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Viscount Astor: My Lords, I support what my noble friend Lord Crickhowell said and in general give my support to the amendment on the noble Lord, Lord Thomson. However, as he said, his amendment is not without problems. We have to remember that we cannot deal with this issue without looking at the Channel 4 funding situation. Noble Lords should remember the concession that my noble friend the Minister gave Channel 4 at an earlier stage, which will be worth £30 million to it. It is achieved by releasing money from the reserve.

The effect of this amendment, if the two dates are brought together, will be that those who make low bids will not want to negotiate and they will hang out for as long as possible. Those who make high bids will want to negotiate as early as possible. As my noble friend said, the problem is that that will fall foul of the Treasury, and it will mean less revenue.

How will the Treasury make it up? Will it take some of the money that Channel 4 is currently paying to the ITV companies? The Treasury will be getting an extra £22 million from the licence fee of Channel 5, which is going to be a new sum of money coming in. Will the amendments of the noble Lord, Lord Thomson, on domestic satellites make them fall into the net so that they can charge? It is a very difficult issue.

The point I make is that when we come to look at the matter we should not be in a position where the companies who got their bids right end up subsidising the companies whose bids were too high. That seems iniquitous and unfair. As my noble friend said, the bids were put forward on a commercial basis. We must be careful when we come to look at this matter. I very much support the general principle of what the noble Lord, Lord Thomson, said. I am sure that the Government will have to look at the whole issue with great care. I emphasise again that it is a crucial issue for the future of terrestrial broadcasting.

9.45 p.m.

Baroness Wharton: My Lords, I agree with much of what my noble friend Lord Thomson said, so I am not going to add anything to this debate other than to say that I believe we should negotiate the Channel 4 funding at the same time as we deal with the Treasury and the Channel 3 licence fee payers. It seems very unfair to take one out of context with the other. They should be dealt with at the same time. I support the amendment.

Lord Donoughue: My Lords, I completely support my noble friend Lord Thomson. This amendment seeks

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to simplify and rationalise the ill consequences and irrationalities of the 1990 Act. We appreciate that there are problems within it. I agree with everything that the noble Viscount, Lord Astor, said.

We know the problems of dealing with the Treasury. If the Minister can come up with any kind of package solution that silences the Great George Street gang, but produces a simpler and more rational situation, I am sure that we will look at that very constructively.

Lord Inglewood: My Lords, the noble Lord, Lord Thomson, most helpfully and candidly explained the purpose of his amendment. He very clearly set out the implications of the issue we are discussing. I am very grateful to him for that and also to my noble friend Lord Crickhowell for talking about this issue from his perspective. I am also grateful to all noble Lords who have contributed to this debate. I have listened very carefully to what has been said and I shall note it with very considerable care.

This amendment is predicated on assumptions about the timing of changes to the Channel 4 funding formula and about the level of Channel 4 payments to Channel 3 companies in future. We shall return to this subject in discussing Amendment No. 162 of the noble Lord, Lord Thomson, as regards Clause 69, but not, I trust, this evening. For the time being I say only that a range of possibilities exist for changes to the Channel 4 funding formula and that these issues are not cut and dried.

Leaving aside that underlying issue, the Government see objections in principle to what the noble Lord, Lord Thomson, has proposed in his amendment. The Broadcasting Act 1990 was clear as to the duration of the Channel 3 licences. They indicated that they should continue in force for 10 years with applications for renewal no earlier than four years before the date of expiry. That was the basis on which the Channel 3 companies bid for their licences. Nothing has changed the underlying legislative framework since that time and as a matter of principle the Government are not persuaded that a change in the statutory ground rules is appropriate at this stage.

The noble Lord indicated that the purpose of his amendment is to enable Channel 3 companies to seek an early renegotiation of their licence conditions in order to compensate them for the projected loss of income from Channel 4. In effect, the proposition is that there should be an early reduction in Channel 3 companies' payments to the Exchequer. The Government do not accept that taxpayers should be asked to accept an uncovenanted loss in order to offset a reduction of Channel 3 companies' income in that way.

As I have said, we shall return to the noble Lord's amendment on the Channel 4 funding formula at a later stage, but, for the reasons I have given, the Government do not support the noble Lord's amendment on the duration and renewal of Channel 3 licences. As I said at

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the beginning of my remarks, we shall take careful note of all that has been said this evening. I am absolutely sure that we shall be debating the matter further.

