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Office of Communications Bill [H.L.]

– in the House of Lords at 6:32 pm on 15th October 2001.

Alert me about debates like this

Second Reading debate resumed.

Photo of Lord Dubs Lord Dubs Chair of Labour Peers 6:53 pm, 15th October 2001

My Lords, I first declare an interest. I am currently chair of the Broadcasting Standards Commission and I was previously deputy chair of the Independent Television Commission. I therefore speak for myself. It is quite clear that any comments on behalf of the regulators are made by the Minister and, in accordance with the rules and conventions of the House, the views I express are simply my own.

I welcome the Bill and I warmly welcome the intention to set up Ofcom. It is right that there should be a light regulatory touch, although I accept that this is easier in theory than in practice. I also welcome the fact that the intention is that Ofcom will not merely be the sum of the five bodies going into it but will have an independent structure and life of its own. It is however to be noted that the five bodies--I believe that there are four regulators plus the Secretary of State in the terminology--are working closely together and establishing close co-operation. That augurs well for a smooth transition to Ofcom when it happens.

It has always been clear that having several regulators with overlapping functions led to confusion and, in some instances, resulted in double jeopardy for broadcasters.

I also welcome the fact that within the concept of Ofcom there is to be technological advance. That means that it is right that the new regulator should cover not only broadcasting but related issues such as the Internet and broadband.

We should ask the question of why it is necessary to regulate broadcasting at all? The answer is that as a society we have long accepted certain values attached to broadcasting. We have usually used shorthand and called it "public service broadcasting". We have accepted that market forces and competition, which have an importance and strength in the scheme of things, may not in all instances protect those values or ensure that the values we believe in are featured sufficiently prominently in broadcasting. So we need to intervene in that process and, hence, we need to have regulation.

There is a cost in this. It may be the BBC licence fee, it may be the way in which independent television companies operate and the way in which Channel 4, with its unique position, operates. We should recognise that there is a cost and that it is part and parcel of the way in which we have broadcasting arrangements in this country.

I do not want to spend a long time defining public service broadcasting. Very briefly, there are certain elements which are important: there should be adequate coverage of news and current affairs; coverage of the arts, culture and religion; proper diversity in our broadcasting media; proper emphasis on regional broadcasting and on regional production. Those are elements in what we would call public service broadcasting.

My noble friend the Minister mentioned in her speech that the Bill gave the Government the ability to time the key appointments to Ofcom in a sensible way, neither too soon, when there would be a bunch of able people not having much to do, nor too late, which would impede a smooth transition to the new body. That is important.

It is quite clearly understood that the five bodies-- the four regulators and the Radiocommunications Agency--represent different cultures, different degrees of independence and, in some cases, dependence on government. The most important single issue before us today is that Ofcom will be a large and powerful body. It is crucial that it should have a cutting edge; that it should not be a bureaucratic elephant but able to move speedily, flexibly and dynamically in an industry which is both dynamic and changing rapidly. The worst outcome would be if Ofcom were to be an insensitive body which could not get on with the job because it was large and unwieldy.

It is therefore crucially important that the people to be appointed--the chair and the small number of non-executive directors--are people who accept the need for a body with a cutting edge. Those non-executive directors will set the tone and appoint the chief executive. That is the crucial task before them long before the Communications Bill comes into force.

I have considered whether there is any way of reducing the size of Ofcom--it will have a large staff--but that will be difficult given the size of the five bodies that will go into it. We are, as it were, stuck with the size of it. It is therefore important that the culture and mode of operation is dynamic and not bureaucratic.

There is a related issue. Given the power that the new regulatory body will have, will there be a mechanism whereby people can appeal against its decisions? Clearly a complicated appeals process will slow things up. I am not certain whether there will be any redress at all. I simply pose the question.

I trust that the people appointed to Ofcom will be fully aware that they are charged with protecting the interests of citizens and will also have a responsibility for the economic wellbeing of the industry, broadcasting, the Internet and so on. From this it follows that the people appointed must be able to exercise their judgment in achieving the right balance between the two pressures of protecting the citizen and looking after the well-being of the industry.

I recognise that there will be an enormous difficulty for the Government in achieving regional representation. They are under great pressure from Scotland, Wales and elsewhere. It will be difficult. If the main board of Ofcom is to be large enough to encompass all of the different regional and other interests, it will not be the kind of board which will manage Ofcom as effectively as it ought. It would not be advisable to have regional representation through the Scottish Parliament, the Welsh Assembly or the Northern Ireland Assembly because the appointments should surely be subject to the Nolan procedures and a nomination from elsewhere would go against that.

The difficulty lies in the fact that if the main board of Ofcom were large enough to encompass all the different regional and other interests, it would not be the kind of board that would manage Ofcom as effectively as it ought to do. It would not be advisable to have regional representation through the Scottish Parliament, the Welsh Assembly or the Northern Ireland Assembly. Appointments should surely be subject to the Nolan procedures, and a nomination from elsewhere would go against that principle. The difficulty arises of making the board too big if regional questions are too strong--although I understand the force of the argument for some regional representation.

One way round the difficulty may be for the proposed content committee--a committee under the main board with lay representation looking after the important area of content--to have some regional representation in order to provide a sense of balance.

The Minister suggested that that we should focus mainly on the Bill that is before the House. However, she invited us to speculate mildly about the communications Bill that is to follow. Perhaps I may take her advice and speculate a little, given that I shall not be the only one who does so. I believe that my noble friend will understand the motive. It is not that we expect an answer from the Minister who will reply to the debate; we merely wish to put down markers which I hope will influence the Government as they finalise the drafting of the communications Bill.

First, I welcome enthusiastically the Minister's willingness that there should be pre-legislative scrutiny. That will greatly facilitate our task when the full Bill comes before the House. I hope it will be possible for the parliamentary draftsmen--are they draftsmen, or draftsmen and women?--to consolidate in the communications Bill the previous two broadcasting Bills. Otherwise, we face the nightmare of having three Bills on our knees while we are trying to sort matters out. The Minister's task will be significantly facilitated if there is a consolidation measure.

I turn briefly to the BBC. Of course, there will be plenty of chances to debate it later. I am an enthusiastic supporter of the BBC and what it stands for. However, I believe that it is in the interests of the BBC that it should come under Ofcom. Otherwise, the arguments about how the BBC operates in regulatory terms will be between the Secretary of State and the BBC, which would be the unhealthiest possible position for the BBC. It is much healthier, in the case of any regulatory argument, for the BBC to receive a slight wrap on the knuckles from Ofcom rather than there being a major row between the Government and the BBC. It is because I have such respect and affection for the BBC that I argue in favour of it coming fully under Ofcom.

I have referred to the desirability of a content committee in terms of regional representation. I believe it to be important also in terms of having a proper focus on content matters, which may not otherwise receive enough attention from the main board.

I am concerned about digital switchover. I understand that the majority of television sets presently being purchased are analogue sets. We must find some way of moving towards the Government's target dates for digital switchover. I know the difficulty: it is not just a matter of one black box per household; it is the fact that there are so many television sets in most households and achieving digital switchover for all of them is difficult. The Government would surely not wish to upset all the young people and teenagers who have second, third and fourth sets.

I shall not comment on media ownership beyond saying that I accept that it is a difficult question for the Government. I shall look with interest to see how they wrestle with it. Radio is of great importance as one of the broadcasting media. I am delighted that a task paring report acknowledges that in terms of ensuring proper consideration for radio within the structural arrangements.

During the Labour Party conference I had an interesting meeting with independent producers who felt that their competitive position was seriously eroded by the kind of contracts they had, particularly in regard to the BBC and but also with other broadcasters. It may be that Ofcom itself is not the right body for protecting competition, but I should like to feel that we can achieve a better arrangement than presently exists if we are to give independent producers a better chance than they have at the moment.

Finally, I welcome the idea of a consumer panel, provided that it is made clear that the panel is not an alternative to the content committee of Ofcom dealing with complaints. If we confuse people, we simply repeat the present muddled situation. The consumer panel has a part to play, but it is not the body to which complaints should primarily be addressed. That is an issue for debate when the full Bill comes before the House. I apologise to my noble friends on the Front Bench for spending rather more time on the measures that I should like to see in the communications Bill than on the Bill that is before the House. I welcome the present Bill. It offers a sensible way forward for a very important industry.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench 7:04 pm, 15th October 2001

My Lords, perhaps I may begin by thanking your Lordships and the Officers of the House most sincerely for the warmth and helpfulness of the welcome extended to me since my arrival in this place.

Even so, I address your Lordships on this particular topic with great diffidence--that is not merely because it is getting late--for this House is packed with communications and broadcasting experience and expertise, including most of my predecessors and successors as chairmen of the Broadcasting Standards Commission. Your Lordships have just heard the quality of my successor as chairman. Following that, I am rather surprised that I dare to speak at all!

Let me first emphasise that I see broadcasting as an important influence on us all. It helps to shape our attitudes, our culture, indeed the very way our democracy develops--critical your Lordships may think, at this unhappy time. I am a lifelong and, for the most part, enthusiastic consumer of British broadcasting, sound and vision alike. I know from my travels that its literally global reputation for quality, diversity and impartiality is well deserved.

I understand as well the need to re-examine our regulatory framework. Change is inevitable. But we need to be sure, as we make those changes, that we do not risk losing strengths which have helped to shape and to secure the quality of British broadcasting. That is the basis on which we need, in my view, to consider the plans that are now in their early stages before this House, as outlined by the noble Baroness, Lady Blackstone.

I start with one firm conviction. I believe that our experience has established the importance of having a visibly objective, independent statutory body to draw up codes of guidance and to receive complaints of the kind considered over 20 years by the Broadcasting Standards Commission and its predecessors. It must be a body empowered to consider--again, I emphasise, independently--both sets of issues that fall within the present remit of the BSC: taste and decency, and fairness and privacy.

How far do the present models, as they begin to be outlined in the White Paper, measure up to those standards? Perhaps I may say a word first about "taste" and "decency". Those two rather prim words tend to obscure what we are actually talking about. We are discussing the possible impact of unsuitable material at unsuitable times. I refer to the portrayal of sex, bad language and violence beamed directly into our homes. Competitive pressures in the broadcasting industry have pushed the boundaries of taste and decency ever further. The evidence, unsurprisingly, shows continuing concern, particularly about violence, and particularly about the impact of such material on children and vulnerable individuals.

In these circumstances, and with at least 60 per cent of even multi-media equipped viewers still preferring the public service "free-to-air" channels, I find it disconcerting, to say the least, that it is apparently proposed in the White Paper to leave decisions on this kind of complaint largely to the broadcasters themselves. They will be less transparently and independently accountable than now. That would contrast sharply with the move towards greater accountability almost everywhere else, from the health service to the railways--indeed, even in your Lordships' House.

As it appears, under the system proposed for taste and decency, broadcasters are to be both judge and jury in their own case--except where the complaint has not been dealt with "in a timely manner"--a somewhat quaint phrase drawn from paragraph 6.4 of the White Paper. I should be grateful if the Minister--if not in his reply then at some other time-- would explain the thinking behind that. How exactly is "timeliness" to be determined, and by whom? What is to be done, and by whom, in respect of a decision affecting taste and decency which may indeed have been "timely" but where the broadcaster's reaction was perhaps unsatisfactory in every other respect?

I turn now to "fairness or privacy", or rather to the handling of complaints of unfairness or unwarranted infringement of privacy. On this topic, I am glad to say, the White Paper's analysis is clear, save in one important respect, of which I shall say more in a moment. For it recognises--here I quote from paragraph 6.5.2 of the paper--that,

"because of the invasive and powerful nature of broadcasting", people should have,

"the right to complain directly to an independent body which is able to make, and ensure the publication of, adjudications".

Every word of that description of the present position is crucially important. The White Paper goes on to describe this approach, quite rightly, as,

"often the most effective means of redress for individuals or groups whose reputation may have been damaged", and promises that the,

"right to seek such redress ... will be retained as an important remedy for those ... affected by a programme".

So far, so very good. I am glad to read and quote:

"This function is currently performed by the Broadcasting Standards Commission"-- as indeed it is, in respect of the BBC, as well as the commercial channels. As has already been pointed out, in the case of the BBC the Broadcasting Standards Commission is the only independent supervisory agency. For this purpose the commission uses "hearings", where both sides present their case in a simple, compact and mutually informative procedure.

The question--and my most important point--is whether the proposed new structure will ensure the continued transparency, effectiveness and, above all, independence of existing arrangements, including, for cases about unfairness and infringement of privacy, hearings of the existing kind. For the White Paper concludes that this will in future be available from Ofcom itself; or, indeed, as was mentioned by the noble Lord, Lord Dubs, possibly from a content board.

It is here that some of the most important uncertainties arise. Will Ofcom have, as it will surely need, the same explicit, statutory powers as the Broadcasting Standards Commission now has? Will they extend, as they do today for taste and decency as well as fairness and privacy, to the BBC? If not, why not? Who will make the decisions on complaints: staff, commissioners, or some other grouping?

In the case of the Broadcasting Standards Commission--in order to avoid the risk of so-called "agency capture"--care has been taken to secure a regular turnover of the membership of this independent commission. I stress that it is the members themselves who make the decisions on complaints.

Will it be possible to ensure the same detached relationship if the adjudicator--the content board, or whatever it may be called--standing between the aggrieved citizen and the broadcaster (and acting, I may say, in a quasi-judicial capacity) is so closely identified with Ofcom, the body whose primary purpose is managing the industry?

I see, of course, the case for reducing and rationalising the number of regulatory bodies. But I have to ask your Lordships: can we be sure that it is right to go for a single, huge integrated regulatory body? Should we not consider at least a "two body" approach--by continuing the existence of something more like the commission, a body with at least the same degree of independence?

I am all for having a "tidy mind". But the trouble with tidy minds--if I may outrageously mix my metaphor--is that they sometimes try to go "a bridge too far".

Photo of Lord Bragg Lord Bragg Labour 7:14 pm, 15th October 2001

My Lords, it is my pleasant privilege on behalf of your Lordships' House to congratulate the noble Baroness, Lady Howe, on her maiden speech. I do so wholeheartedly. It will have surprised no one remotely acquainted with the noble Baroness that her speech was succinct, resonant and full of rich goods no doubt waiting to be unwrapped at a later stage.

The achievements of the noble Baroness are dauntingly wide ranging--from the Equal Opportunities Commission and chairmanship of an inner London juvenile court for 20 years to, relevantly for us here today and as we have heard, chairmanship of the Broadcasting Standards Commission, which, ironically, we may now be set to subsume into Ofcom. However, most tellingly for me, was her decision to take a degree as a mature student at the formidable London School of Economics. We await the noble Baroness's further interventions with some apprehension, as well as with keen anticipation.

Like other speakers, I must begin to talk on this Bill by declaring an interest. I work for Granada Television. I also work for BBC Radio--perhaps they cancel each other out. But the interest that I most want to declare is in public service broadcasting, in which I have worked for 40 years in the BBC, in ITV and in Channel 4. The British system of broadcasting is uniquely characterised by that public service tradition throughout. This is key to the issue of Ofcom.

It is easy to see public service in the BBC. Channel 4 was set up--with ITV money--to be a public service channel, commercially underpinned and it succeeds very well. Most remarkably of all, I think, ITV contributes massively to the public service coffers, at no charge to the viewer. It provides over 10,000 hours of news and other regional programming per year. Your Lordships might not know that that is twice as much as BBC1 and BBC2 combined. It also has a programme spend on creative talent in this country that is the biggest spend on any single channel in Europe. This is now at risk.

I believe that the public service notion cannot be kept out of this evening's debate. Like others among your Lordships, I wish rather to digress to tackle this point, or rather speculate, licensed by my noble friend the Minister. I welcome legislation that will enable Ofcom to be set up and running as soon as the full communications Act is brought into force, providing that it is fashioned to suit conflicting needs, which are now--and quite cannily--individually tailored. But the arrival of Ofcom throws into relief the harmfully, even fatally, slow progress of the communications Act itself, which has been promised for so long--since 1997--and is now pushed back yet again to 2003 at the earliest, by which time it could be the lifebelt offered after the subject has drowned.

The danger signals in commercial television are surely unmistakable. To ignore them is to imperil a valuable commercial and public service enterprise. Ofcom is to be welcomed. But surely it must include the BBC in its remit. To leave out the BBC--approximately 50 per cent of broadcasting business--makes as much sense as having a regulating power for food standards yet leaving Tesco and Sainsbury to regulate themselves. No doubt they would do it responsibly, but the greater points are fairness, transparency and consistency and, for that, everyone needs to be under the same authority, which would be diminished without the BBC as the BBC would, I believe, be diminished without--that is to say, outside--Ofcom.

No one doubts the integrity of the BBC's governors. I am sure that your Lordships wish the new chairman well. No one doubts the high aspirations of the BBC to which the present director-general is devoting his great skills and energies. But the BBC must not be allowed to be a state within the state. Ofcom could become a powerful instance and metaphor for that.

Recently, when the BBC failed to get BBC3, a senior BBC executive said:

"The BBC will get what it wants. The BBC always does".

Even someone like myself, who is a 100 per cent supporter of the BBC, felt a chill come to the blood. No organisation should believe that it can behave like that in our country, and certainly not one wholly subsidised by the people to the tune of £2.5 billion a year.

If Ofcom is not allowed to engage with the BBC, then, like it or not, this will be further proof that the traditional personal and philosophical intertwining of a powerful government and by far the most powerful broadcaster is again prepared to lock forces against the rest of the broadcasting community. There was never a good time to do that. This is, and critically I believe, a very bad time to do it.

Do BBC governors fear to lose their independence if they accept Ofcom? They need not. Granada, under the ITC, which many think could set out proofs to show, is much tougher than the BBC governors. Granada still acts independently. Surely transparency ought to be welcomed by the governors, and consistency--that old level playing field; not a bad image; not an ignoble ambition in a democracy.

The fate of Ofcom will be a crucial signal to commercial, independent television in this country. Bluntly: is it truly part of the agenda, or not? Is this a country that wants commercial television or does it merely tolerate it? Is it prepared to see it wither, in effect, or will it make it part of its central broadcasting concern?

It is interesting in this context to look for a few signs. Granada and Carlton, for example, have invested £800 million in the UK's digital terrestrial platform, with £300 million more to go--yet the Government have failed to follow up their promised commitment to drive digital TV, and the result could be catastrophic. The Chancellor of the Exchequer in another place could help by deciding that a digital component be built into every new television set. That would help manufacturing too. A date for switch-over could be announced, allaying many of the uncertainties. Much else could be done, but there are no signs.

Yet more super-tax is being demanded from ITV while its losses mount. Are there any signs that cross-media ownership rules for TV and radio could be relaxed with instant and direct benefits from the regional to the international scene? Are there any signs that advertising, an essential driver in our society, should have its voice heard? There are still no signs.

There is more, but I shall add only one observation. Recently, the BBC secured not only a new and munificent licence fee settlement, but the Government reopened the previous government's settlement two years early--plenty of signs there. Remember, "The BBC will get what it wants. It always does", as the man said. It is odd, even bizarre. It is no wonder that the rest can feel left out in the cold.

The issue is not only about Ofcom, but about taking the whole of broadcasting equally seriously. It not so much level ground as common ground. The BBC should make alliances and lead. It has nothing to fear. We are a trading country that could enjoy much fuller rewards from one of the world's four great global industries--communications. It is right to support the BBC, but to favour it and conspicuously disadvantage so much else could mean that we miss great opportunities for skills to develop, in manufacturing, in job creation, and in making the best of the rich mix that we still, just, have.

Photo of Lord Corbett of Castle Vale Lord Corbett of Castle Vale Labour 7:22 pm, 15th October 2001

My Lords, it is a strange experience to find myself here after 23 years in another place, but it is made much easier by the helpful welcome of so many of your Lordships, including my friends on the Front Bench and my staff. I do not doubt that as well as renewing old friendships, I shall probably find myself renewing old arguments.

I come to the debate as the spokesman who led for the Opposition during the passage in another place of the Broadcasting Bill 1990. That took a year out of my life, but we prevented the Bill from being as bad for broadcasting as it promised to be, although it did considerable damage to the "must carry" obligations of public service broadcasting, to which many of your Lordships have already referred.

