Communications Bill

– in the House of Lords at 3:23 pm on 5th June 2003.

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House again in Committee on Clause 340.

Photo of Lord Puttnam Lord Puttnam Labour 3:30 pm, 5th June 2003

moved Amendment No. 286:

Page 295, line 9, leave out paragraph (b).

Photo of Lord Puttnam Lord Puttnam Labour

In moving Amendment No. 286 I shall speak also to Amendment No. 322C. If our debates this morning could quite reasonably be described as sublime, we are moving swiftly here to the gorblimey. I and others have worked extremely hard to try to find out where on earth this proposal from the Government came from. It certainly was not sought by any advertising agency and does not appear to have been sought by any media owner. It may be the work of some mad teenaged deregulator. I have to ask that deregulator: whose interests did they believe, for one moment, they might serve?

For any agency to take advantage of the offer being made by the Government here, it would have to withdraw from its own industry body. That cannot be sensible. Having discussed this with media owners and advertising agents, no one knows where the proposal came from and I very much hope that the Government will move business along swiftly this afternoon by disavowing it and passing on to the next amendment. I beg to move.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

I have been caught unawares by the brevity of the speech of my noble friend in moving the amendment. It was somewhat out of keeping with our proceedings before lunch, but if it sets a pattern for the remainder of the day, I can only say how much I rejoice in it. I hope to respond with similar brevity, but with a degree of effectiveness so that my noble friend may feel able to withdraw his amendment after he has listened to my remarks.

The amendments would restore the provisions of the Broadcasting Act 1990 that prevent advertising agencies from holding broadcasting licences. The straightforward point I wish to make is that we do not believe that it is any longer necessary to prohibit the holding of broadcasting licences by advertising agencies. The ban affects a whole category of businesses—businesses that make an important contribution to the economy of the United Kingdom—and it is not our policy to maintain such bans unless they are fully justifiable.

In the past the ban was claimed to be necessary to meet the understandable concerns that for an advertising agency also to be a broadcaster could give rise to abuses and distort the market for broadcast advertising. For example, an advertising agency might be able to offer preferential rates for advertisements broadcast on its "in-house" channel, or the broadcaster might refuse to take advertising otherwise than from the in-house agency.

Those would be serious and undesirable developments, but we do not believe that they would arise because other measures are now available that present an effective way of ensuring that they could do so. In particular, the competition law powers that Ofcom will enjoy and will be able to exercise concurrently with the other competition authorities would prevent economic abuses. We therefore propose to lift the ban because we do not want to restrict participation in the broadcasting market unless it is necessary, and we do not believe it is because any abuses identified will be covered by other legislation, in particular, of course, under the powers in the Competition Act 1998.

So I respond to my noble friend by saying that things have moved on since the Broadcasting Act 1990. We now have in place a range of measures that will help to control the situation. Any advertising agency which applied for a broadcasting licence would be all too well aware of the potential challenges under the other legislation. It is that which is designed to secure the public interest.

Photo of Lord Thomson of Monifieth Lord Thomson of Monifieth Liberal Democrat

Is the Minister aware that his answer to the noble Lord, Lord Puttnam, makes the matter even more mysterious? We have here a vast Bill which is surrounded by a million representations from different interest groups. I repeat the question put by the Minister's noble friend: which interest group sought this proposal? I hate to sound like an old fogey, but this would trample on much of the sacred history that surrounds the rather unique achievement of Britain to have its public service broadcasting centrally funded in order to ensure a total separation of advertising from ownership.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

I understand fully the point made by the noble Lord. If I thought that that aspect in relation to this deregulation measure could give rise to abuses which would threaten what he regards as the historic settlement in terms of the relationship between advertising and broadcasting, then of course I would not oppose the amendment. But I sought to establish that the legislation we now have in place is sufficiently secure to guarantee that any abuses that might arise would fall within its scope and thus we would be able to control the situation without needing to continue with the restriction that obtained in the 1990 Act.

Photo of Lord Puttnam Lord Puttnam Labour

For the time being I shall be happy to withdraw the amendment, but first I wish to make two important points. I was not being glib when I said that I thought honestly that the Government would respond by saying "Oops, sorry, let us move on". There are real ramifications to this. I have talked to a number of people about the matter, among them Sir Martin Sorrel, all of whom have made it clear that if an advertising agency took advantage of this new opportunity—let us call it that—and decided to be prepared to leave its trade associations, how would the other agencies respond? Do they book time and space in the medium which has been bought by the new agency? Is that new agency still an agency? How do you hold together the corpus of interests represented by the industry bodies?

I put this to my noble friend on the Front Bench: please remember that, quite rightly, the advertising industry has been held up time and again during our deliberations in Committee on this Bill as being the one example of a well-regulated, well-organised and thoughtful industry sector. Why fly in the face of that and create legislation which could have the net effect of destroying an industry which until now has been a model of its kind? For the moment I shall withdraw the amendment, but I remain puzzled. I hope that, when we reach Report stage, either the Minister will have changed his mind or he will come back with a clear understanding from the entire sector that it wants this to take place. I ask that because it is the exact reverse of what I have been told. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Baroness Buscombe Baroness Buscombe Conservative

moved Amendment No. 287:

Page 295, line 9, at end insert—

"( ) paragraph 2 (disqualification for religious bodies);"

Photo of Baroness Buscombe Baroness Buscombe Conservative

In moving Amendment No. 287 I shall speak also to Amendments Nos. 288 and 289. Together, these amendments would bring to an end the extraordinary situation which currently exists where the Government have singled out religious groups as unfit even to apply for many categories of broadcasting licence. That is ludicrous for many reasons, not least because there is a significant demand for such programmes. To deny the consumer the opportunity to tune in, and religious broadcasters the right to do their job, places a large question mark against this Bill in respect of human rights. Furthermore, even without the blanket disqualification, more than enough regulations are already in place to allay all possible fears about the nature of religious programmes. The United Kingdom has the world's strictest religious content and ownership rules; of that I am sure.

I shall deal first with the impression given to any reader of this Bill. To go to such lengths specifically to identify religious groups as unfit for broadcasting seems at best surprising and at worst highly perverse. How does such disqualification equate with the Government's efforts and copious projects working alongside religious groups—here I want to emphasise that I mean all religious groups—to build community values and citizenship? In that role, religious groups are rightly recognised as pillars of society, upstanding members of the community, the vast majority of whom are good, law-abiding and tax-paying citizens. Why on earth do the Government feel the need to go to such great lengths to prevent the advocacy of those values on television or radio?

On a different note, the disqualification of religious groups is damaging to both consumers and broadcasters alike. Consumers should have access to the widest possible choice. To place in legislation an outright disqualification is quite contrary to the welfare of consumers, for there is a significant demand that will remain unfulfilled, for no discernible benefit. Placing such a rigid measure on the statute book means that even in an area where the overwhelming majority of the people are in favour of having religious programmes, considerable difficulties will be faced by a would-be broadcaster by virtue of the fact that they are formally disqualified.

Even if it is not the vast majority listening to and watching religious programmes, it is not hard to imagine the comfort and support that such programmes can bring to the vulnerable and excluded, as well as those who are unable to get to a place of worship. The Bill deprives them of a choice to which they are entitled. What is to be lost from leaving licence decisions to Ofcom's discretion and having confidence in the considerable number of regulations in place? The Government's policy is damagingly over-cautious.

Whether that aspect of the Bill violates the Human Rights Act 1998 has been queried by a number of bodies—not least the Joint Committee on Human Rights and the pre-legislative scrutiny committee. A case that the European Court of Human Rights deemed inadmissible is now going to the European Court of Justice. The issue remains highly contentious and I fail to understand why the Government are digging their heels in. They claim that the spectrum is too limited to provide space for religious broadcasters but that is absurd logic. Why should such organisations be targeted when other, clearly questionable causes are free to apply without restriction? The rationale for political parties not being able to apply is something else altogether.

Britain is the only country in the world that advances an argument in favour of religious restrictions. Surely it is better to build a little flexibility into the system by allowing Ofcom to judge the merits of each licence application as it arises. Even if only one frequency is available, if people want to listen to a religious programme they should be able to do so without having to work around disqualification.

In the absence of blanket disqualification, three or four safety nets are already in place to prevent religious fanatics broadcasting on television or radio. According to the Broadcasting Act 1990, applicants must satisfy fit and proper ownership provisions. The content of religious programmes must be responsible and not exploitative. Significant regulation is already in place to prevent broadcasting by extremist factions or US-style telly evangelists—even if they were granted licences.

In response to questioning in the other place on 7th April 2002 about the content rules imposed on broadcasters, The Secretary of State identified a veritable swathe of regulation covering responsible religious programme content, non-exploitation of audience susceptibilities abuse or incitement to hatred, and blasphemy and obscenity. Countless other aspects must be complied with to broadcast a religious programme. Ofcom will still have the power to refuse licences, fine licensees and/or revoke their licences in the event of a violation.

The Radio Authority's recent reluctance to confirm or deny that UK religious radio stations will be eligible for digital AM licences under the Bill raises a new and important issue. It is becoming clear that DRM—the internationally accepted standard for future AM, long, medium and shortwave broadcasting—involves a complex and comprehensive arrangement of multiplexing and multiplexes. Will the Minister deal with that as a matter of urgency? Will the Minister give the Committee and place on record an absolute and concrete assurance that religious disqualification will not apply under the Bill to individual licences or any combination of licences involving multiplexes; multiplexing; multiplex data systems; multiplex frames; simulcasting of digital services with analogue AM signals; and multiplex configurations and reconfigurations?

That question is not just academic but is asked in light of the country's religious broadcasters being denied access to DAB licence applications due to supposed omissions in legislative draftsmanship repeated in Clauses 5 and 44 of the Broadcasting Act 1996. Religious radio and religious radio companies have been locked out of DAB since 1996. The FM waveband offers limited opportunities for further licensing but DRM AM, long, medium and shortwave represent their practical options for future national and local licence applications.

UK religious radio stations such as Premier need to know for certain whether they can apply for DRM licences without being refused access on the ground of digital multiplexing—thus repeating their experience of exclusion from DAB. If otherwise, they will not play a part in long, medium and shortwave radio broadcasting over the next 10 years and will be forced, as a consequence, to consider whether or not they have a future as broadcasters and employers. I beg to move.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop 3:45 pm, 5th June 2003

My noble friend the right reverend Prelate the Bishop of Chelmsford, who has put his name to the amendments, is unable to be in his place today. As I have spoken to these issues on earlier occasions—particularly on Second Reading—I rise in my friend's stead to support the amendments, in the wake of the strongly argued and eloquent case put by the noble Baroness, Lady Buscombe.

Restrictions on the holding of licences by religious bodies began with the introduction of commercial radio in the 1970s. The present restrictions date mainly from the Broadcasting Act 1990—and were to some extent understandable in the context of the limited availability of licences. In this digital age, such restrictions do not fit—certainly not into what the Bill is heralding, with its offering of plentiful choice, expressed as diversity and plurality. I welcome the degree of derestriction that is available in the Bill, to allow ownership of a wide range of licence-holding by religious bodies.

The remaining licences subject to a ban are the analogue public service TV licences, national radio licences and—somewhat perversely, given the access offered to other kinds of digital licences—digital multiplex licences. The derestriction provided by the Bill puts independent religious broadcasters a bit nearer where they want to be—competing openly for broadcasting opportunities.

The Government have emphasised several times that the remaining restrictions are justified on the ground of spectrum scarcity but that argument does not find favour with the Christian and other faith communities, who want the ban on religious ownership completely removed. Amendment No. 287 removes religious bodies and their officers from the list of those disqualified from holding licences and Amendment No. 288 consequentially removes the list of licences that religious bodies and their officers are allowed to hold.

It is not just the remaining restrictions that cause concern. The possible unintended consequences of the regime of restrictions on religious ownership are damaging to potential applicants and existing licence holders—not least because investors are discouraged from supporting financially what may appear to them to be an industry with a very uncertain future. The strictures placed on those entering religious broadcasting and those already within it who wish to keep abreast of technological opportunities are severe. If religious bodies are to take advantage of new opportunities beyond the scope of existing licence categories when they are offered, that requires the specific exercise of the Secretary of State's discretion or even primary legislation. Until the Bill becomes law, there will continue to be no religious bodies among the 40 or 50 broadcasters on the various local or national digital multiplexes—the first of which were on air two and a half years ago.

When the Bill is enacted, all the licences with the strongest commercial and technical appeal will already have been allocated. Stigma is felt by various religious broadcasting organisations and individuals because they are considered unacceptable and are banned.

In this morning's debate on Amendments Nos. 280 to 283, the noble Lord, Lord Puttnam, suggested that other conditions could be set in a way that would allow religious bodies to be freed from the shackles of disqualification. It may well be that in considering whether or not applicants are fit and proper the regulator would be able to take the point of the noble Lord, Lord Puttnam, into account.

Another, perhaps even simpler, way forward is this. At present—I am speaking now to Amendment No. 289—the Secretary of State is given discretion to modify the list of licences that religious bodies are permitted to apply for. If instead the Secretary of State's discretion were a negative one, to exclude licences from those for which religious bodies could apply, that would alleviate at least one, if not more, of the severe consequences that I have described.

I return to the vexed issue of spectrum scarcity. Although the amendments would remove the remaining restrictions on religious bodies, that would not—to follow the Government's argument—make more spectrum available. So if the restrictions are not to be lifted, or if their effects are not to be alleviated, it would be helpful to know from the Government that more categories of licence would become available to religious owners as more spectrum was made available.

I would be the first to acknowledge that the Government have already done that in offering digital national sound programme licences in the Bill. In fact, I understand from a report in The RADIO Magazine of 19 April this year that the Radiocommunications Agency has already drawn up extensive proposals outlining new ways to measure FM reception, which to date has been based on legislation passed in 1904 and tests made in 1947. It may be possible to free additional spectrum in the FM band, the magazine says,

"if a more relaxed approach is taken to planning standards."

I also understand that one of Ofcom's first targets will be clamp down on the overspill of both BBC and ILR local radio transmitters, and that there will be scrutiny of the BBC's national FM allocations. Such changes would enable more spectrum to be made available for all broadcasters, including religious ones. In France, Reims, for example, has 28 radio services. A similar sized city in the United Kingdom—for example, Gloucester—has about 15. Such a system of revised FM standards is already in use in many European and North American countries, allowing for better use of analogue FM spectrum. Taken together, the revised FM standards and, for example, more use of local AM plus new DAB licences should remove for ever the argument of spectrum shortage. I was grateful to the noble Baroness, Lady Buscombe, for emphasising these issues in relation to spectrum shortage.

If the Government wished to stop religious broadcasters from operating Channel 3, Channel 5 and the three analogue INR licences, it would be possible to do so specifically in legislation. They could then allow Ofcom to regulate religious broadcasters for all the other licences on the same basis as all other broadcasters in this digital age.

A further benefit would be that instead of religious broadcasters seeking licences abroad for broadcasting into the United Kingdom, and therefore evading Ofcom's regulation, they would be brought under Ofcom. That surely would be desirable.

Even if these arguments do not prevail now, these restrictions cannot be retained for much longer. In saying that, I want to make it clear, because several Members of the Committee have asked me about this, that I am not aware of any denomination that wishes to hold such a licence. However, there is a sizeable and growing independent Christian broadcasting industry, to which I have already referred, which is willing and waiting to play its full part.

I welcome the proposed lifting of some restrictions, and I am grateful to the Government for that. But I remain disappointed that other restrictions will still be in place. I hear the reasons that have been given in previous debates. Nevertheless, I look forward to the day when all these restrictions are removed, and pray that it will be soon. For religious broadcasting has a full part to play in our nation's life, both within the public service remit and within the range of new opportunities which the Bill now begins to make possible.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

I too support the amendment, which was so succinctly and technically competently moved by the noble Baroness, Lady Buscombe. The very clear way in which the right reverend Prelate the Bishop of Manchester put his point makes the case even more unanswerable.

Clearly, too, the Government are to be warmly congratulated on moving some way to remove the existing statutory disqualifications. There is a question as to the reason for their ever being there in the first place. The removal already proposed—I join other speakers in emphasising that what we say on this matter applies to all faiths, and not only the Christian faith—will be a tremendous benefit, even if the benefit of the changes already agreed will be quite a little while delayed. The right reverend Prelate explained that, and I will not go into it.

However, the concession makes it even more mysterious that the Government have not gone the whole hog and removed all such restrictions on those with a religious background. I look to the noble Baroness the Minister for a full explanation. What possible justification can there be in today's world for not treating applications for any licence, whether analogue or digital, in exactly the same way, by asking "Do the applicants fulfil the financial and other requirements for that particular licence?" and "Are they, in the objective view of those granting the licence, the best candidate?"

That central point remains unanswered and requires an unequivocally clear, and above all convincing, answer from the noble Baroness, if the Government will not accept the amendment. The explanations so far about current spectrum scarcity simply do not stand up. There can surely be no logical reason why this one group should be excluded from consideration and citizens be deprived of their programmes.

Not only did the pre-legislative scrutiny committee raise the issue, but there are serious questions, which have already been mentioned, as to whether current human rights legislation is infringed by continuing such a discriminatory policy.

Lastly, the Government argue on the subject of foreign ownership that the UK's unique regulatory system will prevent the kind of abuse and monopolistic misbehaviour that concerns many Members of the Committee. One understands that concern. If the Government are right about that, surely the same argument should apply to the protection from any real or imagined abuse by those with a religious background holding licences.

In an age when radio and TV licences are granted to those providing so-called adult entertainment, and when an increasing quantity of violence, sex and bad language is tolerated in mainstream programmes, it becomes increasingly ludicrous that the risk of some kind of religious contamination—not vice, but religion—remains the one area which has to be subjected to this absolute taboo.

As I have said, the Committee will require an unequivocal and convincing reply, or—much better—a straightforward acceptance of the amendments in the face of the arguments, which are literally unanswerable.

Photo of Lord Brennan Lord Brennan Labour 4:00 pm, 5th June 2003

The Bill seeks, among its objectives, to make provision for the regulation of television and radio broadcasting. Such a statutory objective is of democratic import; therefore, if we find in its terms a provision that a significant proportion of society shall not be allowed even to apply for a radio/TV licence, nationally as well as locally, our democratic antennae should very carefully be switched on to find out why.

The history of the legislation, which I have looked at in detail, gives no clear, democratic indication as to why, in 1990, 1996 or now, the restriction is required. When the Government were taken to the European Court of Human Rights in 2000, their lawyers, presumably on the Government's instructions, accepted that the present restriction was a breach of Article 10 of the Convention on Human Rights—a restriction on the freedom of religious expression. Their case had to rely upon the second paragraph of Article 10, which allows such a restriction to be applied if, and only if, it is a response to a pressing social need so as to be necessary in a democratic society. A pressing social need necessary for democracy—that is serious stuff.

The only explanation that I can gauge from the Government's arguments in 2000 to justify that exception relied on the practical question of whether there was sufficient frequency availability. Then, their argument was accepted by the Commission, and the case did not go further, while now it might. The critical question is: if the Government have determined that frequency is the justification for restricting the democratic right, and if otherwise that democratic right should be given force, explanations about frequency availability must be forthcoming and convincing. From my present investigation, I fear that that is unlikely to happen.

I shall explain why. On VHF frequency, which we use for local and national stations, as I understand it, Ofcom is about to look at resetting UK standards currently based on tests made in 1947. That may explain the reference by the right reverend Prelate to the fact that in Reims there are 25 more stations than the three available in Gloucester. So one expects that the argument that there cannot be any more frequency for VHF falls immediately.

