Communications Bill

– in the House of Lords at 3:19 pm on 2nd July 2003.

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On Question, Motion agreed to.

Clause 312 [OFCOM's standards code]:

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

moved Amendment No. 182:

Page 275, line 37, leave out "unsuitable" and insert "which may be misleading, harmful or offensive"

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

My Lords, last night my noble friend Lord McIntosh, in replying to one of the debates, said, at col. 835, that the great advantage of the words "suitable" and "sufficient" is that they are capable of a wide meaning. To that I reply that one man's flexibility is another man's uncertainty. That is the core of the reasoning behind my amendments.

Over the years, the advertising industry has acquired widespread respect for the way in which it has regulated itself and submitted to regulation in the case of broadcasting. I think that it is safe to say that very few political speeches would meet the standards of the Advertising Association or the Advertising Standards Authority.

Adverts are extremely expensive to make and no one in the advertising world would want to incur a great deal of expenditure on an advert which might ultimately fall foul of the regulator. For that reason, producers seek to pre-clear the scripts and treatment so that they know, before they commit to expenditure of what can often amount to hundreds of thousands of pounds, that the advert will be all right in terms of regulation.

The terms that the industry has become used to are very precise: "misleading", "offensive" and "harmful". While I concede that they were not set out in the 1990 Act, they have certainly been used in all the codes governing advertising control since then. Let me say in passing that the word "unsuitable" was not used in the 1990 Act either. We are concerned about the huge uncertainty that could arise as a result of the introduction of such a vague term, perhaps resulting in advertising campaigns falling foul of the regulator.

It is that very imprecision that is causing the bother. By chance I bumped into my noble friend Lord McIntosh a little earlier. He told me that a letter was on its way, but I have not yet received it. My noble friend was kind enough to show me the draft. I have read it and, while I do not wish to appear ungracious, if all we can do is seek a synonym for "unsuitable", that simply will not address the problem. It would be more honest for me to divide the House today than to save the matter for Third Reading. I do that with regret because I very much admire my noble friend for having given ground over the past few days where it has been important to do so. The whole approach to the Bill has been transformed.

I am also grateful to him for allowing me to see the draft of his letter. However, no amount of searching through Roget's Thesaurus for a word other than "unsuitable" will help, especially if we substitute it with another vague term that would give Ofcom more power in a hitherto undefined form. I do not believe that that is going to be acceptable.

My noble friend's letter mentions that one of the problem areas might be the ban on certain categories, such as political advertising. He goes on to state that while,

"it may not be misleading, harmful or offensive in itself"—

I believe that many noble Lords might question that—Ofcom must have the power to enforce such a ban. But the ban on certain categories of advertising is still in the Bill. There is no problem about that. I have done nothing to vitiate the position in any way.

A further problem we must deal with is scheduling. When I raised this matter in Committee, Ministers objected by saying that this might not catch scheduling that could affect the under 16 year-olds or children in general. The noble Baroness, Lady Howe, intervened to point out that the commission had always interpreted "misleading, harmful or offensive" in terms of the audience which might be watching at the time. But I have gone further and tabled a second amendment, Amendment No. 183, which, in his letter, the Minister kindly acknowledges would meet the scheduling problem.

I have also weakened Amendment No. 182 to make it state not only "misleading, harmful or offensive", but,

"which may be misleading, harmful or offensive", thus widening its scope to give Ofcom surer ground on which to defend itself against any advertiser who might unreasonably think that he had been ill treated.

I feel therefore that I must press these amendments today. Every noble Lord who spoke in the debate in Committee was in favour of them. They met with the approval of a former chairman of the Advertising Association, a former chairman of the Advertising Standards Authority, the noble Baroness, Lady Howe, with her long experience of broadcasting standards and, at the time—although I gather that it has been leant on since—the ITC. So we want to press ahead and try to settle the matter today. I beg to move.

Photo of Lord Brabazon of Tara Lord Brabazon of Tara Chairman of Committees, House of Lords

My Lords, I should inform the House that there is a misprint in the Marshalled List. The amendment proposed should read:

"Page 275, line 37, leave out "unsuitable advertising" and insert "advertising which may be misleading, harmful or offensive".

Photo of Lord Borrie Lord Borrie Labour

My Lords, in Committee the Government stated that they were keen for Ofcom to have a broad power to ban the advertising of certain products and services—some, no doubt, it could not know of in advance. The Government have indicated that they want Ofcom to have that broad power in order to prevent the inappropriate and unsuitable scheduling of certain types of advertisement, say, around programmes aimed at children. Such concerns on the part of the Government are understandable, but to enable Ofcom to ban "unsuitable" advertising is, in the minds of supporters of the amendment, much too sweeping a power to give to any regulatory agency because it would become almost immune to challenge.

I hope that the Government will recognise that Amendments Nos. 182 and 183 are designed both to achieve the Government's own practical objectives and to introduce precision to the powers being given to Ofcom. As my noble friend Lord Gordon of Strathblane indicated, the protection of persons aged under 18 is now mentioned specifically; so that particular worry has been dealt with. Moreover, the power to enable Ofcom to prevent advertising,

"which may be misleading, harmful or offensive", should give Ofcom ample ability to do what the Government feel is needed, whether it be a power to ban advertisements for gun clubs and other examples that we know about or to ensure that adverts scheduled around children's programmes are adequately controlled. I support both amendments. I hope that the Government will feel able to do the same and accept them.

Photo of Baroness Buscombe Baroness Buscombe Conservative 3:30 pm, 2nd July 2003

My Lords, I am grateful to the Minister for faxing over to me at lunchtime today the letter referred to by the noble Lord, Lord Gordon of Strathblane. I strongly support the amendment, to which both my name and that of my noble friend Lord Saatchi have been added. Notwithstanding our gratitude to the Minister for what he had to say in his letter, I too am not yet satisfied and feel that the matter should be pressed to a vote today. I shall set out the reasons.

As someone who was an advertising practitioner and lawyer, albeit some time ago, I have enormous sympathy with the concerns being expressed by the advertising industry about the sweeping terminology, "unsuitable advertising". First, what is unsuitable for one is not necessarily unsuitable for another. Advertising that is misleading, harmful or offensive embraces concrete and objective concepts. That is the difference.