That was 11 years ago, which was another world in broadcasting and communications. The technological changes have been fast and wide-ranging, but I take the view that broadcasting is about more than knobs and buttons. Technology should not blind us to what underpins our broadcasting services. It is Ofcom's role to hold the ring.

The pride that we generally have in the quality of our broadcasting is properly placed because both the public and commercial sectors are built on the base of broadcasting as a public service with sensible regulation. Your Lordships will not expect me to be contentious in my first speech in your Lordships' House, but perhaps I may say as an aside that the commercial sector and BBC are regulated in different ways to common standards that take into account the differences between the two broadcasting sectors. I am not persuaded of the need to change that.

Public service obligations were placed upon the infant ITV regional network and remain in place today, although they are not as strong as they once were. The fact that the BBC is there and that ITV matches at least its main public service broadcasting obligations, gives the whole system its underlying strength.

Many years ago there used to be a television programme called, "Never Mind the Quality, Feel the Width". In many ways, this is what has happened to broadcasting in the past decade. I am not against change, but against change that loses some of the essential ingredients of what we value most in the broadcasting sector. There is now less factual programming, especially on developing countries. The number of hours of serious documentaries on ITV has almost halved to about 18 hours a year. Budgets for these programmes have consequently been reduced. Despite criticism from the Independent Television Commission, ITV has failed to increase its documentary output. To be even-handed, I shall mention the BBC, which has pared its documentary schedule and there is a risk that its proposals for new digital services could move programmes from BBC 1 and 2 to digital channels ahead of the time when most of the population can access them.

There is much for Ofcom to do on behalf of both audiences and those broadcasters who understand the importance of quality programming. Of course broadcasting must entertain, but in a vibrant democracy it has a duty to inform, educate and activate the public.

I am aware that the Bill is about the regulator rather than the detail of the regulation, but as the Minister issued the invitation, I thought that I might as well take the opportunity to offer a few words. In setting up Ofcom, we need to consider the place where it may be. As digital and other technology expands the number of channels, it is important that there is real choice and variety. I believe that that will be put at risk unless public service broadcasting regulations remain.

The point is well made by Public Voice, which is a voluntary sector network that supports public service broadcasting. It wants Ofcom to ensure that in the bid for audience share, important public service broadcasting obligations are fully and properly met.

Indeed, as the number of channels expands, it is my view that if there is to be real choice and variety, public service broadcasting becomes more important. More choice is less choice if it is a choice of more of the same. I should like the Minister to consider the call of Public Voice to expand the membership of Ofcom--the noble Baroness, Lady Howe, referred to this too--from the proposed number of three to six people to between six and 12, so that a wider range of public interests can be reflected in the membership.

I endorse the suggestion from Public Voice that there should be a consumer committee, or citizens' jury to help Ofcom to assess performance against promise on public service broadcasting obligations by each broadcaster. That would enable and encourage real hands-on involvement by the public and give a spur to broadcasters.

I welcome the Government's stated intention that Ofcom will have powers to strengthen regional production in both TV and radio to give continuing voice to our important regions and the countries which make up the United Kingdom. I hope that the Minister will urgently look into disturbing reports that some ITV franchise holders want to halve the minimum level of regional programming to eight hours a week from next year. That comes only six months after the completion of the renewal of the last round of ITV franchises. If that is allowed to happen, it will severely damage one of ITV's most distinctive features. I hope that the Minister will also repeat an earlier pledge to retain Channel 4 as a non-profit-making corporation.

I support the idea of the UK as a world leader in communications because it helps our democracy, economy and jobs. I hope that this Bill and the communications Bill which follows will maintain real choice and diversity, increase those for radio and have cross-media ownership rules which protect the public from monopoly abuse.

Photo of Lord Baker of Dorking Lord Baker of Dorking Conservative 7:29 pm, 15th October 2001

My Lords, perhaps I may say what a pleasure it is to speak after the noble Lord, Lord Corbett, and congratulate him on his maiden speech. The last time I heard him speak was in the House of Commons when he was Robin and I was Kenneth. He served for some 23 years as a very distinguished senior Back-Bencher and a spokesman on the matters that he has just discussed. He was very respected for his views and he was also chairman of the Home Affairs Select Committee in the House of Commons. I am sure that he will speak a great deal in this House on these matters. However, I tell the Whips that he is not good whipping fodder. He is independent minded. He will always appear on "Today" or "Newsnight" when an independent voice is heard. I hope that that spirit will continue. I note from Who's Who that his recreation is pottering, so he has come to the right place.

It was a pleasure to hear the maiden speech of the noble Baroness, Lady Howe. I have known the noble Baroness for over 40 years. Her contribution to public life in that time has been quite outstanding and unique. The work that she has done to promote the work, the cause and the role of women in our society has been impressive and effective. I am delighted that she is in this House--on some Benches anyway. In a moment I shall strongly support the view she expressed.

I express an interest in that I am the chairman of two companies, one of which provides Internet services to small companies and one of which also provides services to mobile phone users. However, nothing I shall say will have any effect upon the activities of those businesses. What is perhaps more important is that in the 1980s as I was the Minister responsible for privatising BT and Cable and Wireless, I had to set up Oftel. I had to invent Oftel and appoint the first director general. Later in my ministerial career I was responsible for all the other bodies that will be put into Ofcom. The spectrum agency did not exist in those times but I was directly responsible for spectrum allocations. Therefore, I have some experience of the complexity of what is proposed by the Government.

The way the Government are handling the matter is rather strange with a White Paper and then a paving Bill. The Minister said that tonight she would not give us any details of her thoughts and the Government's ideas as the Government wanted to listen and to collect the voices. I suppose that this matter could be dignified as a great public debate. However, on the other hand it could be described as indicative of a government who do not really know what they want in various key areas and decide to follow the good old process of grope, fumble and stumble. The French, as usual, have a word for this: Systeme D. When chaos is about to overwhelm you and you do not know what will happen or what to do, you employ Systeme D. "D" stands for debrouillard. It means, basically, to grope yourself out of the fog. That is the process in which the Government are engaged in the consultation process. What is missing from the White Paper is any intellectual discussion about the need, scope and the consequences of regulation both as regards telecommunications and the broadcasting industries and an assessment of whether the regulatory process which presently exists achieves, or will continue to achieve, the objects that it was supposed to achieve.

The body we are setting up, Ofcom, is rather a strange body because three of its constituent parts are basically concerned with economic matters. Oftel is almost solely concerned with economic matters as a price regulator. The Radiocommunications Agency is largely concerned with economic matters. The Radio Authority has an interest in content but is again very much concerned with economic matters. Those are the economic considerations. On the other side there are the content bodies: the ITC, which is primarily concerned with content, and the Broadcasting Standards Commission, which is concerned with taste, decency, privacy and other matters of that kind. It is rather a two-headed beast, a kind of push me, pull me. Like any two-headed beast, it answers to two voices. It answers to the culture Secretary and to the industry Secretary. Therefore, there will be a huge number of turf wars as that is the very nature of these areas. Just because the industries are converging we should not believe that the interests of those departments will converge.

Behind it all an even more important body in many respects is the OFT, which has to decide crucial matters of competition as regards amalgamations in the broadcasting industry and the television industry and cross-media matters. The regulator is, of course, an independent body. Ofcom will be independent. It will not be accountable to a Minister. Regulators are not accountable to Ministers. Ministers speak on their behalf but regulators make their own decisions and have to defend them. That is an important consideration.

I touch upon the economic regulation, which I consider one of the most important matters. I shall discuss broadcasting later. Is there a case for economic regulation of telecommunications and of broadcasts on the Internet? The answer is yes. There was, and is still, a case but one hopes that one will move to a situation where regulation will largely fall away. When I set up Oftel in the 1980s it was important to have a body that could cope with the overriding monopoly of BT. As we were privatising BT, the policy was to set up a competitor, Mercury. The role of the first director general, Professor Carsberg, was to ensure that that survived against the pressure of a monopolist. The pressure of a monopolist is almost overwhelming. It is difficult to prize the sticky fingers of the monopolist off the monopoly. That was the contribution that Professor Carsberg made. In 1990 we set up Mercury and it established a market share of nearly 20 per cent in seven years under a policy of duopoly.

In 1990 we gave the cable companies power to carry telephony as well as entertainment. That was a real convergence and we led the world. Virtually every other country has now followed our lead. That required a different type of regulation. The second Oftel regulator, Don Cruickshank, ensured that the cable companies could survive the pressures exerted by BT. It all comes down to the interconnect arrangements. That may seem technical but that process has created one of the greatest growth industries in our country. The cable industry and the other telecommunications operators were probably the biggest investors of cash in our country in the 1990s. That matter requires a form of regulation but the nature of regulation changes. The first regulator had to be concerned very much with international telephone calls as they were considered to constitute a racket. The present regulator does not have to control international telephone calls at all. He barely has to control the prices charged by BT. He is now much more concerned--the present regulator, David Edmonds, is a distinguished regulator--to ensure that BT does not stop unbundling in ADSL and also that the mobile operators do not "rip off" the public. If you look at your telephone bill, you will probably find that when you use your telephone to phone a mobile phone, that is the one item that sticks out enormously in the bill. That item may cost £1 or £2. It is cheaper to phone Australia. That is why two or three weeks ago David Edmonds decided to regulate that area and to reduce the prices of calls between mobiles and fixed link phones.

That is the kind of work that Ofcom will spend most of its time doing. That is what the staff will be involved with and where the concentration of numbers will be found. That is economic regulation. The same applies to the Radiocommunications Agency that is to determine matters concerning the spectrum. That is a big business; over a quarter of a million licences of one kind or another must be policed. I assure your Lordships that the regulation of telecommunications is not only complicated but is also a lawyer rich area and an area where lawyers become rich. How can we ensure competition? What is the role of Ofcom and the OFT? For example, at the weekend I read that BT, Carlton and Granada may combine to form a TV digital platform. That is an interesting idea which I had not heard of before. That has substantial competitive considerations as it would bring together telecommunications and broadcasting. However, the cable companies bring together telecommunications and broadcasting. Therefore, who will decide whether that is given approval? Is that a matter for Ofcom or for a Minister? Will it be reported to the OFT? Those are the kind of questions which the Government will have to answer before they produce their Bill.

I turn to content. Most of the speeches tonight have concerned content on the broadcasting side of Ofcom. Here, one is concerned with the protection of children and vulnerable persons, the prevention of crime and disorder, the balanced presentation of news and current affairs and the wide range of programming and plurality of expression that make up public service broadcasting, which the noble Lords, Lord Corbett and Lord Bragg, touched on.

If that is to be done, surely the BBC must be included. I have a word of advice for Ministers. All three Labour Peers who have spoken so far in the debate have said that the BBC should be included. I am sure that the Government will be able to carry anything through the Commons with their large majority, but I would take a bet that it would be difficult to exclude the BBC from Ofcom when the debates come up in this House. I may be proved wrong, but I would be prepared to take a bet. I see two Labour Peers already nodding. The Whips had better note that. The Government should recognise that they have probably lost that one already and move on.

The noble Baroness, Lady Howe, asked who would deal with content considerations. Who will decide the cross-media ownership rules? In my time in government, those rules were protected fiercely by Ministers. In his day, Harold Wilson decided the rules himself as Prime Minister. What will happen? Will that responsibility be moved to Ofcom or will Ministers still have a say on cross-media ownership rules? Will Ministers determine the broad parameters? The rules will have to change all the time because the structure of media ownership is changing. Will a Minister be asked to approve plans by the BBC to establish new channels? I read in the press that the BBC wishes to establish BBC3 and BBC4. That may be an admirable thing to do, but it must have competitive implications for other companies. The BBC intends to produce a national curriculum resource that will be available to all schoolchildren. That is an attractive idea, but there are any number of companies--in which I have no interest--that already provide such resources on a commercial basis to schools. Who will decide on that? Will it be Ofcom? Will it be a Minister? Will the OFT be involved? I hope that the Government will address such considerations while they are gathering voices.

If Ofcom polices the quality and content of the ITV companies, what sanctions will exist to ensure compliance? The original ITC had sanctions to ensure compliance, but they have rather faded. Will there be any sanctions and how will they operate? Will that be done with the approval of Ministers?

As the noble Lord, Lord Corbett, asked, what sanctions exist if the ITV companies decide to reduce their regional content? Will that be Ofcom's responsibility or the responsibility of a Minister? The Government obviously do not know. I understand that. At the moment it is the job of the ITC, but will that continue? How important will the regional content be? What percentage will it constitute and who will decide on it? Those are interesting questions for the OFT.

The noble Baroness, Lady Howe, talked about taste and decency. The problem for Ofcom is that taste, decency, content and privacy are the issues that the public will mainly be interested in. They will not be interested in Oftel and the spectrum, although they might be slightly interested in the work of the Radio Authority. Those issues of taste and decency are what will turn the public on. If the head of Ofcom has to appear on television every other night, it will not be to defend telecommunications regulation, but to justify, defend or condemn something that has appeared that offends public taste and decency. That will be the main role of the chairperson of Ofcom.

The management consultants who were appointed to try to pull together the mechanics of making the process happen produced a report last week. It said:

"We took as our starting point the White Paper, and our understanding that Ofcom's regulatory objectives are now seen as falling under five headings".

One of those five headings is:

"Protecting the interests of citizens, by maintaining generally accepted standards to protect the public from offensive and harmful broadcast content and ensuring protection of fairness and privacy".

The word "privacy" is vital in this context. As I understand it, Ofcom will be able to examine complaints by ordinary citizens who believe that their privacy has been unfairly intruded upon by a television programme. That is interesting, because Ofcom will operate under a code. Will it be the same code as that used by the Press Complaints Commission, administered by the noble Lord, Lord Wakeham? The issues are very similar, but the media are rather different. Will there be different sanctions? If a citizen has been traduced by a television programme, that person could be punished for life. What remedy does he have? What redress for that grievance is envisaged by Ofcom or the Government? Will there be compensation for that person? Will Ofcom be given the power to say that a particular programme must not go out or be repeated?

The Government are moving into an area of tremendous complexity and great public concern. I hope that in the next few weeks we will get some answers to the questions that I have raised tonight. The issues that I have touched on are so different from economic regulation that there is a case for having two bodies, but I suspect that we have lost that argument, because the flood was convergence. We are dealing with two separate areas of human decision making and human activity. The Government should have the humility to recognise that.

I had hoped to listen to the whole of the debate, but I am going to a dinner tonight where I am expected to say a few words, so I may not be able to stay right to the end because of the time taken by the Statements earlier. However, I shall read everything that has been said, particularly the Minister's reply.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour 7:47 pm, 15th October 2001

My Lords, I echo the tributes paid by the noble Lord, Lord Baker, to the noble Baroness, Lady Howe, and the noble Lord, Lord Corbett, on their maiden speeches. Both spoke with immense experience as, respectively, a former chair of the Broadcasting Standards Commission and an opposition spokesman on broadcasting. That shone through their speeches. We all look forward to their contributions at the further stages of this Bill and when the communications Bill proper comes before your Lordships' House, which we anticipate will be in the next Session.

At first sight it may seem rather strange to bring forward legislation to establish the "office of communications" before we have even seen the Bill specifying what the functions of a future Ofcom will be. Further scrutiny does not totally dispel that impression. I fully understand the need for an orderly transition from the five current bodies or offices regulating the communications sector to a single, unified regulator for the entire sector, but unless that body is going to do nothing over the next year and a half or so until the communications Bill proper is passed--we are promised a draft of it in the spring--there must be a real danger that any actions that it takes or appointments that it makes may not accurately anticipate the final shape of legislation, which we have not seen in draft form yet, let alone discussed or amended.

To give but one example, it is by no means impossible that the Government may find themselves persuaded to bring the BBC more fully under Ofcom. If that were to happen, surely it would affect the weight given to the various functions within Ofcom, and possibly the personnel appointed to oversee their discharge.

The final draft of the new communications Bill is clearly not ready, otherwise it could have been introduced in the current Session. There is no disgrace in having second thoughts, particularly in a sector such as communications, which is changing so rapidly. The technical possibilities of the communications landscape and, perhaps even more importantly, the economic resources to exploit them effectively, are changing all the time. Just think back to the spectrum options for the third generation of mobile telephony. The Chancellor certainly sold at the top of the market. How many of the bidding companies today would bid even half of what they committed themselves to less than two years ago, and, in any event, would the banks let them? Dates for digital switchover in television are being extended almost every month. The slump in advertising revenues is giving the commercial sector in broadcasting quite severe problems, perhaps thereby enhancing the case for further consolidation.

I hope that the Government are not hung up on delivering an up-and-running Ofcom by 2003 simply because the election manifesto stated that they would. I am happy to give them the benefit of the doubt, and perhaps I may put forward what I hope is a helpful compromise solution. It would enable progress to be made before a communications Bill is passed but would delay the setting up of "pre-Ofcom" until we have had the Second Reading of the substantive communications Bill.

In opening, the Minister indicated that the Government do not intend to appoint the chair of Ofcom before the spring of 2002 at the earliest. I understand from Statements in another place that the rest of the board of Ofcom will not be appointed until later in the summer. As British Summer Time ends in October, I interpret that to be some time, but not long, before the next Session of Parliament. The insertion of a sunrise clause along the lines that I have suggested would delay matters only for a couple of months or so.

I very much welcome the course of action that the Government are taking in this matter. So far as I am concerned, the more pre-legislative scrutiny that we have, the better. I believe that the publication of the draft Bill in the spring will be the most effective public consultation that we can have. Consultation is always better when one talks about specifics rather than generalities. It will only be when people see the legislation as it impinges on them that they will become active and start to lobby properly. If we have consultation, together with the Second Reading of the communications Bill--although the legislation will not have been passed and will still be capable of amendment--the Government will have a very good idea of what we all want the new Ofcom to be like. If we were to delay the setting up of Ofcom until then, I believe that that would provide several advantages.

Establishing "pre-Ofcom" before then could be unwise. Until the preparations for the Queen's Speech are finalised next summer, there can be no guarantee that there will be a communications Bill in the next Session of Parliament. We could be establishing a body with planning and administrative powers before there is anything to plan or administer. If there is too long a gap between the setting up of a "pre-Ofcom" and the substantive debate on the future communications Bill, there is also a grave danger that "pre-Ofcom" may create a predisposition to pursue a course of action other than that which Parliament may finally decide to be desirable.

It is important that Ofcom works to a clear brief from the outset. One cannot make appointments or, indeed, determine structures in isolation from that brief. There is also a very real danger that in the next 18 months or so before the passage of the communications Bill a prematurely created Ofcom could start to drain authority and attention from the existing regulators, who will still remain in control of the various sectors.

One issue which I gather will be a major talking point in the Bill is media ownership. I believe that we have always been a little too uptight in this country about media ownership to the extent that, if diversity of output is an objective of public policy, our current rules on media ownership perhaps militate against it. If one individual owns three television or radio stations or three newspapers, self-interest and public interest coincide. He will want to make them different because it will be in his own interests to do so. If, on the other hand, one compels them to be held separately, they will end up competing for the same market place. That is against the public interest.

I regard content regulation to be a far surer guarantee of public interest than ownership regulations. In that connection, one heard reports that the Government were prepared to countenance a single ITV. If that is the case in television, they should take a much more liberal outlook towards radio as well. In that, I declare an interest as chairman of Scottish Radio Holdings.

It is perhaps inevitable that our debate today strays into areas which will probably be debated more fully when we come to deal with the communications Bill. However, it is precisely because these matters impinge directly on the nature, structure and composition of Ofcom itself that they must be referred to today, even if only in broad outline.

In respect of the BBC, I hope that I shall be regarded as its friend. I am certainly one of its staunchest admirers. However, I must say that I cannot see any logical reason--the noble Lord, Lord Baker, can now add another Labour Peer to his list--why the BBC should be left outwith the scope of Ofcom. It seems silly to leave the UK's largest broadcaster at least partially outwith the new system. I also believe that in the long run that will be to the disadvantage of the BBC in that it will leave it in an increasingly anomalous regulatory position.