Since the Government went to court in Strasbourg in 2000, provision has been made for 50 local digital audio multiplexes. According to my calculations, within each multiplex, there are 10 subdivisions and 500 frequencies opportunities. On medium wave, in certain parts of the country, regional frequencies can be made available subject to certain power factors without interfering with the general availability of main stations on medium wave. On long wave unused capacity has now been cleared in Scotland and will be used by stations there. Finally, we can expect digital radio mondial in the near future, with yet new standards. The result may be a doubling or tripling of availability—it matters not.

The result of what I have briefly summarised is that the argument that there is no available frequency is simply unacceptable. It begins to concern me democratically. The Human Rights Committee of the House has asked the Government for a reasoned explanation, so the Government must give an answer. I have not seen one; the Explanatory Notes are silent on the question. Is not an answer sufficiently given by just a detailed resume of current thinking about frequency availability? The first step in the argument is the democratic right; the second is why the Government are justified in restricting it.

Members of the Committee may note that in subsections (5),(6) and (7) of Clause 340 the Secretary of State has the right reserved to him or her to revoke a disqualification by laying before the House appropriate delegated legislation. It must follow, therefore, that the Government must anticipate circumstances in which the democratic right will become exercisable. We can look to two answers. If it is frequency, justify it—not just now, but in the long term, as the Bill may stand for years to come. If it is not frequency in a convincing way, the amendment must be carried.

These proposals do not come before the Committee on behalf of religiously inclined citizens of this country, but from me as a democrat. I do not understand why those who would wish to tune into religious broadcasting in this country should find themselves in the same legislative slot as politicians or advertising agencies. The citizens of the nation would think it ludicrous. I do, too, subject to what the Minister may say, but I can assure him that this important democratic issue will not go away.

Photo of Lord Avebury Lord Avebury Liberal Democrat

I hesitate to cross swords with the noble Lord, Lord Brennan, who obviously knows a great deal more about human rights than most Members of the Committee. However, without knowing the details of the case that he mentioned, surely it does not lead to the exclusion of the religious views in question from the broadcasting arena. The provisions simply exclude certain classes of persons from the ownership of broadcasts. That does not mean that you cannot listen to religious broadcasts of all kinds on public service broadcasting channels. Freedom of expression is preserved, therefore, as those who want to air their views have every opportunity to do so—except for humanists, who are systematically excluded from religious broadcasting on the BBC. Every other system of belief has the opportunity of appearing on "Thought for the Day" and the many other excellent religious programmes that the BBC puts on.

But the supporters of this amendment ask for something more: the right to own stations. If the noble Lord, Lord Brennan, represents those views accurately, they are saying that it is a democratic right. It is not my right to own a newspaper. I would like to own The Times, but I do not have the money to do that. Rationing will be by cash. If the right were extended to certain people to bid for religious broadcasting channels, it would not necessarily involve the kind of religion that the noble Lord, Lord Brennan, or I would approve of. It is rationing by the purse.

Photo of Lord Brennan Lord Brennan Labour

I thought that the noble Lord was asking a question, but he appeared to proceed into a speech. I am sure that it was a question, and I would like to take the opportunity to respond.

Photo of Lord Avebury Lord Avebury Liberal Democrat

I apologise; I thought that the noble Lord had finished his speech.

Photo of Lord Brennan Lord Brennan Labour

We are not engaged in democratic patronage. We are engaged in the involvement of peoples' rights. The matter is not a question of ownership. The ownership of a radio station will be determined by Ofcom on the principles set out in their approach to the provision of radio station licences. The question to which I referred was the refusal to allow part of our society to apply to become owners. The factors that the noble Lord, Lord Avebury, has raised may well play their part in an Ofcom decision, but I do not find "Thought for the Day", "Sunday Morning" and one local broadcasting station in London to provide the same democratic benefit as the 650 that are available throughout Europe.

Photo of Lord Avebury Lord Avebury Liberal Democrat

The noble Lord, Lord Brennan, is not giving the full picture when he mentioned a couple a programmes that are on the BBC. The level and quality of religious broadcasting is infinitely greater than the few that have been mentioned. They include the "Moral Maze", "Beyond Belief", "Good Morning Sunday" and many other programmes that could be cited. I want to ask the noble Lord and the Committee whether they have considered the implications of opening up that field to people who want to broadcast their particular brand of religion in this country? Do noble Lords really think that the matter is confined to a few Christians, or do they think that, once the opportunity was there, the floodgates would open and one would have every religious denomination under the sun, provided that they could rake the money together, and apply to Ofcom for a licence?

The noble Lord, Lord Brennan, is shaking his head. He does not believe that that would happen. I am sure that there is a strong likelihood of that happening. Why should Sikhs, Hindus, Muslims and the many different varieties of those religions—because there is not just one denomination—not want their own point of view on the air? The noble Lord is asking us to open up Pandora's Box. That is not a job that I would be happy to undertake if I was in the seat at Ofcom. If there was a competing series of demands for religious broadcasting from all of the various denominations in this country, I do not see how a fair and equal choice could be made between them. How would Ofcom take into account the human rights implications—to follow the noble Lord's train of thinking—of choosing one religion rather than another as having the right to broadcast to the people of the United Kingdom?

Photo of Lord Crickhowell Lord Crickhowell Conservative

I thought that the closing remarks of the noble Lord, Lord Avebury, were astonishing coming from the Liberal Democrat benches. There must be many Liberals of the old tradition who must be turning in their graves to hear such strikingly illiberal views. I was not planning to comment on his speech until he made those closing remarks.

I wanted to comment on the remarkable and extraordinarily well researched speech of the noble Lord, Lord Brennan. He repeatedly asked for an explanation of the extraordinary attitude of the Government. It so happens that we have had the explanation spelt out in short, sharp terms by the Secretary of State, the right honourable Tessa Jowell, when she was questioned on the subject before the Joint Committee. I shall quote the explanation and then I shall ask the Committee to judge whether that was adequate in the light of the comments made by the noble Lord, Lord Brennan. She said:

"The issue is essentially one of spectrum scarcity, and while we are operating in an environment of spectrum scarcity, we believe that the level of prohibition in relation to national radio licences and terrestrial television licences is right, simply because in practice spectrum scarcity means that we would not be able to provide the opportunity for every religion that might want to have its own channel to be able to have that spectrum space".

That was the explanation. I suggest that in the light of the comprehensive analysis by the noble Lord, Lord Brennan, about spectrum availability and about the general principles involved, it is an extraordinarily inadequate explanation by the Government. For that reason I am happy on this occasion to support the amendment of my noble friend on the Front Bench.

Photo of Lord Brennan Lord Brennan Labour 4:15 pm, 5th June 2003

Was the noble Lord here the other day when we were arguing about whether there was space for two local television stations? We were told that we could not have that because there was not enough spectrum. If there are not enough for two local television stations, how can there be enough for the multitude of religions which now wish to broadcast?

Photo of Lord Crickhowell Lord Crickhowell Conservative

I simply repeat the arguments of the noble Lord, Lord Brennan. One cannot have a general exclusion of the kind that is applied to religious broadcasting units, and does not apply to others, without an extraordinary breach of principle. It is extraordinary as we move into a multi-spectrum age that again and again the only real explanation offered by the Government is one of spectrum scarcity. It is time to move on. That is what we felt in the Joint Committee. We felt that it was an inadequate response. Having heard what I thought was a deeply impressive speech from the noble Lord, Lord Brennan, I am now wholly of that view.

Photo of Lord Archer of Sandwell Lord Archer of Sandwell Labour

I did not intervene at Second Reading and I have spared your Lordships any previous intervention in the course of your Lordships' debates on the Bill. Noble Lords may find that to be a matter of relief rather than blame. The matter is not a subject on which I pretend to have any expertise, nor even any familiarity with the vocabulary that is used.

I begin with a declaration of interest. I am a practising Christian, but I became involved in the issue when it was pointed out to me that the Bill contains what appears to be a startling denial of human rights. The Bill deprives someone of a licence, not because he lacks merit, but because he does not have the opportunity to have the merits even considered. The merits are not even relevant. I appreciate that the Bill represents a commendable improvement on the position under the 1990 Act. However, it is not clear, as the noble Baroness, Lady Howe, said, why the Government felt it necessary to stop half way. They seem to be saying "we will rectify half of the injustice, but the other half we will leave unjust". I can never quite understand why governments of all complexions, when they occasionally appear on the side of the angels, always give the impression that they wish that they were somewhere else.

As I understand the matter, some propositions are common ground. Of course there should be a structure for regulating broadcasting. There is such a structure. As many noble Lords have said, there is ample machinery to ensure that a licence is granted only to a fit and proper person. If a licensee ceases to be a fit and proper person the licence may be revoked. In addition there are the specific requirements under Sections 6 and 90 of the 1990 Act to ensure that the licensee observes the proper standards. There is also regulation under the published programme code. As the right reverend Prelate pointed out, the effect of the provision that the amendment would seek to rectify is that we would drive potential programme owners abroad to broadcast into the United Kingdom and they would not be part of the structure at all.

If the applicant does not comply with the requirements, the licence should be refused. That is common ground. If the holder of a licence ceases to comply with the requirements, the licence should be revoked. That is common ground. That cannot justify taking a whole category of applicants and saying that their applications should not even be considered. The question whether they comply with the requirements does not even arise.

I am already on ground on which I am not competent to speak, but it appears that the real thing is to do with the limited spectrum. We just heard that from the noble Lord who has a place on the Human Rights Committee. I do not claim the expertise to comment on that, and, in any event, I would not attempt to improve on the demolition job that my noble friend Lord Brennan has just carried out. However, even if it is true that there is very limited spectrum accommodation, the answer is to examine the various applications according to whatever criteria are deemed appropriate and allocate the available space to applicants who most nearly comply with the criteria. We cannot justify picking on one category—apparently arbitrarily—and excluding it from the race before it even begins.

Usually, the noble Lord, Lord Avebury, and I are on the same side, but obviously there will be moments when we disagree. A few moments ago he said that there were likely to be applicants for religious programmes from different traditions and that granting the facility to one would, in some way, give it an unfair advantage over the others. I follow the logic, and it might be persuasive, if it applied to the real world. However, history suggests that neither within the Christian faith nor between it and other faiths is there any such conflict. To my knowledge, there have been no such problems in the past. If there is only one channel available, it would be relatively easy to construct a consortium that would allocate time among the various members. The noble Lord must agree that, judged purely as a question of human rights, it would be grossly unjust to say to one group of applicants that they will not be entitled even to have their applications considered.

The question provoked an intervention from the United Nations Association, not a notoriously hymn-singing body. It is true that it was dealt with by the UNA's religious advisory committee. It was moved to write to the Secretary of State citing a list of the international human rights that were in danger of being infringed. It dealt with the European convention. It talked about Article 2—no distinction; about Article 18—freedom of thought; Article 19—freedom of opinion and expression; and Article 27—the right to participate in the cultural life of the community. It went on to the Universal Declaration of Human Rights. It referred to the right to hold opinions and the right to freedom of expression and the need for respect for the rights and reputations of others. That was all set out in some detail. Then it turned its attention to the United Nations convention on discrimination. I shall not go through all of it, but it was a long, complicated and well constructed letter.

In reply, the UNA committee received a letter of three paragraphs. The first thanked it for its letter. The last said that a list of present provisions was attached showing which could be applied for and which could not. The paragraph in between set out, in eight and a half lines, what is said to be the present policy of the Government, which it knew already. Not surprisingly, it was so incensed that the chairman wrote to the United Nations High Commissioner for Human Rights, inviting him to place it on the agenda of the Human Rights Commission. I do not know what emerged from that. For a Government who have earned a high international reputation for leadership in international human rights, that is a saddening story.

Photo of Lord Avebury Lord Avebury Liberal Democrat

As the noble Lord knows, the Human Rights Commission has, among its instruments, a rapporteur on religious freedom, Mr Abdelfattah Amor. Is the noble Lord aware of any representations by Mr Abdelfattah Amor to the British Government on the subject? If so, does he not think that, with all the furore that the United Nations Association and others have raised, Mr Abdelfattah Amor would have noticed and would have done something about it, if he thought that the representations were valid?

Photo of Lord Archer of Sandwell Lord Archer of Sandwell Labour

Sometimes, those who are on the side of the angels miss a trick. Even if someone has written to Mr Abdelfattah Amor—I agree that it would be a good idea, and I am glad that the noble Lord has suggested it—we do not know at the moment what his response will be. No doubt, we can all wait, and, in due course, we will see.

There is another aspect that raises another issue of justice and human rights. The exclusion is to apply not only to a body whose objects are of a religious nature but to an individual who is an officer of such a body. So far as I am aware, nowhere is the term "officer" defined. Is a layperson with a career independent of the Church or of his or her religious beliefs excluded because he or she is a Sunday school teacher on a Sunday afternoon? If the Broadcasting Act 1990 means what it says, that Sunday school teacher is disqualified from applying for a licence to broadcast on Wednesday evenings in order to talk about football. Such people are blanked out from all broadcasting for all purposes. What about the choirmaster or the caretaker? Who is in the net of people who will be silenced? It would be helpful if my noble friend could offer us some guidance as to the construction that has been placed on the term "officer".

There are further questions relating not only to freedom of speech or discrimination. There are people who have invested years of their life in this area of broadcasting. Are they to be deprived of the opportunity to deploy those talents? Are their potential listeners to be deprived of the opportunity of listening to them? It is almost as though the Government have said, "How many different human rights can we infringe with one provision?"

I know that my noble friend is capable of recognising the anomalies to which the provision gives rise. She and I have fought many human rights battles together, shoulder-to-shoulder. Now is the time to listen and to earn the credit for listening. She may even find it an enjoyable experience.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

The noble Lord, Lord Crickhowell, made some jocularly slighting remarks about the extent of the liberalism of my noble friend Lord Avebury on the matter. There is no more liberal Liberal than my noble friend, although, on this issue, I think that he is—I nearly used an Anglo-Saxon expression—head over heels. It is not humanists or atheists who are being excluded from applying for ownership of the media channels; they can do it endlessly, and they do. I dare say that Mr Desmond, the porn king extraordinaire, may represent one of the non-religious groups for which my noble friend Lord Avebury has particular concern. It has not got in the way of his getting his way with the regulators.

Photo of Baroness Whitaker Baroness Whitaker Labour

Does the noble Lord accept that to link Mr Desmond the porn king with the humanists and atheists of the western world is to make one of the more invidious comparisons that we have heard?

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

I do not know whether he is or is not. He could be a good practising Christian for all I know. The only point that I make is that my noble friend Lord Avebury got it precisely back-to-front. Anybody who is not of a religion can own one of the media outlets. It is only religious folk who cannot be owners. That must be discriminatory.

It is also like something from Alice in Wonderland that, as the House of Lords, we start with Prayers every day. What is the logic of us then writing into a Bill that the ethics by which we conduct our affairs are somehow inimical to the public interest? Why should the right reverend Prelate be prejudiced in ownership of a television channel? If there was a public interest that gave any credence to this provision, then many of us would be sympathetic to it. Is religion, as practised in modern-day Britain, whether Muslim, Christian or anything else, dangerous to the public peace or subversive of morality? Are we at risk of being drowned in the clash and clamour of religious fervour? The right reverend Prelate might wish that it were so. It is religious apathy that we are in danger of drowning in.

I suggest that we use common sense in considering this amendment. The Government should take the same constructive view that they did of the amendment in the name of the right reverend Prelate, the noble Baroness, Lady Howe of Idlicote and myself earlier in the debate. We sought a higher profile for religions, spirituality and faith, referred to by the noble Baroness, Lady Whitaker, in Section 260 of the Bill which is the public service remit.

Photo of Baroness Whitaker Baroness Whitaker Labour 4:30 pm, 5th June 2003

I apologise for interrupting the noble Lord again. It was not faith that I referred to, it was belief—a term of art which refers to non-faith.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat

I am corrected. I meant to represent the noble Baroness correctly. Our amendment refers to religion and spirituality. The noble Baroness referred to the possible addition of belief as the third limb. We are wholly sympathetic to that. I hope that the Government will be as sympathetic to this amendment as they were to that.

Photo of Lord Elton Lord Elton Conservative

Having been for three years the Minister responsible for the radio regulatory service at the Home Office, I am intrigued by the arguments about frequency and spectrum scarcity. I found the arguments of the noble Lord, Lord Brennan, extremely persuasive. It surprised me when my noble friend Lord Crickhowell made it clear that the government case hitherto has rested entirely on the argument of spectrum scarcity. I rise to ask the Minister to explain the extraordinary juxtaposition in those circumstances of subsection (1)(b) which provides freedom of application to advertising agencies. According to the noble Lord, Lord Puttnam, they do not want it. We are now considering paragraphs which exclude the small number of religious bodies who do want it. This seems to me totally crazy.

Photo of Lord McNally Lord McNally Liberal Democrat

It falls to me to indicate to the House how these Benches would vote if these amendments were put to the test. The noble Lord, Lord Crickhowell, said that old Liberals would be spinning in their graves at some of the things they heard. If Lloyd George and Asquith are looking down from that great National Liberal Club in the sky and heard my noble friends, Lord Avebury and Lord Phillips of Sudbury, they would probably think that nothing much has changed in the old party. I should indicate that we would support the amendments if they were pressed to a vote on Report. Lord Crickhowell pointed to the discussions we had in the Joint Committee. I draw the attention of the Committee to a second part of our recommendation where:

"We recommend that the Government consider the case for permitting Ofcom, in consultation with religious organisations, to impose licence conditions on religious owners of a kind not applying to other licences, as an additional assurance against breach of licence conditions."

What has not been mentioned yet but which is one of the reasons for concern, is that so much of our broadcasting is influenced by the United States. That country has experienced so much disreputable and corrupt religious broadcasting that this should be a matter for concern. If noble Lords are convinced that Ofcom has all the powers to protect us from that kind of broadcasting, perhaps it is safe to let this go through. However, there is that underlying concern. Religious broadcasting has not always been as benign as has been suggested from some speeches of support. We do not want to creep into Britain the kind of Elmer Gantry broadcasting that has caused such disrepute in the United States. I hope that religious broadcasting—I was just about to say something nice about the right reverend Prelate.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop

I am in eager anticipation. I share with the noble Lord, Lord McNally, concerns about certain types of broadcasting, not least Christian broadcasting. The truth is that it is possible to do that outside this country and for it to be beamed in now. If we were able to bring this within the constraints imposed by the Bill, it would control broadcasting in a way which will not happen if there is free rein for people to broadcast from abroad.

Photo of Lord McNally Lord McNally Liberal Democrat

I take that point although there are protections, as was seen in pirate radio, to make it non-profitable. I do not wish to see religion and religious broadcasting placed in a ghetto. I was going to return the compliment when the right reverend Prelate supported me earlier in the Committee on political broadcasting. I hope that our public service broadcasters see it as part of their public service remit to continue to reflect what is still a country that considers itself overwhelmingly Christian. That belongs in public service broadcasting, as well as the reflection of other faiths and beliefs.

I also take the point that was graphically pointed out that the publisher of Asian Babes can apply for a licence but the Archbishop of Canterbury cannot. It is that kind of absurdity that jars against the defenders of individual rights. But I return to an underlying concern: the qualitative nature of some religious broadcasting. I draw the attention of the Committee to that other recommendation that Ofcom might be empowered to ask for clearer and further assurances of religious broadcasters, if this amendment were carried.