Every time this issue has been raised during the passage of the Bill both in another place and in your Lordships' House, the legitimate concerns of the advertising industry have been, to be frank, rather cursorily and inadequately addressed by the Government. The Minister in another place said that the word "unsuitable" is needed to enable the regulator to ban the advertising of products such as tobacco. However, in the current environment I would be most surprised if the regulator was not able to prohibit the advertising of such products under the heading of "harmful". I believe that that word is used frequently in the warning on the front of cigarette packets. Having given up smoking, I cannot remember, but I think that that is fair; I do not think that the cigarette packet would say "unsuitable".

The Minister also said that the word was needed to implement international obligations, in particular the "TV without frontiers" directive, but the need to take account of such obligations is specifically required in Clause 312(7). The Minister went on to say that the word was needed to implement the provisions of the Broadcasting Act 1990, but so far as I can see the sections of that Act applicable to advertising already appear in the Bill.

In the debate on Second Reading in your Lordships' House, the noble Lord, Lord McIntosh, remarked that "unsuitable" simply means advertising that may be unsuitable for certain times and certain audiences and that it is similar to the current powers of the ITC. In Committee the noble Lord, Lord Davies, said that the word "unsuitable" was purposely broad and sweeping and went on to remark that none of the contributions from Peers in support of the amendment had commented in any way on the specific nature of broadcasting and the concept of the watershed. However, I do not think that that is quite true.

The noble Baroness, Lady Howe, made specific reference to the fact that the BSC had taken the timing of the broadcast and its audience into account and she backed the use of specific criteria such as Amendment No. 182 allows.

So many reasons have been given with so little clarity in giving them that it is no wonder there has been no resolution of this quite focused and technical issue. The Government have defended "unsuitable" with different reasons on different occasions—and on none of those occasions have they succeeded in reassuring the advertising industry that the clause represents a good basis for primary legislation on advertising.

It would appear that the problem has arisen because of the structure of the Bill. All the provisions of the 1990 Act are contained in the Bill, but the big difference is that in the Bill the provisions relating to advertising have to be interpreted against the standards objectives in Clause 312. So "unsuitable" is a "suitable" standards objective, say the Government, precisely because it is a catch-all word. "Misleading, harmful or offensive" are not suitable standards objectives because they may or may not exclude some things that the regulator may want to ban.

It has never been the intention of the advertising industry to restrict the scope of existing codes, which have worked well for the past 20 years. Nor was it the intention, of that I am sure, of the ITC and Radio Authority, both of whom supported the original amendment at the Committee stage in your Lordships' House. I know from my own experience in the advertising business that it is most important to encourage certainty in terms of the application of the rules.

The Minister's letter addressed to the noble Lord, Lord Gordon, referred to Section 93 of the Broadcasting Act in relation to radio and stated:

"Although the word 'unsuitable' does not appear, nor do the words 'misleading, harmful or offensive'".

In practice, everyone beyond your Lordships' House, in industry and across the whole media industry, understand the meaning of "misleading, harmful or offensive", and know the parameters, to a large extent, of how that fits in on a day-to-day basis.

I have a real problem with the word "unsuitable". I am grateful that in our negotiations we have encouraged the Minister to consider an alternative but I am not sufficiently assured not to press the amendment to a Division. It is our duty to support the interests of the industry and to confirm everything that we have said at every stage thus far in your Lordships' House.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop

My Lords, I, too, find much that is persuasive in the argument of the noble Lord, Lord Gordon. His amendment provides a clearer definition of the standards to which broadcast advertisers must adhere. It is akin to the standard required by the Advertising Standards Authority for non-broadcast advertisements.

The word "unsuitable" in this context is, as the noble Baroness, Lady Buscombe, indicated, difficult to define. In my view, it is more difficult than the words "misleading, harmful or offensive". For example, in the advertising slots in and around children's programmes, adverts for the latest craze toys at Christmas time are no doubt very suitable from the viewpoint of the children watching but they may be highly unsuitable from the point of view of their parents.

Again taking the example of children's programmes, I am concerned that there are occasions when the advertising slots between pre-watershed programmes are used to advertise more adult pursuits and products and more adult television programmes. I know that there are commercial pressures on broadcasters but I should like an assurance that Ofcom will be watchful and strict about such matters and, indeed, about all matters relating to the enforcement of the watershed.

If the Minister is not minded to accept the amendment, I look to him to give a robust semantic defence of the word "unsuitable" to show that it is more appropriate here than "misleading, harmful or offensive"; that its meaning, as teased out by the Minister, will be carefully and firmly applied by Ofcom to uphold standards in this area rather than to let them drift; and that, in any case, misleading, harmful or offensive advertisements will be proscribed.

If the noble Lord, Lord Gordon, is intent on pressing his amendment to a Division, the Minister's response will help me to decide whether to support the Government or the noble Lord, Lord Gordon.

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

My Lords, I support the amendment of the noble Lord, Lord Gordon, who has made an earnest attempt to meet the anxieties expressed by the Government at the Committee stage. As a former regulator with both the ASA and the IBA I find myself very uncomfortable with the broad and sweeping terminology currently contained in Clause 312(2)(g). The word "unsuitable" means different things to different people and in the debate so far we have not had enough comfort from the Government in terms of its precise meaning or purpose. I share the views of the right reverend Prelate in that regard.

An Act of Parliament should be drafted to leave as little room as possible for unintended interpretations by courts in the future. We know what we mean by "misleading, harmful or offensive", and have done so over many years. They are well tried terms which form the basis of the existing radio and television advertising codes.

I note from the Committee stage debate on 3rd June that the Government want the standards objective for advertising to be as broad as possible, to cover both undesirable product categories and inappropriate scheduling. I well understand their concern but, in my view, the new amendments would generally achieve both aims. "Harm" or "offence" can be used to apply to all kinds of things, including scheduling. For example, section 7.3.6 of the ITC code of advertising standards requires that appropriate timing restrictions be applied to advertisements which might harm or distress children or which would otherwise be unsuitable for them. This falls within the main section on "harm and distress" in Section 7.3 of the ITC code.

The Radio Authority has a similar requirement. Section 11 of its advertising and sponsorship code states that,

"advertisements likely to be heard by a significant number of children . . . must not include any material which might result in harm to them, whether physically, mentally or morally".

If the Government are going to persist with the word "unsuitable" as a standards objective for advertising they must produce good examples that would not be covered by "harm", "offence" or "misleading". In my experience, these terms have been usefully applied in a wide-ranging way by regulators to date. The words have been used very widely for a very long time and the self-regulation system of advertising standards has worked very well.

