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Lord Gordon of Strathblane moved Amendment No. 183:


On Question, amendment agreed to.

Clause 330 [Promotion of equal opportunities and training]:

[Amendment No. 184 not moved.]

Lord Davies of Oldham moved Amendment No. 184A:


    Page 290, line 27, at end insert—


"( ) The conditions imposed by virtue of this section may include provision for treating obligations to make the arrangements mentioned in subsections (1) to (3), or to do anything mentioned in subsection (4), as discharged where a member of a group of companies to which the licence holder belongs—
(a) has made the required arrangements in relation to employment with the licence holder; or
(b) has done anything required by subsection (4) in relation to those arrangements."

The noble Lord said: My Lords, in moving Amendment No. 184A, I wish to speak also to the other government amendments with which it is grouped.

This group of government amendments fulfils the commitment that we gave in Committee to consider Amendment No. 271A tabled by the noble Lord, Lord Crickhowell. The aim of that amendment was to ensure that the equal opportunities and training requirements set out in Clause 330 apply to companies which, while individually small, are part of a much larger group of companies.

Clause 330 requires Ofcom to impose conditions in Broadcasting Act licences for services to which the clause applies that oblige licence holders to make arrangements for promoting sex and race equality and fair treatment for disabled people and for training.

In response to an amendment tabled by the noble Lord, Lord Addington, we announced last week that we would change the current references to fair treatment for disabled people to the more up-to-date term of "equalisation of opportunities".

2 Jul 2003 : Column 900

The conditions in Clause 330 currently apply to a service if (a) the licence holder employs more than the threshold number of people—currently 20—in connection with providing his service and (b) in any year the service is provided for more than the threshold number of days, which is currently 31.

Both those threshold arrangements are intended to avoid imposing disproportionate burdens on small companies. However, there is a potential loophole in that, as drafted, the requirements of Clause 330 would not apply to companies that, while individually small, were part of a much larger group of companies. We propose to address that issue by allowing for the numbers of staff employed across a group of companies or a range of services to be aggregated. In particular, as well as being satisfied when a single licence holder employs more than 20 staff in connection with broadcasting services, the threshold will also be met if the licence holder is in a group of companies that together employ more than 20 staff in that connection. That is achieved principally by Amendment No. 184D, by the new definition of "licensed service" in Amendment No. 184E and by the definition of "a group of companies" in Amendment No. 184G.

Two companies are in a group if, for instance, one controls the other or both are controlled by a third company. The definition of "control" set out in Part 1 of Schedule 2 to the Broadcasting Act 1990 applies for this purpose. However, it is staff employed only in connection with broadcasting who are counted. Employees who are not engaged in broadcasting activities are not counted.

These amendments also cater for the case of a single company that provides more than one service. All staff employed in connection with any of the services are counted. I beg to move.

4.15 p.m.

Lord Crickhowell: My Lords, in Committee I tabled an amendment which attempted to close the particular loophole to which the Minister referred. I am very grateful to him for meeting the commitment made on that occasion that suitable government amendments would be tabled. I am wholly satisfied with what has been done.

On Question, amendment agreed to.

Lord Davies of Oldham moved Amendments Nos. 184B to 184G:


    Page 290, line 31, leave out from beginning to "employs" in line 34 and insert—


"(b) the requirements of both subsections (6) and (6A) are satisfied in the case of that service.
(6) The requirements of this subsection are satisfied in the case of a service provided by a person if—
(a) that person"
Page 290, line 35, leave out "persons" and insert "individuals"


    Page 290, line 36, leave out from "of" to "on" in line 38 and insert "licensed services; or

2 Jul 2003 : Column 901


(b) the threshold number is exceeded by the aggregate number of individuals who are, or are likely to be, employed in that connection by members of a group of companies comprising that person and one or more other bodies corporate.
(6A) The requirements of this subsection are satisfied in the case of a service if the licence authorising the provision of that service authorises either that service or another service authorised by that licence to be provided"
Page 290, line 43, at end insert—

