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Lord Harris of Greenwich: My Lords, perhaps I may intervene on that point. It is a matter of some significance. The noble Lord indicates that when this matter is debated, his honourable friend in another place will not call in aid any decision of your Lordships' House on this order. Is that right?

Lord Inglewood: My Lords, I cannot speak for any Member of another place. No doubt those who are interested will be able to hear what I have said in this Chamber. Having said that, there is nothing in any way improper about dealing with the matter in the way that we propose this evening.

Perhaps I may now turn to other points of substance about which we have had a certain amount of debate. It is important to be clear about one point at the outset. As the noble Lord, Lord Donoughue, commented, in the Government's media ownership proposals it is indeed proposed to bring forward certain primary legislation in the future. However, what we debate this afternoon is secondary legislation which derives its potency from

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existing legislation. We are not talking about secondary legislation in some way derived from future legislation. We are talking about secondary legislation derived from primary legislation already on the statute book. There is nothing remotely unusual about doing that.

Criticism was levelled against the Government, in particular by the noble Lord, Lord Thomson of Monifieth, that we were too fast. Only a few hours ago the Government were accused of being too slow in response to matters.

Lord Thomson of Monifieth: Moderation in all things!

Lord Inglewood: My Lords, that is a characteristic of this excellent Government, as the noble Lord knows only too well. However, in the Government's media ownership proposals, we have a number of policy statements. On page 2 in the summary of the document, the Government propose to enact immediately certain pieces of secondary legislation which includes the orders that we discuss this afternoon. Other matters in those proposals are those considered to be appropriate for further consultation consideration. We now have a position where the Government have determined that it would be appropriate to legislate now and they therefore propose to do so. If that is the Government's policy, it seems to me in no way inconsistent to bring the orders forward. Indeed, in the circumstances it would be slightly surprising if the Government did not bring those orders forward. Against that background, there has been a considerable amount of debate about the merits of a specific proposal and whether it is right or wrong. I do not propose to go over the ground that I covered in my opening remarks. Suffice it to say that if it is appropriate to go forward, we believe that we have a formula which is correct, and that we should therefore do so.

The noble Lord, Lord Donoughue, made two points in relation to a specific bid which has been made, subject to this order going forward. Clearly it is not for me to go into the merits of any proposal. Suffice it to say that in this case the bid came forward after the proposals were made public; and it is all above board. It is inevitably the case that if any statutory regulation changes, it may have economic consequences. But that is true of all regulations of this type. It is in no way unique to what we debate this evening.

I wish to comment on two remarks made by the noble Lord, Lord Donoughue, one relating to the quality of Classic FM, and the other to community radio stations. I can do no better than to refer to the remarks of my honourable friend who is now Minister of State in another place at col. 23 of Hansard for 12th July this year. He made a number of remarks which will, I am sure, allay the noble Lord's fears in that regard. Finally, there is no secret agenda here. The reason is that the agenda on the face of the proposals is self-evident and in our view it should commend itself to the House.

Lord Thomson of Monifieth: My Lords, before the noble Lord sits down, will he confirm that a period of consultation is going on in connection with the proposed

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primary legislation later this year? If so, and if the radio companies are among those being consulted, given the controversy over the matter and that the events have taken place at the other end of the corridor, why do not the Government at least wait until the consultation period finishes in August? Then they could come back to us in the light of the consultation.

Lord Inglewood: My Lords, I had hoped that I had made the point clear in my remarks. The document indicates that certain longer term changes will be considered. Comments are invited on the basis of what is contained in the Government's policy. As I also explained, the Government are of the view that certain matters should be taken forward immediately in secondary legislation, of which the two orders we are debating this evening are part.

Lord Thomson of Monifieth: My Lords, I do not wish to try the patience of the House, and I thank the Minister for his reply. However, I feel that an issue of principle is involved here and I wish to express that issue of principle in the Lobbies.

7.32 p.m.

On Question, Whether the said Motion shall be agreed to?

Their Lordships divided: Contents, 70; Not-Contents, 21.

Division No. 1

CONTENTS

Aldington, L.
Alexander of Weedon, L.
Ampthill, L.
Astor, V.
Balfour, E.
Blaker, L.
Blatch, B.
Boardman, L.
Borthwick, L.
Brougham and Vaux, L.
Burnham, L.
Chalker of Wallasey, B.
Chesham, L. [Teller]
Clark of Kempston, L.
Courtown, E.
Cranborne, V. [L. Privy Seal]
Cross, V.
Cumberlege, B.
Dean of Harptree, L.
Deedes, L.
Denham, L.
Digby, L.
Dixon-Smith, L.
Elliott of Morpeth, L.
Faithfull, B.
Flather, B.
Fraser of Carmyllie, L.
Gardner of Parkes, B.
Glenarthur, L.
Goschen, V.
Hayhoe, L.
Henley, L.
Hooper, B.
Howe, E.
Howe of Aberavon, L.
Inglewood, L.
Kimball, L.
Kitchener, E.
Leigh, L.
Lindsay, E.
Long, V.
Lucas, L.
Lyell, L.
Mackay of Ardbrecknish, L.
Massereene and Ferrard, V.
Miller of Hendon, B.
Milverton, L.
Mountevans, L.
Moyne, L.
Napier and Ettrick, L.
Newall, L.
O'Cathain, B.
Oxfuird, V.
Perry of Southwark, B.
Rankeillour, L.
Reay, L.
Rennell, L.
Renton, L.
Rodger of Earlsferry, L.
St. John of Bletso, L.
Saltoun of Abernethy, Ly.
Seccombe, B.
Shaw of Northstead, L.
Stewartby, L.
Strathmore and Kinghorne, E.
Thomas of Gwydir, L.
Thomas of Swynnerton, L.
Trumpington, B. [Teller]
Vivian, L.
Wade of Chorlton, L.

