Standing Committee E
Thursday 12 December 2002
(Afternoon)
[Mr. Roger Gale in the Chair]
The Chairman: I remind hon. Members that the Committee agreed this morning that proceedings up to the end of clause 27, including schedule 2, must be concluded by 5 o'clock, and not at the end of the morning sitting as is shown on the selection list. Clause 6
Duties to review regulatory burdens
Amendment proposed [this day]: No. 204, in
clause 6, page 7, line 9, after 'secured', insert ', or may be furthered or secured'.—[Mr. Greenway.]
2.30 pm
Question again proposed, That the amendment be made.
The Chairman: I remind the Committee that with this it will be convenient to take the following: Amendment No. 128, in
Amendment No. 3, in
clause 6, page 7, line 16, leave out 'and'.
Amendment No. 4, in
Amendment No. 50, in
Amendment No. 122, in
New clause 2—Duty to establish and maintain Competition Board
To move the following Clause:—
'(1) It shall be the duty of OFCOM to establish and maintain a committee to be known as ''the Competition Board''.
(2) The Competition Board shall consist of—
(a) a chairman appointed by OFCOM; and
(b) such number of other members appointed by OFCOM as OFCOM may determine.
(3) In appointing a person OFCOM must have regard to the desirability of ensuring that the persons appointed are experts, both users and suppliers of electronic communications, working in the industry who have a commercial knowledge of the market.
(4) Before appointing a person to be chairman or another member of the Competition Board, OFCOM must satisfy themselves that he will not have any direct financial or other interest which
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would be likely prejudicially to affect the carrying out by him of any of his functions as chairman or member of the Competition Board.'.
New clause 3—Functions of the Competition Board
To move the following Clause:—
'(1) The functions conferred on the Competition Board must include, to such an extent and subject to such restrictions and approvals as OFCOM may determine, the carrying out on OFCOM's behalf of—
(a) functions in relation to ensuring that there is a constant process of evaluating the level of competition in the market, assessing possible moves to self-regulation, and between ex ante and ex post regulation;
(b) functions in relation to determining the matters to which a regulatory impact assessment should relate; and
(c) functions in relation to addressing and managing the issues of concurrent powers between OFCOM and the Office of Fair Trading.
(2) The power of OFCOM to determine the Competition Board's functions includes power to authorise the Board to establish committees and panels to advise the Board on the carrying out of some or all of the Board's functions.'.
New clause 4—Duty to establish and maintain Economic Panel
To move the following Clause:—
'(1) It shall be the duty of OFCOM, in accordance with the following provisions of this section, to exercise their powers under paragraph 14 of the Schedule to the Office of Communications Act 2002 (c. 11) to establish and maintain a committee to be known as ''the Economic Panel'' to give advice to OFCOM on economic theory and practice in relation to the exercise of their functions under this Act and, in particular, in relation to the following matters—
(a) the nature and operation of markets for electronic networks, electronic communications services and associated facilities;
(b) the interests of providers of such networks, services and facilities as well as those of consumers;
(c) the promotion of competition between such providers; and
(d) economic regulatory policy.
(2) The arrangements made by OFCOM under this section must also secure that the Economic Panel are able, in addition to giving advice on the matters mentioned in subsection (1), to make arrangements for the carrying out of such research relevant to the giving of that advice as they think fit.
(3) It shall be the duty of OFCOM, in the carrying out of their functions, to consider and, to such extent as they think appropriate, to have regard to—
(a) any advice given to OFCOM by the Economic Panel; and
(b) any results notified to OFCOM of any research undertaken by that Panel.'.
New clause 7—Industry consultation
To move the following Clause:—
'(1) It shall be the duty of OFCOM to establish and maintain effective arrangements for consultation about the carrying out of their functions with—
(a) suppliers in the markets for the services and facilities in relation to which OFCOM have functions;
(b) suppliers in the markets for apparatus used in connection with any such services or facilities.
(2) The arrangements must include the establishment and maintenance of a panel of persons (in this Act referred to as ''the Industry Consultative Panel'') with the function of advising OFCOM.
(3) It shall be the duty of OFCOM, in the carrying out of their functions, to consider and, to such extent as they think appropriate, to have regard to the views given to OFCOM by the Industry Consultative Panel.
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The Minister for Tourism, Film and Broadcasting (Dr. Kim Howells): I was about to try to answer the question put by the hon. Member for South Cambridgeshire (Mr. Lansley). He asked whether the Deregulation and Contracting Out Act 1994 posed an obstacle to amendment No. 4. It does not pose an obstacle because the amendment deals with clause 6, which is about self-regulation, and that is not the same as contracting out in the terms of that Act. Ofcom will be able to contract out under clause 1(7). I am grateful to the hon. Gentleman for asking that question because I also know the answer to that now.
Amendment No. 122 seeks to ensure that Ofcom's competition functions will fall within the scope of clause 6. That is not necessary because the Bill already achieves that. The competition functions are excluded from the general duties by clause 3, which ensures that those functions that can be exercised by Ofcom or the Office of Fair Trading are exercised within a consistent framework, irrespective of which body acts. The exclusion of the duties is set out in clause 356(11). However, that applies only to clause 3 duties, and there is no such exclusion for clause 6. That is why this amendment is unnecessary.
I turn to new clauses 2, 3, 4 and 7. New clause 2 would place Ofcom under a duty to establish a competition board. That matter was fully examined by the Joint Committee, which concluded that there was no rationale for an economic or competition board with executive functions. New clauses 2 and 3 do not make it entirely clear whether it is intended that the proposed competition board would have executive functions—as opposed to, for instance, a purely advisory role.
New clauses 4 and 7 apparently envisage a largely advisory role for the economic panel, and an industry panel. However, I assume that a key aim of new clauses 2 and 3 is to ensure that Ofcom gives due priority to competition and to proportionate regulation in its decisions on policy and individual cases, and that it has access to expert advice from people with relevant industry and commercial knowledge. The hon. Member for Blaby (Mr. Robathan) asked me specifically about that. I agree that Ofcom must have constant and ongoing discussions of that kind, and I fully expect it to do so. If that happens, the arrangements that we have laid down in the Bill, and the steps that have been taken so far to create Ofcom, already make satisfactory provision for that without adding unnecessary complication to the structure and operation of Ofcom by the creation of several other boards and panels.
It is important to bear in mind that Ofcom will not be limited to internal sources of advice and expertise, significant though those are. On the contrary, it can obtain and will be offered views and advice from a wide range of sources in industry, commerce, the academic, technical and legal worlds, and the general
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public. Ofcom will not go about its work in secret. The Bill obliges it to consult widely on all significant proposals—not only the general principles, but the detailed content and, especially, the impact on business. Additionally, the clause requires Ofcom to publish regular statements setting out plans for the continuous review of regulatory burdens, including proposals to remove or reduce existing regulations or to replace them by self-regulation.
We hope and expect that a wide range of industry groups and individual firms will contribute fully to all the consultations, as happens at present.
Brian White (Milton Keynes, North-East): Does my hon. Friend accept the point made this morning that the work forces in the different areas have a key role to play and should form part of the consultations in which Ofcom indulges?
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