20 Jun 2003 : Column 1059

House of Lords

Friday, 20th June 2003.

The House met at eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers—Read by the Lord Bishop of Blackburn.

Broadcasting (Independent Productions) (Amendment) Order 2003

Lord Davies of Oldham rose to move, That the draft order laid before the House on 1st May be approved [18th Report from the Joint Committee].

The noble Lord said: My Lords, I beg to move that the draft Broadcasting (Independent Productions) (Amendment) Order 2003 laid before the House on 1st May 2003 be approved. Section 16(5)(a) of the Broadcasting Act 1990 provides for the Secretary of State to specify by order the meaning of the terms "qualifying programmes" and "independent productions". The Broadcasting (Independent Productions) Order 1991 was made in June 1991 to define those terms. The 1991 order was amended by the Broadcasting (Independent Productions) (Amendment) Order 1995. This draft order further amends the 1991 order. It is being laid before the House under Section 16(7) of the Broadcasting Act, which requires a draft to be laid and approved by a resolution of each House. I am satisfied that this draft order is compatible with convention rights.

The effect of the Broadcasting Act 1990 is to require the BBC, the Channel 3 companies, Channel 4 and Channel 5 to ensure that in each year not less than 25 per cent of the total amount of time allocated to the broadcasting of qualifying programmes is allocated to the broadcasting of a range and diversity of independent productions. Part I of the Broadcasting Act 1996 applies a similar 10 per cent independent productions requirement to licensed digital programme services. Among other things, these requirements are intended to implement the council directive of 3rd October 1989 which makes provision as to the proportion of a broadcaster's programmes which are to consist of works created by producers who are independent of broadcasters.

Independent producers help to promote innovation and creativity within the UK programme supply market. It is widely considered that the independent productions quota has been working well providing competition and a stimulus for originality which has benefited programme supply in the UK. However, a number of issues relating to the detailed operation of the quota have been identified and the amendments made in this order are designed to deal with those issues.

I shall explain briefly each of the amendments in turn. As regards change of ownership, the aim of the independent productions quota is threefold: to promote cultural diversity and to open up the

20 Jun 2003 : Column 1060

production system to new energies and voices; to stimulate the growth of small and medium-sized enterprises, promoting creativity and fostering new talent; and to tackle vertical integration within the UK programme supply market. However, under current provisions, restrictions on share ownership of a producer by a broadcaster or an associated company apply where there is no impact on the UK programme supply market because the broadcaster does not aim any of its services at the United Kingdom.

This order means that, rather than applying to broadcasters generally, the existing restrictions on share ownership of a producer will apply only in respect of any broadcaster who provides a television service intended for reception in any area in the United Kingdom—whether or not that service is also intended for reception elsewhere. Therefore where a producer is more than 25 per cent owned by a broadcaster, provided that broadcaster does not aim any of its services at the UK, that producer will qualify as an independent producer.

The second change affects the treatment of producers who lose their independent status. Currently, in order to qualify as an independent production the producer must be independent when the relevant programme is "made". The date on which a programme is considered to be made has been interpreted as the time of transmission. Therefore, even though a broadcaster may have commissioned a programme in good faith from an independent producer, if that producer subsequently loses his independent status before the programme is made, it does not qualify as an independent production. That has caused a number of problems for broadcasters.

By allowing a producer to qualify as independent on the date on which he was commissioned to make a programme, this order will allow him to continue to be so regarded as independent even were his status to change before the programme is transmitted. This is subject to the conditions that the relevant broadcaster must have commissioned the producer in good faith in the expectation that he would be an independent producer when the programme was made and that the programme was made within two years of the date on which it was commissioned.

The final change made by the order is a technical one. Uncertainty has been expressed as to the scope of the duties to monitor the broadcasting of independent productions by the Office of Fair Trading in respect of the BBC's digital programme services and those of the Independent Television Commission in respect of other digital programme services licensed under Part I of the Broadcasting Act 1996. This order makes it explicit that the definitions prescribed by the principal order apply to digital programme services. In our view, that includes the BBC's digital channels.