I am genuinely puzzled as to why the Government are resisting the amendment and making such heavy weather of it. I have not had the advantage of a letter from the Minister and so I cannot speak about that. We have more fundamental and serious matters to discuss at this stage of the Bill and I wonder why the Government are digging themselves in on this matter.

Photo of Baroness Carnegy of Lour Baroness Carnegy of Lour Conservative

My Lords, I have not spoken on the Bill before and I hope that your Lordships will not mind me saying that I find it very strange how the Government are talking themselves into the odd use of words. Only the other day the noble Lord, Lord McIntosh, told us that, whatever our nationality, we must consider ourselves citizens if we lived in this country rather than members of a community. That seems a rather refined way of using language.

The concept of suitability is subjective. The right reverend Prelate made the point that it depends on who you are and what you consider to be suitable. The amendment makes a very good attempt to be far clearer. We do not want a regulator to decide about the "suitability" of something when the word is so subjective. It would be better for him to decide whether something was "misleading, harmful or offensive" because they are much clearer concepts. I support the amendment.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, I, too, share the concern and puzzlement expressed by the noble Lord, Lord Thomson, as to why the Government should be digging in their toes about this. Everybody who has spoken and who spoke on the previous occasion felt that the three words in the amendment were far more indicative of what we were all talking about than the single word that the Minister preferred. Not only that but, if I may say so, I think all three words give a concept to each one of the words used and help better to define the individual's interpretation.

I will repeat what I said last time. All the previous regulators took into account the timing of the programme, which is crucial, and I see no reason why that will not continue to happen. Obviously, at certain later times of the night things would be permitted which would not be permitted earlier or, rather, it would not be a question of finding against the advertiser. But a major problem is that adverts come upon you suddenly. Unlike the increasing encouragement to broadcasters to put warnings on their programmes, which are extremely effective in helping parents and others to decide whether to turn off, suddenly the adverts come on. That aspect needs to be taken very seriously.

Given all the things that have been said about combining the advertising standards approach and this amendment being the right way forward, I hope the Government will decide that they can change their mind.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I am grateful for the debate and the attempt to clarify an issue which has exercised the Government and to which we have attempted to respond as positively as possible. Let us be absolutely clear: there is no real difference of principle between the Government, the regulators and the industry about what we are seeking to achieve. However, I will develop my response in terms of indicating that we are not holding fast to the term "unsuitable" so I will not respond to the invitation from the right reverend Prelate to produce a robust definition of the word. That would take me rather longer than your Lordships would bear.

I shall indicate, as we sought to indicate in our letter to colleagues who were signatories to the amendment, that we were prepared for further discussion. But I shall resist the amendments because they will not improve the Bill. Therefore, they ought not to be pressed to a vote this afternoon. I hope they are not, and, if they are, I hope noble Lords will recognise that the Government have reservations about the terms contained in them and are prepared to discuss the situation further prior to Third Reading.

The current advertising standards for broadcasting are generally considered effective, as the noble Lord, Lord Thomson, and others said. There is, it seems clear, no desire to limit Ofcom's ability to address issues of public interest and public concern in the most effective way. The question is simply whether, on the one hand, the amendment would provide the necessary scope to Ofcom and, on the other, whether "unsuitable" is too broad a term which would open the way to mischievous pressure to ban advertising on flimsy grounds.

Let me make it absolutely clear, therefore, that the Government's policy from the outset has been that Ofcom should have the same scope to regulate broadcast advertising as the ITC and the Radio Authority. The current statutory scope has obviously been wide enough to accommodate the current codes. I emphasise that it is not the issue of what is in legislation that is the determinant of the effectiveness of Ofcom's operation; it is the code, where the necessary terms will appear, that we need to address. That is why, if the Bill becomes an Act, we need a term which is sufficiently broad for the code to have the flexibility, over time, to define itself with some precision according to the needs of our community. The concept must be wide enough to address any future concerns—

Photo of Lord Lester of Herne Hill Lord Lester of Herne Hill Liberal Democrat

My Lords, I am very grateful to the Minister for giving way. Will he agree, however, that in view of the impact on freedom of commercial speech that regulation has in the context of, for example, the European Convention on Human Rights, reasonable legal certainty has to be achieved, either on the face of the Bill or in a legally binding code? Is not the virtue of the amendment that it achieves greater legal certainty than the very vague word that is there?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 3:45 pm, 2nd July 2003

My Lords, I hear what the noble Lord says and treat it with respect, as I always do. But we consider that the term "harmful" in the amendment might well be open to the same problem of being difficult to define legally. If we relied upon "harmful" to deal with the watershed, we might have great difficulty in establishing the legal certainty of just how "harmful" a programme was in relation to whether it came before or after the watershed.

It was suggested in Committee that the three words in the amendment defined the current scope of the ITC and Radio Authority powers. In fact, Section 9(1) of the Broadcasting Act 1990 specifies only this:

"It shall be the duty of the Commission—

(a) after the appropriate consultation, to draw up, and from time to time review, a code—

(i) governing standards and practice in advertising . . .

(ii) prescribing the advertisements and methods of advertising . . . to be prohibited, or to be prohibited in particular circumstances; and

(b) to do all that they can to secure that the provisions of the code are observed in the provision of licensed services".

Similar provisions apply to radio. There is no mention of the three words in this amendment. The statute gives the current regulators the widest discretion. I repeat: the words "misleading, harmful or offensive"—which I recognise have had their value in the code with regard to regulation in recent years—are not the basis of broadcast advertising regulation in the parent 1990 Act.

However, as in the 1990 Act, the Bill provides for the development of a code after consultation. It is the code which provides the clear rules and the regulatory certainty which is necessary. The three words in the amendment appear in the current codes which will be inherited by Ofcom. They could continue to form the core of any new codes developed by Ofcom or a co-regulatory body. As my noble friend Lord Gordon of Strathblane indicated in Committee, these words have indeed provided some regulatory certainty for a number of years. Nothing in the Bill prevents them from continuing to form the core of Ofcom's codes, but they do not necessarily justify all that is in the codes. That has not needed to be tested because the statute does not limit the codes to "misleading, harmful or offensive" matters.

We therefore cannot be confident that these words would provide a sufficiently secure basis for the regulation of broadcast advertising. If the amendment were accepted, Ofcom could be subject to challenge if it could not prove that the advertisement was "misleading, harmful or offensive" ultimately to the satisfaction of a court.

Our policy, therefore, is to roll forward the wide scope of the 1990 Act, with detailed rules set out in a code produced, of course, after wide consultation. I can assure the House that the Independent Television Commission and the Radio Authority have discussed these provisions within the department. They recognise the need for the wide scope of the 1990 Act and fully support the Government's policy of rolling that forward in the Bill.