By contrast, I should like to see the BBC as a benchmark for quality throughout the system but very much part of the system. In that, I advise the Government to reread the White Paper on broadcasting published by a Labour government in 1978. The White Paper drew attention to precisely that anomalous situation with regard to the BBC, which is judge and jury in its own case. I do not consider that to be in the BBC's interests. Such a situation is in contrast with that of the commercial sector, which is subject to regulation by an external body. Allocation of frequencies and spectrum for new services can be made only on the basis of full knowledge of the plans, performance and promises of those involved. Having a major player partially outwith the system does not make much sense.

I also hope that we shall not allow technology to be the sole determinant of what we do. Of course, technology widens the range of choices open to us, but it should never determine the options that we choose. Those must be determined by listener tastes and the availability of resources, whether financial or human, to deliver them. One should reread the arguments in favour of the introduction of cable back in the 1980s and consider what has happened.

In particular, I hope that Ofcom will have regard to the overall health of the system. The fact that new technology permits 200, 400 or 2,000 television channels does not mean that we should have them or want them. Therefore, I hope that Ofcom will have regard to the health of the industry as a whole and will consider the impact of licensing new services before it acts on them.

Too often we regard regulation in a negative sense as preventing people from doing things. However, quite clearly in the case of the roll-out of broadband, Ofcom must have a proactive and encouraging role if we are not to continue with the present unhappy situation whereby only 100,000 UK households have a broadband connection.

Like other noble Lords, I have been deluged with lobbying material by those involved in the provision of broadband. I honestly do not know who is to blame for the current situation. However, what appears to be the case is that, while billions of pounds have been spent laying cable networks between cities and between countries, very little has been spent on the last local mile, which is absolutely necessary if the individual consumer is to participate. Indeed, doubts have been raised as to whether broadband would be viable outwith urban areas. Clearly Ofcom has a crucial role not only in regulating but in stimulating universal access if that is perceived to be a government policy objective.

Although I shall seek the introduction of a sunrise clause along the lines that I have suggested, and although I am pretty well agnostic as to the desirability of creating Ofcom in the form proposed, I am happy to support the Government's broad intentions. However, I warn the House that the creation of Ofcom in the form proposed will almost certainly involve terms and conditions for staff representing the highest common factor of those presently enjoyed by staff in each of the five regulatory bodies. It would not surprise me at all if this single, streamlined regulator did not end up costing us more than five separate ones.

However, it is good to know that the five separate regulators are working closely together. Reference has already been made to the document that they produced, scoping the work required to create the full Ofcom. As a result of such meetings and work, they are quite confident that they know what needs to be done in management terms. They are also confident that they can achieve it within the time-scale that the Government have outlined.

Photo of The Bishop of Wakefield The Bishop of Wakefield Bishop 7:59 pm, 15th October 2001

My Lords, I begin by expressing my gratitude to the Government for the initiative taken earlier this year by the Department for Culture, Media and Sport. It convened a meeting of senior representatives of Christian denominations and other faiths to discuss public service broadcasting issues relating to the White Paper and not least to this proposal. The former Minister responsible for broadcasting indicated at the time that she would convene a further meeting. I very much hope that her successor will be encouraged to do that as the communications legislation progresses.

Religious leaders of all faiths have a particular interest in any new settlement or rearrangement relating to public service broadcasting and especially to the way in which it is regulated. It was our unanimous view across the faiths at the meeting to which I have referred that it is important for the traditions that we have already established in public service broadcasting in this country to continue to be supported under the new regulatory regime and for the British public to continue to have access to quality programmes on a wide range of subjects. Ofcom's proposed responsibility in those areas appears to be reassuring, but I am still not clear--forgive me if I am being obtuse about this--exactly how it will determine whether broadcasters are meeting their public service obligations. Is the process through which Ofcom's decisions will be received sufficiently straightforward? Will there be a straightforward process by which those decisions can, if necessary, be challenged? The noble Lord, Lord Dubs, has already raised that problem.

There is much change taking place across the whole range of communications. As the noble Viscount, Lord Falkland, mentioned, there are complicated matters to be teased out about the nature and regulation of public service broadcasting in a digital age. With so much in the pipeline it would be easy for a heritage part of broadcasting in one area or another to be destroyed; its subsequent re-creation would be much more difficult.

That consideration applies especially in relation to religious broadcasting, which has been a pillar of the public broadcasting scene since the inception of broadcasting. In the UK it has led to many memorable broadcasting achievements. Many programmes have been creative, informative and entertaining and others have reflected the mood of the nation at key times of sorrow or of joy.

Can the Minister give an assurance that the importance of religion, its place in our multicultural society and the way in which that is properly reflected in our traditions of public service broadcasting will be well understood by the new regulatory body? How does she envisage Ofcom fulfilling its role in that area?

The noble Lord, Lord Corbett, discussed, in his excellent maiden speech--I offer him my congratulations--the danger that some serious programmes could be hived off to the digital channels. If that happened to religious broadcasting, it would be a betrayal of our public service broadcasting traditions. Would it not be appropriate for one of Ofcom's proposed advisory committees to be designated for that important role in public service broadcasting or for there to be some other properly agreed means of regular consultation between Ofcom and faith representatives?

I turn, as many other noble Lords have done, to the credibility of Ofcom in relation to the concern that has been frequently expressed by many people in this country, and it was eloquently articulated tonight by the noble Baroness, Lady Howe, to whom I add my congratulations on an excellent maiden speech. It involves the issue of content and of taste and decency. I am no puritan; indeed, Wakefield was known in medieval times as the merry city and on Friday and Saturday nights it still is. I detect among the cross-section of the public whom I meet in my ministry--it is way beyond Church boundaries--a perception that broadcasters and regulators too often and too casually dismiss genuine complaints that are made to them about offensive material that is broadcast, especially on television.

Will the public have reason to be confident that Ofcom will have sufficient clout to deal with such complaints quickly, effectively and fairly? On what basis will it define the boundaries of taste and decency? As several noble Lords have rightly said tonight, generation gaps and different cultural backgrounds make such boundaries very difficult to define. What advice will Ofcom seek in those sensitive areas and from where will it seek it?

I look forward to our future debates on the communications Bill. We shall doubtless go into this matter in much more detail in future but, if the BBC is not included in the arrangements, can the Minister explain why not? I was present and had the privilege of taking part in an earlier debate on the communications legislation in this House. I recall clearly that noble Lord after noble Lord spoke about the need for the BBC to be within the framework of Ofcom. I seem to remember on that night that the Government responded with the advice that in future debates we would find that many people would say, "The BBC should be excluded". I wait to hear such speeches tonight.

Tonight we are putting in place the mechanics before we have addressed the substance and the principle. I understand why the Government wish to adopt that approach and I hope to be reassured by the Minister that those matters will come before the House and that they will not be hurried. Speaking from these Benches, I hope that she can address my concerns and reassure me about one aspect of public service broadcasting; namely, religious broadcasting.

Photo of Lord Borrie Lord Borrie Labour 8:07 pm, 15th October 2001

My Lords, like several other noble Lords, I find it rather difficult to assess whether the form and structure of Ofcom, which is provided for in this paving Bill, are appropriate without knowing in any detail what its purposes and functions will be. The Bill requires Parliament to agree to the creation of a statutory body and to indicate its approval of a certain membership and of a relationship with existing regulators, but it has to do so without being fully aware of the ultimate role that Ofcom will have, perhaps for many years, in the world of communications.

I must declare an interest as the chairman of the Advertising Standards Authority, which supervises the self-regulatory system that obtains in non-broadcast advertising. It is because of that interest that I would like to know, for example, whether Ofcom will continue the Independent Television Commission's highly prescriptive regulation of the content of television advertising, or whether we will move towards a so-called co-regulatory regime, which is contemplated in the White Paper and in relation to which some form of self-regulation would be extended across all media platforms, including broadcasting.

I am reminded of the 19th-century story in which the Archbishop of Canterbury was asked, in the course of a debate on some ecclesiastical Bill, to explain what an archdeacon was. He replied, "An archdeacon is one who discharges archidiaconal functions". "So, what are archdiaconal functions?" The reply came, "They are the functions performed by an archdeacon".

My first point is that we must press for the earliest possible publication of the draft communications Bill. Like the noble Baroness, Lady Anelay, who was the first to speak from the Conservative Benches, I hope that next year, spring will come early and that we shall see it as early as possible. We need to have a better idea of precisely what Ofcom will do and how it will be expected to work. We do not expect full answers from Ministers tonight--we have been told that we cannot have them tonight--but can we have them as soon as possible? Without full answers from Ministers, we shall have to wait for the draft communications Bill for a number of answers. I suppose that we shall need to await the debates on the BBC's Royal Charter to learn the fate of the board of governors. To whatever extent, Ofcom has a BBC involvement.

I happened to be in Italy when the World Trade Centre was attacked by terrorists. Naturally, I watched a good deal of television in my hotel. I have to say that BBC World Service coverage was superb and strikingly superior to that of CNN. I hold no brief for the corporation. I shall reserve judgment about the role of Ofcom until I see what is proposed. However, the strength of the BBC World Service, the intelligence of BBC news correspondents, the welcome development of BBC Online all stem from an excellent public service purpose of the BBC, and not from the strictures of any regulator.

Indeed, a regulator such as Ofcom may be able to prevent bad programmes, but I doubt that it will ever be able to call forth good programmes. Nor will Ofcom be the answer to the menace of competitive television scheduling between BBC1 and ITV. I share the concern recently expressed by the former Secretary of State for Culture, Media and Sport, Chris Smith, about BBC1 no longer providing a broad mix of programmes of wide variety but always of high quality. Chris Smith reminds us that the raison d'etre of the BBC is to act as a bench-mark of quality against which the rest of broadcasting must measure itself; in the famous phrase of Huw Wheldon, to make the good popular and the popular good.

One of the less attractive features of the modern BBC is the urge to compete with other television channels for the biggest audience figures. I am all in favour of competition; it is practically my middle name. Competition between rivals is normally the way in which consumer interest is best served in terms of value for money and efficient service. However, the ratings war is reducing consumer choice.

Both the BBC and ITV now give us their late night news bulletins at the same time, 10 p.m. I understand that total audience for news in peak time has, rather surprisingly, increased following those changes, but the fact remains that those who do not want any news at 10 p.m. have fewer alternative programmes from which to choose, and those who would like to have a news bulletin at 9 p.m. no longer have that choice on the main terrestrial channels.

Why was it that the BBC began to schedule an extra episode of "EastEnders"--which, as noble Lords may know, has 11 million viewers--at 8 p.m. on Fridays? It was because that is the time when ITV broadcasts "Coronation Street", which also has about 11 million viewers. The public interest is likely to be better served by the complementarity of programmes available at any one time rather than by several channels showing the same kind of programme at the same time: the news head to head with the news and one popular soap head to head with another. I hope that Ofcom will continue to insist on clear public service obligations from all their licensees and that the governors of the BBC will remember their obligations under the charter to ensure distinctive programming.

We are told that Ofcom will be a "light touch regulator". If I were in government I suppose I would use that phrase a lot. It does not mean anything in particular but sounds rather good. If Ofcom is to be a light touch regulator, the structure proposed in this paving Bill of an authority with a single board of executive and non-executive directors may well be appropriate. However, can we be sure that regulation of something so powerful in our democratic society as communications will really be light touch unless we ensure legislatively that it has to be so?

The most recent experience of the reaction of Ministers to the Channel 4 "Brass Eye" satire programme was not so much light touch as heavy handed or, as was put to me on one occasion, "not so much light touch as light the touchpaper and retire to a safe distance". One thinks back to earlier interventions by other governments. Today's "Brass Eye" affair was little different from yesterday's "Real Lives" controversy.

Will an Ofcom constituted as in the Bill be sufficiently independent of government? Will the chairman, appointed by Ministers, be executive or non-executive? Will he or she have security of tenure for, say, five years? The need for the right constitutional structure is all the more important when one considers that as presently planned, Ofcom will be a single regulator of both the economics of the communications business and of content.

I mention briefly the regulation of advertising. In the new world of digital communications it is advertising which finances much of what we are discussing. Soap operas were originally a vehicle for advertising household soap. The White Paper was clear that the system of regulation of non-broadcast advertising run by the Advertising Standards Authority, and now in its 40th year, is a success and should be retained. The White Paper confirmed the ASA's role with regard to advertising in the cinema, on video and on the Internet. That role should continue. The White Paper proposed that Ofcom is to have the principal responsibility for regulating advertising in the broadcast media. However, it also raised the possibility of Ofcom discharging that responsibility through co-regulatory mechanisms.

I hope that the communications Bill will enshrine that possibility in legislation enabling Ofcom at some time in the future to recognise a self-regulatory system of some kind for broadcast advertising. I hope that the industry players will act on that prompt and begin to work out how such a regime could operate. That seems to accord with the Better Regulation Task Force, chaired by my noble friend Lord Haskins, which recently concluded that self-regulation may be a more flexible, cheaper and more effective alternative to statutory regulation. It may also be the only realistic way of maintaining standards across multiplying channels and converging media. It would also accord with the references frequently made by the Government to light touch regulation.

Photo of Lord Holme of Cheltenham Lord Holme of Cheltenham Liberal Democrat 8:19 pm, 15th October 2001

My Lords, in such a long debate with so many expert speakers, we all have a duty to be brief. However, after the excellent archdiaconal joke made by the noble Lord, Lord Borrie, I am reminded of the most penetrating remark of Screaming Lord Sutch; that is, "Why is there only one Monopolies Commission?"

I should declare an interest, like other noble Lords, as past deputy chairman of the ITC and chairman of the Broadcasting Standards Commission. In that latter context perhaps I may say, with all deference to the noble Lord, Lord Corbett, and two excellent maiden speeches this evening, how particularly I enjoyed the characteristic trenchancy and clarity of the maiden speech given by the noble Baroness, Lady Howe. I look forward to hearing from her often in this House. I also declare an interest as an advisory director of NTL, which accounts for 60 per cent of the UK cable connection.

I believe that something like Ofcom is desirable and inevitable--so desirable and inevitable that if we were not planning it we should have to invent it. That is because convergence is coming, and in some respects has already arrived, and because the broadband revolution is of the utmost importance to our economic future and to our education and our society as a whole.

I say "something like Ofcom" because at the moment it seems to me--and other noble Lords have made this point in different ways--that Ofcom is rather like a gigantic Rorschach ink blot test on to which we project our hopes and expectations for the future: hopes such as a positive climate for infrastructure investment or a leading role for UK plc at the cutting edge of ITC; expectations like the elimination of duplication and double jeopardy; expectations of cost efficiencies, which I fear may be belied; expectations of greater transparency, accountability, proportionality and consistency; all the good things which, as the noble Lord, Lord Borrie, reminded us, the Better Regulation Task Force set out as desirable for regulation. The hopes may or may not prove to be justified, and the expectations on the whole should end up in operational guidelines, but my plea at this point is to keep the main objective of Ofcom simple and clear.

There should have been a greater clarity of purpose in the White Paper, in which several parallel good points were set out for our inspection. Like other noble Lords, I feel that we have put the cart before the horse. I fear that multiple objectives laid on the new super regulator may result in it falling between two stools. I favour a clear, primary objective for Ofcom, qualified or limited by other objectives: for instance, the promotion of the interests of consumers; that is, viewers, listeners and users, through competition, while sustaining public service broadcasting and acceptable community standards. No doubt the Government will be able to do better than that, but a sense of the priority of the new body is sorely lacking. In other words, in my contention, competition should be explicitly identified as the main driver for consumer satisfaction, subject--and importantly so in this country--to much valued public goods continuing to be secured.

The definition that I have just tried out on your Lordship raises two questions, one about competition, the other about the BBC. I deal first with competition. If we are to have a regulator driven primarily by competition, it is essential to have good market definitions so that competition and market access regulation can work properly. Convergence has made a lot of our traditional thinking about cross-media ownership something of a non-issue, and in that respect I agree with other noble Lords. If teenagers can watch music videos on the tiny screens of their mobile phones between sending text messages to their friends and calling up news headlines, all 1950s ideas of separate boxes and the danger of crossing over between them become obsolete. It is quite apparent that the real economic issue is not cross-media ownership but the total share of voice in the UK marketplace and how to maintain a decent plurality of provision for content and advertising in the UK and the EU, particularly given the formidable weight of the US media industry.

It is a very great shame that the Government have felt unable to address the issue of media ownership in this context at this time. Without wanting to be in any way cynical in your Lordships' House, if it is not addressed in the first two years following an election, it will not be addressed in the last two years, for obvious electoral reasons. I therefore wish the Government would nerve themselves up and, in the context of the Bill, also address the question of ownership.

I turn to the issue of the BBC. Most of your Lordships who have spoken about the BBC have said that you wish it were in Ofcom. I remember that when the BBC was in peril in the 1980s it was quite simple. You were either on the side of the BBC or you were against it, and I was fairly uncritically on the side of the BBC. But I think we now have to acknowledge that the BBC is a fixed point in the ecology of broadcasting and is that important benchmark to us. I wonder whether we could ask for a much crisper definition of what public service broadcasting represents. We do not live in a society in which reference to the past is an adequate justification for the future. The BBC's glorious past does not adequately define the future that the taxpayers expect of it.

I believe that the BBC has made very great and commendable strides in its own accountability, to which we should pay tribute. It is impressive and is an example to other broadcasters. I would say that Channel 4 follows and other broadcasters are still some way behind the BBC. But the moment one accepts, as the BBC has, that you should be accountable, the question is: accountable for exactly what responsibilities? That is the black hole.

I am reminded irresistibly of that great work of literature with which I am sure your Lordships are familiar, The Young Visitors, by Daisy Ashford, in which the heroine, a rather precocious, small girl asks, I think of Mr Salteena, "What is that man for?". I feel that we should ask the same question of Mr Dyke--what is this man for, what is the BBC for?--because we pay his salary.

What I am obviously asking is, what is public service broadcasting? I do not think it is enough for public service broadcasting to be whatever the BBC's management want to do, in the same way as it used to be said--and I hope that this reference does not embarrass noble Lords opposite, because it is slightly old-fashioned--that socialism is what a Labour government do. I think it is an inadequate definition of public service broadcasting.

There has been some very lively debate, in which my party has been much involved, which probably comes down in favour of keeping the BBC out of Ofcom. Being a loyal party man, I do not want to comment on that but simply to say that, whether the BBC is in or out of Ofcom, or half in and half out, as the Government seem to propose, it is absolutely crucial that we have clarity about what is meant by public service broadcasting.

I should therefore like to ask the Minister how the Government propose to arrive at a clear definition of public service broadcasting, against which not only the BBC's current and future activities can be regularly tested but which, in an attenuated form, can be spelled out as part of the continuing responsibilities of Channels 3 and 4. Without that, we do not know whether we are getting what we pay for.

I know that some in the BBC are nervous of that sort of clarity, as they are nervous of being brought within Ofcom. I simply point out to them how much better it would be for the BBC to have public service goals, clearly agreed by Parliament, and to report annually how the BBC is achieving them, rather than to be subject to random political interference driven by various pressures and the recurrent fits of moral panic to which even the best governments seem prone.

With regard to Ofcom itself, rather late in my remarks, I was very much reassured by the Minister's assurances in the original debate on the White Paper that this would be a new organisation, fit for its purpose, set up ab initio, with structure and function analysis, not simply the sum of the existing regulators bolted together. It is a very important reassurance that we shall not have a cartel or market-sharing agreement between the existing regulators to carve up a new world of regulation between them.

I pay tribute to the five regulatory agencies, the Broadcasting Standards Commission, the ITC, Oftel, the Radio Authority and the Radio Communications Authority, for the way in which they have approached this, in not only quite rightly trying to keep skills and capacities in place at a very difficult and uncertain time for their employees, but also trying to imagine a different organisation for the future; and the Towers Perrin report is a step in the right direction.

However, there is great danger of confusion as regards pre-Ofcom looking forward, in particular with the leadership to Ofcom being announced in the relatively near future. I fear also the prospect of a chilling effect on the existing regulators from the existence of this potentially powerful shadow agency. In summing up, will the Minister say whether in six months or so--we are not sure what stage we shall have reached with the Bill by then--we can have a progress report on the introduction of Ofcom and its work and a reassurance that it does not interfere with or chill the work of the existing agencies?

