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Lord Peyton of Yeovil: Each time a clause and a line of this Bill comes up, some noble Lords want to give Ofcom yet more things to do. Ofcom will already be very heavily loaded with duties and simply to add to them may give satisfaction to those noble Lords who propose it, but it will be back-breaking for a new organisation. I do not have the pleasure of knowing the noble Lord, Lord Currie, but I have never yet heard in your Lordships' House any suggestion that the noble Lord is not very well suited to the job. Therefore, if the noble Lord, Lord Currie, is all that is claimed by those who know him better than I do, it is high time someone said that he deserves to be trusted with what is already a very difficult job without being given a load of complicated advice, some of which, together with some of the tasks imposed on him, he could not possibly fail to perform. As for the noble Lord, Lord Currie, being told to take account of numbers, they are an all-important part of the game.

Lord Puttnam: I rise to speak to Amendment No. 200. I am a little puzzled at the need for the amendment as this is an area in which I felt that the Joint Scrutiny Committee and the Government were to a very great extent ad idem. The purpose of the amendment is literally to try to place on the face of the Bill some of the duties which the noble Lord, Lord Currie, and Ofcom will fulfil, and the timings.

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By far the most important purpose is to ensure that Ofcom is able to review production commitments, including regional programme-making commitments of the public service channels and Channel 3 in response to any significant change in the revenue or audience share of the relevant channel. It is important to allow a level of flexibility so that if the market-place, audience shares or revenues, change dramatically, Ofcom has the ability to review that situation and act accordingly rather than be boxed into specific time periods.

6.15 p.m.

Lord Renton of Mount Harry: I rise to speak to Amendment No. 233A in this group. I tabled the amendment only yesterday, and therefore appreciate that it is not included in the sixth Marshalled List, although it has been printed and I have it in my hand. In case Members of the Committee have not had time to study the amendment carefully, perhaps I may remind them what it contains.

The amendment suggests that a new clause should be inserted after Clause 282, which will be headed,

    "Variation of Public Service Obligations of Channel 5".

Subsection (1) suggests that,

    "In the event that the share of audience or share of revenue of Channel 5 for any twelve month period is in excess of 15 per cent, as measured by OFCOM in their review under section 351, the Secretary of State may, by order, require OFCOM to review the conditions placed upon Channel 5 under sections 274 and 281".

The first of those sections deals with the amount of original programming and the second with regional programmes.

Subsection (2) of the new clause suggests that:

    "Such a review shall be required to increase the proportions of original and regional programmes to those most recently produced by Channel 3".

Finally, subsection (3) contains a caveat that,

    "In the event that Channel 3, in the same period, had a share of audience or share of revenue below 15 per cent, the proportions of original and regional programmes should be equivalent to those levels produced by Channel 3 when its share of audience was at 15 per cent or above".

I carry on the point made by the noble Viscount, Lord Falkland, and the noble Lord, Lord Puttnam. However, I suggest a rather starker and perhaps simpler solution than that proposed in their amendments. Their amendments rely on such words as,

    "OFCOM shall have regard to the number of viewers of the public service channel in question",

whether that be Channel 3 or Channel 5.

It is extremely difficult, necessarily, for any outsider, anyone who may have an eye on trying to get control of Channel 5, to know just what those words mean. Surely it would be better to be much more precise in that context and to set a numerical yardstick by which it is clear that if that yardstick is met, if Channel 5 were to have a 15 per cent share of audience as measured by Ofcom at that stage, it would have to match the obligations of Channel 3 in relation to both regional and original programming.

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I hope that I may even persuade my noble friend of many years, Lord Peyton, to follow me in this. I do not suggest a new duty, a new thought for Ofcom, something else which it has to consider. I suggest specifically that under these circumstances,

    "the Secretary of State may, by order, require OFCOM to review the conditions placed upon Channel 5".

I believe that that emphasis is important. Either later tonight or Thursday we shall move into the area of cross-media ownership. If it is on Thursday I very much regret that due to other commitments I shall not be here. However, it is necessary that anyone who considers taking over, trying to gain ownership, of Channel 5 should have in advance a very clear view of what are likely to be the public service conditions laid upon him and his company. It would not be right to leave it to a vague way of thinking, "If I do get the audience share up to 15 per cent or 20 cent I shall have to argue with Ofcom about it and I shall lobby Ofcom to see whether I can twist its arm and persuade it that for any reason, whatever it is, precisely the same condition should not be put on me as on Channel 3". It would be a very great mistake to leave that kind of open gap at this time. It would be much better to put this on the face of the Bill.

