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Lord Lipsey: I wish to speak to Amendment No. 274, which stands in my name and that of my noble friend Lord Alli. I apologise on his behalf for his absence; he is in Ethiopia, working with UNICEF. By the end of today, many of us might wish we were in Ethiopia as well.

I shall first respond to what was said by the noble Baroness, Lady Jay. I do not think that the amendment is unfair to the BBC; at least it is

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commissioning 10 per cent of independent programmes and the commercial sector is not. Incidentally, that is precisely the reverse of the situation in television, where the BBC has been the laggard and the commercial sector has been the leader. However, I am absolutely delighted that there have recently been very strong signs that the BBC is radically changing its attitude to "indies". This year it might even meet its 25 per cent quota—who knows? It did not last year.

The case for increasing independent production in radio is very much the same as that in television. There is a cultural case because it favours diversity. That will become very important later when we reach, for example, cross-media ownership. There is also an economic case because, unless we have a vibrant independent sector, how can we benchmark the costs of the public service satisfactorily? There is a broad case for more independents.

I do not find the argument of the noble Baroness, Lady Jay, wholly convincing—the BBC repeats it—that there is some fantastic difference between radio because it is live and television because it is not. I defer to her experience as a radio producer.

Baroness Jay of Paddington: And as a television producer.

Lord Lipsey: The wisdom and experience of the noble Baroness extends globally, and certainly to both those subjects.

Although it is perfectly true that there are differences between live and recorded material, it is perfectly easy—I have confirmed it with the noble Lord, Lord Alli, who also has experience of the subjects—to work out a form of contract that would enable station integrity and personality to be preserved, even though individual programmes were made by an independent. The producer-provider split ought not to be news or problematic in this House in 2003. I do not accept the argument.

I partly accept the argument about the worry that the BBC is highly focused in its regional studios, and that a rapid move would undermine that. Equally, it is very important that we have a vibrant independent sector of production outside London that does not refer to some London-based organisation. In time, I hope that we can move to that.

Referring specifically to the amendment, I do not think there is any particular magic to 25 per cent. My noble friend Lord Alli and I thought, "Well, it's 25 per cent for telly, it might as well be 25 per cent for radio". However, we are open to bids and for the best figure possible. I should say for myself—I do not know whether it is true of my noble friend—that I have no particular desire to see the provision implemented statutorily in the Bill. The indies would like that, but it does not bother me in the slightest.

In response to the issue that we have raised, I would like a greater commitment from the BBC to push up that 10 per cent floor and the 14 per cent that it is achieving, and a wholehearted embrace of the

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principle of a growing independent sector. With that, I would like the commercial stations to feel that they too could experiment more in the area and increase the size of the independent sector. We do not have an argument about goals. I accept much that the noble Baroness said about the shortcomings of the amendment as a way of getting where we want to go, but it is right that the issue should be canvassed and the BBC invited to respond positively, as I hope and believe that it will.

Lord Gordon of Strathblane: I support most of the remarks made by the noble Baroness, Lady Jay. Obviously, it would be inconsistent with my previous position if I did not welcome the idea of greater transparency and, indeed, external regulation of how the BBC treats independents. However, I genuinely believe that it is entirely right in its contention that there is a major difference between television and radio. In the light of that difference, the BBC's achievement of 10 per cent or even more independent production is, frankly, remarkably high.

I have taken part in BBC programmes commissioned by independent producers. They were programmes that could be recorded in advance; they were programmes, as distinct from what we regard as programming—DJs who are on for three hours in the morning. Physically, how could one have a BBC in-house disc jockey on between 9 o'clock and 12, and then switch outside from 12 until 2 o'clock without having the same access to BBC traffic information, weather information and so on?

My reason for supporting my noble friend Lady Jay is that I genuinely believe that the distinction between programmes and programming, which tends to apply in radio but not television, makes the imposition of a higher target on the BBC undesirable and unworkable.