I accept that we need to discuss the word "unsuitable" further, and we are prepared to have discussions with colleagues before Third Reading. However, I should explain why it appears in the Bill. It is because the Bill is structured differently from the 1990 Act. It sets out the high-level principles applying to broadcasting standards. These apply to advertisements in the same way as they apply to programmes.

Clause 312(2)(g) effectively answers the question: what is Ofcom's particular duty in relation to advertising standards? All Ofcom's responsibility for advertising, whether specified in national or international legislation, must be consistent with that duty. Further detail specific to advertising is provided at Clauses 314 and 315. So, for example, the ban on political advertising, specifically provided for in Clause 314, must be within the scope of the provision of Clause 312. Such advertisements may not be misleading, harmful or offensive but, as Ministers have tried to explain at previous stages, we believe that there are good reasons for maintaining the ban on political advertisements. That is one example of why we are obliged to draw the statute widely. A similar example is the distinction between radio programming and advertising. Listeners must be aware when they are hearing a commercial promotion rather than programming. That would not fall within the terms of the amendment. Other examples have been mentioned in previous debates.

The point has also been made that "unsuitable" might be misinterpreted by interest groups, but that is the problem with "harm" too. If it were to have the wide meaning necessary to maintain even the current levels of regulation, it would be open to the same challenge. But the regulator cannot regulate advertising on a whim. The current statutory provisions provide full regulatory flexibility, but the regulator has to come to a reasoned and defensible view on what should or should not be allowed. That is tested in the statutory consultation on the specific provisions of a draft code. The Bill's provisions require exactly the same and make it no easier than now for the regulator to act on inadequate evidence.

However, we are prepared to consider alternative ways in which to achieve the policy, which is not one of a clash of principles. We want to ensure that we have the chance to discuss matters further. I cannot promise to succeed but we shall certainly examine whether there is any scope to make further progress.

In summary, the draft Bill simply places the current statutory scope for broadcast advertising regulation within the new structures of standards objectives. It provides for clear regulatory rules to be defined in codes so that industry has regulatory certainty and knows where it stands. It provides a robust base for current standards to be rolled forward and for flexibility to address future concerns so that viewers' and listeners' interests are safeguarded. The amendments would not achieve that.

For those who take the view of the right reverend Prelate that there are anxieties about the Government's position as enshrined in the Bill, we are prepared to have further discussion. However, we do not believe that the case has been made by those who have presented the arguments for the amendments today. We shall seek to make progress on the matter.

In presenting the amendments, my noble friend Lord Gordon asked whether the Government were offering some attempt to produce a synonym for "unsuitable". He will recognise that I have shied away from that invitation, which was reinforced by the right reverend Prelate.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop

My Lords, the invitation still stands, and if the Minister wishes to respond to it, I am sure that your Lordships would be most interested to hear him.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I am grateful for the renewal of the invitation, but I shall resist it for the second time. We are not seeking a synonym for "unsuitable"; we are seeking to ensure that the Bill does not offer a peg for lobby groups to demand inappropriate advertising bans. We are trying to ensure that the Bill has the breadth to create the opportunities for the codes to be specific but also to guard against mischievous activity in those terms.

My noble friend Lord Borrie said that the problem with the phrase "unsuitable" was that it would be unchallengeable in court, but that is not so. The specific regulatory rules must appear in any code that we produce under the legislation—a code developed after the fullest consultation. Those specific rules, rather than the breadth of the legislation, must be robust against the challenge, provided that the legislation has a proper basis for the development of the code.

I apologise to noble Lords for taking so long over my reply, but interesting points were raised and the Government are seeking to achieve a solution on the basis of consensus. However, we cannot accept the amendment and I ask my noble friend to consider withdrawing it.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

My Lords, I have considered withdrawing, but I have rejected the option because there is still a gulf in this matter. The Minister's letter suggests that the Government want to continue the current situation. It is certainly true that my words do not appear in the 1990 Act, but neither does "unsuitable". It simply gives the ITC and the Radio Authority an obligation to draw up a code—it says nothing beyond that. My words have the advantage of being in the current codes. Therefore, although I fully concede that even my words are very subjective—after all, one could argue about the meaning of "harmful" and "offensive"—they are slightly more precise than either "unsuitable" or any other single portmanteau word designed to give Ofcom wider powers than the current codes give it.

My feeling is that the advertising industry has grown up with the term, "misleading, harmful or offensive", knows how to interpret it and how not to offend against it. More importantly, the regulators know how to apply it. Why trade certainty, which has produced good regulation and self-regulation in the past 20 years of the industry, for something that manifestly produces uncertainty?

I do not want to appear ungracious, and I am grateful to the Minister for his letter and his offer to talk, but I have a feeling that we are not going to get anywhere. We shall simply overcrowd Third Reading, which will already feature quite a few postponed Divisions. I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 182) shall be agreed to?

Their Lordships divided: Contents, 158; Not-Contents, 117.

Division number 1 Private Parking: Ports and Trading Estates — Communications Bill

Aye: 156 Members of the House of Lords

No: 115 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Resolved in the affirmative, and amendment agreed to accordingly.

Clause 314 [Objectives for advertisements and sponsorship]:

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour 4:10 pm, 2nd July 2003

moved Amendment No. 183:

Page 277, line 45, leave out "312(2)(g)" and insert "312(2)(a), (g)"

On Question, amendment agreed to.

Clause 330 [Promotion of equal opportunities and training]:

[Amendment No. 184 not moved.]

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

moved Amendment No. 184A:

Page 290, line 27, at end insert—

"( ) The conditions imposed by virtue of this section may include provision for treating obligations to make the arrangements mentioned in subsections (1) to (3), or to do anything mentioned in subsection (4), as discharged where a member of a group of companies to which the licence holder belongs—

(a) has made the required arrangements in relation to employment with the licence holder; or

(b) has done anything required by subsection (4) in relation to those arrangements."

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, in moving Amendment No. 184A, I wish to speak also to the other government amendments with which it is grouped.

This group of government amendments fulfils the commitment that we gave in Committee to consider Amendment No. 271A tabled by the noble Lord, Lord Crickhowell. The aim of that amendment was to ensure that the equal opportunities and training requirements set out in Clause 330 apply to companies which, while individually small, are part of a much larger group of companies.

