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Noble Lords: Yes.

Lord Gordon of Strathblane: My Lords, it is a nice thought, but I would not like them to hear that because they will be looking for a rise.

The answer is that we concentrate on such earth-shattering issues as Glasgow traffic rather than London traffic. Believe it or not, the people of Glasgow are more interested in hearing about that than the fact that the Blackwall tunnel may be blocked. It is in the self-interests of an operator to concentrate on local activities because that is where he can beat the BBC. Frankly, the BBC is such a professional organisation that we could not take it on at doing what it does extremely well on Radio 1 and Radio 2, and on Radio 4 for that matter. But where we can beat the BBC is by being more local than it is and by appealing to the local community. On that basis, self-interest and public interest coincide. That is what I would like to see happen.

We should not regard common ownership as a bad thing. If I owned three radio services, it would be in my interests to make them all different. I would not want them to be the same. If, on the other hand, three different people owned them, we would probably all zero in on the one most attractive part of the audience and sound very much the same. Let us be quite clear that ownership itself does not adversely affect quality of output. It probably enhances it.

There is another example of a clause where provisions have been slipped in which are in excess of current regulation. I am in the presence of the current chairman of the Advertising Standards Authority. I bow to him and I will put my name to an amendment if he brings one forward. But, as regards advertising, in addition to the provisions already in the Bill that it must not be misleading, harmful and offensive, which are in the 1990 Act, the Government have inserted a catch-all provision of "unsuitable". In other words, if we cannot think of another reason against it we can get it under the heading of unsuitability. That is the kind of catch-all provision from which we are trying to get away.

I take issue on the question of the BBC for three reasons. If someone came down from the planet Zog and we said, "We are trying to converge regulation on all our media but we are going to leave out the biggest player in television and radio", he would think we were off our heads. Yet that is what we are doing.

I also take issue as a strong supporter of the BBC itself. The Government have argued the point by saying, "Yes, we will do it, but we will do so when we come to renew the Charter", which, it should be borne in mind, will take place next year. I am worried that if it is delayed, there could be a backlash against the BBC. It would be much better to do it now, under Ofcom.

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I say that for a further reason; that is, it will improve Ofcom itself. It may require changes to the staffing or even the structure of Ofcom if it becomes responsible for the BBC. The noble Baroness, Lady Buscombe, when opening the debate for the Opposition Benches earlier today, mentioned the point made by Nick Harvey MP that Ofcom can muck around with ITV and ILR as much as it likes, but that it is not good enough to touch the BBC. That is quite a frightening statement. If that is how little we think of independent broadcasting in this country, then we are in a very bad way.

I shall canter quickly through some further points on which I shall either move amendments or support other noble Lords in their amendments. As regards foreign ownership, my sole but extremely important objection to that is reciprocity. Others may think that it leads to dumping; I do not know enough about it. What I do know is that if we are going to give up something that the Americans will not give back to us, then frankly we should not do it.

I turn next to ITN. I cannot see the public interest argument against allowing ITV to own ITN as it used to when I was a television reporter. Indeed, it is probably a good thing for the principal customer also to be a shareholder. The customer will then have an interest in the quality of the service as well as the profits generated by it. Incidentally, the question of 20 per cent ownership for control again seems daft. Under that definition the current ITV had five shareholders, all of whom controlled it. That cannot be right. Surely it would be better to return to what is the case with the Radio Authority; namely, a 30 per cent holding. That is what the Stock Exchange regards as triggering a bid.

On the issue of Channel 5, again, I am agnostic about ownership. However, I cannot understand the inconsistency here. In introducing the debate the Minister said that Channel 3 and Channel 5 were very different. Channel 5 has only 6 per cent of the audience while ITV has 24 per cent. Furthermore, Channel 5 has coverage of 80 per cent against coverage by Channel 3 of 100 per cent. Those figures are variable. If Channel 5 were being run by someone with considerable media interests and who chose to promote, the odds are that the figures could be remedied very quickly, at which point the distinction drawn by the Government would be meaningless.

On "must carry/must offer", the Government put clauses into the Bill and then took them out. It should be possible for Ofcom to fix a tariff which would be binding on everyone. BSkyB says that that would not give sufficient flexibility. I would reply to that in the manner of Harold Wilson: one man's discount is another man's premium. There is an interest in us all knowing where we are.

I hope also that Ofcom will regard itself as having a duty of care to ensure that we do not flood the market with more services than it can support, thus reducing quality overall. In the area of broadband the body will have to be proactive if we are to go beyond the two-thirds of the country that even have the possibility of

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ever accessing it. I live just outside Glasgow, but I am not getting broadband. I have my name down on BT's waiting list and once the list reaches 200 names, BT might think about providing it. While I fully understand the economic rationale, we can forget the idea that broadband is going to sweep the country. It is not going to reach beyond two-thirds of the population unless someone takes action. In the first instance, that someone should be Ofcom.

I doubt whether any other speaker will touch on my final point. The business of licence renewal, whether it be for ITV or radio, has been parked, as it were, by putting it so far in the distance that none of us is exercised about it. That is a daft way to do things. The termination of a contract is a recipe for drying up investment and nothing happening. I should like to see a return to what we had in local radio at its inception; that is, rolling contracts. If you are doing badly, you are given a yellow card. If you have not smartened up within a year, you are off the park. That safeguards the public interest, is fairer to contractors and, I suggest, is the way ahead.

6.34 p.m.

Lord Dubs: My Lords, it is a pleasure to follow my noble friend Lord Gordon, all the more so because I agree with much that he said, although perhaps not all. Perhaps I may first declare an interest. I am chairman of the Broadcasting Standards Commission and for a time two or three years ago I was deputy chair of the Independent Television Commission.

The Bill is probably one of the largest pieces of legislation in British parliamentary history. It is enormous and it has received a great deal of pre-legislative scrutiny, very ably conducted by the committee chaired by my noble friend Lord Puttnam. Despite that, I understand that we are not going to consider the Bill in Grand Committee; it is to be taken on the Floor of the House. To be frank, I think that is absurd. We can spend more time on it in Grand Committee and go into great detail. We would be able to vote to our hearts' content on Report and at Third Reading. Why in heaven's name are we going to try to debate it in Committee on the Floor of the House? Anyone who has served on a Grand Committee knows that we can better put the arguments and discuss any points raised in more detail. Often we receive a more sympathetic response from the Minister. Except for reasons of a wider political scheme on the part of the Opposition, I cannot understand why the Bill will not be taken in Grand Committee.

Let me give Ofcom a warm welcome. I think that it is a good thing that we have Ofcom, that we shall have one regulator rather than a multiplicity of regulators which could occasionally overlap and come to differing conclusions. That is not helpful to the cause of broadcasters. I welcome too the fact that the Ofcom board is small. I resist the arguments that it should be representative of all the nations and regions of the country, which would then require 12 to 15 non-executive directors. That is not a good idea. It is right that Ofcom should be small, lean and hungry. I believe that the biggest threat to the effective working of

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Ofcom would be that, given its size, it might become a little bureaucratic. I know that my friend, the noble Lord, Lord Currie, is well aware of that. I am delighted that he has been appointed as the chair of Ofcom; it augurs well for the body. Under his chairmanship it will go from strength to strength. However, there is a danger that it could become overly bureaucratic and so it is important, when seeking to move amendments, that we test them to see whether they could make the organisation more or less bureaucratic.

I turn now to an issue that has not been raised so far; that is, cultural diversity. The Bill currently sets out that Ofcom has a general duty to have regard to,


    "the different interests of persons in the different parts of the United Kingdom and of those living in rural and urban areas".

That is fine as far as it goes, but I should like to see the duty extended to include people of different ethnic origins and communities. We could debate the details of the proposal in Committee, but it would be a worthwhile improvement to the Bill if such an amendment could be introduced.

On the question of media literacy, I welcome the fact that under Clause 10 Ofcom will have a duty to promote media literacy. That is extremely sensible. We live in an increasingly electronic age. Electronic media have changed out of all recognition from what they were only 10 or 15 years ago. It is important therefore for Ofcom to be responsible for educating and informing people—individuals in the community—so that they know how to work their way through the multiplicity of electronic media and how to exercise effective and informed choices. That is all part of the democracy argument referred to a few moments ago by my noble friend Lord Gordon.

The content board will be an excellent feature of Ofcom. I hope that it will take to itself the best experience and practice of the Radio Authority, the Independent Television Commission and the Broadcasting Standards Commission. However, I was a little puzzled that the right reverend Prelate the Bishop of Manchester thought that the Bill ought to take a tougher approach to standards on television and radio. I dealt with this for some years while chairing the BSC. It is not an easy area and I would not want to see us become so restrictive that we begin to nanny the entire British population. Equally, I would not want to see us move the other way to a society where "anything goes" on television. The balance is just about right and I look forward to debating with the right reverend Prelate his views when we discuss the point in Committee.

I was a little concerned by the remarks of the right reverend Prelate about religious broadcasting, not so much as regards what is now in the Bill, but as regards his wish to see it widened. I am not clear what constraints the right reverend Prelate would apply to stop all different kinds of religious broadcasting. He will understand what I mean by that. I do not refer to the mainstream religions, but other, smaller religions. How would he stop them from owning radio stations and perhaps using those stations to propagate a particular aspect of their beliefs? We have seen that

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happen in the United States and I would not be happy to see it in this country. One needs certain constraints. When the right reverend Prelate spoke he did not refer to constraints, but I am sure that he will develop the point in Committee.

I turn to the BBC. Like so many Members of this House, I respect the BBC enormously. I have great affection for it and believe that it is a great British institution. However, in turn, the BBC must expect its most fervent supporters to utter words of criticism from time to time. We do so because of the respect and affection in which we hold the corporation, and because we want to ensure that it remains as good as it possibly can be.

I have argued in earlier debates that all tiers of control of the media and Ofcom should cover the BBC—tier 3, as well as the others. I did so for one main reason: I believe that it is better for the independence of the BBC that it should be regulated by Ofcom rather than by the Secretary of State. That said, I am bound to say that the weight of argument appears to be that we should leave that point until charter renewal rather than argue it in relation to this Bill. I accept that point; but it will remain an important argument when we debate charter renewal.

In that context, perhaps I may refer briefly to the role of the BBC governors. I am sure that they do an excellent job. I have the highest possible regard for those whom I know personally. However, I wish that they were rather more open and transparent in the actions that they take on behalf of citizens. They are there, in their own terms, to protect the interests of citizens. They are there to protect us—in the same way as Ofcom will protect us in other respects. I believe that they are doing a good job, but why do they not tell us, and put us in the picture? That would not be too difficult, and it would lessen the fervour of the arguments when we debate charter renewal.

I am in some difficulty as regards the National Audit Office. I understand the force of the argument that the NAO should not get mixed up with editorial matters. Of course it should not. On the other hand, I cannot help thinking that an organisation as large as the BBC could benefit from some form of scrutiny such as the NAO could provide. If we can find an amendment which protects the editorial autonomy and independence of the BBC, but allows for the possibility that bureaucracy is creeping in and efficiency is not all that it might be, I should welcome the chance to bring the NAO into the picture.

I strongly agree with the remarks made by my noble friend Lord Gordon on Clause 307. It is extraordinary that, when talking about broadcasting output, we should suddenly look at the internal workings of a broadcaster. To subject what may be very small radio stations to that type of scrutiny—for example, asking where the staff live, where they come from, and so on—seems to me to exercise not a light regulatory touch but a very heavy one. I hope that the Government will reconsider that provision.

I want to make two further brief points. Under the Good Friday agreement signed up to by the Government, quite a lot was said about the British

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Government's responsibilities in Northern Ireland as regards Gaelic language broadcasting—both in terms of funding such programmes and in terms of the coverage of TG4 in Northern Ireland. Some commitments have been made on this. Perhaps the Government will be able to elaborate on those.

In conclusion, we all believe in public service broadcasting. We believe that it is something positive which has made broadcasting in Britain better than that in many other countries; it has set standards which other countries have not been able to emulate through their different systems. I fully accept that there is a difficult trade-off, which Ofcom will have to referee, as between public service broadcasting and allowing market forces to enable individual broadcasters in the commercial sector to develop their potential to the full. I look forward to seeing the way in which Ofcom will rise to that challenge.

6.44 p.m.

Lord Fowler: My Lords, it is a pleasure to follow the noble Lord, Lord Dubs, with his experience of these matters. My background is in journalism. I worked for The Times in the 1960s, and in the dozen years from 1990 to last year, I was chairman of two regional newspaper companies. I am also a lifetime member of the National Union of Journalists—although the union did at one stage say that, although it valued my membership, it wished that I would take some notice of its policies!

I shall confine my comments at this stage to the news organisations and how Britain can strengthen its position in this area. I shall approach the subject from the ground upwards rather than from Whitehall downwards.

Emergencies, conflicts and wars bring out the best in British journalism. The war in Iraq is no exception. I pay tribute to Terry Lloyd and to the ITN crew. They were obviously very brave men. It is worth making the additional point that, were it not for the efforts of war reporters, the public could simply be manipulated by the propagandists. Objective and skilled reporting is essential for public understanding of what is happening on the ground and is an indispensable foundation for democratic debate. It also throws a light on what we are discussing today; namely, the source of news for the public.

I remember reporting on the Middle East war in 1967. It was not always easy to discover what was happening, particularly if you were reporting from the side which was obviously going down to defeat. One image that stays in my mind from the time I was in Beirut is of an American correspondent, out in the open, a transistor to his ear, listening to the BBC World Service. Coming forward to 2003, a Times reporter waiting with the US Marines to go over the border commented:


    "Still wearing flak jackets, helmets and gas-mask holsters, we listened to the BBC World Service and waited for the war to begin".

It makes one point about our discussion. We in this country are capable—a point made on the regional side of the debate—of providing a service which is

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recognised as authoritative, objective and, above all, professional. In the true sense of the word, it is world-class.

The media world has changed radically in the past 30 years. Methods of communication have been transformed. The old cable office is something of a distant memory and powerful news companies such as Sky and CNN have emerged. Nevertheless, both in radio or television, the BBC remains a major force which, if we have the slightest sense, we shall want to preserve and develop. It provides news in depth, and it provides balanced news. By any measure, it is among world leaders. Its reporters—I stress that I am talking about its reporters—are among the best in the world.

Yet, for some reason, there is an antipathy to the BBC which turns confirmed deregulators into strong interventionists when it comes to looking at the affairs of the corporation. So far as concerns this Bill, I shall not support measures that weaken the BBC.

Nor do I think it enough to say that the Bill is deregulatory, and assume that that simply finishes all argument. For one thing, as with newspapers, it is anything but clear that it does sweep away regulations. For another, it would appear that one undoubted act of deregulation is likely to leave the rest of the world looking on in wonder at this magnificent act of generosity on our part which it has not the slightest inclination to reciprocate.

