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Lord Prys-Davies: I am sure the noble Lord, Lord Temple-Morris, will join me in thanking noble Lords from all parts of the Committee who have spoken in support of the amendment. I also very much appreciate the tenor of the Minister's speech.

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It is clear that the funding formula is of crucial significance to the Welsh Authority. I am pleased to hear the Minister confirm that the department, with the authority, is considering the possibility of mounting a review of the current formulae. That would be a positive step forward.

Finally, the Minister will know that the department has submitted a claim for increased funding. I very much hope that it will approach the request positively, in the spirit of the Minister's speech. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 204 agreed to.

Clause 205 [The Gaelic Media Service]:

Baroness Michie of Gallanach moved Amendment No. 157:

    Page 182, line 20, leave out "may finance, or" and insert "must finance, and"

The noble Baroness said: The purpose of this group of amendments in my name and that of my noble friend Lord Mar and Kellie is to seek clarification on a number of points with regard to Gaelic broadcasting and to make suggestions for improvement.

It was very good to hear the noble Lord, Lord Prys-Davies, talk about how important Welsh is and how necessary it is to fund S4C properly. Indeed, other noble Lords who spoke spelt out that the Welsh language is important not just to Wales and the United Kingdom but to the whole world.

I should like to establish my rugby credentials. The noble Lord, Lord Brooke, has left his place, but my father played 37 consecutive times for Scotland and held the record until 1964. So the noble Lord and I have a great deal in common in terms of rugby playing and language.

I do not intend to repeat what I said on Second Reading. I made it clear how important the Gaelic language is to the people of Scotland and the whole of the United Kingdom, as well as beyond.

Amendment No. 157 deals with finance—always a thorny problem. We heard about it in the previous debate. When the Gaelic Television Fund was set up in Scotland in 1991, it was given 9.5 million a year. I pay tribute again to the Conservative Party, because it was the noble Lord, Lord Forsyth of Drumlean, who set it up. But it was not index-linked and has since fallen by 33 per cent in real terms. As a consequence, television hours have had to be reduced from 195 in 1991 to 150 today.

I believe the proper funding should be restored and protected and, indeed, increased to a realistic sum in order to make use of the new technology. Hence the replacement of the word "may" in the amendment by the word "must". To say the service,

    "may finance, or engage in"

is really very tentative and weak, expressing only a possibility. Surely the wording should be more specific than that in the Bill which, it could be argued, gives an option to the Gaelic Media Service to do little or nothing.

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I did not understand the response of the Minister, the noble Lord, Lord McIntosh of Haringey, to the Second Reading debate. He said of Gaelic broadcasting,

    "that is the responsibility of the Scottish Parliament".—[Official Report, 25/3/03; col. 788.]

Section K1 of Schedule 5 to the Scotland Act 1998 makes it clear that broadcasting is a UK matter—a reserved matter for this Westminster Parliament and for this Government, who ratified the Council of Europe charter for regional and minority languages. Initially, funding was provided by Westminster, specifically for Gaelic broadcasting, but it was not ring-fenced. Nor was it index-linked. On two occasions during its short 10-year history, substantial sums have been diverted from the fund for other purposes. The Bill gives the Gaelic Media Service additional responsibility but no additional funding.

I looked at the Broadcasting Act 1990 again. Section 183 deals with the financing of programmes in Gaelic out of the Gaelic Television Fund. Subsection (1) states that the Secretary of State:

    "(a) may, for the financial year beginning with 1st April 1991, and

    "(b) shall, for each subsequent financial year,

    "pay to the Commission"—

that is what is was called then—

    "such amount as he may"—

or she may, obviously—

    "with the approval of the Treasury, determine to be appropriate for the purposes of this section".

That was all changed. I believe that the Government are failing in their duty if they seek to dump the financial costs on to the Scottish Parliament. In other words, they are saying, "We retain the power here but you pay for it up there".

I wanted to know when this changed, when it was agreed, why and by whom. Was it contained in one of the many concordats that came after the devolution Act? Perhaps the Minister will be pleased if I tell him that I had a fax message just before we started this debate which told me when it had all changed:

    "Section 183 of the Broadcasting Act (1990)—the power to make payments to the Gaelic Television Fund—was transferred to Scottish Ministers by

    "The Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 1999

    "Statutory Instrument 1999 no. 1750)".

