Communications Bill

– in the House of Commons at 4:30 pm on 3rd December 2002.

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[Relevant documents: The Report from the Joint Committee on the Draft Communications Bill, Session 2001–02, HL 169-I and HC 876-I, and the Government Response thereto, Cm 5646.]

Order for Second Reading read.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

I must announce to the House that Mr. Speaker has selected the amendment in the name of Mr. Thomas, and that there is a 10-minute limit on Back-Bench speeches in the debate.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

On a point of order, Mr. Deputy Speaker. Can you confirm that the Government have set a new precedent today? Perhaps it was a Modernisation Committee proposal that we were unaware had been introduced. Can you confirm, Mr. Deputy Speaker, that in future when a Bill has its First Reading, the House can always expect a Government statement, such as we had today? I think that this is probably the first time that that has ever happened.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

The Chair can make no such guarantee, but no doubt Ministers will have heard what the hon. Gentleman has said.

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport 5:06 pm, 3rd December 2002

I beg to move, That the Bill be now read a Second time.

After an almost unprecedented period of scrutiny and debate, we are now proud to be able to present the Communications Bill to the House. I say we, because the Bill is very much the result of cross-departmental collaboration with my right hon. Friend the Secretary of State for Trade and Industry, my hon. Friend the Minister for E-Commerce and Competitiveness, and the Department of Trade and Industry.

I shall take the House through the Bill's main points and principles. To begin at the beginning, the communications industry is one of the fastest growing sectors of the UK economy, and has been growing at 10 per cent. a year for the past decade. The infrastructure of the future needs fast, efficient and affordable communication—telecommunications, the internet and broadcasting. It requires the best competitive environment, effective regulation and continued public and private investment in the technologies of the future. The communications industries are a major driver of our economy, and provide jobs for hundreds of thousands of British workers—the jobs of the future, not the past.

However, communications is about much more than economics. The Bill deals with the means by which our society speaks to itself and, as it were, hears the echo. It is the means by which we talk to the world. It is a shaper of our culture, our identity and our values. For the Government, therefore, the Bill is not simply a device to regulate or deregulate an industry; it plays a vital role in every one of our wider aspirations for Britain. It will give consumers choice—the variety that they demand and deserve—and will give citizens the information that they need. It will free the industry of unnecessary interference, give it freedom to grow and diversify, allow it an opportunity to change as the world of communications changes, and to gain access to new sources of investment, as well as new ideas and challenges. It prepares us for a digital era.

The Bill will preserve what has always been our proudest boast: that we have the best free broadcast media in the world. It will give public service broadcasting a new lease of life. I am sure that all hon. Members share the aims that I have outlined. Like the Bill, those aims are ambitious.

I shall take hon. Members briefly through the history of the development of our proposals.

Photo of Chris Mullin Chris Mullin Labour, Sunderland South

Have I understood correctly that the Bill will allow, for example, an American-owned corporation to buy ITV, while no reciprocal right exists for a British-owned corporation to buy an American company? If so, how have we got into that extraordinary position?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

I thank my hon. Friend for his question. He is a close, long-time follower of such issues. The answer is yes, the Bill would allow an American company to own ITV or our other commercial public service broadcasters. However, it would subject any American, Japanese or Australian owner to a tough content regime that is intended to maintain the public service nature of our public service broadcasting. My hon. Friend also asked about reciprocity. We are opening negotiations to secure reciprocal agreements with the Americans, but as I have said on several occasions, we do not perceive reciprocity as a precondition of lifting the current restriction on foreign ownership of our terrestrial television channels.

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

Given circumstances in which any Italian, French, Swedish or German media company could own our media, it would be inconsistent to preclude from the possibility of ownership American, Australian, Japanese or other markets that could provide our media with badly needed investment.

I am delighted that my right hon. Friend Mr. Smith is in his place. He, with the then Secretary of State for Trade and Industry, published the White Paper XA New Future for Communications" in December 2000. It established a vision for the future of the telecommunications, broadcasting and radio spectrum in the United Kingdom. It had several aims, which included giving the converging communications industries a modern regulatory framework, combining stability with competition, and promoting innovation, skills and enterprise.

In November last year we consulted on the proposals for the reform of media ownership rules that had not been included in the White Paper. We consulted in a framework on ways of promoting competition through deregulation while recognising that competition alone is not enough to safeguard the nature of the media in the UK. We consulted on methods of protecting plurality and diversity, removing outdated and inconsistent rules and providing greater flexibility and investment. Furthermore, the paving Bill for establishing the single regulator, Ofcom, received Royal Assent in March and became the Office of Communications Act 2002.

In May we published the draft Communications Bill for further public consultation and pre-legislative scrutiny by a Committee of both Houses of Parliament. Lord Puttnam, who chaired the Committee, and the other members made a tremendous contribution to improving the draft Bill. That process established the value of pre-legislative scrutiny, which enabled contributions to be made to the development of major policy proposals as well as the provision of detailed drafting comments.

In that context, I would like to thank the hon. Members for South Cambridgeshire (Mr. Lansley) and for North Devon (Nick Harvey), and my hon. Friends the Members for Newcastle-under-Lyme (Paul Farrelly), for Milton Keynes, North-East (Brian White), for East Lothian (Anne Picking) and for Selby (Mr. Grogan) for their contributions to the work of the Committee.

Photo of John Bercow John Bercow Conservative, Buckingham

Will the Secretary of State tell the House what explains the differential treatment of electronic networks and services in part 2 of the Bill from that of broadcasters in part 3? Will she also explain why the Bill fails to bring the BBC fully within the auspices of Ofcom, so that it could be fined for any breaches of its existing obligations to observe due impartiality in matters of political and industrial controversy and in relation to public policy?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

I know that the relationship between the BBC and the regulator will be a major focus of today's debate—

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

I am sure that there are plenty of XYou bets" on both sides of the House on that matter. I shall come to that matter later, if Mr. Bercow will forgive me.

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

I certainly will not forget. In relation to the hon. Gentleman's first question on the differential treatment, we do not intend to regulate the internet, but—as he will understand more fully once he has heard more of what I have to say—we intend broadcasting to be subject to a tough content regulatory regime.

Lord Puttnam's Committee reported in August and the Government responded in October. We accepted more than 120 of its 148 recommendations, including—to pick up on the point raised by the hon. Member for Buckingham—the recommendation that Ofcom should be able to fine the BBC for breaches of tier 1 and tier 2 obligations. The Committee's conclusions also led to our redrafting aspects of the Bill to clarify Ofcom's duty to increase the size of the Ofcom board and to clarify the nature of self-regulation. I believe that the process of consultation with Parliament, the wider industry and the public has greatly improved the Bill. As a result, we now have a different Bill—in a number of respects—from the one published in draft in May.

Photo of George Osborne George Osborne Conservative, Tatton

I believe that this is the first Government Bill that the Secretary of State responsible has been unable to sign off as being compatible with the Human Rights Act 1998. Will the right hon. Lady assure us that all its clauses will be fine, and will not be struck down in the courts after we have enacted the Bill?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

I will come to a full explanation of why the Bill is, in one particular respect, not compatible with the European convention on human rights, and set out for the House the way in which I intend to deal with that.

I shall run quickly through the new provisions in the Bill. It now includes provisions for a new newspaper merger regime that strikes the right balance between deregulation and the protection of essential public interests. On local radio ownership, to allow greater consolidation, we have moved to a minimum of two plus one local radio owners from the three plus one in the draft Bill. As a result of the reorganisation of the spectrum on the multiplexes following the relicensing by the Independent Television Commission, we have also been able to remove the restriction on religious bodies holding national digital radio service licences. I know that there has been a tremendous amount of correspondence with hon. Members on both sides of the House about this. We always said that the restriction was created because of spectrum scarcity, and, now that there is more available spectrum, we have lifted that restriction.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I am pleased to hear of the changes on local radio ownership, but will my right hon. Friend ensure that the Bill remains proof against the continuing attacks of the large radio industry on the ownership, content and diversity measures, particularly clause 302 and schedule 14?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

Yes. I am pleased that my hon. Friend has raised that point, which, again, is a concern to the House. We are determined that deregulation of ownership, which we believe is right to promote investment, should not in any way compromise standards, the discipline of adhering to licence conditions or what is defined in the Bill as localness—the quintessential nature of local radio. Ofcom will have powers to check, or dipstick, in areas where radio consolidation has taken place to ensure that the local character of local radio has been preserved.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee

I have written to my right hon. Friend on this point. She has said that provision will be made for faith organisations to go on the airwaves, but what about those organisations that do not have faith, such as the British Humanist Association and the National Secular Society, which are denied access to Thought for the Day on the XToday" programme? Will they be included, or is the provision just for religious organisations and their fellow travellers?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

My hon. Friend raises an important point, which I am willing to consider further. I hope that it is aired in Committee, and if necessary, I shall offer further definition in the light of his intervention.

Photo of Bob Blizzard Bob Blizzard Labour, Waveney

Will my right hon. Friend explain what the Bill will do to encourage investment in digital radio? For example, will it permit licence roll-overs?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

One of the Bill's objectives is to promote the increase in digital radio, and one way to achieve that is through Government action. A year ago I approved seven new BBC digital radio stations. My hon. Friend will be aware that the price of digital radio equipment, which was very high, is beginning to fall. Take-up of digital radio is still low, but it will be driven by the fact that there will be stations worth listening to that are available only through digital. They will be the drivers for digital radio take-up, just as such stations are the drivers for digital television take-up.

I must make progress on the Bill's content now, if I may. In the light of the pre-legislative scrutiny Committee's report we clarified Ofcom's general duties. We strengthened the independence of the consumer panel and gave it powers to set up its own committee. We also limited its sphere of interest to companies with fewer than 10 employees.

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

If the hon. Gentleman will forgive me, I want to make progress. There will be another point in my speech at which he will want to intervene, I am sure.

We have worked to get the provisions for television licensable content right, limiting regulation to broadcasting services. That underlines the potential for self-regulation.

Also, in relation to the pre-legislative scrutiny Committee's concerns about the capacity of the independent production sector, I asked the ITC to undertake a review to establish the facts about the market and its likely growth, and to make an assessment of issues that might adversely affect its long-term development.

That was prompted by the Committee's concern about the timetable for—but not the principle of—the lifting of the restriction on foreign ownership. We have now received the ITC report, and copies of the summary have been made available to Members. I give notice that we may wish in due course to amend the Bill further after considering the ITC's proposals in more detail.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

The right hon. Lady helpfully explained the scrutiny process relating to independent television production, but why did not the Committee, and why does not the Bill, examine the thorny question of independent radio production quotas? The right hon. Lady will know that the BBC has set itself an internal requirement to produce a minimum 10 per cent. quota. Why is that not enshrined in the Bill? If the principle is all right for television, why is it not all right for radio?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

That is a fair point, which we will consider in the context of the programme supply review. We do not, however, want to be too restrictive. We do not want to impose new obligations on radio that might constrain its growth. That is the framework within which a proposition that I know to be in currency will be considered.

In practice, use of the BBC licence fee as venture capital for the nation's creativity means ensuring a healthy market in programme supply and a vibrant, creative independent sector. I was pleased that the ITC report was welcomed by, among others, Lord Puttnam and the Producers Alliance for Cinema and Television. That welcome is well deserved, reflecting the enormous amount of work that the ITC has done. It makes an extremely strong case for the integral role that an independent market will play in the future of broadcasting, especially given the changes in media ownership and the proposals to maintain production quotas. As I have said, we are considering the report carefully, and will amend the Bill further if necessary.

Photo of John Redwood John Redwood Conservative, Wokingham

Content regulation is censorship by another name. What guarantee can the Secretary of State offer that her actions will not give rise to a very interventionist system that would perpetuate the tyranny of the politically correct? What we want, and what all freedom-lovers want, is a diversity of views to be heard on the airwaves.

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

That is an interesting point. We are avowedly not returning to what might arguably be described as the pre-ITC censorship regime, when the regulator decided which programmes should be shown. We are placing that responsibility on the broadcaster, which is where it should be.

Let me say something about political advertising—a point that was touched on by Mr. Osborne. I have been unable to make a statement of compatibility with the Human Rights Act 1998 in respect of one provision in the Bill. This is the first time since the Act came into force that the Government have made such a statement at the outset of a Bill's passage. I consulted Mr. Whittingdale earlier, gave him notice of the fact, and gave both Opposition spokespersons briefing.

Although there will of course be an opportunity for this matter to be debated fully in Committee, I wanted to explain the position to the whole House. The decision to proceed with a Bill containing a provision of this kind was obviously exceptional, and was made only after careful deliberation and a full examination of both the legal arguments and the policy alternatives.

For many years, successive Governments have maintained a complete ban on advertising of a political nature on television or radio. The Government's intention in this case is to continue with the current ban—a ban that was supported by the Neill committee in its 1998 report on funding of political parties—and to define more precisely what is meant by Xpolitical", so that Ofcom may continue to use the broad reading of the word that existing regulators use. In that regard, I refer hon. Members to clause 309.

However, a potential complication exists in the form of a judgment by the European Court of Human Rights against Switzerland, which maintained an apparently similar ban. That point was also noted by the Joint Committee on Human Rights in examining the draft Bill, and I should like to place on the record my thanks to it for its helpful comments on the draft Bill in its 19th report. In response to the ECHR's judgment and to the Joint Committee's concerns, we looked hard at the current ban to see whether some minor changes would make it more certain that it was human rights compatible. Unfortunately, any such change would still allow substantial political advertising, and I hope that there is cross-party agreement that that would not be a desirable outcome. By denying powerful interests the chance to skew political debate, the current ban safeguards the public and democratic debate, and protects the impartiality of broadcasters.

Having examined all the facts, and following extensive legal advice, I have concluded that very strong arguments could be advanced in favour of the ban contained in this Bill being compliant with the ECHR.

Photo of Mr Richard Allan Mr Richard Allan Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Trade and Industry)

I have every sympathy with the point that the Secretary of State makes about wishing to maintain the ban on political advertising on television and radio. Can she tell us whether there are any current court cases concerning this issue—either in the UK under the Human Rights Act 1998, or continuing through the European Court of Human Rights process—or is the Swiss judgment the only one on the books?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

The Swiss case is the only one that I am aware of at this point.

Photo of Derek Wyatt Derek Wyatt Labour, Sittingbourne and Sheppey

Could you put the evidence in the Library so that we can all read it, and can you explain whether you can get through broadband—

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I am sorry to interrupt the hon. Gentleman, but by now he should be using the appropriate parliamentary language. He is addressing the Chair, not the Minister, by using the second person.

Photo of Derek Wyatt Derek Wyatt Labour, Sittingbourne and Sheppey

I am sorry, Mr. Deputy Speaker. Political advertising can be carried out through broadband technology; how will the legislation affect that?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

On the second point, as I said in response to an intervention a few minutes ago, we are not seeking to regulate the internet. The ban applies to licensed broadcasting—that is the distinction. On my hon. Friend's very fair request, I will certainly ensure that an explanatory note is placed in the Library for Members' information.

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

I want to follow up the point made by Mr. Allan. My understanding is that the current restriction on religious broadcasters owning licences is being challenged under the European Court of Human Rights. The Bill will not wholly remove that restriction, so perhaps the Secretary of State might like to look into that matter further.

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

I shall confirm my previous answer for the hon. Gentleman's benefit: I am not aware of other current challenges, but in preparing a note for the Library, I shall ensure that our intelligence on this matter is complete.

The Government apply testing standards to the consideration of the compatibility of their legislation with the convention and, given the existence of the Swiss precedent, I must ask the House to consider this Bill with a section 19(l)(b) of the Human Rights Act 1998 statement attached to it. That does not mean that we believe the Bill to be incompatible with the ECHR, and we would mount a robust defence if it were legally challenged. Of course, if that defence subsequently failed before the domestic courts, we would need to reconsider our position. Beyond that, we take our international obligations extremely seriously and we would seek to amend the ban in accordance with any judgment of the European Court of Human Rights in Strasbourg that ruled against the UK legislation. As things stand, however, the Government believe that it is right to ask the House to continue the ban on political advertising.

I turn now to the substance of the Bill, which essentially has four themes: giving functions to Ofcom, implementing four European communications directives, ensuring the most effective management of the radio spectrum, and putting in place a framework for broadcasting and media.

Part 1 of the Bill contains details of the functions that will be transferred or assigned to Ofcom, bringing together the functions currently exercised by the five regulators—the Broadcasting Standards Commission, the Independent Television Commission, the Director General of Telecommunications, the Radiocommunications Agency, and the Radio Authority.

Photo of Tom Clarke Tom Clarke Labour, Coatbridge and Chryston

My right hon. Friend had an excellent record of involvement in disability matters before she came to the House. Is she aware that many organisations, including Mencap, are worried that Ofcom's duties do not include conducting research into whether people with disabilities are marginalised or embraced by the electronic revolution?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

I assure my right hon. Friend that the Bill contains strong safeguards for the interests of disabled people. He is right to point out that the consumer panel's scope and terms of reference give ample opportunity for the sort of consultation that he has described.

Part 1 of the Bill sets out the general duties of Ofcom and the establishment of the content board and the consumer panel. It also sets out more clearly how self-regulation fits in the new framework. We are giving a clear signal to the industry that, where self-regulation is effective, Ofcom can remove or reduce its regulations.

I believe that the functions in Part I give Ofcom the opportunity to be much more than the sum of its parts. It is obvious, however, that the new organisation that is Ofcom can be built not by words on a page but by the people who will run it. I am delighted that Lord Currie and his board are making good progress in tackling the enormous management task of forming the new organisation. Our aim remains, subject to the will of both Houses, to have Ofcom fully operational by the end of 2003.

Part 2 of the Bill implements the Government's policy on spectrum management and four European directives concerned with electronic communications. It also deals with a number of other matters relating to electronic communications, such as the persistent misuse of electronic communications networks and services, and the regulation of premium-rate services.

The implementation of the four directives will remove the need for 400 telecommunications licences. They will be replaced with a system of general authorisation and specific obligations to protect consumers and guarantee competition. That is a major deregulatory step. As many hon. Members are aware, the directives mean the UK cannot maintain telecommunications licences beyond 24 July next year.

Although we can implement part of our proposals in respect of electronic communications by making regulations under the European Communities Act 1972, the limitation in that Act means that such regulation would be adequate only for an interim period. The Government hope, therefore, that in the interests of consumers and the industry, Members of this House and another place will consider the Bill in such a way that it may be able to secure Royal Assent before the summer recess next year.

Finally, part 2 also sets out the framework for spectrum management in the future.

Part 3 covers television and radio services. This is where we outline our policy on the protection of content standards and the remit for public service broadcasters. Part 3 also covers Ofcom's relationship with the BBC, and I am aware of the degree of contention that still surrounds that issue.

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

I should like to make some progress, if I may.

The Bill will extend the public service broadcasting remit to the BBC as well as commercial public service broadcasters. It is very important that the House understand clearly how this works. Except for the regulation of accuracy and impartiality, which will remain the responsibility of the governors, Ofcom will regulate the BBC under regulatory tiers 1 and 2 and will also have the power to fine the BBC for any breaches under tiers one or two. Under tier 3, the BBC will be required to publish an annual statement of programme policy, as will the other public service broadcasters, report on performance against policy and consider Ofcom's guidance. Ofcom will also report on the fulfilment of the public service broadcasting remit, including the performance of the BBC, at least every five years.

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

The BBC will be subject to general competition law and to the full force of such law should it abuse its position. The BBC is a charter body; it has a special relationship with Parliament through the licence fee. The Government's position is that that relationship with Parliament should be preserved.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

I am grateful to the right hon. Lady for giving way. I understand her point about regulation under tier 3. However, does she accept that justice must not only be done, it must be seen to be done? Does she understand that when a complaint is made against the BBC under the conditions of tier 3—programme content, in other words—and the governors decide that the complaint is not valid, many people outside Parliament will say that, even if the governors are correct, the BBC is its own judge and jury? For that reason, justice will not be seen to be done, and for that reason it will be wrong.

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

That is why I welcome the moves made by the chairman of the governors, in recognition of much of the criticism similar to that described by the hon. Gentleman, to increase transparency and distinguish between the governors' executive and regulatory role.

I say to the House, the BBC and the other public service broadcasters that most of us on the Labour Benches—I hope—believe that the proposition strikes the right balance. The onus is very much on the BBC governors to show that they are able to discharge that rigorous and independent role that the House clearly wishes to see.

Photo of Mr Calum MacDonald Mr Calum MacDonald Labour, Na h-Eileanan an Iar

I warmly welcome the provisions in part 3 that deal with minority language broadcasting, especially the setting up of a Gaelic media service, which is an important breakthrough. Will the Secretary of State clarify whether the new service will be able to deliver content throughout the whole UK, not only in Scotland, provided of course that she finds a cost-effective and sensible way of doing so?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

Those are exactly the type of proposals that will be examined in the review of Gaelic broadcasting that is currently under way—[Interruption.] I hear what Opposition Front-Bench Members are saying and I want to make clear how much importance the Government attach to the position and the secure future of Gaelic broadcasting. We believe that the provisions in the Bill set that future on a much more secure footing than has been the case in the past.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

My hon. Friend is a member of the Committee.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire

I am grateful to the right hon. Lady for giving way. I was beginning to think that I would be left out.

The right hon. Lady referred in flattering terms to the work of the Joint Scrutiny Committee, but one of our most important recommendations was that the many duties laid on Ofcom should not be treated equally but that primacy should be given to the duty of furthering the interests of consumers through competition and furthering the interests of citizens. However, the Secretary of State has chosen not to follow the Committee's recommendations in that respect. Will she tell the House why?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

The hon. Gentleman makes a good point. In fact, we took seriously the Committee's preference for the term Xconsumer" rather than Xcustomer". We tried to amend references to Xcustomer" to Xconsumer" throughout the Bill because that recognises the nature of the transactions that will form one element of consumerism that the measure will regulate. Later in my speech, I shall deal with the broader reference to Ofcom's competition powers.