We should do much better to look at the Bill and ask what is in the best interests of UK plc, and to do so in an objective and non-political way. I say that because, whenever politics and issues of media control come together, independent judges should look exceptionally hard at the position. Currying favour with powerful media owners is not exactly unknown in our political system. I make that point quite irrespective of political party. The role of this House must be to look behind some of these proposals, particularly because—and I deplore the fact—so much of the Bill has been left without scrutiny in another place.

At this stage, I have four areas of concern. The first is the ownership of ITN. I agree with the point made by the noble Baroness, Lady Buscombe, and by the noble Lord, Lord McNally, in a spirited speech. ITN was at one stage a worthy rival to the BBC. It is, frankly, no fault of the journalists that their position has weakened in the past few years. To move the news about as it has been defies all common sense.

There is no guaranteed solution, but time has moved on, as my noble friend Lord Crickhowell said. The most hopeful way forward would be for ITV to take ownership; there should be one ITV company, made up of Carlton and Granada together, with one news company. That would be in the best British interests.

That brings me to my second point—the ownership of Channel 3. The proposal in the Bill that a United States company should be able to take over here while we are barred there is frankly extraordinary. I am not entirely reassured by the hope expressed by Ministers that, in future, the United States will relent. I cannot believe that these tactics of negotiation were taught at any sensible business school in any country, nor that

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any American company that might benefit would contemplate these tactics for one moment. I give notice that I shall certainly not support that provision.

Thirdly, like others I have doubts about the policy proposed for Channel 5. It is certainly deregulatory—one cannot complain on that score—but it is a form of deregulation that benefits only one company. As the other independent television companies point out, News Corp could take full control of Channel 5, with the effect that it is the single owner of the largest newspaper group in the UK, the UK's dominant digital platform, our most-watched 24-hour news channel and our lightest regulated national commercial terrestrial channel. I would need some persuasion that that was in the interests of the United Kingdom.

Fourthly, I am not convinced that the Bill has done anything to improve the position of newspapers—especially the position of regional and local newspapers. That point was touched on by my noble friend Lord Wakeham. The Newspaper Society believes that the Bill will give the Secretary of State discretion to refer a substantial majority of newspaper acquisitions to the Competition Commission, however small. Note—however small.

There is a 220-page report from the Competition Commission from May 2002. It is not an examination of the transfer of one national group taking over another but the transfer of eight free newspapers, distributed under titles ranging from the Northampton Herald and Post to the Derby Trader. The one point not in contest was that the most that could be said financially was that they broke even. Indeed, by the time of the reference, they were clearly in loss. Nevertheless, after an elaborate investigation, the Competition Commission found against and the merger was scotched. I am doubtful whether that was in the interests of the regional press.

The regional press should be taken seriously, and should not be underestimated. Like regional radio, it remains trusted by the public and financially sound when able to make its own decisions.

I unreservedly applaud one procedure used to examine the Bill—the pre-legislative scrutiny—and I congratulate the chairman and all members of the committee. Some of the issues have been teased out precisely because of that examination. However, it has often seemed to me that what is needed with much legislation is not only pre-legislative scrutiny but post-legislative scrutiny, to see how the Government's plans have worked out in practice. In my experience, it is the lack of objective checks after the legislation has been passed that too often runs us into trouble. I suspect that such a process would benefit this legislation, whether by a special committee or a permanent Select Committee, as advocated by the noble Baroness, Lady Howe.

I would like to be enthused by the Bill, and I support some aspects of it with no difficulty. However, on several important points, I am decidedly sceptical about it.

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6.54 p.m.

Baroness Michie of Gallanach: My Lords, I am grateful for the opportunity to take part in this debate on the long-awaited Communications Bill, because it gives me a chance to reflect once again on the future of Gaelic broadcasting in this age of modern technology, with particular reference to Clauses 205 to 207.

The survival of the Gaelic language in Scotland and the needs of those who speak it in its heartland and in the many communities to which the Gaelic diaspora has contributed is very important. Against a background of global attrition of world languages, the endurance of Gaelic is remarkable. Its continued use as a daily medium of communication is even more significant when we consider that its most direct competition is English, the world's fastest-expanding and most dominant language, which is hugely supported by government policy and institutions.

Under the pressures of anglicised education, social and economic changes and political ill will, the use of the Gaelic language in Scotland has declined over the centuries. Yet it lives, and with the will of the community and the nascent political support of the past 15 years, new initiatives have emerged in education, the arts and broadcasting, which give hope for the future.

I pay tribute to the noble Lord, Lord Forsyth of Drumlean, who when a Minister at the Scottish Office had the courage to see to it that the television fund set up in 1991 was given 9.5 million a year. I also commend the Government, who in July 2001 ratified the Council of Europe Charter for Regional or Minority Languages.

I hope that the Bill opens the way for a dedicated digital Gaelic television channel. Scotland has no equivalent to the Welsh S4C, which has played such a significant part in helping to develop an interest in Wales and increasing the numbers speaking Welsh. Many of your Lordships have said that we must celebrate diversity. Although Gaelic television programmes are few in number and often shown in the middle of the night—insomniacs welcome them—they are successful, with average audiences of more than 300,000. One such programme is "Eorpa", which examines current affairs in Europe in a distinctive way. The audience figures for that programme can be as high as 86,000, compared with the figures of 71,000 for "Newsnight UK" and only 35,000 for "Newsnight Scotland". Those figures show that Gaelic television programmes are of interest to many who are not native Gaelic speakers.

The Bill establishes the Gaelic media service. I hope that we will hear from the Minister, if not tonight then at Committee stage, that it opens the way for a dedicated Gaelic digital channel. I hope, too, that there is provision for the transmission of programmes available to people in Scotland and elsewhere. For example, thousands of Gaelic speakers live in London, and there is a long established and active Gaelic society. Three per cent of the population of Corby are Gaelic speaking. Asda has even put up Gaelic signs in the supermarket in Corby, or so I am told.

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Will the Minister also confirm that the new service will be able to distribute programmes via the Internet, which would be of huge interest to Gaelic speakers throughout the world, to say nothing of the potential for the economy—especially the tourist industry in Scotland?

I return briefly to the matter of resources, which is always a thorny issue. It is not addressed in the Bill, and I believe that that is a grave omission. A successful service must have continuity and guaranteed levels of funding which should be index-linked. In its 10 years of existence, the grant has already decreased by just under 4 million. From an initial target output of 200 hours of television per year, the fund can now deliver only about 160 hours per year. There is no point in saying that funding is a matter for the Scottish Parliament, because this is UK legislation. This is a UK Bill. The United Kingdom reserved broadcasting to the United Kingdom Parliament and should therefore take responsibility.

I should like to touch on other matters such as the membership of the Gaelic media service, but time does not allow. I conclude by saying that although the recent census showed a further decrease in the number of Gaelic speakers, the decline has slowed. With the many new initiatives and the interest in the language, we believe that there is hope for the future of this precious asset. Gaelic television broadcasting must play its part.

7.1 p.m.

Baroness Jay of Paddington: My Lords, it is a fascinating paradox of the Bill that it deals with the fastest moving, most rapidly evolving part of economy and yet, as the noble Baroness, Lady Michie, has just said, it has been a very long time in gestation. I agree with my noble friend Lord Gordon of Strathblane that that time has been very well spent, particularly in the pre-legislative scrutiny so ably led by my noble friend Lord Puttnam, which has been widely referred to by speakers today. I think that the point brought out by that scrutiny is that various points have been taken, dealt with and appropriately referred to and amended by the Government. However, I think that we have to return to some of the other issues that have probably either been put aside by another place or inappropriately dealt with.

I have two special interests to declare. I am a non-executive director of British Telecom and a non-executive director of the Independent News and Media Group. I also join the noble Lord, Lord Fowler, in being a member of the NUJ.

Like other noble Lords who have spoken, my most serious policy concerns lie in Part 3 and Part 5 of the Bill, particularly as they affect media ownership. However, before I speak about the media, I should like to touch on the immense importance of the telecoms industry, which is the subject of the earlier part of the Bill and has perhaps had less attention today. I am very glad that my noble friend Lord McIntosh will, I believe, focus on that industry in his reply from the Front Bench.

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It has indeed been a long two-and-a-quarter years since the White Paper, and much has changed. As we heard, the so-called dot.com boom has gone bust. At the same time, however, the telecoms industry has faced static or, in some cases, falling demand for some of its other principal products and services. My noble friend Lord Gordon spoke of being unable to access broadband outside Glasgow. I should perhaps tell him that, just today, I was told that there are now 40,000 new connections every week. So broadband must be rapidly moving up even towards him. Some 42 per cent of the population—three times as many as in 1999—are now operating online. That is an enormous difference to the way in which people organise their lives. It also brings with it, as noble Lords are well aware, new social problems—the so-called "digital divide".

We cannot underestimate the fact that the UK's success in the 21st century will depend crucially on the telecoms industry. I do not think that it is inappropriate that the telecoms infrastructure is sometimes called "the central nervous system" of the whole new economy. Telecoms are also crucial to delivering improved public services. We know about e-government, but education and health are also now dependent on innovation in ITC systems. Our knowledge-based prosperity will grow only if we exploit the power of the converging technologies and, of course, ensure that they are appropriately regulated. Until very recently, the regulatory mantra for this sector of the economy was "light touch", but that has now been replaced in the Bill by the concept of "proportionality". I think that we need to wait to see how that concept will develop. It may indeed be one of the candidates for the post-legislative scrutiny that the noble Lord, Lord Fowler, suggested.

Fortunately, under its general duties, Ofcom is to have regard,


    "to encourage investment and innovation".

That may turn out to be fundamentally important to expanding telecoms, at a time when many companies are suffering from sector-specific capital problems as well as global uncertainties. I think that there are some particular ways in which the Bill could be improved to encourage an environment of positive development in this area. Overall, however, I think that the proposals provide a realistic and balanced approach. If, as is intended, the Bill becomes law next summer, it will come into force at the same time as the new EU directives. I think that those directives, together with the Bill, will provide a very good platform for Ofcom to deal with what I think we will very rapidly be calling—pace my noble friend Lord Gordon—"The Broadband Age".

However, I expect that our debates in this House will be dominated less by the possibilities of broadband than by the current issues of broadcast. The BBC has been the focus of much scrutiny today. Unlike some of my political colleagues as well as members of the Opposition parties, I am content with the balance of the Bill's proposals on the regulation and governance of the corporation. I think that the new obligations to Ofcom sit well with the governors'

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continuing responsibility for the standards of public service. At this point I must congratulate Gavyn Davies, who, since he became chairman of the BBC, has reinforced the governing body's independence and capacity to meet its core tasks. As we heard, both the internal and the external regulatory arrangements will be reviewed in 2006 when the Royal Charter comes up for renewal. Until then, it seems sensible to allow the regulatory compromise time to develop.

Overall, I am anxious that the BBC should not be diverted from its role as the most successful public broadcaster in the world. Public service broadcasting, both by the BBC and, as we have heard, by ITV, has been rather like the NHS—one of this country's greatest contributions to the quality of people's lives for the past 50-odd years. As parliamentarians, I feel that we have a special role, to try to ensure that those high standards continue and strengthen into this century. That is why I am alarmed by some of the proposals in the Bill about the ownership, and therefore the governance, of commercial companies.

My first concern is the issue of foreign ownership—that is, extending the capacity to hold broadcasting licences beyond the European Economic Area—in other words, letting the Americans into our broadcasting business, as my right honourable friend Tessa Jowell readily acknowledged in the Second Reading debate in another place. As we are aware, the Government have advanced various economic reasons for allowing such American ownership. However, I agree with the words of the Joint Scrutiny Committee when it unanimously responded that each of those arguments "variously lacked force". We will no doubt return to those economic points in detail. Like the noble Lord, Lord Fowler, and other noble Lords, I will also want to raise the question of reciprocity.

In addition, however, I am perfectly happy to admit to a cultural prejudice against a huge number of imported American programmes that could be screened here by US channel owners and—this is the economic point—at marginal cost to themselves. The enthusiasts constantly tell us that we will have more "West Wing" and further versions of "Friends". My fear is that the mass of programmes would probably more closely resemble early evening viewing in, let us say, Des Moines or Detroit, and I have certainly experienced both. That would certainly be the best business case for any US owner.

The noble Lord, Lord Birt, whom many of us seem to be quoting this afternoon, put this succinctly in his seminal New Statesman media lecture in 1999 when he said:


    "There is a risk to our national culture. We have already seen in this century the emergence of a global culture that is essentially American...The coming globalisation of media . . . may intensify this trend, undermining the uniqueness of national cultures".

I was therefore surprised that the Government rejected the proposals of the Puttnam committee to defer the issue of foreign ownership at least until Ofcom had established itself and been able to review the general questions of media ownership. If my noble friend

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Lord Puttnam or any other noble Lord proposes an amendment to give force to the Joint Committee's recommendation, I will support it.

I would also support amendments which could protect Channel 5 from a takeover by major newspaper businesses. Like earlier speakers, I am uncomfortable with the proposals to lift the so-called 20/20 restrictions on cross-media ownership. Again, I think the Joint Committee's recommendation to delay this change was very sensible.

I am attracted to the idea of a new plurality test to be used in connection with all mergers and takeovers across the media. In the same way as Parliament has a duty to try to promote high quality public service broadcasting, we must try to promote diversity of ownership. It may be a cliche, but it is none the less true, that we will maintain a vigorous democracy and vigorous political debate only if citizens receive information and opinion from the widest possible variety of sources.

My final point relates to another concern about the apparently all-powerful newspaper industry. As several speakers have said, the Bill has stimulated a vigorous debate on whether and how Ofcom should have any relationship to the Press Complaints Commission. The opponents of the debate, let alone of any change, have been led by various newspaper proprietors, journalists and editors crying "Censorship" from the rooftops. But recently one or two press voices have been raised expressing different views. In a recent article, Alan Rusbridger of the Guardian, acknowledged that,


    "even the most vocal defendants of the PCC will privately admit to reservations about its workings".

Simon Kellner, editor of the Independent, has expressed his reservations publicly. In his evidence last month to the House of Commons Select Committee inquiry on privacy and media intrusion, Kellner said:


    "I do not have any problem with some sort of press ombudsman who sits above the PCC, possibly under the umbrella of OFCOM, because there are real problems with the PCC . . . it should have more teeth, it should be less cosy".

In another place, my honourable friend Clive Soley tabled a new clause, which was not debated, giving Ofcom the function of reviewing the PCC. Mr Soley was advised that this was within the scope of the Bill, and it seems a fruitful area for us to explore. I expect to return to this issue as the Bill progresses.

In conclusion, I emphasise my overall welcome for the direction of the Bill and, in particular, the powers and responsibilities of the new single regulator. The Government are to be congratulated on introducing such all-encompassing and forward-looking legislation in one of the most important areas of 21st century life. My concerns—to borrow again from my noble friend Lord Puttnam—are to make a better Bill the best yet.