Photo of Lord Lipsey Lord Lipsey Labour 8:31 pm, 15th October 2001

My Lords, I welcome the Bill--at least, I think I welcome the Bill. I welcome the fact that it means that when the big Bill comes it will not be a rushed piece of legislation. By putting a framework in place now--we did not do this with the Financial Services Authority, and it caused certain problems--we are giving ourselves time to get the detail right. But I only think that I welcome it because it matters terribly what we do with that time.

On the one hand, the Government could keep the process of refining their proposals tight to themselves. What will then happen is that the outcome will be determined by the clash between the great lobbying powers of the BBC on the one hand and of the commercial broadcasters on the other. Experience suggests that that will not lead to a satisfactory outcome.

On the other hand, we could have an open, efficient, effective and productive debate. The way to do that is to refer the draft Bill to a Joint Committee of both Houses, such as was successfully employed under the excellent chairmanship of the noble Lord, Lord Burns, in the case of the analogous Financial Services Bill. That proposal was put to the Government by the All-Party Media Group and it was supported by many noble Lords in the debate on communications initiated by my noble friend Lord Gordon of Strathblane on 28th February.

Therefore, I was sorry that despite earlier indications in the press the Government did not pledge such a committee. Indeed, we were told that the decision did not have to be made until the spring. The proposal has been about for a year already and the arguments will be no different in the spring. Are the Government going to get themselves into a position in which they will be forced by the will of this House--I believe that they will be--to concede reluctantly, apparently being dragged along, or will they take the initiative and for once put Parliament and its input first?

In, I think, welcoming the Bill, my future attitude towards it--and that of many noble Lords--will depend on the answer to that question. I choose my words carefully when I say that a decision to announce a Joint Committee now would greatly speed the passage of this Bill.

I want to address the rest of my remarks to the central issue which continues to arise in this debate as it did on 28th February; that is, the role of Ofcom relative to the BBC. I regret that the debate has created more heat than light. For ITV in particular and the commercial broadcasters in general, bringing the BBC under Ofcom has been a stick with which to beat the Beeb. It is part of their general campaign of denigration against the corporation and their attempts to insinuate that, because the BBC is not subject to the same regime of standards regulation as they are, its standards are lower. I do not believe that to be the case.

The BBC top brass has reacted--at least, before the change in chairman it did--very poorly. Instead of the calmness and rationality we should expect of the BBC, it has gone into defensive mode; and the BBC in defensive mode demonstrates an inimitable blend of arrogance and insecurity which makes many of us yearn to give it a bloody nose. Tempted though I am, I shall resist. Let us try to be dispassionate.

Two arguments are advanced for bringing the BBC into the purview of Ofcom. The first is that this would create a level playing field with the commercial broadcasters. When I hear the hackneyed, hideous phrase "level playing field"--and I was sorry to hear the great expert on the English language, the noble Lord, Lord Bragg, give it houseroom today--I reach for my journalist's blue pen. But at least I could make sense of it when it was first applied to competition between commercial companies. It makes no sense here, for we are talking about completely different kinds of outfits engaging in different kinds of activities. There cannot be a level playing field between a commercial broadcaster in the market-place and a public service licence-fee supported broadcaster. It makes as much sense as putting enormous effort into levelling a playing field so that there can be a match between one team playing football and another playing rugby. Therefore, I reject the level playing field argument and I hope never to let those words again pass my lips.

But there is another argument which has as much force and which we have heard today. It is the argument of accountability. Once upon a time when the good and the great ruled our land unchallenged, the accountability of the BBC might adequately have been protected by the board of governors, and the board of governors alone. I do not believe that that is acceptable today. Nor actually does it preserve the independence of the BBC because in practice a paradox arises. The only outfit outside the BBC which has any powers over it is the Secretary of State, an elected politician. He or she determines its charter, the level of its licence fee, what new channels it may launch and who chairs it. There is no accountability other than to a politician. I do not see why the BBC is so adamant that Ofcom should be kept at bay as a way of preserving its independence while apparently accepting that a party politician should have so much power over what it does.

Therefore, it seems to me that the case for a role for Ofcom vis-a-vis the BBC is a powerful and indeed irresistible one. But what in the cacophony of competing lobbies few people seem to have noticed is that the Government propose that it will have such a role. It will--just read the White Paper. It will have a role as commercial regulator of the BBC's commercial activities. It will monitor the BBC's adherence to what are called "tier two standards"; that is to say, clearly measurable performance indicators, such as adherence to independent production quotas, and on targets for regional output. It will advise the Secretary of State on new services. Now it is done on the say-so of a politician. Furthermore, Ofcom will be taking over the regulatory responsibilities of the Broadcastings Standards Commission, so admirably chaired by my noble friend Lord Dubs, which already has a duty to consider complaints against the BBC. Those are not negligible powers relative to the BBC which the Government propose to give to Ofcom.

At the same time, no one, not even Ofcom's strongest supporters, is proposing an end to the governors. They will continue to exist. The White Paper lists them as one of the bodies which would exist after its proposals are implemented, adding in a footnote--and it is a powerful and important footnote to which we shall give much attention--that they will have "modified responsibilities".

The governors' role needs reconsideration. We have that on the highest authority. Gavyn Davies--perhaps I may declare an interest through friendship even before the House's rules require it--is the new chairman of the BBC. He was also the chair of the panel on the future financing of the BBC on which I was lucky enough to sit. On page 146 of its report the panel concluded:

"In regulation more generally a certain tension between regulators and those they regulate is regarded is desirable, since their interests can diverge. It is not clear whether in the case of the BBC such a divergence of interests can become transparent and effective".

Shorn of the verbiage, that means that something must be done about the governors. Here we see the glimmering of a constructive solution to the impasse between the BBC and everyone else. I believe that in the Ofcom legislation, if not in this paving Bill--I have an open mind on this matter--we should provide for Ministers to give Ofcom such powers in relation to the BBC as they may, after due consideration, judge to be appropriate. The time to do that is in the context of charter review which looms. In view of the way that the legislation has dropped back, we shall be in the middle of charter review before we get the main Bill.

Therefore, the correct time to determine the future role of the governors and the relationship with Ofcom is when the charter is reviewed, and when the role of the governors is sorted out in the course of that review. If we get the Bill when we are told we shall get it, that may mean that the status quo will abide for a couple more years than would otherwise be the case. To me, that is a price that is well worth paying to get right the governance of a major national institution in the new world of broadcasting which is dawning on us so fast.

Photo of Lord Pilkington of Oxenford Lord Pilkington of Oxenford Conservative 8:41 pm, 15th October 2001

My Lords, I begin by congratulating the noble Baroness, Lady Howe, on her excellent maiden speech. She succeeded me as chairman of the amalgamated commission and carried through that difficult process with elegance and success. Although I did not always agree with her, I agreed with her speech.

I must also congratulate the noble Lord, Lord Corbett, who is not here. He once said that he wanted to sack me when my noble friend Lord Baker appointed me. He said that the first act of a Labour government elected in 1992 would be to get rid of Canon Pilkington. Fortunately, that event did not occur and his speech shows a generosity of spirit which he did not show at that time.

As a former chairman of the Broadcasting Complaints Commission I can talk only about content. I confess that I know little about economic regulation. I share the anxiety of my noble friend Lord Baker about combining economic regulation with the business of judging content. That said, as to content I welcome the Bill. During my four years with the Broadcasting Complaints Commission I found that there were too many regulatory bodies which could, and did, lead to confusion. During my time there were occasions when they arrived at different conclusions on the same complaint. That is both confusing to the public and makes a mockery of the whole system.

I believe that anyone who has dealt with regulatory bodies will agree that it is difficult for the general public, given the number of regulatory bodies, to know which one they should approach when they have problems in the broadcasting area. Canada has long had a unified system which has proved very successful. Therefore, Ofcom has a model abroad to which I believe we should give some attention.

That said, I should like to make two specific points which underline what many other noble Lords have said in this debate. I believe that these points should be considered when the communications Bill is brought before Parliament. First, my commission, which was amalgamated with the Broadcasting Standards Commission, considered the narrow area of unfairness and infringement of privacy. They were not cases that gained great publicity, but those complaints were by people or companies who felt that their personal lives or business reputation had been injured by a particular broadcast. In many cases they suffered great agony as a result of that situation.

I believe it is important to underline that the role we played was essentially that of an ombudsman. Whatever happens with Ofcom, I believe it is terribly important that within the structure such a role should exist. In some ways, that is what worries me and other noble Lords about the vagueness of a paving Bill. We shall plunge into it before we know the details. In some way the role as an ombudsman should be ring fenced so that its task of providing a just redress is not subordinated to the other issues that Ofcom will have to consider.

In that context, the point raised by my noble friend Lord Baker needs to be underlined. The Government are to create a body that is both economic and also judges individual cases. In part, the old Broadcasting Complaints Commission had quasi-legal status, as the noble Baroness, Lady Howe, said, and some of the independence that belongs to a court of law. The noble Baroness is to be congratulated that when she had to combine the divergent roles of taste, decency and quasi-legal status in dealing with individuals who had suffered personal hardship she managed to ring fence the situation so that the integrity of that body was never questioned. I believe that the Government should consider that matter.

Like all other noble Lords, I must turn to the BBC. Like anyone else in the debate, I cannot understand why the BBC is not to be placed under the new body. Perhaps I may reminisce a little over the history. Up until the mid-1950s when the BBC had a monopoly the governors were able to perform their role as guardians of public service broadcasting, impartiality, fairness and much more. But once that monopoly went and ITV began the governors were merely part of a competing broadcasting system and were very concerned for the success of only part of that system which they represented. Therefore, they were not just guardians of the public interest as they were prior to the mid-1950s; they were also directors of a company.

That becomes even more marked when one considers the pressure of digital and global broadcasting and so much more. Certainly, in this situation it would be difficult for them to be the best judge of complaints of unfairness, infringement of privacy and so on. That may conflict with their general role as directors of the company. Some group--my ombudsman--external to the corporation is essential in this area. I underline the words of the noble Baroness, Lady Howe, that at present the only body that can judge the BBC because of its statutory position created in the early 1980s is the Broadcasting Standards Commission.

The Canadian system places public service broadcasting under the overall body. I remind noble Lords that in the late 1970s the Annan commission, which has been quoted by previous speakers, reported that the BBC had failed to judge complaints fairly. The result was the Broadcasting Complaints Commission. Therefore, I cannot envisage that the Government could go back to the situation previous to the proposals of the Annan commission which produced the legislation that established the Broadcasting Complaints Commission in the early 1980s.

Therefore, with qualifications I welcome Ofcom. We see barely bones. It is rather like an archaeological dig; one sees the faint sign of bones and the odd piece of pottery and skull, but little else. But my job and that of other noble Lords is to put flesh on the bones and table amendments in Committee. Gradually, the Government will come to realise that they must put forward more precise proposals. I hope to contribute a few morsels myself.

Photo of Lord Currie of Marylebone Lord Currie of Marylebone Crossbench 8:50 pm, 15th October 2001

My Lords, like other noble Lords I welcome the Bill. It moves us towards a single regulator in the field of communications. That is a sensible, and perhaps overdue, response to growing convergence in the industry. In many respects, it mirrors the earlier convergence in financial services that led the Government to create the FSA. Like the FSA, Ofcom will regulate a sector that is crucial to economic growth, efficiency and innovation. But, unlike the FSA, it also regulates a sector that is crucial to profound issues of citizenship, democracy and social inclusion. It is crucial, therefore, that we get it right.

Convergence, of course, is slow to come, despite being much talked about, and the bursting of the dot.com bubble will not bring it forward much faster. But it will come and it is essential that we have in place a regulatory structure that can cope with it. We must ensure that key commercial decisions, notably non-investment and products and service innovation in that sector, are not distorted by regulatory gaps, regulatory overlaps and regulatory inconsistencies. That will be more readily accomplished under Ofcom than under the present five-headed structure, however good the co-ordination between the different heads of those five bodies.

Moreover, a single body can more easily deploy regulatory resource where it is most needed and withdraw from regulation where it is no longer needed--a key factor in key parts of the telecoms sector. That is more easily done than will be the case with many smaller organisations with more limited individual resource and narrower agendas. Furthermore, I believe that the issues of economic and content regulation are more interrelated, perhaps subtly so, but certainly more interrelated than suggested by the noble Lord, Lord Baker of Dorking. That again points to the need for a single regulatory body in this area.

I also welcome the Bill because through it the Government are preparing the ground to create the new regulatory body. Creating one single organisation from five is no simple management and organisational task. It will involve vexed questions; for example, where to locate the body, and the creation of a unified salary structure. I do not believe that a single salary structure implies a levelling up and therefore a necessary increase in cost, providing that it is well managed. It requires a unified organisational structure; and it needs to deal with some vexed questions, such as pensions. All those matters can be managed, particularly given the excellent co-operation among the existing regulatory bodies. But it needs to be worked on and it needs time.

The example of Ofgem--I declare an interest as a non-executive director of the new Gas and Electricity Markets Authority--merging the old Offer and Ofgas, and the example of the FSA, which brought together certainly many more than five organisations or parts of organisations, illustrate both the issues and their resolution and merit a study. But what they clearly bring out is that time and careful planning are of the essence. It is key that we do not lose momentum. As outlined by the Minister, any delay in the timetable could easily lead to loss of morale in the existing regulatory bodies and a loss of key talented personnel. As good regulation depends crucially on good people, delay is to be avoided.

I also welcome the board structure proposed for Ofcom. I do not think that that has been challenged in the debate tonight. But it is, one should observe, relatively new for economic regulation. Oftel, Offer, Ofgas and Ofwat were all set up with individual director-generals, individually responsible for fulfilling the statutory duties placed on them by Parliament. The experience of the new Gas and Electricity Markets Authority--I leave it to noble Lords to judge the record of that authority--has been a good one. A board structure depersonalises issues; it allows different experiences and expertise to be brought to bear on difficult decisions; and it provides greater continuity over time. Ofcom will certainly need that experience and expertise as it has to balance the different requirements of regulatory policy for achieving economic efficiency, policies towards content regulation, and policies towards the roll out of, and access to, new technologies; and it has to grapple with the difficult issues of the analogue switch off and convergence and the roll out of broadband.

Like the noble Lord, Lord Holme of Cheltenham, I should like to see clarity in the objectives that we place on Ofcom, but I fear, although I may be proved wrong, that it will prove impossible to find a single primary duty that we can place on Ofcom in the legislation to follow. Simply rolling together different objectives into a single sentence does not avoid the very difficult questions of choice and trade off that arise in this area.

Much has been said about the position of the BBC. I shall be brief on the point. I agree fully with my noble friend Lord Borrie--perhaps now Lord Competition Borrie-- that regulation has its strengths. But a major and inevitable weakness of regulation is that it operates largely by constraints and negative powers. There is great merit in an organisation such as the BBC which has a positive mission to pursue its role in public sector broadcasting, updated, to be sure, for the 21st century. I believe that British broadcasting generally has been the better for that positive influence over the decades that the BBC has exerted in carrying out its mission. We would be unwise to tamper with that too fundamentally. The BBC's mission needs to be defended. The Government's position of partially bringing it within the regulatory oversight of Ofcom, leaving the positive mission for the BBC, is a good one.

Finally, perhaps I may touch on a concern that I have heard expressed by a number of informed commentators but which has not been touched on in your Lordships' debate tonight. The issue of broadcasting attracts many, each with their divergent interests and views. The danger, not so much with this Bill but with its successor, is that as it proceeds through Parliament we will each try to hang our own favoured bauble on this particular Christmas tree. I hope very much that we resist that temptation.

Future regulation will be the better the more that the Bill lays down high-level principles and refrains from detailed prescription. Regulation needs to be flexible and fleet of foot to keep up with rapid technological advance and market changes. We need to avoid building too much prescriptive detail into primary legislation. We need to allow the board of Ofcom to exercise its discretion in pursuit of the high-level objectives laid down by Parliament. That point applies as much to Government as to the rest of us. The Minister will be better served by leaving the detail of regulatory practice to Ofcom and ensuring consistency and clarity in overall objectives. Light touch regulation--I hope that phrase has real meaning--of this kind will serve us best over the coming years, and avoid the need to return to primary legislation within the decade.

Photo of The Earl of Sandwich The Earl of Sandwich Crossbench 8:59 pm, 15th October 2001

My Lords, I want to speak briefly on one aspect of broadcasting; namely, the coverage of international affairs. I declare an interest as a trustee of Christian Aid and as an associate of Save the Children Fund and a number of other aid agencies. Through these organisations I have also had links with the International Broadcasting Trusts, the One World Broadcasting Trust and 3WE, which is the third world and environment broadcasting project.

The Minister knows that I have expressed concerns to her in her previous capacity as regards public awareness of international issues. She was personally sympathetic to those concerns. We are now at a time when these matters seem more urgent and the case for more understanding of other cultures is considerably strengthened.

The Government have made genuine advances in the promotion of development education, support for a wider curriculum and the building up of alliances in the voluntary sector for global citizenship and racism awareness. Now that broadcasting has come back into focus, the Minister will recognise that the same policies will be needed in programme regulation. Since the events of 11th September, that has become even more important.

In the debate on Second Reading I wish only to register concern that the new Bill, while obviously welcome to most of us because it reflects a new environment, may not do enough to promote global awareness and to ensure that the public will receive a proper standard of programming in this field. Much of the positive content of the "Tier 3" category of broadcasting applies directly to global citizenship, but as the Bill is currently drafted, the regulator will have little impact on its performance. I hope that the Minister will be able to give some guidance as regards the extent of monitoring and the likely consequences in the event of any failures in this area of broadcasting.

It may surprise some noble Lords to learn that since the last Act of 1990 there has been a significant fall in the television coverage of international affairs. Monitoring of the four main TV channels by 3WE showed that non-news factual broadcasting on international issues fell by 42 per cent in the period from 1992-2000, while coverage of developing countries fell by 50 per cent over the same period. The addition in 1997 of Channel 5 made almost no impact. Those figures have caused great concern among the aid agencies since they show, first, an erosion of the commitment of public service as well as independent broadcasters and, secondly, that the regulatory arrangements put in place a decade ago were not sufficient in themselves to arrest the decline. It is essential that this trend does not continue at home, even as we applaud the success of the BBC overseas.

Finally, as regards Ofcom itself, I suggest that the strength of the interest of the voluntary sector concerned with international affairs surely indicates that its advice, perhaps through the suggested advisory panel to run parallel with the consumer panel, would be helpful to the regulator. In his reply, can the Minister confirm that that proposal will be given serious consideration during the passage of the Bill?

Photo of Viscount Chandos Viscount Chandos Labour 9:02 pm, 15th October 2001

My Lords, for a short Bill, I shall try to keep my comments comparably brief--a virtue already displayed by my noble friend Lady Blackstone in her excellent introduction. Nonetheless, I want to take a little time to pay tribute to the notable maiden speeches of my noble friend Lord Corbett and the noble Baroness, Lady Howe. It seems to me that both are good advertisements for, on the one hand, the traditional method of entering this House and, on the other, the new way.

I should also declare an interest as a venture capital investor in or board member of a number of companies already entered in the register whose activities may be affected by the future operations of Ofcom. In the spirit of the future rules of the House, I should add the name of one company, Video Networks, in which I am--to me--a significant shareholder, as indeed are my former colleagues there and other friends.

I welcome the Bill unreservedly, both for the principle of establishing a unitary regulator and for the pragmatic approach of constituting Ofcom through the Bill, so that in its initial incarnation it can both participate in and inform the debate about the subsequent Bill and prepare to implement its provisions once they are enacted. The noble Baroness, Lady Anelay, complained that the Government were putting the cart before the horse, an analogy which itself seems almost completely topsy-turvy. To adopt that analogy, even if we do not know the precise weight of the future regulatory burden, the sooner we start breeding a thoroughbred to lead it, the better.

I want to touch on four points: competition, concurrency, cost and composition; four C's. In the process, I may flag one or two issues relating to the future regulatory Bill either because of the importance that I attach to them or because they illustrate the huge task that will face Ofcom once it assumes its full responsibilities.