Clause 330 requires Ofcom to impose conditions in Broadcasting Act licences for services to which the clause applies that oblige licence holders to make arrangements for promoting sex and race equality and fair treatment for disabled people and for training.

In response to an amendment tabled by the noble Lord, Lord Addington, we announced last week that we would change the current references to fair treatment for disabled people to the more up-to-date term of "equalisation of opportunities".

The conditions in Clause 330 currently apply to a service if (a) the licence holder employs more than the threshold number of people—currently 20—in connection with providing his service and (b) in any year the service is provided for more than the threshold number of days, which is currently 31.

Both those threshold arrangements are intended to avoid imposing disproportionate burdens on small companies. However, there is a potential loophole in that, as drafted, the requirements of Clause 330 would not apply to companies that, while individually small, were part of a much larger group of companies. We propose to address that issue by allowing for the numbers of staff employed across a group of companies or a range of services to be aggregated. In particular, as well as being satisfied when a single licence holder employs more than 20 staff in connection with broadcasting services, the threshold will also be met if the licence holder is in a group of companies that together employ more than 20 staff in that connection. That is achieved principally by Amendment No. 184D, by the new definition of "licensed service" in Amendment No. 184E and by the definition of "a group of companies" in Amendment No. 184G.

Two companies are in a group if, for instance, one controls the other or both are controlled by a third company. The definition of "control" set out in Part 1 of Schedule 2 to the Broadcasting Act 1990 applies for this purpose. However, it is staff employed only in connection with broadcasting who are counted. Employees who are not engaged in broadcasting activities are not counted.

These amendments also cater for the case of a single company that provides more than one service. All staff employed in connection with any of the services are counted. I beg to move.

Photo of Lord Crickhowell Lord Crickhowell Conservative 4:15 pm, 2nd July 2003

My Lords, in Committee I tabled an amendment which attempted to close the particular loophole to which the Minister referred. I am very grateful to him for meeting the commitment made on that occasion that suitable government amendments would be tabled. I am wholly satisfied with what has been done.

On Question, amendment agreed to.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

moved Amendments Nos. 184B to 184G:

Page 290, line 31, leave out from beginning to "employs" in line 34 and insert—

"(b) the requirements of both subsections (6) and (6A) are satisfied in the case of that service.

(6) The requirements of this subsection are satisfied in the case of a service provided by a person if—

(a) that person"

Page 290, line 35, leave out "persons" and insert "individuals"

Page 290, line 36, leave out from "of" to "on" in line 38 and insert "licensed services; or

(b) the threshold number is exceeded by the aggregate number of individuals who are, or are likely to be, employed in that connection by members of a group of companies comprising that person and one or more other bodies corporate.

(6A) The requirements of this subsection are satisfied in the case of a service if the licence authorising the provision of that service authorises either that service or another service authorised by that licence to be provided"

Page 290, line 43, at end insert—

""licensed service", in relation to an employee or likely employee of a person, means a service the provision of which—

(a) by that person, or

(b) by a body corporate which is a member of the same group of companies as that person, is authorised by a Broadcasting Act licence;"

Page 291, line 1, leave out "persons" and insert "individuals"

Page 291, line 2, at end insert—

"(7A) For the purposes of this section a person is a member of a group of companies to which a person licensed to provide a service belongs if, and only if, both of them are bodies corporate and either—

(a) one of them is controlled by the other; or

(b) both of them are controlled by the same person.

(7B) In subsection (7A) "controlled" has the same meaning as in Part 1 of Schedule 2 to the 1990 Act."

On Question, amendments agreed to.

Schedule 12 [Corresponding obligations of the BBC and Welsh Authority]:

[Amendments Nos. 185 and 186 had been withdrawn from the Marshalled List.]

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendment No. 187:

Page 402, line 43, leave out from "under" to end of line 45 and insert "the BBC Charter and Agreement"

On Question, amendment agreed to.

[Amendment No. 188 not moved.]

Schedule 13 [Financial penalties under the Broadcasting Acts]:

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, in moving Amendment No. 188A, I wish to speak also to Amendments Nos. 188B to 188H, 213A, 213B, 216A to 216D and 241C. As we know, digital radio is becoming more and more popular but it is also available on digital television, although I cannot seem to get it on my freeserve.

In licensing terms this means that a television multiplex service or general multiplex can carry digital radio services. That is provided for in the Bill. Some consequential amendments were necessary to ensure that the penalties for contraventions relating to digital radio programmes services take into account the services carried on a general multiplex or on a TV multiplex as well as those carried on a national radio multiplex. Some of the amendments necessary to achieve that are already contained in the Bill but it has been brought to our attention that others need to be made, and these amendments complete the picture. They also make minor corrections to amendments in Schedules 13 to 15 of the Bill that for television already achieve the necessary extension of the basis on which penalties are calculated. I beg to move.

On Question, amendment agreed to.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendments Nos. 188B to 188H:

Page 424, line 38, after second "to" insert "television multiplex services and general"

Page 426, line 32, leave out "national radio multiplex revenue" and insert "relevant multiplex services"

Page 426, line 41, leave out from "revenue" to "is" in line 44 and insert—

"(a) attributable to a person in relation to national radio multiplex services,"

Page 427, line 1, leave out "in any other case" and insert "attributable to a person in relation to television multiplex services or general multiplex services"

Page 427, line 19, leave out "national radio multiplex revenue" and insert "relevant multiplex services"

Page 427, line 31, leave out from "revenue" to "is" in line 34 and insert—

"(a) attributable to a person in relation to national radio multiplex services,"

Page 427, line 36, leave out "in any other case" and insert "attributable to a person in relation to general multiplex services"

On Question, amendments agreed to.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendment No. 188J:

After Clause 339, insert the following new clause—

"STATEMENT OF CHARGING PRINCIPLES

(1) OFCOM are not to fix a tariff under section 4(3) or 87(3) of the 1990 Act or under section 4(3) or 43(3) of the 1996 Act (tariffs for fees payable under Broadcasting Act licences for recovering OFCOM's costs) unless—

(a) at the time they do so, there is in force a statement of the principles that OFCOM are proposing to apply in fixing that tariff; and

(b) the tariff is fixed in accordance with those principles.

(2) Those principles must be such as appear to OFCOM to be likely to secure, on the basis of such estimates of the likely costs that it is practicable for them to make—

(a) that the aggregate amount of the Broadcasting Act licence fees that are required to be paid to OFCOM during a financial year is sufficient to enable them to meet, but does not exceed, the cost to them of the carrying out during that year of their functions relating to the regulation of broadcasting;

(b) that the requirement imposed by virtue of paragraph (a) is satisfied by the application to such fees of tariffs that are justifiable and proportionate to the matters in respect of which they are imposed; and

(c) that the relationship between meeting the cost of carrying out those functions and the tariffs applied to such fees is transparent.