7.13 p.m.

Baroness Whitaker: My Lords, it is a pleasure to follow my noble friend Lady Jay, whose views on the importance of the telecoms industry for our economy and for our democracy I share.

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Apart from my interest as the deputy chair of the Independent Television Commission, I welcome this Bill as a private citizen. To many, television, in particular, is culture. It is also, as my noble friend the Minister said, the most widely used and trusted source of news and information. For those reasons, it needs a framework which enables creativity, and it must affect our democratic values. The Bill does pretty much all that; and I also welcome measures to encourage competition, investment and growth.

I propose to focus on a couple of citizens' needs from broadcasting—the reflection on what is going on in our society and accurate knowledge of the real world around us. At a time when we mourn the death in action of the ITN reporter Terry Lloyd, news still needs protecting. Its total audience has been in decline for the past eight years, although those for good individual programmes, like Channel 4 News, have increased. The advent of more and more specialised niche channels tends to marginalise news. The decline is even more marked in the United States. The National Geographic magazine found last year that fewer than 20 per cent of young Americans could locate news-making countries such as Iraq, Afghanistan and Israel on a map, although perhaps they could now. Is there not a connection with America's foreign policy here?

Although this turning away from news in the USA is serious, it would be additionally damaging if it happened significantly in this country. The USA has a large internal market, but the UK is a small trading nation. It needs to be at home in the wider world, informed, unprejudiced, open to change and understanding change. This simply cannot be achieved nationwide without radio and, particularly, television news—not because television news is better but because more people watch it.

So, for the present, I welcome the proposed obligation on ITV to ensure that the nominated news provider is properly funded to fulfil its role, continuing the requirement for "a sufficiency of news", independently sourced, in peak time, and keeping—again, for the time being—the proposed restrictions on ownership. Ofcom will be able to keep its eye on this as the broadcasting ecology develops.

What could be done now, as the voluntary sector pressure group Public Voice recommended, is to strengthen ITV's remit to require factual programming as well as entertainment; and, as the right reverend Prelate the Bishop of Manchester also said, to remove exemptions for penalties on grounds of economic conditions for channels which cannot meet public broadcasting standards. For factual programming is another endangered species. Television can contribute uniquely to the understanding of recent history, as in Brook Lapping's programmes over more than two decades from "The Death of Yugoslavia" onwards. But there is a decline, in particular in the coverage of hard issues in the developing world, well mapped in another report, Losing Reality. Noble Lords might remember that before October of last year, Bali was presented as a holiday destination and that the BBC once did a three-part programme on the Congo which omitted any

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mention of the war and its 3 million dead. I should add that hard issues are not necessarily bad news—VSO's report, Live Aid Legacy, sets out many examples of harmful stereotyping of developing countries as places uniformly of poverty and despair.

So it is welcome that my right honourable friend has accepted the arguments of the Public Voice campaign to include "matters of international significance" and "science" in the remit for public service broadcasting. Ofcom could well report on this with the rest of these aspects of public service broadcasting much more frequently than the five years that the Bill proposes.

By news, we mean impartially delivered information. We need to be sophisticated about impartiality. Shared values can be narrow values, which present events with a particular focus. In ITC research carried out by Professor Ian Hargreaves, only 65 per cent of ethnic minority groups thought they were well served for local news, as against 83 per cent of white people; 46 per cent of black people said that much of TV news was not relevant to them. That is an argument for plurality as well as diversity. Both need to be safeguarded in the Bill. Ofcom could also assess how well broadcasters have reached under-served groups. I hope that is not too much on the Christmas tree of the noble Lord, Lord Currie.

The Joint Committee on Human Rights, of which I am a member, recommended that the Government should respect freedom of religion and belief by lifting some restrictions on religious organisations, which they did. I assume, although the Bill does not say so, that it includes non-religious ethical organisations like the British Humanist Association or the National Secular Society. Balance is wanting here, too. It is a matter of regret that the BBC continues to deny any slot in "Thought for the Day" for the long-standing humanist movement, thus repressing any reflection of the great European traditions of sceptic morality.

A sizeable proportion of people in the UK say that they have no religion—more than some of the faiths. Do they not deserve the occasional programme on topical moral issues which reflects and illuminates their views? In another place, my right honourable friend undertook to look at this. I should be grateful if my noble friend could tell me what her conclusions are.

I have two anxieties, the first of which follows the recommendation of the Joint Committee on Human Rights that the Government should have to set out criteria for those exceptional cases when they may direct broadcasters; that is, eliminate freedom of expression—the sort of thing we associate with war; a massive terrorist attack or other national emergency. At present, in Clause 329, no such context is given. The Government's power is completely untrammelled. It is unattractive in a democracy and we can do better.

My second anxiety concerns the continued criminalisation of BBC TV licence defaulters. Most people who refuse to pay for the purchase of a service are sued by the creditor, not prosecuted as a criminal. The fee takes a progressively larger proportion of the living standards of the poorest viewers since it rises by one-and-a-half times more than inflation, and benefits

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rise only according to prices. When I used to sit regularly as a magistrate, TV licence defaulters were almost uniformly poor; often so poor that they had to choose whether to have their electricity cut off or to pay their TV licence. Many were lone parents, for whose children TV was almost the only entertainment. We can have different views about what other opportunities parents of such children could provide, but to criminalise their mothers for a civil fault seems to me wrong. There are other ways to obtain the licence payment.

In conclusion, we are a nation which knows the characters of "EastEnders", though not those in politics, and where more watch the weather than the news and more watch "Coronation Street" than either. This Bill provides most of the basic framework for the broadcast media to grow, and grow soundly, in the citizen's and the community's interest.

7.23 p.m.

Lord Pilkington of Oxenford: My Lords, I am the penultimate member of the pre-legislative scrutiny committee to speak today. Before turning to my major points, I want to say first how successfully the noble Lord, Lord Puttnam, managed to rally together a diverse committee so that party allegiances were forgotten. Noble Lords need only look at the votes of the committee to see how we abandoned the ideology of our parties.

On the whole, like many other noble Lords, I was pleased with the response of the Government, who accepted many of our recommendations. It may seem uncharitable if I then concentrate on the recommendations that they did not accept; but that is the way of the world. Like other noble Lords, I feel that the Bill could be improved if some attention were given to some of the areas where our recommendations were rejected.

I begin with the content board, a very important element of Ofcom. I must confess to a slight worry. I welcome the appointment of the noble Lord, Lord Currie, but I share the worries of the noble Baroness, Lady Howe, that although we are at an early stage in the making of appointments there is a tendency for the competition element of the body to prevail over the content aspect.

As a former chairman of the Broadcasting Complaints Commission, which was later incorporated into the standards commission, I am very concerned that its functions—the old broadcasting standards complaints—with regard to fairness and the infringement of privacy should be protected. These are not the most sexy parts of broadcasting regulation, but they cause enormous distress to individuals. They demand a great deal of time. It is a ombudsman-like role and I must confess to noble Lords that I fought on the committee to have included in this board a ring-fenced, ombudsman-like role—and I lost. I am therefore expressing a view that I lost in the committee, but many of my fellow members accepted what I was saying.

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I would therefore support additional independence and power being given to the content board. In particular, I will support amendments which I believe the noble Lord, Lord Puttnam, will table to give the body executive responsibility for the regulation of tiers 1, 2 and 3. I would support one other non-executive member of the main committee being given a place on the content board in addition to the chairman. I am worried about the fact that preliminary investigations seem to show that such an enormous amount of work can be done in about three days a month. On the broadcasting standards and broadcasting complaints bodies we were doing it every week. We must remember that individuals are suffering—and that it is not just a question of the whole business of standards of taste and decency. Therefore, the ombudsman-like role needs protection. I hope that the noble Lord, Lord Currie, will cast his mind occasionally from competition to the very important element of content.

I am afraid that I join other noble Lords and part from my Front Bench on the issue of non-European Union ownership. I hope that the Government will take note of our recommendation that before we allow foreign—in other words, American—ownership of television, without reciprocity, Ofcom should examine the issue. My goodness, it was a modest suggestion. We do not ask for an amendment because it is the most modest suggestion one could make—our Lord himself would be pleased with it. But, lo and behold, the Government rejected the recommendation.

It is a modest but important safeguard. I am not plugging the book written by the noble Lord, Lord Puttnam, but I read it. It is a history of America's relationship with the media in the past 100 years and it shows that in no sense was it ever kind to foreign owners. Certainly, our film industry suffered and lost. If the proposal goes through, I would not be happy to be an independent producer in the United Kingdom. I hope that the Government believe in creativity and will take note of our recommendation.

I am afraid that I also have to be difficult—again I part company from my Front Bench—and say that I will support amendments from the noble Lord, Lord McNally, which would restrict ownership of Channel 5 by a major newspaper group. Our committee considered the matter and took evidence on it. Ultimately, it decided that there was no justification for it. I agree with the noble Lord, Lord Puttnam, and other noble Lords that considerable problems would be caused to the British broadcasting organisations. I find it amazing that people believe that Channel 5—I reiterate the view of the noble Lord, Lord Puttnam—is so bad when there is powerful money behind it. I look at it myself and enjoy it—in fact, I enjoyed a breakfast on its behalf today.

On the BBC, I accept the position of the noble Baroness, Lady Jay. I believe that it must be approached in the next two years with sensitivity. I should like to remind noble Lords that the reason we are in this regulatory position—I ask noble Lords to cast their minds back to the late 1970s—is because the Annan commission said that the BBC was so cavalier with regard to complaints that it set up the

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Broadcasting Complaints Commission. Therefore, any development of relationships between Ofcom and the BBC demands sensitivity on both sides. The noble Lord, Lord Currie, must show sensitivity, but so must the mighty BBC. As it moves more and more into commercial activities, it must show sensitivity to complaints. Its destiny will be created by itself and by Ofcom.

On the business of spectrum charging, I am glad that the Bill also allows Ofcom to consider that. It is a difficult matter. My own belief, for what it is worth, is that some spectrum charging might be beneficial. The Ministry of Defence has given up some of its large band of the spectrum. If there is money involved, the Treasury might demand that it gives up more. The BBC tends to take a little more of the spectrum than it needs. It is like a vegetable garden where lettuces are planted but not radishes in between. For example, Classic FM has less of the spectrum than some of the BBC channels. It is a matter to which Ofcom ought to be allowed, and be prepared, to give attention. It is not a matter on which I have made up my mind, but it needs to be considered.

As regards financing, I totally agree with noble Lords who say that the body that we are discussing must be adequately financed. When I presided over the Broadcasting Complaints Commission, the Treasury was very mean towards it. We were dealing with the giants of industry who could employ lawyers. If they liked our lawyers, they offered them a higher salary and employed them as well. The body needs to be properly financed. If the Government think that a saving of 25 per cent or whatever will be made through amalgamating various bodies, the powerful media giants will produce 25 lawyers to their one. As I say, those media giants will say to a good lawyer, "Come and work for us. We shall double your salary".

Those are all the points I want to make. I hope that the noble Lord, Lord McIntosh, in replying to the debate, might, like the committee, abandon ideology and welcome our proposals. Again I say, patting the members of the Broadcasting Complaints Commission on the back, that we did a decent job. We united—Tories and socialists voted together. That was the first time I had voted with socialists. It might be worth while for the Government to listen to us; otherwise their amendments may be contested. I say that not as a threat, but as a fact.

7.32 p.m.

Lord Thomas of Gresford: My Lords, for about 15 years I was chairman of an independent local radio company which broadcast to about 2 million people across north Wales and Cheshire. Therefore, I know a little about the problems that the Bill throws up.

First, I turn to Welsh representation on the Ofcom board. Broadcasting plays a vital part in cultural and public life in Wales. The devolved National Assembly is a democratic policy-making forum which both creates and implements public policy in many of the areas where Ofcom will also have responsibilities. So there is a great need for mutual understanding between

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the two. We feel that the position of the National Assembly is not sufficiently spelt out in the Bill. It is a unique broadcasting environment using both English and Welsh. The reporting of news and of politics is very distinct in both languages. Although we have at the moment representation from Wales on the ITC, the Radio Authority and the Broadcasting Standards Commission, there is none proposed at Ofcom level in the Bill. The appointments that we already have have ensured that the organisations have the ability to deal with linguistic aspects unique to broadcasting in Wales.

S4C has commissioned very successful programmes in Welsh—contemporary drama, children's programmes, animation (the recent Mabinogi feature, and the Gogs, which I once saw in Hong Kong to my great surprise as it is a Welsh animation film). The Gogs come from Y Gogledd in north Wales. We are known as the Gogs to the southerners. Serious documentaries are covered. Recently Ann Clwyd was followed to Iraq in Y Byd ar Bedwar. Y Stryd won an ITC 2003 award for its programme on drug misuse in north Wales.

Ofcom will be a public body for the purposes of the Welsh Language Act 1993 which will require it to produce Welsh language schemes indicating its compliance with the Act. There are also in Wales ongoing problems with broadcasting reception difficulties due to topography. A large proportion of the population receives signals from English transmitters. Indeed, it is very difficult to pursue, for example, an election to the National Assembly when 40 per cent of the viewers or listeners have their aerials turned to English programmes. The signals come from English transmitters and that affects the commercial viability of television in Wales. If it is intended to loosen the ownership of broadcasting, there is a danger that the specific needs of Wales will be brushed aside by commercial companies.

We do not feel that our distinctive interests are adequately protected by the content board proposed in Clause 11 which provides equal representation to all regions of England, Scotland and Northern Ireland, as they have different problems. The functions of the content board in Clause 12 are woolly and non-specific. Although there may at the moment be a member from Wales on the current Ofcom board, that may not always be so. We believe that there is a need to promote consultation with the National Assembly with a firm guarantee that Ofcom will contain a Welsh member.

I turn to access to services. The Bill does not do enough to secure that all public service channels, including the BBC, ITV, Channel 4, Channel 5 and S4C are easy to access. There should be a clear "must carry" obligation on BSkyB to carry public service broadcasts on digital, with Ofcom empowered to regulate a fair price for them. Electronic programme guides are already used by those people with access to digital television to choose which channel they would like to watch. With the growth in channels to 200 and beyond, the regulation of EPGs will be more important in the future than it is today.

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The Welsh language broadcaster, S4C, is particularly concerned that its place in this new digital universe will be secured and that the Government will ensure that Ofcom has sufficient powers to ensure that S4C remains easily accessible for those viewers, both in Wales and beyond. Your Lordships will not be surprised to hear that nearly 200,000 people a week watch Welsh language programmes—not just rugby on Friday night—on S4C's digital service in other parts of the United Kingdom.