There is no hierarchy in Ofcom's responsibilities. The definition of general duties used in the Bill was developed in direct response to the Scrutiny Committee's view that those duties should be expressed coherently rather than in the way that they had been listed previously. My colleagues and I accepted that.

To return to the point that I was making before I took that stream of interventions, it is fair to recognise that the BBC has been open to more scrutiny since the licence fee settlement in February 2000. The governors have introduced a package of reforms relating to transparency, fair trading and accountability. I have already welcomed the reforms announced by the chairman of the governors earlier this year. Much will be governed by amendments to the agreement between the BBC and the Secretary of State and we shall lay the relevant extract of the draft agreement before the Committee that will consider the Bill.

Part 3 also covers the Government's approach to the carriage of public service broadcasters on cable and satellite. For satellite, the measure rolls forward the current system, which is policed by Oftel and is based on EC provisions that conditional access system providers must give public service broadcasters access to their systems on a basis that is fair, reasonable and non-discriminatory. In addition, there will be a new fallback power for the Secretary of State to compel public service broadcasters to offer their services to platform providers.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Will my right hon. Friend give way?

Photo of Chris Bryant Chris Bryant Labour, Rhondda

I had not expected such generosity from my right hon. Friend—[Hon. Members: XOh."] I meant that my right hon. Friend had already been extremely generous in taking interventions.

My right hon. Friend has wisely included the backstop power to which she referred. Is she wholly confident that it will be sufficient unto the day and that it will ensure that vertical integration in the industry does not stymie competition and open access for all broadcasters?

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

Yes. We have given these issues very careful consideration and believe that the conclusion on the face of the Bill is right.

Finally, this part of the Bill also contains our much-discussed policy on media ownership. It removes the restriction that prevents foreign ownership of United Kingdom broadcasters, removes the rules on Channel Five ownership, in recognition of its currently small audience share and limited reach, and liberalises the rules on local and national radio ownership.

It is important to understand that our proposals on media ownership are driven by three basic principles. The first is that British media need new sources of investment and the Government's job is to remove the unnecessary obstacles to that investment. The second is that it does not matter whether the investment is a dollar, a euro or a yen as long as the content of our media remains of high quality, and the policing of that content by Ofcom will ensure that we end up with the best of both worlds: their money and our standards. I do not accept that relaxation of the ownership rules will lead to dumping of poor quality foreign programmes on the public. Ofcom will not let it, and the public will not watch it.

Thirdly, ownership rules must reflect the reality of a global marketplace. So we seek to remedy the situation where, for example, Vivendi Universal, a huge foreign company with significant United States-based operations, can, as a French company, buy anything that it wants, whereas similarly global firms like AOL/ Time Warner or Viacom are barred.

The outcome of this approach should be better programming.

Part 4 is concerned with TV licensing—

Photo of Tessa Jowell Tessa Jowell The Secretary of State for Culture, Media and Sport

I shall make progress.

Part 4 consolidates the existing provisions, enabling them to keep pace with developments in receiver technology.

Finally, part 5 gives Ofcom tough competition powers to act concurrently with the Office of Fair Trading. Ofcom will be able to use general competition powers, but we are also retaining, very importantly, sector-specific competition rules for broadcasting—a vital part of protecting markets that do not deliver key policy objectives purely by leaving them to competition alone. Ofcom will have flexibility to use sector-specific powers, but it will not use them where it would be more appropriate for it to use general competition powers.

Part 5 also reforms the newspaper merger regime contained in the Fair Trading Act 1973, to bring it in line with the Enterprise Act 2002.

In conclusion, the Bill is the product of almost unprecedented consultation and has been greatly improved by that. I therefore repeat my thanks to the industry, to the Joint Committee, to Lord Puttnam and to the many others in the House and beyond who have made this a productive consultation process.

When we embarked on developing the legislation, we said that we wanted the most dynamic communications industry in the world. The Bill will make that possible. We said that we wanted the best TV and radio in the world. The Bill will safeguard that. We said that we had to protect the consumer and ensure that the media that they consume are free and fair. The Bill will ensure that. We said that we knew the difference between deregulation and laissez-faire. The Bill proves that. We said that we had the highest aspirations for the British communications sector, and we said that we wanted it to flourish and improve. The Bill will deliver that; I commend it to the House.

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport 5:54 pm, 3rd December 2002

On behalf of the Opposition, I make it clear that we welcome and support the Bill, although, as the House would expect, we have reservations about some of its provisions, and in respect of some parts we shall press the Government to go further.

The Bill is designed to achieve two main purposes. The first purpose—to create a single regulator for the communications and media industries—was a commitment in the last Conservative manifesto, so I am pleased that it will now come about, even if it is not a Conservative Government who are enacting it.

The second purpose is to revise and liberalise the rules governing the ownership of the media. It is more than six years since we last considered this issue, during the proceedings on the Broadcasting Act 1996. As a member of the Standing Committee, I argued that the rules would still be drawn too tightly and that change was happening so quickly that the danger was that the law would become obsolete and over-restrictive almost before the ink was dry. I am pleased, therefore, that the rules are to be liberalised again, enabling us to move further towards the media being subject to the competition rules that apply in every other industry.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

I congratulate my hon. Friend on the principled stand that he took, which stopped him being on the Front Bench at the time. Is he convinced, however, that the Bill has the flexible architecture that will enable it to keep pace with technological advances over the next five or eight years?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

We shall need to explore that important point in Committee, but the Bill is undoubtedly a step in the right direction. Whether it goes far enough is a genuine point of concern that we will have to consider.

The new regulator, Ofcom, was extensively debated during its paving Bill in the last Session. Disappointment was expressed at the fact that so much of the debate concentrated on its role in respect of the regulation of broadcasting and so little focused on its telecommunications role. With more channels becoming available, the need for intervention and regulation of broadcasting steadily declines, but competition in telecommunications is less extensive and the need to open the market and to regulate it remains fairly strong. Ofcom will undoubtedly be an enormously powerful body, whose remit will extend across a huge sector of our economy, so it must be subject to the necessary checks and balances. We think that, in some areas, those may need to be strengthened.

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

Does the hon. Gentleman agree that the reins must be loosened, if only to ensure that broadband is promoted throughout the country and that we move into the new technology more quickly and cheaply?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

I strongly agree about the importance of broadband and I shall come to it after I have dealt with Ofcom's competition role, which is equally important.

Concern has been expressed that Ofcom may not have the necessary resources and expertise to take over the function of competition regulation, which in some cases is now exercised by the OFT. That, I hope, is another issue that we shall consider.

Some have suggested that in addition to a separate content and consumer board there should be an economic board, in recognition of the importance of the competition responsibilities that Ofcom will have. I understand that the Government have rejected that idea, on the grounds that the economic function will be fundamental to everything that Ofcom does; but there remains a concern that businesses, whether they be suppliers or users of communications services, will lack a guaranteed mechanism to ensure that their voice is properly heard.

Photo of David Drew David Drew Labour/Co-operative, Stroud

Would the hon. Gentleman care to comment on one of the problems that have been brought to my attention? The growth of access radio is to be commended, but many small commercial stations rely entirely on advertising revenue. If access radio tries to tap into that source of funds, many stations may be driven out of business.

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

In principle I, like the Government, support the idea of access radio, but the hon. Gentleman raises a legitimate concern that has been expressed to me by one of my local Essex commercial stations, which is doing an extremely good job. It is entitled to be worried that competitors may be established and enjoy unfair advantages over it. That is another issue that we shall need to consider.

The Bill includes a number of safeguards to ensure that Ofcom's regulation will indeed be light touch, but we believe that they need to be strengthened in some places. In particular, it needs to be made explicit that Ofcom must operate in line with the principles that have been set out by the Better Regulation Task Force. There may also be a case for establishing a mechanism by which the House can scrutinise the activities of Ofcom and go beyond the excellent job that I have no doubt the Select Committee on Culture, Media and Sport will do under the chairmanship of Mr. Kaufman.

Photo of John Redwood John Redwood Conservative, Wokingham

Although I am sure that the Secretary of State is quite sincere when she says that she wants us to have the most successful media and telecommunications industry in the world, is my hon. Friend worried, as I am, that her right hon. Friend the Chancellor of the Exchequer is busily demolishing the telecommunications industry with massive tax impositions, which have left it cruelly short of cash to finance the very expansion that Labour Members want? Is that not a great paradox? Do not we need to get the Chancellor out of the way if we are to have any hope of success?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

It is undoubtedly a paradox and, sadly, not just telecommunications businesses are struggling under the enormous burden of increased taxation under this Government.

Ofcom will take over the telecommunications responsibilities of Oftel, the first utility regulator to be established. It is disappointing that less progress has been made in achieving a competitive market in telecommunications than in some other markets, such as energy. Sometimes it has seemed as though Oftel has spent more time intervening in those parts of the market where strong competition already exists than in those where it does not. In particular, it is arguable that we now have an aggressively competitive market in mobile telephony with four, soon to become five, operators.

Those operators already have significant debts following the 3G—third generation—auction and face the challenge of financing and installing the infrastructure necessary for them to make a return on their investment. The Better Regulation Task Force suggested that mobile telephony might now be sufficiently competitive that it can be regulated by competition law alone, yet Oftel has decided to extended price caps and continues to seek to regulate specific tariffs.

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

I hope that the hon. Gentleman will forgive me for not giving way. I am very conscious of the number of hon. Members who wish to speak.

Oftel has continued to regulate mobile telephony, but it has been less successful in creating a competitive market in fixed-line telecommunications, in which BT remains the dominant supplier. The most recent attempt to open up the market was supposed to involve local loop unbundling, but the difficulties encountered by companies seeking to negotiate with BT led a number to abandon the attempt altogether, and the number of local loops that have been unbundled remains pitifully small. I believe that, out of about 28 million local loops, well under 1,000 have been unbundled.

A balance must be struck between promoting competition in the short term and encouraging investment in infrastructure development in the longer term. In all such debates, the vital importance of increasing access to broadband must be a priority, and Britain is lagging far behind in that respect. Although the number of households with broadband access has now passed 1 million, we are still way behind our competitors.

BT's latest price cuts have undoubtedly encouraged demand, as has its huge advertising campaign, although it must be said that the campaign has merely rubbed salt into the wound of the third of the population who cannot access ADSL—advanced digital subscriber line—or cable broadband services. In rural areas, less than 5 per cent. of people have access to those services.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I very much agree with the hon. Gentleman's comments on rural areas. Many parts of Wales beyond the M4 do not have access to broadband services—indeed, many parts of Scotland and England do not enjoy access to broadband—so does he accept that, in that regard at least, we are very reliant on the BT network? It has been the only provider of services in rural areas. Surely it would be better to build on that network in co-operation with Ofcom, perhaps by putting a duty on Ofcom to ensure access to broadband services, rather than leaving that to the market, which is not delivering.

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

The hon. Gentleman is right to say that it seems that BT is the only player in the game in terms of extending services. According to BT, people in rural areas may have to wait between 10 and 20 years before they are given access to such services, which is unacceptable. We will have to consider that issue because there is a real danger that this country will have a two-tier economy and that, once again, rural Britain will be disadvantaged. Ofcom will have to address that issue.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

BT says that competition law prevents it from rolling out broadband services not just to rural areas but to many semi-rural areas and that it is unable to subsidise the roll-out to individual exchanges. Does the hon. Gentleman believe BT?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

I am tempted to say, XThey would, wouldn't they?" I would want to look at rather more independent evidence than that provided by BT. Nevertheless, I accept that there may be a conflict between the short-term objective of promoting competition and the long-term objective of achieving investment in broadband services, and we will need to consider that issue.

I suspect that the Bill's provisions on radio spectrum pricing will not receive as much attention as its other parts. We support the modernisation of spectrum management through the introduction of spectrum trading because it is likely to lead to more efficient allocation, but the proposed introduction of recognised spectrum access has raised concerns that it is in effect a tax on satellite services. Those who are affected argue that it is unfair, that it is unduly restrictive and that it may deter the switch to digital. We also wish to scrutinise those important issues, and I hope that we will have the results of the Trade and Industry Committee's inquiry on that issue before we do so.

Let me now turn to the area about which I expect there to be most debate, not least because nothing interests the media more than themselves. In the past 10 years, the range and choice of media in this country have been transformed. The old argument that spectrum scarcity limits the number of outlets is no longer applicable, so the case for the Government taking an active role in controlling who owns and what appears on television and radio has become more and more unsustainable. I therefore unreservedly welcome the measures to liberalise the rules that restrict the ownership and regulation of our media companies.

There has already been extensive debate about the Government's decision to do away with the current prohibition on non-European companies acquiring British media companies. Although I would much prefer a similarly liberal regime to exist in countries such as America, that in itself is no reason for us to maintain a restrictive regime in this country. The suggestion that we have nothing to learn from America about television programming is no longer credible. Today, many of the most innovative and stimulating television programmes are American-made; nor can it be argued that the British commercial television sector is so well run that it must be protected from overseas management. I therefore congratulate the Government on their decision to stand firm and to resist the protectionists on Lord Puttnam's committee.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

Does my hon. Friend recall the considerable furore in the House when Central Television was acquired by Carlton? There was much concern that Central Television would not provide good local regional programmes and news coverage. Was he reassured by the fact that the licensing conditions ensured that good programming continued? Does that not demonstrate that, in fact, no matter who owns ITV or other commercial broadcasters in this country, licensing agreements will ensure that programme standards are maintained?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

I am becoming slightly concerned about the number of times that I agree with the Secretary of State, but I think she said that there is a difference between the regulation of content and that of ownership. I think that that is the point that my hon. Friend is making, and I have to say that I agree with it.

We also welcome the lifting of the restrictions that have prevented the creation of a consolidated ITV company. The merger of Granada and Carlton has to be considered by the Competition Commission, but in principle it may create a stronger company that is more capable of competing internationally in a multi-channel world. However, the Government still lack the courage of their convictions in other respects and are intending to maintain restrictions beyond those required under competition law.

In particular, we believe that the continuation of ownership limits on ITN are unnecessary and may hold back its development. Even though the limit on individual ownership will be raised to 40 per cent., the effect of a Granada-Carlton merger will leave the new company still unable to increase its stake and, unlike most television companies in other countries, unable to own its news provider.

That is a retrograde step, because, under the old regime, it was at least theoretically possible for ITN to be wholly owned by the ITV companies. The Government claim that they are concerned to protect ITN's editorial independence. What ITN needs, however, is investment to be able to compete with Sky News and the BBC. Retaining a cap on ownership effectively prevents ITN from growing as a business and providing a strong third force in news provision.

The Government have also made welcome moves to relax the existing restrictions on the involvement of religious bodies or individuals in broadcasting. The lifting of the ban on religious bodies holding national digital sound programme service licences is long overdue. However, it is still intended that there should be a complete ban on religious organisations holding national analogue radio and television licences and multiplex licences. In addition, although the rules preventing a religious person from applying for a licence allow Ofcom to make a determination, it remains the case that those holding religious office in a local church or religious charity are discriminated against. Of course, there may be cases in which it is inappropriate for a religious body to be granted a licence or for an individual involved in a religious organisation to hold one. It is discriminatory and offensive to many involved in religious organisations, however, that they should still be singled out under the legislation and subjected to a more restrictive and arbitrary regime.

In the case of cross-media ownership, the Government have decided to lift the restriction on a newspaper proprietor controlling more than 20 per cent. of the national newspaper market owning Channel Five. At the same time, however, they argue that to allow ownership of channel 3 would represent an unacceptable concentration of influence. When the last Broadcasting Bill was introduced in 1996, I argued that the 20 per cent. limit was arbitrary and unfair and that its effect was to punish a newspaper group for its success—[Interruption.] I am glad that Labour Members remember that; I remember it well, too. I am therefore slightly astonished by the Labour party's attitude today. In 1996, the Labour party's then spokesman, Dr. Moonie, who is now a Minister, said that

Xthe Government have concocted a 20 per cent. rule for cross-media holdings. That is unnecessary and wrong."—[Official Report, Standing Committee D, 21 May 1996; c. 412.]

The Minister for E-Commerce and Competitiveness, Mr. Timms—I look forward to hearing him wind up this debate—was also a member of the Committee. He made an impassioned speech in favour of the amendment that I, along with other hon. Members, had tabled:

XHow can it be right that an organisation with a 19.5 per cent. market share can own a whole television station, whereas one with a 20.5 per cent. share can own only 20 per cent.?"—[Official Report, Standing Committee D, 21 May 1996; c. 427.]

I was delighted at the time that the amendment was supported by both hon. Gentlemen and their colleagues on the Labour Benches. The House will therefore understand my puzzlement that the Government now propose to retain the very limit that they voted against six years ago.

Let me turn to the provisions affecting newspaper ownership. The Government have frequently trumpeted their belief in press freedom, which we would all echo. In the UK, statutory regulation of the publishing industry has always been viewed as unnecessary and dangerous, with any benefits being far outweighed by the loss of freedom that it might entail. The Government have on many occasions made clear their support for the current system of press self-regulation as administered by the Press Complaints Commission. Publishers are subject to no special legal regime above and beyond the stringent general laws of defamation, obscenity, breach of confidence, copyright, court reporting and so on. That reflects the belief, as guaranteed by the Human Rights Act 1998, that freedom of expression and opinion are rights that must be strictly protected in a free and democratic society.

A real concern exists, however, that the Bill, far from protecting press freedom, will do precisely the opposite. It may be the law of unintended consequences, or it may be something far more cynical. At the moment, the press is—for very good reason, of which we are all aware—not responsible to any of the statutory bodies that will make up Ofcom. Ofcom will be an amalgamation of state regulators that deal with electronic communications, and they have no knowledge or experience of the newspaper industry. Under the Bill, however, it is intended that Ofcom be given a say in Xpublic interest matters" affecting newspapers as well as considerations of Xplurality" in newspaper transfer issues.

The Secretary of State already possesses exceptional powers in this area. Giving an additional responsibility to Ofcom is unnecessary and potentially dangerous. These are issues on which Ofcom lacks expertise, in which its role is already performed by the Office of Fair Trading and which may have the consequence of introducing statutory regulation of newspapers through the back door. Unforeseen consequence or not, that must not be allowed to occur. If the Government really value press freedom, the Bill must make that crystal clear. There can be no room for doubt, obfuscation or clarification by the courts. It is too important a matter to leave to chance.

The Bill contains welcome measures to strengthen the requirements on broadcasters to ensure that their programmes are accessible to the deaf and the visually impaired. In some cases, we believe that more can be done, particularly in terms of publicising the availability of subtitling and promoting design that is easily used by disabled people and those with sight problems. We also look forward to amendments being tabled by the Government to strengthen the rights of independent producers. The ITC has produced a report on the programme supply market that has been widely welcomed by the industry. It is now for the Government to act on it.

Finally, I come to the glaring omission in the Bill. The creation of a single independent regulator for our broadcast media is fatally flawed as long as the biggest and most powerful broadcaster is not fully within its remit. In recent months, the BBC has become steadily more commercial and has strayed further and further from its public service remit. Its commercial activities, undertaken by BBC Worldwide, now compete directly with private companies through television channels such as UK History, through its publications, and even through its provision of educational software. At the same time, through the licence fee, it competes with the commercial sector for film rights, and finances channels such as News 24 and BBC 3, which appear to be carbon copies of existing commercial stations. All complaints about the BBC's activities, however, must be made to and adjudicated by the BBC. It is indefensible that when every other broadcaster is subject to independent scrutiny and regulation, the BBC should be exempt from it.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Will the hon. Gentleman give way?

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Culture, Media and Sport

No, I must finish.

Bringing the BBC fully within the scope of Ofcom is supported by the whole commercial sector. It is supported by the BBC's former chairman, Lord Hussey, and by Lord Bragg. It is extraordinary that, on this point, the Government appear to be deaf to all reason, and, instead, have listened only to the seductive voice of the BBC.

This is generally a good Bill, and we do not intend to oppose it. Even though it has already been subjected to much scrutiny, its size, scope and importance mean that it is essential that it should receive proper detailed consideration in Committee, which we intend to ensure.

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury 6:18 pm, 3rd December 2002

I begin by reminding the House of the interests that I have declared in the Register of Members' Interests.

We have travelled a long road—almost two years to the day—since the White Paper was published that set this process in motion. Much has happened in terms of consultative processes, pre-legislative scrutiny and a draft Bill being published in advance. That process of consultation has been immensely valuable in producing this Bill. I congratulate my right hon. and hon. Friends on the way in which they have approached the Bill, and I hope that that will act as a model for future detailed legislation of this kind.

I also want to welcome the broad thrust of the Bill. It seeks to achieve three major things. First, it seeks to converge the regulators of broadcasting and telecommunications in a way that matches the convergence of the technologies governing the way in which we receive material as viewers, listeners and consumers. Secondly, it seeks to bring in a lighter touch of regulation generally. Out go the number crunching, the minute counting and the detailed specific regulation that act as a barrier to creativity in our broadcasting environment. In come sensible self-regulation and co-regulation that will give a certain degree of trust to our public service broadcasters but with reserve powers for the regulator to intervene if that is necessary. That is a sensible approach. Thirdly, throughout the Bill, there is the intention to safeguard the values of public service broadcasting and of high-quality broadcasting, which are essential if we are to have a good broadcasting environment into the future.

The Bill seeks to get right the balance between the competition that will promote choice and the protection of public service and quality broadcasting for the viewer and the listener. I believe that it gets that balance broadly right.

