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Baroness Blackstone: I shall endeavour to demonstrate to the noble Lord, Lord Brooke, and all other noble Lords who have contributed to this debate that the Government's heart is in the right place with regard to the independent production sector.

I strongly agree with the claim made by my noble friend Lord Alli, the noble Viscount, Lord Falkland, and practically every other speaker in this debate; that is, that the independent production sector is very important within the whole broadcasting environment. I also strongly agree that it produces some very fine programmes. If I did not acknowledge that, I should be in grave trouble with my daughter, who currently happens to make documentary programmes in the independent sector. I do not know whether that involves declaring an interest; the noble Lord, Lord Brooke, declared an interest in relation to his son.

The Government asked the ITC to undertake a review of programme supply in the UK, as the noble Lord, Lord Alli, and others mentioned, in response to concerns expressed during consultation on the Bill about the overall economic health of the programme supply market and the position of independent producers within it. It also commissioned that because it agreed with what my noble friend Lord Puttnam

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said; that is, that the sector should be protected and nurtured. I agree with all the former and current producers who spoke this evening about that.

The ITC's authoritative and incisive report was published in November 2002 and was well received by the whole industry. The Government accepted almost all its recommendations. Following the review, we made a substantial body of amendments in another place to strengthen the Bill's requirements on independent productions.

Let me reassert, therefore—it is important to the noble Lord, Lord McNally—that the Government are listening and have already made a great many changes to the Bill of which this is another example. These amendments will require all broadcasters to draw up and agree with Ofcom codes of practice for their dealings with independent producers. They will give Ofcom the power to measure the independent productions quota by value as well as volume if appropriate. I say that to the noble Lord, Lord Alli, and my noble friend Lord Dubs. They will require Ofcom to review periodically the way the quota is working and report to the Secretary of State. They will give Ofcom the power to require broadcasters to make up any shortfall in the quota in subsequent years.

These amendments demonstrate our strong and ongoing commitment to the independent production sector. I am grateful to my noble friend Lord Alli and other speakers who have begun at least to acknowledge that. I can assure the Committee that the issue of independent productions will be very much at the forefront of Ofcom thinking. That is what the Government intend and expect of Ofcom. In particular, under its annual factual and statistical report, Ofcom must consider certain aspects of the programming quota for independent productions.

Paragraphs (e),(f) and (g) of Clause 351(3) require Ofcom specifically to consider the application of the quota and the effectiveness of the conditions and duties that are in force; whether to recommend to the Secretary of State that he exercise the power to change the quota or the way the quota is operated; and the extent to which independent productions are produced in the United Kingdom in a range of production centres outside the M25 area.

I believe that Ofcom's wide-ranging requirements adequately meet the concerns that prompted Amendment No. 14. I do not believe, therefore, that it is necessary to include a reference to the independent production sector as one of the overarching objectives contained in Clause 3(2). As far as a link between Ofcom's general duties and the UK programme supply market is needed, it seems to me that it is one of the "relevant markets" referred to in subsection (3)(e) and as such Ofcom will have to have regard to the desirability of encouraging investment and innovation in it. I hope, therefore, that my noble friend will not press his amendment.

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Amendment No. 42 would insert a new clause proposing a new duty for Ofcom to promote the independent production sector. As I have explained in some detail, Ofcom will be very aware that to promote the independent production sector is already firmly within its remit. Furthermore, I am sure that Ofcom's radar is already fixed on this issue as one to which they must have particular regard. Again, I do not believe that that additional duty for Ofcom is necessary.

Furthermore, I am unsure as to the value of a register of programme ideas. Indeed, I am not aware that it has been raised as a specific concern in the broad consultation that has taken place on the Bill either by broadcasters or by the independent producers themselves. I agree, therefore, with the noble Lord, Lord Crickhowell, that keeping a register of all original programme ideas would appear to be a pretty big administrative burden to be placed on Ofcom, the benefits of which are not immediately obvious. Perhaps a register of original programme ideas might be considered a useful tool for independent producers. If that is the case, it would be appropriate, perhaps, for PACT, as the trade association which represents their interests, to develop and maintain such a register. Perhaps my noble friend would like to take that up.

Perhaps I may comment briefly on the issue of copyright protection, which my noble friend also raised. We are aware that some people have raised concerns about the existence of copyright protection for programme formats in the past. However, I think that many people now take the view that sufficiently elaborated original programme formats are already protected by copyright, and that is something with which the Government agree.

I reinforce what I have said by emphasising again that Ofcom will have an enormous amount of flexibility to promote the independent production sector in carrying out their duties. Therefore, I do not think that this new clause is necessary.