As the noble Lord, Lord Baker, made clear, competition lies at the heart of economic regulation. In an area with external constraints--spectrum, for instance, in particular in the analogue era--the regulator may need to be actively interventionist to balance competitive forces with non-economic objectives such as programme diversity. As constraints such as these are eased by, for example, digital technology, the regulator must judge carefully what measures will allow the most vibrant and responsive markets to emerge through a transitional period into a time when, as the noble Lord pointed out, the lightest of light touches may be all that is needed.

A good illustration of how not to do it has been provided, I am afraid, by Oftel in its handling of local loop unbundling. Five separate approaches to local loop unbundling were identified by Oftel--I am sure that there are countless other variations--which then managed to choose the one, a complete free-for-all, which may have created the illusion of competition but in reality offered the consumer the smallest possible chance of benefit. As the White Paper noted, in countries where local loop unbundling had already commenced, itself an indictment given the UK's early lead in telecommunications deregulation, the process had proved problematic. Oftel appeared to pay little or no attention to the lessons that could be learned from abroad. British business and individuals are the poorer for that. The interests of the consumer would have been hugely better served by the introduction of targeted competition through licensing a limited number of alternative service providers in any one region, combined with a significantly more vigorous and proactive attitude towards BT. It is essential that Ofcom enforces effective competition rather than simply introduces illusory competition.

The realpolitik of competition in the analogue era has to be scrutinised with a fresh eye as digital technology changes the terrain. My noble friend Lord Bragg raised the fragile position of ITV Digital. The partners in the company formerly known as ONdigital have urged the Government to advance the date for analogue switch-off in order to accelerate the take-up of digital, as well as taking other measures to stimulate that process. In principle, now that we have started down the road towards digital switch-over, it is right to continue; and, if to continue, to do so as rapidly as possible, however formidable the challenge, for fear of being stuck with the worst of both worlds.

But if this proves to be the route we take, it may present the partners in ITV Digital with a conundrum, for those same companies own the majority of the ITV network and have loudly declared the desirability of merging fully as soon as possible. Yet the sooner that full digital coverage is achieved and the necessary steps taken to allow analogue switch-off, the weaker the argument is to allow that merger. Why? Because the availability of digital channels would allow Carlton and Granada each to have a national network and, instead of cosily sharing prime-time programming, have to compete to win both audiences and advertisers.

If this scenario, heavily dependent on a determined approach to analogue switch-off, were to become a possibility, we would face most vividly a case of concurrency, my second C. The White Paper sets out very clearly the Government's thinking on the interplay between Ofcom and the OFT--which I suspect the noble Lord, Lord Baker, may have forgotten when he criticised the Government's thinking on the whole area of economic regulation--and it suggests that the OFT would have primacy on any merger, in consultation with Ofcom, whereas Ofcom would have primacy in competition issues within broadcasting, presumably excluding mergers. This represents a considerable improvement on the existing position-- described by my noble friend Lord Dubs as "double jeopardy"--but I suspect that there may be some further clarification which would be desirable.

Very briefly, on my other two Cs, the creation of the merged office may not give the opportunity to make net savings in cost but it should not be the cause of an increase. Regulators of industries where practitioners enjoy significant financial rewards always have the challenge to induce at least some poachers to turn gamekeeper, so I suspect that an effective Ofcom may need to have a smaller number of people, better rewarded.

Finally, on composition, like my noble friend Lord Currie, I welcome the proposed composition of Ofcom, with a small board as well as a chief executive. Unlike other noble Lords, however, I would favour a board which remained as small as possible indefinitely, with its members, while remaining non-executive, active in the strategic direction of the office and with the resources to do that.

Photo of Viscount Astor Viscount Astor Conservative 9:10 pm, 15th October 2001

My Lords, I, too, welcome the Bill. I start by declaring an interest as a non-executive director of ITV Digital.

The Bill not only brings together the five regulators involved in broadcasting and radio but also sets the agenda for the future. It will end the occasional turf wars between departments and their regulatory bodies over broadcasting and media responsibilities.

It will be useful to start by looking at the principles underlying a single regulatory regime. In the Government's White Paper, A New Future for Communications, published last December, the Government set themselves the task of introducing clearer and simpler regulation; they gave a commitment that broadcasting will retain a strong public service remit; that they would encourage competition and future market development, and would place the BBC partly alongside the other broadcasters. So the question we must pose to the Government is whether the Bill sets the scene to achieve those ambitions.

The BBC would come under the first two tiers of regulation by Ofcom but not the third. The BBC will account to the standards required under the statements of programming required by the third tier, but will account to the chairman and board of governors. As we have heard, the management board of the BBC and the regulator of the BBC have two roles.

The BBC's charter and agreement has five years to run. I do not believe that a case has yet been made for altering that agreement, but I do believe that these issues will have to be carefully considered before a new agreement can be put in place in five years' time.

There are difficult issues here that put the chairman and the governors in the position of judge and jury. An important issue is the separation between the public service remit, the commercial broadcasting services and, for example, the Internet services of the BBC. The responsibility lies with the board and the auditors but it is not a transparent process.

The BBC has a unique public service remit and constantly reminds us of it. But so do other commercial broadcasters have their own public service remit. ITV's public service remit is enshrined in its licence conditions and covers scheduling and a range of programmes that must be broadcast.

There may be a role for Ofcom and I do not accept the argument that Ofcom's other responsibilities could conflict when it comes to the BBC. Under its charter and agreement the BBC is accountable to Parliament, but it is a cumbersome process. If the present arrangements were to stay, the BBC would need to be accountable also to the Public Accounts Committee and to the National Audit Office. That is the alternative to Ofcom. I believe that Ofcom may prove to be a more welcome alternative for the BBC.

Turning to the commercial sector, I believe that ITV, Channel 4 and Channel 5 will also benefit from a single regulator. I do not understand the reasons for S4C, the Welsh language channel, being left out and remaining self-regulating. It has a public service remit, but it also carries advertising. Broadcasting is not a devolved matter. If S4C is regulated by a chairman appointed by the Department for Culture, Media and Sport and the National Assembly for Wales, should not Scottish television and BBC Scotland be regulated in Scotland? I shall be interested to hear the Minister's response.

Ofcom will not merely pull together all the functions of the previous five bodies. It will do more, particularly dealing with the increasing number of European directives. Who will scrutinise Ofcom? To whom will it be responsible? It will certainly not be directly responsible to the Secretary of State. Will it come under the scrutiny of the Public Accounts Committee?

I was interested to see in the report by Towers Perrin published at the weekend, commissioned by the five existing regulators, a warning that the opportunities for cost reductions are small and that Ofcom may require greater funding. It will be a large organisation with over 1,100 people on the payroll and a budget of £119 million. I hope that the Minister will give an assurance that Ofcom will receive the funding that it requires to do the job, and that he will explain how its cost controls are to be monitored.

The Minister assured the House that Ofcom will consult with the industry before it sets up its internal structures and working arrangements. Will the Government explain how they see the split of roles and responsibilities between Ofcom and the OFT?

There are now over 250 television channels available to viewers in this country. New services--Internet via the television and interactivity--are developing rapidly. Television is an easy way to bring the Internet into every home. Over 30 per cent of all viewers in this country have gone digital. Sky has 5.5 million subscribers, NTL and Telewest have 1.2 million customers between them, and ITV Digital has about 1.3 million viewers.

More television has not meant less quality television; it has actually produced both better programming and occasionally, of course, worse programming. What it has produced is better choice. More choice enables broadcasters to offer new services and encourages innovation. Digital television has been the main driver of new channels, promoted by the private sector in its terrestrial and satellite forms. The BBC has done little so far to promote digital take-up, except to pay Sky an undisclosed sum for BSkyB to carry BBC on its satellite platform. So much for the new transparency--the BBC will not say what it pays.

Going digital has had a large cost. Pay-to-view is the most important way to drive take-up. Digital television has grown because Sky, Carlton and Granada supported the installation of set-top boxes. Without pay-to-view driving and subsidising the take-up, there is no chance of meeting the Government's goal of analogue switch-off between 2006 and 2010.

The pay-to-view broadcasters, including cable operators, cannot do it all on their own. The Government must put policies in place which encourage take-up and which encourage manufacturers to produce more and cheaper digital televisions. The BBC and Channels 4 and 5 must play their part.

The BBC has been allocated three new television channels and five new radio stations by the Government. These services, which can be seen on digital television, will cost £300 million out of the licence fee over the next two years. So the BBC must promote digital viewing if it is to justify this expenditure out of its licence fee income. After all, the BBC has been given the best multiplex for broadcasting.

The BBC has been required by the DCMS to show that these new services do not replicate existing services. I support the introduction of the new television channels; however, I am concerned that the proposed new radio channels have not had the proper scrutiny that they deserve. They are going to compete directly in areas already covered by independent radio stations.

I welcome the draft digital action plan published jointly by the Department of Trade and Industry and the Department for Culture, Media and Sport. The accompanying statement by the two Secretaries of State makes it clear that the Government,

"wants every home to be able to enjoy the present and future benefits of digital television"

That is an admirable ambition with which we all agree.

What do the Government intend to do about the ownership of radio licences and local terrestrial television licences by religious bodies? They do not seem to have made up their mind yet.

Perhaps I may say a word about what the Bill does not contain. As many speakers have said, it is disappointing that there is no review of media ownership restrictions. There is clearly room for consolidation within ITV while maintaining the important aspects of regional programming.

Following the emergence of cable and satellite, old rules have been made redundant. It should be the aim of government--I hope that it is--to bring broadcasting and radio and the rest of the media within a normal competitions policy over a period of time. The old barriers do not make sense any more in a global market.

I do not have time this evening to go into the matter, but I am also concerned about bundling, market abuse and about the criteria for "must carry" channels. While some services should be available for all, different platforms should be able to carry their own unique services. The industry needs a main communications Bill. I hope that the Government will stick to their plan and publish a draft of the Bill early next year. Perhaps they will be able to do so before we have finished improving the Bill in this House. It is crucial for the industry that a Bill should be ready for Parliament during the following Session. There will be much to debate during the passage of this albeit rather short Bill, but I am sure that noble Lords on this side of the House will be constructive and, I hope, improve the Bill as it passes through your Lordships' House.

Photo of Lord Thomson of Monifieth Lord Thomson of Monifieth Liberal Democrat 9:21 pm, 15th October 2001

My Lords, declarations of interest in this debate have been fluttering around like leaves in the autumn, so I had better begin by stating my own. I declare that I have a daughter who is a BBC executive. As a former chairman of the IBA, I should also declare that I am an IBA pensioner and president of the IBA pensioners' association. In the immortal words of the Broadcasting Act, I hope that "due impartiality" will have been satisfied by that declaration.

This Bill starts the process of determining the character and quality of our broadcasting and telecommunications, certainly for the early decades of the new century. I join with others in welcoming the fact--an accidental fact, I believe, but a happy one--that it is a skeleton Bill and that the flesh of what will go on the bare bones will come later. Much of that flesh is indicated in the Government's White Paper, so we are not as ignorant about what is likely to come in the main Bill as some noble Lords seem to fear. However, I believe that this skeleton, paving Bill provides us with a priceless opportunity for pre-legislative consultation, involving both Houses of Parliament. I join the noble Lord, Lord Lipsey, in expressing the hope that the Minister may be able to be more precise in his response than the noble Baroness, Lady Blackstone, as regards the Government's commitment to having that kind of pre-legislative consultation.

The Bill will establish a huge new regulatory body. It will merge other bodies that have a staff collectively of 1,000 in 20 offices who will be dealing with the issue of 250,000 licences. Inevitably, it recognises the reality of 21st-century technology. When I became chairman of the IBA, which was only 20 years ago, telecommunications and broadcasting were entirely separate and in entirely insulated little national boxes. Today, all the frontiers are down. Satellites, fibre optic cable, computers and the Internet have seen to that. If this requires some kind of super-regulator--an Ofcom--so be it.

However, like the noble Lord, Lord Gordon of Strathblane, I am bound to confess that I remain rather agnostic about this being the only possible pattern. Some noble Lords have suggested that we could have two bodies. Indeed, I believe that the noble Lord, Lord Corbett, made that suggestion in his excellent maiden speech. One can be sure of one thing: there may be total convergence in the world of the new telecommunications and broadcasting technology, but there will certainly be two bodies in Whitehall with not much convergence between them: the DCMS and the DTI. That will be a situation upon which Parliament will need to keep a pretty watchful eye.

What kind of Ofcom should it be? Patricia Hodgson, the director general of the ITC, used a vivid phrase in answer to that question. She said that Ofcom should be mean and lean and both things at the same time. It should be lean because a regulator on this scale, covering many diverse, conflicting but clearly interrelated activities, must guard against becoming a bureaucratic monster. Many noble Lords would agree with that proposition. It should be mean, too, because however much Ofcom relies on self-regulation, it must be able to intervene quickly and decisively when it does act.

How to reconcile meanness and leanness will require the wisdom of Solomon. The new body will have to avoid setting itself up simply as a patchwork of the various bodies it absorbs. There has been a good deal of agreement about that in the debate.

Ofcom must establish an integrated identity of its own, but how will it ensure that commercial radio is not overshadowed by the giants of television, as tended to happen in the old IBA before there was a separate Radio Authority? I rather welcome the proposal in the document provided for us, which refers to a horizontal radio organisation within Ofcom, which would be extremely important.

Judging from the flood of representations that we have received, Ofcom will have to organise itself to satisfy a wide variety of national, regional, ethnic minority and other functional interests. I do not presume to give any advice about how to deal with that tonight, but it would be wise for Ofcom to start small and compact. It may be that some of these matters can be best dealt with by building up a corpus of effective advisory committees, reflecting the interests and concerns of various outside activities.

The Government's White Paper provided a welcome assertion of the importance of public service broadcasting. But we are uneasily aware that their drive for digital television and radio was driven not by a belief in better public service broadcasting, but by the Treasury's obsession to raise £22.5 billion by auctioning off the analogue frequencies for the third generation of telecommunication purposes. From many of the speeches that we have heard in this debate, it looks as if all this is going a little sour. The bidders are burdened by debt. ITV Digital is in trouble. There are signs that even the natives, among whom I include myself, are becoming restless as we sit before our analogue television screens. The Government's target for switching off terrestrial analogue is 2006-10. The last published forecast by the ITC, which it has never repeated, was that the digital switch-off could not take place until 2018.

In the mean time, the Cassandras among us who took part in the debates on the previous Broadcasting Bill have seen depressing evidence that even the present proliferation of TV channels has put downward pressure on the terrestrial public service channels. ITV still does excellent things in its regional programming. Under the leadership of the noble Lord, Lord Bragg, it preserves the "South Bank Show" as a monument to cultural programming. ITV has undoubtedly, as we forecast and under the pressure of new developments, dumbed down in its general pattern of programming. It is not alone. Soaps are now stripped across the week and even Channel 4, with its unique innovation remit, is showing worrying symptoms. Its first chief executive, Jeremy Isaacs, wrote an interesting article recently in the Independent, expressing his concern about that. The newspaper itself reached the verdict that in Channel 4,

"we have a publicly owned broadcaster that behaves more and more like a privately owned one".

The remit of Channel 4 which enjoys the great privilege of not having to pay for the spectrum it uses--I gather that is worth about £100 million a year--will come directly under the responsibility of Ofcom and will be a good challenge to it in terms of its responsibility for the programme remit of one of our most important television channels.

In that situation, those of us concerned to maintain the range and quality of British broadcasting should be concerned to preserve and strengthen the special remits of the BBC and of Channel 4 and, indeed, of S4C, as has just been mentioned. We must ensure not only that their privileged position is protected, but we must make equally sure that they themselves vigorously fulfil the special responsibilities and duties that go with those privileges. It is against that background that I make my comments about the relations between Ofcom and the BBC. There has been an artificial dichotomy as regards that issue in some of the speeches. The White Paper proposes that Ofcom should establish the general framework for all broadcasters including the BBC--the so-called tiers one and two of the White Paper--and ensure fair competition. It would be good for the BBC to have its separation of licence revenue and commercial revenue scrutinised for transparency by Ofcom as an independent watchdog.

However, there is a difference between Ofcom and the BBC that is central to this question. Ofcom is a regulatory body with the traditional role of the old Victorian headmaster; namely, to find out what the boys are doing and forbid it, whereas the BBC governors have a different role. If they are doing the heart of their job properly--that is a question that we must all continue to be vigilant about--they are public trustees with the positive duty to promote high quality public service patterns of programming. They are not there to protect their professional broadcasters from public criticism when things go wrong. They are there to make the difficult definition of where the public interest truly lies in the role of broadcasting in society today. I very much agree with the point made by my noble friend Lord Holme that the time is right for the BBC to consider redefining rather precisely what we mean by public service broadcasting in the modern world. The governors are free from having a duty to shareholders or advertisers. They therefore have to justify their use of that rare freedom.

The BBC, warts and all, is, in the true sense of that overworked cliche, a world-class British institution. Like a great university or a great school, such creative institutions grow up only gradually and can be damaged easily. The BBC is instinctively recognised as a special case by the British people. On that dreadful day of 11th September, 33 million citizens turned to the BBC for the news from New York. That was more than all the other news providers in this country added together. The BBC World Service, which presently transmits to Afghanistan 17 hours a day, is the global standard of impartial, international news.

For three-quarters of a century the BBC has been an essential cement that has given the diverse nations and regions of the United Kingdom their sense of unity. Its mainstream programmes have stretched the interests of viewers and listeners in ways they never knew they could enjoy. It has had an educational and cultural force that the new niche channels can never achieve although they can usefully supplement it.

In conclusion, the relationship between Ofcom and the BBC will be a major matter for debate in the pre-legislative discussion. Perhaps the longer-term future of the BBC and its governors will be a subject for separate debate when the charter comes up for review in the years that lie immediately ahead. However, there will be many more matters than those to be considered in the pre-legislative discussion that I hope we shall have, including the questions of ownership. I hope that we can deal with this paving Bill quickly and move on to discuss the main Bill before its problems are too firmly set in stone.

Photo of Baroness Young of Old Scone Baroness Young of Old Scone Non-affiliated 9:35 pm, 15th October 2001

My Lords, I declare an interest, as other noble Lords have done tonight, as a recent vice-chairman of the BBC and as the sister of an employee of the BBC. However, I speak tonight not only as someone with an interest in public sector broadcasting, but also as a regulator, wearing my hat as chief executive of the Environment Agency. I have an interest above all in effective and proportionate regulation.

I support the principle of the single regulator represented by Ofcom. In the new digital age it will be even more vital to avoid the current complexity and duplication, as convergence of technologies blurs the lines that currently differentiate regulatory areas.

We also need to overcome the rather ridiculous situation that we find ourselves in from time to time when different regulators dealing with the same case can come to very different decisions on taste, decency or impartiality. That must be abundantly confusing for the poor complainant and for the public.

Like the noble Lord, Lord Currie of Marylebone, I think that it is an excellent idea for a regulatory board to head up Ofcom rather than the heroic one-man band regulatory regimes that we have seen in some other areas of regulatory life, when regulatory decisions have been rather over-sensitive to the personal quirks of the incumbent. I do not think that I am mis-stating the case to say that that was true with the previous water, gas and electricity regulators before we had Ofgem.

Speaking as a regulator, I think that modern regulation must be effective and proportionate. In the case of communications regulation, "proportionate" definitely does not mean that one size fits all. Regulating a music service delivered through a third generation mobile telephone service, a subscription-based digital TV channel for which people have chosen to pay, an advertising-funded free-to-air channel with an element--but only an element--of public service broadcasting, and the BBC, whose sole role is public service broadcasting, will be very different jobs. It would be madness to assume that the regulation of all those very different services should be carried out in the same way.

I support the principle of tiered content regulation, setting down basic content standards for services with small groups of niche viewers, listeners or service takers who are free to choose and to come and go, rising through higher programming obligations and quotas up to the highest requirement to account against statements of programming for broadcasters where there is little choice.

The roles and objectives of diverse ranges of providers with diverse sizes of audiences are very different, so the markets in which they operate need to be clearly differentiated, otherwise we risk having all providers regulated on the basis of issues of competitiveness. Public service broadcasting should not be about competitiveness, but about content, and above all distinctive content.

