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We entirely support the amendments, which in turn support the independent sector. We believe that the amendments would lead to more independent production, which therefore would promote greater competition and greater transparency of the programme production market. They provide for the greatest push in programme exports and they would encourage entrepreneurs like the noble Lord, Lord Alli, to enter the television market. That has to be a good thing.
I move quickly on to Amendments Nos. 197 and 198, in my name, and note straight away what the noble Lord, Lord Alli, has said. The amendments are intended to introduce a definition of independence which would allow companies which gained no economic advantage from an ownership relationship with another broadcaster to produce programmes that qualify for the quota. At present, production companies that have an ownership relationship with a broadcasterthat is, they share the same parent, but have no preferential commissioning relationship with that broadcasterare deemed to be non-qualifying independentsalthough to all intents and purposes they are, on a day-to-day basis, independent. Those companies are therefore at a disadvantage compared with both other independents whose productions count towards the quota and with in-house production teams. That is damaging not only to specific non-qualifying independents, but to the independent production sector more widely, as success for smaller independents and ensuing investment from larger companies can result in loss of independent status. Large UK producers are the most likely source of risk capital for small UK independent production companies. Similarly, up-and-coming producers are being discouraged from working for successful and supportive companies which are non-qualifying independents for fear that their work will not be commissioned.
I do hope that the Minister will look on these amendments sympathetically. Amendment No. 198 would require producers to show that they have derived no more than 33 per cent of gross revenues from production activity from a related broadcaster. We believe that this test would be easy to measure and account for. In addition, it means that should a production company change status and become economically dependent, it would then automatically lose its independent statusexactly what the law is intended to account for. I hear and accept what the noble Lord, Lord Alli has said. He has raised the
I am grateful to the noble Lord, Lord Alli, for raising that point. I hope that the Minister will give a favourable response to the principle behind the amendments, bearing in mind that we would be keen and willing to take another look at the actual wording between now and Report stage.
Lord Crickhowell: I warmly support the first amendment, with its emphasis on the need to maintain a vibrant independent production sector. I believe that that is right. I confess to some doubts about the proposition that the register of ideas should be in the hands of Ofcom. In his Second Reading speech the noble Lord, Lord Alli, said that it was time to consider a system of registering ideas. I have no difficulty at all with that. In part of his speech this evening he said that it was time for the television industry to establish a register. I have no difficulty with that. However, I am sceptical that it can be the right job of a regulator like Ofcom, with all its other responsibilities, to hold the register, police it, and presumably see that something useful is done with it. I am not sure that that is the right place for the register and therefore I have serious doubts about those amendments.
When the noble Lord, Lord Alli, turned to my noble friend's amendments, he presented them as representing a possible attack on the independents by Carlton and Granada. I want to put a slightly different point of view. I no longer have any connection with either of those organisations, but I have some experience of the relationship of licence holders such as HTV with the independent sector. I suppose that together with my noble friend I can claim some role in promoting the independent sector through the part we played in establishing S4C. Probably the biggest boost to the independent sector in Wales was the establishment of S4C and the need therefore to produce Welsh language television.
However, there has been a boost to the independent sector not only in the field of Welsh language television, and perhaps I can claim some modest part in that during my time as a director of HTV. The relationship between a company such as HTV and other licence holders and the independent sector has been extremely important and productive.
Clearly, we cannot have a situation in which the programmes of a regional subsidiary would qualify as independent for its owner's network schedules, but there are strong arguments for suggesting that ITV regional companies should qualify as independents for other broadcasters.
There is a strong case for considering that if companies such as HTV could produce programmes for the BBC or other separate companies, they would be likely to work with independents and would encourage independent production. In Wales, we would certainly see a growth of English language independents in addition to the Welsh language independents.
I note that the noble Lord, Lord Alli, who has a particular interest in this matter, disagrees with me, but the view is strongly held by my former colleagues. They believe passionately in the case of the independents and perhaps for a particular reason. We as a company were among the first to feel the enormous financial burdens that fell on the industry as a result of the bidding process. We suddenly had to get rid of a large number of our former employees. We probably led the way in the industry. A large number of our former employees set themselves up as independent producers and we continued to work with themonly with the difference that they produced for us and for others, and did so in a different relationship. So I return to my starting point; that is, the passionate belief in the role of the independents.