I turn to Amendments Nos. 196 and 199, which would require Ofcom to secure that every public service broadcaster in each year must meet a programming quota for independent productions by both "value" as a percentage of the broadcaster's annual budget allocated to qualifying programmes as well as by "broadcast time".

Amendments Nos. 272 and 273 to Schedule 12 would place similar requirements on the BBC. It is perhaps appropriate at this point to say that like the noble Viscount, Lord Falkland, and one or two other speakers, the Government are somewhat disappointed that the BBC has not managed to meet its quota targets. Indeed, my right honourable friend the Secretary of State has written to the chairman of the BBC about that. I am sure that we will have a reply very soon. We know about the particular problems caused by the issues of Endemol, but I do not think that that entirely explains why it has not reached its quota.

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The ITC UK programme supply review specifically examined a recommendation of the committee chaired by my noble friend Lord Puttnam. The ITC review was not persuaded of the need at present for such intervention in broadcasters' scheduling decisions. However, the review recommended that Ofcom keep that position under review, with reserve powers in the Bill to monitor the programming quota for independent products by value as well as or instead of by broadcasting time if that seemed appropriate. The Government have accepted that recommendation. It does not quite meet what is proposed by the amendments but it goes a very long way towards doing so. I hope that what the Government are doing in that respect will be accepted.

An order-making power for the Secretary of State to effect that change was introduced in another place. That power, which must be triggered by a recommendation from Ofcom, would allow the Secretary of State to make an order which would give Ofcom a duty to set licence conditions for the public service channels—Channel 3, Channel 4 and Channel 5—which would secure in each year that the programming quota for the independent productions must be met by value as well as or instead of by broadcasting time.

The "by value" measure at Clause 273(5) means that the broadcaster in question must apply a certain percentage of its programming budget for qualifying programmes in a year to the acquisition of independent productions. That could be applied as well as or instead of the present measure which requires a certain proportion of broadcasting time to be devoted to such productions. Similar provisions were also introduced in Schedule 12 to extend that power to both the BBC and the Welsh Authority. I shall return to the issue raised by the noble Lord, Lord Roberts of Conwy.

I hope that noble Lords will agree that should it appear to Ofcom that a "by value" programming quota for independent products is needed, there are now appropriate measures in place to impose those requirements. I therefore hope that the amendments will not be pressed.

I turn to the points raised by the noble Lord, Lord Roberts of Conwy. S4C has never before had a quota for independent production, but the Bill includes S4C in the 25 per cent for the first time. As with Channel 4, the expectation is that S4C will achieve a higher percentage. I hope that that response meets the noble Lord's points.

The noble Baroness, Lady Buscombe, spoke to Amendment No. 197, which would insert the term "independent producers" into Clause 273(2)(b). Amendment No. 198 would define that term as a producer who is not an employee of a broadcasting company, and is not a body corporate deriving more than 33 per cent of its gross annual revenue from a related broadcaster.

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Prior to the establishment of programming quotas for independent productions a decision was taken in the Broadcasting Act 1990 that the definition of both "independent productions" and "qualifying programmes" should be set by the Secretary of State by secondary legislation. This was considered to be a rather more flexible approach to ensure that the definition of the terms used within the primary legislation remain appropriate to achieving the objectives of the quota. Establishing a definition of the term "independent producer" in primary legislation would restrict the flexibility and scope of the order-making powers under the Bill. Therefore, it really would defeat the purpose outlined by noble Lords who contributed to this evening's debate.

As I am sure the noble Baroness is aware, defining "independent producers" in the way proposed was considered as part of the ITC UK Programme Supply Review. The review examined the role of independent producers within the programme supply market and specifically examined the current definitions. The ITC noted that it did not think that there was a case at present for changes in qualification criteria to include producers who have ownership links to UK broadcasters. It considered available evidence, which showed—contrary to what has been suggested tonight—that producers in this category were not being unduly affected by exclusion from the quota at present, and that a change of definition would most likely impact adversely on other independent producers.

I understand the arguments that noble Lords have made by way of these amendments. I can assure them that, through the ongoing monitoring of the quota, Ofcom will keep these definitions under review. I hope that helps noble Lords, at least a little. Any further changes to the definition can be made by secondary legislation. However, I believe that the programming quota for independent productions has worked well. It has served as a catalyst. It has also helped stimulate competition and diversity and encouraged a thriving and innovative production sector.

Through Clause 273 we aim to ensure that independent producers continue to make a significant contribution to the programme supply market in this country, as well as allowing us the flexibility to make some changes as circumstances dictate. I therefore see no reason to make such a fundamental change to the clause. I hope that the noble Baroness will not wish to press her amendment. Similarly, in the light of what I have said at somewhat great length in an effort to be helpful, I hope that my noble friend Lord Alli will feel able to withdraw his amendment.

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