We are still trying to find out where this statutory instrument was debated and who decided that this should happen. It really is making life extremely difficult when it comes to the resources needed for Gaelic television. People are finding it difficult to continue to produce the programmes. The issue of resources has not been addressed in the Bill and that, I believe, is a grave deficiency

On Amendment No. 158, Clause 205 establishes the Gaelic Media Service, which is welcome. I hope that it opens the way for a dedicated Gaelic language digital channel to provide for the first time on television a

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comprehensive and integrated service which can be scheduled to meet audience needs, which does not happen at present. We are all aware of the achievements and successes of the Welsh Broadcasting Service. While Gaelic language broadcasting has also been successful in attracting larger audiences, especially of non-Gaelic speakers, learners and those who are interested in the culture, it occurs in a different context from that of Wales and on a much smaller and more sporadic scale—in fact, erratic to say the least. There is no Gaelic TV channel, so Scotland has no counterpart to S4C, which has average audiences of 700,000. Gaelic language programmes average audiences of more than 300,000, which is three times greater than the pool of Gaelic speakers in Scotland. That demonstrates that the interest is there. The channel in Wales has played a significant role in the increase in the number of Welsh speakers, as shown in the recent census.

The wording of Clause 205 does not make it explicit that such a channel can be established. New subsection (4B) describes at some length what the service cannot do, but is less explicit on what it is allowed to do. For example, does it mean that a dedicated channel is prevented from transmitting radio broadcasts and certain graphic-only programmes?

Members of the Committee will note that the amendment includes the words "and elsewhere". With all the new technology, it should be possible for the delivery of programmes elsewhere in the United Kingdom. I referred in my remarks at Second Reading to the many Gaelic speakers furth of Scotland. For example, there are thousands here in London who would welcome access to such a digital channel. We need to reach as many of the Gaelic-speaking population as possible. I hope, too, that this new channel and new service will be able to distribute Gaelic programmes via the Internet, so that we can communicate with the Scottish diaspora across the world, especially the Gaelic speakers in the United States, Canada, Australia and New Zealand. We believe that the word "elsewhere" is more embracing than the reference to "and to others" on page 183, line 16. In fact, I should be grateful if the Minister would explain who the others are.

I turn to Amendments Nos. 159 to 168. New subsection (5) in Clause 206 makes it mandatory for membership of the Gaelic Media Service to include nominees of the BBC, the Highlands and Islands Enterprise and Bord Gàidhlig na h-Alba—the Gaelic Development Agency. New subsection (7) places the responsibility on Ofcom to ensure that the interests of regional Channel 3 services in Scotland and those of the independent television and radio production industries are adequately represented.

The BBC competes with the Scottish Media Group—SMG—and with the independent sector for grants from the Gaelic broadcasting fund. Hence, there is a public perception of a danger that members nominated by the BBC and any chosen to represent the interests of the independent production sector and SMG would face serious conflict of interest. That would hamper decision-making in the Gaelic Media

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Service, both in policy formulation and in the implementation in relation to allocation of funding. The potential for conflict of interest could reduce the effectiveness of the involvement in the Gaelic Media Service of members who are nominees or who are appointed to represent sectoral interests. It could also affect public confidence in the impartiality of the Gaelic Media Service.

The mechanism of creating a consultation group encompassing those interests to advise the service is designed to negate conflict of interest and to ensure that the Gaelic Media Service appointments are on individual merit, based on skills and experience rather than on a representational basis. It has been suggested in another place that the composition of the Gaelic Media Service board, as proposed in the Bill, is designed to ensure that it has access to expert advice from the industry. The structure proposed in our amendments deals with that but seeks to prevent the conflict of interests inherent in a structure in which all recipients of Gaelic Media Service funding are represented on the board of the Gaelic Media Service.

It could be argued that the two-tier structure proposed in the amendments is an over-bureaucratic response to the issue. However, Ofcom, under the amendments, could resolve that problem. Ofcom could choose to appoint no more than six members to the board of the Gaelic Media Service and no more than six members in the consultation group. Thus the two-tier structure proposed would have the dual merits of dealing with conflict of interest but would have no more individual members than are currently envisaged to be involved in the board of the Gaelic Media Service under the provisions of the Bill.

There is, incidentally, a precedent for a consultation group. The old Highlands and Islands Development Board benefited from the advice and expertise of such a body, although it met only about four times a year. It was not a very expensive exercise, but it gave tremendous advice to the HIDB. I beg to move.

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