I also want to welcome two recent decisions by the Government. The first is the decision on local commercial radio ownership. It has made absolute sense to move from the draft Bill's three-plus-one formula to the two-plus-one formula now before us. I welcome that primarily because it will allow greater investment in local programme making, local events and local news coverage in local radio stations around the country.

Secondly, the Government's decision to embark on the programme supply review, which has now been published, is also extremely welcome. The recommendations of the review are remarkably radical. They present the possibility that the contractual relationship between independent producers and broadcasters could change much to the independent producers' benefit. That could ensure that the strong ecology of a mixture of independent and broadcaster-led material can benefit the viewing public into the future. I hope that the Government will introduce proposals during the debates on the Bill that will enable the recommendations of the supply review to be implemented.

However, there are several issues where I hope that the Government can go a little further than they have in the Bill. The first of those issues was referred to by the Opposition spokesman when he completed his remarks. I refer to the relationship between Ofcom and the BBC. Although the Opposition spokesman was technically wrong in what he said about the handling of complaints by the BBC and Ofcom, he had a fundamental point. The regulations of tiers 1and 2 in relation to the BBC will be very much in the hands and under the purview of Ofcom, but the regulatory backstop powers, which Ofcom has for all the other public service broadcasters under tier 3, will remain in the hands of the BBC's board of governors.

The Government will probably argue—indeed, they have argued—that the Secretary of State has reserve powers in relation to the BBC. For example, if the board of governors goes completely off the regulatory rails and fails to fulfil the public service remit that Parliament has placed on the BBC, the Secretary of State can always step in and can, ultimately, sack the board of governors. However, that is a nuclear-button option that would never be exercised. I therefore suggest that it would not only be in the interests of fairness between the different public service broadcasters, but in the interests of the BBC to place a backstop power in the hands of Ofcom to intervene if the governors fail in their broad duty to fulfil the remit. By all means, let us leave the governors in charge of their day-to-day responsibility to fulfil the remit and to manage the BBC as an organisation, and let us give the BBC the self-regulatory powers that the Bill gives to all other public service broadcasters in tier 3, but let us reserve a power for the independent regulator, Ofcom—rather than the Secretary of State—to intervene.

The overall review of broadcasting is flagged up in clause 256. It contains the provision for the once-in-every-five-years exercise that Ofcom will undertake to consider the whole public service broadcasting landscape and the trends, difficulties and balances between the different public service broadcasters that emerge. The review is one of the most important things that Ofcom will do. The original Bill said that the review should take place every three years, but this Bill says that it is up to Ofcom to decide when to carry it out but that it should take place at least once every five years. Whether it is three years or five years, the interval between the reviews that Ofcom will undertake is too long. I hope that the Committee will examine that point in greater detail as the Bill receives further scrutiny.

The developing problem of piracy of moving image material is extremely worrying. Piracy and counterfeiting are already crucifying the music industry. They pose a danger to television and film in almost equal measure. Ofcom cannot have a power to intervene directly to prevent piracy, but it can have the duty to bring together all parts of the industry to agree common standards that will provide the best possible barrier against piracy in future. I hope that that point will also be considered as the Bill goes through its proceedings in the House.

As those debates take place, I hope that the Government will take some of these points on board. My right hon. and hon. Friends deserve the thanks of the House for introducing the Bill in the way and in the condition that they have. It will not take very much for them to make it even better.

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Culture, Media and Sport) 6:27 pm, 3rd December 2002

We also welcome the Bill and will support its Second Reading. We very much hope that it will form the basis for the regulation of a new generation of communication technologies. Therefore, it is vital that we get the regulations absolutely right.

I applaud the Government for their attitude towards the consultation that they have allowed on the Bill. I served on the scrutiny Committee, and that process was entered into by Members of both Houses and from all political parties with a positive mindset. The Committee was deftly chaired by Lord Puttnam. The Government's acceptance of many of the Committee's suggestions has been helpful. We approach the Bill's passage through Parliament with a number of the major issues resolved between the parties.Of course, I wish that the Government had gone further towards meeting one or two of the Committee's other recommendations, and I will refer to them.

The underlying principle should be to retain a serious broadcasting and production industry in the UK and to create the conditions by which creativity and freedom of expression can flourish. We must therefore guarantee plurality, with a range of providers in the public service and the private commercial sector. The choice is not simply between public service broadcasters and other channels.

We must also guarantee access. The new regime will have to ensure that not only is there a choice between providers but that consumers have the ability to access all the services and make a choice between them. That means making sure that consumers are not left behind by technological advances.

We need to guarantee diversity in broadcasting and telecommunications. To achieve that, all consumers must be able to exercise choice. We also have to maintain quality and standards in broadcasting and all material produced.

Photo of David Heath David Heath Shadow Spokesperson (Trade and Industry), Shadow Spokesperson (Home Affairs)

My hon. Friend talks of maintaining production capacity and standards. That is most under threat in children's broadcasting. The production of quality children's drama is increasingly under attack by commercial forces, such as cartoons that are produced in the far east. Is there anything in the Bill to reverse that process?

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Culture, Media and Sport)

My hon. Friend makes an interesting point. I intend to deal with material from abroad. I welcome the new BBC services in that sector and hope that they will provide a counterbalance to those forces.

It is important that Ofcom have a strong requirement to consider the interests of citizens and not only the consumer of services. We need sector-specific regulations on top of general competition regulations because the communication sector is special and unique. Broadcasting in particular is not just a commodity to be traded like any other. Although such regulation is implicit in the Bill, we need to be more explicit to ensure that we promote and protect the interests of citizens. Much of that work should take place in the content board.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Transport)

Does the hon. Gentleman agree that the fact that no creators are on the content board of Ofcom is an omission? Does he think that the board would be enhanced by having someone who is involved in the creative side of the industry at the heart of the decision-making process?

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Culture, Media and Sport)

It is important that the content board have a wide membership that brings together as much expertise as possible. The hon. Gentleman makes an interesting point.

The principal duty of Ofcom should be to further the interests of consumers and citizens. We support the creation of Ofcom offices in Scotland, Wales and Northern Ireland and agree that the accounts of the activity of each office should be published. We would also welcome regional and national councils advising the content board. Ofcom would also be well advised to have an advisory panel of business interests to give it an idea of the likely impact of its decisions.

We must recognise the unique role of Britain's public service broadcasters and the significance of those broadcasters to our evolving broadcasting ecology. We are happy that the Bill creates the possibility of a merger between Carlton and Granada. There was a time when that would not have been welcome, but in a fast-changing world market it is important that we have a strong ITV that is able to compete. There is no sense in maintaining artificial competition now that they are both up against such strong competitors both in the United Kingdom and, more particularly, from abroad.

I agree with what Mr. Whittingdale said about ITN. It makes little sense to sustain the restrictions on ITN ownership. I would go one stage further and make ITV take full responsibility for ITN if they merge to ensure that it is driven to be a serious competitor for BBC news and Sky news. I fear that the current arrangements are beginning to undermine ITN and will continue to do so.

I also agree with what Mr. Smith said about the review period. It was originally meant to be every three years and the scrutiny Committee suggested that it should be every two years. I am rather despondent that the Bill sets out that it should be at least once every five years. It needs to be more frequent than that if it is to make a meaningful contribution.

Photo of John Bercow John Bercow Conservative, Buckingham

If there are alleged breaches by the BBC of its duty to observe due impartiality and the board of governors refuses to act, does the hon. Gentleman agree with the suggestion by the right hon. Member for Islington, South and Finsbury that there should be a back-stop power in such circumstances for Ofcom to exercise? If so, does he agree that a level of public opinion or protest could be a suitable catalyst for the exercise of such a power?

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Culture, Media and Sport)

I agree that there should be a back-stop power, but it would be more appropriate, at least for now, for that power to reside with the Secretary of State and not with Ofcom. As Ofcom is a predominantly economic regulator and secondarily a content regulator, it has not evolved or matured enough for it to have ultimate responsibility for the BBC, which is what the Conservatives propose. The Government have got the balance just about right. We will soon have a detailed debate on the future of the BBC when we come to charter renewal. By that stage, Ofcom will be up and running and will have had a chance to prove itself. Then and only then should we debate what the hon. Gentleman's colleagues propose.

The scrutiny Committee had little time to absorb the 35 pages of clauses produced in the early summer on Xmust offer" and Xmust carry". The omission of those from the Bill has put some public service broadcasters into a bit of a spin. I do not advocate that the 35 pages should be reinstated, but we have not heard enough from the Government on why they came and then so swiftly went. Perhaps the Minister can tell us why they have been swept aside and why the Government are so confident that the fairly minimalist provisions now in the Bill will suffice. Irrespective of what form the Bill takes when it completes its parliamentary passage, we need to be sure that viewers across all platforms have access to all public service broadcasters. How that is achieved, from the consumers point of view at least, is a subsidiary issue. We do not want to lose sight of that.

If Ofcom is ultimately to arbitrate and referee negotiations between platform providers and public service broadcasters on terms that are fair, reasonable and non-discriminatory, we have to send either both parties into those negotiations with a pistol to their heads, or neither. We cannot have an imbalance. If there is to be a Xmust offer", logic dictates that there needs to be a Xmust carry", and vice versa. Both sides need to be locked in. Ofcom must have back-stop powers come what may to ensure that agreement is reached. We must consider those issues in Committee. I accept that the European directive as implemented in delegated legislation has the makings of a Xmust carry" provision, but we might want to probe that in more detail.

I, too, welcome the ITC's review of the programme supply market and congratulate the Secretary of State on asking it to set that up so promptly after the scrutiny Committee suggested it in its report. A vibrant and successful independent programme-making sector is important to the future of British broadcasting. Original UK production is part of the vitality of our broadcasting industry. It is especially important in the regions. A high proportion of independent production and a fair distribution of intellectual property rights need to be facilitated if independent production is to survive and thrive, as I am sure we all hope it will.

I welcome the provisions for access radio. Some of the experiments in access radio are proving successful and could nurture a great deal of radio talent for the future. It is important that, as we proceed, adequate spectrum is made available for access radio, and some of that may, for example, come from BBC sub-bands.

We have heard the suggestions for radio ownership rules. It is important that the regulator is able to determine a meaningful requirement of localness, which has not always been implemented with great vigour in the past. The Bill will need to be particularly tight in that area if we are to protect local radio and its listeners, so I welcome Ofcom's duty to impose localness conditions.

As for the revolution in media ownership—that is what this is—that the Government are heralding, that was not part of the White Paper. It emerged in the early summer before the scrutiny Committee started its work and only as we reached the draft Bill stage. Nothing that is suggested is implacably wicked or wrong in principle, but we already have two new Acts, the Competition Act 1998 and the Enterprise Act 2002, and we are now introducing this Bill, which we presume will be enacted next year. There will also be a complete upheaval in the apparatus of regulation, as five bodies make way and a new one is set up.

I should have thought that with three Acts needing to bed down, to prove themselves and to be probed, and a new regulator that may take time to work properly and to prove its worth, the Government are taking an enormous gamble by launching into complete upheaval of our ownership rules. To my mind, it would have made sense to allow the legislation to prove itself, and to allow Ofcom to prove itself, and then during a periodic review of the market to return to the question of ownership rules. However, the Government seem confident that it will work. The Secretary of State said in her speech that Ofcom will not permit some of the practices about which people have expressed worry, and I can only hope that her confidence will prove to be well founded.

Photo of Chris Mullin Chris Mullin Labour, Sunderland South

On the question of wickedness, is it the hon. Gentleman's understanding that removing the cross-media ownership rules from Channel Five would enable a newspaper proprietor who already owns, say, four national newspapers and one television channel to purchase Channel Five and use it to subvert ITV and Channel 4, in the same way as he subverted much of the rest of Fleet street? That would be fairly wicked, would it not?

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Culture, Media and Sport)

It certainly would, and I entirely accept the hon. Gentleman's point. It has to be said that the broadcasting sector is regulated a great deal more tightly than the newspaper sector, but the hon. Gentleman certainly raises an interesting point, and it will cause hon. Members to stop and think.

Photo of Chris Mullin Chris Mullin Labour, Sunderland South

I am relatively new to this conversation, but I would like to know whether the hon. Gentleman's understanding of the decision to remove the cross-media ownership rules from Channel Five is the same as mine.

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Culture, Media and Sport)

Yes, it is, but the hon. Gentleman may want to think about some of the general competition rules that might apply. Although the Bill makes sector-specific points, he may be reassured by the fact that general competition rules might prevent that degree of cross-media ownership. Who knows, however? We are stepping into new realms. I should have thought that if the proprietor that the hon. Gentleman may have in mind were to get control of Channel Five, which I believe is being opened up because it has very low viewing figures, those figures might quickly increase, and the market might look very different shortly thereafter.

On radio ownership rules, I note that the Government have moved from three plus one to two plus one. I welcome the definition of a Xwell developed commercial radio market", but as I said, it is important that localness can be ensured and that Ofcom sets about that serious task.

I agreed with the general thrust of the comments made by the hon. Member for Maldon and East Chelmsford about religious ownership. The Government's proposals are pragmatic and sensible, but they leave in primary legislation the prohibition on religious ownership, which seems peculiar. I believe that the position will be challenged and that the Government will have to revisit the matter. I do not understand why religious organisations should be banned from even applying for a licence, although I can well see that when it comes to allocating licences, there may be strong arguments.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

In that case, would the hon. Gentleman also remove the restriction on political parties having broadcasting licences?

Photo of Nick Harvey Nick Harvey Shadow Spokesperson (Culture, Media and Sport)

There is a big difference between the two, and more people would see the sense in the political ban than would see the sense in the religious ban. However, as the Secretary of State implied, the days of the political ban may be numbered.

On telecommunications, which is clearly an important part of the Bill, we are now in a period of rapid technological progress, which is to be welcomed. Nevertheless, the role of the regulator in that market will be vital. It is important that Ofcom use the various tools that the Bill puts at its disposal, such as the provisions on significant market power and on privileged suppliers. We welcome also the universal service conditions, and we hope that they will be used progressively to ratchet up the requirement on telecoms providers to make sure that broadband becomes increasingly available in rural areas. It will be a serious blow to constituencies such as mine and those of many of my right hon. and hon. Friends if there is two-track progress on that and rural areas are left out. It is important that that not be allowed to happen and that Ofcom use the powers at its disposal.

The Government should consider whether there should be more scope for self-regulation in advertising. I welcome the provision of the consumer panel but I regret that it will not be more independent. The Government were wrong to turn down the idea of the Secretary of State appointing the panel. It will not work as well as it could if it is a creature of the regulator.

There are various issues concerning disabled consumers of communications, who are not given the priority in the Bill that they should receive. It is interesting that although the Government have included provisions, they are only modest; for example, the requirement for 10 per cent. of audio description in any given week. Would not it make sense to give Ofcom a power, or indeed to impose on it a duty, to increase some of those proportions over time? That would not have to be done at an unrealistic speed. Simply to include requirements in the Bill and then wait for years until another Bill is introduced seems to indicate a rather relaxed attitude.

In conclusion, we welcome the Bill, and we hope that some of the problems can be ironed out in Committee. The Bill undoubtedly provides a framework that could be effective in regulating these crucial industries for many years to come.

Photo of Anne Begg Anne Begg Labour, Aberdeen South 6:49 pm, 3rd December 2002

Like everyone who has spoken so far, I welcome the Bill. It must be the first Bill to receive so much scrutiny before hitting the Floor of the House, and I suspect, and hope, that it will be a model for future legislation.

There is certainly a logic in creating one regulatory authority. The media are constantly and quickly changing, and we have different means of conveying news, gathering information and providing entertainment.

That is a far cry from the original vision of Lord Reith when the BBC was created. In fact, he would not recognise broadcasting provision today. In an ever-changing world with overlapping media and a convergence of different types of media, it is sensible that a light-touch regulatory authority should look at the principles of regulation, rather than the detail. Inevitably, anything that we discuss in the House today and over the coming weeks in Committee may be out of date by the time it receives Royal Assent.

I was pleased that the Secretary of State reaffirmed in her opening speech that public service broadcasting would be given a new lease of life by the Bill, as I support it strongly. Because we have a tradition of such broadcasting in the UK, we have a high standard of broadcasting which is the envy of the world. When we talk about public service broadcasting, everyone assumes that we are talking about the BBC but of course we are not—we are talking about the ITV channels, Channel 4 and Channel Five. I now have access to a range of channels through satellite—I finally gave in and got it last summer—but it is to terrestrial channels that I turn for most of my viewing, simply because most of the others offer repeats of stuff that I have already seen. Most innovative, exciting and new work is produced by the public service broadcasters.

In my own area of Aberdeen, the regional identity that is an important component of public service broadcasting is delivered not by the BBC, but by Grampian TV and Northsound Radio.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Transport)

Does the hon. Lady share my disappointment that there is no representative from Scotland on the Ofcom board, although we previously had a place on the Independent Television Commission? Does she not think that our strong regional identity in Scotland may be lost because we do not have that position any more?

Photo of Anne Begg Anne Begg Labour, Aberdeen South

I do not know where the hon. Gentleman lives, but to have a place specifically for someone from Scotland on a board of nine would be overgenerous. The Scots get everywhere. I cannot believe that nine board members serving a national body there will not include at least one Scot. My right hon. Friend the Secretary of State for Scotland is an exception, because she has a place in Cabinet, but the hon. Gentleman's proposal is equivalent to saying that we want a special seat for a Scot. If anything, the problem is usually the reverse—people from the English regions are always complaining that they do not get a say in anything because the dominant voices are from Scotland—[Interruption.] Indeed, and Wales as well. There will be nine people on the board, and I hope that they will include Scots who can reflect Scotland's views.

As I was saying, it is important that the content rules of public service broadcasting include the promotion and protection of local and regional content. In my own area of Aberdeen, that regional identity is catered for most capably by Grampian TV and Northsound radio. However, I am concerned that there may be a loss of that regional identity. While I accept that it may be desirable for Granada and Carlton TV to merge, and understand the wish for a strong ITV and perhaps a single ITV channel competing with the BBC, I am concerned that Grampian's specific regional identity may be lost. It is important that the content rules deal with that—it is not just about a pan-Scottish identity but about narrower identities within Scotland.

Photo of Robert Smith Robert Smith Opposition Deputy Chief Whip (Commons)

Is that not a classic example of the Secretary of State having to examine her reassurance that it is not ownership but regulation that matters? In the Scottish Media Group's takeover of Grampian, the ITC had to work hard to apply the spirit as well as the letter of the regulations.

Photo of Anne Begg Anne Begg Labour, Aberdeen South

Indeed, it did so successfully. Now that the Scottish Media Group has put The Herald up for sale, there are concerns that it and The Scotsman will be owned by the same people. There are therefore anxieties about the possible narrowing of media ownership, as well as worries about the opening of media ownership to people from non-European Community countries. In Scotland, the worry is not that more people will own more media outlets but that those outlets will be in the hands of fewer people. The Bill's proposed liberalisation, which would allow foreign ownership of media outlets, may, notwithstanding the concerns that many of us have about some individuals involved, result in a broader range of media owners in Scotland.

The Bill deals not just with television but with radio. I have given Grampian and Northsound a few plugs today—I commend both of them on their good sense in deciding to locate new headquarters in my constituency. Very often, local commercial radio stations cater for local identity. They have a good community spirit and are active in the community. While the UK overall may be frightened that too much output comes from London, people in the north and Scotland are frightened that too much comes from the central belt, so it is important that we make provision for regional differences.

Time is moving on, so I shall make one more point on the Xmust carry, must offer" controversy. I shall not go into what money should change hands if that provision comes into force, but it is crucial that both Xmust offer" and Xmust carry" are included in the Bill. When the analogue signal is switched off, the only platform from which some people, particularly in rural areas, will be able to receive a signal is satellite. It is unlikely that everyone in this country will be able to receive a digital signal from the usual transmitter system, so they will have no choice but to access digital television through satellite platforms. If that is the case, it is incumbent on the satellite platforms to ensure that they carry all the public service broadcasting channels. People currently have choice in certain areas but, crucially, that may not be so in future. I therefore hope that the Government will ensure that there are backstop powers in the Bill.

The Bill is important, as I have said. It has had a lengthy gestation, and hope that all the discussion that preceded today's debate will result in a better Bill rather than, as one wag said to me last night, a longer Bill made even longer. I commend it to the House.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield 6:58 pm, 3rd December 2002

In one sense, I had hoped that the Bill would be slightly longer, as it would have been nice if it had been a consolidated Bill. It is a bit like the Maastricht treaty—you read the ruddy Bill but cannot understand it because it keeps referring to earlier legislation, in this case, the Broadcasting Act 1996.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Is Xruddy" a parliamentary word?

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

I will not drawn by the hon. Gentleman towards the Maastricht treaty, or I might be very much out of order, Mr. Deputy Speaker.

Like other hon. Members, I welcome the Bill, which is an important measure that has been, as Miss Begg said, a long time coming. It reflects the change in technology. There is convergence not only in technology but in the law.

I do not agree with all the hon. Members who spoke about religion. I agree with Mr. Bryant. I am personally uncomfortable about the idea that broadcasters who represent specific religions might have access nationally to analogue radio. However, I believe that there will be national coverage on digital radio; the Secretary of State did not make that clear.

Like my hon. Friend Mr. Whittingdale and, apparently, like Mr. Smith, the former Secretary of State, who has taken the road not to Damascus but to Islington, South and Finsbury, I believe that there is a huge anomaly in the treatment of the BBC. That is different from what the Secretary of State said earlier and from what the right hon. Gentleman said when he was Secretary of State.

