its distinguished chairman, Sir Peter North—principal of Jesus College, Oxford, and a former vice-chancellor of that university. He also commended the way in which the Government propose in these clauses to bring operations under the umbrella of Ofcom. I heartily agree.

In my capacity as chairman of the Advertising Standards Authority I was grateful to the noble Baroness, Lady Buscombe, and the noble Lord, Lord Thomson, for their comments—particularly when the noble Baroness mentioned that the Advertising Standards Authority had published an adjudication early in the year banning a clearly irresponsible advertisement that had appeared in the Daily Sport advising customers to call a premium rate number in order to make a purchase of airguns.

The ASA has some sanctions available to it which are not available to ICSTIS, and vice versa. But in that instance the sanction that the ASA had available—which was to issue a so-called "ad alert" to the media regarding the carrying of advertisements likely to be contrary to the code—was immediately effective and useful.

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The noble Baroness, Lady Buscombe, and the noble Lord, Lord Thomson of Monifieth, expressed some concern about regulatory overlap, to use shorthand. I do not feel all that bothered about it. If two bodies have a power to some extent over the same field—in this case misleading or irresponsible advertisements—and have a range of sanctions and powers as self-regulatory bodies, does it matter a great deal if there is overlap? I suggest that it would matter a lot more if there were a hole or a gap between the self-regulatory bodies. The fact that there is overlap means that the publisher of an advertisement such as the one I mentioned relating to the use of airguns, obtainable through the use of premium rate services, comes under the aegis of two sets of sanctions. That is certainly better than having none. If it is too difficult to organise precisely where the lines should be drawn, the present position does not seem too bad.

I strongly agree with the later points made by the noble Lord, Lord Thomson of Monifieth—particularly drawing on the carefully thought-out speech made by the noble Lord, Lord Currie of Marylebone, the chairman of Ofcom, at the Advertising Association annual lunch yesterday, which I attended. It was in immediate reaction to the Advertising Association's task force, which had proposed a self-regulatory body to deal with broadcast advertising, modelled on the system that operates for non-broadcast advertising. It is a very promising indication by Ofcom that it will use the powers that we have discussed in Clause 3 to support and promote self-regulatory systems so long as they are effective and financially viable. That was a very useful comment.

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