Photo of Baroness Blackstone Baroness Blackstone Minister of State (the Arts), Department for Culture, Media & Sport, Minister of State (Department for Culture, Media and Sport) (Arts)

Let me begin by saying that after this debate, which has gone on for just over an hour, I may not manage to answer all the questions that were raised. I shall write to noble Lords where I fail to do so. The first and most important point I wish to make is that the Government support and encourage religious broadcasting. From some contributions this afternoon, one would not get the impression that that is the case. Anyone who suggests that is being grotesquely unfair.

We recognise that religious programming is an important part of public service broadcasting. Noble Lords will recall that in amendments tabled by the right reverend Prelate, the Bishop of Manchester, the noble Lord, Lord Phillips of Sudbury, the noble Baroness, Lady Howe of Idlicote, I undertook to look at how that can better be reflected in the definition of a remit of public service broadcasting. Where possible, we have removed unnecessary restrictions on religious bodies holding licences. That has not been reflected in what has been said in the debate this afternoon.

Once the Bill comes into effect religious bodies will be able to hold a wide range of licences, including local analogue radio licences, national and local digital radio licences, digital terrestrial television programme licences, radio and television restricted service licences, and licences for radio and television cable and satellite services. The changes proposed in the Bill have been widely welcomed outside the Chamber. Again, that fact was not reflected in this afternoon's debate.

The only remaining significant restrictions on religious bodies holding licences relate to Channel 3 and Channel 5 licences, national analogue radio licences and multiplex licences. I should clear up one issue here that has arisen during the debate. As the noble Lord, Lord Avebury, rightly said—I support him strongly in this respect—there is nothing in this legislation to prevent religious broadcasters from broadcasting on multiplexes and, hence, using multiplex technology. The only constraint is on holding a multiplex licence; that is to say, a licence to operate a multiplex. However, if the noble Baroness requires even more detail on some of the issues that she raised and as regards the long list that she gave, I shall, as I said, write to her accordingly.

We want as few restrictions as possible. Our policy is to allow religious bodies to hold broadcasting licences wherever that is consistent with satisfying as many viewers and listeners as possible, and giving equal respect to everyone's beliefs; in other words, we want to avoid a situation where, through scarcity of spectrum, some religions achieve access to the airwaves but others do not.

Where there is no spectrum scarcity—such as with cable and satellite—there are no restrictions. It follows from this that restrictions could be removed in the event that significant new spectrum became available. There has already been a concrete example of this, where the introduction of additional digital radio capacity on Freeview led us to remove the restriction on national digital sound programme service licences.

I should also make it clear that in the event of any new types of licences being introduced, we would carefully consider whether religious organisations should be able to hold them. There will not be a presumption that they cannot do so. The decision will turn, as now, on questions of spectrum scarcity.

I believe my noble friend Lord Brennan slightly implied that there is no issue as regards spectrum scarcity. I should point out to him that there is. Moreover, my noble friend listed a comprehensive range of frequencies and associated licences in an effort to demonstrate that our argument of spectrum scarcity did not apply. I shall study most carefully the list outlined by my noble friend when it is printed in the Official Report, but I believe that every type of licence that he mentioned is already open to religious ownership precisely because there is no spectrum scarcity in those cases.

Let us take the case for the continuing restriction on national analogue radio licences. At present, there are only three national analogue licences, which are currently held by talkSPORT, Classic FM and Virgin 1215. Given the limited spectrum availability in this area, we have taken the view that it would be inappropriate for one of those licences to go to a religious organisation. We take that view because we do not believe that a religious radio service would have sufficient appeal to justify it having one of only three national licences. To the latter we add our concern that it would be invidious for just one religion to have a national station, while the others would not. This could be perceived as extremely divisive and most unfair.

Some people have responded by suggesting that we lift the ban for multi-faith broadcasters. That could be said to address the second problem of not wishing to disadvantage specific religions. However, it does not address the first problem. Even a multi-faith channel is unlikely to have the level of support in terms of listenership that would justify it having one of only three national licences. I know that existing religious services have loyal listeners and viewers, but the viewing and listening figures support the view that the level of national support would not justify one of only three national licences being held by a religious body.

I hope that I have persuaded the Committee—

Photo of Lord Archer of Sandwell Lord Archer of Sandwell Labour

I thank my noble friend for giving way. I wish to question two points that she has just made. First, my noble friend said that there would not be a sufficient listenership to justify the award of a licence to a religious broadcaster. But is that not a matter that should be assessed on the strength of the evidence, if and when an application is made? My noble friend also made a separate point; namely, that there would be competition among Christians and between Christians and people of other faiths. Has she any evidence to suggest that that would be the case?

Photo of Baroness Blackstone Baroness Blackstone Minister of State (the Arts), Department for Culture, Media & Sport, Minister of State (Department for Culture, Media and Sport) (Arts) 4:45 pm, 5th June 2003

Given that we are talking about only three national licences, all I can say in response to my noble and learned friend's first question is that I believe all the evidence available would support what the Government are saying; namely, that viewing and listening figures would not justify inviting a large number of religious organisations to make applications that would be bound to fail. We believe that it is more honest to make it clear at this stage that there would not be spectrum availability, rather than invite religious organisations to carry out a lot of work in preparing applications that would be bound to fail at the first hurdle. I wish to continue with my response, so I shall write to my noble and learned friend on his second question.

I hope that I have persuaded Members of the Committee that the restrictions are made necessary by reason of spectrum scarcity.

Officers in religious bodies are "disqualified persons" under this clause for the purposes of holding certain broadcasting licences. I know that some people are unhappy about this, as outlined in this afternoon's debate. They believe that that unfairly stigmatises people with religious beliefs. I can assure noble Lords that this is not the intention. Given that restrictions remain on religious bodies holding licences, it is important that the remaining restrictions are effective. In order to be effective, it is important that the restrictions not only apply to religious bodies, but also extend to office holders in such bodies. If that were not the case, it would be a simple matter for a religious body to put the licence in the hands of one of its officers and thus defeat the purpose of the restriction. The position is not unique to religious bodies; similar arrangements apply in respect of political bodies, whose office holders are also prevented from holding broadcasting licences. In short, restrictions on office holders are simply a necessary anti-avoidance device.

My noble and learned friend Lord Archer asked me about the definition of "office holder" in this context. There is no definition of the word "officer" in the legislation. It would be impossible to list exhaustively all the possibilities, because all organisations have different structures. Therefore, the word has its ordinary meaning. It is a question of fact whether or not a person is an officer. Ofcom will have to consider all the relevant circumstances and make a decision. In particular, Ofcom will take into account whether the person has a formal position and what his role or function in the organisation might be. It seems to me that it is a matter of using common sense.

It is also important to recognise the nature and extent of the restriction. Religious office holders are prevented from holding broadcasting licences only to the same extent as religious bodies. They can hold all other licences in their own name. That fact does not seem to have been fully understood by speakers in this debate. I hope that Members of the Committee will agree that this is a necessary evil rather than any deliberate intention to stigmatise religious office holders. Of course that is not the case.

The restrictions on local and national digital radio will be lifted as soon as the broadcasting parts of the Bill come into force—which should be by the end of the year. As soon as that happens, there will be plenty of new opportunities: local digital radio multiplexes are still being licensed, so religious broadcasters can seek to obtain some of these new slots. In the case of existing radio multiplexes, there should still be chances for religious bodies to get slots on these multiplexes that are currently unfilled, or become vacant in the future. There are also opportunities to take up radio slots on Freeview.

I understand from Ofcom that it will use its best endeavours to process any applications as soon as possible after the restrictions on religious bodies are lifted by the Bill. It is also proposing to review the existing guidance on religious ownership before the ownership provisions come into effect.

Let me turn to the human rights aspect, which a number of speakers mentioned. I repeat once again that we place restrictions on religious bodies holding licences only where there is spectrum scarcity. We have sought legal advice and are confident that the continuing restrictions are fully compatible with our obligations under the ECHR. Moreover, the Joint Committee on Human Rights has concluded that it considers the position in the Bill is likely to be compatible with ECHR.

While we remain convinced that for the present there is a case for some restrictions, we also believe that the Bill offers enormous possibilities for religious broadcasters. In the light of what I have said, I very much hope the noble Baroness will feel able to withdraw her amendment.

Photo of Baroness Buscombe Baroness Buscombe Conservative

I thank the Minister for her extremely full response, but, with great respect, I feel that she has entirely missed the point. We are addressing in these amendments a point of principle.

Mr. Kerridge of Premier Christian Radio said recently:

"The changes in the Bill are a bit like being invited to a wedding that took place last year. Faith groups are being asked to help the authorities in other areas of society for the social good, but are excluded when it comes to communication".

I hear what the Minister said about certain areas in which it is possible for religious broadcasters to be on air. That said, we are talking about discrimination against one particular class, one particular sector, of society, and that cannot be right.

I am extremely grateful to all noble Lords who have spoken in support of this amendment, most particularly those who added their names to my amendment. The right reverend Prelate the Bishop of Chelmsford is sadly not in his place, but the right reverend Prelate the Bishop of Manchester spoke so eloquently in his place. I particularly appreciate the support of the noble Lord, Lord Brennan, and the noble Baroness, Lady Howe, for the amendment. I also want to thank my noble friends Lord Crickhowell and Lord Elton. The noble and learned Lord, Lord Archer of Sandwell, almost apologised for not being here to intervene at Second Reading. He has missed quite a lot thus far. We have had an extraordinary number of interesting and sometimes, if not always, amusing debates. I encourage him to stay with us for the remainder of the Bill's scrutiny. I also thank the noble Lord, Lord Phillips of Sudbury, and the noble Lord, Lord McNally, whose support for the amendment I greatly appreciate. He said that he would vote for it if we were to put it to a vote, which we will not do this evening. However, following the Minister's reply, I have every intention of putting it to a vote on Report.

The noble Lord, Lord Brennan, made a particularly eloquent speech. As he said, history gives no clear democratic indication as to why this restriction is required. We need an answer or an acceptance from the Minister that this disqualification should be lifted, and we have not received that this evening. This is a question of choice. I hear what the noble Lord, Lord Avebury, said—there are opportunities for those who represent different religious bodies to speak on radio. "Thought for the Day" was one example. I am sure if I rang up and asked to speak I would not get a slot—my name is not Anne Atkins. I have always wondered who Anne Atkins is.

It is interesting that the Government are working so hard to reassure us that strong content rules, coupled with a strong competition law regime, are enough to ensure that we can retain quality broadcasting. Yet when it comes to religious broadcasting we are not in a safe position. I think that is what it is—I cannot believe it is anything to do with spectrum scarcity. I simply will not accept that vacuous argument.

The noble Lord, Lord McNally, pointed out that religious broadcasting has not always been benign. I entirely agree. He used the example of some extraordinarily aggressive broadcasting on American television. I have often listened to it and it is extremely disturbing. I think that is the main reason why the Government are concerned. There may be a strong lobby stressing that concern, but the Government cannot rest upon that argument if, at the same time, they want us to be assured that we have strong content rules in place.

We on these Benches are not satisfied. Noble Lords have asked the Minister to give us clear reasons. As I have stressed, it is ultimately a question of principle.

It has been suggested to me that this proposal to discriminate against one particular sector, which happens to be religious broadcasters, by preventing them even from making an application—as the noble and learned Lord, Lord Archer of Sandwell, said, we should let the merits be decided by Ofcom—makes the Bill hybrid. I will have to research this to be sure, but the ruling on hybridity applies to a piece of legislation that treats one class of persons differently from others. This religious disqualification seems to do this and if the Bill is hybrid in this way, it is in real trouble. This is really worth investigating and I ask the Government to consider that between now and Report.

I am grateful to the Minister, who has offered to write to me about my rather technical questions on multiplexes in particular. But this is really a question of choice and democracy—it is a question of principle. I am so grateful to all noble Lords who have supported the amendment. For now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 288 and 289 not moved.]

Photo of Lord McNally Lord McNally Liberal Democrat

moved Amendment No. 290:

Page 296, line 32, leave out subsection (6) and insert—

"(6) No order is to be made under subsection (5) other than one that is confined to giving effect to recommendations made by OFCOM in a report of a review under section 384."

Photo of Lord McNally Lord McNally Liberal Democrat

The amendment would provide an opportunity to discuss the recommendation of the Joint Committee that there should be no powers to amend primary legislation on media ownership by means of secondary legislation. Unfortunately, I was absent this morning when the Committee discussed media ownership. Briefly, the Joint Committee felt that the Government were rushing their fences in terms of taking this power to secondary legislation in the area of media ownership.

We have in the past two or three years put some powerful organisations into being with the Competition Act, the Enterprise Act and now with Ofcom, but we are not yet sure how in practice they will operate. There is a great deal of proper concern about how media ownership will shake out under the new regime. Parliament should rightly keep control of media ownership matters through primary legislation. As the pre-legislative committee said, in due course Parliament may well be happy at the way in which the new bodies and the new Acts are working, but media ownership is too important to entrust, at this stage, to secondary legislation, and we ask the Government to draw back from that.

Photo of Lord Puttnam Lord Puttnam Labour 5:00 pm, 5th June 2003

I support the amendment tabled by my noble friend Lord McNally. There is no reason to debate this matter in too much detail, but for us this was very much a power too far. We have spent some time in Committee discussing the pros and cons of the Secretary of State having the ability through secondary legislation to vary licence conditions. This is a far more serious and important matter, and by raising it we are helping the Secretary of State to pause and think about the implications of this power.

The power would mean that, in the run-up to an election, the Secretary of State of the day—it may well not be the current Secretary of State—can be lobbied by media owners anticipating that they may well be able to receive improved levels of access or favours in a post-election period. That would not be true of the Secretary of State alone; it would be true also of Front-Bench spokespersons from other parties. Surely, the best possible protection would be if the Secretary of State would make such a recommendation only following the advice of Ofcom. That would protect her and any other person finding themselves in the position of being lobbied by media companies. That is a sensible way forward, and I urge the Government to resist the grab for power, as on this occasion it could well turn round and bite them.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

I am grateful for the way in which the mover and my noble friend have contributed to this short debate. The issues as we see them are these. In the Bill, there is a balance between the powers of Ofcom and the Secretary of State to ensure that neither body has too much power in relation to change in ownership rules.

The Bill distributes different roles in the change process to different bodies. Ofcom has the responsibility of carrying out the reviews under Clause 384 and recommending changes. The Bill puts the order-making powers in the hands of the Secretary of State, who must consult Ofcom before exercising her powers, except where Ofcom has itself recommended the changes that she is making. Then, of course, Parliament has the opportunity to scrutinise any proposed changes before they become law and, if it so chooses, to reject them.

The intention of the order-making powers is that the Secretary of State should have the flexibility to respond to changing circumstances. In that way, it future-proofs the Bill as far as possible. Consistent with that, we believe that the Secretary of State should be able to take the initiative if she feels that changes are warranted. Ofcom will have the opportunity to make recommendations, which is right and proper. However, we would not want to be in a position where the Secretary of State could not act because Ofcom had no plans to review part of the legislation that was ripe for change.

I am somewhat surprised that the noble Lord, Lord McNally, spoke as he did to the amendments. It has caused me to think further about the position, which we thought was much more in line with the case put forward by my noble friend Lord Puttnam—namely, the question of balance and how often such an event would occur. We are seeking to have balancing factors between the two actors in the position and Parliament's right to decide on the matter in the final instance with an affirmative resolution.

I hear what the noble Lord, Lord McNally, says about primary legislation, but he will know how difficult it is and how long-term primary legislation needs to be. We recognise that ownership rules are an important part of the Bill, but we also recognise that this legislation is meant to obtain for a considerable period of time. There are bound to be changes in what, after all, is probably the most rapidly changing area of economic and technological development. We believed that we should assure the Committee that there is a balance within the legislation that guarantees that the two primary actors—the Secretary of State and Ofcom—work in consort, and that Parliament has the final say in terms of an affirmative resolution.

I hear what both noble Lords said. I hope that I have responded as fully as I can in reassuring my noble friend Puttnam. As for the noble Lord, Lord McNally, I can say only that the particular thrust that he put on the amendment would really suggest that the legislation and the issues of ownership ought not to be subject to change at all except by a fresh Broadcasting Bill. We have seen the processes involved with regard to this Bill. I do not believe that we have it in mind to introduce another Bill in the next two or three years, but ownership issues could certainly occur in a more limited time than that in which we could hope to bring back a piece of legislation of this magnitude. It is on that basis that I hope that the noble Lord will recognise that we have a balance and proper safeguards in the Bill and that he will withdraw the amendment.

Photo of Lord McNally Lord McNally Liberal Democrat

I do not believe that I have heard anyone deliver assurances in such emollient tones since I used to listen to Dr Charles Hill as the radio doctor. How could one doubt the Minister when he gives us such assurances?

Whether this was the time to future-proof and give flexibility caused a question mark in the mind of the pre-legislative scrutiny committee. I shall consult my noble friends who co-sponsored the amendment and read the Minister's assurances. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 340 agreed to.

Clause 341 [Licence holding by local authorities]:

[Amendment No. 290A not moved.]

Clause 341 agreed to.

Clause 342 [Relaxation of licence-holding restrictions]:

[Amendments Nos. 290B and 290C not moved.]

Clause 342 agreed to.

Schedule 14 [Media ownership rules]:

[Amendments Nos. 290CA and 290CB had been withdrawn from the Marshalled List.]

[Amendments Nos. 290D and 291 not moved.]

Photo of Lord Puttnam Lord Puttnam Labour

moved Amendment No. 292:

Page 430, line 23, at end insert—

:TITLE3:"PART 1A CHANNEL 5 LICENCES

:TITLE3:Ban on newspaper proprietors holding a Channel 5 licence

6A (1) A person is not to hold a Channel 5 licence if—

(a) he runs a national newspaper which for the time being has a national market share of 20 per cent or more; or

(b) he runs national newspapers which for the time being together have a national market share of 20 per cent or more.

(2) For the purposes of this paragraph, each of the following shall be treated as holding a Channel 5 licence—

(a) the actual licence holder; and

(b) every person connected with the actual licence holder.

(3) The provisions of paragraphs 2 to 4 of this Schedule shall apply for the purposes of this Part of this Schedule insofar as they relate to national newspapers as if a Channel 5 licence were a licence to provide a Channel 3 service."

Photo of Lord Puttnam Lord Puttnam Labour

The amendment gives the Committee an opportunity to debate Recommendation 89 from the Joint Select Committee that the prohibition of joint ownership of Channel 5 and of a major national newspaper group should be retained. When moving Amendment No. 280 this morning, I honestly believed—perhaps naively—that we were offering the Government an alternative way forward on these vexed ownership issues. As the Committee will remember, that offer was rebuffed, somewhat to my surprise, albeit that Members of the Committee will surely find it hard to follow the logic of the Government's argument when they study it in Hansard prior to regrouping their forces for Report stage.

The Government have chosen their ground for battle, which is fine by me. I signalled my intention to the Government at the end of our Committee sitting on 22nd May that I would seek evidence-based responses in justification of their policy proposals, especially in the area of ownership changes. Given the nature of the responses that we have received so far from the Government Front Bench, and for the sake of brevity, I have decided to hold my fire on my own evidence-based objections, as it strikes me that they will be better used, and that we should avoid repetition, if I made them on Report. That would give an opportunity to seek the opinion of the House.

So I shall instead restrict myself to this observation. Today in Committee we have listened to, or had access to, two dozen noble Lords all of whom have direct and specific experience of the broadcasting industry or its regulation. I had the enormous privilege of chairing the Joint Scrutiny Committee which over a 10-week period was able to review literally hundreds of pieces of evidence and talk to hundreds of concerned individuals, and we reported accordingly. However the Government know better. Or, as Mark Twain once said,

"Every dogma has its day".

