Public Bodies Bill [HL]

Lord Fowler Excerpts

Monday 28th March 2011 Lords Chamber

[Lord Whitty]

My Lords, in moving Amendment 39 I wish to speak also to Amendment 54. Essentially, my question to the Minister is the same as it was in the previous debate: namely, why is Ofcom still included? When we started out on this Bill, almost all the economic regulators were in one schedule or another—Ofgem, Ofwat, the Office of Rail Regulation and, I think, the CAA were all in there. However, only Ofcom remains. When my noble friend Lord Hunt pressed the Government on this earlier, there were references to cost saving and other things, but why does Ofcom appear in Schedules 4 and 5? Instead of a rational approach to the role of economic regulators, we have had departmentally based assessments of their roles, most of which have not yet reached a final decision. Ofgem and Ofwat are being reviewed by their departments but we are not looking in general at the role of economic regulators. We know that some changes are coming along the line to the scope of Ofcom because the Postal Services Bill, which is passing through this House, extends Ofcom’s reach by transferring the work of Postcomm into Ofcom. I support that move but a transfer mechanism or a modification does not need to be included in this Bill because a separate piece of primary legislation exists to achieve that.

Expenditure on Ofcom has already been reduced by the department and the reference in the previous stage to a saving of some £400,000 could be achieved administratively. It is also true that advisory committees to Ofcom can be changed without primary or secondary legislation. Indeed, it seems to me that Ofcom, presumably with the connivance of its parent department, has already removed by stealth the Communications Consumer Panel from effective operation without it being entirely clear where those functions for the protection of consumers in the communications business now lie. Therefore, it is unclear why the Government need additional powers to make savings and streamline Ofcom’s operation.

As regards Ofcom’s inclusion in Schedule 5, we know about the transfer into Ofcom of the Postcomm responsibilities but there is a suspicion that there may be some transfer out of it. Ofcom has responsibility for regulating a whole range of communications industries, many of which are deeply sensitive. I referred just now to its sponsor department but it is sometimes unclear to us who is the sponsor department for Ofcom because, on the media side at least, a significant proportion of Ofcom’s activities now appear to be the responsibility of DCMS rather than BIS. I do not regard that as a particularly healthy move. However, either way, it raises a suspicion that some of its media responsibilities, such as media ownership, broadcasting content and the whole structure of regional broadcasting, may be in line for being curtailed or moved back to the department. It would be alarming if a transfer out involved any of those items.

There are also other responsibilities. Just to show that I am not being partisan, I had a substantial and ongoing row with the previous Government about their provisions in the Digital Economy Bill. Those provisions have been handed over to Ofcom to implement, which is finding some difficult in doing that. There may be some irritation in government about that. Therefore, a lot of Ofcom’s responsibilities could be transferred out.

I should like an assurance that Ofcom’s continued inclusion in Schedule 5 in particular does not mean a reduction in its scope, particularly as regards those responsibilities. Ofcom has, in general, been a pretty good economic regulator in the consumer’s interest, as compared with some other bodies. However, it was and is always up against some powerful telecoms, broadcasting and media companies and their lawyers in almost every move that it makes. I therefore hope that the Government are not envisaging that we should reduce Ofcom’s responsibilities and are not using its inclusion in Schedule 5 to facilitate that reduction without primary legislation. I beg to move.

[Lord Fowler]

My Lords, I agree entirely with the noble Lord, Lord Whitty, that Ofcom is an extremely important body, and I hope that the Government accept that because, in the media area, a body such as Ofcom that is independent and seen to be independent and skilful is of the utmost importance. Certainly, as regards Schedule 3, I should like confirmation that it is not necessarily the case that the proposal means there will be a cut in Ofcom’s budget, although the budget can be modified either way.

I say that because it is difficult these days to debate Ofcom without discussing the role of the BBC Trust, which was set up by the previous Labour Government. The previous Secretary of State rightly changed his view, decided that the trust was an unnecessary body and that the logical way to run the BBC would be for there to be one chairman, a board and the executive, rather than the current extraordinary position, which is unique in the western world, whereby there is at one level the executive and then, in a separate building, the trust, headed by the noble Lord, Lord Patten of Barnes—I am glad to say. However, the noble Lord is able to call himself the chairman of the BBC only as an honorary title. That is ridiculous. He should actually be the chairman of the BBC, and there should be one unitary authority. That is the logical way, and that is why 99.5 per cent of organisations in this country run themselves in that way.

The position that I reach from that is that the responsibilities that are now with the BBC Trust could easily be transferred to Ofcom. That is their logical place and everyone has argued for that. If that happened, one would find that the Lords Communications Committee—no longer under my chairmanship—would consider this matter further. If that is the position, there would clearly be adjustments to funding arrangements and the rest, as set out here. That does not necessarily mean that the funding would be reduced, but that the funding for Ofcom would have to increase.

I ask my noble friend Lady Rawlings—who, I am glad to see, is refreshing herself with water for her reply—whether she will confirm that that is the case. It would be a grave mistake for the Government to accept the argument put by people who have very vested interests that Ofcom is of no particular value and should be downgraded. Everything that has happened in the media world over the past six months confirms the view that the importance of Ofcom should be underlined. That is what I should like to hear from my noble friend now that she has refreshed herself.

[Baroness Jones of Whitchurch]

My Lords, I am grateful to my noble friend Lord Whitty for continuing to champion the organisations that stand out as protecting consumer interests, and for the remarkable good sense that he has shown again this evening in defending Ofcom's independence.

During the passage of the Bill there have been several attempts by Ministers to make reassuring noises about the importance of Ofcom and its central role in the future of media regulation. This may well be the case, but I share my noble friend's concern that the thrust of these changes, far from giving Ofcom greater responsibility, will limit its power to intervene in crucial issues such as media ownership and changes to public broadcasting. Power appears now to be increasingly centralised in the hands of the Secretary of State.

As is the case with many other organisations for which changes are sought in the Bill, one is left to wonder about the cost savings that might occur if the Minister's department is serious about taking on those functions. I concur with the questions of the noble Lord, Lord Fowler, about the proposed savings expected from Ofcom in this context. The Government have trumpeted the increased transparency that will occur, but it remains unclear how we will be able to scrutinise the major decisions that will be taken in the department on issues such as media control. When it comes to transparency, give me Ofcom any day.

My noble friend repeatedly emphasised, in previous debates and today, the special status of the economic regulators and the need to protect their independent function. Again, the Government took steps in the past to reassure the House on this matter. However, like other noble Lords today, I am left wondering why they felt that it was necessary to put the remaining changes to Ofcom in the Bill, and whether this still represents a shift in power and authority away from independent economic regulators and back to the centre. If this is the case, it is a backward step both for the consumer and for the wider public, as well as being a cause for celebration for would-be media barons. I remain unconvinced of the need to change Ofcom's role through the formal mechanism of the Bill, and very much look forward to hearing the Minister’s justification of why it is necessary.