In an intervention, I said that when the BBC does not uphold a complaint against it about programme content, even if the corporation is right, justice must be seen to be done. It is not right for the BBC, or anyone, to act as their own judge and jury, yet the BBC is acting in precisely that way. However, I welcome the fact that the BBC will be covered by tiers 1 and 2. Tier 3 is the control on public service broadcasters, which include not only the BBC but channel 3, Channel Five and Channel 4. It translates into greater transparency, but ultimately the governors of the BBC will act as judge and jury on their performance. That must be wrong.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

The hon. Gentleman makes an important point. I suspect that it will be debated at length in Committee. Nevertheless, does he accept that the BBC has a backstop: the House of Commons, to which the BBC is accountable? Is he genuinely suggesting that a regulator is necessarily better for democratic accountability than hon. Members and Ministers?

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

Yes, on a day-to-day basis. As the right hon. Member for Islington, South and Finsbury said, an intervention by the Secretary of State to sack the board of governors would be the nuclear option. The BBC is ultimately responsible to Parliament because it has a royal charter whose contents are determined by Parliament. However, I emphasise that intervention by Parliament is the nuclear option. Ofcom, not the board of governors, should have day-to-day control.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Will the hon. Gentleman give way?

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Is it not important that, in law, the Secretary of State cannot sack the governors? Secretaries of State in every other country in Europe can sack the governors of public service broadcasters. Here, they are appointed by the Queen in Council, and it is important to maintain the BBC's independence by ensuring that its governors cannot be removed by politicians.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

The hon. Gentleman makes an interesting point. I simply echoed the point of the right hon. Member for Islington, South and Finsbury.

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury

The hon. Gentleman's answer to my hon. Friend Mr. Bryant should be that the Queen acts on the advice of the Secretary of State and the Prime Minister.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

I am eternally grateful, but now I shall move on or I shall run out of time. I emphasise that the BBC is its own judge and jury, and that is wrong. I suspect that, more often than not, the BBC makes the right decisions about complaints against it.

Again on the BBC, a frequency imperialism pertains. That point was made time and again in the 1980s, when I worked in the broadcasting industry. Nowadays, the Radio Authority makes it clear that access radio, which the Bill and the Secretary of State encourage, is impeded by the BBC, which continues to sit on frequencies that prevent access radio from using the FM band. I hope that Ministers will deal with that problem when we consider the Bill in more detail in Committee. If I am chosen to serve on the Committee, I shall table amendments to ensure that there is an option to move the BBC from time to time when it squats on frequencies and prevents access to independent broadcasters. The independent production sector is acknowledged as being important to the United Kingdom, and generates not only pounds through payments from sales to television broadcasters in the United Kingdom, but dollars and perhaps even euros from the sale of programmes overseas.

There should be quotas for radio as well as television. The BBC, especially Jenny Abramsky, has resisted that, but I do not understand the reason. The BBC has an internal quota of 10 per cent. and currently runs about 13 per cent. of analogue radio channels. I therefore believe that 10 per cent. is a reasonable quota. If the Government claim that a quota is too rigid, why does that argument not apply to television? There should be comparability. If television will have a quota, there should be a quota for radio too. It should be achievable, and I acknowledge that there is more live broadcasting on radio than on television. [Interruption.]

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I say to Michael Fabricant that I am capable of keeping order and I do not need his assistance.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

Thank you, Mr. Deputy Speaker.

Radio needs a quota that is different from the one for television because of radio's higher live broadcasting content.

Let us consider the technical aspects of the Bill and the telecommunications perspective. Several hon. Members rightly said that that should not be ignored. When I served on the Committee that considered the Office of Communications Act 2002, several hon. Members, especially Brian White, often the made the point that we concentrate too much on television and radio and not often enough on broadband.

Several hon. Members, including the hon. Member for Rhondda, whom I like to plug because he serves on the Select Committee on Culture, Media and Sport, said that not only rural but also urban areas suffer from lack of access to broadband. My hon. Friend the Member for Maldon and East Chelmsford also made the same point. I put in a plea for Burntwood in my constituency. It has a larger population than Lichfield but no access to asymmetric digital subscriber line—ADSL.

The Bill is also gold-plating some European Union directives. A rather depressing example is its provision for a directive to control apparatus that BT and other telephone operators use. The reason for that is often given as the position in Kingston-upon-Hull, where telephones are hard-wired in. However, that represents a small proportion of telephone systems in the United Kingdom. We all know that the majority of telephones in this country are plug-in. They can be bought from Dixons, Comet or the John Lewis Partnership, which I am always keen to promote. There is therefore no problem with competition. There is no reason at all to have provisions in the Bill to protect the consumer against BT or anyone else who controls this sort of equipment.

I want to draw to the House's attention the concerns expressed by Channel 4, which has raised an important point. Although it welcomes the fact that ownership of television may change—we are almost certain to see consolidation in independent television, because of the huge losses of advertising revenue; they are down by 13 per cent. on last year—Channel 4 and other broadcasters are concerned that such consolidation would give a particularly powerful position to channel 3, if TV sales came under the control of one organisation, in terms of controlling the advertising market. That would be to the detriment of Channel 4, Channel Five and other broadcasters. Channel 4 has made it clear that it does not oppose the ownership changes, but it believes that Ofcom should have the necessary powers and expertise to maintain an open and competitive advertising sales market. That is absolutely right.

With those caveats, I welcome the Bill. It represents a move towards the future, and its architecture is sufficiently open for the Bill to be flexible enough to encompass further technological changes when they occur. It is important, however, that the Bill should be scrutinised properly in Committee.

Photo of Derek Wyatt Derek Wyatt Labour, Sittingbourne and Sheppey 7:11 pm, 3rd December 2002

I should like to add my voice to the chorus of approval for both the Department for Culture, Media and Sport and the Department of Trade and Industry with regard to the way in which they have conducted themselves in bringing the Bill to the Floor of the House.

I commend to the House a speech that I heard at the Edinburgh television festival in 1994—in fact, it was the McTaggart lecture—by a young man called Gregory Dyke. In it, he said that the BBC should be free of all political interference. That is probably why I am one of those on the Government side of the House who support the idea that the BBC should be completely regulated by Ofcom. We persuaded the Secretary of State for Health that we should be allowed a free vote on aspects of the Adoption and Children Bill last Session, and I wonder whether it would be possible to have a free vote on whether the BBC should be so regulated. It would then be the House's decision. There is a feeling abroad that the BBC will ultimately come into Ofcom, but it will do so only when it has its charter renewal and an improved licence fee. Those two elements really should be inside Ofcom's remit, not outside it.

One or two hon. Members have mentioned ITN. The hon. Members for Maldon and East Chelmsford (Mr. Whittingdale) and for North Devon (Nick Harvey) made the very good point that ITN is quite fragile. I believe that it needs some care and attention, and it needs it now, not tomorrow. Will the Secretary of State convene a meeting—similar to the meetings relating to the merger of Granada and Carlton—with the ITN board to see whether there is a better way of dealing with ITN, rather than having to wait?

I am a big fan of community radio and television, and I am nervous that it is not clear who is to fund the proposals for the extension of those services. I would like to see powers in the Bill to provide for perhaps 1 per cent. of the licence fee being allocated to community television and radio. After all, if they are not a public service, I do not know what is. If that proposal is unacceptable, perhaps 1 to 5 per cent. of the licence fee could be given over five years, so that we could build up a reservoir of money for community radio and television people to bid for.

This is quite a complicated issue. My hon. Friend Mr. Drew said that he was worried about commercial radio losing out to those services in terms of advertising, but we could keep them in trust so that they did not have to advertise. That would be a way of funding something at the edge of radio and television—and, indeed, broadband. I commend that proposal to the Minister and look forward to his response.

I disagree with my noble Friend Lord Puttnam about overseas investment. I welcome such investment, but two provisions ought to come with it. First, Ofcom should regulate for a higher percentage of local programming. If, for example, Disney were to buy Channel Five, or Murdoch wanted to make inroads into Granada, we could then insist, under the Ofcom regulations, that 80 per cent. of all production took place in this country. I like the way in which the French look after their media, and we must do the same.

I would also like to see a much higher independent production figure. The figure of 25 per cent. was set in 1981. It was supposed to be a floor, but we treated it as a ceiling. That figure of 25 per cent. is the only reason why the independent production market cannot develop and grow bigger. I would like to see a floor of 40 per cent. built in over five years, as Michael Fabricant suggested for radio—an idea that I also support. It should not involve 10 per cent. now and 10 per cent. tomorrow, however, but 25 per cent. over five years. I would like to see a burgeoning of radio production.

In the creative businesses that I know so well, creativity always lies in smallness, not in largeness. That is where our people's brilliance is.

Photo of Martin Smyth Martin Smyth UUP, Belfast South

Does the hon. Gentleman accept that that production quota of 25 per cent. is often confined to the London area, and not scattered across the nation as a whole? Does he also accept that it is important to start spreading it?

Photo of Derek Wyatt Derek Wyatt Labour, Sittingbourne and Sheppey

I well remember the regional director of the BBC getting on the train at Euston, finishing up in Manchester for the week, and coming back on Friday. I agree entirely that there should be some regional perspective in the production quota, too.

Something that has struck a raw nerve with me is a matter over which Ofcom has reserved powers in relation to the public interest, which I would like to see toughened. The provisions are too prescriptive at the moment, and I would like to see a law protecting minors from spamming. For hon. Members who are not sure what spamming is, I shall explain. Last year 8 per cent. of all e-mails contained pornography or child pornography. This year that number has increased to 38 per cent., and it is rising daily. That is totally unacceptable, and the Ofcom rules on it are too weak. We are not addressing the issue, and I want to see a much tougher power for Ofcom included in the Bill. We must tell the internet service providers that they must either accept a charter given to them by Ofcom, or be charged a licence fee. They would choose a charter pretty quickly. If they were not prepared to, Ofcom should be allowed to require the installation of screening software to ensure that all ISPs screen for pornography, especially child pornography, which is appalling and disgusting.

Hon. Members have mentioned broadband. The sad thing is that we have lost that thing called universality. We had it for television; we built the transmitters. We had it for electricity; we built the national grid. We need to charge Ofcom with introducing regulations to find the funding for rural communities—the 35 per cent. who do not have and never will get broadband. That funding may have to come from part of the licence fee or from a levy on advertising, but there must be a way of coming up with an intelligent solution so that the rural and semi-rural communities are not downgraded. That is something that Ofcom must do.

Photo of Andrew Robathan Andrew Robathan Shadow Spokesperson (Trade and Industry)

The hon. Gentleman is making some extremely important points. May I take him back to his point about pornographic spam—if that is what we should call it? We agree that it is undesirable, but how does he intend it to be regulated?

Photo of Derek Wyatt Derek Wyatt Labour, Sittingbourne and Sheppey

I am not an advertising man, but there are several outstanding pieces of software on the market that I could name. I have seen them working, and they are between 95 and 98 per cent. successful. We will never be able to screen out such spam completely, but we should insist that screening software be installed. Furthermore, we can test that software, so there is a solution to this problem.

I shall return to my starting point—the BBC. It is currently streaming video on a channel, and I would love to know whether it has permission to do so. Is it a television channel, a broadcast channel or a broadband channel? I think that it is a broadcast channel, and that it does not have permission. Who regulates that channel? I would like that question cleared up. This is one of the fundamental reasons why we must put the BBC inside Ofcom. I commend the Bill to the House.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire 7:19 pm, 3rd December 2002

Like everyone else in the House, I welcome the Bill, which was brought about by a number of pressures, including the need to comply with European directives. Although there is some gold plating, I am still in favour of the Bill and what it brings before us tonight.

I have served in the House for a number of years, and I have been a member of Committees that scrutinised Bills that created XOfthis", XOfthat" and XOf-the-other"—I have not regretted scrutinising any of those Bills, particularly the one on XOf-the other". The particular matters that came before us encountered resistance from the Labour party, but as time has gone on, all those bodies have been welcomed and have come to be regarded as good things. They have gone from strength to strength.

Greater scrutiny of such Bills would have been valuable on occasion, however, and the Government have a poor record of timetabling legislation without allowing adequate time for proper examination. I have in mind the Enterprise Act 2002; not only clauses but rafts of clauses went undebated because of the timetable motion, yet still became law. We must hope that they work properly.

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

Does the hon. Gentleman agree that the pre-legislative scrutiny will make the Bill successful? As it has already been considered, it will also be easier to amend in Committee.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

The hon. Gentleman not only gives me another minute or two, but brings me to my next point. I commend the pre-legislative scrutiny, which has been immensely valuable, and the Government are to be congratulated on introducing the process—not only for this Bill but, I sincerely hope, for others. If the pre-legislative scrutiny had not taken place, I shudder to think how many clauses of this 543-page Bill would have gone undebated.

Even so, the Bill could be further improved by spending more time in Committee, so the programme motion disappoints me. Again, there is insufficient time for us to do the legislation justice, so if my hon. Friend Mr. Whittingdale, who is leading for the Opposition, wishes to object on that point he will find me in the Lobby beside him, supporting more time for scrutinising the Bill. Indeed, as we have broad and general agreement, I hope that Ministers will not be too upset, and officials will not feel that their virility has been tested, if they agree to the odd amendment to improve the Bill.

Integrating the work of the Broadcasting Standards Commission, the Independent Television Commission and the Radio Authority to achieve a coherent, common and consistent policy on licensing broadcasters, maintaining standards and considering complaints is a desirable objective. Making it all work smoothly and seamlessly is a major undertaking in itself. Of course there will be difficulties over the details of the role and procedures that Ofcom will adopt, the extent of its powers to regulate, access to services, and the composition of the authority. I know that my hon. Friend Michael Fabricant will be very interested in its membership.

Despite all the support for Ofcom, it is nevertheless important to say at this point that fundamental issues are at stake. I am not sure how the Bill will clarify the position of the BBC. Obviously, many Members in the House are not clear about that either. Even the previous Secretary of State has seen the light, and I hope that Ministers can bring themselves to support the idea of Ofcom covering the BBC.

Under clause 3, Ofcom has a general duty

Xto further the interests of consumers in relevant markets, where appropriate by promoting competition".

By almost any definition, there are sections of the television and broadcasting market in which the BBC has a strong, entrenched position, but, as the satellite and broadcasting groups rightly point out, the BBC will fall outside Ofcom's remit. Independent companies operating in the terrestrial cable and satellite market as well as the radio sector will be subject to the full impact of regulation, but the dominant player will lie beyond Ofcom's reach.

I made a careful note of the Secretary of State's opening remarks. She said that there was to be full rigour of competition law, covering, as it will, the BBC. Fine, but what does that mean? Will the penalties imposed by Ofcom and the Office of Fair Trading be the same? Will the speed of implementation be the same for both? Will the legal defences available to businesses against both bodies be the same? Will a judgment by one body on significant market power be accepted by the other? What will be done to prevent a business from facing two rulings, which may be conflicting, from two bodies?

If the Minister's answer to those questions is, XIt will all be seamless and it will all be the same," I shall argue, XWhy shouldn't the BBC come under the control of Ofcom?" I support Mr. Wyatt, because there should be a free vote on the issue. It should not be a matter for party discipline and Whips. This is a moral issue, just like foxhunting or something like that. That may seem a bridge too far, Madam Deputy Speaker, but there we are.

May I flag up another concern? Members on both sides of the House are fully aware of the importance of broadband services, and our foreign competitors are aware of it as well. Deutsche Telecom, with German federal Government support, has 90 per cent. of that country covered, France has invested the equivalent of $25 per head and Japan a massive $90. We are on $5. According to BT, coverage is some 66 per cent., but it will be another five years before 90 per cent. of our population have access to broadband services.

My hon. Friend the Member for Lichfield plugged a place in his constituency, so I shall plug one in mine. The town of Chorleywood is full of keen internet and broadband users, but they are still waiting for connections so that they can start to use the service. Some rural areas will never have—

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

If the hon. Gentleman will excuse me, I shall not, because I have given way already, and the time limit is such that I shall be cut off in my prime if I do.

Some rural areas will not have cover because current legislation and the Bill prevent cross-subsidy. Sooner or later, one of two situations will arise: either the Government will have to put their hand in the taxpayer's pocket to fund non-commercial areas, or such areas as Cornwall will have to remain a communications desert. I disagree strongly with the hon. Member for Sittingbourne and Sheppey. Why should companies that have paid a fortune for licences be forced to pay more to cover areas that it is commercially impossible to cover? We disagree fundamentally there. The Government have made enough money out of all this without getting further help.

The Government made a serious mistake in the bidding process, as they were interested only in the numbers that bidders were prepared to gamble. The Chancellor and his chief economic adviser were willing to take the money, but they failed to consider how the various broadband services were to be rolled out and funded. Conservative Members vehemently opposed the bidding war that the Government created, and we pointed out that implementation of those services would be slow. We are seeing the consequences at this very moment, and the Government are to blame, as they were very greedy up-front. Now they are unable and unprepared to put their hand in their pocket to ensure that everybody in this country gets broadband services.

Photo of Chris Mole Chris Mole Labour, Ipswich

Will the hon. Gentleman give way?

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I know that the hon. Gentleman does not like hearing this, but the Government are not prepared to ensure that everybody gets the broadband services that they deserve and that other EU countries are to provide.

Conservative Members can thoroughly endorse the promotion of competition. The Bill will give a new regulatory body a duty to promote that aim, and I hope that it will be successful—but, both inside and outside the House, we shall still need to assure ourselves that that aim and the means suggested for accomplishing it are fully compatible.

Photo of Eric Joyce Eric Joyce Labour, Falkirk West 7:29 pm, 3rd December 2002

Having listened to the excellent speeches made so far, I want to raise two points. They may not be hugely original, and others may raise them later, but I shall raise them none the less.

My first point relates chiefly to newspapers. Clause 359 repeals sections 57 to 62 of the Fair Trading Act 1973, and places the newspaper industry under the merger control regime set out in the Enterprise Act 2002. Clauses 361 to 375 specify the rules under which the Government can intervene when there is concern about a monopoly or an abundance of ownership in a particular part of the market, not just in the United Kingdom as a whole but, according to my reading, in parts of it. I am not sure whether that would apply to, say, Scotland or Wales—perhaps others will be able to interpret it better—but there has certainly been a lot of debate in Scotland over the last few weeks because of the potential sale of The Herald to the proprietor of another Scottish newspaper.

I suspect that most Members with an interest in Scottish affairs want as diverse a market as possible in Scotland. In fact, the subject was discussed in Westminster Hall earlier today. I do not know what will happen about The Herald. It will be a commercial judgment for the directors of the Scottish Media Group, who have a legal obligation to ensure that they secure the best possible return for the shareholder. They can take account of various factors, such as the wellbeing and welfare of staff, but those are pretty marginal issues. By and large, they are constrained by the size of the bids that come in.

Having said that most people want as diverse a market as possible, I should add that what are often described as London newspapers during Scottish debates are, in fact, United Kingdom newspapers. All are sold in Scotland, many in Xeditorialised" form. I would like to see more people in Scotland reading The Guardian, and I would like The Guardian to make more effort to sell itself in Scotland, but there it is. Whatever rationale underpins the decision of the Scottish Media Group directors, it seems entirely possible that ownership of The Herald and The Scotsman will remain in separate hands; but I think it worth saying, for future reference, that that should best happen through the market rather than through political intervention.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Transport)

Does the hon. Gentleman share my fear that, if the Bill is passed in its current form, the takeover will be more permissible and most likely?

Photo of Eric Joyce Eric Joyce Labour, Falkirk West

I am not sure that that follows. What I am saying is that, wherever possible, the market should dictate such developments. Moreover—this has been discussed at length, at least in Scotland—there should be scope for consolidation of media ownership. The Scottish Media Group is a strong regionally based group which is divesting itself of The Herald, and I think it should be able to consolidate. I think that the Bill allows about the right amount of regulation.

I suspect that the market will take care of things on this occasion, but it is possible that in due course—in five years, perhaps; who knows how long—the problem will rear its head again in Scotland. At present it is widely recognised that, despite considerable investment by the owners of The Scotsman, the paper has not performed as well in the markets as The Herald. Views vary; I think The Scotsman is a perfectly good newspaper. The Herald has certainly performed well, although its journalists would say that it had received less investment because it was part of a larger media group that some feel has erred in the direction of television interests.

Those points are open to debate, but in Scotland there seems to be a substantial market for one newspaper and only half a market for the other, and I am not certain that market conditions will change over the years. The markets will probably sort this out to the reasonable satisfaction of most MPs and members of the public, but we may well need to return to it, and I hope that in that event it will be dealt with not through political intervention but through the market's delivery of the right solution.

My second point relates to impartiality. An important principle of broadcasting in the United Kingdom has always been the fair, accurate and impartial delivery of news, and I expect that most Members support that principle. So far, the only argument against impartiality—well, there may be others, but it is the only one of which I am aware—has been advanced by Rupert Murdoch and one or two others who believe that the markets should be allowed to deliver television news in the same way as they deliver it in newspapers. In other words, they believe that the expression of editorial opinion should be permitted, and that it should be slanted in relation to choice. People would watch this or that news programme according to its slant, just as they might buy newspapers according to their slant.

That argument has been more or less defeated until now, and has constituted the main challenge to impartiality. However, a report by Professor Ian Hargreaves, on behalf of the ITC—which is about to make way for Ofcom—raises an important point. News providers, if they can be called that, such as al-Jazeera broadcast from outside the UK through satellite channels. They represent a minority interest in the UK at present, but cynics might argue that they do not attempt to be impartial; they attempt to target a specific market, which is what proponents of the anti-impartiality argument have argued should happen in the UK.

I suspect that the fact that it does happen, and that such channels are available in the UK, may put pressure on the Government. It may not be necessary to take account of the possibility in Committee, but if a market develops for impartial services broadcast from abroad it may have a substantial bearing on the whole issue of impartiality.

