Joint Committee on The Draft Communications Bill Minutes of Evidence


Examination of Witnesses (Questions 600 - 612)

THURSDAY 20 JUNE 2002

MS JANET LEWIS JONES, MR HUW JONES AND MR JOHN HOWELLS

Brian White

  600. You argued very strongly, like the BBC, that you should not be subject to tier three. Is that not true of Channel 4 and some other public service broadcasting companies? Will OFCOM not look way beyond that anyway and get involved and you will end up having this argument with them?
  (Mr Jones) I think there are some very particular reasons in respect of S4C. First of all, we are the only Welsh language television service. OFCOM's remit in respect of Channel 3 and Channel 5 clearly has to do with ensuring that the overall public service requirements are delivered across a range of organisations which have a number of different impulses driving their actions. We have a simple impulse, which is to deliver a public service in the Welsh language, and we are the only channel delivering that. It is, of course, in a different language to the one in which OFCOM will be concentrating its activities and, therefore, it needs a regulatory authority which has full competence to take account not only of the language of the service itself but the cultural and linguistic context of the audience at which that service is primarily directed.

  601. Would it help or hinder you if there was a representative of the Principality on the OFCOM Board?
  (Ms Lewis Jones) That is a tricky one and perhaps we can all chip in on this. One point to be made is if you look at the broad sweep of OFCOM's powers, they are very largely to do with competition in the wider communications industries. We are not, alas, a dominant media player which might otherwise compete unfairly, so a lot of the broad sweep powers where OFCOM needs to take an overview of what is going on are actually irrelevant to us as a broadcaster without an effective competitor at the moment. The argument for having a presence on OFCOM for that reason falls away. The view we take is we are the regulator under the third tier, we are the regulator and the broadcaster. There is another example of that with the BBC. Our concern is not so much to be involved with OFCOM as a regulator as to ensure that OFCOM as a regulator has an appropriate relationship with us as a fellow regulator. I am not sure that seeking representation on OFCOM by itself goes anywhere towards helping that given our very particular remit.

Chairman

  602. Brian's question is a very legitimate one. There has been quite a flurry of interest on our online forum of people contacting us saying that there is insufficient representation and there ought to be significantly more. We should make available to you the evidence that is coming in to us.
  (Ms Lewis Jones) I am sorry, I interrupted my colleague.
  (Mr Jones) Could you repeat the last sentence, please?

  603. All I was really saying was Brian's question is legitimate and is of very real interest in our online forum in that regional representation, not just Welsh but the Scots and English regions as well. It is possibly an issue that you could take a look at.
  (Mr Howells) It seems to us that the really important point—which is only partly about membership—that the regulatory framework should be sufficiently sensitive to reflect regional interests, be they national regional interests or the interests of the regions of England. The difficult question for this Committee to examine, and for Parliament after that, is whether that balance is struck. Our view is that the provisions overall strike a quite good balance at the moment.

Paul Farrelly

  604. I was well aware before being appointed to this illustrious body that you were crying out for more money, particularly given the digital revolution. In your evidence you are concerned that the legislation does not give the Secretary of State elbow room to give you more money beyond the current RPI formula and that we should take some opportunity to give her that more space. Have you got any evidence at all that the Government's wish to give you more money has been constrained by legislation?
  (Mr Jones) There are two issues here. The reason we are raising it here is that, unlike other broadcasters, the way by which we can deliver our remit is that resources are made available according to a formula set out in primary legislation, and therefore primary legislation is the opportunity to look at the funding level. The Government has made mechanisms available to other broadcasters to incentivise paying the costs of digital transmission and the introduction of digital services. I refer to the increase in the BBC's licence fee and to the dividend which has been allocated to ITV for each home becoming digital. Those monies have certainly helped those organisations to go into digital with confidence. If anything, the digital solution was even more important for us because on analogue, as you will be aware, we share the channel with Channel 4. We have dual responsibility for not only providing Welsh language service in peak but trying to squash in all the Channel 4 services as best we can at other times. This leads to situations such as last Monday, when the Test Match was running on Channel 4. We were running it, it overran, and we were forced to make a decision between broadcasting our daily Welsh language soap opera at 7 o'clock or the end of the Test Match. That is a particularly acute example to illustrate why a digital channel of our own was an opportunity to be seized. But an extended digital service needs to be funded. We believe that the Government recognises the strength of our case, is constrained probably by the revenues available to the Department, but if those revenues were made available by statute they would, presumably, have no such constraints.

Nick Harvey

  605. Which did you show?
  (Mr Jones) On Monday we showed the Test Match.

  Chairman: Good answer!