NTL in Cardiff has relegated S4C to channel 752. NTL neither lists S4C's programmes in its marketing nor does it provide any information on its availability to its customers. Consequently viewers are deprived even of the opportunity to find out what is offered by S4C. We know that many Welsh-speaking families in Cardiff now watch far fewer Welsh programmes than in the past.

S4C remains the only public service television service not to have received any sort of financial recognition from this Government that broadcasting in the new digital age does lead to additional costs. Every single one of our terrestrial public broadcasters has been helped in some way. But S4C's funding formula is determined by statute and, although this legislation makes some changes to allow the Secretary of State to increase S4C's funding to take account of the new digital environment, there is no undertaking as yet in the Bill that that funding will be made available. S4C has done a magnificent job over 20 years of broadcasting. It has had five Oscar nominations and awards from the Royal Television Society. It can compete for audiences and succeed in the future only if the Government provide it with sufficient funding.

It is essential that the cultural diversity which makes the United Kingdom such a very special place is reflected on our screens and through our radios. For us in Wales, our national identity and our particular cultural expressions, whether in the English or Welsh languages, are of great importance. BBC2W is coming on-stream on digital, but more effort needs to be made in having programmes in the English language that deal with Welsh matters.

As my noble friend Lord McNally pointed out, too much of the debate around the Bill has focused on all those issues which may well be of great interest to the powerful, the institutional shareholders, and the great global and international corporations. However, that forgets that we want a broadcasting ecology which can deliver programmes of excellence to people across the UK to provide not only the lazy entertainment, but inspire them and enrich their lives. We feel that there is a great opening for broadcasting in Wales, both on television and radio, and we will do our best to ensure that the Bill provides the framework in which that broadcasting can be carried out.

7.41 p.m.

Lord Harris of High Cross: My Lords, there is clearly much to welcome in the Bill. I particularly rejoice that it proposes a further measure of

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liberalisation in the market by loosening or removing state regulation. We have seen that process already in telecom, as we have heard, and in energy, air travel, financial markets and similar dynamic spheres of economic activity, of which broadcasting and the printed media are leading examples.

I have often regretted that the House is not more backward-looking. Who now cares to remember, and draw lessons from remembering, the world of the 1950s, when what we called "wireless" was jealously monopolised by the dear old BBC? The menu was confined to Home and Light Services, with restricted hours of broadcasting, later supplemented by the Third Programme for high-brows. The BBC defended its monopoly on grounds of limited wavelengths, which was largely bogus even in the days before the introduction of frequency modulation. The only competition was from Radio Luxembourg and sundry pirate radio stations. On television, the peasants were permitted two BBC channels until the 1950s, when Churchill dared to permit a commercial programme, which old Labour instantly pledged to abolish the moment that it came into power.

It is central to my analysis, and to my challenge to much that we hear from the Liberal Democrats, that all the remarkable progress that we have seen in communications in the past couple of decades owes absolutely nothing to politicians or governments of any party, not even the Liberal Democrats. Like all material advance, the progress starts from innovative engineers, scientists and others. Yet their groundwork would be barren until fertilised by entrepreneurs—they are fearsome characters in Liberal Democrat eyes—prepared to invest their capital in the hope of profit, but at the risk of loss.

Of course, governments have a vital role in setting the framework within which the competitive system best operates. The Bill is part of that legal framework, and our chief task is to judge whether the proposed rules are appropriate to one of the most dynamic fields of economic endeavour. In exercising that judgment, our watchwords should not be caution and safety first, but confidence and freedom. Above all, we should avoid the risk of weakening the springs of future enterprise.

On the controversial issue of foreign ownership of broadcasting licences, the Bill removes antiquated restrictions. I gather that the Liberal Democrats wish to reverse that, yet what could be more liberal or democratic than opening a market to the widest possible global competition and talent, without nervous, narrow, tit-for-tat governments trying to exclude other nationalities?

The Bill has gone some way towards liberalisation on newspaper mergers, by removing the need for prior consent of the Secretary of State and the threat of criminal sanctions. But why should the Bill include a role for Ofcom, which has neither the knowledge nor the experience of the industry and, as a statutory regulator, can control the content of licensed media? I caught a whiff of anxiety on that in something that the noble Lord, Lord Wakeham, and my noble friend Lord Currie said earlier.

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As an economist, I enormously welcome the whole idea of trading in the radio spectrum, long delayed and overdue. I also welcome the power of Ofcom to fine the BBC for unfairness and infringements of privacy. However, I oppose the provision that the BBC governors should have the last word on its commitment to impartiality. Why should the BBC be judge and jury in its own court? On a central issue in British politics—a referendum on the euro, which would dwarf all other issues—the BBC must be checked from continuing as what my noble friend Lord Pearson of Rannoch calls "the Brussels Broadcasting Corporation". He has repeatedly presented what seems incontrovertible, independent and professional evidence of sustained bias from the BBC on the European Union, yet the governors have blithely continued to display a total lack of interest.

In our debates at later stages of the Bill, dare I venture to urge the noble Lord, Lord McNally, and what he said was his serried army of supporters, to ponder how far it is either liberal or democratic to seek to punish pioneers in the competitive TV stakes such as Sky, which has succeeded most conspicuously in widening choice? In responding to the Queen's Speech, a Liberal Democrat spokesman in another place acknowledged:


    "Technology is changing fast and Britain must keep up with the game".

However, on Second Reading, the same MP hinted heavily that Mr Rupert Murdoch should be kept out of Channel 5 at all costs, despite its low viewing figures that he might be able to improve.

I find myself wondering, from a Liberal Democrat perspective, whether the aim of broadcasting is to serve customers or exclude entrepreneurs of whom party men frequently disapprove? In much the same spirit, a leading Liberal Democrat said that,


    "the Government still relies too much on a rigorous competition regime to deliver the goods. Radio, television and newspapers cannot rely on market forces alone to deliver quality, diversity and choice".

Rigorous competition? Market forces alone? I find myself wondering what would be left of either if the Liberal Democrats had their paternalistic and restrictive way.

7.48 p.m.

Lord Bragg: My Lords, I wish to begin by declaring an interest. I work as a programme maker for Granada Television. I also work as a broadcaster for BBC Radio 4. I have worked in radio and television for more than 40 years, all of it in public service broadcasting. Like many noble Lords, I greatly welcome the broad and complex Bill, and wish it well.

It is to the public service heartland of television that I will address my remarks. My aim is to test the Bill against what in my opinion are the interests of public service broadcasting. I shall put it through that prism which I and millions of others believe has served and continues to serve viewers and listeners in this country so well.

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Public service broadcasting in our society, after a patrician beginning, has come to stand for a system that guarantees, among other things, that it will deliver at all times a diversity and quality that the market may or may not deliver, often understandably. It is also based, crucially, on the conviction that the public service sector should be big and powerful.

Our broadcasting system is founded on the belief and the positive evidence from practice that an appropriate degree of regulation is necessary for the widest choice to be offered to the public, and for the public to be, unashamedly, offered opportunities for continuing education and enlightenment, original entertainment and comedy. It is also founded on the belief that the public should be properly informed about civic and political matters, domestic and international—a vital part, as my noble friend Lord Gordon of Strathblane said, of the democratic process. It is an ideal uniquely conspicuous for its proven performance and its wide acceptance in our country.

One of the strengths of public service broadcasting has been the competition for public service broadcasting. Over the past 40 years at least and increasingly since the 1980s, the BBC—the licence fee-funded cornerstone—has had to compete with ITV and then Channel 4, which has competed in strict public service terms in money, manpower and commitment. I believe there is no reason why that cannot be maintained. It could be said that the BBC needs ITV and Channel 4 every bit as much as Wellington needed Blucher at Waterloo.

The BBC is the overwhelmingly mighty and key public service champion and it holds the ring. Under its present bold leadership, it holds it well. Greg Dyke was rightly praised in the excellent speech of my noble friend Lord Alli. But I would argue that its own public service reach is buttressed by—perhaps even dependent on—the public service commercial broadcasting channels, ITV and Channel 4, whose interests, I believe, have been rather neglected with possibly serious unintended consequences in the Bill. Were the BBC to be left as the sole public service broadcaster, it would, I am convinced, gradually wither into an over-worthy marginal player, overburdened with public responsibility and isolated from the mix of market and regulation which has helped it to thrive.

A key question is whether the BBC should be a full part of Ofcom, to which all good fortune, and to the noble Lord, Lord Currie, all good fortune. The BBC is already included in tiers 1 and 2. It runs its programmes subject to the usual laws of the land; its own form of governance has served it long and, on the whole, well; and there is evidence that recently it has been strengthened. This is a difficult one, especially as the BBC Charter review and renewal will soon be upon us. And it can be argued that Ofcom, in its first years, will have enough to do without attempting to absorb the governance in one swallow of more than 40 per cent of British broadcasting which is already working well.

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Then there is a concern about the monopoly of taste. Logic says that both the BBC and Ofcom would be mutually stronger were they to merge. But for two or three years I would be like Mr Asquith and would wait and see. Nor am I persuaded that the BBC needs the attentions of the NAO, but it, like much else, must wait for the Committee stage.

The merger between Carlton and Granada is going ahead, subject to the Competition Commission. It is an anomaly at least and extraordinary at most that, of all the major advanced democracies, Britain is the only one not to have produced an international television company, other than the BBC, whose primary purpose is to serve the British licence-fee payers at home—those who support it. Whether or not your Lordships approve of the major European and American companies, the fact is that, outside the BBC, we are far too small to compete. Our historical regional structure has tied us down in this area and held us back. I believe that keeping the BBC as the sole international player puts an unfair and potentially damaging burden on its raison d'etre and its resources.

That merger has been referred to the Competition Commission, which is to judge the size of the market. But what market do we mean? Do we mean only the terrestrial television market or the whole media market? Some advertisers have expressed anxiety, of course, and their views deserve to be heard. Yet I believe that advertisers themselves surely need, and will appreciate, one big commercial public-minded company which delivers the unique portfolio of massive audiences and cracking public-service specialist programmes.

So what is the best for the public good here? Is it to continue with relatively small and inevitably fractious players—pawns on any international chessboard—or to give the Carlton-Granada couple the benefit of the doubt and, suitably regulated, as they are so used to being, encourage them to be fast at home and let loose abroad?

I move on to the question of whether ITV should own its own news—again, like every other major broadcaster in the world and, again, I suspect, there is prejudice that ITV is not quite to be trusted. That puts it at an unfair disadvantage. Both ITV and ITN believe that, in retaining rules that guarantee a fragmented ownership structure for ITN, independent news is less likely to be sustained as a proper competitive force to the BBC and, now, Sky. ITV also believes that, were it to own ITN outright, it could combine national and international news more effectively with the wholly owned regional news service, which is very important in this country, providing a full competitive and comprehensive news alternative to the BBC.

One role of public service, regionally anchored commercial television is perhaps to be the third force between what could otherwise be a bare-knuckled contest between BskyB and the BBC. Much of that is highlighted in the ownership rules for Channel 5. My noble friend Lord Puttnam, whom I congratulate on his scrutiny committee, has been eloquent and

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passionate on the matter and I am in his camp. So it seems are my noble friends Lord McNally and Lady Jay, who also gave powerful speeches.

My fear is the domino effect. By massive and unprecedented cross-promotion—and why not?—and combined buying and selling—and why not?—a News Corporation take-over of Channel 5 could quickly double or even treble its current 6 per cent share. That could only have severe effects on the public service remit of the BBC, ITV and, most crushingly of all, on Channel 4, which would have nowhere to go. Briefly, I believe that all of them would have to jettison most of their expensive and restrictive public service obligations to keep audiences and just to survive. They cannot be expected to conspire in their own obliteration.

Finally, I turn to the subject of the regions. Noble Lords will have heard often enough that ITV makes more regional programmes than BBC1 and BBC2 combined. At present, and more importantly I believe, more than three-quarters of all television production is in London. Surely that matter must be addressed. One way is for the BBC to allow ITV regional companies to bid for programmes as independents. We hear that the BBC is under-quota. From working for Border Television and Tyne Tees Television, I know how much it means for people at a local level to receive other national channels.

There will be no conflict of interest. I have heard the BBC complain that there are not enough good independents. There are in the regions, and a generous pro-bono BBC would look at this possibility with an open mind. Regional television enriches us all. It provides skilled employment; it fortifies local identity; it keeps talent near its roots; and it can produce work of a flavour found nowhere else.

There is much more to be said on a range of subjects, but that will have to wait for the Committee stage. My basic concern—one which is, I know, shared by many of your Lordships and by many people in this country—is that in our broadcasting the very best be encouraged and that excellence be given space and resources. We should show all that is finest in our culture and make it available on the most democratic medium ever known.

How do we retain the system that produces that? How do we let it breathe and grow and not simply preserve it and make a Miss Havisham of public service, but enrich it further and, above all, pass on what we have had to succeeding generations? The Bill, with some amendments, makes that possible.

7.58 p.m.

Lord Borrie: My Lords, it is a very great pleasure to follow my noble friend Lord Bragg. Whether it is 8 p.m. in this House or 9 a.m. on another media, he invariably has something of great interest and substance to say.

Clause 3 of the Bill says, among other things, that Ofcom must have as one of its objectives the desirability of promoting and facilitating the

25 Mar 2003 : Column 735

development and use of effective forms of self-regulation. I mention that because, since last year, the Advertising Association has convened a task force of advertisers, broadcasters and others to devise a scheme of self-regulation to control advertisement content appearing in the broadcast media—television and radio—modelled on the scheme that operates for the non-broadcast media under the aegis of the Advertising Standards Authority.

I declare an interest as chairman of the ASA for the past two years. My predecessor, the noble Lord, Lord Rodgers of Quarry Bank, brought about a number of significant changes, including the application of Nolan principles to the appointment of the independent non-industry members of the ASA Council, who constitute the majority, and for an independent review of the adjudications made by the ASA Council.

Even before the time of the noble Lord, Lord Rodgers—under the chairmanship, I believe, of the noble Lord, Lord Thomson of Monifieth—the vital matter of adequate financial resources was secured, as they have been continuously over the years, by the very successful device of a levy imposed on advertisers and agencies. The task force to which I referred has undertaken to submit to Ofcom a viable properly resourced scheme for broadcast advertising in the next month or so for Ofcom's consideration.

My experience of the Advertising Standards Authority is that effective self-regulation is by no means the same thing as deregulation. It may be a lighter touch, but it is not a soft touch. Advertisers in the non-broadcast field have a healthy respect for the independence and objectivity of the ASA and for the system's ability to secure compliance with its adjudications.

One of the advantages of self-regulation, whether it be in the field of print advertisements or—I dare to suggest—broadcast advertisements, is a commitment to the system. Another is flexibility to respond to change in fast-moving media landscapes. The current code of practice has just been revised to cover e-mail, text messaging and the Internet. Imagine having to await primary legislation to keep abreast of developments in the new media, now or in the future.