The issue arises in particular in regard to the attitudes of members of black and ethnic-minority communities. While the UK public as a whole support impartiality as a principle, that does not apply to the same extent to those who are not white. A market could arise for foreign services that could not be delivered from the UK—foreign services conveying far more extreme messages. This may seem far fetched, but although some people say that channels such as al-Jazeera are rubbish, high-quality journalists work for them and capable people run them. They target their markets in a very slanted and cynical way.

I want to put down a marker for the future. The impartiality issue raised by Professor Hargreaves will need to be revisited. I feel, however, that the Bill has the right touch in terms of its regulation and the way in which it allows the markets to do their own thing, but to step in when it may be necessary. That, I think, is just about the right balance.

Photo of David Cameron David Cameron Conservative, Witney 7:39 pm, 3rd December 2002

I should begin by pointing out my entry in the Register of Members' Interests. I am a consultant to Carlton Communications, for which I worked for seven and a half years before coming to this place. What I say is coloured by my experiences in working for Carlton, and I make no apologies for that. It is a heavily regulated industry, and I hope that it will be useful to talk about my experience in it.

I welcome the Bill. The television and media industries need to be treated much more like other industries. Regulation has held those industries back, and that fact flows from a fundamental point that we cannot get away from. We have five terrestrial channels, three of which are state-owned. One of the other two, ITV, still has huge regulatory burdens, and the commercial sector in this country is, if anything, still too small.

I am concerned about the size of the Bill. Everyone talks about deregulation, but it is something of a monster. As my hon. Friend Michael Fabricant said, it will be a source of disappointment to the industry that the legislation actually adds to, rather than supersedes, the Broadcasting Acts 1990 and 1996. I remember how difficult it was when working at Carlton to take decisions such as whether to invest in a cable company or in radio, or to change the schedule, when all the time one had to refer to two—now, it is three—enormous documents. That can be quite debilitating. We ought to encourage television and media companies to invest where there is value.

It is also a truism to say—but it needs to be said—that if people do not like something on television, they will not watch it. The Minister should have that message burned into her desk, along with the answer to this question: why do television companies make great programmes? They do so not because of who sits on the Content Board, the contents of a Bill, or what a Minister says, but because people in the industry go to work every day wanting to make great programmes, because schedulers want the strongest schedule, and because airtime sales wants to sell advertising. That is why we can watch programmes such as XDr. Zhivago" on ITV, and XWalking With Dinosaurs" and XDaniel Deronda" on the BBC.

I want to deal with the question of what was wrong with previous legislation, given that, once the Bill is enacted, we will have had three such Acts in the past 12 years. The 1990 Act was deregulatory, but it prevented terrestrial television companies from expanding. They should have been allowed into cable and satellite, but they were not. The 1996 Act was better, but digital terrestrial television, which I was involved with at Carlton, was hopelessly over-regulated. There were very complex rules about how many digital channels one could own. In the end, that was used by Sky as an excuse—and legitimately so—to say, XWe can't sell you our channels to put on your platform because of these very complicated rules." The lesson that we must learn is not that there has been too much deregulation, but that there has not been enough.

I want to mention four elements of the Bill, the first of which concerns the changes relating to ownership, which are overdue and welcome. My hon. Friend the Member for Lichfield said that consolidation should not harm regionalism, and I believe that he is right. Individual ITV licences, the board and programme policy statements still exist. However, we should note that television companies make regional programmes not just because they are told to by regulators, but because they work. That is one of the great strengths of television in this country. Such programmes are not always purely regional; they include programmes made in a region that are included in the national schedule. One thinks of XPeak Practice", which is made in the midlands, of XHeartbeat", which is made in Yorkshire, and of XTaggart", which is made in Scotland. The star of XTaggart" died five years ago, yet it continues on peak time ITV because it is such a terrific programme.

Photo of Boris Johnson Boris Johnson Conservative, Henley

It is? What is XTaggart"?

Photo of David Cameron David Cameron Conservative, Witney

My hon. Friend tries to distract me from a sedentary position.

There are scare stories about foreign ownership. The main such story that we read is that, if a US company takes over Channel Five or ITV, we will suddenly be flooded with cheap programmes from America that will be dumped on to our market. That is nonsense. The figures and the schedules show that domestic production beats imports every time. Mercifully, the days of the BBC showing XDallas" or XDynasty" at peak time have gone, because everybody in television knows that domestic production—home-made programmes—is what wins. If ITV or the BBC wanted to buy reams of American programmes and dump them into the schedule, they could do so now. One simply goes to one of these well-upholstered television festivals in Los Angeles or Cannes, and buys them. However, I do not believe that that would happen.

On reading commentators on such matters, one sometimes gets the feeling that, if only the BBC or ITV had had the foresight to buy XThe West Wing" or XFriends", all their problems would be over. That is nonsense. Much better to have programmes such as XThe Bill", XCoronation Street" or XEastEnders", because it is domestic production that delivers the audience. The scare story about foreign ownership is simply not right. Deregulating ownership is a good thing—it will allow investment to flow, exactly as the Secretary of State described.

My second point concerns ITN, to which Members on both sides of the House have referred. The case has not been made for ownership restrictions on ITN. Every major television channel in the world owns its own news supplier. ABC owns ABC News, and NBC owns NBC News. Why would having outside shareholders suddenly make such a news supplier stronger? If that were the case, we should tell the BBC, XYou cannot own BBC News—it must have outside shareholders." As Mr. Wyatt said, there would be a real benefit in having strong shareholders who care about ITN. In fact, there is a very good example of that. ITN's 24-hour news channel is now owned exclusively by the two ITV companies, because the other ITN shareholders did not want to continue to fund a loss-making channel. That is good evidence that having strong shareholders who get behind the news supplier is a very good thing. I hope that we can change the Bill in that respect.

My third point concerns content regulation. Everyone talks about this big Bill as having a light touch, but I wonder about that. Some have even expressed the concern that it is not tough enough, and that there should be more regulations, but I am not sure that I agree. As I said, television companies do not make great programmes because of the content of a Bill, or what a regulator says. The Bill still provides for statements of programme policy, based on existing licences, that every television company will have to produce. Clause 256 includes a very full description of what public service broadcasting actually means in the multi-channel world. According to clause 259, one cannot change a programme policy statement without permission from Ofcom. It could be argued that, in a multi-channel world with many competing channels, the Bill constitutes active regulation, rather than a light touch.

I turn to my fourth and final point. There is no point in criticising a Bill for being too long unless one can think of something to remove from it, and I suggest removing the part concerning the consumer panel. What are consumer panels for? The creation of a giant bureaucracy is being suggested. They just might be suitable for telecoms—for which we have had such panels in the past—but please do not extend them to television. As I said, if people do not like what is on television, they switch off or switch over. The Xoff" button is often the best regulator that there is.

This is a good Bill, but it still imposes too much control. If we set the media industry free, we will be able to watch it grow. The Secretary of State's name appears very frequently in the Bill, and I hope that, during its passage, the ministerial team will consider what further regulations they can get rid of, what powers they can cede, and what controls they can give up. If they do that, they will produce a very good Bill, and the industry will be thankful.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee 7:48 pm, 3rd December 2002

I welcome the Bill, and the Government are to be congratulated on the way in which it has been handled. The pre-legislative scrutiny and the extent to which the recommendations were accepted provided a model for such matters, and in the light of that I hope that proceedings in Committee will not be unnecessarily long. Although the Bill is very big, many of the arguments have already been rehearsed, so repeating them might be unduly tedious.

Most of today's debate has, understandably, been content-driven. That is primarily because this issue is of concern to the chattering classes; indeed, we have all been subjected to lobbying on a massive scale in that regard. Some have expressed concern about the role of the BBC, and I echo the sentiments of Nick Harvey, who pointed out that we will be able to address the charter issue in a couple of years' time.

I hope that the charter will be dealt with in the same way as the Bill. We need a sensible debate. It would be appropriate to revisit the matter if shortcomings are found in the BBC's structure, but not before.

However, I want to make a nod in the direction of the telecommunications sector. Understandably, and for the reasons that I have given, we have tended to lose sight of the importance of that sector, and especially of the role of the regulator in challenging BT's power and strength.

I am not an opponent of BT, but it is understandable that it should protect its position. Some of its financial calls have caused it difficulties, but by the same token it is making a remarkable recovery. It retains great power and influence, and dominates the market. Its fixed infrastructure has the capacity to exclude potential players. It has the strength to embrace and adopt technological change in ways that can influence market development. For those reasons, regulation is necessary for some time to come.

Initially, it was suggested that regulation might be like Lenin's concept of the state—that the need for it would wither away. However, very much like Lenin's state, regulation has persisted for a considerable period, although it is probably regarded more benignly than the governance of the former Soviet Union.

It is clear that Oftel, in what might be called its dying days, has been quite effective and has addressed a number of issues. The package produced in August that provided protection for the poorest 80 per cent. of customers has been very useful. I am Chairman of the Select Committee on Trade and Industry, and we have had our moments with Oftel. Occasionally, we have felt that its director general, David Edmonds, has not properly understood the nature of competition. For example, he has said that four mobile phone companies are somehow competitive, even though they each account for some 18 to 22 per cent. of the market, or a little more. Also, he sometimes seemed to ignore the concept of complex monopoly, which occurs when players of roughly similar size behave in exactly the same way—albeit independently—and come to fairly convenient conclusions about their market situation.

Regulation must have a continuing role. It must not restrict progress or be too prescriptive, but it should promote the market and at the same time protect consumers. Some consumers remain vulnerable. For example, they buy the wrong mobile system with the wrong pricing arrangements. Young people do not always appreciate the costs involved, and anyone who has had teenage children going through the mobile phase will have been presented with bills or demands for additional pocket money because mobile cards have become exhausted more quickly than anticipated. Such considerations must be borne in mind.

It has been suggested of late that the regulator has been captured by BT. Some have felt that, when we were talking about unbundling the local loop, Oftel's director general was unduly understanding of BT. Instead of going in with a bludgeon, he wanted to continue talking. As a result, we lost valuable time, and the unbundling process has never recovered. We started seriously on the process too late in the day. By the time the process really got under way, the telecoms bubble had burst—fortunately, one might say. The director general took the view that it was better to negotiate than to act by diktat. I think that it is sometimes better to go in hard and quickly than to try to achieve something through protracted negotiation.

However, I want to take Ministers to task about the proposed consumer panel. In our brief regulatory experience, there have been several examples of how a so-called consumer council has become largely a creature of the regulator. Under the old electricity regulatory system, the relevant body depended on the regulator for secretarial assistance; it had little independence and few resources. I would like to think that that will not be repeated, and that the regulatory process adopted by Ofcom will have integrity and independence. I hope that the consumer panel will represent the Secretary of State, and that there will be a clear separation of powers.

It is fair to say that Energywatch, the body responsible for protecting energy consumers, has, after a rather slow start, become an extremely effective voice in defence of some of the poorest and most disadvantaged people in our society who depend on gas and electricity supplies. Its strength lies in its physical, financial and political independence from Ofgem. I think that that model, which exists already in the Government's regulatory system, is worth consideration.

On the whole, the Bill is worth while and ambitious. I have not gone into its effects on media such as television and the like; I shall leave that to others. However, in the past couple of years, the telecoms sector has been effective and robust. We should ensure that the new set-up is not concerned only with market power and how that is controlled. We should also give proper consideration to the needs of consumers. With a bit of tweaking and care and attention, the Bill will provide a more independent and effective way to deal with such matters.

That is my only misgiving about the Bill, but it is relatively minor and not too serious. I wish the Bill well, and I also wish success to those who serve on the Standing Committee.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion 7:57 pm, 3rd December 2002

I beg to move,

That this House
declines to give a Second Reading to the Communications Bill because it fails to ensure the representation of Wales and Scotland on the Office of Communications (OFCOM);
does not address the needs of people with disabilities adequately;
does not regulate sufficiently cross-media ownership;
does not protect against a monopoly of ownership;
fails to ensure access for all to digital broadcasting and broadband communications;
and further weakens democratic scrutiny and regulation of industries which are vital to citizenship.

I am pleased to speak to the reasoned amendment tabled in my name and in that of colleagues from the Scottish National party. We oppose giving the Bill a Second Reading on principle, but I acknowledge the value of the pre-legislative scrutiny procedure through which the Bill has gone. The Bill has been improved by that process and I welcome that, even though my party cannot support the Bill at this stage.

We have two principal concerns about the Bill. First, we consider that it still enables the broadcasting and IT industries to serve the needs of business more than the needs of the public. I am glad that Mr. O'Neill recognised the need for regulation in the sector, although we believe that the Bill does not go far enough. Secondly, we oppose the lack of Scottish and Welsh representation in the proposed Ofcom set-up. The regulator thereby lacks democratic representation.

We believe that the proposed regulatory system is centralist in its approach to Scotland and Wales, and to the Scottish Parliament and the Welsh Assembly. Before devolution, Wales and Scotland were represented at the highest level on the Radio Authority, the ITC, the BBC and the telecommunications advisory committee. Under Ofcom, Wales and Scotland will be represented only on the advisory bodies—the content body and the consumer panel.

That is further forward than where we were a year ago when it was not guaranteed that even that would happen. However, it is ironic that we have less representation now, post-devolution—albeit on a non-devolved issue—than we had pre-devolution. There is a democratic deficit for the people of Wales and Scotland. All we have left is a seat on the BBC Wales board of governors.

Photo of Rosemary McKenna Rosemary McKenna Labour, Cumbernauld and Kilsyth

Ofcom will have a board of nine; it will then appoint a contents board and a consumer panel. The Bill states that it will set those up with a representative from Scotland, Wales and Northern Ireland; Ofcom will then set up offices in each country. Given that there is a board of nine, that there is direct contact in each country and that broadcasting is a UK-retained issue, surely that set-up will be much better than the current one.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I cannot agree with the hon. Lady that the situation will be better than at present. At least we currently have representation on the ITC and the Radio Authority, but we will not have representation on Ofcom.

In the Committee considering the Office of Communications Bill, I moved an amendment to provide that the board should consist not of nine members but 15, which would have allowed representation from all areas of the United Kingdom. That was one way forward.

The hon. Lady says that Ofcom will appoint a consumer panel and a content panel. That is even worse—a body with no democratic representation from Wales or Scotland appoints bodies to look after Wales and Scotland. The decision-making and advisory powers will be delegated to Ofcom. Nothing in the Bill says that, in making those appointments, Ofcom has to negotiate, discuss or even take advice from the Scottish Parliament or the National Assembly for Wales. That is a scandal in terms of the relationship between Westminster and other democratic bodies. The Labour-Liberal Democrat Cabinet of the National Assembly for Wales and the Cabinet and Executive of the Scottish Parliament both asked for this level of representation in the Bill. That is a problem.

There is an alternative way forward. If we are not to get direct representation, we can consider representative bodies for Wales and Scotland. I have advocated an overall Wales or Scotland advisory committee to advise Ofcom. It is vital that Ofcom make an annual report to the Scottish Parliament and the National Assembly for Wales on its activities in broadcasting and IT within Wales. Again, that is not provided for in the Bill. The other suggestion is to have a separate consumer panel for Wales and Scotland.

Photo of Anne Begg Anne Begg Labour, Aberdeen South

I am sure that Ofcom will reflect all the constituent parts and regions of the UK. What would be the purpose of a separate report to the Scottish Parliament or the Welsh Assembly when they can read the national report that covers everybody? The relevant section will be in the report for them to read.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I do not know what the situation is like in Scotland, but when I want to find out what is happening about Wales I have to read the footnotes of UK reports.

Wales has a Welsh language broadcasting channel, which has not been mentioned tonight. S4C is the fourth channel in Wales, and we need to know what Ofcom is doing to support Welsh language broadcasting in Wales as well as digital English language broadcasting in Wales. That is a specific requirement that my party would like to see.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Transport)

Does not my hon. Friend find it incredible that Scottish Members are arguing for a solution to a situation that will be worse than the present one? Even Jack McConnell, the First Minister, was brave enough to make representations to ensure that we had a place on the Ofcom board. Surely Labour Members would agree to our having a place at Ofcom's top table.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

My hon. Friend has made my point for me. I shall certainly not go any further down that road.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I do share my hon. Friend's concern and will mention the S4C budget in a moment.

Issues of broadband and IT infrastructure are also of vital interest to Wales. Access to digital broadcasting and broadband is different in Wales because its population—and that of Scotland—is unevenly distributed. There is physical geography to take into account, such as the problems of mountains. That means that the television spectrum is much fuller. We need many more transmitters to achieve transmission throughout Wales. In that context, broadband is lagging behind. Wales is at the bottom of UK broadband connectivity. I do not know where Scotland is, but I think that it is in the same position.

We are told that broadband access will be achieved at the south pole by 2011 but not in rural Wales or Scotland. I met BT yesterday to discuss issues in my constituency. I have one exchange in my constituency that can take ADSL, and that is only because of public subsidy—in other words, the project has been funded by Europe. We must move more quickly on these matters. I would like the Government to look again at the 95 per cent. threshold for the switch-off from an analogue to a digital signal and bear in mind that although that figure could be reached at a UK level, about 70 per cent. of the population of Wales and 70 per cent. of the population of Scotland might not have access to digital transmissions. Members representing seats in both countries would have a problem if their constituents were to opt to turn off their signal when there was no access to digital transmissions.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I regret that I cannot now; I have taken several interventions.

The other aspect of the Bill that is worthy of mention is the public service commitment within Ofcom. There is a series of regional quotas, and I use the word Xregional" advisedly. However, I remind the House that Xregional" in Wales, as in Scotland, is national. In Wales, HTV is a national television channel, and it sees itself as such, particularly post-devolution. I welcome that.

The Bill states that the channel 3 programmes made in the United Kingdom outside the M25 area—a very patronising way to look at things—constitute what appears to Ofcom to be a suitable range. Once again, a body that has no Welsh or Scottish representation decides what sort of regional production is suitable for Wales and Scotland. That is not good enough. We would like the Bill to be amended to take into account the need to protect and encourage radio and television programming from Wales but also to Wales, and in both the languages of Wales.

That brings me to S4C and the point made by my hon. Friend Mr. Llwyd. S4C celebrates its 20th anniversary this year; it has been one of the great success stories of broadcasting in Wales. It has created a whole creative industry in Wales, not only in Cardiff but in the west, towards Swansea and towards the north. This rolling-out of a creative industry has encouraged other industries into the area. The final scene of the recently released Bond film, for example, was shot in my constituency, and I look forward to seeing that beach in the film.

The Bill says that S4C will continue to need to provide a substantial amount of Welsh language programming. There is no definition of Xsubstantial", and we need to know what it means in this context. Eighty or 90 per cent. will mean nothing if we do not have funding to enable S4C to meet the digital challenge. S4C recently approached the Department for Culture, Media and Sport with a £3.5 million bid. That sounds like a lot of money, but, given the threat to language programming, it is not. The money would have enabled S4C to deliver a wider range of digital programmes. It is the only public service broadcaster that has not received a penny for digital programmes. The BBC has been able to negotiate a significant rise in its licence fee to pay for digital programmes, some of which—on the net, for example—are available in Welsh, curiously enough, thus apparently taking away some of the audience for S4C. That is an interesting perspective and we will need to explore it further. I want the Government to take on board the recommendation and acknowledgement in the Joint Committee's report that S4C's funding should be looked at again in the light of the digital revolution.

We are concerned that the situation outlined by Labour Members regarding cross-media ownership will arise, leading to a lack of accountability in Wales. We shall see not a plethora of owners, but the centralisation of ownership in the hands of a few companies or individuals.

We do not consider that regulation will necessarily be burdensome. In our view, it can protect the public interest. Parliament is giving up control over citizenship and over regulation of the broadcasting industry to a regulator. I accept that in principle, but we must be sure that the regulator will take fully democratic principles into account. Until that is achieved in the measure and until the Bill recognises the different circumstances that apply to the broadcasting and communications industries in Wales and Scotland, we shall continue to oppose some of its principles.

Photo of John Robertson John Robertson Labour, Glasgow Anniesland 8:10 pm, 3rd December 2002

I want to declare an interest, as recorded in the Register of Members' Interests. I worked for BT for 31 years. I am a member of Connect—the union for professionals in communications—and my researcher is funded by Connect. I am also the chair of the all-party group on telecommunications, so it is probably safe to say that I have more than a passing interest in this subject.

I prepared a long speech, but as the debate has progressed, many points have been raised on which questions need to be answered. Unfortunately, as many of those issues were raised by Opposition Members who have since left the Chamber I cannot put my questions to them, so I shall make my points to the Minister for E-Commerce and Competitiveness, my hon. Friend Mr. Timms.

It is crucial that Ofcom follow the mandate stipulated in the Bill and that we be confident that the House can monitor that effectively. It is also important that we and the Secretary of State examine how Ofcom does its job. The Select Committees on Culture, Media and Sport Select Committee and on Trade and Industry have considered the Bill, but we should think about setting up a new Select Committee to deal primarily with Ofcom.

Ofcom is composed of five bodies that cover everything relating to communications and broadcasting and is likely to be one of the most important bodies set up by the Government. It will probably be more important than anything done in this field during the 18 years of the previous Conservative Government.

The existing structure has not resulted in detailed or regular assessment. The current regulatory bodies do not work. I disagree with my hon. Friend Mr. O'Neill, who said how well Oftel had worked. I remember the problems that we experienced with Atlantic Telecom when, as was pointed out in a previous speech, Oftel was as much good as a chocolate fireguard. I hope that Ofcom will deal much better with problems in broadcasting than Oftel did with problems in telecommunications. Many of my constituents found that their businesses were going down the tube because telephone numbers listed in XYellow Pages" and other publications no longer existed.

The Joint Committee which undertook pre-legislative scrutiny did an excellent job and its members are to be commended for their work. However, they missed one point in relation to clause 24, which deals with training. Training and education for staff in the broadcasting industry will be covered by Ofcom, but the same provision does not seem to apply to the telecommunications side of the business, where no scrutiny is provided for.