That is why—this was considered in the pre-legislative committee of which I was not a member—it would be more sensible to insert into the Bill a clause such as I mention at this early stage. Whether the appropriate figure is 15 per cent, 10 per cent or 20 cent would be a matter for further consideration and decision by Members of the Committee. But it would be a starker and, perhaps for that reason, more uncomplicated solution than that suggested by other noble Lords, of simply saying to Ofcom, "If this happens, you must have another look at it and one of the things you should think about is the number of people in the audience".

I believe that Members of the Committee would agree that it is interesting that we are having this debate on the day after the Federal Communications Committee in the United States agreed on substantial further deregulation there, allowing media companies greatly to increase their ownership of either television or radio stations. That caused considerable furore in the United States, as is reported in today's press. Many people in the United States believe that that is a movement in the wrong direction. At this stage of the Bill and in the debates we are shortly to have, we shall have the same considerations before us.

As regards the public service obligations of Channels 3 and 5, I hope noble Lords will forgive me for quoting remarks made by Tessa Jowell, the Secretary of State for Culture, Media and Sport, in today's business section of the Guardian.

    "Ms Jowell suggested the Bill had been misrepresented, insisting again that it is 'proprietor neutral'. She said the change in the Five ownership rules would be matched by the most draconian programme regulation in history. If Five changed hands or substantially increased its audience share"—

these are the key words,

    "the new media regulator, Ofcom, would review its public service responsibilities with a view to toughening them".

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That is just what we should not allow. We should be much more specific; hence the clause I propose to the Committee.

The Culture Secretary ends her interview with the rather touching words that she wholeheartedly believed in the Bill. She stated:

    "I've spent a huge amount of my life over the past two years on this; I think it's good legislation and I have confidence in it".

I spent two years on the Broadcasting Bill between 1987 and 1989 when I was Minister of State to Douglas Hurd, the Home Secretary, now the noble Lord, Lord Hurd. We spent a great deal of time trying to ensure the future independence and continuation in existence of the 14 regional ITV companies. We had no idea of the degree to which satellite would dominate television in this country, satellite that is increasingly owned and dominated by one very substantial newspaper proprietor.

Perhaps I may say to the Culture Secretary that I very much hope that she will not be as disillusioned by the next 10 years of developments in the television and radio world as I have been by the past 10 years after working hard for two years on the Broadcasting Bill of 1990.

Lord Davies of Oldham: The noble Lord, Lord Peyton, has won another friend and influenced another Minister by his contribution to this debate, which has enabled me to reduce the length of my reply. That is because we entirely accept his contention that the main thrust of our response to the amendments is that we already have within the Bill the necessary obligations upon Ofcom for it to do its job, which is to safeguard the very objectives defined by the amendments, that we broadly share them, and that therefore it is not necessary to be as specific as the amendments would indicate.

I shall address myself to the amendment of the noble Lord, Lord Renton, in the context of its grouping and the issues that it raises on the question of increasing potential audience share. He will forgive me if I do not join him in a major debate on the potential change of ownership of Channel 5. We are scheduled to have that debate either in the wee small hours of tomorrow morning or, more likely, on Thursday. I regret that he will not be present then, but that is when the big issues are to be discussed, and that is when we shall have that more wide-ranging debate. However, I shall, I hope, do him the courtesy of responding to his amendment.

Of course, the Government recognise the importance of a strong programme production sector to the health not only of the broadcasting industry, but of our creative economy as a whole. I was pleased to note from the recently published Independent Television Commission annual report that Channel 3, Channel 4 and Channel 5 are all meeting their licence requirements for original and regional production—and in some cases meeting them comfortably. That said, I can of course understand the view of noble Lords that requirements for independent, original and regional production should reflect audience size and

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the changing revenues and audience share of particular channels, which has been the burden of several of the main representations on these amendments.

Those are certainly factors that Ofcom may want to take into account in setting and maintaining production and programme-making targets, but they are not the only ones. Ofcom may also wish to consider, for example, the existing levels of original or regional production achieved and the broader requirements of the public service remit for the channel in question. The Bill already gives Ofcom a range of tools to enable it to set and maintain targets at the right level, and I am not therefore persuaded—any more than the noble Lord, Lord Peyton, was—that that new powers are needed.

I must also confess to some concern that the amendments as drafted might actually prove counter-productive in operation. There are three main concerns.

First, in setting the targets, Ofcom will have its discretion circumscribed if it must in all circumstances give weight to the number of viewers of the channel in question.

Secondly, it is entirely possible under the new clause in Amendment No. 200 that Ofcom's review would lead to decreases in the various requirements on public service channels in response to falling revenues and audience shares, rather than to increases. This could be the case for only one public service channel if, say, Channel 3 lost market share to Channel 5, but all the public service channels could find themselves in weaker market positions as multi-channel viewing gained ground. In such a situation, Ofcom could come under pressure to reduce the production and programme-making requirements for all the public service channels, leading to a net loss for the viewer. That cannot be right.