The noble Lord, Lord Currie, the chairman of Ofcom, has thrown down a challenge to the advertising business and commercial broadcasters of all kinds. I believe there is every chance that an effective scheme will be presented for broadcast advertisement content control that is worthy of Ofcom's support and as being very much in the public interest, which is of course what counts.

I now want to say something about cross-media ownership because I am keen that we in the United Kingdom should have the maximum plurality in the media; but I am not too keen on the retention of a priori detailed prohibitions. I accept the Government's view that to allow a major newspaper proprietor to own a major stake in a Channel 3 provider is undesirable.

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The Minister has pointed out that Channel 3 is currently the only television channel, apart from the BBC, that has a mass audience. She quoted a 24 per cent audience figure. But any fixed limit on who can or who cannot take over that, based—for example as the Government have done—on a 20 per cent market share, is bound to be arbitrary. Why not instead trust Ofcom and the Competition Commission to reach what I suppose would be an appropriately adverse conclusion if News International bid for a Channel 3 service?

What the legislation needs—which it does not have in its current state—is a provision for intervention by the Secretary of State, on Ofcom's advice I suggest, referring any takeover proposal to the Competition Commission. It needs public interest criteria set out for the Competition Commission to follow, similar to those contained in the newspaper merger provisions of the Bill—which of course are not new; they have been around for a long time, but in the narrow field of newspapers—such as the value of diversity, plurality and so on.

Given the right statutory criteria the Competition Commission is well capable of looking beyond classic competition concerns of dominance, as it has done over the years with the aid of a number of special people appointed to a newspaper panel when dealing with newspaper mergers.

The Bill is meant to last for some years. The Minister must surely not wish to return in a year or two and propose amendments. Television audiences have a tendency to be not static. Indeed, such broader provisions in the Bill for exceptional public interest references to the Competition Commission would also be of value in the case of any newspaper takeover of Channel 5. Channel 5 may have only 6 per cent—some people say 6½ per cent—audience share now, but what about the future? Even now, as my noble friend Lord Puttnam pointed out earlier today, a newspaper takeover would provide opportunities for cross-promotion that should be looked into critically, not as it is now when the audience share is relatively modest, but how it may change over a relatively short time.

An arbitrary prohibition on a newspaper proprietor owning a Channel 3 service and an equally arbitrary free-for-all in respect of a newspaper proprietor owning Channel 5 are both unattractive.

Noble Lords will gather that I am rather fond of the public interest desiderata listed for the Competition Commission's consideration of newspaper mergers set out in Clause 368 of the Bill. They talk about the,


    "accurate presentation of news",

the


    "free expression of opinion",

and the plurality of ownership. They are, as I have indicated, not new. They even predate the Fair Trading Act 1973 to an Act of Parliament of 1965—a Labour Government I am happy to point out to Members of your Lordships' House opposite—but they could be given a wider application than just newspapers buying other newspapers. They could be given an application to one kind of media taking over

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another kind of media. We should put in place machinery and criteria that will satisfy the test of time and prevent the kind of dominance in this country to various platforms and various media that Mr Berlusconi enjoys in Italy, which is such an offence to democracy.

8.6 p.m.

Baroness Flather: My Lords, first I declare an interest. I am chairman of a radio station called Club Asia, which will cater for the needs of young Asians in the London area. I am also involved in an application for a limited licence in another area.

My remarks will be restricted to radio because that is a subject I know a little about. There is anxiety in our field because we wonder whether, without a dedicated regulator, as much attention will be paid to radio as at present. That is understandable, because radio forms a relatively small part of the whole regulatory field.

Radio has expanded hugely and beyond expectations. It must be looked after and regulated carefully for the future. Radio is the one medium that must cater for local needs. I am talking about independent local radio, in case people think that I am talking about the BBC, which does not have to do anything, because we pay for it. Independent local radio must generate its own funds. If it does not cater for local needs, it cannot generate its own funds and therefore cannot keep the business going.

I have concerns for the future. There are now two or three large companies in the field that own huge numbers of radio stations and also multiplexes, which are, as we have heard, the gateways to other licensees. In that climate, there is deep concern about whether ethnic minority stations will ever be able to flourish or increase in number.

There is no ethnic minority—or minority—station on FM in the London area. There are two or three smaller stations in the Midlands, but none in the London area. When we consider the ethnic minority population of London, that is clearly a big worry. There is no level playing field, but I would further say that there is no playing field at all for minority stations.

On the one side, we have the BBC, which is extending its reach through new stations and channels and, in fact, doing many of the same things that other people outside want to do. In fact, some of the ideas have been taken from other people, but I shall not go into that now. On the other side, the big companies have the clout, money and so on and are anxious to obtain as many licences as they can. That is understandable.

The Radio Authority has told us that access radio should provide ethnic minorities with a means of having something of their own, but access radio is very small-scale although we are not now dealing with so few people. Access radio has a limited ability to cater for any sophisticated matters; it is about community news and issues. We deserve better than that.

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We are often concerned because small stations have little voice in the Commercial Radio Companies Association. That is not because we are excluded, or told that we are excluded, but because of circumstances. Usually, small stations cannot either afford or find personnel who can spend their time attending the meetings where the issues are discussed.

I shall say a few words about religious broadcasting. It is interesting that so much has been said about it, but there is religious broadcasting at present. There are several stations airing religious broadcasting. There are restrictions on certain religious bodies or officers of those bodies owning radio stations, but there is no restriction on religious content. I should have thought that that met many of the points that have been made in the debate.

Several local analogue, satellite and cable licences have religious broadcasting as their main content. Once the Bill is enacted, there will also be digital sound programme service licences for religious broadcasting. So that anxiety exists without it having been properly considered what is currently possible and whether it is really necessary to extend provision to specific groups that set out to perform a certain kind of religious broadcasting. Then, of course, we enter the problem of having a level playing field. There are lots of religious groups; should they not all have the opportunity to own stations? That is a deep concern.

I see that my noble friend Lady Wilcox is nodding, but we could get into difficulties there, because not every group is perhaps middle of the road, if I may put it as gently as that. We must be a bit careful about what may happen when everyone thinks well of everyone. Some things may not work when certain issues are involved.

My plea is based on the concern that thought must be given to some small radio stations if they are to survive and flourish; otherwise we will have just three, four or perhaps only two big companies. The CRCA does not like to think along those lines, but it is practically the case now.

8.14 p.m.

Lord Phillips of Sudbury: My Lords, I commend the work of the committee chaired by the noble Lord, Lord Puttnam, as did others. It has been a remarkably effective and useful prelude to this massive piece of legislation. My noble friend Lord McNally gave a bravura performance and expressed much of what I and most on these Benches would have wished to say. Although I have been a practising solicitor throughout my life, I have had close involvement with the media. For 26 years I had a slot on a BBC Radio 2 programme. I also presented "The London Programme" for London Weekend Television and a series for Anglia Television. For a decade, until last year, I was a trustee of the Scott Trust, which owns a large media group including the Observer and the Guardian. My interest could be said to be semi-informed but very intense.

The first thing that strikes me about this wonderfully complicated Bill, which at 570 pages will be a bonanza for my profession, is that only a handful

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of people will ever really understand it. I wonder whether yet again both Houses—the other House must have its share of the blame—have come up with a measure so complicated that, to some extent, it will be self-defeating in time, and whether we are placing on Ofcom a wholly unrealistic burden. I hear the arguments about isolating and giving power in one hand, but, as we go through the Bill, we must keep a canny eye on it to see whether it can be simplified. I wholly concur with the proposal by the noble Lord, Lord Fowler, for a downstream impact assessment.

I am strongly in favour of the 20:20 rule in relation to cross-media ownership and Channel 5. It would not be remotely effective to try to achieve public interest protection through powers given to Ofcom that can be used only after such a merger. Our statute book is littered with such powers and discretions, which are often unexercised or exercised capriciously or ineffectively. The threat of a distracting, expensive legal action against the regulator by big media battalions is a real deterrent to effective operation.

Chapter 2 of Part 5 of the Bill deals with newspaper mergers. I hope that I have not got the wrong end of the stick, but it seems to amend the Enterprise Act 2002, which has been in force for only less than a year. That Act retained the special provisions on newspaper mergers first introduced by the Fair Trading Act 1973. They were relatively concrete and relatively effective. When Tiny Rowland and Lonrho took over the Observer in 1981, the Secretary of State was able to impose a severe, effective network of provisions. Those provisions controlled Tiny Rowland when, in 1985, he tried to cajole the independent directors into undermining the position of the then editor. When he did not get his way, he withdrew all the advertising that came to the newspaper from his empire. Still that did not achieve the trick. Those provisions will be much weakened by the new measures.

In her opening speech, the noble Baroness, Lady Blackstone, called the provisions in Clause 368 "advisory" requirements on the part of Ofcom to ensure, "accurate presentation of news", "free expression of opinion" and,


    "a plurality of views in newspapers".

I suggest that that is much too insubstantial to be an effective constraint.

The other broad issue underlying my opposition to weakening the newspaper and cross-media ownership rules is the already powerful effect on our national life of the giantism that has grown out of the original ITV concept. Although I agree with everything else that the noble Lord, Lord Bragg, said, I must part company with him in that regard. It says it all that we are awaiting a decision on whether or not to allow the amalgamation of the only two survivors of the great ITV experiment. From the "let regional flowers bloom" concept based on independent regional television companies that are regionally staffed, independently directed and have regional studios and production, we are now in thrall to two giants. Of course, they would say that they are not giants and that only by joining can they punch their weight in world markets.

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I accept that there is a conflict between that aspiration and the regionalism or localism in favour of which the noble Lord, Lord Bragg, spoke so eloquently. Perhaps we cannot have it both ways, but I would have thought that if we can build Airbus in two disparate countries, we can surely combine to achieve some of the great programming that we all want to see. I think that the noble Lord, Lord Puttnam, called the contrary a risible idea.

It is certain that the centralisation of power that has, in my view and that of my party, so damaged our society in recent decades is no less a commercial than a political phenomenon. Those who want to see the BBC on a so-called level playing field ignore the massively distortive effect of modern commercialism on life in general. Unrivalled as an allocator of goods and services, the market should not be the sole determinant of the shape of British television. I blanched at the prediction made by the noble Lord, Lord Birt, that, in not many years, the sole significant provider of public interest broadcasting would be the BBC.

I suppose that that view is based on what I agree to be the reality; namely, that modern financial markets are morally and culturally indifferent to everything but money return. The very workings of the City are anti-cultural. The efforts of those markets have destroyed regional television. I think of my local TV channel, Anglia, swallowed up a few years ago by Meridian, a vehicle of the noble Lord, Lord Hollick. In spite of assurances given at the time that the level and quality of local productions would be maintained, both have in fact been decimated. Today, Norwich is a shadow of its former self.

The need to salvage and sustain what is left of regional production makes me oppose letting the ITV companies further off the hook by treating them as independents when making programmes for broadcasters outside ITV. I agree with the right reverend Prelate the Bishop of Manchester who criticised the "taken together" judgment allowed to Ofcom in its oversight of the public interest test. I also share the view of Public Voice that it is laughably vague for Ofcom to be able to require Channels 3 and 5 to source merely a "suitable" proportion of programmes outside the M25.

As my noble friend Lady Walmsley said, British Music Rights has effectively drawn attention to the plight of independent music makers. Capital, Chrysalis, Emap and GWR operate a central playlist for their local stations, with an overlap of approximately 90 per cent in the records that they play. That is vastly destructive of the diversity and local talent that is the seed-bed for the stars of tomorrow.

I concur wholeheartedly with what the noble Baroness, Lady O'Neill of Bengarve, said. She drew attention to the extraordinarily reductionist goals of this mammoth Bill, set out in Clause 3. We must give a less dispiriting view of what the Bill is all about, and I look forward, with your Lordships, to doing just that.

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8.23 p.m.

Viscount Chandos: My Lords, I welcome the Bill, but I welcome it in the same way as I greet my doctor's recommendation to do 100 press-ups twice a day. I am sure that it is good for me, but, as I look at the 403 clauses and 19 schedules, I cannot help, like the noble Lord, Lord Phillips of Sudbury, wishing that there was an easier way.

Of course we must recognise that the creation of a single regulator—there are five now—and, through that, the establishment of an integrated and, I hope, consistent regulatory regime for the communications industry represents the construction of an edifice that, like Rome, cannot be built in a day. But it should be a clear objective that for every hour that your Lordships spend on considering the Bill, many thousands of hours of subsequent regulation will be eliminated. A complex Bill covering a complex and important subject should not lead inexorably to more burdensome regulation. Time invested wisely now in Parliament should give a return of more time for the companies and bodies which Ofcom will regulate to serve their customers and their audiences.

Extraordinary amounts of time have already been given by my noble friend Lord Puttnam and his colleagues on the committee to the benefit of the Bill and, hence, to the benefit of all of us who enjoy the relevant services to be regulated by Ofcom.

Among my interests listed in the register are some which relate to this Bill. In particular, I am a shareholder and a former director of a company providing broadband television and video-on-demand services over BT's ADSL network. I am a director of a company, owned by two major advertising agencies, which provides the principal ratings research for the UK television industry. My only interest in broadcasting itself, however, is in a Russian television network. While I should welcome Ofcom bringing a little rationality to its regulation, I suspect that my noble friend Lord Currie would regard that as being several steppes too far.

I previously suggested to your Lordships that debating broadcasting regulation induces the sensation of being in the recurring world of "Groundhog Day", trying to remember whether this great issue or that was central to the Act of 1996—or was it the 1990 one? In 1996, there was not one single digital television home and now over half the country's homes are multi-channel—most of them digital. How many homes then had PCs, let alone Internet connections, even narrow band ones?

When we return like clockwork to the issue of broadcasting and communications regulation, the perennial challenge is to think what these worlds will be like at the end of the useful life of the legislation, not just at the beginning. What will be the landscape in, say, 2010 when next this House (however composed) considers new legislation?

Therefore, the underlying approach of Ofcom allowing emerging competition, whenever appropriate, to supplement regulation is absolutely correct, precisely

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because of the dynamic markets and the vibrant creativity—which my noble friend Lord Alli described so well—that characterises this industry.

Ofcom, mandated through this legislation, will be responsible, on the one hand, for ensuring a ferociously efficient communications infrastructure for consumers and businesses; and, on the other hand, for preserving all that is so good about our public service broadcasting heritage, which other noble Lords have described far better than I can.

Even if the highest ratings are likely to be achieved for the passion and the fury with which the latter issues are debated in the weeks to come, we must not neglect the less glamorous areas of telecommunications. As the noble Baroness, Lady Buscombe, said, the market for mobile telephony is a remarkable story which we should be careful not to harm unnecessarily. More than that, we should learn from the success of that market when we seek to stimulate other and new markets, such as broadband.