In effect, that means that in times of plenty when business is booming, a company such as BT, for which I used to work, could supply all the new companies that spring up. Those companies could cherry-pick all the good workers and experts. But what happens if there are no companies to provide training? What will happen if there is no one to train people in the new technology that is being developed?

A recent study produced some startling figures. According to the European Information Technology Observatory, the number of unfilled vacancies in the ICT and e-business sectors in the European Union is expected to rise from 2.23 million in 2001 to 3.67 million in 2003—a 65 per cent. increase in the number of people who will be unable do the job. We have to deal with that problem.

New technology is not something that people can just pick up. We have to train people in it; we have to train them to maintain it. The Bill needs to be better balanced. It seems to suggest that we must provide education and training for broadcasting but that people can do as they please on the telecommunications side. We need to ensure that people in both sectors are trained.

Mr. Whittingdale said that we needed to examine the regulation of mobiles and mobile companies. He pointed out that as such companies had experienced great growth, they should be regulated. However, those companies amassed customers and grew so fast precisely because they were not subject to strong regulation.

Mr. Thomas pointed out that there was no broadband in his country—nor is there in mine or in many parts of England. Part of the problem is that the regulator prevented companies such as BT from getting out into the marketplace.

These companies were so busy looking over their shoulder to see what the regulator was saying that they missed the boat, and two years down the line they had an excellent product but could not market it because everyone had forgotten what the product was. We have reached the stage now where people in places such as the rural areas of Scotland and Wales, and for that matter England, cannot get broadband because the company cannot afford to put staff out there. If we had started back when there was a boom, we might all have broadband; even if we did not, we would certainly have better companies than we do today.

Photo of Chris Mole Chris Mole Labour, Ipswich

Does my hon. Friend accept, in the context of the argument about the rolling out of broadband to rural areas, that we need to bear in mind the fact that there are fundamental physical limitations to the reach of technologies such as ADSL, based on the competence of existing technology; that it is only with the creation of new technology such as the delivery of broadband by satellite that some of these areas can be reached; and that we shall have these problems again when we have high data rate digital subscriber line and very high data rate digital subscriber line?

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

I thank my hon. Friend; he is absolutely right. I am sure that people in Wales and Scotland can identify with that. They will have to pay thousands of pounds for something for which other people will be able to pay hundreds or less. We must lighten the regulator's grip and allow companies to grow.

Mr. Page mentioned Deutsche Telecom. Earlier in the year, I visited Deutsche Telecom in Munich to look at its ADSL and I was surprised when I discovered how quickly the company was growing. It has been growing because its regulator does not impose strong commitments on it. The company saw a niche in the market. It cut its prices. It went and did it, and only then asked the regulator whether it was okay. The company did not think about what the regulator was going to say, put forward a business case, took months to go to the regulator, then suddenly found out that the regulator now agreed to what it was proposing.

Photo of Mr Brian White Mr Brian White Labour, North East Milton Keynes

Is it not true that one of the reasons why Deutsche Telecom did that was that it knew that it had to divest itself of its cable companies, and to stifle competition it put broadband into the areas when it was going to have to divest itself of those companies?

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

My hon. Friend is correct, but we are now lagging behind with broadband. We must get broadband out there, and if we are to bring the UK up to the standard of some of our competitors, we need to get out there now.

Another thing was missing from the Bill. One group that was never mentioned as a stakeholder was employees. Employees work at the sharp end. They know about their companies. Yes, they may look after their own interests when negotiating with management, but they know more about the business than the management force do, and they should have been regarded as stakeholders and allowed to participate in the advisory bodies, because they can probably contribute more than most. Not only do they have knowledge of the companies for which they work, but they are customers, so they have a very firm grounding. Those are the people who are missing: the people who do the work, who have the knowledge about how the product works. I know many very good managers who know how to run companies, but they know absolutely nothing about their product. I believe that in the case of BT and the selling of broadband to the country, that has been the main problem: the people who knew most about broadband were not the ones who were marketing it, and we all know what has happened.

I feel passionately about this subject, and if I am fortunate enough to be asked to serve on the Committee, I shall take great pleasure in doing so. There are lots of other aspects of the Bill that I should like to discuss with the relevant Ministers, which probably ensures that I shall not be asked to be a Committee member. I believe that communication is the No. 1 thing in this country; we all need to communicate. One of the best things that we can do to make that possible is to give it to the people and ensure that they know how to use it and can get access to it.

Photo of John Thurso John Thurso Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Scotland), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Scotland) 8:22 pm, 3rd December 2002

I have listened with great interest to the debate. On the broad principles there is a fairly strong welcome for the Bill on both sides of the House, with considerable reservations, which have been expressed. Having served on the Select Committee on Culture, Media and Sport when we held an inquiry before the draft legislation was produced, I found that, as I learned more, my understanding actually lessened. The communications industry has definitely proved to be a challenge to me. However, I commend the Government for the way in which they have taken this process forward. It has proved beyond doubt that taking the time to produce draft legislation and providing the opportunity for scrutiny produces far better Bills. This Bill is immeasurably better than the one that we started with some time ago.

It also became clear from what we saw in our Committee that prescriptive legislation of the type that we have had in the past is out of date almost the moment it arrives on the statute book, so the Bill had to try to set down principles and a mechanism that would last for some time into the future. I believe that broadly, with one or two reservations, the Bill achieves that.

I should like to address three specific concerns. They are all relatively Scottish, but they could just as easily be expressed for Wales or, indeed, many of the rural regions of England. My first point relates to the way in which the Bill sets out to represent the nations and regions. I wish to say at the outset that, when our Select Committee considered the issue, I was predisposed, although with an open mind, to think that, in all probability, Ofcom's main board should include representation from Scotland and Wales.

Having heard the evidence, however, especially that given to the Select Committee by the Federal Communications Commission in Washington, I reached the view that it was far more sensible for Ofcom's main board to do the job of regulating the industry and not to set out at that point to deal with the more complex issues of sectional, national or regional representation. Having reached that view, however, my concern is that the consumer and content panels will not necessarily fulfil the role that I would expect them to play.

Scotland—this goes for Wales, too—has a very diverse and different architecture from that of England. For example, one of my constituents, Miss Hutt, who lives in a croft near the village of Dunbeath, recently applied to BT for a telephone. Having initially been quoted about £74, she was quoted just under £12,000 when the survey was done. Bearing in mind that the nearest telephone line was 400 m away and that she lives 500 m from the main A9, that was somewhat expensive. The price was reduced to £3,000, when she agreed to dig the trench and lay the cable herself, but £3,000 for a telephone is still rather worrying. Therefore, it is particularly important that the consumer panel should have sufficient teeth and that the provisions that relate to it should be strengthened.

The Bill simply states that Scotland and Wales should have one representative on the consumer panel and one representative each on the content panel. If that is all there is, it is a pretty weak force to look after the contents and the consumers. I must say that, having accepted totally the fact that the Ofcom's main board should not include such representation, I should like to see much stronger representation on the consumer panel by including in the Bill an advisory council for Scotland and one for Wales. Ofcom has the power to ask for that, but it does not have a duty to provide it at the moment, and that is one change that I should like to see.

The second point, to which other hon. Members have referred, is the analogue switch-off. My constituency—all 3,000 and several hundred square miles of it—contains areas throughout much of Sutherland's north-west coast that barely receive analogue broadcasts. One gets used to watching television through a figurative or literal snow. When the switch-off takes place, those people will be deprived of any signal. It is highly unlikely that they will receive a digital signal, so Ofcom should be given a strong steer towards ensuring that, when the analogue switch-off occurs and we go to digital only, constituents such as mine who live in remote rural areas will not find themselves entirely deprived of terrestrial television and forced to rely on satellite services. I hope that we will consider that issue in Committee.

The third issue that I should like to address is the broadband roll-out. Many hon. Members on both sides of the House have stressed the importance of broadband services. I should like to refer particularly to the highlands.

We were fortunate to have considerable Government investment, through the Highlands and Islands development board and its successor body, Highlands and Islands Enterprise, in integrated services digital network, which was the great technology of a decade ago. As a result, we have a considerable number of high-tech companies, which rely on communications to be able to make money. By not enabling broadband, those companies, which require high-quality communications, are not merely denied a competitive advantage but put at a huge competitive disadvantage. There is a company in Wick that is going to relocate to India if broadband is not introduced within two years. That is the scale of the competition. Once companies decide to move, they do not just move out of the north of Scotland or Scotland as a whole; they move out of the United Kingdom altogether.

I therefore make the same point to the Minister as I made to the Secretary of State in the Select Committee. Given the amount of public money that has been invested in fibre optic cable running up near to the A9 and in the implementation of ISDN, and given the companies that depend on that, the Government must take the lead in the broadband roll-out. If they do not, we will end up losing out on the investment that has already been made. With those principal reservations, I warmly welcome the Bill and look forward to its passage through the House.

Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby 8:31 pm, 3rd December 2002

This is a unique Bill. It is unique in its size—it is enormous—unique in that it has received such a broad welcome across the country, and unique in that almost all Front-Bench spokesmen, apart from the nitpicking nationalists, have given it a broad welcome today. It is unique, too, because it produces broad acceptance but also many problems, reservations, cavils, quibbles and difficulties, which have been well aired tonight. I propose to add my contribution to that.

I must start by saying that I am a bit suspicious of the Bill. I am suspicious because I am conservative about change—that is why I am a member of the Labour party—and because I do not want change in structures that have given us the least worst television in the world, with a system of regulation that has stopped the descent to lowest common denominators and with different sources of funding. In the end, if pigs are fed from the same trough, they produce the same manure. We have managed to avoid that in British television.

It would not be too much to say that there was a golden age in British television—largely a period in which I worked in it, having worked for the BBC, ITV and Sky, and having run a local radio station, which is a fairly unique experience—which was ended by the Conservative legislation of 1990. That legislation was sold to us on much the same grounds as those on which this Bill is being sold to us. We were told that we must give television the scale to take on the world. Now we are being told that we must bring in the world to take it over, because it is not investing enough. We were told that we must have light-touch regulation, which has led gradually to the dumbing down and the relegation of current affairs, news and politics to late night slots that would normally be filled by sex or romantic interludes. Television is now largely about building—DIY—botox and bellies, given the endless cooking programmes.

I am therefore suspicious about dumbing down, which I do not want to be furthered by the Bill. I am also suspicious about the briefing given to Labour Back Benchers, which describes the Bill as

Xcreating the most dynamic, competitive communications industry in the world—opening up competition, removing unnecessary burdens on business and streamlining the regulatory environment . . . ensuring universal access to a choice of diverse services of the highest quality that viewers, listeners and customers expect—we will not compromise on quality."

All that—and XBlind Date" too—will be quite an achievement.

The Bill will not be the beginning of the reign of virtue, however, as it will be the beginning of a period of great turmoil. First, all the different regulators, each of which have their own agendas, which they will want to maintain, will be shoved in one box and will have to learn to work together by new rules. A period of difficulty from 2003 onwards will follow. Then there will be the skirmishing for takeovers as we settle into the new organisations.

We also face the problem—we are dealing with it today and I hope that we will deal with it in Committee—that results from the fact that the devil is in the Bill's detail. I shall say something about some of the problems that I envisage, because we must state our basic view and describe what we want from the Bill. That will guide its implementation.

I seem to be a lone voice when I say that the BBC should be subject as little as possible to the new regulatory framework. The BBC is a unique institution. It is a public corporation that has its own procedures and methods of dealing with complaints. At the moment, there is a good deal of jealousy of the BBC, partly because Greg Dyke is a driving, dynamic and competitive head of the BBC, and partly because it has much more money than ITV. People are envious. Far too much of that money has gone into creating new digital channels that no one watches rather than into producing programmes. More than £100 million has been wasted so far on News 24, which is only just coming into its own. The BBC suffers from premature digital ejaculation and the money should be devoted to making programmes. However, that is a matter not for the regulator but for the licence and charter renewal that is ahead of us. These matters can be taken care of then.

ITV has had a hard time. I suppose that it is inevitable that there will be one ITV company. Perhaps that will not be too bad, as long as it is Granada, which has a passionate concern about programmes and about regional activity, and not Carlton, which has a passionate concern about money. However, when ITV is one company, it is important that we maintain regional production, the regional framework, regional centres of excellence in television, such as that in Yorkshire, and the regional clusters of independent producers that are found around each existing company. Such clusters are also found around the BBC, which is putting a lot more into the regions.

We want dynamic production on a big scale that takes place outside the M25. It is nice that Xoutside the M25" is now a legislative concept, but it could have been called civilisation actually. We need production outside the M25 and ITV is the main framework to which it should be attached. We must keep up the pressure for that. It will be more difficult to maintain a regional service if ITV becomes only one company. The regional service has been ITV's strength and provided its roots, and it brings it much benefit. The service also brings the regions many benefits in terms of employment, economic stimulus and all the activities that go with it. Pressure will have to be kept up to maintain that service.To do that, it must be possible to turf out a provider—even if it is one company—because that would provide a check over quality. It must be possible for a rival contender to exist and there should be a review that examines whether a provider is performing properly.

On ITV, I echo the general view that it is insane that ITV is not allowed to control ITN. ITN is the only news organisation that does not have its own news channel, but it should be able to control one. ITV was good and adequately funded when the individual companies controlled it. We should return to that situation.

We should maintain the protected status of Channel Five. I know that people say that it is not particularly important as it is only a small channel. They argue that not much could happen if it were bought by Murdoch or an overseas company. However, let us consider what happened to The Sun. It was only a small and non-competitive newspaper that did not serve much purpose. Murdoch took it over and what happened then? It is entirely possible that, if Channel Five buys an audience with sport and has money pumped into it, it might become a major problem for ITV.

I am trying to scoot through the issues quickly, but I want to say something about foreign ownership. European Union rules require us to allow European bidders, but it is not a level playing field. It would be difficult for a British company to take over television production or radio stations in France. Let us consider the problems that Murdoch faced with Kirch, for example.

I agree that if we are to allow European competition, we must also allow American competition, but why not leave that to the discretion of the regulator? It should decide whether there is a level playing field, by which I mean that a foreign takeover can be allowed here if we can take over interests in the country concerned. The process needs to be phased in when the regulator decides the time is right to avoid an immediate turmoil of takeovers.

Although I have other points to make, I finish by stressing that the Bill is important because we need to maintain British production, British quality, British regional services and British strength in television.

Photo of Andrew Lansley Andrew Lansley Conservative, South Cambridgeshire 8:40 pm, 3rd December 2002

I am glad to have the opportunity to contribute to the debate. I served on the pre-legislative scrutiny Committee and, like other hon. Members who sat on it, pay tribute to the noble Lord Puttnam for the way in which he skilfully handled his chairmanship and brought us to a consensus on most issues. I might touch briefly on those aspects on which we were not of one mind.

In the Committee's defence, I must tell John Robertson that we considered employment and training. He will note from paragraph 53 of the report that we felt constrained by the annex to the authorisation directive which does not permit a general condition of authorisation to be extended to employment and training in telecommunications. I say that to emphasise the detail with which we conducted our scrutiny.

The Bill's principles will not encounter substantial opposition on Second Reading, with the exception of the Scottish and Welsh nationalists. It is important, however, that we discuss the first-order issues, not the second-order issues, before the Bill goes into Standing Committee. We need to consider what the Bill's principles are and what we are trying to achieve. If we are clear about that, it will help us tremendously when we consider the detail of this long and complicated Bill.

It is interesting that light-touch regulation was at the forefront of the Secretary of State's presentation of the Bill when it was produced in draft form earlier in the year, because that is the dog that did not bark this evening, and rightly so. It is not a matter of the quantity of regulation that is imposed on any given industry, but a matter of the character of the regulation and what results it has. I am afraid that we do not get good regulation simply by having a lot of regulation that is accountable and transparent. We need to protect the necessary public interest. We also need the minimum amount of regulation so that we permit competition to succeed to the greatest possible extent.

Although other hon. Members have mentioned broadband, I do not want to be diverted into a discussion on that. Indeed, the Bill is not intended to be a strategy for the roll-out of broadband. However, it is clear that whatever one might think about the relationship between Oftel and BT, it was only when BT cut prices that the extension of roll-out of broadband began. That may have happened in circumstances that did not lead to competition, but it demonstrates forcefully that ex-ante regulation—in this case in the form of 37 directions and determinations in the two years leading up to the time when prices were cut for wholesale broadband—does not deliver competitive outcomes and probably does not deliver the best outcome in terms of consumer benefits.

Two themes run through the legislation, from telecommunications to broadcasting. It is important not to consider those sectors in isolation. The two themes are the necessity of increasing competition in communications markets if we are to succeed internationally to a greater extent, and the protection of the interests of consumers and citizens. Those two things could easily have been at the forefront of the Bill in response to the scrutiny Committee's recommendations. We thought it necessary to further the interests of consumers wherever possible through competition, and to balance that with the interests of citizens. Those two interests expressly arise in relation to plurality and the media.

The Government have chosen not to accept that recommendation. I hope that they will reconsider their decision, even at this late stage. It is a matter not just of clarifying duties, but of setting a hierarchy of duties. It is not simply a matter of handing over duties to Ofcom and telling it to decide how best to strike the balance in all circumstances; it is a matter of indicating Parliament's intention concerning those duties.

If we legislate without giving primacy to issues such as competition in telecommunications, we will take a backward step. The Office of Telecommunications, in using its powers under the Telecommunications Act 1984, did not, until earlier this year, give primacy to competition. It is important to carry that primacy through into the way in which Ofcom does its job, just as competition has been important to the way in which Ofgem works and is increasingly built into the structure of our utilities regulation.

There are other instances in which the Bill would be better if we thought strictly in terms of competition and citizenship. On media ownership, the Government have confused themselves because many of those who come to them, including many with vested interests, have said that they want certainty. They want some media ownership rules to rolled back and the burden of regulation to be reduced.

There is something to be said for certainty; cross-media ownership rules, in particular, give some certainty, but it is only temporary. We know from many past experiences that the circumstances that give rise to such rules are likely to be rapidly overtaken, requiring further legislation. Whatever we think about those rules now will be undermined by the markets, sometimes very rapidly, so we should concentrate on competition. How can we future-proof the Bill? How can we make it endure in a form that drives towards competitive markets in areas including broadcasting and the media and at the same time protects the interests of the citizen? We cannot do that until we tackle the question of plurality, and of how the citizenship interest in plurality is to be protected.

On the newspapers, it seems to me evident how we should approach that question. We have not had cross-media ownership rules for newspapers. We have effectively allowed the market to determine ownership within normal competition rules, which are now to be strengthened. Within that structure, we have established, and will re-establish in the Bill, special tests intended to govern plurality. Why is that not equally true for other forms of media ownership? Why do we not give equal protection to the rights of citizens?

The Government should consider that, because we would establish a better long-term structure for the Bill if we swept away more of the media ownership rules. The members of the scrutiny Committee were not of one mind on that, and I think that we should have gone further. However, we did agree that we wanted plurality. The Committee did not say that it wanted to restrict foreign ownership or to have tighter cross-media ownership rules. To paraphrase St. Augustine, it said, XMake me competitive, O Lord, but not yet"; we need however to include in the Bill a competition structure to take us into the future.

I turn now to another area where competition may be important, the BBC, and some of my hon. Friends may have an opportunity to amplify this point. On the face of it, one would say that the BBC is not subject to competition, but it is subject to competition rules, and some Members who have contributed to the debate have asked how that works. In theory, if the BBC uses its licence fee money to buy public service broadcasting in a form that has anti-competitive affects, it can be subject to competition rules, and Ofcom should clearly apply those rules if necessary.

The BBC is not, however, subject to competition in the use of the licence fee. We need to think forward to 2006 and charter renewal, and we need to include in the Bill a structure that will be sensitive to all the changes that may come with charter renewal, even up to and including the possibility of separating the BBC, as a provider of public service broadcasting, from the governors, as the custodians of the licence fee. As the Secretary of State said, the licence fee is venture capital for the nation's creativity. The nation's creativity is not confined to the BBC alone—that is beyond the scope of the BBC—so BBC governors, who control the licence fee, should be able achieve such a separation.

In conclusion, competition to deliver consumer benefits and protecting citizens' rights should be two threads that run right through the Bill. We can relate many issues to those goals with success.

Photo of Paul Goggins Paul Goggins Labour, Wythenshawe and Sale East 8:50 pm, 3rd December 2002

I do not mind admitting to being technically challenged by some aspects of this rather lengthy Bill. None the less, I join other hon. Members in welcoming it, and the pre-legislative scrutiny associated with it.

First, I strongly welcome clause 256, which sets out the detail of the public service remit for TV broadcasting in the United Kingdom, including provision for education, entertainment, news, current affairs, children's interests and so on. In the modern world there are specialised channels for all those areas of interest, but it is important to have a balanced menu on our main TV channels. I particularly welcome the requirement to cover matters of international significance or interest.

I have seen a worrying report from 3WE, a coalition of development agencies and international organisations, which demonstrates the dramatic reduction in such programmes in recent years. For example, the production of non-news factual programmes on international issues on our main channels fell from 1,037 hours in 1990 to 728 hours in 1999. Indeed, factual programmes on the developing world fell by 50 per cent. in the same period. That trend is ironic, given that globalisation emphasises every day the growing importance of the need for everyone to understand international issues, whether those involve Iraq, Afghanistan, or the plight of the 14 million people in southern Africa who face famine. If we want people to understand and engage with those issues, it is essential that television provide them with the necessary background information and analysis. It is less than a week since my right hon. Friend the Chancellor of the Exchequer spoke in the Chamber of his ambition to double global spending on development. A similar increase in the coverage of international affairs on our television screens would be encouraging.

