Communications Act 2003 (Maximum Penalty and Disclosure of Information) Order 2005

My Lords, I thank noble Lords for their broad support for the order. I shall try to deal with the questions raised; if I do not answer all of them, I shall certainly write to noble Lords in due course. The noble Lord, Lord De Mauley, asked for assurance that the fine was up to £250,000, not locked in at only £250,000. That is correct. He made the point about it putting small businesses out of business. The provision is applicable to rogue traders, the people who do not comply with the code of practice. If they do not comply with the code of practice, they should suffer the fines imposed. The fine level was derived at after consultation, and is aimed at being proportionate to the difficulties that arise. The range of fines within the system was meant to reflect the sort of financial damage that could be done to users. He inquired whether the level was not set at an appropriate amount originally. The issue was exacerbated by some of the scams that arose in 2004, which I highlighted when I introduced the order. They particularly prompted a look at the whole process. The noble Lord asked how many companies were involved. The system is that you have an originating communications provider—the likes of BT—a terminating communications provider, and then a service provider. The originating communications provider has the relationship with the subscriber—you or me—and the terminating communications provider has the relationship with the service provider. There are now around 200 originating communications providers using their own fixed or mobile networks, or using wholesale or leased capacity from network operators. There are around 70 to 100 terminating communications providers in the system, and something like 4,000 service providers responsible for providing as many as 40,000 PRSs in the UK at any time. That gives a glimpse of the scale. I do not have in front of me or cannot readily quote the growth in that market, but it has been considerable. I think that I have some of the data somewhere in the brief, but perhaps I can follow up on that. I will not go through all the other recommendations; there were 18 in total. Each has been implemented, is the subject of the order, or is due to be implemented in early 2006—the latter in particular because there has been consultation around the code of practice, and it is through that that some of the additional recommendations will be implemented. On the schedule that I have, each recommendation is due for implementation by early 2006 if it has not already been implemented. If the fines are to be an effective deterrent, it is important that the fines levied must be collected. Certainly, the DTI and Ofcom will focus on performance in that matter. As I said, the provision about the delayed payment will help collection, because it will enable the money to be obtained in some circumstances before it goes offshore to people who have no intention of paying the fines. The issue of offshore providers is difficult and complex, but what is happening includes a change in the code of practice of ICSTIS, not only in relation to the fines, but to ensure that it is easier to reach offshore service providers. The code of practice focuses on the relationship between the terminating communications providers and requires them to undertake due diligence, among other things, when looking to whom they contract with. That is one of a number of mechanisms and this will be an ongoing process. I was asked whether it was fair for BT to hang on to subscription money if harm was being done throughout the process. As I indicated, the relationship with the subscriber is with the originating communications provider. They do not generally have a direct relationship with the service provider—the people who instigate and provide the service. That comes through the terminating communications provider. In those circumstances, it is difficult to impose the sort of provisions that were suggested. The important thing is that we have an effective system to stop such scams. The recommendations of the review will collectively help that considerably, and other matters that have developed. That is the best way to go forward. On Question, Motion agreed to.