""licensed service", in relation to an employee or likely employee of a person, means a service the provision of which—


(a) by that person, or
(b) by a body corporate which is a member of the same group of companies as that person, is authorised by a Broadcasting Act licence;"
Page 291, line 1, leave out "persons" and insert "individuals"


    Page 291, line 2, at end insert—


"(7A) For the purposes of this section a person is a member of a group of companies to which a person licensed to provide a service belongs if, and only if, both of them are bodies corporate and either—
(a) one of them is controlled by the other; or
(b) both of them are controlled by the same person.
(7B) In subsection (7A) "controlled" has the same meaning as in Part 1 of Schedule 2 to the 1990 Act."

The noble Lord said: My Lords, I beg to move Amendments Nos. 184B to 184G en bloc.

On Question, amendments agreed to.

Schedule 12 [Corresponding obligations of the BBC and Welsh Authority]:

[Amendments Nos. 185 and 186 had been withdrawn from the Marshalled List.]

Lord McIntosh of Haringey moved Amendment No. 187:


    Page 402, line 43, leave out from "under" to end of line 45 and insert "the BBC Charter and Agreement"

On Question, amendment agreed to.

[Amendment No. 188 not moved.]

Schedule 13 [Financial penalties under the Broadcasting Acts]:

Lord McIntosh of Haringey moved Amendment No. 188A:


    Page 424, line 14, after second "to" insert "television multiplex services and general"

The noble Lord said: My Lords, in moving Amendment No. 188A, I wish to speak also to Amendments Nos. 188B to 188H, 213A, 213B, 216A to 216D and 241C. As we know, digital radio is becoming more and more popular but it is also available on digital television, although I cannot seem to get it on my freeserve.

In licensing terms this means that a television multiplex service or general multiplex can carry digital radio services. That is provided for in the Bill. Some consequential amendments were necessary to ensure that the penalties for contraventions relating to digital radio programmes services take into account the services carried on a general multiplex or on a TV multiplex as well as those carried on a national radio

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multiplex. Some of the amendments necessary to achieve that are already contained in the Bill but it has been brought to our attention that others need to be made, and these amendments complete the picture. They also make minor corrections to amendments in Schedules 13 to 15 of the Bill that for television already achieve the necessary extension of the basis on which penalties are calculated. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 188B to 188H:


    Page 424, line 38, after second "to" insert "television multiplex services and general"


    Page 426, line 32, leave out "national radio multiplex revenue" and insert "relevant multiplex services"


    Page 426, line 41, leave out from "revenue" to "is" in line 44 and insert—


"(a) attributable to a person in relation to national radio multiplex services,"
Page 427, line 1, leave out "in any other case" and insert "attributable to a person in relation to television multiplex services or general multiplex services"


    Page 427, line 19, leave out "national radio multiplex revenue" and insert "relevant multiplex services"


    Page 427, line 31, leave out from "revenue" to "is" in line 34 and insert—


"(a) attributable to a person in relation to national radio multiplex services,"
Page 427, line 36, leave out "in any other case" and insert "attributable to a person in relation to general multiplex services"

On Question, amendments agreed to.

Lord McIntosh of Haringey moved Amendment No. 188J:


    After Clause 339, insert the following new clause—


"STATEMENT OF CHARGING PRINCIPLES
(1) OFCOM are not to fix a tariff under section 4(3) or 87(3) of the 1990 Act or under section 4(3) or 43(3) of the 1996 Act (tariffs for fees payable under Broadcasting Act licences for recovering OFCOM's costs) unless—
(a) at the time they do so, there is in force a statement of the principles that OFCOM are proposing to apply in fixing that tariff; and
(b) the tariff is fixed in accordance with those principles.
(2) Those principles must be such as appear to OFCOM to be likely to secure, on the basis of such estimates of the likely costs that it is practicable for them to make—
(a) that the aggregate amount of the Broadcasting Act licence fees that are required to be paid to OFCOM during a financial year is sufficient to enable them to meet, but does not exceed, the cost to them of the carrying out during that year of their functions relating to the regulation of broadcasting;
(b) that the requirement imposed by virtue of paragraph (a) is satisfied by the application to such fees of tariffs that are justifiable and proportionate to the matters in respect of which they are imposed; and
(c) that the relationship between meeting the cost of carrying out those functions and the tariffs applied to such fees is transparent.
(3) Before making or revising a statement of principles OFCOM must consult such of the persons who, in OFCOM's opinion, are likely to be affected by those principles as they think fit.