However, I urge that we do not simply dismiss the idea that a partnership can produce even more productive results than an exclusion. I hope that further thought will be given to those relationships and that even the noble Lord, Lord Alli, will consider it a possibility. I give way.
Lord Alli: This is a dangerous argument. It is seductive to believe that ITV, when it is consolidated into a single company which still has brands out there called HTV, Scottish Television, Granada, Carlton or London Weekend, should, with the broadcaster resources, be allowed to qualify for quota for the BBC. That is an absurd suggestion. There is nothing stopping the BBC buying programmes from London Weekend Television or HTV, but it should not be allowed to use the quota as an incentive to subsidise the ITV broadcaster. That does not help the independent production sector, but helps a combined ITV owned by a single set of shareholders and not the creative community.
Lord Crickhowell: Perhaps I may make one further point in that regard. It is a subject to which we shall return on later amendments. It is production outside the M25. For some curious reason we have now entered into a situation where it is thought to be entirely satisfactory if television is produced two miles outside the M25, which counts as regional production.
I entirely agree with the proposition that has just been advanced by the noble Lord, Lord Alli, if we were going to have a centralised system in which all the production came from Pinewood or somewhere in the Home Counties. As I shall argue in a later debate, we have to strengthen regional broadcasting, in which I believe passionately. Therefore, the noble Lord should not close his mind entirely to the idea that partnership out in the regions is wholly helpful and constructive for the independent companies that have established themselves in those regions. I leave the matter there for the time being.
Viscount Falkland: We on these Benches broadly support the issues that are raised in this group of amendments. The noble Lord, Lord Alli, has eloquently explained the position based on his great experience. I fancy that none of us would disagree about the importance of the independent sector and the successes it has had, and continues to have, in providing vitality in this country's broadcasting output.
I had not been aware that the BBC is not yet meeting its quota. That is worrying. I am not quite sure why that should be the case. It may be that between now and the next stage of the Bill I can speak with the noble Lord, Lord Alli, to shed some light on the matter. I would not want to throw loose accusations around the Committee. The importance of the independent sector will not be lost on anybody, least of all on those taking part in the Committee. There is the vitality which the independent sector brings with a quick response to changing ideas and taste in different categories of the population, including the young and ethnic groups. It is stimulating as regards the creative work that is done by many people who might not otherwise have access to the machinery whereby their work can develop and be put into programming.
The debate on quotas has become a great deal more complex than I had expected. As we understand it, the current regime, well intentioned though it is, creates some difficulties for the independent sector where quotas apply. We all know about the minimum of 25 per cent of time allocated to the broadcasting of qualifying programmes.
We also understand that secondary legislation will shortly come before Parliament. That legislation is currently being redrafted. It will to some extent correct the definition of "independents". The noble Baroness, Lady Buscombe, explainedtherefore, I shall not go into it in any depththat independent companies which are under the umbrella, or in the orbit, of a large broadcaster now find themselves in a difficult position whereby they are not considered to be independents in the sense in which that term is understood under the current regime. That leads to serious consequences for those businesses.
The Secretary of State, Mrs Jowell, at the ITC's programme supply review at the Oxford media conference in January rightly announced a strengthening of the powers that would be given to Ofcom to police the independent production quota. But that has created a lot of disturbance from the point of view of the long-term commissioning process. Companies are now worried that those independents that they have been considering may not be qualified to provide programming for them. That is obviously an unintentional effect. I hope that the Minister will tell us whether there has been any further thinking on that point. Some of the larger independent companies have close shareholding relationships with larger broadcasters with which they have very little programme-making activity but do work for others, including the BBC. At the moment they consider that they are in an extremely vulnerable position. I believe that most noble Lords would agree that that matter must be looked at and corrected.
I do not intend to discuss the issue debated by the noble Lord, Lord Alli, and other noble Lords on further refinements of the matter we are discussing. I shall read Hansard very carefully. Presumably we shall revisit the matter at a later stage. It seems to us that the way in which Ofcom will deal with the future of the independents is one of the most important aspects of the legislation.
Having said that, we look forward to studying the matter very much more closely and perhaps being better equipped to enter into the very sophisticated debate which developed between the noble Lords, Lord Crickhowell and Lord Alli. We feel rather inadequately equipped to enter that debate at this stage although undoubtedly we shall do so at a later stage.
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