In conversation with some of the officials who prepared the Bill, they agreed that this particular clause was a "judgment call"—their words, not mine. I would ask whose judgment and based on what expertise that is unavailable to the rest of us. It is quite clear to me that the two dozen expert voices that we have heard just in this House disagree with the Government's position. Before sitting down, therefore, I shall offer the Government three more bits of evidence—or assertions, as they certainly seem to prefer assertions—for them to chew over between now and Report stage.

The first one is from FCC Commissioner Michael Copps. It is significant because, as the Committee will know, on Monday of this week the FCC voted, along party lines, by three votes to two, to add significantly to the deregulation of the American broadcasting industry. Mr Copps said:

"I see centralisation, not localism. I see uniformity, not diversity. I see monopoly and oligopoly, not competition. This is a huge and foolhardy gamble with the future. Every American's future. This issue is not Republican or Democratic, it is not liberal or conservative, it is not north or south, not young nor old".

He quoted Judge Learned Hand, who reminded us that the hand that rules the press, the radio, the screen and the fast-spread magazines rules the country. Mr Copps concluded:

"The largest company owned less than 75 radio stations before deregulation. Today, one company, Clear Channel, owns more than 1,200 stations, eight stations in many cities, and in some towns virtually all the stations available. In fact the number of radio station owners has decreased by an incredible 34 per cent since 1996".

As Mr Copps said, this is not an issue of right or left. So I offer the views of the respected conservative columnist, William Safire, in the New York Times of 22nd May. He said:

"The overwhelming amount of news and entertainment comes via broadcast and print. Putting these outlets in fewer and bigger hands profits the few at the cost of the many. Does that sound unconservative? Not to me. The concentration of power—political, corporate, media, cultural—should be anathema to all conservatives. The diffusion of power through local control is the greatest expression of democracy".

To those on my own Benches I would say that there is tremendous resonance in the notion of power being given to the many, not the few. That is something to which certainly I signed up in 1997.

The Committee will forgive me if, as a movie producer, I finish with a quote from the film "Network". Noble Lords may remember that Peter Finch played, and won the Oscar for, the role of a type of Walter Cronkite figure who had just had enough. I think that he was called Howard Beale. He said:

"You people and 62 million other Americans are listening to me right now because less than 3 per cent of you read books, because less than 15 per cent of you read newspapers, because the only truth you know is what you get over this tube. Right now there is a whole generation that never knew anything that did not come out of this tube. The tube is the gospel, the ultimate revelation. The tube can make or break presidents, popes, prime ministers. This tube is the most awesome force in the whole godless world and woe to us if it ever falls into the hands of the wrong people".

I hope that the Government will explain how this particular part of their policy makes it absolutely certain that this extraordinary power will never fall into the hands of the wrong people. I beg to move.

Photo of Lord Glentoran Lord Glentoran Conservative 5:15 pm, 5th June 2003

What the noble Lord, Lord Puttnam, just said has tremendous truth. I support what he said completely. I was talking to none other than Floella Benjamin along that line yesterday.

I support the amendment. The Government's decision to relax the existing restrictions on Channel 5 is based on the premise that in comparison with Channel 3, Channel 5 is a much smaller enterprise. That premise then leads to the conclusion, so we understand, that there is no need for there to be any restriction as to who can hold a Channel 5 licence. The Government therefore propose that anyone who runs a national newspaper, however large its market share, will be entitled to hold a Channel 5 licence.

The logic is unfortunately flawed. It ignores the future. It is possible that in a few years' time Channel 5 will be a more substantial concern than Channel 3. Indeed, without restriction on the holder of a Channel 3 licence, it is more likely than not that Channel 5 will develop considerably in the future. It is almost inevitable that a newspaper group will come to control Channel 5 and will exploit that opportunity in a way that would not be possible with Channel 3.

Channel 5 presents a wonderful opportunity to a newspaper proprietor. It would be sitting there waiting to be exploited. It will inevitably develop a far greater market share than Channel 3 if in the hands of a national newspaper proprietor with significant market share. The result will be that the mischief that the Government intend or wish to avoid as regards Channel 3 will be achieved as regards Channel 5. We must stop that. I support the amendment.

Photo of Lord Lipsey Lord Lipsey Labour

I am very sympathetic to the objective which my noble friend Lord Puttnam seeks to obtain, but I am not necessarily wholly convinced that this is the best method.

Before dealing with that, however, I should like to say that there has been a lot of talk today about Murdoch buying Channel 5 and the consequences. We should not think that just because something is possible it is certain to happen. An awful lot of hoops would have to be gone through before that happened. First, he would have to want to buy it. I shall return to that point. Next, the existing owners would have to want to sell it—that is, be convinced that he could get more value out of it than they could. They would then have to agree a price. The change would have to be approved by the competition authority. He would then have to invest huge sums in it and that investment would have to pay off. Not all his investments pay off although many of them do. It could happen of course, but it will not necessarily happen. I do not think that we should always be totally diverted by a single possibility. There are other newspaper proprietors and other people. We should try to look at the wider picture.

The second and perhaps more important point is that if Murdoch does want to establish a strong presence here, it is not true that his only route is to buy Channel 5. Another possibility—which becomes more of a possibility as we get more and more digital homes; and we will of course all be digital homes when we get to switch-off—would be to make one of the existing Sky channels a heavily promoted, free-to-air channel funded through advertising. If we block the route of buying Channel 5, it would make that route more attractive. It might be just as dangerous. There is no lasting miracle to being a terrestrial broadcaster. It is a distinction that with time will mean ever less.

I do not think that there is a perfect solution here, but there is a three-legged approach that might offer an alternative to the approach in the amendment. The three legs are as follows. The first—we debated it earlier—is a much stronger public interest test for the competition authorities to bear in mind. The second is protection against the very specific abuses that can occur in cross-media ownership. The great fear in respect of cross-media ownership is that one uses the Sun to advertise one's TV channel. If there were in the Bill a set of cleverly devised measures that would prevent that kind of abuse of cross-media ownership, that might be more effective than simply banning such ownership.

The third leg—and this is the great difference with the United States—is stronger appropriate content regulation. The Government have already moved some way in that direction for Channel 5. It would be possible, as the Secretary of State said recently, for that content regulation to become stiffer as the channel grows, so I would not want anything as crude a simple ceiling ratchet, but there could be a device of that kind.

The philosophy of the Bill, which I broadly share, is that control of ownership is not the best way to regulate content. I hope I have spoken in a constructive spirit in seeking almost exactly the same objectives as my noble friend Lord Puttnam. I hope that I have set out a more constructive approach towards achieving the result that we all want, without the crude kind of control that is implicit in the amendment.

Photo of Lord Razzall Lord Razzall Liberal Democrat

I support the amendment from these Benches. I will not delay your Lordships by repeating the arguments put forward by the noble Lord, Lord Puttnam, and the Tory Front Bench, but I would like to add two or three points which have not been made so far.

It is important to indicate why there has always been concern about newspaper proprietors owning television stations in this country. That does not amount to an attack on Sky. I take the point that was made by the noble Lord, Lord Lipsey, that there is no indication as to whether Sky and Rupert Murdoch wish to acquire Channel 5. The underlying concern that one has about newspaper proprietors owning TV stations or broadcasting media is that, by and large—and it is more large than by—newspaper proprietors and people who buy newspapers tend to have something of a political agenda. We have only to look at our media and newspapers run by Members of your Lordships' House to realise that there is a significant political agenda behind newspapers. There is a significant political motive, quite often, among people who own newspapers. It was for that reason that, in the past, governments of both political persuasions have not been convinced that it is a good thing for newspaper owners also to own television stations.

My second point relates to the comments of the noble Lord, Lord Lipsey—and this argument has raged significantly in the run-up to the Bill. As I understand it, the Government's position is that, these days, ownership does not really matter, because what really matters is regulation. I suspect that that is the argument that the Minister will make against the amendment. I have heard people extremely close to the Prime Minister ask why so many people bother about the idea that Mr Murdoch and Sky can control a television station, because, after all, that can always be dealt with by regulation and ownership does not matter. The concern that we on these Benches, as well as the movers of the amendment, have is that that is a pretty big risk to take, bearing in mind the known motivation of newspaper proprietors with regard to the ownership of their newspapers.

Finally, once governments cross the threshold of allowing newspaper proprietors to acquire Channel 5, the intellectual argument will be lost that ownership matters in relation to TV stations. If, as is perfectly possible, we end up in a world in which the BBC is on one side, Sky TV on the other, and a failing ITV as a result of a collapse in advertising revenues, what will be the argument against allowing Sky then to say, "We can buy ITV"? I know that there will be competition and regulatory issues, and great hoops that will have to be jumped through, but once the intellectual step is taken to accept that a newspaper proprietor can own Channel 5, what will stop the same argument being used for that newspaper proprietor also to own Channel 3?

Photo of Lord Bragg Lord Bragg Labour

I rise to support the amendment of my noble friend Lord Puttnam and much of what other noble Lords have said. Like many other noble Lords, I seem to have been talking about this all day, every day, so I shall be as brief as I can.

There are two reasons why I fear this part of the Bill if it is not amended. The first reason involves the domino effect, which works in British television. We can give instance after instance of that. Basically, various channels are competing for a single, finite market, and one gains at the expense of the others. As has been pointed out, if Channel 5 has very few obligations and regulations compared with the other main terrestrial channels, and money and influence are pumped in by what could be called a cross- media owner, there is no doubt whatever that it could and would grow like a rocket. Judging by the stuff that has been shown, which is not expensively made—some of it is okay—Channel 5 could grow comparatively cheaply and bring in audiences. That would seriously disturb the current balance.

Does that matter? I believe that it does. Can that be stopped by putting in a ratchet? Would all the regulations come in if the service got 10 per cent? That is like trying to put the genie back in the bottle. I do not know how one does that or when 10 per cent would have been reached. People could say, "In August, we were at 8.2 per cent. We managed to get 11.5 per cent in November, but that was only because of what we showed. We should not forget the situation back in January". They could play around like that for years. I do not believe that the ratchet effect would work at all. It will take all of Ofcom's efforts just to put a ratchet effect on someone who was determined to make Channel 5 grow and had the power to keep it growing. I do not believe that a ratchet will work; it is a non-starter.

What I believe will happen—my noble friend Lord Puttnam referred to those of us with some experience in this regard—is the domino effect. Channel 5 will grow and grab audiences. It will go head to head with Channel 3, which is where it will try to get its audiences. It will get those audiences, and Channel 3 will have to fight back. The way to do that is to do two things: one makes things more cheaply and one offloads the cumbersome and expensive programmes, which, by and large, are one's public service responsibilities—classic dramas and programmes that take a lot of money. One can always make them more cheaply, as I said earlier. One can make drama and documentary cheaply but one then gets a cheap system. Channel 3 will have to fight back in relation to the new Channel 5. BBC 1 will have to follow Channel 3. Channel 3 must get its money; that is its obligation to shareholders. BBC1 must get sufficient viewers for a sufficient amount of time to justify everyone in this country paying a licence fee. It has very little room for manoeuvre in that regard and will have to fight back in the same coin. Those three bodies will compete for the same market and the audiences will drop on Channel 3 and BBC1. Moreover—I said that I should be brief and I will be—Channel 4 and BBC2 will suffer even more. I make that assertion and am quite prepared to discuss it at greater length if noble Lords want to do so. I hope that noble Lords follow me in that regard.

Secondly, I began by talking much earlier in our debate about where I started from, and where most people in this country start from; that is, the public service interest. We have developed broadcasting from its radio days as a system that is public service based. It has been a quite remarkable—an extraordinary—story. We have a commercial system, ITV, which is public service. When we invented a second commercial channel, Channel 4, we made it public service. We are a public service system and, by and large, it works. When people are required to put their hands up to vote for it, they do so. That is what we want. This approach will not serve that. I cannot see how this procedure will make the public system stronger, how it will make it more valuable and how it will enrich it. I fail to see how it would add value in any way to what is central and important to our system, which is currently under threat all over the place. The system has to manage very carefully without unleashing a massive competitor that would undoubtedly and inevitably go for the throat of the audiences. I think that would result in a great diminution of the public service content of our main terrestrial channels.

Photo of Lord Bernstein of Craigweil Lord Bernstein of Craigweil Labour 5:30 pm, 5th June 2003

I also support the amendment tabled by my noble friend Lord Puttnam. I was about to make a speech very much along the same lines as my noble friend Lord Bragg. However, first, he got in ahead of me; and, secondly, he made it much more fluently than I could. All I can say is that I support exactly what he said. ITV would suffer from a multi-media ownership competitor. One may say that that is no great problem because it is a commercial operation. That is true. But it also performs a great deal of public service broadcasting, which is bound to suffer.

As my noble friend Lord Bragg also said, Channel 4 is given the licence to be distinctive. If its advertising base is attacked, it too will have to drop distinctiveness for popularity. This is a very dangerous issue. I hope that the Government will think again before the Report stage, because it is an issue upon which many of us feel we cannot support the Government.

Photo of Lord Judd Lord Judd Labour

I hesitate to intervene. I must apologise to the Committee because previous deliberations on the Bill have coincided with my responsibilities at the Council of Europe and Western European Union. But it is a Bill about which I feel very strongly indeed. I believe that the amendment comes to the centre of much public anxiety about the Bill and what is being proposed.

My noble friend Lord Puttnam, in speaking to his excellent amendment, talked about the experts who have spoken in the debate. Certainly, impressive experts with a great deal of experience have spoken in Committee. I cannot in any way claim to be an expert, but I can claim to be a person who cares about the quality of democracy. That quality of democracy depends upon the quality of information available to the electorate; the quality of commentary; and the quality of the stimulation of debate in society. The Bill deals directly and indirectly with all that.

As an ordinary layman, it seems that the danger of a concentration of power in the hands of wilful people with their own agendas is a threat to the quality of democracy. Therefore, I would say, "We cannot take this issue too seriously".

To my noble friend Lord Lipsey I would say only this: I have always had a high regard and a liking for him, because he is an utterly reasonable person. However, I think that he falls into a pit by his own reasonableness because he tempts himself to believe that he is dealing with other people who are equally reasonable and who do not in effect have ruthless agendas in which once an opening is made, that opening will be pursued through to a conclusion which may not at first be on the surface. But to pretend that that conclusion is not already in the minds of some of those people is—and I hope my noble friend will forgive me using the word, because I actually think it can be quite complimentary to some people in the cynical age in which we live—rather naive.

Therefore, I want to put on record, again stressing the fact that I am not an expert in any way, that I think this amendment is absolutely essential, and that unless the Government move their position very considerably, I hope it will be pursued to a vote on Report.

Photo of Baroness O'Neill of Bengarve Baroness O'Neill of Bengarve Crossbench

The amendment lies at the core of what is needed to improve the Bill. It would be nice to think that we know now how to mitigate the power that ownership gives and that we have reached a stage where the perfection of regulation is such that we can relax and allow ownership to fall where it will.

Those of us who have lived in heavily regulated sectors of our society have a tiny degree of scepticism about the perfectibility of regulation. That is why I spoke earlier today about the importance of belt and braces, and why I support the amendment.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

I intervene briefly, simply to say that I can see no grounds for making any distinction between Channel 3 and Channel 5, except in one small respect, which is remediable: both were licensed by the Independent Broadcasting Authority. The fact that one is a larger body than the other is very much a temporary factor of the programmes produced by it. With the effect of cross-promotion, which would be available, I would agree with all noble Lords who have pointed out that that is easily changed.

There are two respects in which there are differences between the two channels at the moment. First, the ITC let Channel 5 get away with murder, frankly, in its first few years. Its licence should have been taken away because it breached every pledge it made when applying for the licence, with the result that we have reached the conclusion that it no longer has public service obligations. We can easily give it exactly the same public service obligations as Channel 3, and in my view we should. Secondly, at the moment it does not reach the whole of the country. That with time is changeable, in which case there is no ground for any distinction between the two.

Photo of Baroness Jay of Paddington Baroness Jay of Paddington Labour

We have spoken often in the course of today's debates on various amendments about the example of the United States and whether or not that is relevant to the Bill. I support the amendment. I would say in that context that I wonder whether the Minister was able during the very truncated lunch-hour we had, to see the reports from Washington from yesterday, in which the Senate has moved to try to redress what it sees as the impact of the Federal Communications Commission's decision of Tuesday, about which we spoke earlier in the day. The Federal Communications Commission has now decided to relax still further the cross-media ownership rules in the United States and all the potential outcomes, to which various noble Lords who have taken part in this most recent debate on Amendment No. 292, have referred.

The Senate has now decided that it must try to introduce legislation to redress some of that in the face of the FCC's decision. I simply say to the Minister that I very much hope that as a Parliament we will not seek to do that kind of thing ourselves in a few years' time because when, as people have said, the genie is let out of the bottle by the relaxation of these cross-media rules we shall be faced with the kind of deregulation to be found in the United States. All of us have spoken about this at length and I certainly do not intend to do so again.

Echoing my noble friend who spoke about the relevance or otherwise of individual owners, we have to accept that this Bill, in the words of the Government repeated several times, is "proprietor neutral". I draw attention to the useful quotation from Mr Rupert Murdoch, to which my noble friend referred to in an earlier speech, but not in this House. When challenged on the question of regulation having an impact on the rules of ownership, he said, leaving out the expletives,

"You can tell these politicians whatever they want to hear, but once the deal is done you don't worry about it. They are not going to chase after you later".

Photo of Baroness Blackstone Baroness Blackstone Minister of State (the Arts), Department for Culture, Media & Sport, Minister of State (Department for Culture, Media and Sport) (Arts)

I am going to disappoint my noble friends. I believe that every speaker in this debate is on this side of the House with the exception of the two Front Bench speakers for the Opposition and the Liberal Democrats.

We are convinced that our policy of freeing Channel 5 from ownership restrictions is the right one. I shall explain our reasons for reaching that conclusion, which, I readily concede to my noble friend Lord Puttnam, include judgment in difficult decisions of this kind.

One aim of this Bill, which I believe it achieves, is to strike the right balance between the interests of viewers on the one hand and growth and investment in the broadcasting industry on the other. I believe that removing the ownership rules from Channel 5 will be in the interests of both. Channel 5 is small. Opening the market to as many investors as possible will bring in new investment, which in turn should lead to better programming for viewers. Higher standards of programming on Channel 5 will in turn cause other terrestrial channels to raise their game as well.

I cannot agree entirely with what my noble friend Lord Bragg said in this respect and neither can I see that there is anything wrong in Channel 5 growing. We hope and expect ITV to grow. What is there to fear from a strong Channel 5 competing for audiences with programmes that viewers want to see?

When we embarked on the thorough and wide-ranging consultation on media ownership that preceded the draft Bill, we made it clear that we wanted to promote competition and investment because we believe that it will in turn lead to higher quality broadcasting for viewers. At the same time we were certain that we wanted to protect plurality and diversity. We recognise that competition law will not always safeguard those elements and in order to ensure that different viewpoints are heard in the media we need to keep some media ownership rules. But with just over 6 per cent of the audience and a reach of only 80 per cent of the country, we do not believe that Channel 5 is large enough to need protecting in the same way as ITV, yet these amendments would apply much the same rules to both channels.