The Secretary of State is required to carry out a formal consultation under the Broadcasting Act 1990. The BBC, the ITC, the Welsh Authority and the Producers Alliance for Cinema and Television—PACT, the trade association—were consulted during the preparation of this instrument.

20 Jun 2003 : Column 1061

As the House is all too well aware, the Communications Bill is currently progressing through Parliament. The policy on independent productions was outlined at an early stage in the communications White Paper. It evolved following consultations on that White Paper and on the draft Communications Bill published last summer. In particular, major changes were made following the review by the Independent Television Commission of programme supply market, published in November last year.

Noble Lords will recall that the Secretary of State asked the ITC to carry out this review in response to concerns expressed during the consultation on the draft Communications Bill, in particular by the joint committee chaired by my noble friend Lord Puttnam, about the overall economic health of the UK programme supply market and the position of independent producers within it.

The ITC report welcomed the Government's proposals,

    "to permit qualification for the quota to apply to broadcasters without a UK channel presence, and to producers who are 'independent' at the point of commission, rather than time of transmission".

These are the two main concepts contained in the order. I think it safe to say that the issues have been thoroughly considered and, accordingly, I commend the order to the House.

Moved, That the draft order laid before the House on 1st May be approved [18th Report from the Joint Committee].—(Lord Davies of Oldham.)

11.15 a.m.

Baroness Buscombe: My Lords, as the Minister has said, this order has been drafted to reflect the recommendations made in the ITC programme supply review and consequently to amend the definition of "independent producer" in accordance with the review's recommendations. While we welcome the extension of that definition, we do not believe that this order is the correct mechanism through which these changes should be implemented. The Broadcasting Act requires that the terms "independent productions" and "qualifying programmes" are defined by order. The meaning of the terms was first specified in the initial 1991 order, which was subsequently amended in 1995. The order laid before the House today further amends the 1991 order.

It is not clear why the Government have chosen to amend the existing Broadcasting Act rather than introduce a relevant provision into the Communications Bill, which contains the requirements for the programming quotas for independent production. I would welcome further clarification on this issue.

The order amends the current definition of who may be regarded as an "independent producer" for the purposes of Article 3 of the original order in two ways. The limits on share ownership in Article 3(4) of the 1991 order will now apply only with respect to UK broadcasters. The effect of the order will be to apply a

20 Jun 2003 : Column 1062

restriction to UK producers and not to other European producers. This indicates that the Government believe that it is acceptable to own a television channel or, for that matter, a number of television channels in other European countries and qualify as an independent producer, but if a producer owns a channel in the UK, it will be prohibited for quota inclusion.

The order therefore allows Endemol, for example, which has significant broadcasting interests in Europe, to be classed as an independent producer. However, the order still prevents Fremantle, formerly Pearson, from being regarded as an independent for the purpose of the quota because its parent company, RTL, owns 65 per cent of Channel 5. Fremantle provides less than a fifth of Channel 5's programming and will be significantly affected by being classed as a non-qualifying independent. Does that really make sense?

The Government have conferred powers on Ofcom through the provisions of the Communications Bill to ensure that the programming quota is adhered to. We believe that the independent producers not falling within the definition of "qualifying independents", as specified by the order, will suffer considerably as licensed public service channels will have to take account of whether the programmes that they commission fall within the quota requirement. The consequent effect will be to damage the non-qualifying independents and therefore distort the market for independent programme commissioning. We think it would be prudent to review programme commissioning from non-qualifying independents in addition to qualifying independents to ascertain how this independent production quota is impacting on the sector.

The second modification inserts two new sections into the 1991 order and relates to the status of the independent producer. We support the proposal that an independent producer's status at the time a programme is commissioned will dictate whether the quota will be met. In a constantly evolving industry such as independent production, this clarification of the producer's status will provide the necessary certainty needed within the sector.

I hope that the Minister will rethink the order and its consequent effect on programme commissioning. We wish to encourage growth and innovation and not to punish the large independents for their success. An alternative definition of independent producers would be preferable. We believe the proper mechanism for achieving that would be through the Communications Bill.

Next Section Back to Table of Contents Lords Hansard Home Page