2 Jul 2003 : Column 903


(4) The making or revision of a statement of principles for the purposes of this section has to be by the publication of the statement, or revised statement, in such manner as OFCOM consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by it.
(5) As soon as reasonably practicable after the end of each financial year, OFCOM must publish a statement setting out, for that year—
(a) the aggregate amount received by them during that year in respect of Broadcasting Act licence fees required to be paid during that year;
(b) the aggregate amount outstanding and likely to be paid or recovered in respect of Broadcasting Act licence fees that are required to be so paid; and
(c) the cost to OFCOM of the carrying out during that year of their functions relating to the regulation of broadcasting.
(6) Any deficit or surplus shown (after applying this subsection for all previous years) by a statement under subsection (5) shall be—
(a) carried forward; and
(b) taken into account in determining what is required to satisfy the requirement imposed by virtue of subsection (2)(a) in relation to the following year.
(7) References in this section to OFCOM's functions relating to the regulation of broadcasting do not include references to any of their functions in relation to the BBC or the Welsh Authority.
(8) In this section— "Broadcasting Act licence fee" means a fee required to be paid to OFCOM in pursuance of conditions included in a Broadcasting Act licence under any of the following provisions—
(a) section 4(1)(b) or 87(1)(c) of the 1990 Act; or
(b) section 4(1)(b) or 43(1)(c) of the 1996 Act; "financial year" means a period of twelve months ending with 31st March."

The noble Lord said: My Lords, in moving Amendment No. 188J, I wish to speak also to government Amendments Nos. 210A, 210B, 213ZA, 216ZA, 226B, 238ZA, 238ZB, 241A and 241B.

During the consideration of the Bill in Committee, a number of amendments were tabled regarding the funding of Ofcom. One of those amendments, tabled by the noble Lords, Lord Crickhowell, Lord Puttnam, Lord McNally and Lord Hussey of North Bradley, was designed to provide that administrative charges set under the broadcasting legislation should be set in accordance with clear principles and relate only to functions related to broadcasting.

In responding to that amendment I made clear that it has been our general approach that the costs of sectoral regulation should be borne by those who are regulated and I indicated that the Government would consider tabling provisions which would introduce a statement of charging principles for broadcasting comparable to that for networks and services. Therefore, I should now like to speak to the amendments which are designed to give effect to such a statement of principles.

First, Amendment No. 188J will require Ofcom to have in place a statement of the principles which it proposes to apply in fixing tariffs for licence fees payable under the Broadcasting Acts 1990 and 1996 and for any such tariff to be fixed in accordance with those principles.

2 Jul 2003 : Column 904

Those principles must be likely to secure that the aggregate amount of Broadcasting Act licence fees required to be paid to Ofcom in any financial year is sufficient to enable it to meet, but does not exceed, the costs to Ofcom of carrying out its functions in relation to the regulation of broadcasting during that year. The tariffs which apply to such fees must be justifiable and proportionate to the matters to which they are imposed and there should be a transparent relationship between the costs of carrying out those functions and the tariffs applied to such fees.

Subsections (3) and (4) of the new clause would require that, before making or revising any statement of principles, Ofcom consults anyone it considers likely to be affected by it. Ofcom would also have to publish any statement of principles or revisions to it in such a way as to bring it to the attention of anyone likely to be affected.

In addition, under subsections (5) and (6) of the proposed new clause, Ofcom will have to publish a statement after the end of each financial year setting out the aggregate amount of Broadcasting Act licence fees received by it that year, the aggregate amount of Broadcasting Act licence fees remaining outstanding and likely to be paid or recovered, and the cost to Ofcom of carrying out its functions in relation to broadcasting during that year. Any deficit or surplus would then be carried forward by Ofcom and taken into account in determining the amount required in the following year.