The economic regulation which Ofcom will undertake will run alongside that of the OFT, under what I think is the medieval doctrine of concurrence. Reluctantly, I accept that there is no alternative to this duplication if we want to afford any special protection for our media. But, as has always been the case in the past, we must be ready for it to create endless confusion.

Today, the noble Lord, Lord McNally, cried that the combination of newspaper and television interests which he feared would follow from the provisions of this Bill would represent, I think he said:


    "a concentration unacceptable in any industry".

Fear no more noble Lords, I suspect that such a level of concentration, even if it was not forbidden under this legislation, would be swiftly despatched by the OFT under the terms of the Competition and Enterprise Acts.

In the short time available, I am not sure that I can bring any new perspectives on the ecology of public service broadcasting. I believe that the BBC and Channel 4, extraordinary and unique organisations that they are, lie at the heart of British television's excellence. Every change that is contemplated should, inter alia, be considered in the light of its possible impact on those broadcasters.

On the other hand, I am deeply wary of perpetuating an overly prescriptive regulatory regime which attempts to design the garden rather than to foster the ecology. I cannot agree with the suggestion of the noble Lord, Lord Birt, that the ITA, the IBA and the ITC successively presided over a "triumph of regulation". The history of ITV's regulation has been a story of regional promotion and protection, coming at a devastating cost to achieving the full potential of the nation's television—and film— industry.

Ironically, that does not make me sympathetic to the proposed merger of Carlton and Granada which, whatever the final form of the Bill, will be determined, in a classic example of concurrence, by the Competition Commission. ITV has squandered its

25 Mar 2003 : Column 743

extraordinary inheritance largely through its own devices, like a wastrel son in a—probably BBC— costume drama, and is owed no special favours.

I believe that the Competition Commission faces an unusually difficult task in assessing the concentration of advertising revenue attributable to the two companies. ITV's share will, I am sure, continue to decline. I have long believed that by the time it has reached a level which may be acceptable under the Competition Act, the penetration of digital may have reached a level where it would be feasible for the two companies to compete nationally on digital networks rather than cosily merge, thereby separately stimulating new programming and production far better than would be the case together.

My noble friend Lord Alli cited trust as the first principle of public service broadcasting—I believe that he was quoting Greg Dyke—and, in the end, the best resolution for the shape of television may come through placing trust in Ofcom to exercise its judgment and powers in a way that strikes the best balance between commercial market forces in its economic regulatory role and the preservation of public service broadcasting values.

Could that create a very litigious environment as the noble Lords, Lord McNally and Lord Phillips, fear? Possibly. But if we do not believe that Ofcom is strong enough for the fight perhaps we should all pack up and go now. In any case, if this leads the noble Lord, Lord McNally, to putting his children to work as communication lawyers, it conjures up the prospect, with a little help from a noble friend, of a distinguished new firm—McNally, Alli and MacBeal.

I shall end by flagging one specific issue for the later stages of the Bill in the area of training. Declaring one extra interest as a former governor of the National Film and Television School, I very much hope that the provisions in the Bill for Ofcom's promotion of training may be fine-tuned to ensure that the broadcasting industry's support for the NFTS will continue to allow its extraordinary work to be safeguarded.

8.33 p.m.

Viscount Astor: My Lords, I welcome the Bill. Our communications regulation is outdated and in need of reform. I congratulate the noble Lord, Lord Puttnam, and his Joint Committee on the fine work that they have done on the draft Bill. They have produced an excellent report on an enormous piece of legislation in a very tight timescale.

A year ago I would have had to declare an interest as a director of ITV Digital. Sadly that company is no more, leaving the Government's digital terrestrial ambitions badly dented and the prospect of analogue switch-off now some years away.

Its collapse demonstrated quite clearly the need for a single regulator. Attempting to improve digital terrestrial television coverage in conjunction with a plethora of different regulators, all with competing

25 Mar 2003 : Column 744

agendas, proved impossible. Of course there were management failures, but these alone did not put the company out of business.

Broadcasting is not a licence to print money; it is a risky business. ITV Digital cost its shareholders about 1 billion. But BskyB lost around that amount on Open, and even more on its investment in Kirch. Cable companies in this country have lost many billions of shareholders' funds in establishing their networks.

However, I want to look forward and to address six areas of concern raised by the Bill. I shall start with the BBC. The BBC is a wonderful institution which produces fantastic programming both on television and radio. Under the charter and agreement, the BBC should be answerable to Parliament, but there is no adequate mechanism which currently allows that to happen. I have no issue with the licence fee and believe that when the current charter and agreement ends, the licence fee should form the basis of any new agreement. However, I take issue with the lack of parliamentary scrutiny over how the licence fee is spent. We are considering 2.5 billion-worth of public money that is raised via a compulsory levy.

It is no longer sustainable for such a large sum of money to be beyond public scrutiny. Both the National Audit Office and the Public Accounts Committee should carry out value-for-money and financial audits of the BBC. Opponents argue that that could undermine the editorial independence and governance of the BBC. I have to say that I believe those arguments to be very weak. The National Audit Office and the Public Accounts Committee will not examine the editorial policy of the BBC, but whether licence fee payers' money is being spent effectively.

The position is similar to that of government departments. Both the National Audit Office and the Public Accounts Committee know that they cannot question the merits of any particular policy, but they can investigate whether the money used to implement any policy has been spent effectively. I believe that the BBC has nothing to lose; in fact it has much to gain. Parliamentary scrutiny would not affect the role of the governors, and to those who say it would, I say this: it is like claiming that shareholders at an AGM inhibit the role of a board.

In 1999 Gavyn Davies's own committee of inquiry recommended that the BBC should be audited by the National Audit Office. The alternative would appear to be more scrutiny by the Government, in particular by the Department for Culture, Media and Sport. That would risk political interference in the management of the BBC. I should have thought that scrutiny by an independent auditor and by Parliament, conducted in an open and transparent manner, would be far preferable.

There is also the risk of widening the debate when the BBC's charter comes up for renewal in 2006. The BBC should be independent of government but answerable to Parliament in the same way as other bodies funded by taxation. As a compulsory levy, the licence fee is in fact a tax.

25 Mar 2003 : Column 745

My next concern relates to the BBC and Ofcom. As drafted, the Bill limits Ofcom's remit over the BBC to the second and third tiers. The BBC is a large player in the market and a strong competitor to commercial operators. Like the other public service broadcasters, ITV and Channel 4, it should be brought fully within Ofcom's remit. The defence put forward that the backstop should reside with the governors of the BBC is not good enough. We need independent scrutiny and that should be conducted by Ofcom. The BBC has the ability to cross-promote via television, radio and publications like no other broadcaster. Ofcom should also have overall responsibility for approval of any new BBC services and scrutiny of existing digital channels. That is not to downgrade or inhibit the role of the governors. I believe that it would make life easier for them and it would protect the BBC as it faces charter renewal.

I turn next to the issue of media ownership. The proposals from the Government lack consistency. They agree that, subject to competition law, ITV should be one company. I agree with that; ITV needs to consolidate in order to survive, otherwise it will remain a minnow in comparison with its European competitors. Let us take RTL, owner of 35 per cent of Channel 5. It is worth 3.5 billion—double the combined market capitalisation of Carlton and Granada—and a staggering 11 billion less than BskyB is currently worth. Those figures put the values into perspective.

As we have heard, the Bill prevents single ownership of ITN. Every other major television channel in the world is allowed to own its own news supplier, but apparently not ITV. Single ownership of ITN would provide focus, secure future investment and strengthen rather than diminish it.

The cross-media ownership rules in the Bill are arbitrary. For example, they would allow a newspaper proprietor with just under 20 per cent of circulation to own Channels 3 and 5, with a combined audience share of around 40 per cent. But on the other hand, they would restrict a proprietor with just over 20 per cent of newspaper circulation share to Channel 5, which has an audience of only 6 per cent. Can the Minister explain the discrepancy? How can the rules be "proprietor neutral", as the Minister claimed in her opening remarks?

Will the Minister explain why some regulations on media ownership are in the Bill or are governed by Ofcom, but other cross-media ownership issues are left to the competition authorities? What are the principles, the rationale, governing these policies? What is the reason for that split? How did the Government decide which body should govern what?

Rights of appeal are vital if operators in the communications business are to have the confidence to invest—as they guarantee an independent decision on flawed decisions. I have some concerns that the Bill as drafted does not give broadcasters sufficient rights of appeal. It allows telecoms operators to appeal to an independent tribunal against any Ofcom decision

25 Mar 2003 : Column 746

made under Part 2 of the Bill, but limits appeals by broadcasters under Part 3 to decisions made for competition purposes only. For example, a mobile phone operator would have a guaranteed right of appeal against an Ofcom decision to regulate the packages it offered or the prices it charged; yet, were similar restrictions to be applied to a broadcaster, that broadcaster would have no right of appeal if Ofcom purported to make the decision on consumer protection grounds.

The Government have introduced a series of amendments to the Bill bolstering the position of the independent production sector. I welcome those. However, it appears that there are still a few gaps.

Two weeks ago, the OFT announced that the BBC had missed its statutory obligation to ensure that at least 25 per cent of its qualifying programmes were made by independents. One way of helping both the BBC and the independent sector would be, as we have heard from many speakers, to allow regional ITV productions to count towards the quota. So, for example, Border Television could bid to make BBC programmes which would count as part of the BBC's independent production quota. That would help the BBC and would have the added benefit of boosting regional production.

I am also concerned about the situation in radio. The independent radio supply market is dominated by the largest commissioner—the BBC. That puts the BBC in a powerful position over independent radio producers. One solution would be to extend the 25 per cent independent production quota provisions to BBC Radio. Another answer could be for Ofcom to be given responsibility for regulating the terms of trade between independent producers and the BBC. That would introduce an element of external scrutiny into the process.

I turn to the "must carry/must offer" rules in the Bill. There seem to be a number of inconsistencies which I should like the Minister to explain. Will the Minister explain why cable operators, which are subject to "must carry" obligations, cannot charge public service broadcasters for carriage on a fair, reasonable and non-discriminatory basis? Why do the "must offer" obligations not cover the BBC? As drafted, they apply only to public service channels licensed by Ofcom. Will the Minister explain why?

Finally, will the Minister explain the Government's position regarding regulations covering electronic programme guides (EPGs)—the on-screen TV listings? Current regulations require that public service broadcasters must be given due prominence and the system is regulated jointly by the ITC and Oftel. The current regulatory regime appears to work well. Is there a need for change? The BBC is pressing for change. Could that be connected with its decision to broadcast unencrypted—without making use of Sky's conditional access facilities—on satellite?

Will the Minister confirm that the BBC will be able to broadcast in the clear without regulatory change? If change is needed, how will that affect ITV? A requirement for satellite and cable broadcasters to give

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due prominence to every permutation of public service broadcasters' regional output could severely affect ITV.

I apologise to the Minister for asking so many questions, but the Communications Bill is a huge piece of legislation. I do not expect all the answers this evening, but I hope that the Minister will be able to write to me before Committee stage.

We have heard a great diversity of views from all sides of the House. Many issues need to be resolved. I look forward to debating them in more detail in Committee.

8.44 p.m.

Baroness Cohen of Pimlico: My Lords, I should declare that I was a governor of the BBC from 1994 to 1999, at which point, in the endearing BBC terminology, I expired. I was also a member of the pre-legislative scrutiny committee that considered the Bill. In that context, I would dearly like to wring your Lordships' hearts with an account of our trials and tribulations, but it would take time and, anyway, it should really be set to music.

Suffice it to say that we received nearly 300 written pieces of evidence of varying quality and length. That was before we took evidence from some 50 witnesses and participated in several breakfast seminars. At times it seemed like a continuous session, lasting for three and a half months. Through it all, my noble friend Lord Puttnam kept his head, his manners and his good temper and extended such a warm welcome to all contributors that they found the process a pleasure rather than a burden. He also formed his little group into a stroppy organisation that took no account of party politics.

Those of us who speak at number 34 in a debate have a duty to throw away those parts of their speech that someone else has already given. I have done that, but I cannot bear not to make three quick points.

Given the care and thoroughness with which the committee considered the key provisions of the Bill which relaxed the conditions of cross-media ownership and removed all prohibitions on foreign ownership of our major TV channels, it is the more surprising that the Government took no real account of our views. The idea that the owner of four major newspapers and one major television channel could also own a majority of Channel 5 struck the committee as more than peculiar. I, at least, shall join my noble friend Lord Puttnam in tabling amendments in Committee; indeed, I shall probably go further than him. Perhaps the prohibition should be for ever, rather than allowing Ofcom a crack at it in three years' time.

The Government have continued to insist that only good and new capital can come from allowing any overseas company to own our major television companies. That seems equally daft. Anyone who has ever dealt with or thought properly about major American television companies knows that, like the good businessmen they are, they seek to sell their programmes in as many markets as possible. Being American, they make their programmes in English—

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that may have escaped people's attention. That means that there is little additional cost in selling the programme that they have already made. It is especially easy if the same company owns the channel on which the programme would be transmitted. In business terms, the turnover drops straight to the bottom line. Anyone who believes that we as audiences will sensitively reject material not specifically made for us in a foreign land cannot have watched much television lately, and certainly not in the daytime.

The committee did not believe that quotas for local production would not be eroded, almost immediately, by the continual legal challenges and salami slicing that powerful companies would deploy in a businesslike pursuit of their best interests. I cannot except the United States in that regard. The realistic protection against all this lies, as it always has, in protecting the ownership of channels.

On the subject of salami slicing, I have listened to a variety of attacks on the BBC, usually prefaced by the profession of unqualified admiration for this jewel in our midst. I believe that the Bill has the balance right; Ofcom should regulate tier 1 and 2 services but regulation of content should stay with the governors. As my noble friend Lord Alli observed, one needs to look carefully at where the sniping is coming from. In my experience, a commercial experience is usually involved, at least in loading the rifle. I commend leaving the BBC where it is in terms of regulation.

8.49 p.m.

Lord Inglewood: My Lords, I begin by declaring an interest as chairman of the Cumbrian Newspaper Group, which owns several local newspapers in northern England and some commercial radio stations throughout the United Kingdom. We have several concerns about the contents of the Bill, but it is not for me to argue them this evening.

This Bill's predecessor was the Broadcasting Bill, subsequently the Broadcasting Act 1996. I think that the debate surrounding that legislation may have been dazzled by the shiny newness of digital technology's application to radio and television and the possibilities that it offered. Perhaps we were less focused than we should have been on the economic and social consequences of the changes that we were discussing. The tentacles of this Bill—with its overall embrace of telecommunications—spread deeper into the economy and society. Its impact on everyone in Britain today will be enormous. Show me someone who does not have a television set, a radio, a mobile phone, access to the internet or a credit card, or who is not in some way affected by all those things, and I will show you someone who will not be affected by it. In reality, it is going to affect all of us, probably in more ways that we do not immediately recognise than in those that we do.

