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Michael Fabricant: The hon. Gentleman completely misunderstands what I am saying. He has plucked a figure of £1 billion out of the air. I am speaking of £2.5 billion in revenue costs—the income derived by the BBC. The income derived by Channel 4 comes from advertising, not from the licence fee. That is an entirely different matter. The hon. Gentleman is confusing revenue income with capital charge that would have to be made if the shares were sold. The two do not relate at all.

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I spoke earlier about the parlous state of ITV. I contacted Carlton Television for some figures. In my experience in broadcasting, it is often advertising revenues that suffer first when the economy gets weaker. People perceive—falsely, in my opinion—that that is the first thing that they can save on their operating budget. The current position gives cause for concern.

In the 12 months to September 2001, which is the year-end for Carlton Television, net receipts were down by 12.7 per cent. For the 12 months to September 2002—these figures come from Carlton Television—City analysts reckon that the range of the further fall in net advertising receipts will be between 15 per cent. down at worst, and 4 per cent. down at best. According to Carlton Television, the figures for ITV as a whole would have been down 12 per cent. in 2001. The introduction of Ofcom could not come at a better time. As the right hon. Member for Islington, South and Finsbury said, this is indeed the time for a light regulatory touch.

My hon. Friend the Member for South Suffolk, speaking from the Front Bench, asked the Minister how many people will be working for Ofcom. That is an important question for a number of reasons. There are only 40 or 50 people working for the Federal Communications Commission in Washington DC, which is ably chaired by Michael Powell, son of Secretary of State Colin Powell.

I wonder how many people will work for Ofcom. If the numbers are too high, there will be a temptation for the staff to show that they are well employed by introducing too strong a regulatory burden on broadcasters. That will also put up the cost to broadcasters, who have to pay for the funding of Ofcom. The Minister will no doubt confirm that once it is up and running, Ofcom will not be funded by the Treasury, but will be self-financing. The Under-Secretary of State for Culture, Media and Sport nods. The body will be self-funding from fees paid by those whom it is trying to regulate. For that reason, too, it is important that the operating costs of Ofcom are kept down. We all know that the largest contribution to the costs to any organisation arises from the number of staff employed in it.

Finally, various organisations have lobbied us, including the Royal National Institute for the Blind, which emphasises the need for commentary to be available, over and above television programming, which is possible on digital TV. Furthermore, the RNIB asks

That was not addressed by the Minister in his introductory speech, and I hope that the matter will be dealt with by the Under-Secretary when he winds up.

There is much to be said about the structure of Ofcom, but this is neither the place nor the debate in which to do that. We are merely debating the paving Bill, which sets up Ofcom. I could have gone into much more detail, but I am showing considerable restraint, as I know that others wish to speak, and as the debate started rather late today.

I am pleased that the former Secretary of State now agrees that there ought to be equal controls over the BBC. I am pleased that, so far, there seems to be general agreement in the House that Ofcom should be a light regulator. Most of all, I am pleased that the Government recognise, some four years after the Select Committee wrote its report, that because of the advance of technology

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and because of a changing world, Ofcom needs to be introduced. I echo the words of the former Secretary of State by saying that the legislation must not only mirror the existing position but try to anticipate technological and economic changes that will happen over the next five or 10 years. That will be a real challenge for the Government.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Let me offer some advice to the House. If all hon. Members who are seeking to catch my eye are to be successful, it would be helpful if, in the remaining time, speeches were nearer 10 minutes than 20. In order to help in that regard, hon. Members might like to bear in mind that they should not stray too far into the territory of the anticipated Bill, and that they should stick more broadly within the confines of the present paving Bill.

7.49 pm

Mr. Derek Wyatt (Sittingbourne and Sheppey): I should put it on record that I am non-executive chairman of Spafax. We sell media to the airlines, including British airlines, but sadly also including Swissair.

A hundred years ago, there was a major debate in Europe about electricity. British politicians and scientists recommended that a 1 amp system should go into businesses and homes because they confused electricity with lighting. German politicians and scientists decided to introduce a 3 amp and then a 13 amp system. They jumped to the 13 amp system very quickly. When the scientists were asked about the change, they said "We are not sure exactly what electricity can be used for, but we know that it is more than lighting." That is exactly where we are in terms of the Bill because of the debate about broad band. The Bill is an enabling measure for broad band, but I want to ask a few questions about how it can be enabled through this Ofcom paving Bill.