As it is not the intention that the costs associated with Ofcom's regulation of the BBC and the Welsh Authority should be borne by other broadcasters, subsection (7) of the proposed new clause specifically excludes Ofcom's functions in relation to the regulation of the BBC and the Welsh Authority. Of course, there are provisions in Clauses 195(4) and 204(6) that enable Ofcom to charge the BBC and Welsh Authority for the costs of carrying out their functions associated with their regulation. The proposed new clause will ensure that broadcasters have a similar comfort to that given to the providers of networks and services as a result of the electronic communications directives—that the costs that they will be charged by Ofcom will be only in relation to the regulation of their particular sector.

Of course, there was concern about general issues on the funding of Ofcom. The noble Lord, Lord Puttnam, raised issues on that about which he sought assurance. Although I do not think that they need to be addressed through provisions in the Bill, I want to respond to the thrust of his points.

The first related to the general costs of Ofcom, for which it will not be able to make a charge on the providers of networks and services or where such costs are not clearly referable to the regulation of a particular sector. As I made clear in responding to the earlier debate, the Government have always recognised that there would be such costs, mainly due to restrictions put in place by the authorisation directive, and that, where they clearly cannot be

2 Jul 2003 : Column 905

covered by other means, the costs will be covered by payment of grant from the Exchequer. I am pleased to give that assurance to the House again.

One area of particular concern raised by the noble Lord, Lord Puttnam, related to the funding of Ofcom's competition functions under Part 5. The House will be aware that the general principle applied to regulators in other sectors operating with similar concurrent powers has been that the cost of investigations under those powers should be borne by the relevant sector. In the case of Ofcom, the effect of the authorisation directive is to rule out such charges being made in relation to networks and services. That will mean that, where such costs are incurred by Ofcom in relation to networks and services, they will have to be met by the Exchequer.

The noble Lord, Lord Puttnam, also sought further assurance that, should Ofcom have substantial legal costs or damages awarded against it by the courts, the Government would support Ofcom and underpin those costs. Again, in responding, I indicated that that would indeed be the case. The matter is not unusual to Ofcom. For example, the consideration is central to the funding of the Office of Fair Trading, which carries an equal uncertainty about the outcome of its investigations. Of course, Ofcom would need to consider the possible consequences of any action that it may undertake and the risks associated with them, including the financial risk, and make appropriate provision in its budgets to bear such risk. However, we would not want Ofcom to be in a position in which it was deterred from taking the necessary action because of fears of the possible financial consequences of losing a legal challenge to its decisions.

Therefore, given the difficulty of forecasting litigation costs, where Ofcom has acted perfectly reasonably but finds that it has large and unavoidable increases in legal costs or damages awarded against it that it could not reasonably have predicted and cannot meet by other needs, it would be necessary for it to make the case for support to be provided from the Exchequer. I am therefore happy to assure the House again that, in such circumstances, the Government would consider access to the reserve.

Amendments Nos. 210A, 210B, 213ZA, 216ZA, 226B, 238ZA, 238ZB, 241A and 241B are minor consequential changes resulting from the provisions in the proposed new clause. Amendment No. 226B makes paragraph 8(1) of the schedule to the Office of Communications Act 2002, relating to Ofcom finances, consistent with the proposed new clause. Amendments Nos. 210A, 210B, 213ZA, 216ZA, 238ZA, 238ZB, 241A and 241B make consequential amendments and repeals in Sections 4 and 87 of the 1990 Act and Sections 4 and 43 of the 1996 Act. I also need to draw attention to Amendments Nos. 216ZA and 241B, which correct an unconnected amendment in Section 43(2)(b)(ii) of the Broadcasting Act 1996,

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consequential on the transfer of the Secretary of State's spectrum management functions to Ofcom, which had been missed previously. I beg to move.


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