(3) Before making or revising a statement of principles OFCOM must consult such of the persons who, in OFCOM's opinion, are likely to be affected by those principles as they think fit.

(4) The making or revision of a statement of principles for the purposes of this section has to be by the publication of the statement, or revised statement, in such manner as OFCOM consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by it.

(5) As soon as reasonably practicable after the end of each financial year, OFCOM must publish a statement setting out, for that year—

(a) the aggregate amount received by them during that year in respect of Broadcasting Act licence fees required to be paid during that year;

(b) the aggregate amount outstanding and likely to be paid or recovered in respect of Broadcasting Act licence fees that are required to be so paid; and

(c) the cost to OFCOM of the carrying out during that year of their functions relating to the regulation of broadcasting.

(6) Any deficit or surplus shown (after applying this subsection for all previous years) by a statement under subsection (5) shall be—

(a) carried forward; and

(b) taken into account in determining what is required to satisfy the requirement imposed by virtue of subsection (2)(a) in relation to the following year.

(7) References in this section to OFCOM's functions relating to the regulation of broadcasting do not include references to any of their functions in relation to the BBC or the Welsh Authority.

(8) In this section— "Broadcasting Act licence fee" means a fee required to be paid to OFCOM in pursuance of conditions included in a Broadcasting Act licence under any of the following provisions—

(a) section 4(1)(b) or 87(1)(c) of the 1990 Act; or

(b) section 4(1)(b) or 43(1)(c) of the 1996 Act; "financial year" means a period of twelve months ending with 31st March."

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, in moving Amendment No. 188J, I wish to speak also to government Amendments Nos. 210A, 210B, 213ZA, 216ZA, 226B, 238ZA, 238ZB, 241A and 241B.

During the consideration of the Bill in Committee, a number of amendments were tabled regarding the funding of Ofcom. One of those amendments, tabled by the noble Lords, Lord Crickhowell, Lord Puttnam, Lord McNally and Lord Hussey of North Bradley, was designed to provide that administrative charges set under the broadcasting legislation should be set in accordance with clear principles and relate only to functions related to broadcasting.

In responding to that amendment I made clear that it has been our general approach that the costs of sectoral regulation should be borne by those who are regulated and I indicated that the Government would consider tabling provisions which would introduce a statement of charging principles for broadcasting comparable to that for networks and services. Therefore, I should now like to speak to the amendments which are designed to give effect to such a statement of principles.

First, Amendment No. 188J will require Ofcom to have in place a statement of the principles which it proposes to apply in fixing tariffs for licence fees payable under the Broadcasting Acts 1990 and 1996 and for any such tariff to be fixed in accordance with those principles.

Those principles must be likely to secure that the aggregate amount of Broadcasting Act licence fees required to be paid to Ofcom in any financial year is sufficient to enable it to meet, but does not exceed, the costs to Ofcom of carrying out its functions in relation to the regulation of broadcasting during that year. The tariffs which apply to such fees must be justifiable and proportionate to the matters to which they are imposed and there should be a transparent relationship between the costs of carrying out those functions and the tariffs applied to such fees.

Subsections (3) and (4) of the new clause would require that, before making or revising any statement of principles, Ofcom consults anyone it considers likely to be affected by it. Ofcom would also have to publish any statement of principles or revisions to it in such a way as to bring it to the attention of anyone likely to be affected.

In addition, under subsections (5) and (6) of the proposed new clause, Ofcom will have to publish a statement after the end of each financial year setting out the aggregate amount of Broadcasting Act licence fees received by it that year, the aggregate amount of Broadcasting Act licence fees remaining outstanding and likely to be paid or recovered, and the cost to Ofcom of carrying out its functions in relation to broadcasting during that year. Any deficit or surplus would then be carried forward by Ofcom and taken into account in determining the amount required in the following year.

As it is not the intention that the costs associated with Ofcom's regulation of the BBC and the Welsh Authority should be borne by other broadcasters, subsection (7) of the proposed new clause specifically excludes Ofcom's functions in relation to the regulation of the BBC and the Welsh Authority. Of course, there are provisions in Clauses 195(4) and 204(6) that enable Ofcom to charge the BBC and Welsh Authority for the costs of carrying out their functions associated with their regulation. The proposed new clause will ensure that broadcasters have a similar comfort to that given to the providers of networks and services as a result of the electronic communications directives—that the costs that they will be charged by Ofcom will be only in relation to the regulation of their particular sector.

Of course, there was concern about general issues on the funding of Ofcom. The noble Lord, Lord Puttnam, raised issues on that about which he sought assurance. Although I do not think that they need to be addressed through provisions in the Bill, I want to respond to the thrust of his points.

The first related to the general costs of Ofcom, for which it will not be able to make a charge on the providers of networks and services or where such costs are not clearly referable to the regulation of a particular sector. As I made clear in responding to the earlier debate, the Government have always recognised that there would be such costs, mainly due to restrictions put in place by the authorisation directive, and that, where they clearly cannot be covered by other means, the costs will be covered by payment of grant from the Exchequer. I am pleased to give that assurance to the House again.

One area of particular concern raised by the noble Lord, Lord Puttnam, related to the funding of Ofcom's competition functions under Part 5. The House will be aware that the general principle applied to regulators in other sectors operating with similar concurrent powers has been that the cost of investigations under those powers should be borne by the relevant sector. In the case of Ofcom, the effect of the authorisation directive is to rule out such charges being made in relation to networks and services. That will mean that, where such costs are incurred by Ofcom in relation to networks and services, they will have to be met by the Exchequer.

The noble Lord, Lord Puttnam, also sought further assurance that, should Ofcom have substantial legal costs or damages awarded against it by the courts, the Government would support Ofcom and underpin those costs. Again, in responding, I indicated that that would indeed be the case. The matter is not unusual to Ofcom. For example, the consideration is central to the funding of the Office of Fair Trading, which carries an equal uncertainty about the outcome of its investigations. Of course, Ofcom would need to consider the possible consequences of any action that it may undertake and the risks associated with them, including the financial risk, and make appropriate provision in its budgets to bear such risk. However, we would not want Ofcom to be in a position in which it was deterred from taking the necessary action because of fears of the possible financial consequences of losing a legal challenge to its decisions.