Paul Farrelly

  606. Presumably for your own protection you would like to keep this anomalous situation where money is provided by primary statute, but you would like it to be RPI plus a bit of elbow room. Or would you like to get rid of the protection altogether?
  (Mr Jones) There are swings and roundabouts. There is benefit to stability but that stability should also relate to current need.

Lord Crickhowell

  607. At the time you prepared your case for the last broadcasting Bill so effectively—and I watched with total admiration the effectiveness with which it was put over—you were making exactly these points. It was the start of the whole digital changeover and therefore you were funded at the time in a way that some of us thought was very generous precisely in order to put yourself in a position to meet this changing world. Now you want to go through the whole process all over again.
  (Mr Jones) I beg to differ. That was a point on which our lobbying exercise failed. We sought to persuade the Government we needed adequate resources and not to be capped at RPI, which was the change brought in in 1996. We made the case about the need for digital and the concession we were given was to be allowed to exploit commercial freedoms to try and make more money. We have done our best to do that and we have implemented efficiency gains on our producers to such an extent that we really fear that their ability to develop ideas and be creative for the future is being endangered. That is why we have returned to this subject with equal vigour this time around.
  (Ms Lewis Jones) The existence of a statutory funding formula is immensely valuable in the sense that it retains the arm's length relationship between the channel and the funding department. The amount paid under that formula turns out to be inadequate in ways which we have explained. What was added on the face of the statute to that statutory funding formula was a one-off discretion for the Secretary of State to give us additional funds to meet digital costs. That was a narrow area of discretion with which we were not unhappy, but it has not yet been exercised in our favour and that is part of the problem.

Nick Harvey

  608. You were suggesting there is a bit of a potential friction between the annual report mechanism that you have at the moment and the machinery of statements of programme policy, and you are keen to see that these do not duplicate or rub up against each other. Are we not in danger of having a surfeit of public information about what you are doing? We would not want there to be a lack of information but what is the solution to the problem that you identified?
  (Mr Howells) We think it comes down to an issue of clarity. We have heard earlier today about battling regulators. There are very detailed provisions set out in the Bill with regard to the preparation of statements of programme policy and their publication. S4C believes that its annual report is the opportunity to be held to account for its programme service on an annual basis and is slightly concerned that the Bill gives the impression that it will be the statement submitted to OFCOM which will be the means by which this will happen in the future, given that both are about programmes at the end of the day. Without making this into a major issue, it seemed to us that there would be room for clarification around that issue and that there should be no need to duplicate.

  609. Your preference is to stick with your annual report?
  (Mr Howells) We believe it underlines the responsibility of the Authority for the regulation of S4C.

  610. But you would then be the only broadcaster not following this mechanism.
  (Mr Howells) No, if you read the proposed amendment to the BBC agreement, it suggests that they will publish their statement on performance against their programme statement in their annual report. What we want is wording along the same lines.

Lord McNally

  611. There seems to be some disagreement about the handling of complaints. The Government is going to allow complaints to go direct to the regulator. This is on the basis, apparently, of discussions with broadcasters and regulators, but your evidence is against that.
  (Mr Howells) We felt that the emphasis placed on self-regulation in the original White Paper got it right. It stressed that complaints should go to the broadcaster in the first instance. S4C finds it quite useful to have that feedback from its viewers. I hasten to add that praise as well as complaints come through our viewers' hotline. But once you provide an alternative avenue for complaints, people will tend to choose the alternative avenue. I am not sure it adds very much to the sum of human understanding to grant the right to complain about a matter of taste to an independent organisation immediately. The broadcaster loses something if it loses that feedback from its viewers. That was the thinking behind our suggestion—that the original policy should be reflected on the face of the Bill; at the moment it is not.

  612. I hear the rumble of tummies but can I just ask one last question. All of us have been heavily lobbied by Gaelic broadcasters who will not be given your opportunity to appear directly before us although they have given us written evidence. What lessons has S4C learned or would you urge on the Committee about dealing with languages within the United Kingdom? What are the benefits to the language of having a designated channel?
  (Mr Jones) I have no doubt that without the existence of the channel, and of course the parallel provision of Radio Cymru by the BBC, that the language would be in a much more parlous condition today. We are currently going through a period of flux with respect to the language. But there has been a growth in the number of young people who are speaking it and there is extensive confidence that the language has a future. I am absolutely certain that unless you have mass media which allows people to be creative in modern ways in that language that the language has not got much hope for the future. I think it is to the great credit of the United Kingdom Government and Parliament that it can sustain and support indigenous languages in these ways in the modern media and it should take greater pride in so doing in the international arena.

  Chairman: Does the Bill team have any questions? All I would say is there is no provision in the Bill for you to be subject to foreign ownership—and I congratulate you. Thank you very much indeed.





 
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