We believe in the importance of plurality, as I have said, but let us not forget the presence of the BBC and Channel 4. Even if Channels 3 and 5 were in the same hands there would still be three separately controlled free-to-air public service broadcasters. With an ever-expanding number of digital channels, our proposals for Channel 5 do not present any threat to plurality in the television market. Indeed, the development of the market, the growth in the number of digital channels and digital TV audience figures means that plurality is becoming integral to our broadcasting ecology.

An important safeguard of equality which applies to Channel 5, regardless of ownership, is provided by content regulation. The Bill maintains and strengthens that as Members of the Committee know. There is a quota for independent production. Channel 5 news will have to be of high quality and cover both national and international matters. Channel 5 must fulfil the quotas for original productions and 50 per cent of its content must originate in the EU.

A suitable proportion and range of Channel 5 programmes must be made outside the M25 area and a suitable proportion of its budget must be spent there too in a range of production centres. These requirements are not fixed. If the respective audience share of Channel 5 and ITV changes so that they are more or less comparable, the Bill will allow changes to the public service broadcast obligations of Channel 3 and Channel 5 licences. For example, Ofcom could alter the channel's original programme requirements or the quota for independent programmes could be changed by order of the Secretary of State.

If Channel 5's audience share—

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

I thank the Minister for giving way. I and various other Members of the Committee toyed for a while with some form of ratchet arrangement which would bring about a change only if the audience increased. But I have been successfully persuaded that that would be a bad idea, because if people know that doing better means Ofcom heaping more obligations on them, they will simply limbo-dance under whatever threshold of comfort.

Photo of Baroness Blackstone Baroness Blackstone Minister of State (the Arts), Department for Culture, Media & Sport, Minister of State (Department for Culture, Media and Sport) (Arts)

What I am going on to say may answer my noble friend's point. If Channel 5's audience share becomes broadly equivalent to that of ITV, the Secretary of State may introduce, for example, the equivalent of nominated news provider arrangements for Channel 5 or change those obligations for Channel 3. However, we do not think it practical to set out in advance precise audience or other targets that would in turn trigger precise new obligations. It involves too much double-guessing future market circumstances and it could produce perverse incentives if licence holders sought to remain just below the threshold.

Following the ITC's review of the television programme supply market, the Bill introduces a new requirement that Ofcom should review the effect on regional independent and original production and news and current affairs programmes when Channel 5's licences change hands. Ofcom will be empowered to introduce licence variations to prevent existing standards from slipping. We have an opportunity to offer a quality boost to Channel 5 and to provide the beneficial stimulus of more competition to the other free to air channels. That will encourage higher quality across the board and the end beneficiary of the changes will be the viewers.

Photo of Lord Puttnam Lord Puttnam Labour 5:45 pm, 5th June 2003

I thank all noble Lords who have spoken. They have all added some air to an important and difficult issue. My noble friend Lady Jay sent me the article on the US Senate moving to tighten limits on media ownership. I want to make the point that this has nothing to do with Mr Murdoch. I have spoken little about Mr Murdoch and it insults the intelligence and argument of those moving these amendments constantly to pin things back on Mr Murdoch. I have enormous respect for him. If I did not respect him I probably would not be nearly as concerned about what the future may bring. It has nothing to do with Mr Murdoch.

Ironically—perhaps this is the good Lord helping me—immediately below the article on the US Senate is a headline that states:

"Berlusconi nearer to immunity after vote".

It goes on to record that Mr Berlusconi, who is far and away the largest media owner in Italy—and who also just happens to be the Prime Minister—has organised his troops in such a way to get immunity not just for himself, because he is a generous man, but for the entire Italian Senate. I wonder if that has anything to do with them voting with him.

That is clearly absurd. We sit in a democratic Chamber, thank God, still in a democratic country, and this is risible. The problem is that it is happening in a nation that will in a few days' time take on the presidency of the European Union. That is essentially what Amendment No. 292 and other similar amendments are about.

It has been said more than once today that we all know what we do not want. We certainly do not want the Berlusconi-isation of British politics. I suggest that we insufficiently value what we have. A former Conservative Minister wrote to me recently expressing his concern. Interestingly, he ended his letter:

"It seems to me that the Government is demonstrating no sense of history and is instead sleepwalking towards disaster".

I will of course withdraw the amendment today because time in my judgment will give force to the arguments that have been made from all parts of the Committee. But I say to the Minister that it will be one or the other: an enthusiastic embracing of Amendment No. 280A, which we debated at great length; or some similar amendments along the lines of this one. The Government will lose on one or the other. The only person who will look foolish if I am wrong will be me. I urge the Government to choose intelligently and thoughtfully. They have a couple of weeks to ponder the matter, but their present position is unacceptable in every respect. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Lord Eatwell Lord Eatwell Labour

moved Amendment No. 292A:

Page 430, line 30, at beginning insert "Subject to paragraph (1A),"

Photo of Lord Eatwell Lord Eatwell Labour

In moving the amendment, I shall speak also to Amendment No. 292B. Before doing so, I declare an interest as chairman of the Commercial Radio Companies Association. The amendments are of a more technical nature than the important debate to which we have listened. However, they correct what I am sure is a mistake in Schedule 14, in so far as it refers to the ownership of local radio digital multiplexes.

It is worth reflecting that commercial radio, urged on by the Government, has invested over £100 million of shareholders' funds in the development of the digital radio network. These funds are not expected to yield a return in the near future. They are an expression of confidence in the future and in the Government's commitment to digital broadcasting.

Unfortunately, the schedule as drafted would introduce investment controls on digital multiplexes that are far more restrictive than is currently the case, making a mockery of the Government's commitment.

The schedule would prevent a company from owning two overlapping digital multiplex services. The problem arises because that fails to take account of what in the trade are deemed to be "accidental overlaps". For example, if the schedule were to stand, Capital Radio would be prohibited from co-owning digital radio multiplexes in London and in Kent because the Kent and the London multiplexes overlap. I am sure that everyone would agree, when looking at the case in hand, that that would impact negatively on the provision of digital radio in Kent, where Capital Radio owns the heritage commercial radio service.

My amendment corrects this anomaly, which I am sure is a mistake, while still preventing undesirable concentrations of multiplex ownership. The simple consequence of my amendment would be that in an area with two or more overlapping digital multiplexes, there should be at least two multiplex owners. I stress that. This would not create monopolies because there should be at least two multiplex owners.

Not only would the amendment remove the new restrictions inherent in the current schedule, it would also be consistent with the two-plus-one approach to local radio ownership elsewhere in the Bill. I beg to move.

Photo of Baroness Buscombe Baroness Buscombe Conservative

I rise briefly to support the amendment tabled by the noble Lord, Lord Eatwell. As the noble Lord has said, the amendments aim to provide a more practical framework within which the requirements for restrictions on holding national multiplex licences can operate. The Bill provides that:

"A person may not hold any two multiplex licences at the same time where the coverage area of one . . . overlaps with . . . the other in a way that means that the potential audience for one of them is or includes at least half the potential audience of the other".

As drafted, the paragraph disallows any company from holding two overlapping digital multiplex services. This would implement a more restrictive regime for the future of digital radio than exists in current legislation. The amendments therefore take account of any accidental overlap while ensuring that no detrimental concentration of ownership could occur.

This can be illustrated by example. If the Bill were enacted now, Capital Radio would be prohibited from co-owning digital radio multiplexes in London and Kent because the London and Kent multiplex coverage areas overlap. But in a Bill that purportedly future-proofs the development of multimedia and claims to be largely deregulatory in nature, is it not inappropriate to implement a measure that would discourage much-needed investment in this sector? The amendment provides the appropriate balance needed to prevent ownership concentration while allowing continued industry growth.

Photo of Viscount Falkland Viscount Falkland Liberal Democrat

I rise simply to say that we on these Benches agree with the amendments. I have nothing further to add because they have been so admirably explained by both the noble Lord, Lord Eatwell, and the noble Baroness, Lady Buscombe.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

It would be easier to respond if I could agree with my noble friend that this is a mistake in Schedule 14, but unfortunately that is not the case for the reasons that I shall seek to explain. The amendments would change the proposed ownership rules on local radio multiplex licences. The present rules set out in the schedule provide that no person would be able to hold any two local radio multiplexes where the coverage area of one of the services overlaps with the other by 50 per cent or more of the potential audience. The amendment would provide that where there are three such overlapping licences, the proposed rules should be relaxed so that, instead of three separate owners, one owner could hold two of those licences.

Local radio multiplexes are the means by which terrestrial digital radio services are delivered to a locality. Each multiplex holds eight to 10 programme services, and therefore the multiplex owner plays a crucial gatekeeping role. The multiplex holder is entirely responsible for which services the multiplex carries, subject only to the requirement not to discriminate between service providers. As noble Lords will recognise, that provides the multiplex holder with considerable influence.

The media ownership rules are concerned with plurality and the need to avoid too much influence falling into too few hands. Nevertheless, we have taken the view that there should no limit to the number of multiplexes that anyone can hold, subject to the single restriction that they cannot hold two overlapping multiplexes, an overlap being where one multiplex includes at least half the potential audience of the other.

My noble friend clearly identified Kent as an area of difficulty, where the situation in London has created an anomaly. We do neither expect nor intend that anomaly to repeat itself and appear elsewhere.

The restrictions are not onerous and only affect London. From the point of view of plurality, London is such a large and important market that it is entirely reasonable to ensure that no one multiplex licence holder should be able to determine two thirds of London's digital radio stations, so the restrictions in Schedule 14 should be retained.

The Bill provides for the ownership rules to be revised as circumstances change. There will be no more clusters of three multiplexes licensed during the remainder of the first phase of the digital rollout. If more spectrum is made available for digital radio, that will not be until 2007 at the earliest. The introduction of the new spectrum will be the appropriate time to consider relaxing the multiplex ownership rules.

Meanwhile, with the proviso that I entered with regard to Kent, it is proper to preserve plurality. The issue affects the London situation overwhelmingly and there are good reasons for seeking plurality in those terms. I hope that my noble friend will feel able to withdraw his amendment.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

Before my noble friend sits down, as he recognises the anomaly but does not accept the amendment, how does he intend to resolve the anomaly?

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

I am not in a position to resolve the matter directly. The Radio Authority is seeking to deal with the situation in Kent but there is the problem of overlap with London. That unique situation is a product of the times and is unlikely to be repeated. It is a genuine difficulty but it is not likely that it will be resolved in the short term. I seek to defend that which we want to see obtaining across the country and to prevent the Kent situation recurring.

Photo of Lord Eatwell Lord Eatwell Labour

I can advise my noble friend the Minister that the way to address the anomaly right away is to accept my amendment. I am astonished at my noble friend's reply. Over several years, the Government have encouraged the commercial radio industry to invest enormous sums of money in digital broadcasting. To kick that industry in the teeth when it has been encouraged to invest significantly in advance of any return is not the way for a Government decently to behave. I assure the Government that we shall return to this matter on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 292B not moved.]

Schedule 14 agreed to.

Clause 343 [Restrictions relating to nominated news providers]:

[Amendment No. 293 not moved.]

Clause 343 agreed to.

Clause 344 [Changes of control of Channel 3 services]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour 6:00 pm, 5th June 2003

moved Amendment No. 294:

Page 301, line 13, leave out from beginning to "in" in line 14 and insert—

"(ii) is involved, to a substantial extent, in the provision of the programmes included"

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

I wish also to speak to the other amendments in the group: Amendments Nos. 295 to 299 and 303 to 306.

This group of amendments narrows the definition of the "relevant change of control" that triggers a review by Ofcom of various public service broadcasting requirements of Channel 3, Channel 5 and local broadcasting licensees. The aim is to reduce burdens on Ofcom and licence holders and focus efforts on the changes of control that really matter.

Clauses 344 and 345 apply in cases where there is a change in the persons who have control over a company holding a licence to provide a Channel 3 service. The clauses require Ofcom to review the effect of a "relevant change of control" on various public service broadcasting requirements—including original and regional productions and news and current affairs programming—and to vary the Channel 3 licence if necessary to ensure that the new owner does not deliver less than the old.

Clauses 346, 347, 348 and 349 set out corresponding provisions for Channel 5 and local sound broadcasting services respectively.

A "relevant change of control" is defined in Clauses 344, 346 and 348. As drafted, the expression includes a change of control over any body which is "connected" with the licence holder and is involved to any extent in the provision of the programmes for inclusion in the relevant service. The circumstances in which one body is connected with another are in turn defined in Schedule 2 to the Broadcasting Act 1990. They include, for example, the case where a programme maker is controlled by the licence holder, or where both the licence holder and the programme maker are controlled by the same holding company.

We believe that the net effect of these provisions is that the definition of a relevant change of control is too widely drawn. As things stand, Ofcom would be required to undertake a review every time there was a change of control of a connected body—for example, a production company in shared ownership with the licence holder—involved in even the most minor way in the provision of programmes for inclusion in the licence holder's service. This would cause a burden both for Ofcom, in carrying out really unnecessary reviews, and licence holders, in notifying Ofcom of irrelevant changes of control.

We therefore propose amendments to Clauses 344, 346 and 348 to make it clear that connected bodies must be involved to a substantial extent in the provision of programmes for inclusion in the service. This will ensure that efforts are focused on those cases that really matter, where the change of control has a genuine potential to affect the existing quality of the service.

For consistency of approach, corresponding amendments are also proposed in Schedule 15 to make changes to Sections 21 and 103 of the Broadcasting Act 1990, where similar definitions are used in the context of changes of control over Channel 3 or Channel 5 licences or national analogue radio licences soon after they are awarded, or within a year of the service commencing.

I beg to move.

On Question, amendment agreed to.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

moved Amendment No. 295:

Page 301, line 15, leave out "to be likely to be" and insert "is likely to become"

On Question, amendment agreed to.

Clause 344, as amended, agreed to.

Clause 345 agreed to.

Clause 346 [Changes of control of Channel 5]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

moved Amendments Nos. 296 and 297:

Page 303, line 34, leave out from beginning to "in" in line 35 and insert—

"(ii) is involved, to a substantial extent, in the provision of the programmes included" Page 303, line 36, leave out "to be likely to be" and insert "is likely to become"

On Question, amendments agreed to.

Clause 346, as amended, agreed to.

Clause 347 agreed to.

Clause 348 [Variation of local licence following change of control]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

moved Amendment Nos. 298 and 299:

Page 305, line 20, leave out from beginning to "in" in line 21 and insert—

"(ii) is involved, to a substantial extent, in the provision of the programmes included" Page 305, line 22, leave out "to be likely to be" and insert "is likely to become"

On Question, amendments agreed to.

Clause 348, as amended, agreed to.

Clause 349 agreed to.

Photo of Baroness Buscombe Baroness Buscombe Conservative

moved Amendment No. 299A:

Before Clause 350, insert the following new clause—

"MEANING OF "CONTROL"

(1) Paragraph 1 of Part I of Schedule 2 to the 1990 Act shall have effect subject to the following amendments.

(2) For sub-paragraphs (3) and (3A) there shall be substituted—

"(3) For the purposes of this Schedule a person has control of a body corporate if that person is able, or it is reasonable to expect that person to be able, directly or indirectly to ensure that the affairs of a body are conducted in accordance with that person's wishes.

(3A) In determining whether a person controls a body corporate all relevant circumstances shall be taken into account including the level of participation in the body corporate of that person and the level of participation of other participants in the body.

(3B) Without prejudice to the generality of sub-paragraph (3)—

(a) a person has control of a body corporate if that person is beneficially entitled to more than 50 per cent of the equity share capital in the body or possesses more than 50 per cent of the voting power in it, and

(b) a person has control of a body corporate if that person is beneficially entitled to 50 per cent of the equity share capital in the body or possesses 50 per cent of the voting power in it, and is party to an arrangement with another participant in the body corporate under which they agree to exercise their voting power or any of it in a particular way either generally or in relation to any particular issue or not to exercise their voting power or any of it in relation to any particular issue."

(3) After paragraph 3 there shall be inserted—

"3A (1) In this paragraph "guidance on control" means guidance on the matters which OFCOM consider should be taken into account in determining whether any person controls a body corporate within the meaning of paragraph 1(3) to (3A) above.

(2) In determining the question whether a person has control of a body corporate account shall be taken of any published guidance on control.

(3) OFCOM shall prepare guidance on control and shall publish a draft of the guidance in such manner as they consider appropriate for bringing it to the attention of persons who in OFCOM's opinion are likely to be affected by such guidance.

(4) OFCOM shall also publish, together with the draft, a notice that any person may make representations to OFCOM on the draft within such period as may be specified in the notice, not being less than one month from the date of publication.

(5) OFCOM shall take account of the representations made within the specified time in preparing the guidance on control and shall publish the guidance, not later than 3 months from the last day on which representations may be made under sub-paragraph (4), in such manner as they consider appropriate for bringing it to the attention of persons who in OFCOM's opinion are likely to be affected by such guidance.

(6) OFCOM shall keep the guidance on control under review and may publish revised guidance from time to time; and sub-paragraphs (3) to (5) above shall apply to any such revised guidance as they apply to the original guidance, with any necessary modifications.""

Photo of Baroness Buscombe Baroness Buscombe Conservative

I shall speak to Amendments Nos. 299A and 300 and the Question whether Clause 350 should stand part of the Bill.

In relation to Amendments Nos. 299A and 300, on Report in another place similar amendments were tabled by my honourable friend Mr John Greenway. Although there was time to hear the reason for tabling the amendments, there was no time available for the Minister's reply. Therefore I return to the issue. I shall begin with the Government's introduction in Clause 350(2) of a presumption of control in relation to any person with a holding of 20 per cent or more of shares or voting rights. As has been made clear in another place, there are significant concerns that the provision places on companies undue obligations that do not exist at present and that the 20 per cent figure is arbitrary and unjustified.

Starting at the level of general principle, it seems wrong to require companies to prove that they do not have control when they have an interest of between 20 and 50 per cent, rather than for the regulator to prove that they do, as is the case at present. It runs against the tried and tested principle that a person is innocent until proved guilty. For the principle to be reversed, some extremely important issue must be at stake, which we do not believe exists in this case.

The Government have already presented their justification for the change. In Committee in another place they argued that the 20 per cent figure was consistent with the application of the 20/20 cross-media ownership rule, and that it was in the range of shareholdings that the OFT and Competition Commission are likely to scrutinise as constituting a possible material influence under the mergers legislation of the Enterprise Act 2002. They also pointed out that, in the United States, persons with more than a 5 per cent stake in companies without a majority shareholder are deemed to have control.

However, those justifications are unconvincing. We have already debated today the 20/20 cross-media ownership rule, which in itself is arbitrary and unjustified. It is true that under the Enterprise Act 2002, there is the ability for the OFT to take into account more than a 20 per cent interest in deciding whether control exists, but it is still for the OFT to prove that it exists. In that respect, it is no different from the approach that the ITC can apply today. In neither case, however, is there a statutory presumption, which has to be proved to the contrary, that control exists at more than 20 per cent. The Government must explain why the difference in approach is justified. It is also true that in the US a 5 per cent presumption of control exists where companies do not have a major stakeholder. But that is hardly a justification for a rigid 20 per cent threshold in the UK, regardless of whether there is a major stakeholder.

We should be clear that we are not arguing that control should never be shown to exist at 20 per cent, or even at 5 per cent. We argue that a system of regulation is needed whereby Ofcom investigates each case on its particular merits and has the onus of demonstrating such control where it concludes that it exists. On that point, I shall give an example of government ownership regulation that is inconsistent with the 20 per cent presumption. The intention to increase the limit on ITN ownership from 20 per cent to 40 per cent indicates in this instance that the Government believe that 40 per cent ownership will not give control. They have argued that a 40 per cent limit is still necessary because they do not want to see a single body in control of ITN. That contradicts the Government's position on Clause 350. I hope that the Minister will be able to provide clarification in that regard. It all seems so arbitrary; it does not make sense.