The development of BBC1 as a mass market channel over the past few years is a present example of the risk of over-emphasis on competition. I am sure that not many of your Lordships sit glued to BBC1 on a Saturday night. I believe that the very competitive environment that existed in the run-up to the last licence fee settlement, in which the determining factor was seen very much as audience share, meant that the focus was on what was popular and, eventually, on what was populist. That is what results from insisting that the BBC competes for audience share.

The comments of the noble Lord, Lord Borrie, on head-to-head scheduling provided just such an example. However--it is unfortunate that the noble Lord is not here to receive this excellent piece of advice from me--if he wants to hear the news at nine o'clock, he can tune in rapidly to News 24, available on the ring main here in your Lordships' House for occasions such as this when we are bound to miss the ten o'clock news. Not only can he have the news at 9 p.m., he can have it at 9.15, at 9.30 and at 9.45 p.m. That is what digital news provision is all about.

I believe that the BBC is different, even from the advertising-funded "free to air" broadcasters who have an element of public service remit, because its sole role is public service. Therefore, I believe that it would not be appropriate for it to be wholly regulated by an Ofcom under which competition would drive its regulatory ethic.

An example of that is the Government's recent decision to support the BBC's launch of new digital channels for children. The commercial broadcasters got themselves into a stew about that. They were very against the idea that the BBC should be able to launch those children's channels. They saw it and predicated it as direct competition. They said that a range of children's channels are viewed actively by children in this country.

However, the issue rested on the fact that, although there was a range of children's channels, there was no channel of the type proposed by the BBC. The type proposed was one with distinctive and creative programming, originated primarily through those channels and primarily of UK provenance, not a cartoon-based or American-based children's channel, and not one interrupted by exploitative advertising where My Little Pony is pushed harder than heroin up the All Saints Road on a Saturday night. That is what parents said that they wanted. They wanted a channel with original content, one that was UK-based and one that was very much free from advertising. The Government recognised that and approved the BBC's children's channels because they were different. It was not a matter of competition but of distinctiveness. I believe that that would be a virtually impossible decision for an Ofcom to take, charged with regulating across all the providers, including the BBC.

The BBC is different from other broadcasters. Its sole role is public service broadcasting. The governors of the BBC have a duty to direct the BBC in the public interest, free from political or commercial bias, and to ensure impartiality and independence. The noble Lord, Lord Holme, talked about great steps to ensure enhanced accountability of the BBC through its governors. That is very true. The BBC's governors have changed considerably over the years, and successive charters have introduced new requirements. Indeed, the BBC has improved its own accountability systems internally. It now has clear duties to consult the public and to seek government approval for new services. There are clearer duties on the governors to safeguard the remit and accountability, and there are new responsibilities for new institutions such as the national broadcasting councils.

The governors do hold the BBC accountable. In addition, it is proposed that Ofcom will have two key roles in respect of the BBC. It will have an absolutely appropriate one, as is the case with all public sector broadcasters, in the areas of basic content standards and programme obligations and quotas. Of course, the BBC will be subject, as, indeed, would be any commercial operator, in the areas of its purely commercial activities to competition law and competition regulation. However, Ofcom will not--appropriately, I believe, under the current proposals--have a role in deciding the range of BBC public service broadcasting activities on the basis of its place in a competitive market.

I believe that communications regulation should be proportionate and should not be about what the noble Lord, Lord Lipsey, called the level playing field, which he abhorred. To use a phrase of which I am sure he would approve--I know that he is a horseracing man--we should have horses for courses. Tonight a few of us have argued for distinctive and unique regulation for our distinctive and unique public service broadcaster, the BBC. We, the few, hope that the Minister will find us persuasive.

Photo of Lord Eatwell Lord Eatwell Labour 9:45 pm, 15th October 2001

My Lords, I begin by declaring an interest as the chairman of the Commercial Radio Companies Association. The success or otherwise of Ofcom will have a powerful impact on the future of members of the association and on the whole radio industry. My remarks tonight represent my own views but they have inevitably been influenced by the prospective fate of the radio industry as a whole.

As many noble Lords have noted, there is a certain incongruity in discussing a paving Bill for the creation of an organisation the scope and content of whose activities are as yet not precisely defined, although we had a broad view of them in the White Paper. That has not stopped several noble Lords opining this evening about what those activities might most appropriately be, and I am afraid that it will not entirely stop me.

First, however, I want to focus on the basic issue before us; namely, whether there should be an Ofcom at all. Is its existence really a good idea? So far as broadcasting is concerned, will it contribute to access, choice, diversity and the efficient use of scarce spectra? All of those issues are fundamental to the success of broadcasting in this country.

It is well known in relation to the economics of regulation that if there is more than one regulator for an industry the result is wasteful duplication and inefficient utilisation of scarce resources and the consumer is badly served. Those were some of the reasons why the Government rightly decided to opt for a single regulator for the whole of the financial services industry. The creation of the Financial Services Authority was the rational response to convergence in financial services, just as Ofcom is a rational response to convergence in the communications industry. That involves in part convergence in the delivery of services, although that has been somewhat over-hyped, and, most importantly, convergence in the common demands that are placed on scarce spectra. The selfsame logic that supported the creation of the FSA supports the creation of Ofcom. That makes sense--the fact that it makes such good sense is the reason why I welcome the Bill.

It is worth noting that support for the creation of Ofcom is not unanimous throughout the broadcasting industry. We have heard much this evening about the relationship between Ofcom and the BBC but not much about the BBC's view of Ofcom. The creation of Ofcom was discussed fully by the director-general in a speech that he delivered at the radio festival in July. Mr Greg Dyke argued that there should be not one regulator but a plurality of content regulators that could match the plurality of content providers. He went further and declared:

"It has been recognised from the beginning of mass media in this country that plurality is fundamental to the basic values of democracy".

There we have it--the charge is the serious one that Ofcom is a threat to democracy. I presume that we can be confident that the Minister does not agree with Mr Dyke.

Mr Dyke argued that there should be many regulators, but just how many he did not make clear. Nor did he make it clear how the multiplicity of regulators could relate to one another or to different parts of the industry. If the multiplicity of regulators is to be the defence of democracy, surely broadcasters should be able to choose their regulator. Individual radio companies should be able to escape from beneath the heel of an oppressive regulator and search out the sunny uplands of the more liberal regulators. BBC radio, for example, oppressed by the governors, should be able to opt to be regulated by the Radio Authority. Mr Dyke's argument is nonsense, which is why everybody is laughing. It is designed for one purpose only, to disguise the fact that there is no real argument for the BBC not to be regulated by Ofcom. That is what he is afraid of.

I would argue that to establish a single regulator and to leave one broadcaster outside its scope is a recipe for serious inefficiency. It would be as if the Government had gone to all the trouble of creating the Financial Services Authority and then decided that one major firm--shall we say Goldman Sachs--should be exempt from the regulatory regime and allowed to regulate itself. I should like to ask the Minister why, if self-regulation is not good enough for Goldman Sachs, is it good enough for the BBC?

On that topic I make a further point. If Ofcom does not regulate the BBC, the integrity and independence of the corporation are placed in serious jeopardy. History has shown that it is not possible for the BBC board of governors to avoid being sucked into the management as well as the regulation of the BBC. That point has been made by many noble Lords. That is why the governors do not have the power to determine which services should be provided by the BBC and why the Secretary of State determines the content of such new services.

However, in the long run surely it is not right that the Secretary of State should be the arbiter of the content of radio services. We do not want state radio in this country, yet that is exactly the slippery slope down which the absence of independent regulation is pushing the BBC. The creation of Ofcom by the Bill provides the Government and the BBC with a means of escaping from that dilemma.

My noble friend Lord Lipsey pointed out that certain aspects of BBC activity will be regulated by Ofcom. However, the crucial issue of format and content will not be. That is particularly vital as an economic issue and in the case of a corporation which in its recent annual report demonstrated that it is driven by the desire to maximise market share. I realise that this is not the Bill in which to discuss the issue of scope and content. Hence the question of regulation of the BBC is a topic to which we shall turn on another date.

I return to the structure of Ofcom as envisaged by the Bill. Clearly, Ofcom involves the amalgamation of four regulators together with the Radiocommunications Agency. I would ask the Minister in winding up to answer two questions about the nature of the single regulator. The first question has been raised by other noble Lords: what is the relationship between Ofcom, the Competition Commission and the various competition authorities? That is a question of enormous importance to the commercial radio industry, which needs to know now where it will stand after Ofcom takes over as its regulator. As my noble friend the Minister will be aware, at present the Radio Authority exercises economic regulation over the radio industry. She will also know that in anticipation of this Bill and the succeeding Bill, the commercial radio industry has joined with the Radio Authority to draw up a blueprint for a simplified economic regulation in future.

The new simple rules define the minimum number of companies which can provide radio programmes within each area of the country. However, the question still remains, what will be the relationship between any economic regulation by Ofcom and the role of the competition authorities? The Competition Commission has an overarching brief in all industries. Perhaps in winding up the Minister could answer that question, first as regards local radio and secondly as regards the national franchises.

My second question is whether the Minister is confident that when five organisations have been incorporated into Ofcom there will be less regulation, not more. If she is, what is the basis of such confidence? We have heard much about light-touch regulation. However, as other noble Lords have asked, what exactly is "light"? Is it lighter than what we have today? The Minister will be aware that despite all the talk of convergence--much of it is just that: talk--communications infrastructure and broadcasting continue to be two quite different things. By bringing the communications and broadcasting regulations together, it appears that Ofcom will face a more massive and complex task than is currently faced by any of the individual existing regulators.

The Minister will also be aware that the Towers Perrin report states that in the short run more work is likely to start than stop and that,

"it is difficult at this stage to make an assessment of the level of resources Ofcom will need".

Given this statement by the independent consultants, is the Minister still confident of the assessments of cost set out in the explanatory notes?

Throughout the progress towards Ofcom, commercial radio has made it clear that having its own regulator has worked well. The progress of the commercial radio industry since 1990 has been more rapid and more beneficial to listening choice than anything achieved under the aegis of the IBA between 1973 and 1990. The attention of the IBA was concentrated for most of its time on television. Will this recur? What will be the position of radio within this new amalgam? Does the Minister accept the Towers Perrin recommendation that there should be,

"a horizontal Radio Group, to ensure the integration of broadcast radio regulation", throughout Ofcom?

If Ofcom is not to become an unwieldy, sclerotic barrier to progress, its regulatory activities must be transparent, flexible and reduced to the essential minimum. If the organisation established by this Bill is to play a role in the creation of a highly competitive, prosperous, creative and diverse radio industry, it must bring to the twin tasks of content and economic regulation a new spirit of openness and enterprise, a new approach to regulation. If it achieves that, its creation will have been thoroughly worth while. I hope and believe that it will.

Photo of Lord Inglewood Lord Inglewood Conservative 9:56 pm, 15th October 2001

My Lords, like previous speakers, I begin by declaring my interests. I am a non-executive director of the CN Group, which has a number of commercial radio interests, and I have in the past, but do not now, advised the BBC and the ITV Association.

I recall in early 1996 standing where the noble Baroness was standing earlier this afternoon and introducing the previous Broadcasting Bill. Before delivering my speech on that occasion, I well remember the discussion in the department about its content, especially the more general opening section. Not only did the description of how the digital world might develop stagger me, a non-scientist, I was very concerned not to paint a picture that your Lordships would dismiss as fanciful.

Whether I succeeded then, I do not know. However, in the intervening years it has become clear that the political and social implications of what is happening are far more wide-ranging than many people thought at that time. I have recently tried to clarify in my own mind what the digital revolution is doing and what it has created. I have to admit that I am finding it very far from straightforward.

One analogy is with the Age of Faith. In a way that appears different from the view of contemporary theologians, the Kingdom of Heaven was believed in those days to be immediately at hand and invisible. After all, in quattrocento paintings angels are to be seen almost everywhere, obviously invisible to the human, but there none the less; and the painter, who clearly never saw an angel as he depicted them, knew that they were there and so painted them in, rather like the person who carved the bosses on the roof. In parallel with the physical world, there was a heavenly world that was very real and very close. In a somewhat similar way, the digital world has developed very close to the physical world in which we now live.

A different, more contemporary analogy is with the world of Harry Potter. In J K Rowlings' books there exists the wizarding world and the muggle world; the muggle world is our world. They exist in parallel and those who are wizards can move between them.

It seems to me that the revolution of the digital world is that there is existing in parallel with the traditional physical world of our daily lives a world of digital codes and electrical impulses which we have harnessed for a whole variety of separate purposes and which in a real sense changes our traditional relationship with space and time.

The digital world's physical form is a network of cable, wire and radio waves permanently pulsating with binary code transmitted by electrical impulses. What had previously been distinct networks--that is to say, television, telephone, Internet or radio--are now becoming fused. Technology gives entry and exit to the primal soup of digital bit stream out there in cyberspace contained in the networks.

Of course, in the old analogue era it made sense to have different regulators for television, radio and telecoms because they were distinct networks each with their own separate problems. But now they are not; they are fused, or at least fusing, together in a single whole and as such the logic for a single system of regulation is, in my view, overwhelming. That is what this Bill is intended to do and why I support it.

It seems to me that the important political question is how that regulatory system will operate. I do not believe that you can simply separate form and function, as the noble Baroness suggested in her opening remarks. The way the system operates determines what the system as opposed to the structure on which it is based does; whether it will run with or against the grain of public interest; and how it might be answerable or accountable both to the public and to Parliament. Only by looking at those together can we judge whether it is doing the right thing.

I believe that what is needed was put succinctly and emphatically by Patricia Hodgson, mentioned by the noble Lord, Lord Thomson of Monifieth. She is chief executive of the ITC and she gave a speech to the European Media Forum on 26th September this year in which she said that the three vital priorities for regulation were investment-friendly policies, competition and a new settlement for public service broadcasting. I believe that she is right. The way in which Ofcom works must align with these priorities, for if it does so the industries affected by it will flourish and if it fails they will not. The form of Ofcom must enable it to deliver the priorities.

As has been said by a number of speakers, the Bill is not the answer to all the problems facing the sector. It is merely a precursor of the forthcoming communications Bill, which must provide a settlement for the next few years, just as the Broadcasting Act 1996 has done for the past few. Paradoxically, in the case of this kind of legislation, it can only be deemed successful if it creates conditions which make it out of date a few years later.

As we know, the world of telecoms and the media is changing very fast and changes are needed to the regulatory regime in response to that. As has already been mentioned, some of them such as those relating to cross-media ownership do not necessarily require statutory change. What are the Government proposing to do about that? Will they do something now or do they want to wait?

I want to concentrate on two of the many aspects of this area because I believe that one cannot separate form and function in the debate. I want to talk, first, about access and, secondly, public service broadcasting. The interface between our physical world and the public networks of binary code is via a series of gateways which are the bottlenecks in the system. Those who control these gateways, whether it be through software, ownership of hardware or by other legal means, are in positions of great power. In my view, perhaps the most important role of Ofcom will be to police those gateways which are under our national jurisdiction in order to ensure that there will be fair, reasonable and non-discriminatory access to enable those of us in this country to draw down through them what it is that is outside.

The proper regulation and policing of that aspect has been one of the major priorities of Ofcom's predecessors and I very much hope that the noble Baroness or the noble Lord, Lord McIntosh, in responding will be able to confirm that it will be at the centre of Ofcom's workload and that what will be done will be compatible with the provisions of the electronic communications package currently going through the European legislative process.

If one moves through the gateway the corner of the digital world one first enters is that part which is under the UK's jurisdiction. Beyond it there is the equivalent, in digital terms, of international waters where our jurisdiction does not extend. In the area within our jurisdiction are to be found our national public service broadcasters.

As a number of noble Lords have said this evening, public service broadcasting is a vexed and topical question. In this country it comes in a unique and, some would say, rather idiosyncratic form, but, in the best traditions of British institutions, it all works. I believe that that concept has served this country and its citizens well and enabled them to enjoy probably a better choice and range of good quality broadcast services in a whole range of different milieus than is the case elsewhere. In a world of increasing choice and pluralism it provides a benchmark that its commercial competitors must match to capture audiences.

The rationale for public service broadcasting and the form that it takes is bound to be changed by the technological changes of the past few years. It does not matter that the old arguments may have died or are less relevant. I believe that there are cogent new ones to replace them. It is important that nobody becomes a prisoner of nostalgia for form. Anything that is worth its salt must adapt as the world changes and that applies to public broadcasters as much to everything else. Between them they must provide a body of high quality material for our countrymen not only on television and radio. I have always been a strong supporter of the BBC's news activities and online business. I believe that the BBC was right to put effort and money into that.

Just as we have a tradition of art galleries, museums, public libraries and subsidised music and theatre--after all, there are none better in the world--so we have evolved a series of arrangements for television and radio wherein within its genre we have top quality. It may to some extent have happened by chance, but so be it. It improves the quality of life in this country. No doubt it is possible to make some ready money by dismantling the system, just as the proceeds of the sale of the Victoria and Albert Museum or the National Gallery could be used to pay off the national debt, but they would be silly things to do. But it is not silly to review critically and thoroughly what is done and how it is paid for. Are the right things being done by the right people in the right way and in the right quantity? For example, perhaps we may have too few or too many channels providing public service broadcasting on the digital multiplexes. Do we need channels 3 and 5 in their present form? Should they be different? What, for example, should the relationship be between public service broadcasting and e-commerce, or the cross-referencing of public service broadcasting to commercial organisations?

Already in their response to the consultation following the launch of the communications White Paper the Government have begun to propose adjustment of the relationship between these various organisations via the way in which Ofcom will handle them. As has been said this evening, perhaps the most contentious is the position of the BBC for, like the Church of England--an institution with which it has a number of similarities--it operates under a different legal regime from the rest of society. No doubt when the BBC was established its arrangements represented the way that things were done. As the number of commercial broadcast offerings increased the subordinate system designed to regulate them grew and grew, so that now the BBC's arrangements may appear to some to be a minority anomaly. Faced with such a state of affairs it is tempting to try to force a perceived anomaly into the wider more general framework, which I believe to be a mistake. It is much better to examine the general role, status and legal character of the BBC and its relation with the putative regulator, other broadcasters and society as a whole as part of the process in the run-up to the communications Bill.

Over the years the BBC, governed by charter and agreement, has changed as their provisions and the arrangements put in place beneath them have evolved. Having debated the matter in this Chamber, I am aware that it is not a straightforward business, but I believe that a serious examination of all the options will be called for in due course. It cannot be left until the end of the year 2006 when the current charter and agreement expire. It should, therefore, be brought forward for consideration with the other matters to be dealt with before the Communications Bill finally passes through Parliament. Not least of my reasons for this is my belief that it is likely that the best way in which the BBC can deliver a series of strong public service programmes for this country is by being a major global player, which is desirable for other reasons as well. In the contemporary world television in the English language is a global commodity, as are those who create it. Already we see BBC Worldwide generating sales of £587 million and contributing just under £100 million to the corporation's cashflow.

In the future the key to a successful domestic BBC will be a successful global business. In turn a successful domestic BBC will be the driver of a successful global business. We must find the appropriate legal basis and constitutional framework to do that, which is fair both to other broadcasters and to the corporation, as well as being transparent, because a failure to achieve that will impoverish us all in more ways than one.

However important that may be, it is just one part of Ofcom's wider task. In conclusion, because it is important to be clear about the overall approach of this new organisation and the way that it looks at matters, I repeat the remarks of Patricia Hodgson that I quoted earlier. The three vital priorities of regulation for Ofcom should be investment friendly policies, competition and a new settlement for public service broadcasting.

While structure is important, it will all come to naught if this is not achieved. If we get these priorities right the rest will follow; if we get them wrong it will not.

Photo of Baroness Jay of Paddington Baroness Jay of Paddington Labour 10:11 pm, 15th October 2001

My Lords, I am very pleased to take part in this debate and not to have to declare any interests at all. I must be unique among noble Lords who have spoken in being completely free from interest in this respect. I am not only free from government responsibilities, but also free from the corporate interest had my summer pursuit of the BBC chairmanship turned out differently. In that context, I take this first opportunity that I have had publicly to congratulate Gavyn Davies on his appointment to the BBC chair of governors. I am sure that the House recognises that he will be a formidable champion of public service broadcasting--the issues that we have heard discussed this evening--and a very powerful leader of the corporation in today's increasingly complex broadcasting environment which the Bill begins--everyone has emphasised that--to address.