It is clearly very important to have a digital terrestrial box for the 24 public-service channels that are free to air and to the population. We should be keen for that public service to be available. If we were to sponsor the process, we could go from analogue to digital overnight without having to worry about television sets, as we could provide the box in each home, but where can we get the money and who will pay? The change could be paid for fairly quickly by adding to the licence fee. The facility could be given away free in the next financial year and then clawed back in the two following financial years through a £20 surcharge to the licence fee. Very quickly, this country would be broad band and digital, and we would be leading the rest of the world. That would be a huge and important development for the British economy and would take us into first position.

If the BBC is not inside Ofcom, however, how on earth will broad band be paid for and how will we move to a digital environment? I want the BBC to be included in Ofcom. I do not think that the licence fee should be the BBC's territory 100 per cent. That is what part of the fight is about. The BBC has got wind of something: if Ofcom takes over the reins, who will control the licence fee? Will it be the chief executive of Ofcom, or will the BBC governors remain in charge? That is why there is some reluctance on the part of the BBC regarding inclusion in the Bill.

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The matter creates a conundrum for the Government. We have friends at the BBC and they are resolutely opposed to having anything to do with this paving Bill. Yet, if we want the best media environment in the world and aim to attract increasing investment, we must have a single point of call for business and it must be Ofcom, which must regulate the digital future and digital broad-band players. We cannot have one of the biggest players, if not the third or fourth biggest player in the world, half a leg in and half a leg out. That makes no sense whatever.

Asking questions about the BBC in this place is nearly impossible. I wrote to the former Speaker asking whether I could table such questions for inclusion on the Order Paper and she referred me to the then Secretary of State for Culture, Media and Sport. He referred me to the then chairman of the governors at the BBC, who referred me back to the Speaker. If it is incredibly difficult to ask questions about the BBC in the House, how is it democratically controlled and how do we have any authority over it? We do not have such authority. Is that right? I do not think so, and one of the ways in which we can move the goalposts is to include the BBC in Ofcom. I liked the suggestion made by the hon. Member for Twickenham (Dr. Cable) in relation to the Bank of England. I like the analogy of an all-party or Joint Committee before which Ofcom would appear once a year.

I suspect that the reason why the BBC is playing hard to get is not too difficult to work out. The next licence fee is due. As I understand it, the review will take place next year, for implementation on 1 July 2006. The BBC does not want to discuss the matter with Ofcom. It wants to discuss it only with the Secretary of State for Culture, Media and Sport and friends at No. 10. That is why it does not want to be inside Ofcom. Let us get real. It wants to get the matter out of the way before it comes and plays with Ofcom at all. I think that that has constantly to be resisted. The BBC must be in the paving Bill and it must be Ofcom that deals with it.

Hon. Members have pointed out that five players that are currently outside Ofcom will form its constituent parts. I see that only the chief executive of Oftel is present to listen to the debate, which I find instructive. I wonder where the other four chief executives are. On a cautionary note, I am very nervous that the Independent Television Commission currently feels that it will be Ofcom and is making a lot of play in that regard. We wish the chairman and chief executive to be new people who come from outside the existing five bodies. That is very important.

I want to mention two other issues, as time is short. One of the biggest developments occurring in the new technologies is community television and radio. There has been an anomaly with regard to school radio. When a radio station was situated in a school, the airwaves had to stop at four o'clock. They were switched off because somebody from the community was not allowed to come into the station and open it for community use beyond that time. I am glad to say that the previous Secretary of State changed that situation and we are piloting some community radio and television channels.

Piloting is one thing, but every community needs community radio and television. It is not clear to me where the remit resides in Ofcom, how such community services will be paid for and where responsibility lies in

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terms of the directors. I would like one of the directors to be concerned specifically with community television and radio and regional broad-band hubs and television, because television as we know it will be broad band. I would like one dedicated person inside Ofcom to have the remit. I think that the BBC and ITV have missed a real trick by not creating regional broad-band hubs and becoming the focus in terms of regional development agencies in Northern Ireland, Wales and Scotland. We, too, have missed a trick, because we could have created through such services many more jobs in the creative industry.

It is pretty obvious that if we do not include the BBC in this paving Bill, it will not be a paving Bill at all.

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