The second area of concern that my new clause seeks to address relates to the changes to the meaning of "control" introduced under Clause 350(1). Part I of Schedule 2 to the 1990 Act currently defines "control" as,

"having regard to all the circumstances, to expect that he will be able, by whatever means and whether directly or indirectly, to achieve the result that the affairs of the body are conducted in accordance with his wishes".

That is, at 50 per cent. Clause 350(1)(a) changes that to the following:

"although he does have such an interest in the body, it is reasonable, having regard to all the circumstances, to expect that he would (if he chose to) be able in most cases or in significant respects, by whatever means whether directly or indirectly, to achieve the result that affairs of the body are conducted in accordance with his wishes".

Our concern is that those changes give Ofcom much greater latitude in deciding whether a person controls a body. The phrase, "would (if he chose to)" would allow Ofcom to second-guess the behaviour of the person. "In most cases" could allow it to dismiss arguments that disprove a particular conclusion and in significant respects. Moreover, "affairs" (as opposed to "the affairs") would allow Ofcom to make judgments on only parts of a company's business. What is meant by the word "significant", for example? What will happen if individuals take a genuine view that something is not significant, but Ofcom takes the view that it is significant?

The much looser definition could, for example, mean that a chief financial officer or chairman of an audit committee was deemed to control a business simply because he would be able to expect that, in "significant respects", the company would do as he said. Indeed, any director with specific managerial responsibilities is likely to be able to make the company carry out his wishes so far as they relate to those responsibilities. Can that director be described seriously as controlling the company just because he has that kind of influence? We do not believe that such a significant loosening of the definition, and the greater degree of uncertainty in decision-making that it will cause, is either justified or proportionate.

As I noted previously, the Government claim that the revisions are justified because the previous definition was "insufficiently robust" and would,

"make it too easy for people to set up arrangements that, under the rules, would not be deemed to give them control, even though in practice it would be clear that they had control".

Yet no evidence of such avoidance practices has been presented to justify those claims. Yes, the Government have reduced the number of ownership rules, as they pointed out during the debate on the issue in Committee in another place, but that is not on its own sufficient justification for the proposed changes. Such changes should be proportionate to the identified need, which has not up to now been identified. I hope that the Minister will be able to shed further light on the area, and not just repeat the arguments made in previous debates.

I have also tabled Amendment No. 300 in order to probe the Minister further on a point raised previously in Committee in another place. Rather than the Government's proposed changes to the meaning of control, the amendment proposes that the words,

"to achieve the result that the affairs of the body are conducted in accordance with his wishes", are replaced with,

"to control or materially to influence the policy of the body".

That wording is the same as that used in Section 26(3) of the Enterprise Act 2002, which defines enterprises ceasing to be distinct enterprises.

Finally, I wish to press the Minister on the question of consultation on matters that will be taken into account by Ofcom when determining whether a person has control of a body. As drafted, Clause 350(4) simply requires Ofcom to publish guidance setting out its intentions in that area, which I think is insufficient. My new clause seeks to ensure that, before Ofcom publishes any guidance, or revised guidance, it issues that for consultation. That guidance will be of great importance, reflecting Ofcom's policy towards control and the factors that it will take into account when assessing whether there is control. In order to ensure that such guidance is appropriate and encompasses all relevant factors, and so that it has the support and understanding of those likely to be affected by it, their views should be considered prior to Ofcom's publication of such guidance.

The Government's reasons for rejecting the proposal in Committee in another place were unconvincing. I agree, as was argued, that the need for consultation depends on the importance of the issues at hand, but that is no reason why there should be no consultation at all on what is by any standards an important area of policy. Furthermore, just because the principles of better regulatory practice encourage consultation, they do not require it, and there is no certainty that such a route will be adopted in that area when the time comes—that is, unless we can change that on Report.

Finally, I would say that it verges on the paranoid to argue, as the Government have, that consultation will allow less scrupulous operators the opportunity of staying one step ahead of the game in respect of the new arrangements to get around the ownership rules. Such an argument could surely be applied to any form of consultation, which would be ludicrous. I urge the Government to think again on the proposal. The additional burden on the regulatory process would be entirely justified in this instance by gains in transparency and confidence in the regulatory process. I beg to move.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour 6:15 pm, 5th June 2003

I shall speak briefly to Amendment No. 300A, which is grouped with the noble Baroness's amendment.

I agree with the "innocent until proved guilty" point. I also think that 20 per cent is the wrong figure and could produce a degree of confusion. After all, the City regards 30 per cent as the trigger for requiring a full takeover bid. In other words, control lies at about 30 per cent. Likewise, over the years, the Radio Authority has regarded 30 per cent as the figure for control. There is a history of dealing with the 30 per cent figure, and I cannot see why we are suddenly reducing it to 20 per cent.

Photo of Lord Eatwell Lord Eatwell Labour

I speak to Amendment No. 300B, which is also in the group. I remind the Committee of the declaration of interest that I made a few moments ago.

The amendment addresses the Government's position on minority shareholdings that act as a trigger for consideration of control. My amendment would correct what I thought was an unfortunate slip in the drafting, but, given the experience that I had with the amendment that I moved a few moments ago, it may not have been a mistake after all. The amendment would correct an error in the drafting as to the use and effect of the trigger. Most importantly, the clause, as drafted, lies entirely outwith UK regulatory practice. It is, for example, inconsistent with practice under the Financial Services and Markets Act 2000.

Clause 350 amends Schedule 2 to the Broadcasting Act 1990 to enable Ofcom to treat a person as having control of a company if he or she has a minority shareholding of only 20 per cent. Ofcom would not have to provide any evidence that the person had such control. The burden of proof is placed on the minority shareholder to prove that he or she does not have control of the company. Not only is that offensive to our standards of natural justice and contrary to British regulatory practice; it is also economically inefficient. It discourages investment in the industry and could clog up Ofcom with requests for prior clearance of investment decisions.

My amendment would remove those distortions from the process by requiring Ofcom to advance some reasonable grounds for believing that the possession of a minority shareholding of one fifth of a company's share capital provided a person with control of the company, as is, for example, typical in the Financial Services and Markets Act. There must be reasonable grounds, rather than a simple assumption that that is the case. The person would then be given the opportunity to consider those grounds and, if they can, rebut them.

Clause 350 provides the regulator with a power that is open to abuse. The amendment would correct the position as regards the issue of control.

Photo of Lord Razzall Lord Razzall Liberal Democrat

I shall add one comment to those that have been made, but I shall not detain the Committee long.

Several pertinent questions have been asked of the noble Baroness. I look forward to her answer. I shall add one more: is she happy that the definition of control—either amended in the various ways proposed or unamended—deals with something that is a concern in other jurisdictions, of which I would pick out Australia as being typical, where it has been the practice for control of media companies to be disguised by the use of offshore trusts? Is she satisfied that, under the provisions in the Bill as it stands or amended as proposed by the noble Baroness and the noble Lord, such questions will be dealt with by the definition of control?

Photo of Lord Crickhowell Lord Crickhowell Conservative

I shall not speak for long but this is an important matter. It was not a subject for consultation by the Government. It came as a surprise to most of those involved and reverses the onus of proof. I entirely agree with the point made by the noble Lord, Lord Eatwell. It is likely to have a potentially damaging impact on investment, particularly at a crucial moment when companies are developing from a small base. Coming from a government who have always said they wish to encourage investment, this seems perverse. I agree with the points made by my noble friend Lady Buscombe.

As to which amendment I would pick, I admit to not having very strong views. I like the amendment of the noble Lord, Lord Eatwell, for its simplicity and because it switches the onus of proof. That has some virtues. This is a clear case where the Government can come forward with a workable solution. Throughout the day the Minister has been unresponsive. She has found a reason to deny almost every suggestion that has been made. She is piling up an enormous raft of trouble for Report stage. I suggest that this is an occasion when she should understand that it would be perfectly possible for the Government to come forward with a more acceptable solution. If they do, they will remove that subject from lengthy debate at Report.

Photo of Baroness Blackstone Baroness Blackstone Minister of State (the Arts), Department for Culture, Media & Sport, Minister of State (Department for Culture, Media and Sport) (Arts)

The 1990 Act, as amended by Clause 350, supplies a definition of where a person has control over a body even though they do not hold more than a 50 per cent interest. The intention is to allow the regulators to consider cases where a person has substantial control over a body without that being reflected fully in formal or legal terms, such as in a minority shareholding. The regulator is to look at all the circumstances to determine whether that person is reasonably to be regarded as having such control of that body.

I shall start with Amendments Nos. 300A, 300B and the first part of new Clause 229A. An amendment to Schedule 2 to the 1990 Act made by Clause 350(2) means there would be a presumption of control in relation to any person with a holding of 20 per cent or more of shares and voting rights. I am aware that there are many objections to this presumption of guilt. Having considered the arguments—the noble Lord, Lord Crickhowell, always poses his question at the right point—I am prepared to consider this further with a view to bringing forward amendments at Report stage to remove this presumption. They will place those with an interest in a media company in a similar position to those with a holding in any other enterprise. I therefore hope that Amendments Nos. 300A, 300B and the first part of 299A will not be pressed. I hope this meets the point raised by my noble friends Lord Eatwell and Lord Gordon of Strathblane.

Turning to Amendment No. 300, spoken to by the noble Baroness, Lady Buscombe, it is important to recognise that the Enterprise Act and the Broadcasting Act are different acts with different purposes. The relevant provisions of the Enterprise Act are concerned with merger control, while the Broadcasting Act provisions are concerned with safeguarding plurality. There is no necessary reason why their definitions of control should be expressed in the same way. That is the answer to the question asked by the noble Baroness.

I am quite sure that the words in the Enterprise Act were carefully chosen and that they achieved the required result in that context. That does not mean that they should be adopted in the different context of media plurality. The provisions in the Broadcasting Act have worked effectively since 1996. Those who operate them and on whom they operate, know how to interpret them. The purpose of Clause 350 is not to make any substantial change in those provisions, but simply to clarify them. Therefore, I can see no reason to abandon an established form of words in one context for a different form of words from a different context. Both formulations do the job for which they were intended: if something is not broken, you do not fix it.

I return to the rest of the proposed new clause in Amendment No. 299A. As the Committee will be aware, Clause 350 already requires Ofcom to publish and, from time to time, revise guidance on the matters that will be taken into account when considering questions of control. Subsection (3) onwards of the new clause would also require Ofcom to consult on the guidance in draft and give a timetable in that respect.

I recognise that Ofcom is required in some cases to consult on draft guidance. However, that is not always the case. It depends upon the importance of the issue.Further, Clause 3 requires Ofcom to adopt "best regulatory practice". Therefore, even where the Bill does not require it, I should imagine that Ofcom will choose to consult on guidance in many cases. In my view, it is really a question that can both safely and sensibly be left to Ofcom to decide. After all, we are talking about pretty technical issues. It is not obvious that consultation would always be of real benefit.

The proposed clause would also make the guidance much more prescriptive by making it include the factors that Ofcom consider,

"should be taken into account".

Clause 350 deliberately makes it clear that the factors in the guidance need not be exhaustive. This is because companies will constantly bring forward new arrangements for avoiding control. No one blames them for that; it is the nature of the game. But it is important that Ofcom should not have its hands tied by over-prescriptive guidance that would prevent it from reaching correct decisions on these new arrangements just because it had not included them in the guidance. The test that matters is whether the person in question could be said to control a body, not whether the arrangements are already set out in the guidance.

As for the specific question raised by the noble Lord, Lord Razzall, I should have thought that matters like offshore trusts would be taken into account. However, I shall check the position and write to the noble Lord to confirm that information.

In the light of my response, I hope that the noble Baroness will feel able to withdraw her amendment.

Photo of Baroness Buscombe Baroness Buscombe Conservative

I shall be brief. I thank the Minister for her reply, with which I am somewhat disappointed. As my noble friend Lord Crickhowell said, we are discussing important issues. That is especially so as they were not properly aired in another place. I shall consider with care the Minister's response to all these amendments. Unlike my noble friend, I like all the amendments in the group. I am certainly supportive of the noble Lords, Lord Eatwell and Lord Gordon of Strathblane. Their amendments simply approach the matter from a different angle in an effort to face this most important subject. We are concerned about any proposal in the Bill that would in any way deter investment. That point is tremendously important.

As I said, I shall read and carefully consider the Minister's response in the Official Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 350 [Meaning of "control"]:

[Amendment No. 300 not moved.]

Photo of Lord Geddes Lord Geddes Conservative

Before calling Amendment No. 300A, I must advise the Committee that if it is agreed to I shall not call Amendment No. 300B due to pre-emption.

[Amendment No. 300A not moved.]

Photo of Lord Eatwell Lord Eatwell Labour

had given notice of his intention to move Amendment No. 300B:

Page 306, line 38, leave out from "be" to end of line 41 and insert "taken to have control of a body corporate as mentioned in sub-paragraph (3)(b) if—

(a) he is a participant with a 20 per cent interest in that body or is one with more than a 20 per cent interest in that body;

(b) OFCOM has reasonable grounds to believe that he has such control; and

(c) having been given the opportunity to consider those grounds, he is unable to show to the contrary."

Photo of Lord Eatwell Lord Eatwell Labour

I am very grateful for my noble friend's reaction to the remarks that I made. I shall get it right this time: amendment not moved.

[Amendment No. 300B not moved.]

Clause 350 agreed to.

Clause 351 [Annual factual and statistical report]:

Photo of Baroness Whitaker Baroness Whitaker Labour 6:30 pm, 5th June 2003

moved Amendment No. 301:

Page 308, line 18, at end insert—

"(l) the extent to which news and current affairs programmes included during the period are serving all groups within the community and such international and national coverage is relevant to their interests."

Photo of Baroness Whitaker Baroness Whitaker Labour

I declare both my interest as the deputy chair of the ITC and its support for the amendment. The amendment echoes the one tabled previously by the noble Baronesses, Lady Howe and Lady Prashar, to Clause 331, for which my noble friend on the Front Bench at the time offered some support.

The amendment is directed at a perceived, serious failing in our news and current affairs programmes. Recent authoritative research by Professor Ian Hargreaves on news and by the BBC, the BSC, the ITC and the Radio Authority, shows that broadcasting content simply does not reflect the world and the interests of minority parts of our multicultural society. The news research shows that less than half think TV news represents all sections of society fairly. It shows that black and Asian viewers trust the impartiality of TV news significantly less than white viewers and that it is often felt to be not relevant to their interests.

The joint research shows a widespread perception of tokenism, negative stereotyping, unrealistic and simplistic portrayals of particular communities and negative or non-existent images of countries or areas of origin. The reasons people wanted proper and more sensitive coverage were, principally, three: to demonstrate a sense of belonging within our society; to foster a better understanding of minority cultures; and—very important—to allow children to identify with positive representatives of people from their communities.

These are important social objectives. To abandon them to the inertia of the status quo would contribute to undermining both order and a sense of freedom. It will be an easy matter for Ofcom to include among its annual reporting obligations regular research of the kind I have referred to on how far news and current affairs programmes met the needs of all our communities. I beg to move.

Photo of Viscount Falkland Viscount Falkland Liberal Democrat

We on these Benches broadly support the noble Baroness's amendment, particularly with regard to the young in ethnic communities in this country and, beyond that, in the way that she has described. We particularly support her desire to avoid the inertia of the status quo. That is always a danger, and I am sure the regulatory body will be well aware of it. We support the sentiments behind the amendment.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop

As Members of the Committee will know, I serve in an area of the country where there are very many different ethnic communities. I warm to the point that the noble Baroness, Lady Whitaker, has made. I imagine it would be easy to include this proposal, and I hope that it gets a favourable response from the Minister.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

This amendment would require Ofcom, in its annual statistical and factual review, to consider whether news and current affairs programming is serving,

"all groups within the community and such international and national coverage is relevant to their interests".

This annual statistical review, which is essentially quantitative, is the wrong vehicle to get at this more qualitative judgment. We believe the intention behind the amendment is entirely admirable, but this is not the best way to achieve what my noble friend wants. It would not be in keeping with the general purpose of this clause to require Ofcom to review a qualitative issue such as whether news and current affairs programming is relevant to the interests of all communities. The general purpose of Clause 351 is to produce a statistical and factual review of the whole television and radio market.

The factors to be considered by Ofcom are on the whole quantitative and objective, such as the size and behaviour of audiences and the financial condition of the market, rather than qualitative issues. However, we believe that the Bill requires all public service broadcasters to provide programmes which,

"reflect the lives and concerns of different communities and cultural interests and traditions" in the UK.

In addition, one of the overall purposes of public service broadcasting is the provision of services which are properly balanced and meet the needs and satisfy the interests of as many different audiences as practicable. These provisions, which reflect the aims of the amendment, fall within Ofcom's review and report on public service broadcasting under Clause 260. The review would take place no less frequently than every five years.

I hope that, for the reasons that I set out, my noble friend Lady Whitaker will feel able to withdraw her amendment.

Photo of Baroness Whitaker Baroness Whitaker Labour

I am grateful to the right reverend Prelate and to the noble Viscount, Lord Falkland, for their enlightened support of the amendment.

I must tell my noble friend on the Front Bench that the research to which I referred was in large part quantitative, and I am not entirely sure that I follow him in the split that he made in how Ofcom should account for broadcasters. However, I shall read carefully what he said in Hansard. In the mean time I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 351 agreed to.

Clause 352 [Grants to access radio providers]:

[Amendment No. 302 not moved.]

Clause 352 agreed to.

Clause 353 agreed to.

Schedule 15 [Amendments of Broadcasting Acts]:

Photo of Baroness Blackstone Baroness Blackstone Minister of State (the Arts), Department for Culture, Media & Sport, Minister of State (Department for Culture, Media and Sport) (Arts)

moved Amendments Nos. 303 to 306:

Page 440, line 19, leave out "In"

Page 440, line 20, after "licence)" insert "shall be amended as follows.

(2)" Page 440, line 21, at end insert—

"(3) In subsection (2), in the definition of "associated programme provider", for the words from "appears" to "inclusion" there shall be substituted "is or is likely to be involved, to a substantial extent, in the provision of the programmes included"." Page 450, line 12, after "interpretation)" insert—

"(a) in the definition of "associated programme provider", for the words from "appears" to "inclusion" there shall be substituted "is or is likely to be involved, to a substantial extent, in the provision of the programmes included"; and

(b) in the words after the definition of "the relevant period","

On Question, amendments agreed to.

[Amendments Nos. 307 and 308 not moved.]

Schedule 15, as amended, agreed to.

Clause 354 agreed to.

Clause 355 [Interpretation of Part 3]:

[Amendment No. 309 not moved.]

Clause 355 agreed to.

Clause 356 [Licence required for use of TV receiver]:

[Amendments Nos. 309A to 309C not moved.]

Clause 356 agreed to.

Clauses 357 and 358 agreed to.

Clause 359 [Powers to enforce TV licensing]:

[Amendment No. 309D not moved.]

Clause 359 agreed to.

Clauses 360 and 361 agreed to.

Clause 362 [Matters in relation to which OFCOM have competition functions]:

[Amendments Nos. 310 and 310ZA not moved.]

Clause 362 agreed to.

Clauses 363 to 365 agreed to.

[Amendment No. 310A not moved.]

Clauses 366 to 368 agreed to.