Therefore, given the difficulty of forecasting litigation costs, where Ofcom has acted perfectly reasonably but finds that it has large and unavoidable increases in legal costs or damages awarded against it that it could not reasonably have predicted and cannot meet by other needs, it would be necessary for it to make the case for support to be provided from the Exchequer. I am therefore happy to assure the House again that, in such circumstances, the Government would consider access to the reserve.

Amendments Nos. 210A, 210B, 213ZA, 216ZA, 226B, 238ZA, 238ZB, 241A and 241B are minor consequential changes resulting from the provisions in the proposed new clause. Amendment No. 226B makes paragraph 8(1) of the schedule to the Office of Communications Act 2002, relating to Ofcom finances, consistent with the proposed new clause. Amendments Nos. 210A, 210B, 213ZA, 216ZA, 238ZA, 238ZB, 241A and 241B make consequential amendments and repeals in Sections 4 and 87 of the 1990 Act and Sections 4 and 43 of the 1996 Act. I also need to draw attention to Amendments Nos. 216ZA and 241B, which correct an unconnected amendment in Section 43(2)(b)(ii) of the Broadcasting Act 1996, consequential on the transfer of the Secretary of State's spectrum management functions to Ofcom, which had been missed previously. I beg to move.

Photo of Lord Alli Lord Alli Labour

My Lords, I want to speak to Amendment No. 224A, which is grouped with this set of government amendments. Before doing so, I should tell the Minister that, although I did not understand everything that he said on the amendments, I felt a sense of reassurance, particularly when it came to the financing of Ofcom.

Amendment No. 224A has two purposes. First, it welcomes Clause 394 and the obligation that it places on Ofcom. Secondly, it ensures that the objectives of the clause are achieved as early as possible in the life of what will then be the Act.

Noble Lords will appreciate that Clause 394 sets out a principle which has worked successfully in broadcasting. It is that Ofcom's function of collecting, on behalf of the Treasury, the economic rent from the use of the airwaves should be separate from the process of funding Ofcom itself. Once the system envisaged by that clause comes into effect, it will allow Ofcom to retain that part of the sums paid to it for use of the spectrum, which is required to cover Ofcom's costs of carrying out the functions relating to the use of the airwaves. To do that, Ofcom will be required to publish a statement of principles authorising the retention of the sums paid to it.

When in operation, Clause 394 will therefore reinforce the independent status of Ofcom, and free it from the need for direct government funding for the purposes of activities relating to the use of the spectrum. The clause as drafted, however, is silent about when all that must start to happen. I am keen to ensure that Clause 394 is brought into operation speedily, to establish the independence of Ofcom. The proposed amendment seeks to ensure that Ofcom institutes the new arrangements as early as possible. I hope that the noble Lord can reassure me that, if he cannot accept Amendment No. 244A, he will try to make such provisions go through.

Photo of Lord Puttnam Lord Puttnam Labour

My Lords, I thank the Minister. It is an extraordinarily generous and full decision by the Government to address what were very real problems. The noble Lord, Lord Crickhowell, first raised them in Committee more than a year ago, and has gnawed away at the bone. I find it quite interesting that, with no sound and fury, we are about to pass what may end up as the most important single amendment for the future life of Ofcom. It is a relatively small child entering a very big playground with a lot of tough kids in it. That the Government have been prepared to put their arm around that child and see it through to maturity is a very important step. Were I the noble Lord, Lord Currie, I would regard this as the most significant concession that the Government have given. I am truly grateful.

Photo of Lord McNally Lord McNally Liberal Democrat

My Lords, I am quite sure that the noble Lord, Lord Currie, will welcome the concession. I want to highlight and welcome the more general point that the Minister made about the funding of Ofcom. He will recall that, when Ofcom was set up, there was a general assumption that the bringing together of five regulators into one would bring savings with it, and that Ofcom would be a leaner beast. I understand that, during the Bill's passage through Parliament, 53 new responsibilities have been given to Ofcom. All that I ask the Minister is to keep an eye on his colleagues in the Treasury, and make sure that they do not go candle-end saving. We want an Ofcom that works, and Parliament is willing to pay for that.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, if the noble Lord, Lord McNally, would refrain from placing more obligations on Ofcom and undertake to do that during the remainder of the passage of the Bill, both the Treasury and I would be very happy. I am grateful for what has been said, especially by the noble Lord, Lord Puttnam, but I need also to respond to the noble Lord, Lord Alli, and the point is slightly complex.

Let me explain the system for Ofcom recovering the cost of carrying out its spectrum functions. Spectrum payments are made for the use of a scarce national resource, and prices are generally set using either auctions or by reference to spectrum management considerations, not in relation to the cost of regulation. Payments can be regarded as fair recompense for a resource that is a public asset and is, rightly, income for the Exchequer.

Clause 393 requires amounts received by Ofcom under the Wireless Telegraphy Act to be paid to the Consolidated Fund. In practice, an administrative arrangement will be put in place between Ofcom and the Treasury to allow the requisite amount needed to meet the cost of Ofcom carrying out its spectrum functions to be taken out of those moneys and appropriated to Ofcom. So that Ofcom can have similar arrangements for each of its main income streams, Ofcom has indicated that it would eventually like to move to a new system in which it could retain sufficient amounts from the payments made under the Wireless Telegraphy Act to meet the costs of carrying out its spectrum functions. Under the new arrangement, Ofcom would make a statement of principles, which would be approved by the Treasury, setting out the basis on which it would calculate the costs of carrying out its spectrum functions and retain the necessary amounts. Clause 394 would therefore allow those new arrangements to be put in place.

Ofcom intends to move to the new regime as soon as practicable but, realistically, it is unlikely to be able to do so before 2005. There will be further discussion between Ofcom and the Treasury to settle the detail of how the system would work before it was possible for it to be introduced. Indeed, Clause 394(10) requires the Treasury to give its consent before a statement of principles, which is required under the clause, can be made, revised or withdrawn.

Clause 394 provides the legal mechanism for bringing the new system into force. When that further work has been done, I am sure that Ofcom will want to start the discussions as soon as it can but I do not believe that it would be appropriate to place a deadline on it. I hope that the noble Lord, Lord Alli, will therefore not press the amendment.

Photo of Lord Alli Lord Alli Labour 4:30 pm, 2nd July 2003

My Lords, before the Minister concludes, I am grateful for that reply, which I will study carefully. If he could use his good offices to ensure that that is done as quickly as possible, I should certainly be content.