Let us not forget that the sector of the economy which we are discussing is very important. Telecommunications and television broadcasting revenues alone amount to about 5 per cent of GDP. No serious business in Britain is going to be

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unaffected. The aggregate of the differences between getting it right and getting it wrong are going to be quite significant; indeed, I would say enormous.

We are discussing matters not only domestically to Britain. Particularly in the telecommunications sector—perhaps personified by Sir Chris Gent and Vodafone, with its takeover of Mannesman—UK business has established very valuable holdings abroad. Equally, we are world leaders in certain aspects of television and radio. It is therefore very important that we create a sound domestic framework for these industries here at home which will enable them to flourish and to expand abroad.

During the forthcoming discussion in your Lordships' House we shall hear a lot about quality in our media, and quite rightly so. However, we must not overlook the connection between prosperity and quality. In all areas of life, better quality goods tend to cost a bit more than shoddy wares. If we want good quality television, radio and telecommunications, they are going to have to be underpinned by thriving businesses supplying them.

As for free-to-air services funded by advertising, there has to be enough advertising to generate the necessary money. I think that we sometimes tend to gloss over the fact that, apart from the BBC, all other free-to-air public service television and radio is funded by advertising. So their performance is inevitably directly linked to the advertising market, which in turn is not infinitely elastic.

As I previously explained to the House, I believe in public service broadcasting as a benchmark in the domestic broadcasting scene and as a means of providing a component of quality television and radio. However, no one has to look at or listen to it. Nevertheless they, like the National Gallery and the Victoria and Albert Museum, are there for those who want them. Equally, I think that it is far too easy to assume that public service broadcasting alone is worth while and that everything else is not. There is plenty of top-rate television on satellite and cable, and much of it comes from abroad. I think that we should acknowledge that and do so ungrudgingly.

Equally, there are plenty of good things on public service broadcasting that I do not think much of. But, after all, many of those are not intended for white, 50-year-old men in suits who sit in the House of Lords—which by any analysis is a very niche sector in the market. Indeed, I recall one of my daughters rebuking me for moving to turn off a well-known Australian soap with the words, "It's my news, Dad". As noble Lords may gather, I do not much care for soaps—but I dare say that that was what Jane Austen wrote.

Anyone who travels by train or air has the chance at the terminus bookstall to buy a wide range of books and magazines, on most of which I would not want to spend my time or money. But if others do, why should they not? Surely the same is true of television and radio. Surely we should be relaxed within the framework of the rules regarding

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defamation, privacy, taste and decency, bias and so on, not least when there is a vein of public service broadcasting available.

In today's world, with its globalising media marketplace, especially in the English-speaking world, I believe that the BBC, the only UK business of a size to be a global force by itself, is right to have moved into the production of commercial services. But of course that poses a series of questions about fair competition, transparency, accountability and regulation. These questions are already widely canvassed, but it does not make them any easier to deal with. Suffice it to say, however, that although I do not think this Bill is the place for dealing with many of them—that is for the charter and agreement renewal in 2006—I am increasingly coming to the view that changes in the constitutional and legal status of the corporation may be appropriate, and that its regulatory and accountability arrangements are becoming anachronistic. In fact, I think such changes might well enable the BBC to be better able to get on with its prime purpose—broadcasting.

As for cross-media ownership rules, I believe it is appropriate to have safeguards above and beyond those afforded by competition policy alone. Equally, those rules should be as unintrusive as possible and address real abuses in a realistic way that is proportionate to the mischief they are intended to combat.

As I have already pointed out, the media and telecommunications sectors are commercial and are always changing, stimulated by the marketplace. This is generally good and delivers for society, although that is not an invariable outcome. In particular, for as long as the proposed merger between Carlton and Granada is subject to a Competition Commission inquiry, I would not want to express a view about where the balance of advantage lies, but such a move clearly has some benefits. Equally, were it to proceed, I cannot see why the merged company cannot have its own news provider if it wants, despite the Minister's rather flimsy attempt earlier to persuade me otherwise.

Just as all politics is local, so is the media. What affects or interests us as individuals is what matters most. Hence the regional component to Channel 3 is important, although increasingly in the contemporary world, the distant is ever-closer, as the coverage of the Iraq war shows so vividly.

Now that the United Kingdom public service broadcasters are finding ways of transmitting all their regional channels by satellite, it is important that they are all accorded appropriate prominence on electronic programme guides. I welcome this extension of regional services. It is depressing enough waking up in a hotel room in Brussels, but then to turn on the television and be told what is happening in Gravesend when you are more interested in Carlisle does not make it any easier.

Moreover, while on the subject of regionality, can the Minister say what plans the Government may have for the roll-out of broadband through the more distant and sparsely populated parts of the United Kingdom, particularly given Commissioner Monti's recent

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remarks that he accepts that it will be legitimate under state aid policy for public money to be used to assist this process?

There is one aspect of the media and telecommunications industries which often tends to be overlooked—the huge significance of the regulators. The aggregate impact of the myriad decisions they take will have a very material effect on the future well-being of the industries. The noble Lord, Lord Currie, and his colleagues are shouldering onerous burdens and taking on great responsibilities. As parliamentarians, we should recognise their independence from us and exercise our responsibilities as the body to which, ultimately, they must give an account.

One particular area in which Ofcom will be engaged will be in the transposition and implementation of the considerable body of European legislation that affects this part of the single market, since United Kingdom policymakers are quite tightly constrained by decisions taken at EU level in a number of areas which we are discussing this evening. I hasten to add that I am not complaining about that, but I hope that the House will carefully watch these developments as part of its wider scrutiny role. Certainly, as the Minister responsible for much of the negotiation of the last Television without Frontiers directive, I felt I was hardly held to account by Parliament regarding what I was doing on behalf of the country. It is to be reviewed again quite soon, and while I know the noble Baroness has plenty of things to fill her day, I hope that she may be able to keep us up to speed as and when these negotiations are put in hand.

I hope that the Communications Bill, when enacted, will not have a long life on the statute book in its present form, just as the Broadcasting Act 1996 is now being unpicked. No sector of the economy is moving faster than telecommunications, the media and broadcasting and legislation must guide its evolution, not kill it off.

This Bill proposes some good things, but it could do more. I hope that the noble Baroness may be able to find it in her power to enhance its benefits and to mitigate its shortcomings during its passage through the House.

9 p.m.

Lord Lipsey: My Lords, like my noble friend Lady Cohen, I recognise that at this time of night the only chance of a hearing is to be brief. But I cannot resist making one short preliminary remark. It is 31 years this year since I first worked in these Houses of Parliament. For the bulk of that time I watched with alarm as it seemed to me that Parliament was moving from what Bagehot called the efficient part of the constitution to the dignified part of the constitution, counting for less and less.

With the Joint Committee, so magnificently chaired by my noble friend Lord Puttnam, for the first time I feel a genuine hope that that process has been reversed. Here, through the evidence and the report and the debate, we saw Parliament right at the centre of a

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national debate on these matters. Whatever the outcome, therefore, this is a great victory for Parliament and we should celebrate it today.

The only substantive issue I want to talk to today also concerns Parliament, in particular the relationship between Parliament and the BBC. As a young student of politics, I was taught that the textbook role of Parliament was the scrutiny of supply; that is, the voting and monitoring of public spending. The Public Accounts Committee is the parliamentary committee charged with this task. It is chaired by a leading member of the Opposition—currently, Edward Leigh. It is serviced by the National Audit Office, itself headed up by an officer of Parliament, the Comptroller and Auditor-General.

It is not—and this is crucial—concerned with policy. It is concerned with whether, given the policy, public money is spent efficiently for the purpose for which it has been granted. But it is not concerned with all public money, for the BBC is outside its remit. That anomaly was rejected by the committee on the future of the BBC licence fee, chaired by my good friend, now chairman of the BBC, Gavyn Davies, on which I sat. However, I see that he has now told noble Lords that he was opposed to this particular recommendation in the report which he signed.

It was authoritatively rejected by the committee on the audit of public spending, chaired by the noble Lord, Lord Sharman. The whole PAC, irrespective of party, has asked that it be lifted. And now we have a Secretary of State who is not the BBC's messenger girl in this matter. Ministers have made it clear that if Parliament decides the restriction should go, go it will.

I understand the BBC's concerns in this matter. However, I believe that some of them are down to misapprehension. The noble Baroness, Lady Hogg—I am sorry she is not in her place—seemed to believe that the National Audit Office would be auditing the BBC's accounts, appointing its auditors and interfering with her audit committee. It has no such intention. Some people seem to believe that it is a Trojan horse for Ofcom. I backed PAC responsibility towards the BBC for precisely the opposite reasons. I fear that Ofcom will take too large a role too soon in this and that unless the public have some guarantee that the BBC is accountable to someone for the public money it spends, it will speed up that process. That is why I oppose it.

Most seriously—and this is a genuine concern—the BBC worries that the NAO will interfere with the editorial content of programmes. I, too, believe that concern to be misplaced. Every noble Lord will agree that there is no part of the BBC whose independence is more important than that of the World Service. It is a beacon of impartiality throughout the world, particularly at times such as these. Yet by a quirk—it is funded by a grant in aid from the Foreign Office—the World Service is subject to NAO and PAC scrutiny. Needless to say the BBC fought a rearguard action to the last drop of Chablis to persuade Members of both Houses to get it exempted. Fortunately, they failed.

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There is no suggestion anywhere, including from the BBC, that this has led to any meddling with its editorial independence. Yesterday I checked with a former distinguished head of the World Service, Sam Younger, who now runs the Electoral Commission. Mr Younger confirms not only that there was no illegitimate interference but also that NAO scrutiny was a spur to the efficiency of the organisation he ran.

But it is a case of belt-and-braces and the BBC needs reassurance. Let us see what we can do. I understand that the NAO is perfectly happy to sit down with the BBC and discuss with it how it would plan to conduct its scrutiny should the rules change. I believe that it will do so—having had some insight into its thinking—in a way that satisfies any legitimate concern that the BBC and its supporters may have.

As the Davies committee found, the BBC licence fee is by far the best way to finance the kind of services that the BBC provides. But it is a particularly onerous tax. It is a poll tax, one that it can take a low paid worker a whole week of labour to earn. Parliament has decided to be generous with the BBC and to increase the fee each year by 1.5 per cent more than inflation. That is why the BBC can achieve so much today. I signed up to that on the Davies committee and I do not resile from it in any way today. I was persuaded by the noble Lord, Lord Birt, that every penny was justified. But I do argue with all the force I can muster in your Lordships' House that we can do that and continue to do that only if we can assure the people that that money is being spent efficiently and not frittered away, as in the pre-Birt days I fear much of it was.

I want a BBC that is independent. I believe in an independent BBC as strongly as any Member of this House. But I also want a BBC which is accountable, and accountable above all to this Parliament. By asserting the rights of the PAC subject to the sound assurances that it is prepared to give, this House will, with the Bill, have an opportunity to strike a blow for an efficient Parliament as well as an efficient BBC.

9.7 p.m.

The Duke of Montrose: My Lords, I wish to address issues that are a little more local than those addressed by the noble Lord, Lord Lipsey. The idea of replacing five separate regulatory boards with one single regulator has a nice tidy administrative feel about it. It will particularly give reassurance that there is not some element of communications that is going to fall outside the net as it exists at present. The element that we shall need to guard against is that with communications being handled by one large body it does not start to lose touch with the grass roots, although I realise that that is not perhaps the view of the noble Lord, Lord Dubs.

There are three issues I can think of that will be of concern particularly to those who have a stake or an interest in Scotland: national and regional consumer representation; regulations governing the electronic programming guide; and the development of broadband in remote areas. Given the time of night I shall touch on just two of those matters.

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Noble Lords will be well aware that Scotland has distinct social and cultural characteristics. The higher than average number of households living on low incomes might also be a factor, but I refer more particularly to the numbers and remoteness of some communities. Large swathes of the country are still subject to an effective BT monopoly as far as fixed line telephony is concerned. Scottish research has shown that outside the cabled areas of the central belt over half the customers are unable to name a single competitor to British Telecom. They may even be like me and not really want to know of a competitor while having to rely on BT for the maintenance of overground lines in our rough northern maritime climate. I certainly hope that by having to deal with only one company as a supplier, it may be possible to achieve a speedier remedy to any problems that I face.

We heard a most interesting speech from the noble Lord, Lord Gordon of Strathblane, on the advantages of regional emphasis in communications. Currently the need for regulation to recognise Scotland's special characteristics is allowed for by the statutory Scottish board members on both the Independent Television Commission and the Broadcasting Standards Commission. In addition, there is the Scottish Advisory Committee on Telecommunications. I certainly accept that the Bill as drafted allows for Ofcom to set up an office in Scotland, and for the content board and the consumer panel each to have a member for Scotland appointed by the main Ofcom board.

Of course, I am delighted to see in Clause 205 the transmogrification of the Gaelic Broadcasting Committee into the Gaelic media service, although I would wait for details from those more familiar with its work, such as the noble Baroness, Lady Michie of Gallanach, who spoke earlier, to know whether and where the provision can be improved. On that point, I have to declare an interest as having been signed up as a life member of An Comunn Gaidhealach in the days before I could even walk.

All that will make it extremely difficult for only two Scottish positions to be filled by individuals who can adequately represent all the different stakeholders. Have the Government given consideration to requiring the consumer panel to have a committee for Scotland? It would perhaps be constrained by the remit of the consumer panel itself, but would go some way to replacing the Scottish consumer input currently provided by the Scottish Advisory Committee on Telecommunications.

Now that the multiplicity of channels and what I believe are called platforms are moving into double figures—the noble Lord, Lord Birt, termed the way in which they are doing so as a spectrum of abundance—we already have experience in this country of regulating the provision of electronic programming guides. My noble friend Lord Inglewood referred to that a few minutes ago.

In speaking to some of the representatives of the BBC, I have been made aware that it no longer has a policy of encrypting its public service programmes

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when providing them for satellite broadcast. With the money saved from the encryption process, the BBC proposes to make all regional variants of its programmes and news available on satellite. If that becomes the norm for all Scottish broadcasters, it means that enthusiastic Scottish football supporters in London will be given the chance to watch their own regional football coverage on a Saturday evening, as if they were watching one of the Scottish regional channels. That recommends itself to many Scots.

Because the construction of the electronic programme guides is very much subject to the whim and financial interest of the provider, the role of the regulator becomes extremely important. It has to see that the public service element does not become completely buried and that viewers have ready access to the right regional version of the public service channels provided for them. All that means that Ofcom must be given the clear objective of updating and maintaining the regulation of electronic programming guides to protect the public interest.

9.13 p.m.

Lord Ashley of Stoke: My Lords, I warmly welcome the Bill, with its wide-ranging remit, but I must say frankly to my noble friend on the Front Bench that quite a few amendments will be required before it is satisfactory to some of us.