Clause 369 [Adaptation of role of OFT in initial investigations and reports]:

Photo of Lord Wakeham Lord Wakeham Conservative

moved Amendment No. 310B:

Page 324, line 33, leave out from "daily" to "newspaper" in line 34 and insert "or Sunday"

Photo of Lord Wakeham Lord Wakeham Conservative

I get the impression that we are moving on rather fast. I shall therefore be as quick as I can. In moving Amendment No. 310B, I shall also speak to my other four amendments in this group. Although the amendments are perhaps out of the wide range of the debate which we have been having all day and are relatively small in some senses, they are pretty important to the newspaper industry. I should like to say a word or two about them.

Four of the amendments seek to restrict the way in which the public interest regime would be operated in the case of small and local newspapers, a regime which is in my view quite unnecessary for those small and local newspapers. Amendment No. 310F seeks clarification from the Government on exactly what they meant by a concession which they made in another place.

Amendments Nos. 310B and 310C effectively remove from the newspapers that are subject to this regime the weekly newspapers and the smaller newspapers, leaving in fact only daily newspapers. That is very much in line with what the Joint Committee which considered the draft Bill recommended: that there should be a substantial deregulatory outcome for the newspaper industry, whereas I think the Bill as drafted unnecessarily increases the burden on newspapers. The Bill would, for example, put a burden on newspapers with a circulation of fewer than 50,000, including I note with some horror a newspaper that is circulated in my old constituency of Malden which has a circulation of 8,000 copies. I think that that is a very heavy weapon to employ.

There are many reasons why that burden should not fall on local newspapers. The Competition Commission has never found that an acquisition of purely local newspapers raises issues that are against the public interest. The editorial content of local newspapers has to be driven by the views of the local population—otherwise they do not survive—and the burden of compliance on these newspapers is both onerous and in my view unnecessary.

Amendments Nos. 310D and 310E are concerned with restricting the Secretary of State's discretion to intervene in regional and local newspaper transfers to those where the acquiring newspaper owns a 25 per cent share of all newspapers in the United Kingdom or the acquiring publisher is to acquire newspapers in some substantial part of the United Kingdom where the publisher already owns a 25 per cent share. So again it is an attempt to restrict the interventions of the Secretary of State in the regulatory regime to those that I think will be of public concern and will avoid unnecessary complications for the smaller newspapers and where there is no public interest likely to arise.

Amendment No. 310F follows a helpful government amendment to the Bill in another place to remove the supply of the newspaper advertising from the criteria that allow intervention on special public interest grounds when examining plurality interests. Despite this change, the industry feels that the width of the interpretive direction given to the decision-making authority by this clause could still enable newspaper advertising share to remain a trigger as a backdoor option under Section 59(6) of the Enterprise Act. Indeed, the illustrative draft of statutory guidance for the operation of the new regime refers to the newspaper advertising. The amendment seeks simply to clarify the Bill and to avoid any future ambiguity in its intentions and applications. I beg to move.

Photo of Lord Fowler Lord Fowler Conservative 6:45 pm, 5th June 2003

I support my noble friend, particularly in Amendments Nos. 310B and 310C. The noble Lord, Lord Borrie, and I debated earlier today the rival merits of the regional and local press. It is worth underlining what my noble friend Lord Wakeham said. Although the amendment appears not to raise some of the profound issues we discussed today under some of the broadcasting amendments, a strong regional and local press is vital to this country. As I suggested earlier, there is no question that public support for and trust in the regional press is very great indeed. All the surveys suggest that it is rather greater than trust in national newspapers. We would be well advised to pay careful attention to that and certainly not to change the rules in any way that would act against the interests of local newspapers.

My concern, as has also been set out in Amendments Nos. 310B and 310C, is that the Government seem to be moving backwards. The Joint Committee on the draft Communications Bill recommended that the Government should have full regard to the need for a substantially deregulatory outcome for the newspaper industry, especially as regards local newspapers. However, far from deregulating the industry, the new regime, in some respects, is rather more restrictive than the present one. The practical implications for the Bill as it is now drafted mean that the transfer of smaller, free and paid-for local newspapers, which would not be subject to the special merger regime under the Fair Trading Act 1973, would be exposed to extended discretionary scrutiny on plurality grounds alone under a new exceptional public interest regime. The proposed regime would increase the scope of discretionary ministerial involvement in newspaper transfers where the newspapers in question have an average daily circulation of under 50,000. That would lead to the anomalous situation in which the transfer of a newspaper with a circulation of 8,000, 9,000 or 10,000 could be treated with the vigour of the special controls together with mergers that threaten national security. That seems frankly to be out of proportion.

The amendments address that issue. To someone such as myself who, in my old days, was a chairman of regional newspapers, the process of going before the Competition Commission, putting forward the evidence and setting it out seems to place a tremendous time and financial burden on any newspaper company that has ever sought to do that. Therefore, the burden of compliance under the new regime would be onerous for smaller weekly and free newspapers. The direct costs that arise can be unduly onerous as well.

I hope that the Minister will listen to the points that have been made, particularly by the Newspaper Society, which is well respected in the regional newspaper industry. It has represented the regional newspaper industry for a long time. I hope that she will listen to it and make some movement towards the amendments proposed by my noble friend.

Photo of Baroness Buscombe Baroness Buscombe Conservative

I rise briefly to say that I fully support my noble friend's amendments, which would tighten the definition of newspapers so that smaller newspapers are not caught by the special public interest regime. They would also reduce the scope of the Secretary of State's discretion to intervene in cases in which editorial plurality problems are not raised without removing altogether the possibility of intervention. It would be otiose of me even to begin to repeat the words of my noble friends Lord Wakeham and Lord Fowler, who have considerable experience in this area. I hope that the Minister will look favourably on the amendments.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

I am grateful for the celerity with which the noble Lord moved this important amendment, and for the succinctness with which the subsequent contributions have been made.

I defer to the vast knowledge of the noble Lords, Lord Wakeham and Lord Fowler, in terms of the newspaper industry but I will not defer to them in signifying my interest in and commitment to the local press; none of us could have served in another place without having a particular relationship with our local newspapers. We know that many criticisms voiced about the national press are singularly inappropriate in relation to local newspapers; they conduct themselves with a degree of partiality and effectiveness, which their bigger brothers and sisters often should take note of in relation to national journalism. We are aware of the reasons for the differences between them.

Amendment No. 310B amends Clause 269, as the noble Lord, Lord Wakeham, said, by deleting references to local newspapers that are published on other than a daily or Sunday basis. Although we believe that our definition could be more elegant, it was drafted in this way to ensure that only local periodicals were subject to the special newspaper merger regime, and not national periodicals, such as the Economist.

Local periodical titles were included in the definition of a newspaper at the insistence of Parliament during the passage of the Monopolies and Mergers Act 1965, which was the precursor to the Fair Trading Act 1973. That was in recognition of the importance of local newspaper titles and of the fact that the vast majority of such local titles are weekly.

I consider it appropriate that local newspapers should be included in the special newspaper merger regime. I listened carefully to the arguments advanced by the noble Lord. There have been cases under the Fair Trading Act regime where transfers involving local weekly papers have given rise to an adverse public interest finding and it is important that the Secretary of State should continue to be able to address those cases in which public interest issues are raised.

Although previous cases involving local weekly titles have also involved a local daily, it is entirely possible that public interest concerns could arise in a case involving only local weekly titles and the regime should surely have sufficient flexibility to permit scrutiny of such cases where relevant.

Noble Lords will be aware of examples of previous cases involving local weekly titles; they include the DMGT/T Bailey Forman transaction, which the Competition Commission found gave rise to plurality concerns in the East Midlands, and David Sullivan's proposed acquisition of the Bristol Evening Post plc, where the proposed acquisition of a number of weekly titles was blocked on plurality grounds. Issues arise infrequently. We are dealing with powers that would be triggered only on rare occasions but they should, however, be available.

The jurisdictional tests proposed for newspaper mergers are the same as those for the standard Enterprise Act merger regime. The only exception to that is that where there is an existing 25 per cent share of supply of newspapers in at least a substantial part of the UK, plurality issues may be taken into account although there is no increase in the share of supply. I hope that the noble Lord recognises the importance of that. That ability to intervene in newspaper mergers where there is no direct overlap has been introduced because consolidation may not be directly relevant to plurality assessments.

Also, under the proposals set out in the Bill, the very smallest newspapers will be taken out of the regime altogether. The noble Lord, Lord Fowler, emphasised that point. The enterprise acquired needs to have a turnover in the UK in excess of £70 million or it must have a 25 per cent supply threshold. So we have a framework which takes out some of the smaller positions.

Amendment No. 310C seeks to amend Clause 369. It would introduce the concept of "substantial". Although the term,

"substantial part of the United Kingdom", is used elsewhere in the Bill, in relation to the share of supply test, its omission from this part of the Bill is deliberate. The two tests are intentionally different as they serve different purposes.

The phrase,

"circulating wholly or mainly in the UK or in a part of the UK", in the Clause 369 definition of "newspaper" is designed to exclude titles that are predominantly overseas publications but which have some circulation in the UK—for example, the Wall Street Journal or Le Monde. After all, this is only the first step in applying the any jurisdictional test that might be so applied.

However, the share of supply test ensures that having established that a given title is essentially a UK publication, it is only where the newspaper merger involves a share of supply of at least 25 per cent in a substantial part of the UK that the newspaper public interest regime may apply.

Amendments Nos. 310D and 310E are intended to restrict the scope of the special public interest regime for newspaper mergers in such a way that the 25 per cent share of supply must apply to the acquiring company and must be satisfied in the same area as that in which the daily newspapers, if any, of the target circulate.

These amendments would undermine the purpose behind the special public interest regime. This aspect of the regime is intended to enable scrutiny of acquisitions of newspaper titles where there is no overlap in share of supply in the UK or a substantial part of the UK, but where at least one of the parties has a significant presence in at least a substantial part of the United Kingdom.

The amendments would mean that a number of types of acquisition would not be caught by the special public interest regime, even if the track record of the acquirer suggested that the acquisition would be likely to have an adverse effect on accurate presentation of news, freedom of expression of opinion, or plurality of views in newspapers in the UK.

In effect, the amendments would prevent scrutiny under the special public interest regime of acquisitions concerning only local weekly newspapers, acquisitions of a local monopoly, involving daily and weekly titles, if the acquirer does not itself have a 25 per cent share of supply in the same area, and acquisitions of newspapers with a significant share of supply in at least a substantial part of the UK by an overseas purchaser.

I believe that it is important that the Secretary of State should be able to intervene in acquisitions such as these, if it appears that, having regard to the newspaper public interest considerations, such an acquisition may operate against the public interest.

As I have already indicated, we consider that local weekly newspapers play an important part in the communities they serve. To exclude such titles from the ambit of the special public interest regime surely would undermine that role. I stress that the Government are committed to sustaining the role emphasised in terms of the beneficial effect by noble Lords who have contributed to the debate.

I turn finally to Amendment No. 310F. It seeks to prevent the OFT using newspaper advertising or newspaper advertising revenue when assessing whether or not the share of supply test is satisfied for the purposes of the special public interest regime. The Bill as originally drafted expressly specified that newspaper advertising could be used as a basis for establishing whether the share of supply test was satisfied.

The Opposition in another place tabled amendments to remove express references to newspaper advertising. The amendments caused the Government to reflect further with the OFT as to how it might operate the share of supply tests in the extended jurisdiction regime.

Following discussions with the OFT, we are satisfied that it is not necessary to include an express reference to newspaper advertising in the provisions dealing with the special newspaper public interest regime. Accordingly, in order to avoid any confusion that might be caused by having express reference to newspaper advertising in the special newspaper public interest regime, amendments were tabled by the Government at Report in another place to delete this superfluous wording. Unfortunately, it did not have time to consider these beneficial government changes and as a result we are picking up the consequences, as is so often the case. We consider that it would be inappropriate to require the OFT to use two different methodologies to assess whether or not the share of supply test is satisfied depending on whether the merger falls within the standard merger regime or the special public interest regime. Moreover, that would be contrary to the aim of streamlining procedures between the standard merger regime and the public interest regime, as far as it is possible to do so.

We consider that share of the supply of newspaper advertising or newspaper advertising revenue may be an appropriate measure of economic strength in relation to free newspapers where circulation and distribution figures may not be available or may not be a true indication of the economic strength of the titles in question. We also consider it important that the OFT should be free to use the measure of share of supply that it considers appropriate having regard to the relevant circumstances and regardless of whether the acquisition leads to an overlap in share of supply.

I have dealt at somewhat greater length with the amendments out of deference to the fact that the noble Lord moving them had truncated his remarks and gone to the heart of the issue. I also believed that it was obligatory for me to present the Government's defence of the present situation as fully as I was able to do, within the time constraints under which we are all operating. On the basis of the reply I hope that the noble Lord will be able to withdraw his amendment.

Photo of Lord Wakeham Lord Wakeham Conservative 7:00 pm, 5th June 2003

I am grateful to the Minister for his response. As regards Amendment No. 310F I am happy with his reply, but I am not quite so happy as regards others. because it is overkill, too bureaucratic and expensive for the industry. The right thing for me to do is to read Hansard and reflect on what the Minister said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 310C not moved.]

Clause 369 agreed to.

On Question, Whether Clause 370 shall stand part of the Bill?

Photo of Lord Wakeham Lord Wakeham Conservative

This probably reveals me in my true colours. As regards my earlier remarks on a previous amendment, I was very supportive of the Bill. I listened to a great deal today and as the debate continued I tended to be more and more supportive of it and less supportive of some of the amendments which were moved. I may find myself in the rather unique position at Report of voting with the Government and against many of my colleagues in the House. I know that it is not normal for a former Chief Whip to say things like that.

Having said that, I agree with the Minister in particular as regards what he said in response to the first debate this morning on Amendment No. 280A. I do not believe that there is any serious dispute about the need to take the public interest into account. The Minister set out the logic of this Bill in a very clear way. Certain parts of the media, television and radio need licences and, quite rightly, the public interest is controlled by the granting, withdrawing or the modifying of such licences.

The Bill is about that important issue. I have not addressed the Committee on that subject at all because I am concerned about the newspaper industry. The newspaper industry does not need licences. Anyone can start one up, but there is still a public interest which has been and continues to be dealt with by competition law. The Bill does not change that and I am happy with that position.

My concern is that the logic set out by the Government is not followed in the Bill in the way that it should be. The Bill gives Ofcom some responsibility for newspapers. I would like to see Ofcom removed from the responsibility of the newspaper industry entirely. I do not think it is wise for a regulator with a primary role in the statutory oversight of broadcasting content and licensing of the electronic media to be involved also in newspaper mergers. There is a danger that Ofcom will become involved in the editorial content of newspapers and indeed in editorial personnel. That is a slippery slope down which we should not tread.

There is no justification for a number of things I heard in today's debate; for example, that newspapers must be unbiased—accurate and truthful, yes, but partisan and prejudiced are in my view the essential stuff of a free press and I wish to preserve those qualities. For that reason, logic indicates that newspapers and their control should be removed from the Bill. I am therefore unhappy about Clause 370. My remarks could be repeated about Clauses 373, 375, 377, 378 and parts of Clause 384. My noble friend Lord Peyton, if he were here, would not be happy with those parts of the Bill.

I suspect that my proposals would make Ofcom a better organisation and that some people who think this is the right way forth are not in a position to say much about it. It is a dangerous slope to seek to bring the newspaper industry into the Bill, with which I have a great deal of sympathy. The Government are handling the television and radio side of it better than perhaps the debate has given them credit for. But I am still very concerned about the effect on the newspaper industry.

Photo of Baroness Buscombe Baroness Buscombe Conservative

I support my noble friend Lord Wakeham and have added my name to his on all the amendments in this group. As he said, we want to remove Ofcom entirely from responsibility for newspapers. We oppose the clauses concerning newspaper mergers for a number of reasons. I hope that the Minister will look on our arguments favourably, not least because there is a great deal of concern in the industry surrounding the Government's proposals. I believe that the Government are fully aware of that.

The new regime presented in the Bill will mean that four regulators will be involved in making references in investigating the merger and determining what measures should be taken following any reference: the OFT, Ofcom, the Secretary of State and the Competition Commission. We are concerned that a newspaper wishing to become involved in a merger would be required to negotiate with all four regulators on exactly the same matters. Surely that is overly bureaucratic and burdensome for all those involved, not to mention time-consuming for Ofcom.

We therefore propose that Ofcom be taken out of the regime entirely. I appreciate that this may seem to be a drastic measure, but for the reasons I am about to give, we believe that it would be beneficial for newspapers and for the regulators involved.

Concerns have been expressed beyond your Lordships' House that Ofcom's capacity for content regulation might impinge on its activities in other areas. Ofcom will be dealing with sectors in which there has been spectrum scarcity and in which some content regulation has been justified. We would appreciate some reassurance from the Government that Ofcom's content powers will have no bearing on its role in newspaper mergers, and how will they ensure that that is the case. Alternatively, would the Government consider removing Ofcom from the mergers regime entirely?

Does the Minister agree that it is a regressive step to grant a body with a powerful content arm a say in newspaper matters, a body which, with all due respect, is completely out of touch with our tradition of a free press? Does the Minister further agree that the OFT is perfectly well equipped to deal with newspaper mergers in the same way as any competition issue is dealt with? In fact, does it make sense to leave those who have previously advised the Secretary of State on such matters to continue to do so in the future?

Photo of Baroness Blackstone Baroness Blackstone Minister of State (the Arts), Department for Culture, Media & Sport, Minister of State (Department for Culture, Media and Sport) (Arts)

I am aware of the concerns in the newspaper industry about Ofcom's role in this area. However, the role will be advisory and limited to the specified newspaper public interest considerations set out in the legislation. It will take no decisions and will have no role in newspaper mergers unless the Secretary of State intervenes in a particular case. Furthermore, unlike the OFT's competition analysis, Ofcom's advice on plurality will not be binding on Ministers.

It has been suggested that the advisory role contemplated for Ofcom should instead be carried out by the OFT, which I believe lies behind the remarks of the noble Lord, Lord Wakeham, and the noble Baroness, Lady Buscombe. However, that would be contrary to the thrust of the reforms of merger control set out in the Bill and in the Enterprise Act 2002, which is to establish and empower the OFT as a specialist competition authority.

I should also make it clear that, under the current regime, the OFT has no track record in advising on public interest issues relating to the accurate presentation of the news, freedom of expression of opinion or plurality of views in newspapers in relation to mergers. Instead DTI officials have responsibility for this advisory function under the current special newspaper merger regime, which I think answers the question put to me by the noble Baroness, Lady Buscombe.

As the independent media and communications regulator, Ofcom is the body best placed to advise the Secretary of State on the specified newspaper public interest considerations so as to help her decide whether to make a reference or, following a Competition Commission report, to implement the remedial action required. DTI know-how and expertise in this area can be shared with Ofcom as part of the transitional arrangements for the introduction of the new regime and, over time, Ofcom's expertise in this area will develop.

Ofcom's involvement will also help to make sure that it can comment on the newspaper merger regime when it carries out its triennial review. Such reviews may cover ways in which the regime could be improved and, indeed, whether there continues to be a need for such a regime.

We have also seen repeated assertions in the press that the provisions of the Bill will lead inexorably to regulation of the press. Contrary to those reports, the proposals set out in the Bill do not give Ofcom any role in content regulation. I want to assure the noble Lord, Lord Wakeham, that the Government are not bringing in statutory regulation of the newspaper industry through the back door.