NOT-CONTENTS

Airedale, L.
Bradford, E.
Craigavon, V.
Elis-Thomas, L.
Falkland, V.
Harris of Greenwich, L. [Teller]
Holme of Cheltenham, L.
Howie of Troon, L.
Lawrence, L.
McNair, L.
Monkswell, L.
Palmer, L.
Reading, M.
Rodgers of Quarry Bank, L.
St. Albans, Bp.
Seear, B.
Sharples, B.
Stoddart of Swindon, L.
Thomson of Monifieth, L. [Teller]
Tope, L.
Tordoff, L.

Resolved in the affirmative, and Motion agreed to accordingly.

17 Jul 1995 : Column 80

Broadcasting (Independent Productions) Amendment Order 1995

7.40 p.m.

Lord Inglewood rose to move, That the draft order laid before the House on 29th June be approved [25th Report from the Joint Committee].

The noble Lord said: My Lords, I now turn to move the Broadcasting (Independent Productions) Amendment Order 1995. This too forms part of the extensive package of legislative measures proposed by the Government's policy document on media ownership. In accordance with our statutory obligations, it has been the subject of consultation with both the BBC and the ITC. The Broadcasting Act 1990 requires that in each year not less than 25 per cent. of the total amount of time allocated to the broadcasting of qualifying programmes by each regional Channel 3 service, Channel 4, Channel 5 and the BBC is allocated to


    "a range and diversity of independent productions".

The aim of this measure is to stimulate the development of a successful and competitive independent production sector in the UK and extend further the diversity and range of programming available to consumers. It has been successful in these aims, and there are now over 900 independent producers established in the country.

The Independent Production Order 1991 defines what constitutes an "independent producer" for the purposes of the 25 per cent. quota. During the widespread consultations that took place as part of the review of the media ownership rules, a number of anxieties were raised by the industry about the content of the current Independent Productions Order and its effect on the future development of the sector. The changes proposed in this amending order reflect the needs and wishes of the broadcasting and production industries, and the advice of the BBC and ITC.

The Government propose to make four main changes. All move in the direction of liberalising the system of ownership control so as to encourage the further development of the independent production sector.

First, and most significantly, we propose to increase from 15 per cent. to 25 per cent. the stake that broadcasters may have in an independent producer, and vice versa, without the producers losing their independent status. This measure is designed to encourage greater investment and financial stability

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within the sector without prejudicing the distinctive nature of independent production companies. With the latter point in mind, we propose to retain an aggregate maximum of 50 per cent. for the proportion of equity in an independent producer which broadcasters (as a whole) may earn. Moreover, the existing "connected persons" provisions in the 1991 order will ensure that two or more broadcasting companies cannot, if they are connected in some way, each take stakes of up to 25 per cent. in the same independent production company.

Our second proposed change is to allow United Kingdom producers to invest in broadcasters outside the European Economic Area without losing their independent status. This means that a production company would retain its independent status if, for example, it held stakes above 15 per cent. in a broadcaster operating solely in the Caribbean. This arrangement is a one-way street. A broadcaster operating outside the EEA will not be permitted to acquire a producer within the EEA without that producer losing its independent status. This prevents large non-European broadcasters purchasing EEA-based independent production companies in order to take advantage of the favourable market access arrangements resulting from the independent production quota.

Thirdly, and in connection with the same control, the Government propose to simplify the nationality restrictions on producers. At present, a producer is defined so as to include all connected persons (in effect, connected companies). This has caused difficulties in determining the country of incorporation or principal place of business of a producer who may have connected persons established in different countries. The proposed amendment simplifies this by stating that the location of any connected persons shall be disregarded in determining the country where the producer is established. Remembering that the proposed liberalisation applies only to the control of non-EU broadcasters, this relaxation in no way weakens the protection that the law gives against non-European control of UK independent producers.

Finally, the Government propose to exclude the providers of Teletext and similar services from the definition of a broadcaster. Such services are currently caught by the existing definition. Teletext providers are thus limited to a 15 per cent. stake in independent producers. We see no reason for this, given the marked distinction between broadcast and Teletext services, and the amendment that we propose leaves the Teletext provider completely free to invest in independent producers. I commend the order to the House.

Moved, That the draft order laid before the House on 29th June be approved [25th Report from the Joint Committee].—(Lord Inglewood.)

7.44 p.m.

Lord Thomson of Monifieth: My Lords, I thank the Minister for that very thorough, clear and detailed description of the order. To show him how reasonable I normally am, in this case I see no particular reason why it should not go through in advance of the more general broadcasting legislation that will come next year. It does not raise the same issues as the previous order did.

17 Jul 1995 : Column 82

On Question, Motion agreed to.


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