Secondly, I warmly welcome clause 254, which covers access radio. I was delighted when, in March 2001, my hon. Friend Janet Anderson, who was then a Minister, came to my constituency to announce the access radio pilot. Wythenshawe FM is now one of 16 pilot radio stations under the access scheme. Jason Kenyon, the station manager, leads a team of four staff and 70 volunteers, including schoolchildren, pensioners and many other people in the community. The station is now broadcasting seven days a week, from 7 o'clock in the morning to midnight. It is important to emphasise that access radio is not just about programmes for local audiences, but is also about engaging local people and securing their participation in the planning and presentation of programmes, as well as listening to them.

Wythenshawe FM is already producing some interesting programmes. For example, XFamily Action Benchill", a local voluntary organisation, has just started a series of programmes to highlight the problem of domestic violence. Chief Inspector Peter Aaronson from the local police force has a regular weekly slot in which he answers questions and updates people on the ways in which local police are trying to fight crime in the area. No radio station is complete without traffic and travel news. In Wythenshawe they are especially necessary because we have a complex road system and two motorways. Funds do not run to having an Xeye in the sky", so on Wythenshawe FM it is XBradley on the bridge". Bradley is the 12-year-old son of a volunteer presenter, Simon Delaney; he makes regular visits to the bridge over the M56 and rings back on his mobile phone to give an update on the traffic flow.

I pay tribute to Wythenshawe FM's parent organisation, Radio Regen, which is based in Manchester. As the name suggests, for that organisation access radio is about regeneration and giving people confidence and skills. It therefore provides a great deal of training, not only in radio production but in marketing and business skills.

There are three significant challenges for access radio. The first is the need to emphasise the local dimension. Clause 302 gives Ofcom a duty to safeguard the local content and character of local sound broadcasting. The debate has made it clear that some people are not so enthusiastic about local content and character. It is vital that the Government and Ofcom resist any attempts to dilute that important dimension of the Bill and the accompanying guidance.

Secondly, frequencies have been discussed. There is limited wavelength capacity, and it is vital that access radio get its fair share. The hon. Members for Lichfield (Michael Fabricant) and for North Devon (Nick Harvey) said that the BBC could help, and I agree. If, for example, Radio 2 broadcasts in Manchester on 89.9, why can the BBC not release 90.7 for local access radio in the city? It is not good enough to say that that might interfere with Radio 2 in, say, Southampton. It should be technically possible to implement my suggestion, and I encourage the BBC, Ofcom and access radio to get together to try to find a way forward.

Thirdly, let us consider funding. I welcome the power in the Bill that enables Ofcom to give grants to access radio. Some people argue for wider funding streams for community media. In addition, access radio will get money for training and it will want to draw in funds from sponsorship.

I understand the dangers and difficulties of over-commercialisation for access radio. My hon. Friend Mr. Drew mentioned the possible destabilising effect on local commercial stations. However, if Manchester airport wanted to sponsor a programme on Wythenshawe FM about attracting people to work at the airport, who could lose? Local people would get jobs, the airport would be happy, and another funding stream would be available for Wythenshawe FM. Such sponsorship can only be good.

I am delighted by the progress of access radio pilots, especially that of Wythenshawe FM. I look forward to the rest of the Bill's passage through the House.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater 8:57 pm, 3rd December 2002

I shall continue with the theme of access radio. There is an anomaly in my area of Somerset that the Bill does not tackle. Our local BBC station, Somerset Sound, is on medium wave; we have no FM frequency in Somerset for the BBC. That is bizarre, because long before I became a Member of Parliament, my predecessor Lord King tried to get an FM channel. If communications are to move into the 21st century, we should be able to get FM frequencies on all BBC stations throughout the United Kingdom. It is anomalous that Somerset cannot get it. We have no chance of doing so, because we have been given a new AM frequency to keep us off the FM band.

Access radio could cause many problems in my constituency. We have two small radio stations. One is based in an area that covers only 10,000 people, and the other in an area that covers approximately 30,000. The Radio Authority's licences serve most communities of fewer than 300,000 people, a third of communities with fewer than 200,000 people and a fifth of communities with fewer than 100,000 people. That gives hon. Members some idea of the small size of the radio stations in my area. If, under the Bill, there can be three stations in an area, the number would have to be subdivided twice in Exmoor. We would end up with approximately 3,500 people per station. That is blatantly ridiculous.

By and large the stations work from hand to mouth, because we have no large business community to bring in an enormous amount of revenue. If that is the case in the longer term, we need to create either more business—that would bring problems—or a bigger area. We would then hit another anomaly.

We are in part of a national park. The national parks are happy to allow people in, but anyone who tries to put up a radio transmitter will not be allowed to do so. We therefore have a radio station that has been given a licence by the Radio Authority but can only hit about one third of its total area. It is meant to cover most of my constituency and that of my hon. Friend Mr. Flook, but it cannot do so because of that anomaly.

I hope that the Government will look at the Bill to see whether national parks could be asked—not compelled—to be more, shall we say, congenial towards the placing of radio transmitters, so that local radio can be accessed across the large areas that cannot receive it at the moment. We receive a wonderful programme from Wales—I cannot understand anything it says—but we cannot get our local FM station. Perhaps we need a Welshman on the board—but perhaps that would not really help us on Exmoor. If we had a station that we could listen to, it would be helpful.

Bridgwater, at the other end of my constituency, with 30,000 people, has just got its own radio station: BCR FM—Bridgwater Community Radio Ltd., or whatever it is called. It is just starting out, and its representatives are very worried about access radio. Both its presenters came to see me and told me what they were forecasting, and hoped to achieve, for the next five years. They are earning below the minimum wage to try to keep the station on the air. They are happy to do that; it is what they set out to do, and they are achieving it.

If we were to set up another station, sponsored by the BBC, the licence payer, individual businesses, newspapers or a bigger channel such as Carlton West Country, which covers my area, that would unfairly penalise a local radio station such as BCR, which could not compete. That would put an enormous number of businesses out of business, and I strongly believe that that would be unfair. If the Radio Authority grants a licence to a radio station, that licence is there to be utilised by that company. If it is then effectively taken away by giving another two radio stations, including a BBC channel on medium wave, to an area that cannot sustain them, the system will be impossible to sustain from start to finish. There are some large anomalies in Bills such as this, but if we do not consider them in the context of the highlands and islands, for example, or rural Somerset, we shall probably miss out.

As for broadband, I asked BT for a map of my constituency showing the exchanges that were switched on. I found one exchange, which covers Bridgwater—my biggest town—but then I looked further across the map. I have a big constituency; it stretches for 57 miles. BT cannot physically switch some of the exchanges on to broadband because they are so archaic. I asked BT how much it would cost, and was told: XA quarter of a million a shot." I asked how many people would have to sign up, and was told about 500. When I asked whether BT was sure about that, I was told, XNo, it's about 700, but we need 500 who will definitely sign up before we switch you on. Oh, and by the way, we won't do it anyway, because you're too far up the line."

The whole idea is that we are trying to encourage business to come into Exmoor—we heard earlier about a potential change in legislation in that regard—yet we cannot get broadband. Would the national park allow satellite dishes to be installed to pick up broadband via satellite? I doubt it. Would it be happy for us to go and dig everything up, as we always do in Britain—we seem to be great at digging up roads? No, it would not like that. Again, therefore, there is an anomaly concerning how we should bring broadband into an area of high rural dependency.

Minehead, my other town, has 10,000 people, quite a lot of small businesses—and I mean small—and a busy tourist trade. It has the biggest Butlin's in the country. I spoke to representatives of a company in the town, and they would love to have broadband. [Interruption.] I suspect that my hon. Friend Mr. Osborne is going to intervene on me to talk about Butlin's in a minute. Broadband cannot be installed at Butlin's because BT cannot enable the exchange. Butlin's has said that it would like to do something about that, but it cannot, because BT will not let it. BT has said, very kindly and magnanimously, that it will compile a report on how long the operation would take in my constituency, and how many potential consumers it would require before it was able to switch on the supply. I am still waiting for that report.

I broadly welcome the Bill, but if it is to be acceptable across the whole country it must be fair, to start with. If we introduce a Bill that does not provide a level playing field from the start, we will never catch up, because when it is implemented, certain areas will not be able to go on to the next stage—in relation to new FM channels, or whatever—because they did not get adequate provision in the first place.

I know that the BBC would love to have an FM channel, but it cannot get one at the moment, although we do not know why. I have asked the BBC up here, but I have never had an answer. Perhaps the Minister will slip in an amendment on that—I do not know—but it would be nice to be able to go down that road. If we do not provide that ability, we shall cut off another section of our community.

There is definitely a place for access radio, but that place is in larger conurbations, not small rural areas. If we lose what we have we shall not get it back. We cannot sustain too many radio stations simply because we do not have the revenue or the support—unless those come from the public purse, which would probably mean shutting down the smaller ones in the first place. I support the Bill, but I hope that those little anomalies are studied carefully. If they are, I am sure that they will be resolved long before the legislation reaches the statute book.

Photo of Rosemary McKenna Rosemary McKenna Labour, Cumbernauld and Kilsyth 9:05 pm, 3rd December 2002

Thank you for calling me to speak, Madam Deputy Speaker; I am surprised to be called at long last.

Like many of my colleagues, I am interested in communications and how we feed information to and get it from our constituents. What politician is not fascinated by the political media? However, I am also interested because I have lived through a time in which communication has evolved from print and radio to live satellite broadcasting from the other side of the world. I remember my mother hauling me away from the radio when I was a small child, as I had to do my homework. I contrast that experience with standing in Glasgow airport lounge and watching live on television the second plane as it flew into the twin towers. So much has happened in that short period, and the changes in communication are enormous.

Those of us with an interest in the Bill have just about disappeared under a mountain of paper, which is interesting as it is about electronics and modern communications. Although our preparations for the debate involved receiving a huge amount of paper, I shall make only a few general remarks before concentrating on this country's music business, which I think is important, although it has not had much coverage.

I am delighted that the Department has taken on board a great deal of the Culture, Media and Sport Committee's inquiry and the Joint Committee's deliberations. Ministers have shown their ability to listen, and I am sure that they will continue to do so as the Bill progresses through the House. The pre-legislative scrutiny has set a good example for all other Bills.

On regulation of the BBC, the Bill has achieved the right balance. I put on record my support for the BBC: it is not perfect, but the standards that it sets are a benchmark for high quality broadcasting throughout the world. We underestimate at our peril the importance of news and information provided by the BBC to people all over the world. While it might be good sport for some to knock the BBC, I believe that we should cherish it. We should criticise it when necessary, but we should also value it as one of the best examples of broadcasting in the world. The Secretary of State made the right decision in putting the BBC within Ofcom's remit under tiers 1 and 2 only.

May I speak about the importance of television and radio to the music industry? I am a member of the all-party music group, but I am just beginning to come to terms with and understand the scale of the industry in this country. It is a huge contributor to Britain's economy. Most people are aware of what they see on television—the few people who make a fortune from the music business—but that is far from a true picture, and behind it all a huge number of people, such as the creators of music and the producers, do not earn a fortune. They work hard in an industry that is of great benefit to the country.

That benefit is not translated into huge financial rewards for the thousands of people behind the cultural and economic success of an industry that has been a world leader for the past four decades.

The success of individuals and companies depends very much on opportunities for the creation of music, and also for the broadcasting of music by both national and regional radio and television. The success of Britain's broadcasting industry is inextricably linked to its relationship with the British music industry. It is worrying, therefore, that many local radio stations play the same music all day every day. Modern music must be given a hearing, but not to the exclusion of everything else.

Under the current proposals, Ofcom has a general duty to protect the local content and character of the news and programmes on local radio and television, and I think that that should be extended to music. At present the Bill contains no local requirement relating to music. BBC Scotland and Radio Clyde 1 and 2 are superb examples of local radio stations, and I am sure that many of my colleagues can cite other examples. The newer local stations, however, tend to transmit the same kind of music, mostly pop.

I enjoy all kinds of music. I enjoy listening to pop music as much as anyone else. But I fear that in creating more local radio stations, we may fail to encourage the promotion of local creative talent and respond to local tastes. I hope the Minister will confirm that the award of licences, and licence review, will depend on licensees meeting a requirement to broadcast music that caters for a range of tastes and interests and matches local audience needs. How would such a requirement be monitored, and how would it be enforced?

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Transport)

I find myself in the curious position of agreeing with almost every word that the hon. Lady is saying. Does she agree that the best way of achieving what she wants would be to include a Xcreator" on the content panel—someone involved in the music industry, who would know what it represents, what it is worth and what it contributes?

Photo of Rosemary McKenna Rosemary McKenna Labour, Cumbernauld and Kilsyth

Indeed. I recently met Feargal Sharkey. Let me explain, for the benefit of those who do not know, that he was a great entertainer and is a creator of music. He is a member of the Radio Authority, by appointment, and makes a great contribution. Such expertise should indeed be represented on the panel.

I am grateful for the opportunity to speak. I think the Dept has done a wonderful job in terms of pre-legislative scrutiny, and I look forward to participating in the Bill's later stages.

Photo of Martin Smyth Martin Smyth UUP, Belfast South 9:13 pm, 3rd December 2002

I listened carefully to the speech of Rosemary McKenna. I am not convinced that the Bill is perfect, however: that is one reason why it must have a Committee stage. It needs fine-tuning. Issues have already been raised that demonstrate the need for detailed examination.

I intervened earlier on Mr. Wyatt. Mr. Mitchell said that the M25 should take us out into civilization. There seems to be an unwillingness to think beyond the M25, and to conceive of creative genius elsewhere.

The Producers Alliance for Cinema and Television has made that point. It is looking for encouragement for creative producers throughout the United Kingdom. I also welcomed the suggestions made by the hon. Member for Sittingbourne and Sheppey about curbing pornography on the internet.

The Northern Ireland Advisory Committee on Telecommunications is concerned about these matters. Interestingly, to judge by their comments, certain Members from Wales and Scotland—and others—do not seem to think that there is another, remote part of the United Kingdom. Northern Ireland is the only part with a land frontier, which adds to the difficulties. Both the Committee and I sympathise with the concept of having one representative for the three regions, rather than one for each region, in order to provide an understanding of what is going on. Given that representation on the Committee has increased from six to nine, that would not pose a tremendous challenge. The three regions represent 16 per cent. of the United Kingdom, population and it should be possible to find one person with the calibre and expertise to represent those regions, as well as dealing with such issues for the nation as a whole.

So far as Northern Ireland and certain other parts of the United Kingdom are concerned, some regulation is needed, because not every region is equally far advanced in terms of competitive communications. It is therefore necessary to provide some regulation; otherwise, the fear is that Northern Ireland will be left behind if it is not effectively and properly funded through regional representation. I welcome the suggestion that the consumer panel and the content board should include representatives from the regions, so that they might make a contribution.

Ours is a relatively small region. However, in dealing with some of the problems, and in listening to discussions on broadband, I have been fascinated to discover that, although we have a good fibre-optic network, we have not yet completed the linking of such communications. I have heard it said that the challenge of broadband can still be met through smaller groupings, and some people are already advancing broadband in rural areas and small communities. As has been pointed out, the tragedy is that, in some areas, even British Telecom has not established the modern communications that would help the development of broadband.

Photo of Mr Roy Beggs Mr Roy Beggs UUP, East Antrim

Does my hon. Friend agree that, although the relevant expertise exists, if the Government really intend that every part of the United Kingdom should have access to broadband, they should make some financial commitment to bring about such access?

Photo of Martin Smyth Martin Smyth UUP, Belfast South

I think the people of Northern Ireland would be happier if the Secretary of State, rather than Ofcom, dealt with that issue, because they are frightened by what has happened in the past.

Photo of Martin Smyth Martin Smyth UUP, Belfast South

I am sorry but I cannot. I would love to give way to the hon. Gentleman because I have appreciated his practical contributions, but with the limited time at my disposal I want to move from Northern Ireland and the general discussion to an issue that has yet to be covered properly in this debate.

I remind the House that, before publication of this Bill, the Northern Ireland Assembly voted unanimously to call on the Government to permit the broadcasting of Christian radio, including Christian music. Such music cannot be broadcast throughout the nation, because of the restrictions that have been imposed. The general public in Northern Ireland support such a move, and many Members of this House have received letters on the matter. I believe that, on one occasion, 16,000 such letters were sent to Downing street.

I welcome many aspects of the Bill relating to the development of the communications sector, but clause 335 is difficult to understand. Mr. Liddell-Grainger said that he finds it difficult to understand Welsh, but I am sure that there are those who find it difficult to understand the English in clause 335. It is hardly written in simple English.

Clause 335 lifts some restrictions, for example on local and national digital programme services, but it contains religious disqualifications, as set out in part 2 of schedule 2 of the 1990 Act. They are applied, for example, to local and national digital radio and television multiplexes.

Many issues could be raised in the debate, but I am concerned with the effect on organisations and companies with religious affiliations. Christian broadcasting companies in the industry have suffered from being classified as disqualified persons, and have been prevented from developing and competing in the market place. Although one might not support such organisations, or not like religion at all, or not choose to watch or listen to items that might be produced, that is no reason for disqualification. There are many channels to which I never listen, but I would not deny their right to apply to broadcast.

Photo of Andrew Selous Andrew Selous Conservative, South West Bedfordshire

Does the hon. Gentleman agree that the Bill still leaves officers of religious bodies and convicted criminals the only people unable to operate a licence? Will not the Bill mean that the UK remains the only country in Europe to suffer that discrimination in respect of religious broadcasters?

Photo of Martin Smyth Martin Smyth UUP, Belfast South

I do agree with the hon. Gentleman. It is fascinating that we permit doubtful programmes to be broadcast and thus corrupt the nation, yet are more worried about programmes that might help the nation. Interestingly, the Government have approached faith bodies to help them deal with communities, yet are not prepared to allow those bodies to broadcast.

Earlier, the Secretary of State said that clause 309, relating to advertising, was not compatible with section 19(1)(b) of the Human Rights Act 1998. However, I wonder whether she had overlooked outstanding application 11072/02 before the European Court of Human Rights in Strasbourg when she said that she was unaware of any impediment other than a political one. When the Minister winds up, will he state clearly whether, in the light of that outstanding application, clause 335 is compatible with the European convention?

The Puttnam committee noted that a case had been lodged at the European Court of Human Rights in Strasbourg. My information is that the court has given the application the case number to which I have referred already, in the name of the Centre for Justice and Liberty v. the United Kingdom. The Government should be aware of that from consultations and documents.

Jesus Christ taught that we should love our neighbour, pray for those in authority and forgive those who have offended us. I believe that the heritage of freedom and tolerance for other people's beliefs that has been won at great cost for this nation over the years still has a place in this now liberal society, alongside other views. I ask that the House consider removing the religious disqualification measures in clause 335. To highlight that, and the need to take consideration of Northern Ireland, we will support the relevant amendment.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme 9:23 pm, 3rd December 2002

In view of the time, I shall shorten my remarks, but I hope that Government and Opposition Front-Bench Members will bear with me, as they took well over an hour to present their opening statements.

I also had the pleasure to serve on the Joint Committee with Mr. Lansley. It is always a pleasure to listen to him. Given the spirit of the debate, I do not think that it will harm his promotion prospects if I say that on some of the more controversial issues he was closer to the Government line than some Labour Members.

The Government should be congratulated on opening the draft Bill up to pre-legislative scrutiny. To their credit, they have accepted some major changes of policy as well as some drafting points. On content, for instance, they have accepted that Ofcom should be able to intervene to specify levels of original TV production at peak viewing times.

Clearly, in view of the Bill's deregulatory intent, safeguards for UK content and production are vital. I hope that the Government will go further in future amendments. We have, for instance, a thriving independent sector, producing and exporting everything from such hits as XBob the Builder" to serious drama. These are creative national champions, writ small individually, but collectively the potential is huge. In the face of a powerful BBC and ever-increasing concentration of ownership in ITV, the sector needs all the help at home it can get.

In its recent report, the ITC reinforced the Committees concerns about the operation of the independent supply market. It suggested a code of practice; we suggested an urgent review by Ofcom. Along with my right hon. Friend Mr. Smith, the former Secretary of State for Culture, Media and Sport, I hope that the Government will look favourably at the thrust of those recommendations. Indeed, I hope that they will go further still. Independents have clearly benefited from quotas, but the evidence shows, as my hon. Friend Mr. Wyatt pointed out, that they act as ceilings, not floors, and are adhered to grudgingly. We know that 25 per cent. by hours is a world away from 25 per cent. by programme value.

The ITC's expert panel recently recommended that value should be part of the quota. The main ITC report said that Ofcom should have the power to look at this, and so did we on the Joint Committee. I hope that the Government will accept that. Indeed, my right hon. Friend the Secretary of State for Culture, Media and Sport has set a precedent in this respect with BBC3.

A second area in which the Government have changed their policy is on religious broadcasting. Indeed, I suspect that there is no other area on which we have been lobbied more religiously during this process. With the number of digital licences on offer, I think that the Government have got the balance right.

There are major areas of policy disagreement between the Joint Committee and the Government. I should like to say a few words on two in particular—major newspaper groups owning Channel Five and non-EEC ownership of ITV. When we called for evidence to back up the Government's bold assertions, we found that evidence to be sadly wanting. More than that, we found grave and widespread reservations, which is why we recommended keeping the restrictions until Ofcom had had the chance to review the issue within three years. What is the hurry? Why set up a powerful new regulator, a fount of all knowledge, only to plough up the playing field before it is even up and running?

As far as cross-media ownership and Channel Five is concerned, that has become known as the Murdoch clause, but it is wrong to personalise the issue. It is not about one media mogul of shifting nationality but the desirability of anyone—right, left or the North Korean Politburo—owning 36 per cent. of the national newspaper market, plus the dominant satellite provider, concentrating ownership even further in their hands by owning a significant terrestrial broadcaster. The Government have recognised the force of that important principle by retaining the ban on ownership of ITV after all.