I agree that Ofcom, the Competition Commission and Ministers will be able, indeed will need, to look at the range of views currently available in newspapers in a relevant market and to consider the track record of the parties to a newspaper merger against the specified newspaper public interest considerations. Similar consideration takes place under the current special newspaper merger regime. I could give the Committee a recent example from Northern Ireland but will not take up time doing that now.

It should also be borne in mind that the merger control regime assesses the impact of structural changes. Assessing whether or not a purchaser is likely to have an impact on accurate presentation of news, freedom of expression of opinion, the plurality of views available in newspapers given the purchaser's track record and, if necessary, imposing remedies to ensure that the public interest is protected following such structural changes is clearly different from ongoing monitoring of content.

The newspaper public interest considerations are only relevant to assessing the impact of a given merger on the public interest and have no relevance outside that context. As a result, Ofcom's advisory role on such issues cannot lead to the sort of creeping regulation feared. It is significant that an advisory role for Ofcom was supported by the pre-legislative scrutiny committee.

Clause 370 agreed to.

Clause 371 [Extension of special public interest regime for certain newspaper mergers]:

[Amendment Nos. 310D to 310F not moved.]

Clause 371 agreed to.

Clauses 372 to 375 agreed to.

Clause 376 [Advice and information in relation to newspaper mergers]:

[Amendment No. 310G not moved.]

Clause 376 agreed to.

Clauses 377 to 382 agreed to.

Schedule 16 agreed to.

Clause 383 [Annual Report on the Secretary of State's functions]:

[Amendments Nos. 311 and 312 not moved.]

Clause 383 agreed to.

Clause 384 [Review of media ownership]:

[Amendments Nos. 313 to 313B not moved.]

Clause 384 agreed to.

Clause 385 agreed to.

Clause 386 [General restrictions on disclosure of information]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

moved Amendment No. 314:

Page 335, line 8, at end insert "of the United Kingdom"

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

In moving Amendment No. 314, I shall also speak to the other amendments in the group. They correct minor drafting errors, or make small technical amendments to the Bill. Amendment No. 314 makes clear that the words in Clause 386 should be read in accordance with the definitions in Clause 398. Amendment No. 322AZA simply translates a number of terms in the Broadcasting Act 1990 that relate to existing telecoms legislation into the language used in Part 2 of the Bill.

Amendment No. 323 is a consequential amendment missed from an earlier amendment made in another place to Schedule 17 (160). Amendment No. 324 brings the language used in the European Parliament (Representation) Act into line with the Bill. Amendment No. 328A is a drafting correction that removes an erroneous "or". Given the lateness of the hour I have been brief, but if any noble Lords would like more details, I would be happy to write to them. I beg to move.

On Question, amendment agreed to.

Clause 386, as amended, agreed to.

Clauses 387 to 397 agreed to.

Clause 398 [General interpretation]:

[Amendments Nos. 315 and 316 not moved.]

Photo of Viscount Falkland Viscount Falkland Liberal Democrat

moved Amendment No. 316A:

Page 348, line 8, after "of" insert ", or in connection with,"

Photo of Viscount Falkland Viscount Falkland Liberal Democrat

I speak behalf of my noble friend Lord Razzall who is not in the Chamber. This is a minor, drafting amendment to amplify the existing definition of consumers in a market for a service. I have some optimism that the Government will be sympathetic to the amendment. I beg to move.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

The Government are sympathetic to the amendment and are most grateful to the noble Viscount.

On Question, amendment agreed to.

Clause 398, as amended, agreed to.

Clause 399 agreed to.

Schedule 17 [Minor and Consequential Amendments]:

[Amendment No. 317 not moved.]

Schedule 17 agreed to.

Schedule 18 [Transitional Provisions]:

Photo of Lord Crickhowell Lord Crickhowell Conservative

moved Amendment No. 317A:

Page 529, line 32, at end insert "or

(c) for any right or obligation to arise,"

Photo of Lord Crickhowell Lord Crickhowell Conservative

In moving this amendment, I shall speak also to Amendments Nos. 317B and 317C. These have been prompted by the advice of a very distinguished group of lawyers. Many thousands of commercial agreements have been entered into where there is the provision that in the event of a party losing its telecoms licence, that agreement may be terminated or may even come to an end automatically. Obviously, when they entered into the agreement, the parties did not have in mind the circumstances of licence loss now being created by the Bill, which is abolishing the licence regime and replacing it with something else.

To avoid problems arising and many agreements being unintentionally terminated or revoked, the Government have inserted a provision to the effect that the loss of licence created by the implementation of the directives by the Bill shall not be effective to trigger such clauses in commercial agreements—

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

In the interests of time, we see merit in these amendments and will consider them. Perhaps that may help the noble Lord.

Photo of Lord Crickhowell Lord Crickhowell Conservative

I wondered whether the Minister might rise to curtail this debate. These are important amendments with a very good pedigree behind them. I am grateful to the Minster and look forward to seeing the emergence of what he referred to. I beg to move.

Photo of Lord Avebury Lord Avebury Liberal Democrat

As the Minister is in such a good mood, I hope that he will say something nice about my amendment, which follows on from an earlier debate. The Minister is nodding his head so I know he is aware of what I am about to say. The noble Lord, Lord McIntosh of Haringey, had written to me saying that he hoped to have some good news for me. Therefore I will not make the speech that I had prepared. I shall listen to the noble Lord instead.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

The noble Lord will not have to listen to me for very long. I was merely going to say that my noble friend Lord McIntosh of Haringey had indeed written. We did not think we had given the appropriate reply to the earlier debate on this issue and the amendments of the noble Lord. I would like to assure him that we will consider his amendment in the same vein as those of the noble Lord, Lord Crickhowell. I hope both noble Lords will not press their amendments.

Photo of Lord Crickhowell Lord Crickhowell Conservative

I beg leave to withdraw my amendment

Amendment, by leave, withdrawn.

[Amendments Nos. 317B to 318 not moved]

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

moved Amendment No. 318A.

Page 531, line 39, leave out from "applies" to end of line 40 and insert "where OFCOM give a continuation notice to the holder of a licence granted under section 7 of the 1984 Act."

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

I beg to move Amendment No. 318A and to speak to Amendments Nos. 318B to 318F, 319A to 319E and also to comment on Amendment No. 319.

As far as Amendment No. 319 is concerned, the Government agree in principle with the intention behind that amendment. These are government amendments meant to address this issue, we hope satisfactorily as far as Amendment No. 319 is concerned. This aims to secure that where the conclusion of the relevant market review is that it would not be appropriate to impose an SMP condition on the relevant person, Ofcom should then terminate the continued obligation. We agree that this is appropriate. I confirm that this will be one of the effects of the government amendments which I now move on behalf of the Government.

This has arisen because we have some difficulties with regard to time in relation to European directives and our compliance with them. If we are not to have an unacceptable lacuna in important existing regulatory requirements—including the BT price cap—it becomes necessary to provide for the transitional continuation of a wider class of existing licence conditions. This does however have the advantage that it eases the timetable constraints for the market review process, thus meeting a significant concern on the part of the industry.

Amendments Nos. 319D and 319E are merely consequential on the amendments which I sought to move. We think that these are appropriate and necessary modifications to meet the new timing constraints impacting particularly on the process of market review which is required by the EC directives. I beg to move this amendment and hope that the noble Lord, Lord Avebury, will not press Amendment No. 319.

Photo of Lord Avebury Lord Avebury Liberal Democrat

I am grateful to the Minister for what he said about Amendment No. 319. However, do I gather that the Government do not contemplate adding any particular words into the Bill such as those we propose in this amendment? If that is the case, we are not clear that the clause is to be construed as if the words in the amendment were added. Would it be able to take account of a case where Ofcom has decided not to apply SMP conditions? In such a case, if Ofcom, having made that decision, does not serve a notice, then can the Minister confirm that the failure to do so would be subject to appeal, and where is that to be found in the Bill?

Such an appeal would be bound to succeed, thus effectively placing Ofcom under an obligation to issue the notice. It would surely be more straightforward and kinder to those who have to understand what is already a horrendously complicated piece of legislation to spell that out in plain English.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips) 7:30 pm, 5th June 2003

I understand the noble Lord's point. He will recognise that we are seeking to address that issue by way of amendment. However, we have a little time left to us as far as concerns the passage of the Bill. I shall happily write to the noble Lord with such reassurance, and shall fill in the details as regards the matter he raised.

Photo of Baroness Buscombe Baroness Buscombe Conservative

I rise to seek some reassurances from the Government on the issue. I make it quite clear at the outset that I find the whole area reasonably technical and quite difficult. However, we are discussing important amendments. There is no question of our being unhappy with the amendments. In the same sense expressed by the noble Lord, Lord Avebury, we, too, have concerns about interpretation. Therefore, we are looking to the Government for assurances.

As we understand it, the Government's amendments to Schedule 18 seek to provide the Director General of Telecommunications with the power to issue notices to continue certain licence conditions beyond 25th July 2003, once the Telecommunications Act licences have been abolished, as is required by the EC electronic communications directives. The four GSM mobile operators—O2, Orange, T-Mobile, and Vodafone—are looking to us for assistance to obtain confirmation from the Government that there will be circumstances where Amendments Nos. 318A to 318F will not allow continuation notices to be issued for licence conditions that are in place on 24th July 2003.

Article 7(1) of the access directive is clear that national regulatory authorities are obliged to maintain obligations that,

"were in force prior to the date of entry of this Directive".

The directive came into force on 24th April 2002. The corollary of that obligation is that national regulatory authorities should not issue continuation notices for any conditions that have been imposed after that date. A particular example that concerns the four mobile operators is,

"the control of interconnection charges"— a condition introduced by Oftel on 4th April 2003, after a review by the Competition Commission—nearly a full year after the access directive came into force.

Amendments Nos. 318A to 318F should not alter Oftel's position, as described in its submission to the Competition Commission in June 2002. Oftel stated then that a,

"licence condition proposed by the Competition Commission and imposed by the Director General, will fall away on 25th July 2003".

Oftel also said that it,

"can impose a 'replacement' condition to take effect from 25th July 2003, following a market review".

Oftel has commenced such a review, and the initial consultation period will end on 24th July 2003. If appropriate, any replacement condition should flow from the review within the next few months.

In addition, the four mobile operators to which I referred seek further clarification that this is what the Government believe should happen, and that no continuation notice for this condition will be issued on the basis of Article 7(6) of the framework directive—that is, where it is an exceptional and urgent case. We believe that that would not be appropriate or proportionate, bearing in mind that the due process is already in train.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

As I indicated to the noble Lord, Lord Avebury, when he moved Amendment No. 319, these are very technical and complex matters. We have a little time before we need to reach a definitive position on the Bill, so if the noble Baroness will allow me, I shall write to her before Report with our response to the very important position that she has adopted and the points she has made in her contribution to this debate.

Photo of Baroness Buscombe Baroness Buscombe Conservative

I am grateful to the Minister, and hope that he will write to us before Report, as he says, so that we can review the situation then.

On Question, amendment agreed to.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

moved Amendments Nos. 318B to 318F:

Page 531, line 41, leave out from first "that" to "has" in line 15 on page 532 and insert "a provision contained in a condition of the licence is to have effect, after the abolition of licensing—

(a) to the extent specified in the notice; and

(b) subject to such modifications (if any) as may be so specified.

(2A) OFCOM are not to give a continuation notice except to the extent that they consider that provision to which it will give effect, as modified by the notice, ("the continued provision") corresponds to provision of one or more of the following descriptions—

(a) provision that they have power to include in SMP conditions;

(b) provision authorised by section 70(2) or (4) for inclusion in access-related conditions;

(c) provision relating to matters mentioned in Article 16 of the Universal Service Directive or Article 7 of the Access Directive.

(2B) A continuation notice relating to provision corresponding to anything that OFCOM have power to include in SMP conditions—

(a) may identify the market by reference to which an SMP condition replacing the provision would have to be set; and

(b) in so far as the provision corresponds to anything that OFCOM have power to include only in SMP apparatus conditions, must do so.

(2C) OFCOM are not to give a continuation notice relating to provision corresponding to anything that OFCOM have power to include only in SMP apparatus conditions except to the extent that it" Page 532, line 18, leave out "that condition" and insert "the continued provision"

Page 532, line 18, at end insert—

"(2D) The modifications for which a continuation notice may provide—

(a) must be confined to modifications for the purpose of securing that the provision to which they relate continues to have effect for so long as the notice is in force; but

(b) in the case of provision which is expressed to impose a requirement to be met before the abolition of licensing, may include a modification under which that requirement must continue to be met for so long as the notice remains in force." Page 532, line 20, leave out from beginning to "remain" in line 24 and insert—

"(a) the continued provision,

(b) every provision made by a direction, determination or consent given or made for the purposes of the continued provision, and

(c) so far as necessary for giving effect to anything mentioned in paragraph (a) or (b), every provision made by or under the licence under the 1984 Act that is not so mentioned, are to" Page 532, line 27, leave out sub-paragraphs (8) to (10) and insert—

"(7A) Where the continued provision is one that OFCOM have power to include only in an SMP apparatus condition, it shall be their duty, as soon as reasonably practicable after giving the continuation notice—

(a) to carry out an analysis of the market which, under sub-paragraph (2B), is identified in that notice;

(b) to take all other steps necessary for enabling them to decide whether or not to set an SMP apparatus condition by reference to that market for the purpose of replacing the continued provision; and

(c) to decide whether or not to exercise their power to set such a condition for that purpose.

(7B) In the case of every other continued provision, it shall be OFCOM's duty, as soon as reasonably practicable after giving the continuation notice—

(a) to take all steps necessary for enabling them to decide whether or not to set a condition of any other description under Chapter 1 of Part 2 of this Act for the purpose of replacing the continued provision; and

(b) to decide whether or not to exercise their power to set a condition under that Chapter for that purpose.

(7C) It shall be the duty of OFCOM—

(a) as soon as reasonably practicable after making a decision required by sub-paragraph (7A) or (7B), but

(b) in a case where that decision is a decision to set a condition, not before the coming into force of that condition, to give a notice under sub-paragraph (7) with respect to the continuation notice.

(7D) The duties imposed by sub-paragraphs (7A) to (7C) apply only where OFCOM have not previously given a notice under sub-paragraph (7) with respect to the continuation notice in question.

(7E) This paragraph has effect in the case of a licence granted under section 7 of the 1984 Act to persons of a particular class as if—

(a) references to the holder of that licence were references to the members of that class; and

(b) the manner in which a continuation notice or notice under sub-paragraph (7) is to be given to members of that class were by its publication in such manner as, in OFCOM's opinion, is appropriate for bringing it to the attention of the members of that class who are affected by the notice."

On Question, amendments agreed to.

[Amendment No. 319 not moved.]

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

moved Amendments Nos. 319A to 319E:

Page 533, line 8, at beginning insert "Sub-paragraph (1A) has effect"

Page 533, line 14, leave out from "2003/330)" to "in" in line 15 and insert—

"(1A) If, at any time after the commencement of section 42, OFCOM

(a) are satisfied that a procedure has been followed in relation to the proposal that satisfies the requirements of Article 7 of the Framework Directive, and

(b) publish a notification to that effect in such manner as they consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by the proposal, the proposal (with such modifications, if any, as are specified in the notification) is to have effect, from the publication of the notification," Page 533, line 45, at end insert—

"( ) Section 189 applies to a decision by OFCOM to publish a notification under this paragraph as it applies to a decision by them under Part 2 of this Act.

( ) In this paragraph "the Framework Directive" has the same meaning as in Chapter 1 of Part 2 of this Act." Page 534, leave out line 39 and insert—

"(a) any provision to which effect is given, after the abolition of licensing, by a continuation notice" Page 535, line 4, leave out "the conditions" and insert "anything"

On Question, amendments agreed to.

[Amendment No. 320 not moved.]

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

moved Amendment No. 320A:

Page 540, line 2, at end insert—

"(1A) Where a dispute—

(a) has arisen or arises about anything occurring or existing before the time when the revocation of those regulations comes into force ("the relevant time"),

(b) relates to matters disputes about which would (before that time) have been referable to the Director under regulation 6,

(c) is neither a dispute which was referred to him before that time nor a dispute arising after that time which is referable to OFCOM under section 182, and (d) is referred to OFCOM after that time either during the transitional period or in a case in which OFCOM are satisfied that the circumstances that prevented the making of a reference before the end of that period are exceptional, sub-paragraph (1) is to have effect as if the dispute were a dispute arising before the relevant time in the case of which a reference to the Director had been made under regulation 6 before that time."

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Labour

What I have to say now is known as the Pepper v. Hart statement—that is, a statement about the meaning of the Bill which is intended to be relied upon in courts if there is any doubt about its correct interpretation.

Doubts have been expressed in this House, in another place and elsewhere as to whether the Bill clearly provides that decisions taken by the Secretary of State or by Oftel in exercising any Ofcom function in the transitional period envisaged by Clause 401 is subject to appeal under Clause 189—that is, to a full appeal on the merits. Our view is that this is indeed the effect of Clause 401. Subsection (2) provides that in relation to any such exercise of Ofcom's functions, references in the Bill to Ofcom are to have effect as references to the Director General of Telecommunications or to the Secretary of State, as the case may be. This is as much in respect of references to Ofcom in Clause 189 as in respect of any other references in Part 2 of the Bill.

I hope that noble Lords will find this statement helpful and will not press Amendment No. 320AA. I beg to move.

[Amendment No. 320AA, as an amendment to Amendment No. 320A, not moved.]

On Question, Amendment No. 320A agreed to.

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

moved Amendments Nos. 320B to 320G:

Page 540, line 4, after "(1)" insert or "or (1A)"

Page 540, line 16, at end insert—

"( ) But OFCOM are not to give a direction by virtue of sub-paragraph (2)(a) containing provision which they would have no power to include in—

(a) a condition set under Chapter 1 of Part 2 of this Act; or

(b) a direction under section 187." Page 540, line 25, leave out from "consider" to end of line 27 and insert "that the direction makes provision corresponding to that which they have power to include in—

(a) conditions set under Chapter 1 of Part 2 of this Act; or

(b) directions under section 187." Page 540, line 29, leave out from beginning to end of line 30 and insert "(in whole or in part) a direction which—

(a) was given by virtue of sub-paragraph (2)(a); or

(b) is a direction to which a notice under sub-paragraph (4) relates." Page 540, line 30, at end insert—

"(6A) Where a direction which OFCOM have power to revoke under sub-paragraph (6) makes provision corresponding to anything that OFCOM have power to include in a condition set under Chapter 1 of Part 2 of this Act, it shall be their duty, as soon as reasonably practicable after giving the direction or as the case may be the notice under sub-paragraph (4)—

(a) to take all steps necessary for enabling them to decide whether or not to set such a condition for the purpose of replacing the direction; and

(b) to decide whether or not to exercise their power to set a condition under that Chapter for that purpose.

(6B) It shall be the duty of OFCOM—

(a) as soon as reasonably practicable after making a decision required by sub-paragraph (6A), but

(b) in a case where that decision is a decision to set a condition, not before the coming into force of that condition, to give a notice under sub-paragraph (6) revoking the direction in question.

(6C) The duties imposed by sub-paragraphs (6A) and (6B) apply only where OFCOM have not previously revoked the direction in question." Page 540, line 32, at end insert—

"( ) In this paragraph "transitional period" means the period which is the transitional period (within the meaning of section 401) in relation to this paragraph."

On Question, amendments agreed to.

[Amendments Nos. 321 and 322 not moved.]

Photo of Lord Davies of Oldham Lord Davies of Oldham Government Whip, Lords in Waiting (Whips)

moved Amendment No. 322AZA:

Page 542, line 12, at end insert—