The Minister earlier urged your Lordships to approach the Bill as a beginning, as the start of a wider debate which we hope will lead fairly rapidly to the much fuller communications Bill. I hope that the Minister, like me, has been interested in the very wide- ranging comments and contributions which have been made by noble Lords from such a variety of backgrounds and with such authority. We have gone back to first principles and in the case of the noble Lord, Lord Inglewood, back to the world of fantasy. My contribution will be somewhat more mundane as I intend to make some brief remarks about the regulation of public service broadcasting and, in particular, the BBC.

As has been all too often repeated this evening, the BBC is not included in the Bill. That is an omission which has been roundly criticised by distinguished speakers on this side of the House, notably, and perhaps most recently, by my noble friend Lord Eatwell who was devastating in his humorous attack on the fact that the BBC had been excluded. But the noble Baroness, Lady Anelay, the first speaker from the Opposition Front Bench, spoke about putting forward an amendment to the Ofcom Bill to correct the omission. That issue will come up shortly. It is appropriate to think about the matter in some detail. Therefore, I make no apology for perhaps going over some of the ground about which some of my noble friends, and other noble Lords, such as the noble Lord, Lord Thomson of Monifieth, have already spoken.

I should like to go back for a minute, even though it is now after 10 o'clock, and assert--perhaps this will be controversial--some of the fundamental characteristics of the BBC which make its place in broadcasting unique and therefore make it right that it should be uniquely regulated. In my view--I do not necessarily expect to satisfy the noble Lord, Lord Holme of Cheltenham, on this matter, but I have to say it satisfies me--the corporation maintains the gold standard of quality in public service broadcasting which, because its core services are funded by a licence fee, means that it can provide the most extensive range of original programmes and, very importantly, use its resources flexibly.

We have seen a very powerful illustration of this special capacity in the last month, since 11th September. My noble friend Lord Borrie and the noble Lord, Lord Thomson of Monifieth, have already referred to this.

I think it is a point worth emphasising. Surely no one can doubt the scale and seriousness of the BBC's information gathering, its reportage and its flexible programming during this period. For example, when last week air strikes began in Afghanistan, the BBC had a team of 25 people inside the country who were using new technology to send live reports to the evening programmes. Senior correspondents reported from the neighbouring capital cities, and there was extended capacity throughout the Middle East, in Moscow and in Washington. The peak audience for BBC1's special news programmes last Sunday week was 11.5 million. Over the whole evening the average audience was a little over 8 million, compared with just over 3 million tuned to ITV. As we have already heard from my noble friend Lord Borrie, throughout this time, the BBC World Service has done what my right honourable friend the Prime Minister called "a magnificent job". The World Service has sustained a uniquely difficult role of impartiality and responsibility in its extended broadcasts made in the Arabic, Pashto, Persian and Urdu languages, as well as many others. Since 11th September, I would assert that overall the BBC has consistently demonstrated that it is the nation's prime provider of high quality, well resourced news information and analysis.

Noble Lords have already pointed out that the BBC remains the place to which people instinctively turn in times of crisis and uncertainty. As we know, in the 20th century it was traditional for all of us to rely on the BBC, both in good times and in bad. In the 21st century, at least in the bad times, we really do still rely on it.

At the same time, however, the broadcasting environment has been transformed. So what should be the role of the broadcasting corporation now, and how should it be regulated? In the White Paper the Government state that:

"We will continue to rely on public service broadcasting for one clear reason-- it works".

I would say that that is slightly mealy-mouthed, but I wholeheartedly agree with the subsequent paragraph which points out that the success of public service broadcasting is not an accident in this country. It is founded on the economic, demographic and cultural characteristics of our broadcasting. It is for those reasons that I believe we should confront and dismiss the argument that the existence of the BBC, along with its separate governance and regulation, distorts some--albeit theoretical--perfect competitive UK market in broadcasting. I hope that the economists in the House will not think it superficial or naive if I say that it is almost as inappropriate and inaccurate to argue that the existence of the National Health Service distorts the private health market.

If, in the future, the BBC continues to justify the funding of its core home services by a licence fee, as I am sure it will, and if in the future we see the same trends in commercial broadcasting ownership that have been seen over the past few years, it seems extremely unlikely, if not impossible, that the UK will ever provide a conventional "true market". The White Paper assesses the situation correctly when it states that:

"It would be foolish to frame our policy for a potential contentious future rather than the current successful reality".

But of course none of this suggests or even seeks to propose that everything today is perfectly set in immovable stone. In the past it has certainly been a legitimate criticism of the BBC that its somewhat iconic status has at times produced a curious indifference, almost a complacency, about its own governance. I say that with one of the successful vice-chairmen of the BBC sitting behind me. However, I believe that on occasion that sense of distance from the realities of the world and even from the realities of the audience has been noticeable.

For that reason, I am pleased that under the proposals for the three-tier regulation to be administered by Ofcom there will be significant external regulation of the BBC. Contrary to the assertions of speakers such as my noble friend Lord Bragg, this will become a reality: external regulation will take place. However, at the same time, I believe that the corporation must itself act speedily to introduce internal reforms which do not simply conform to the letter of the White Paper proposals, but enthusiastically develop their spirit.

The noble Lords, Lord Lipsey and Lord Thomson of Monifieth, have gone over some of the detail of the organisation of the three-tier regulation and the way in which it embraces the BBC, but, given the balance of the contributions from noble Lords today, I believe that it is perfectly legitimate for me to go over some of it again and, perhaps, to reinforce some of the points they made about the way in which the BBC will indeed be included in Ofcom.

As has been pointed out, the first proposed tier of regulation will cover all broadcasting comprehensively. In the second tier, for all public service broadcasters, Ofcom will monitor independent original production and regional programming. In addition, for the first time, the BBC will be required by Ofcom to provide news and current affairs programmes at peak audience times.

All of these second-tier touchstones of public interest can, of course, be quantified, and to that extent this is the easy end of regulation. Nevertheless, on the question of news, for example, I can foresee vigorous debates between the BBC and Ofcom about news and current affairs in prime time. The BBC has recently published a first-year review of moving the main TV news bulletin from 9 p.m. to 10 p.m. The review seems to show that the move has been very successful for both audiences and broadcasters, but I think that it is at least questionable that external regulators would have judged 10 p.m. as prime time if they had been making a judgment about that move in advance.

However, the broad point is that the general and the specific oversight of the BBC by the new requirements of Ofcom, combined with the back-up powers of the Secretary of State and the existing statutory and charter obligations, creates a fairly exacting framework of external regulation for the organisation. The controversy which seems to have emerged from the debate today, the concern which noble Lords have expressed, really focuses on the distinct residual responsibilities of the governors to self-regulate, to safeguard the public interest, the so-called "third tier".

Under the proposals in the White Paper, BBC governors will continue to do this by maintaining the general quality of programming, maintaining editorial independence and calling the executive management to account. This must be the trickiest part of regulation because it often needs subjective judgment rather than objective benchmarking.

But here, too, it is not intended that the governors are set loose on their own. The White Paper insists that public service broadcasters must develop agreed policies and mechanisms with Ofcom, and must do so before the legislation reaches the statute book. The BBC's latest report demonstrates that internally the governors are already setting strategic objectives against which performance can be judged.

In addition, the report publishes four promises to licence holders by the governors. The 12 objectives from the promises are all laudable in themselves and range from a commitment to make the BBC more open and accountable to improving sports coverage at an affordable cost.

My anxiety, my query, about all of this concerns the governors' ability to deliver. Do they have the tools and the capacity to be effective in the new tough environment which has been set both by themselves and by Ofcom? Let me make it clear though that I--perhaps unlike some earlier speakers--want them to succeed; I want them to retain their independence. I do not want ineffectiveness in the future to become a justification for sweeping all BBC regulation into Ofcom.

To avoid that particular fate, the governors will need more dedicated resources to do their job properly and, as several noble Lords have mentioned, a clearer and more precise analysis of their role and functions. I believe that there is a strong case for the BBC to create a secretariat, and possibly some kind of research capacity, which will work exclusively for the governing body so that the governors have a source of information, advice and data separate from, and independent of, the managing executive. Common sense suggests that it must be difficult for the governors to exercise effective oversight of management if they depend on management to advise and brief them. The governors must work hard to avoid the impression of rubber-stamping executive decisions. To mix the metaphors, they must be given more teeth.

Similarly, the governing body needs to develop more obvious mechanisms to improve its own accountability and the transparency of its deliberations and decisions. For example, the governors could set up a more direct interface with the licence payers, perhaps using interactive technology. At the parliamentary level, one good suggestion is to hold formal committee hearings on the corporation's annual report rather than the present, somewhat casual presentations to Members at Westminster which many noble Lords have attended.

These kinds of changes are essential if the BBC is to continue to convince the Government, Ofcom and the public that there are areas of regulation and governance that must remain its alone. It may, of course, mean more of a commitment by individual governors as well as by the chairman. But in the new framework of responsibility this seems entirely appropriate. I am sure that we all agree that the days of perceiving governorship of the BBC as being almost like receiving an honour are certainly over.

To return to the point at which I began my remarks, I believe that there remains a wide consensus in Britain that the unique nature of the BBC contributes uniquely to our national life. In today's complex and commercially dominated communications world, the challenge for all of us who value the BBC is to maintain support for that consensus. Personally, I believe that there is a problem about extending that viewpoint to younger generations of viewers and listeners. The BBC needs actively to build brand loyalty among children and young people, and thus continue to build support for licence-funded public service broadcasting. I agree with my noble friend Lady Young of Old Scone about digital programmes for children. But in that context, and given the Government's position as expressed in the White Paper, I have been slightly surprised by the decision to block BBC3 and by the slow development of the BBC's digital curriculum for schools. Both of those decisions seem to be somewhat at odds with the Government's determination to maintain a dynamic consensus for BBC broadcasting. However, I am acutely conscious of the time and of the Minister's wish that we should not have an all-encompassing debate today. So I merely refer briefly to those points.

I conclude by welcoming this paving measure. In general, it seems to me both far sighted and sensible to establish Ofcom now so that there is minimum delay once the communications Bill comes into effect. In particular, I hope that the Government will maintain their position towards the BBC as stated in the White Paper, and that Parliament will support it. This position seems to me to combine what has been called "proportionate", but none the less effective, regulation with a proper understanding of the special character of public service broadcasting produced by the corporation. I look forward to the next stage of the Bill.

Photo of Lord McNally Lord McNally Liberal Democrat 10:27 pm, 15th October 2001

My Lords, I am sure that the Minister is thinking: "If only I had not uttered that throw-away line about Members feeling free to broaden the debate beyond the terms of this particular Bill. If only I had not said that, I could have been at home drinking my cocoa at this very moment". Let me reassure the Minister. I have studied the list of speakers carefully, and there was not a chance of this debate remaining restricted to the terms of the Bill. Therefore, the Minister should not blame herself for the fact that we are still here at 10.30.

Perhaps I may begin by paying tribute to the two maiden speakers. I agreed in particular with the reminder from the noble Baroness, Lady Howe, of the importance of broadcasting to the workings of our democracy. I strongly endorse the call by the noble Lord, Lord Corbett, to retain the existing regional structures within our broadcasting ecology. Both are very important.

Like 90 per cent of the speakers in this debate I have interests to declare. I worked for one of the largest public relations companies in the world. I am sure that if the Guardian is assiduous it can find one of our clients who is likely to benefit from the legislation. I have recently retired from the presidency of BREMA, the television manufacturers trade association. But I am not aware of any plans for the company for which I worked to pay for lobbying. What the House will hear are my views plus those of my party's study group on broadcasting, of which I am chairman.

The reason why we have had such a broad debate is that this is the first piece of a larger puzzle. We all know that we shall have a series of pieces of legislation over the next five years that will shape the quality, diversity and choice in communications for decades to come. In so doing--this was clear from the various conflicting remarks that have been made--Parliament will have to solve a kind of Rubik cube: if we get one part right, we might look around and find that we have caused a problem elsewhere. It will be a difficult task.

In trying to solve that task, I start by quite consciously using the mantra, "quality, diversity and choice". Those words will be recognised as having featured in the title that the noble Lord, Lord Hurd, used for his 1989 White Paper on broadcasting. However, I still believe that it best sums up what Parliament's objectives should be in the task with which we are now faced. We should aim for a communications industry that offers quality, diversity and choice. As for the BBC, I am still old-fashioned enough to believe that it should cling to the old Reithian objectives; namely, to inform, educate and entertain. Noble Lords will notice that I put quality, diversity and choice and to inform, educate and entertain as objectives ahead of the Minister's priority of creating the most competitive communications industry in the world--or, indeed, the plea of the noble Lord, Lord Bragg, for that mythical level playing field.

I fully accept that it is important that investors and entrepreneurs who wish to operate in our communications industries should be assured that we wish to create a system of light-touch regulation that ensures full, fair and transparent competition between operating industries. But it should also be clear that Parliament reserves the right to tilt the level playing field to ensure that British broadcasting retains a strong and robust public service element.

A strong nerve will be needed by government and by Parliament to resist powerful vested interests, not least powerful vested interests who seek this opportunity to weaken and undermine the BBC as the bench-mark provider of quality broadcasting. As has been said, there are grounds for optimism. The BBC is well funded above inflation over the next few years. It has been given the go-ahead for the new digital channels. I share the view of the noble Baroness, Lady Jay, that the right man, Gavyn Davies, was chosen as the BBC's chairman. However, I understand why she may think that the BBC could have been even more radical and have picked the right woman.

There is a need to drive the message home, perhaps even to the noble Lord, Lord Eatwell, who is not present in the Chamber at the moment. It is simply not a question of the regulation of markets, as is the case with the Financial Services Authority. As the noble Baroness, Lady Howe, reminded us, society has a right to insist that the forthcoming legislation underpins both the cultural and democratic strengths of our country. The BBC is the iron pole around which the public service commitment can be built. It is no use commercial interests complaining that the BBC distorts the market. The noble Lord, Lord Lipsey, seemed to understand this in a way that the noble Lord, Lord Bragg, does not: the whole idea of having the BBC is that it distorts the market in favour of quality. If it does not distort the market in that direction, it does not have a reason for existing.

I understand the emphasis or desire of the noble Lord, Lord Holme, to see the BBC define "public service broadcasting", but I do not wish to give the noble Lord, Lord Baker, any encouragement that he already has the votes in his pocket to force the BBC into the Ofcom remit. I say that even though the noble Lord, Lord Bragg, gave his usual 200 per cent support for the BBC, rather like a rope supports a hanging man.

The right reverend Prelate the Bishop of Wakefield also asked where were the supporters of the BBC. They were a little thin on the ground during the previous debate, but tonight on the Labour Benches we heard from the noble Lord, Lord Lipsey, and the noble Baronesses, Lady Jay and Lady Young of Old Scone. The reason why is not only that the BBC is different and should be different but also that people worry that some of the strongest advocates of this move are the very vested interests who would like to see an emasculated and ineffective BBC confined to a public service ghetto.

It is reported that the Secretary of State will look again at the relationship between the BBC governors and Ofcom. Like the noble Lord, Lord Borrie, and a number of other speakers, we want to see much more clearly the size, shape and temperament of the beast that we are creating in Ofcom before we consign the BBC to its tender mercies.

We need more persuasive arguments than those of the noble Lord, Lord Eatwell, that it will give greater regulatory efficiency. In turn, the BBC must address the criticism of the noble Lord, Lord Holme, that it is vague about what is meant by public service. It should be showing much more vigorous promotion of digital television. It seems to be taking a passive role at present.

The noble Lord, Lord Borrie, wants to see the shape and content of the main Bill on communications--we all do. The noble Lord, Lord Gordon, suggested a sunrise clause, which is an interesting idea, and the noble Lord, Lord Holme, suggested that we should report back in six months on how Ofcom is performing.

All those suggestions show the real doubts that have emerged throughout the debate. Ofcom is too large and all-embracing. It is too technology-biased. It has come too early in this legislative process. The Minister admitted that it is a child of the dot.com boom rather than what is needed now. There is now a mood of much more caution about the pace and direction of change. If we are to be given a legislative pig in a poke, we are going to poke the Ofcom pig firmly to find out what it is about.

There is the suspicion and the fear that the issue is the culmination of the 20 year-old turf war in Whitehall between the DTI and the Home Office, at first, and then the Department for Culture, Media and Sport, about who controls broadcasting. The contradictions have been shown time and again. The noble Lords, Lord Thomson and Lord Eatwell, referred to the fact that 11 years ago Parliament, in its wisdom, said that radio needed a separate regulator because in the big IBA radio did not get a fair share of interest. What will radio get under the mammoth Ofcom? There are contradictions, and the acceptance that big is beautiful is far from convincing.

A concern was expressed by the noble Baroness, Lady Howe, the noble Earl, Lord Sandwich, and others, that content will become the poor relation of technical and commercial interests, especially as Oftel and the Radio Communications Agency will be the dominant players in terms of regulatory know-how and total staff numbers. If we accept the logic of a single regulator--I suspect that the Government have enough votes to get their way--we must ensure that it is a new and fresh regulatory body that truly reflects the new shape of the communications sector and is not just an amalgam of old prejudices and old vested interests.

Although the ultimate aim, as expressed by the noble Lord, Lord Baker, is for an Ofcom that will be a lighter regulatory regime, it is important in markets where there is still only one, or at best a handful, of dominant players that the regulator must be proactive in promoting competition and addressing abuses of dominance. Ofcom also has a major duty to the consumer. It is interesting that both BT and the Consumers' Association agree that Ofcom needs a membership that has the support of both the industry and the consumer. It is important that from the start there should be an open and consistent approach on Nolan principles in the appointments to Ofcom.

There should be a clear and effective way of reporting to Parliament. I was interested in British Telecom's view that the present procedures failed to deliver accountability and in its call for the establishment of a parliamentary communications committee as part of the process. That, together with the proposal to establish a communications consumer panel, which was welcomed by the Consumers' Association, should ensure that Ofcom does not become too introverted or industry oriented in its work. A number of other issues have been raised tonight to which we shall have to return.

As regards cross-media ownership, frankly the Government seem like a rabbit in the headlights. The leaks that they cannot make up their mind on that issue are an increasing disgrace. The noble Lord, Lord Borrie, mentioned overlap, double jeopardy and the multiplicity of agencies concerned with advertising. The noble Viscounts, Lord Chandos and Lord Astor, mentioned the need for proper funding and proper technical staffing. Clearly there are conflicts here. There is a need for hard thinking. Can we solve this Rubik's cube? Can we ensure that Ofcom is both Patricia Hodgson's lean and mean regulator and at the same time defend what a recent ITC study called our cultural citizenship? We shall see.

Finally, I endorse what the noble Lord, Lord Lipsey, and my noble friend Lord Thomson said. It would help if we could be given a firm commitment to establish a pre-legislative committee of both Houses to consider the matter. We have seen from the amount of briefing that has been produced and the lobbying that has occurred that that would be far the cleaner way to obtain a variety of views before Parliament as the legislation rolls forward. I had hoped that the noble Lord, Lord McIntosh, might this evening perform as the first cuckoo of the spring we have been promised. However, I suspect that he will mimic the old owl in the rhyme who, the less he said, the more he heard. I hope that the noble Lord will have heard much tonight to make him think.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative 10:42 pm, 15th October 2001

My Lords, following the example of the noble Lord, Lord Holme of Cheltenham, I shall try to be brief and avoid taking up too much of your Lordships' time by repeating some of the observations made by my noble friend Lady Anelay or indeed in the excellent contributions made by everyone this evening, especially the two maiden speakers whom we are all pleased to hear. However, I believe that there are a few points that I should reiterate. Although I have slashed away with my pen, I hope that I have not slashed the important points; otherwise, I suspect that I shall be "for it".

Noble Lords:

No!