The Government have also made much of the fact that under current rules Silvio Berlusconi, of all people, could buy Channel Five. That is a red herring, because unlike News International or the Daily Mail and General Trust, Silvio Berlusconi does not own a substantial UK newspaper group. What is at issue is the desirability of one person or group's world view or prejudices holding an ever greater sway over a UK audience. The same could be said for relaxing cross-media ownership with respect to radio and local newspapers. I agree with Nick Harvey that Members of Parliament, above all, should want to get the definition of three distinct local media voices right. Local should mean local, certainly not regional or national.

On non-EEC ownership of UK television, the major concerns lie with the potential effects of the takeover of ITV or Channel Five by major US media concerns. We heard no evidence that that would lead to a huge inward boost to our television industry, apart from snapping up shares on the stock market. Rather, we heard the opposite—the concern was that it would lead to reduced investment as US groups substituted local production for their own. If the Government are determined to go down that route, strengthening the safeguards of the content is vital.

Because of the merger of ITV companies, regional production outside London has already been decimated. What are the prospects if ITV is controlled from Miami or Hollywood?

The recent ITC report made further recommendations regarding clear and enforceable commitments for investment and production outside London. I hope that as we go through the Bill, the Government will act on these concerns as well. What is the rush on deregulation? Let us be calm; let us be considered. Let us set up Ofcom and let it examine all these important issues carefully.

Photo of Roger Williams Roger Williams Liberal Democrat, Brecon and Radnorshire 9:29 pm, 3rd December 2002

The Bill has much support in the House, although reservations have been expressed by Members who represent constituencies on the margins of the country and in the countryside itself, in areas where communications have not yet developed to their full potential. Some Members are concerned that we are making changes at a time when our constituents are excluded from benefits enjoyed by people living in more urban areas.

In my constituency, for example, we do not even have full coverage for mobile telephones. As a result, the first responder initiative, whereby volunteers give help when people suffer a heart attack, cannot be spread across the whole area because there are not enough masts.

In Scotland, Wales and Northern Ireland, we are concerned that the representation that we enjoyed by right under the old system will be taken away from us. We have no certainty that we shall have representation on the main board of Ofcom. Many problems could be resolved if the Bill included a provision that the Secretary of State had a statutory responsibility to consult the Welsh Assembly, the Scottish Parliament and the Northern Ireland Assembly on appointments to the board.

My hon. Friend John Thurso suggested that Ofcom should have a duty to set up consultative bodies for Scotland, Wales and Northern Ireland. That would give people in those countries confidence that their special problems would be addressed and resolved.

Concerns have been expressed about the Welsh language in Wales and the role of S4C, our television channel, which is celebrating its 20th anniversary. S4C has a hugely successful output of programmes, but its financial situation remains tenuous. The company welcomes some of the Bill's provisions, although there are also some reservations. I hope that they can be dealt with in Committee and resolved by Ministers.

Photo of Andrew Robathan Andrew Robathan Shadow Spokesperson (Trade and Industry) 9:32 pm, 3rd December 2002

At this stage of our proceedings, it is often said that we have had a good debate. Having sat through almost all of it, I can say that it has been genuinely well informed. We have heard speeches in which Members expressed a range of views and reflected their knowledge and experience.

The debate has been interesting—as the Committee, too, will be interesting. As my hon. Friend Mr. Cameron pointed out, the Bill is a leviathan: 395 clauses and 19 schedules. I pay tribute to anyone who has tried to read the whole thing in one go, because it is hard going.

The Joint Committee made 148 recommendations and the Government accepted 120. I am sure that we all agree that the work of the Joint Committee on the draft Bill was extremely valuable. We have heard from several of its members, especially my hon. Friend Mr. Lansley, and we have benefited from that. The Government were wise to set up that Joint Committee.

As we proceed to the Standing Committee, I suspect that the Government will propose yet more amendments—[Hon. Members: XNo."] It is possible. I was told this morning that the team working on the Bill was happy and did not expect to table amendments. However, I am willing to make a small wager with anyone in the Chamber that the number of Government amendments will reach three figures before the Bill is enacted.

I was surprised to hear the Chairman of the Select Committee on Trade and Industry say that we needed little more scrutiny. This is an enormous Bill and it is important that the House and its Committees take a proper look at what will be extremely important legislation. Indeed, when we have explanatory notes that run to 268 pages, which is longer than most novels, we know that this is a complicated Bill. It is hugely complex and very technical.

I should like to highlight some issues. I wrote this little speech before the debate, so I am interested to note that several hon. Members have mentioned these subjects. First, I want to discuss the position of the BBC. Hon. Members on both sides of the House have said that it is not logical that the BBC should not be entirely subject to Ofcom. We shall certainly want to examine the reasoning behind that in Committee. We shall also wish to examine broadband access, which has been mentioned by hon. Members, especially those representing more distant parts of the United Kingdom. The lack of access to a speedy internet connection may be a major barrier to company growth, economic growth and, indeed, prosperity in future.

We should like to look at the scrutiny of Ofcom itself, and how it should report to Parliament. It should report to Parliament and its decisions should be scrutinised by Parliament. We are interested in the appointments to Ofcom. I wish to make no comment on Lord Currie, whom I do not know, except to quote from The Guardianhardly my favourite reading. Its headline on 25 July was, XThe lord Labour loves". The article said:

XBroadcasters"— a big word for the Chairman of the Select Committee, I know—

Xwill be hoping today that, as a long-term Labour supporter and a handy cellist, David Currie's repertoire extends beyond simply playing the Government's tune . . . A glance at his curriculum vitae suggests that before Lord Currie . . . gets on with his role as one of the country's most important watchdogs, the quietly influential Labour peer will first have to prove he is not just another member of the party's north London intellectual clique being handed a cushy job."

I believe that Lord Currie has a very good reputation, and I have no personal criticism of him whatsoever, but I consider it a very great pity that so many key appointments in the Government's gift go to known Government supporters. It is no surprise that there is an issue of Tony's cronies, in which connection we might just mention the BBC, where the chairman, the director-general and the political editor are all known Government supporters. This is a very serious issue about impartiality, but Labour Members just sit there and laugh.

Photo of Eric Joyce Eric Joyce Labour, Falkirk West

I do not know whether the hon. Gentleman recalls this, but the chair of the BBC under the last Conservative Administration was the brother-in-law of the then Cabinet Minister responsible for the BBC.

Photo of Andrew Robathan Andrew Robathan Shadow Spokesperson (Trade and Industry)

Of course I do. I also recall that the former director-general, Lord Birt, now works for the Prime Minister in a very close capacity, so I think that shows that we were genuinely impartial. [Interruption.] The cheap seats are a little rowdy as we discuss broadcasting and media.

I should like to turn to a few of the comments that have been made. The Secretary of State spoke of the Bill's economic importance and of its values. She said that it covers every one of the Government's wider aspirations for Britain. That was rather over-stating the case, if I may say so. She said that these were ambitious aims, as the Bill was ambitious. Well, I think that these are ambitious claims for the Bill because I do not think that the Government can claim the credit for everything in it. I suggest that it will be private companies and private enterprise and innovation that will bring the benefits, not the Bill itself. The Bill should set up the structure and allow others to get on and deliver.

Photo of Derek Wyatt Derek Wyatt Labour, Sittingbourne and Sheppey

That is what government is for.

Photo of Andrew Robathan Andrew Robathan Shadow Spokesperson (Trade and Industry)

Indeed, but obviously the hon. Gentleman should pay attention and read in Hansard what the Secretary of State claimed.

I was glad that the Minister mentioned the licence fee, about which we may have something to say in Committee. We shall discuss the human rights issues, which she mentioned, especially those affecting religious broadcasters.

My hon. Friend Mr. Whittingdale made an excellent speech. He raised many issues in detail, particularly religious broadcasting and cross-media ownership. I was particularly interested that he reminded us of the comments that Mr. Timms, now the Minister for E-Commerce and Competitiveness, made during the passage of the Broadcasting Act 1996, because although I was there I had forgotten them. I look forward to hearing him explain how he has managed to change his position by 180 degrees.

My hon. Friend also discussed newspaper ownership and referred to the statutory regulation of newspapers through the back door.

Mr. Smith brought his own expertise to the debate. That was particularly useful, but I think he was wrong about the Government sacking the BBC's governors. He wants the BBC to be properly regulated, as we do, under tier 3 by Ofcom, but I do not think that the Secretary of State can sack the governors. He referred to that as the nuclear option, but I doubt whether she can sack them—perhaps she can, and perhaps the Minister will mention that as well. He also mentioned piracy—a very important issue—and suggested that Ofcom should have responsibility for it, which is in interesting idea.

I wanted to say that Nick Harvey, who speaks for the Liberal Democrats, sat on the fence and agreed with both sides at once, but he actually made some good points: he agreed with us, for example, about religious broadcasting and broadband services. I look forward to hearing his very long and fascinating contributions in Committee.

I shall just skip through a few other hon. Members and refer to my hon. Friend Michael Fabricant, whom I trust I can look forward to seeing on the Committee. He took us back to the Maastricht treaty. My hon. Friend the Member for Maldon and East Chelmsford voted against Maastricht treaty Bill on Third Reading. I am not sure that we want to dwell on that, but he was very sensible about the BBC not being seen to be properly regulated and being its own judge and jury.

Mr. Wyatt, who also served on the Joint Committee, made some very sensible points about the BBC. I was interested to hear how we control pornographic spam. I am not entirely sure about the software to which he referred, but he revealed a depth of knowledge, some experience—[Interruption]—not of pornography but from his past as well as the Joint Committee and some thoughtful ideas. I should like to see him on the Committee, but I am afraid to say that with his knowledge, experience and sensible ideas there is absolutely no chance of that happening.

My hon. Friend Mr. Page particularly wanted me to refer to him because he made both the points that I made earlier, and I agree with him. Of course he is absolutely right to point out that there will be a tremendous failure of scrutiny in Committee because the debates will be guillotined.

Mr. O'Neill, who is Chairman of the Select Committee on Trade and Industry—

Photo of Andrew Robathan Andrew Robathan Shadow Spokesperson (Trade and Industry)

I am sorry. We have the Communications Bill so that we can communicate better across the border. I do not agree with the hon. Gentleman on one or two things, but it was nice to know that a Labour Member of Parliament is still allowed to refer to Lenin. [Interruption.] I think that it was Lenin, not Lennon.

Mr. Thomas, who spoke for the Welsh nationalists, and John Robertson referred to the importance of broadband services. That reinforces exactly what we are saying—broadband must be mentioned.

Although I was absent at the time, I have a note from my hon. Friend Mr. Bellingham, who sat in for me, to the effect that Lord Thurso—my apologises, Madam Deputy Speaker; John Thurso—said that a lot of people fishing on his river in Caithness will not be able to get digital television. He raised a very important point about the analogue switch-off.

My hon. Friend Mr. Lansley, who, I hope, will serve on the Standing Committee, has a tremendous contribution to make. He gave a thoughtful, well informed and incisive speech, particularly about Ofcom's priorities in relation to competition and protecting the interests of consumers and citizens.

Lastly, I should like to refer to Paul Goggins, who honestly admitted to feeling technically challenged when studying the tome that is the Communications Bill, and I suspect that many hon. Members will have felt the same. That is certainly not unique, but I suggest that he should study more, rather than listening so much to Wythenshawe FM, to which he referred at length.

In conclusion, my hon. Friend the Member for Maldon and East Chelmsford and I served on the Committee that considered the Broadcasting Bill in 1996, as indeed did the Minister for E-Commerce and Competitiveness, who is about to reply to the debate.

I sat in silence throughout the Bill, as a Parliamentary Private Secretary in the Department of National Heritage. My hon. Friend the Member for Maldon and East Chelmsford sat as a Parliamentary Private Secretary, but, halfway through, rebelled against the Conservative Government and resigned his position. Six years on, we look forward to revisiting the issues in Committee, and to giving this very important Bill as much detailed scrutiny as the guillotine will allow. I doubt whether all 395 clauses and 19 schedules will be examined, which is a matter of regret. I hope that there will be a spirit of co-operation, however, as we do not disagree with the principles of the Bill. I hope that we will try to achieve the best possible result for all those who are involved in, or who are consumers of, broadcasting and communications in this country.

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness) 9:45 pm, 3rd December 2002

Early in the new year, the first third-generation mobile services will become available in the UK. Users will be able, at any time, to download the latest television news bulletin and watch it on their mobile handset. Will that be a case of broadcasting or telecommunications? My hon. Friend Mr. Wyatt quoted another example of the traditional distinctions and boundaries between the different domains becoming increasingly hard to maintain. Higher capabilities of mobiles, rapid take-up of broadband, growing use of wireless for fixed communications and the spread of digital television are all blurring the old distinctions. Bringing the regulators together is, therefore, clearly the right action. I welcome the support for that change that has been expressed on both sides of the House, and outside the House, too.

Photo of Mr Brian White Mr Brian White Labour, North East Milton Keynes

Technology is undoubtedly converging. The uses to which people put that technology, however, are not necessarily converging. Will my hon. Friend address that point?

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

My hon. Friend makes a valid point. What is important, however, is that those who make the judgments about how these matters should be regulated will be in one place rather than in different institutions. Increasingly, more than one of those regulators has had to get involved in a particular case. Ofcom will be the place where these decisions are made, which is clearly a big improvement.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

The Minister referred to the blurred domain boundaries and Ofcom's role. Does he accept that the clause covering Ofcom's duty to ensure reasonable regional coverage is not strong enough in areas such as mine, which is close to the west midlands and east midlands regional boundaries? Because of topographical features, we are not able to receive east midlands television, for instance, in any form. The people of Ashby, Coalville and Whitwick want to hear about their own communities, and not about Aldridge, Cannock and Walsall, wonderful though those communities are.

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

I am sure that my hon. Friend's constituents will be pleased by what he says on their behalf.

The recent Booz Allen Hamilton benchmarking study rated the UK as the second-best environment for electronic commerce among all the major economies after the United States. That is a good position for us, but we want to do better. A world-leading regulatory regime is an important step in that direction. We are seeing rapid development in the UK. As well as the imminent launch of third-generation mobile services, broadband connections passed the 1 million mark two months ago. They are available to about two thirds of households around the country, and that number is increasing by about 30,000 every week. The penetration of digital television is higher in the UK than anywhere else in the world. We are addressing the challenge of broadband content, as well as network infrastructure, including music, as my hon. Friend Rosemary McKenna pointed out. We are looking at encouraging new content and new applications through the research and development tax credit, business support schemes and embedding broadband in the modernisation of public services.

The Bill requires Ofcom, in performing its duties, to have regard both to the promotion of competition and the encouragement of investment and innovation. In developing the new networks, competition is key. There is sharp competition in the broadband market between services based on telephony and on cable television networks, with cable television having the larger share at the moment, and strong retail competition between BT and the large number of other service providers reselling its wholesale ADSL product.

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

Not at the moment.

Mr. Lansley was right to emphasise the fact that we need more competition to deliver the innovation in technology and marketing that alone can drive the extra functionality and the wider availability of the services that people demand into every part of the UK. Ofcom will need to ensure that new entrants and innovative players have a fair chance to offer their products and services so as to boost the competitiveness of the UK economy. Our communications infrastructure has long been one of the strengths underpinning our success in inward investment.

Photo of Robert Smith Robert Smith Opposition Deputy Chief Whip (Commons)

I am just a bit concerned. The Minister said that competition would drive these services into every part of the UK. Does he really believe that rural areas and the further-flung parts of the UK will receive these services as a result of competition? Will there have to be another route?

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

The hon. Gentleman should consider the example of mobile phones. Exactly the same concerns about the provision of services in rural areas were raised. The competition between the service providers led to innovation in marketing and technology that drove the services into those areas. It is also the case that public services in all parts of the country will demand broadband. My right hon. Friend the Prime Minister made the commitment the week before last that, by 2006, every school in the country will have broadband. Once the school in an area has broadband, it is possible for the service to be provided to other users as well. However, we need new investment as well as competition.

Photo of Michael Fabricant Michael Fabricant Conservative, Lichfield

Before the Minister starts believing his own propaganda, will he accept that the penetration of broadband in the UK is far less than in other parts of Europe, let alone the United States? Does he also realise that what he calls broadband—512 kilobytes per second—is far lower than the general definition of broadband, which is 1.5 megabytes? Basically, the Government have a lot further to go.

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

It is the case that the UK made a slow start with broadband but it is equally the case that we are catching up very rapidly. Some 30,000 new connections are made each week, and the rate of growth is significantly faster than elsewhere in Europe. We can look forward with a good deal of confidence to having the extensive as well as highly competitive broadband market in the UK that we most certainly need.

Photo of Andrew Robathan Andrew Robathan Shadow Spokesperson (Trade and Industry)

I live only one and a half hours' drive from London. Lutterworth is a large town, but we cannot get broadband there or almost anywhere in my constituency.

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

The hon. Gentleman will be pleased to know that BT announced at the e-summit a couple of weeks ago that it would achieve 80 per cent. availability of broadband right across the country by 2005. He also needs to take account of the potential for wireless to deliver broadband services, particularly in rural areas. That will be another element of competition that holds out much promise for driving these services into areas where they are not available at the moment. It is important that we do that.

We need new investment. Players in the capital market need now to reassess their caution about the technology sector, particularly in the UK where economic stability provides such a strong foundation. Technological change is creating a vast array of new commercially attractive opportunities. We need investment on a substantial scale to come forward for those opportunities to be realised.

The Bill will help to make that easier. For example, it will enable Ofcom to designate people other than network operators, such as a local authority, to hold the powers necessary for infrastructure construction so helping to facilitate infrastructure sharing and to reduce the cost of rolling out new networks. Members may well be interested in clause 144, which restates the power for a local authority to provide a public network as originally set out in the Telegraph Act 1899. That may have new relevance in the digital era.

Let me comment on several of the major points that have been raised in the debate. I very much welcome the broad agreement across the House on some of the key issues, including some of those that have been hotly debated over the past year or so. Questions were raised about ITV news. When 59 per cent. of people consider television to be their most trustworthy source of information, it is vital that, as the main competitor to BBC news, ITV news should be impartial, and as my hon. Friend Mr. Joyce pointed out, independent and of high quality. As my hon. Friend Paul Goggins said, it should deal with international, as well as national, matters. That is why we are retaining the current nominated news provider system for ITV as a guarantor of quality and independence.

A number of hon. Members, including Mr. Whittingdale, said that we need to go further. The Bill raises the ownership limit from 20 to 40 per cent. to help to make strategic decision making and investment easier. We will be able to change the system in the future, without further legislation, if the market can provide an adequate range of high-quality easily accessible television news services without those requirements.

The BBC's relationship with Ofcom has been a prominent theme. It was mentioned by my right hon. Friend Mr. Smith, who welcomed the Bill in its current form. The BBC will be regulated by Ofcom for tier 1 and tier 2 obligations. We have agreed, after careful consideration of the recommendation by the Joint Committee, that Ofcom should have the power to fine the BBC for breaches of those obligations. Tier 3, for which the governors will be responsible, requires the BBC to publish an annual statement of programme policy, to report on its performance on that policy and to consider relevant Ofcom guidance. We aim to ensure that the BBC maintains its independence. We want a regulatory regime that recognises its distinctive character through the charter, the agreement and its relationship with Parliament, while bringing it within the overall regulatory structure. I believe that our proposals will have that effect.

Effective reflection of the interests of all parts of the UK is important. That idea featured prominently in the remarks of my hon. Friend Miss Begg and Mr. Thomas among others. We have included provisions to ensure that the interests of nations and regions are represented on Ofcom. The board needs to remain small enough to react quickly to fast-changing circumstances. Adding members on the basis that they are from different nations and regions would jeopardise that, as John Thurso said.

Photo of Chris Mullin Chris Mullin Labour, Sunderland South

Can my hon. Friend explain how it is possible to justify a relaxation of the rules on cross-media ownership to allow someone who already owns four national newspapers and one television channel to buy Channel Five?

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

The general approach in the Bill is to remove unnecessary restrictions. We are permitting some consolidation in ITV because of its size and reach, but Channel Five is small. It has a 6 per cent. market share compared with 24 per cent. for ITV and only 80 per cent. coverage. So it makes sense to remove the ownership restrictions in that case. Of course, if the audience grows, the Secretary of State could make changes, perhaps to require a nominated news provider system, as with ITV. We have established the right balance, which is reflected in the Bill.

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

I am afraid that I need to press on.

The content board of Ofcom will have designated members representing Scotland, Wales, Northern Ireland and England, as will the consumer panel. My hon. Friend Mr. O'Neill was right to emphasise the importance of a robust consumer panel. The Bill requires Ofcom to establish and maintain offices in each country. A memorandum of understanding between Ofcom and the relevant Secretary of State could well include other measures, such as those mentioned by hon. Members.

The hon. Members for Maldon and East Chelmsford and for Belfast, South (Rev. Martin Smyth) referred to religious ownership. It is worth explaining that the restrictions were placed on the statute book by the Conservative Government in the Broadcasting Acts 1990 and 1996. The restrictions that will remain when the Bill is enacted will be largely theoretical. For example, it is highly unlikely that anyone who has lobbied us on the subject will be in a position to own a digital multiplex. Following the Committee's report, we have decided that religious organisations should have access to a national digital radio licence.

The Bill has been much improved by extensive consultation. I have great confidence in commending it to the House.

Question put, That the amendment be made:—

The House divided: Ayes 14, Noes 329.

Division number 15 Communications Bill

Aye: 14 MPs

No: 329 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on second or third reading), and agreed to.

Bill accordingly read a Second time.