Lord McNally: I speak only because the noble Lord, Lord Lipsey, with his usual political ruthlessness, airbrushed me out of Amendment No. 274, to which I also put my name. I did so as a gesture to our leading fluffy, the noble Lord, Lord Alli, whom we all wish well in Ethiopia. I also did so because I was underwhelmed by the BBC evidence to the Puttnam committee about its commitment on television. Mr Greg Dyke was at his most churlish when he referred to that commitment. The evidence left me with the feeling that the BBC needs a prod and a nudge on such matters. It has failed to hit the target of 25 per cent in television, so it worries me that the commitments are ceilings rather than baselines.

When I discovered from the noble Lord, Lord Alli, that the commitment in radio was much lower, I again thought that a prod was useful. I did so based on a conversation that I had with the noble Lord, Lord Bragg, on the margins of the debate about the growing importance of the creative industries within our whole economy. I was recently at a presentation by the GLA on what it wanted to do about London. London's base for the creative industries was greatly emphasised and the noble Lord, Lord Bragg, and I said that that was

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equally true of many regional centres. That ties in with Tessa Jowell's comments about the licence fee being venture capitalism for the creative industries.

I added my name to the amendment because I want to prod the BBC. We will refer to the subject later in relation to commercial matters and music. I want the BBC to use the independent sector in radio and television to encourage creative industries, and to use its strength and power to support them, especially in the regions. As was said by the noble Lord, Lord Lipsey, we are not tied to any particular percentage at this stage. I say to the BBC that the amendment should not be seen as a threat, but a real opportunity to win friends and influence people by using the creative talent of the independent sector as venture capital and to strengthen greatly the quality of what is given to BBC listeners.

12.30 p.m.

Baroness Blackstone: As many Members of the Committee will be aware, there has been a statutory independent production quota for TV since 1990, and the Bill makes provision for that to go on. The BBC will also be subject to requirements on how it trades with independent television producers, and those will be enforced by Ofcom. In accordance with our general approach to the BBC, those requirements will be set out in the agreement rather than the Bill.

As my noble friends Lady Jay and Lord Gordon of Strathblane rightly said, there are major differences between independent production for TV and radio. In TV, independent producers have the option of a number of different commissioners—namely, public service television broadcasters—thereby providing a genuine market for the supply of programmes and the capacity for the independent supply industry to grow.

The independent radio programme supply market is, by contrast, characterised by a single commissioner, the BBC. It would therefore be difficult to build up an independent production sector by way of a quota, because, having only one commissioner for its programmes, the sector would not have capacity to develop it in the same way as it is done for television.

The corporation has consistently met, and often exceeded, its 10 per cent target ever since it committed itself to a target. It has reaffirmed its view that the 10 per cent commitment is a floor, not a ceiling. As my noble friend said, it often goes above the floor. The BBC believes that the independent radio production sector provides innovative and creative programmes which make a valuable contribution to its output.

I say to the noble Lord, Lord McNally, and to my noble friend Lord Lipsey that the BBC's commitment in this area is clearly set out in its statement issued in December 2002. It is keen to open up commissions to independent producers and to develop the independent production sector. We believe that it is entirely right that the BBC should be commissioning a significant proportion of radio output from independent producers and we absolutely endorse the voluntary target which the corporation has set itself.

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We are not persuaded that it is necessary to set a formal independent radio production quota which could apply only to the BBC. Nevertheless, the Government will keep the position under review as the radio market develops.

Turning to the terms of trade issue, the BBC is, as I have said, subject to a code governing the terms of trade with independent television producers. But that is not a requirement that applies only to the BBC; rather, it mirrors the requirements placed on all licensed public service broadcasters.

The code was developed in response to concerns raised by the Joint Scrutiny Committee and by the ITC in its programme supply review report. We are not persuaded that there is a case for applying a similar requirement, and one which applies only to the BBC, in the radio context.

The Government attach importance to the role of the independent radio producer sector and we want to see it grow. I know that the BBC takes a similar view; however, I do not believe that these amendments will help to achieve that aim. I therefore hope that the noble Baroness, Lady Buscombe, will be willing to withdraw the amendment tabled by her noble friend.

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