Thirdly, if, on the other hand, revenues and audience shares for the public service channels—or some of them—increase, and the requirements are increased, as proposed by Amendment No. 233A of the noble Lord, Lord Renton, that will amount to a penalty for success. What incentive would there be for a young channel such as Channel 5 to grow if the result is an automatic increase in its public service commitments, without any consideration being given to the other factors I mentioned earlier as being relevant in the round in setting targets? Far better, a shrewd channel owner might conclude, to manage revenues and audience share at a point where such new obligations do not cut in. That surely cannot be right, either.

Aside from those concerns, I believe that the Bill already provides sufficient protection for programme production and sufficient powers for Ofcom to ensure that targets are set and maintained at the right levels. In the case of the original production quota, that means an appropriate level for ensuring that the relevant channel is consistently of a high quality, and in the case of the regional programme-making quotas it means an appropriate level for ensuring that a suitable proportion of the channel's programmes are

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made in the UK outside the M25 area—and, one hopes, in a number of cases further north than St. Alban's, although I have nothing against that town—and for the licensed public service channels that a suitable proportion of their expenditure relates to a range of production centres outside that area.

Ofcom is already required to carry out, as soon possible after the end of the first 12-month period beginning with the commencement of Clause 260, and thereafter at least every five years, a review of the extent to which the public service broadcasters have provided television services which, as a whole, fulfil the purposes of public service broadcasting in the United Kingdom. Ofcom must prepare a report on its findings, with a view to maintaining and strengthening the quality of public service broadcasting.

Ofcom is also required to publish an annual factual and statistical report. The report will follow a review by Ofcom of the provision of television and radio services in the United Kingdom during the relevant period, and will include consideration of the financial condition of the market and any trends appearing or operating in the size of the audience, which is a substantial burden of the amendments. The review will also focus in particular on the operation and effectiveness of the arrangements currently in place in relation to independent productions.

In addition, we have strengthened Ofcom's power to amend licence conditions on a change of control of a Channel 3 licence holder, and given it similar powers in relation to Channel 5. When it is notified of a relevant change of control, Ofcom must review the effect on various programming and production requirements, including original and regional production, and may vary the licence to ensure that the new owner cannot cut back on what the old owner actually delivered. The aim is to ensure that the change of control does not in itself lead to a reduction in the quality of the service.

These strengthened provisions were introduced in response to the ITC's review of the UK programme supply market, which in turn followed concerns in this area raised by my noble friend Lord Puttnam, to which he referred this evening, and by his colleagues on the Joint Scrutiny Committee on the draft Bill. I draw the Committee's attention to the fact that the Government have changed their position in the light of the committee's work and the Bill's progress in the other place.

The ITC's excellent report was published towards the end of last year, and the Government announced shortly afterwards that they had accepted practically all of the ITC's recommendations. As a result, over 60 amendments were made to the Bill in another place. I hope that the Committee will agree that this substantial body of amendments has vastly improved the Bill. They also indicate that the Government have kept an open mind about improvements to the original draft measure.

As well as the specific powers I have mentioned, the Bill preserves for Ofcom a general right under the Broadcasting Act 1990 to vary a licence, having given

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the holder a reasonable opportunity to make representations. So Ofcom may at any time alter the original and regional production requirements, following consultation with the licence holder. The level of the independent production quota is set by the Secretary of State by order, so Ofcom does not have the power to alter this; nor would it be able to do so under the proposed new clause in Amendment No. 200, unless there were further changes.

I hope that I have reassured the Committee that we take production and programme-making very seriously and have made provision in the Bill to ensure that the broadcasters deliver. As the noble Lord, Lord Peyton, said, we must now trust Ofcom to do its job, to set the right targets for regional and original projects, to review them as appropriate and to take action where necessary. Ofcom has the tools to do that and to ensure that the UK has a healthy programme production market able to deliver a wide range of high-quality programmes to the home audience and better able to compete in the global market.

The Bill already contains more than 400 clauses. It is so long because it is a comprehensive measure set out through consultation and through the benefit of work by many noble Lords in the past few months to produce the right structure for the industry. I hope, therefore, that it will be recognised that the amendments are not necessary and that those who moved them will feel able to withdraw them.

6.30 p.m.

Lord McNally: I am growing increasingly worried about the love affair between the Government Front Bench and the noble Lord, Lord Peyton. Since the Government Whip is interested in speeding up passage of the Bill, would it not be an idea to invite the noble Lord, Lord Peyton, down to the Front Bench?

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