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

Yes, my Lords, I suspect that I shall. As my noble friend has made clear, broadly we accept both the need for the Bill and for its general principles. But that is where the problem lies. The Bill deals in generalities, not in detail. In the current cliche the devil is in the detail--details of which the Government have failed to communicate to us in a Bill about communications. The Government's White Paper, which is subtitled in paragraph one,

"The government's vision and objectives" was published as long ago as December 2000. That was 10 months ago. It was debated for two hours by your Lordships on 28th February when no fewer than 23 noble Lords made important and constructive contributions in a debate excellently initiated by the noble Lord, Lord Gordon of Strathblane. But what has happened in the intervening eight months? Not much. We now have this small piece of legislation, a paving Bill.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, I suppose the Government should be congratulated on that even if I do not care for the result. However, the fact remains that a communications Bill was promised in the 1997 manifesto. Nothing as yet has appeared. We are being asked to spend time considering this little Bill when we do not know what it will deal with. The Government admit in their Explanatory Notes that the Bill is a preface to a real communications Bill which will be published at some unspecified date in the future and, one assumes, will carry out the Government's real objectives in the important field of communications. That is legislation which the debate on the White Paper and today's debate show will largely be uncontroversial--assuming, that is, that the Government stick to what they have already published about their objectives and intentions. I say that with hesitancy, because we have some reservations about certain aspects of the Bill, particularly as it affects--or rather does not affect--the BBC.

Leaving aside that small reservation, perhaps the Minister will tell us why the substantive legislation is not ready after this long lapse of time. He said a few moments ago that it was due to an election, but the Government must have had some idea of what they were going to do. When will we see the Bill--in what part of the spring that the noble Baroness, Lady Blackstone, referred to earlier this afternoon?

The Labour Party promised a communications Bill in its 1997 manifesto. We appreciate that there has been an election, but that manifesto was produced four years ago. We have had only the White Paper and this small Bill.

We also recall the fiasco in the last Parliament, when a utilities Bill was introduced in January 2000, but by February the Government had tabled 359 amendments to it and the telecommunications part of it had to be dropped. It seemed to us then that the Government may have wanted to delay disclosing their true intentions until after the recent election. It was possible that at the time they did not wish there to be any discussion about cross-media ownership--a subject that many noble Lords have mentioned this evening.

Perhaps the Government hope that, by taking the legislation in two stages, Parliament could be presented with a fait accompli. I sincerely trust that the Minister will be able to allay those suspicions by explaining to us what at the moment seems to be an inexplicable timetable.

I share the concern expressed by my noble friend Lady Anelay about the disclosure in the Towers Perrin report that final decisions on the structure will rest with the paving Ofcom Bill. A quick read of the summary, which I found on my desk today, suggests that the nature of Ofcom has already been decided. Given that the Minister who opened the debate restricted her remarks to the bare bones of this Bill and said that the noble Lord, Lord McIntosh, would do the same when he wound up, it is all the more necessary that we should examine the Bill with great care and diligence. The final decisions on the structure of the industry and the method of overseeing it should rest with Parliament, which must have some say. Such vital decisions should not be pre-empted by this new and powerful quango. We must not give it that power without knowing what the final communications Bill will say.

We have already made it clear that we support the creation of a single regulator to replace the current patchwork of regulators. We entirely agree that that is a desirable objective. Apart from avoiding having too many cooks, it will prevent different regulators approaching similar problems in differing ways and applying different criteria. Even more importantly, with the rapid advances in communications technology, many aspects of communications now overlap. The need for a single, powerful regulator who will not get tangled up in demarcation disputes with other regulators covering overlapping jurisdictions is unanswerable.

However, the Bill does not give specific details about what the regulator will do and how he will do it. The Bill says that Ofcom shall,

"do such things as they consider appropriate for facilitating the implementation of, or for securing the modification of, any relevant proposals about the regulation of communications".

What does that mean? As now frequently happens, we are being asked to give the Government a blank cheque for the substantive legislation, when it comes.

Talking of blank cheques, I refer again to the Towers Perrin report, which suggests that the cost of Ofcom will be considerably more than the £119 million already received by the five regulators that it is to replace. And it appears that it will be considerably more than the extra £5 million which the Explanatory Notes to the Bill suggest will be the case. Returning to this legislation, at least we can be grateful that the real legislation, when it comes, will be a primary Act and not a ministerial decree in the form of a statutory instrument, slipped in as unobtrusively as possible.

We are extremely concerned that the Government propose to leave the BBC out of the new regulatory regime. We consider it to be totally illogical--I believe that the noble Lord, Lord Bragg, made a very similar point--that when Ofcom is created to deal with the dual issues of content and free competition, somehow the largest broadcasting organisation of all should be outside the remit of the independent regulator, Ofcom.

The White Paper had claimed that the BBC would be placed alongside other broadcasters, creating for the first time a level playing field for British broadcasting. What sort of level playing field is it when the two teams have different referees and one of the teams is the referee itself? In its briefing notes, the BBC claims:

"The BBC will be subject to the same set of obligations as other broadcasters. Ofcom will monitor BBC compliance with industry-wide obligations".

But there is one major difference. If, when the substantive Bill is unveiled, it follows precedent, Ofcom will have the power to inflict penalties on an offending broadcaster's turnover. Will the BBC fine itself? I do not think so. Will the Secretary of State, exercising what the BBC's brief describes as his "backstop powers", fine it? I do not think so. There is no level playing field not only so long as the BBC is judge and jury but while there is no executioner.

Where is there a definition of public service broadcasting? I believe, as do many other noble Lords, that that should be the major function of the BBC. I was gratified to learn that, during the hours following the events in America on 11th September, the BBC gave free access to its television broadcasts to many countries which did not have the facilities, including, for example, India and New Zealand. That, I believe, is certainly an example of public service.

However, it seems to me--again, noble Lords have referred to this--that the main objective is ratings. The noble Lord, Lord Borrie, made the point about "EastEnders" now coming head to head with "Coronation Street" on Friday evenings. The BBC is a publicly subsidised operation financed by the licence fee, which is a tax levied on everyone who owns a television set, whether they watch the BBC broadcasts frequently, rarely or possibly even never. It earns a portion of its income from commercial activities. However, the bulk of its finance, equivalent to more than many major companies on the Stock Exchange, comes from the public. It is in no danger of losing its financial support and business, however badly it performs, which, incidentally, I do not suggest that it does. I simply make the point that it is unlike any ordinary commercial programme maker.

My view that the BBC should come within the remit of Ofcom does not detract in any way from my admiration for it and for the work that it does. It has made many fine programmes recently; for example, "The World of Dinosaurs" and "History of Britain". Those are world-class, to say nothing of old favourites, such as "The Proms", "Question Time", "Crimewatch" and "Songs of Praise".

I now come to the matter of appeals procedures. The present Bill merely provides for the setting up of the office of Ofcom with no real day-to-day functions as yet. But when shall we learn about the accountability of the regulator--this powerful, all-embracing regulator? To whom and how can appeals be made against his decisions? In short, who will regulate the regulator?

In their White Paper the Government invited comment on the cross-media ownership rules. I was most interested, incidentally, in the views of the noble Lord, Lord Gordon of Strathblane, on this matter. The subject certainly provides food for thought. His view was one that I had not considered previously and I have not heard anyone else articulate it. However, unless I have missed something--I shall appreciate the Minister pointing it out if I have--where are the results of that consultation and what will the Government do about it?

In the absence of current facts, before the publication of the operative communications Bill and in the light of the rapidly changing technology, we on these Benches reserve our position. However, it is right to give the Government fair warning that, when they publish their Bill, this matter will receive careful scrutiny. We do not wish to have legislation in the blank and not know what will come afterwards. That is dangerous and should not be necessary with such a Bill.

This Bill involves creating a powerful regulator. When we discover what he will do--apart from, to use the words once employed by the noble Lord, Lord Steel of Aikwood; that is, to go and prepare for office--we trust that his powers will not be so great that he will be tempted to over-regulate an industry whose very basis is, within the bounds of the law, freedom of expression, whether in print or on screens of all shapes and sizes.

My remarks have been about as long as the text of the body of the Bill, and for that I apologise. We will, as I said, support the passage of the Bill, but we are unhappy that Parliament's time is being taken up with a proposal that should have been included in a substantive Bill that should have been introduced some time ago, but which as yet is not in sight.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 10:55 pm, 15th October 2001

My Lords, I have very much enjoyed this debate because it has been full of wise words from people who know their subject intimately and who speak with a great deal of authority, and because I do not have to respond to much of what they said. Many comments that were made very legitimately represent the beginning--or the continuation--of consultation on the substantive Bill. My noble friend Lady Blackstone invited such a response.

I shall begin by defending and propounding the procedures that we are going through in this regard, from the Green Paper through to the final implementation of proposals to reform the system for regulating telecommunications. I shall then defend the specific element contained in the Bill; namely, the single regulator, which is called Ofcom. Then I shall deal with those issues that refer to the Bill--this little Bill, as the noble Baroness, Lady Miller, called it. Finally, I shall deal briefly and without commitment with some of the worries that have been legitimately expressed in this debate. In particular, I shall conclude by referring to what the Bill says and the Government's approach to the relationship between Ofcom and the BBC.

I start with the process. We have had a Green Paper, which involved consultation and which was followed by a White Paper, which appeared in December last year. That has now been followed by a paving Bill, which will be followed in the spring of next year with a draft Bill, which will allow for consultation. Several noble Lords rightly said that the quality and nature of the consultation will be critical to the success or otherwise of the Bill. I shall come to that in a few minutes. At the end of that process, a Bill will go before Parliament and it will have to be approved by Parliament before reform can be implemented.

That process is both transparent, in the sense that we are consulting at every stage and allowing for informed public and parliamentary opinion to play a role, and it is efficient, in the sense that the paving Bill will, when the consultation process and the legislative process are complete, allow implementation to take place at least six months--possibly as much as 12 months--earlier than would otherwise have been possible. The structural processes that are provided for in the Bill will now be concurrent with the policy decisions rather than follow on from them. That does what the noble Lord, Lord Chandos, referred to as illuminating and informing debate and it provides for a significant saving in terms of time. The other substantive element of the Bill is that it proposes a single regulator, who will cover both regulation of content and economic regulation. I have listened carefully to the debate and would say that about two-thirds to three-quarters of the speakers were unequivocally in favour of the single regulator principle and that the others expressed their views in perfectly legitimate ways. There is an argument about whether a regulator is the same thing as a consumer representative. I think not, but much regulation is based on the supposition that it is.

Clearly, from all that comes the conclusion that if we are to have a single regulator of that kind, it is difficult to see how we could define the objective of that single regulator, as the noble Lord, Lord Holme of Cheltenham, and others would wish, in a single word or phrase. One may wish to say that the core is competition or that it is public service broadcasting and then to seek a definition of that. Nevertheless, it is difficult to do that because we propose here, deliberately, explicitly and openly, a regulator which covers the wide spectrum of communications and broadcasting. We do that because the structure of the industry when those regulators were set up many years ago is changing. It may not be changing as fast as some people thought it would. It may be some years before the convergence between telephony and television, broadband and narrowband and all the technological elements is achieved. Nevertheless, it is happening. The noble Lord, Lord Eatwell, expressed that particularly well. He said that our proposal for a single regulator is a rational response to that convergence.

Another feature, which is explicit in our proposal of a single regulator, is that it must have an independent status, as stated clearly by the noble Baroness, Lady Howe, in her admirable maiden speech. I am able to answer the noble Baroness, Lady Miller, not in several months time but now. Ofcom will be an independent regulator accountable to Parliament. It will have to make a report to the Secretary of State, which the Secretary of State will have to lay before Parliament and which will be audited by the National Audit Office. That is not a new definition of independence of a regulator. It happens in many spheres of government and public life. There is nothing startling, difficult or innovative about it. It provides the guarantee of independence rightly called for by noble Lords.

I turn to the elements of the structure of Ofcom, which arise from the provisions of the Bill. It has to be a lean and efficient organisation, able to operate flexibly with a light touch. But a number of elements about its constitution and the way it is organised are yet to be determined. I was able to see the Towers Perrin report only over the weekend. I understand that most noble Lords have probably seen only the executive summary. Certainly, it raises many questions which it does not answer. It is legitimate for the noble Lord, Lord Eatwell, to say, as he did, that what is said in the Explanatory Notes about the cost of regulation is open to question. Paragraph 25 of the Explanatory Notes states that in the longer term there may have to be a more detailed assessment in the Explanatory Notes to the substantive Bill, and that it may well be that the figures on cost are for only the transition period.

I was glad to have support from the noble Lord, Lord Currie, the noble Baroness, Lady Young, and others, for the provision in the Bill for a board rather than a single regulator. Having been involved rather more closely than I would have wished with the establishment of a lottery regulator and then a lottery commission, I think that is entirely right.

The size of the board has deliberately been kept small, and that has been widely welcomed. In answer to the noble Baroness, Lady Anelay, who first raised the issue, although others raised it later, I say that ways will have to be found of dealing with the interests of regions and countries, because they, of course, are essential elements of public service broadcasting. The White Paper referred to the need for Ofcom to establish close links with the devolved assemblies. We are committed to that, and ways will have to be found of achieving it.

With regard to the timetable, we have made it clear that the chair of Ofcom will not be appointed until the spring. The other non-executives will choose a chief executive, which may take until the early autumn of next year. In response to the noble Lord, Lord Gordon, I honestly do not believe that anything would be gained by setting up the board only at Second Reading of the substantive Bill. I do not see any advantage in that delay. It would leave us with many administrative and structural changes to make after Parliament had made its decision on the content of the final Bill. However, I am perfectly prepared to say to the noble Lord, Lord Holme, that we will report back in six months' time, or at such time as seems appropriate to him, on the progress of the setting up of Ofcom under the terms of the Bill.

Of course, the issue of coverage involves the question whether we should have two regulators rather than one. I have already referred in general terms to why I think we have to combine economic regulation with content regulation.

The noble Baroness, Lady Howe, referred to the fact that the primary purpose of Ofcom is to manage the industry. She did so in order to put a perfectly legitimate argument, with which I agree, about the necessity for adequate regulation of content. I do not think that that is its primary purpose. The two go hand in hand and, as convergence proceeds, it will become clear that one cannot be considered without the other.

I have already dealt sufficiently with the issue of costs and the Explanatory Notes.

The noble Baroness, Lady Anelay, made a particular point about what the costs would be if Clause 4 were invoked and the whole process aborted. The literal answer is that the Government and the taxpayer would have to pay. There is provision for Ofcom to levy charges, but I do not think it could quite be used for that purpose.

I turn now to the issue that has concerned many noble Lords: pre-emption of future decisions and in particular the pre-emption of decisions of Parliament. The Bill includes specific measures in Clauses 2(5) and 3(4) to ensure that none of its provisions should be construed as dispensing with the need for any parliamentary approval that would otherwise be required. In other words, nothing in the Bill will pre-empt Parliament's role in considering the future regulatory regime. Ofcom will not have any regulatory functions until Parliament has had an opportunity to consider those functions and decide what they should be.

A number of noble Lords, including the noble Lord, Lord Lipsey, made the legitimate point that a Joint Committee of both Houses of Parliament proved to be invaluable in the run up to the Financial Services and Markets Act. Having been involved in the passage of that Bill, I certainly agree with that. I hope that we have enough time for a Joint Committee. It would, of course, be a decision for Parliament rather than for government. Both Houses of Parliament, rather than the Government, would have to demand it. It would be impertinent of the Government to impose it. But if there is time to do it, and if both Houses of Parliament ask for it, I cannot imagine that the Government would wish to resist it.

I say the same to the noble Baroness, Lady Miller, who spoke of final changes in the structure. These are not changes in the structure of the industry, as she seems to believe, but they are changes in the structure of Ofcom itself. It is simply not a case of Ofcom coming into full flower as the regulatory body when the final legislation has been passed and not having the ability to change its own structure. What is provided in the Towers Perrin report and in the regulators steering group is some valuable thinking that is designed to cut short later unnecessary delay about the way in which such a regulator could work.

Despite what was said by the noble Baroness, Lady Anelay, the noble Lord, Lord Gordon, and others, I simply do not see that anything in the work of the regulators pre-empts the future role of Ofcom. The noble Baroness, Lady Anelay, referred to paragraph 12 of the Explanatory Notes relating to the provision for committees. That is the power only to set up committees; it does not demand that committees should be set up or what they should be. The main decisions will ultimately be for the Ofcom board and not for any preliminary steering group of the existing regulators.

A number of noble Lords asked legitimate points about the relationship with the competition authorities. That is a difficult area and it always will be, but it is not a new difficult area. We stated in the White Paper that Ofcom will have concurrent powers with the Office of Fair Trading under the Competition Act and the fair trading legislation. That is normal in the case of concurrent jurisdiction. Ofcom and the OFT will have to decide which of them is best placed to deal with specific issues or concerns in which both may have reason to be involved.

I know that that is not a satisfactory answer to give the noble Lord, Lord Baker, because I know he wants me to commit myself in much more detail about the relationship than is possible at the moment, but it is the answer that has been given by governments successively whenever there is concurrent jurisdiction. There is, after all, the cheerful thought that a lighter touch in regulation implies that there should be less regulatory overlap than would otherwise be the case.

Similarly, while I would like to fall into the trap of the noble Lord, Lord Eatwell, of giving specific answers about local radio and the national radio network, I cannot do so. I believe that that must be subject to the normal concurrent jurisdiction rules.

The concerns which noble Lords expressed were particularly and understandably about content regulation. A number of speakers saw the economic regulation as leading the pack, so to speak. The White Paper recognises that the freedoms and responsibilities in broadcasting go hand in hand and Ofcom will have as one of its principal duties the protection of the interests of consumers and citizens, including those of children.

That goes with the regulator being independent. It means that the regulator, being independent, will have to make a meaningful decision about the issue of what is timely, as the noble Baroness, Lady Howe, rightly suggested. It means, as was said by the right reverend Prelate the Bishop of Wakefield, that the regulator will have clout to enforce its regulation. The White Paper goes into a great deal of detail on the way in which we approach content regulation and it is not unreasonable for me to suggest to the House that we should rely on the White Paper for the time being and see the policy develop under the supervision of Parliament. Similarly, I resist the temptation to define "public service broadcasting". I say to the noble Lord, Lord Holme, I do not believe that "definition" is necessarily equal to "clarity". When one has an organisation of this kind with complex objectives one does not necessarily benefit from extensive definitions of what is meant by "public service broadcasting".

I believe that in his wise maiden speech my noble friend Lord Corbett had some very relevant comments to make on this matter. In case there is any doubt about it, of course religious broadcasting is part of any such definition that I could recognise. The same is true of education, coverage of international news and many of those matters which over the years we have come to expect as part of public service broadcasting. The same is also true of regional broadcasting which has been an essential element in all the ways in which public service broadcasting has developed in this country. As is well known, it is an important part of the remit of the ITC and so it will continue under its successor.

Finally, I should like to say something about the BBC and Ofcom. I have heard both sides of the argument. I believe that in expressing their views too many have sought to show that there is something in the Bill which predetermines the relationship between the BBC and Ofcom. There is not. All of these matters are for the main Bill which will be fully consulted upon when it is published in draft in the spring. This Bill is about the structure of Ofcom before it takes on its regulatory powers. It is of no structural importance to Ofcom whether it does or does not regulate the BBC. The Bill deals with the structure of Ofcom at this preparatory stage.

The noble Baroness, Lady Anelay, quoted Clause 2 and the transfer from existing regulators. The clause refers to,

"transfer from the existing regulators or otherwise".

After all, there is an agreement between the Secretary of State and the BBC which is approved by Parliament. That agreement must be amended to accommodate the White Paper regulatory regime, whatever final decisions are taken about the BBC. If thought appropriate, it could well include an obligation to co-operate with Ofcom.

This debate has shown that there are many valuable thoughts on the value and role of the BBC. I have in mind in particular the very well informed, authoritative and persuasive arguments of my noble friend Lady Jay. All of these will take their place in the final consultative process.

I congratulated myself on not having to respond to all the points made in the debate, but I have still taken 22 minutes, for which I apologise. However, I am sincere in saying that, like the debate at the end of February, this one is a valuable contribution to public thinking on issues which will concern all of us, including Parliament, in the months to come. I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at twenty minutes past eleven o'clock.