I propose mainly to deal with the Bill's effect on disabled people, as did the noble Lord, Lord Addington. On a more general issue, I hope that the Bill will be made to work for the benefit of consumers now and in the longer term.

I am anxious to make a specific point. I agree with the noble Lord, Lord Puttnam, on the proposed changes to media ownership laws. I hope that the Government will accept his suggestions, which I very strongly support.

I particularly welcome the Bill's proposals to extend subtitling and signing requirements to cable and television services. Their exemption showed a scandalous disregard for disabled people, and is a classic example of the naivety of governments in the face of commercial lobbying which claimed that subtitling was too expensive. That is an absolutely nonsensical claim. Goodness knows why Ministers bought it.

The basic fact about subtitling of television is that, without it, television simply does not exist for people with a serious hearing impairment. For them, it is a silent or mumbling box of moving pictures, devoid of all sense and substance—a teasing reminder of our greatest medium of communication but rendered meaningless by the absence of subtitles. It is a ridiculous situation when subtitles can transform the understanding of television for profoundly deaf people. If subtitles are not available, such people cannot watch television because they cannot understand it.

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The targets proposed in the Bill for subtitling are reasonable—for example, 90 per cent every week for Channels 3 and 4, and 80 per cent every week for other services. But we should not lose sight of a 100 per cent target, which is the eventual aim.

Many of the 50,000 profoundly deaf people whose first language is British Sign Language do not have the necessary language skills to allow them to follow subtitles. They need on-screen signing, and the targets for that are inadequate and certainly need to be revised in the Bill.

However, if the targets for subtitles are reasonable, the target date of 10 years is laughable and absolutely nonsensical. IT companies, which often aim at target dates of 10 weeks or 10 months, must be laughing at the Government's target of 10 years. By then, of course, we may well have television sets on our watches or even our spectacles! Providing subtitles should be child's play. Whoever put the case for 10-year targets and persuaded the Government to accept them was skilful at pulling the wool over the eyes of Ministers.

That is yet another example of commercial interests pleading poverty, regardless of the fact that, if successful, they would damage the interests of deaf people. I urge the Government to change their minds, and I shall give them an opportunity to do so with amendments in Committee and on Report seeking a five-year absolute maximum within which subtitling should be at 100 per cent.

Another source of concern is the proposal for exemption from the suggested provisions for subtitling. Many factors will be taken into account in considering whether a channel should be exempt, and Ofcom will properly make some exemptions. I presume that it will not readily dish them out like confetti, but there is a danger that it will allow them on flimsy grounds, to the detriment of deaf people. Again, I shall be making suggestions at a later stage of the Bill.

I turn briefly to some issues that affect people who are blind as well as those who are deaf and, indeed, those with other disabilities. Equipment design that includes meeting their needs is very important. Many products connected with television, such as video recorders and subtitle access, are more complex than they need to be and they create major difficulties for disabled people. What we call "add-ons" are costly and expensive, but if we have inclusive design—that is, if such add-ons are prepared at the manufacturing stage—the costs to the manufacturer are minimal and the disabled person gets a better product.

Another issue that affects people with all kinds of disabilities is the issue of an advisory committee with a special remit on disabled and older people. Without that, the problems encountered by such people could easily be overlooked—indeed, they will be—despite the provisions in the Bill, which I regard as inadequate. Such an advisory committee to the consumer panel should be set up to articulate the needs of disabled and older people.

Much of what I said earlier applies to audio description and other problems for sight-impaired people. Audio description provides a commentary to

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fill in the picture for those who are blind and cannot see it. It is a very valuable exercise and one that is indispensable for blind people. We should have far more of it.

The provisions of the Bill will affect the lives of people with sensory disabilities. With appropriate amendments, which I am sure the Government will look on kindly and sympathetically when we reach the Committee and Report stages, the Bill can be of enormous value to them or it can leave them still excluded from some of the wonders of television. I am optimistic that the Government will help.

9.19 p.m.

Lord Pearson of Rannoch: My Lords, I was fortunate enough to have an Unstarred Question in your Lordships' House on 11th March last year, to ask the Government whether the BBC was fulfilling its duty to produce political programmes which were impartial, wide-ranging and fair. I have a feeling that at this late hour your Lordships might appreciate it if I do not repeat again now what I said then, so I shall refrain from so doing, but I should like what I said in that debate at cols. 654 to 656 to be taken into account by the Government in their consideration of the Bill.

That debate took place because the Euro-sceptic movement in this country believes that the BBC is guilty of consistent Euro-phile bias. Because bias, like beauty, is often in the eye of the beholder, the noble Lords, Lord Harris of High Cross and Lord Stoddart of Swindon, and I decided to commission genuinely independent research to find out if those fears were justified. So, through our research unit, Global Britain, we commissioned Minotaur Media Tracking, which is run by Mr David Keighley, a former publicity officer for BBC TV news and current affairs and a former director of corporate affairs at TV-am, to analyse the BBC's political output.

By 11th March last year, we had received six surveys of the BBC's political coverage of the European issue. Those reports showed alarming Euro-phile bias, some of which is detailed in our debate that day.

Since then we have commissioned four further reports, which, alas, continue to show the same picture. The nature of broadcast monitoring is obviously laborious, and the 10 surveys we have so far commissioned run to some 507 pages for the main reports, supported by 674 pages of background analysis and 1,412 transcripts, which run to a further 2,750 pages. The first six reports can be judged for themselves because they are on the www.Globalbritain.org website, together with our contemporary correspondence with the chairman and management of the BBC and with the Secretary of State, going back to Minotaur's first survey of the BBC's coverage of the European Parliament elections in 1999.

We have not put on the website any of the later reports or correspondence since March 11th last year because we have been trying to get the BBC to honour its public service remit by changing its editorial stance, but I fear we may have failed.

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I am aware that a number of your Lordships may share the BBC's view that the European Union is an obviously benign institution and that our membership of it is so clearly in the national interest that anyone who disagrees must be mad. Now is not the time to debate that question and I hope it will not cloud our consideration of the Bill. What is beyond dispute, and what is relevant to this debate, is that a substantial proportion of the British people do want to leave the European Union, and even if the BBC thinks they are all mad, it has a duty to air that significant strand of public opinion.

For instance, according to opinion polls, some 30 to 40 per cent may want to leave the EU, sometimes more, depending on the question asked. But so far the BBC has refused to represent their view. The BBC does not deny that. In his latest letter to me of 25th February this year, the chairman writes as follows,


    "it is accepted that the euro-sceptic point of view that Britain should withdraw from Europe deserves inclusion in the BBC's coverage, but the fact that none of the main political parties has adopted this position will inevitably influence the prominence with which it is covered".

Fair enough, except that it is not a question of the prominence which the BBC accords to this subject; the fact is that the BBC has never permitted or encouraged serious debate about whether we should stay in or leave the European Union. It is also disingenuous, to put it politely, of the BBC to imply that it gives only minimal coverage to positions which are not shared by the main political parties.

For instance, the BBC gives plenty of airtime to those who oppose GM crops and food and to those who favour the legalisation of cannabis and other drugs. It also gave ample airtime to the anti-monarchist view in the run-up to last year's Jubilee. None of these positions has been adopted by the main political parties as far as I am aware. Of course, there are other examples with which I do not have time to trouble your Lordships now.

I gather that the BBC's defence for giving so much time to republicans before and during last year's Jubilee may be that the Jubilee was a major national event and that it was therefore required by its public service remit to reflect all shades of public opinion. Fair enough, one accepts that. But the BBC has, by comparison, almost completely ignored the new EU constitution emerging from Mr Giscard D'Estaing's Convention on the Future of Europe. That has fundamental implications for the future of our democracy and may therefore turn out to be much more important than the Jubilee. So that excuse does not wash either.

Our second complaint, which I made on 11th March last year but which I repeat because the BBC refuses to do anything about it, is that the Minotaur reports are passed by the chairman to the BBC's management, and not to the governors. Yet it is the governors who are responsible for the BBC's duty to be impartial, wide-ranging and fair; to educate and inform. Not surprisingly, on every occasion, the management tells the chairman that the report's conclusions are unfounded and he duly reports the message to us.

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In an attempt to be helpful, we have therefore twice suggested that the reports should go to an independent arbiter for adjudication. The chairman has twice turned down that suggestion flat, presumably because the BBC fears the result of such independent validation. That is a pity from our point of view, because independent adjudication would also reveal whether the reports find that the BBC is indeed guilty of Euro-phile bias just because they have been commissioned by such well-known Euro-sceptics as the noble Lords, Lord Harris, Lord Stoddart and myself.

That suggestion was even advanced, I regret to say, by some of your Lordships in our debate on 11th March last year—understandably, perhaps, because he who pays the piper often calls the tune. But it is a bit more worrying when the BBC's only defence to the press against the Minotaur reports is that they were commissioned by arch-Eurosceptics and must therefore be unreliable. That appears to be the case. Anyway, we have offered to put them to the test but have been turned down.

It is also not frightfully helpful when the chairman suggests, as he has on more than one occasion, that we should address our complaints to the BBC's Programme Complaints Unit, or even to the Governors' Programme Complaints Committee, because both those committees deal with complaints about specific programmes or items and are not geared to hearing complaints about consistent editorial bias.

Perhaps partly in answer to that impasse, the chairman last year set up a new Governance and Accountability Department, to support the governors' public service role. A week ago he made a speech about the Bill and BBC independence, which I expect has been circulated to most of your Lordships. It reached me this morning, and contains one error of such fundamental importance that I feel that I should put it before the House. The chairman says:


    "The need for the Board of Governors to act as a buffer between the services of the BBC and outside forces in the worlds of politics and business remains as great as ever".

Quite so. He continues:


    "We have completely revamped the way in which the Governors set objectives for the organisation, and then hold the executive to account. We have established a new department to give the Governors entirely independent advice and support in these areas, and in ensuring BBC compliance with the law . . . For the first time, the Governors are now supported by a substantial body of professionals, who work outside the control of the executive".

The fundamental misconception about those statements is that the people who work in the new Governance and Accountability Department are not independent of the BBC. They may show up in a separate box on the BBC's organisation chart, but they have merely been shuffled across from other departments and are still employed by the BBC. They therefore still owe their prospects and careers to Mr Dyke, Mr Damazer and the other top brass, whom they would be most unlikely to offend by, for instance, advising the governors that the Minotaur reports should be taken seriously. It is not surprising that we have seen no sign of that new department bearing fruit in the year since it was introduced.

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So we made another helpful suggestion: the new department should be employed by separate trustees to guarantee the independence of their advice to the governors. The chairman also turned down that idea, but it may be worth airing it in Committee.

There are other areas on which the BBC stands accused of editorial bias. But those claims are not supported by such a substantial body of research as that which underpins the accusation of institutional Euro-phile bias for a long time. If the BBC cannot cure the problem, it might as well go under Ofcom.

9.30 p.m.

Lord Eatwell: My Lords, I declare an interest as chairman of the Commercial Radio Companies Association, which represents virtually all commercial radio companies, large, medium and small.

Radio is the Cinderella medium in the great communications debate. Yet radio listening is rising as TV viewing declines. As a consequence, radio employs more people than television does. Commercial radio is a 500 million business providing three national stations and almost 250 local stations. By comparison, the BBC manages only 40 local stations. Commercial radio is a very local medium. Almost half of commercial radio stations serve communities of fewer than 300,000 people, and a fifth serve fewer than 100,000 people. It is the responsibility of Government and the task of the Bill to ensure that that wonderful local medium flourishes. In many ways, that is exactly what the Bill achieves.

The radio industry welcomes the philosophy of regulation embodied in the Bill. It welcomes the commitment to light-touch regulation and the fundamental theme of competition-based regulation. The commercial radio industry welcomes and is most grateful for the manner in which the Government have approached the construction of this complex measure, both through the committee of the noble Lord, Lord Puttnam, and the extensive opportunities for consultation offered by Ministers and civil servants.

An important outcome of the consultation process was the Government's acceptance of the radio industry's concerns about restrictions on the ownership and scale of local radio. The Government have made clear that Schedule 14 will be used to create a framework for a listener-friendly consolidation of the local radio industry, providing a wider range of programming and on the scale to provide the truly local services that benefit listener and broadcaster alike.

That will come about by means of the Government's proposed two-plus-one rule, which provides that within a listening area of appropriate size there must be at least two different owners of commercial radio stations plus the BBC. I pay tribute to Ministers for the manner in which they were prepared to debate their concerns on the issue with the industry, to work hard to gain a full understanding of the industry's character and needs and to elicit assurances that the consequent deregulation of radio ownership would enhance diversity in local markets.

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In the light of those achievements, it is all the more disappointing to find that at the last moment the Government have introduced to the Bill an entirely new layer of micro-regulation without any consultation whatever. I refer to Clause 307, on which the noble Lords, Lord Gordon of Strathblane and Lord Dubs, commented. The clause is apparently designed to ensure localness. It is totally redundant.

Has the Minister ever paused to reflect why there are so many local commercial stations? They exist because localness is a successful competitive strategy. Any local station that ceases to be local will soon lose its listeners. No local station needs either the Government or the noble Lord, Lord McNally, to tell it to be local. None the less, the Government already have belt-and-braces powers to ensure localness.

Clause 306 reaffirms and strengthens the regulatory powers contained in the Broadcasting Act 1990. Those powers ensure that, when issuing radio licences, Ofcom will be able to specify the format of local radio stations' activities. As currently practised, format control determines matters such as where programmes are made, how much news is broadcast, the type of music to be played, community information broadcasts and so on. Clause 306 ensures that those controls will remain in place in the future. The radio industry supports format control and supports the development of a clear localness code.

Given the competitive imperative for localness and given the fact that all the necessary powers for defining localness already exist in Clause 306, will the Minister tell the House what Clause 307 is for? Precisely what powers does it add to the Bill that are not already there in Clause 306? More generally, what will Clause 307 require local radio stations to do that they are not doing now? Can the Minister, in his winding-up speech, give the House a couple of examples of how the content of local programming will be changed by Clause 307?

Although Clause 307 is redundant, it embodies a worrying indication of the approach that the Government intend Ofcom to take to the regulation of localness. One might expect that a localness strategy would be concerned with the range and content of programmes that are available to listeners—not a bit of it. Clause 307 expresses no concern about the quality and content of programmes. It is concerned entirely with inputs.

We must examine the content of that peculiarly intrusive piece of micro-management. Subsection (1)(a) refers to the need for "local material". That seems reasonable enough, until we consider what it might mean. We might consider the case of a station broadcasting modern music. What does "local material" mean? Can my noble friend Lady Blackstone of Stoke Newington tell the House what, in Stoke Newington, is distinctive local modern music? Can my noble friend Lord McIntosh of Haringey comment on the local musical heritage of Haringey?


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