Lord Thomson of Monifieth: My Lords, I am not surprised, and in that sense I am not disappointed, by what the Minister said but I ask him to take back to his Secretary of State and ask her to take to the Cabinet more generally the unanimous view that has been expressed even in this modest House. All sides of the House have been represented and have tended to express the same view.

It is a question of trying to deal with the problems that have arisen from the 1990 Act and achieving a more sensible outcome from this Bill. In view of the feelings on all sides of the House I hope that the Minister will return to the matter in a more positive manner than he has shown in simply reciting his Committee brief. He has not moved any further forward. However, I know that he recognises the feelings of the House and that the proposal has some merit. I am content to rest with that tonight, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dixon-Smith moved Amendment No. 84:


Before Clause 65, insert the following new clause--

Amendment of the Broadcasting (Restrictions on the Holding of Licences) Order 1991

(".--(1) The Broadcasting (Restrictions on the Holding of Licences) Order 1991 is amended as follows--
(2) In article 12(3) for "two" there is substituted "three".
(3) In article 13(1)--
(a) for "hold a licence" there is substituted" hold more than one other licence"; and
(b) for "holder of a licence" there is substituted "holder of more than one other licence".
(4) In article 13(2)(a) for "for which the service" there is substituted "for which a service".
(5) In article 13(2)(b) there is inserted "and
(c) provided as a local radio service falling into category A or B".
(6) After article 13 there is inserted--
"Radio service licences
13A--(1) Subject to paragraph (5), a person who holds a licence to provide a local radio service shall not at any time hold a licence to provide a local radio service to which this article applies; and, subject to paragraphs (3) and (4), such a person shall not be a participant with more than 20 per cent. interest in a body corporate which is the holder of a licence to provide a local radio service to which this article applies.
(2) This article applies to a local radio service which is--
(a) provided for an area which is substantially the same as that for which the service provided by the person mentioned in paragraph (1) is provided; and
(b) provided on the same frequency band as that service; and
(c) provided as a local radio service falling into category C or D.
(3) A person who holds a licence to provide a local radio service may be a participant with more than a 20 per cent. interest in a body corporate which is the holder of a licence to provide such a local radio service as is described in paragraph (2) if the number of persons over the age of 15 resident in the smaller area does not exceed 10 per cent. of the number of such persons resident in the larger area.

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(4) Where such a person as is described in paragraph (3) is a participant with more than a 20 per cent. interest in a body corporate which is the holder of a licence to provide such a local radio service as is described in that paragraph he may not be a participant with more than a 20 per cent. interest in any other such body corporate.
(5) Nothing in this article shall prevent a person from holding licences to provide local radio services if--
(a) that person was, immediately before the grant of the licences, a local radio contractor for an area which was substantially the same as the area in respect of which those licensed services are provided; and
(b) he provided two or more different programme services on different frequencies pursuant to his contract.
(6) For the purposes of this article two areas are to be regarded as substantially the same if at least 50 per cent. of the persons over the age of 15 resident in the smaller area are also resident in the larger area.".").

The noble Lord said: My Lords, this amendment returns us to the more intimate field of independent local radio. It has been tabled to bring a limited relaxation of the regulation which at present controls that sector by permitting an independent local radio station to control two FM channels in particular circumstances. It is not my purpose tonight to go over the ground which I advanced at Second Reading and which was developed in Committee by the noble Lord, Lord Desai, and others. However, the amendment has been amended in the light of our Committee debates.

I regret that the noble Lord, Lord Chalfont, is not in his place because his concern in Committee related to the possibility of local monopoly. I spoke to him earlier today. He had received a copy of the revised amendment which puts in place both limitations on the possibility of holding two FM channels in terms of population size--it can happen only in communities of more than 1 million people--and an arithmetical formula which would limit the power of monopoly. The noble Lord was kind enough to inform me that we had answered the vast bulk of his concerns about the original amendment.

I do not propose to take up any more of the time of the House. The case is a strong one and I hope that my noble friend on the Front Bench may find it possible, in the light of this revised amendment, to agree that such provisions should go forward. I beg to move.


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