On Question, amendment agreed to.

Photo of Lord Puttnam Lord Puttnam Labour

moved Amendment No. 189:

Before Clause 340, insert the following new clause—

"MEDIA PLURALITY PUBLIC INTEREST CONSIDERATION

(1) Section 58 of the Enterprise Act 2002 (c. 40) (specified considerations) shall be amended as follows.

(2) After subsection (2B) (which is inserted by section 368 of this Act) there shall be inserted—

"(2C) The public interest in the promotion and maintenance—

(a) of a plurality of media owners committed to a balanced and impartial presentation of news and to a balanced presentation of comment, and

(b) of a wide range of voices such as to satisfy a variety of tastes and interests is specified in this section."

(3) In subsection (3), after the words "any consideration", there shall be inserted "(other than the consideration specified in subsection (2C))"."

Photo of Lord Puttnam Lord Puttnam Labour

My Lords, in moving this amendment, I shall speak also to Amendments Nos. 190, 191, 192, 199A, 222B and 222C.

I know that I speak for all members of the Joint Scrutiny Committee in this House and another place. I received this morning an Early-Day Motion signed by all six Commons members of that committee supporting the amendment. More particularly, I spoke this morning to the noble Lord, Lord Hussey, who I always felt was the conscience of our committee. He asked me to apologise to the House for the fact that he is unable to join us, having only just returned home from hospital. I know that the House will join me in wishing the noble Lord a speedy recovery.

Noble Lords:

Hear, hear.

Photo of Lord Puttnam Lord Puttnam Labour

My Lords, when we completed our report, the noble Lord, Lord Hussey, made it clear that he regarded the "public interest plurality test" as the most important and far-reaching of all our recommendations. During our telephone conversation this morning, he asked me to tell the House that, having had almost a year in which to reflect and review dispassionately developments in the media, he has slightly changed his mind. He now regards the amendment as twice as important as he did then!

In the statement accompanying the publication of our report on Wednesday, 31st July 2002, the Joint Scrutiny Committee said:

"At the heart of our conclusions and recommendations about media ownership is the proposal for a new plurality test to be used in connection with mergers and takeovers across all media. We hope that this recommendation will stimulate an important and timely debate".

Little did we know how right we were.

For us, the legislation rested on three vital pillars. The first was that the citizens' interests were paramount in respect of the provision of content and information; we dealt with that last Monday, when the House made its view overwhelmingly clear. The second was that Ofcom was sufficiently well resourced to withstand attack from the biggest beasts in the jungle and was able to slug it out on equal terms in respect of firepower and expertise. We dealt with that a few moments ago. The third was that a plurality test should be introduced that was sufficient to look across all media and make determinations in the best interests of the citizen. Those were, if you like, the three non-negotiables.

In Committee, the noble Lord, Lord Borrie, made the most interesting and concrete contribution to our discussions on the plurality test. I will repeat some of his comments. He said:

"I believe that the same sort of consideration which influenced people concerned with democracy in the 1960s in relation to the press now justifies a stricter control over cross-media mergers that is applicable to other goods and services. Amendment No. 280A"— now renumbered as Amendment No. 189—

"proposes a reporting role by the Office of Fair Trading. It proposes that by amending the Enterprise Act, the Competition Commission, when faced with a reference concerning cross-media ownership, would be concerned not just with economic matters but with the much wider concern for plurality and diversity in the media.

"The Government claim . . . that a Competition Commission involvement in such cross-media mergers would lead to uncertainty. Indeed it would. One cannot deny that during a period of a reference there must be uncertainty as to the outcome—otherwise what would be the point of the reference? However, I would suggest that that is a small price to pay for ensuring a free and diverse media. Once ownership is changed, it is exceedingly difficult to revert to square one; the damage may have been done".—[Official Report, 5/6/03; col. 1437.]

I have nothing to add to the thoroughness of those remarks, beyond saying that they possibly lay the ghost once and for all that the provision of information within the media is anything but the sale of widgets.

There has been a terrifying situation for a number of years in which the media are seen as just another business. They are not just another business. There has been a great deal of confusion, which I will illustrate. The honourable Member of Parliament for Maldon and Chelmsford East said in today's Financial Times that,

"the plurality test undermined the government's desire to relax the laws governing the media.

"The whole thrust of the communications bill is to liberalise the rules on ownership. A plurality test erects another obstacle in the way of takeovers within the media sector".

I am puzzled by that because in last Friday's Guardian, the honourable gentleman was quoted as saying:

"My view is that a plurality test has some merit, but it is very difficult to define. I would rather the test applied across the board, however, than just to certain companies".

It is absolutely clear that the test is designed specifically to apply across the board; otherwise, frankly, there would be very little point in pressing the amendment.

It has been possible at times during the endless discussions surrounding the clause to believe that the Bill is something of a "luvvies' charter", as it was put to me. During the earlier and noisier stages of an orchestrated appeal to the hearts and minds, we were lured on by the promise of access to high-quality US programming. The same six or seven titles were trotted out—always, I found, starting and ending with "The West Wing".

It is interesting to note that at last week's congressional hearings on media ownership, one Congressman typified the current output of programming from America's commercial media as "The Axis of Drivel", referring to the preponderance of look-alike reality programmes on so many broadcast and cable channels, and so little substance in news reporting and public interest programming. The truth is that television in this country has always enjoyed a greater variety and diversity of output than has ever been genuinely available in the United States. It is rather odd that in recent years, modesty seems not to have allowed us to trumpet that fact!

Another Member of Congress at the same session, Mr Byron Dorgan of North Dakota, was thoroughly unimpressed when a broadcast lobbyist, testifying before his committee, insisted that there was no need for regulations regarding ownership because there were, after all, in America more choices, more channels and more voices in the media landscape than ever before. "Yes", Mr Dorgan replied,

"more voices but only one ventriloquist".

Much has been made in the past few weeks of the underlying rationale of the amendment. I have heard it referred to as the "Murdoch clause"; it has even been described as something that attempts to demonise sections of the media. That is not and never has been the case. The Secretary of State was entirely right in insisting that the Bill and the amendment were entirely "proprietor neutral". It is more to do, as I see it, with attempting to make our democracy proprietor neutral.

In view of the change occurring today in the presidency of the European Union, it seems entirely appropriate to look at what we are trying to protect against in that context. It is what I see as a drift in media ownership and a drift in the relationship between media ownership and, as it were, a census of power. We have spoken at length about the Bill being "future-proof", because the situation that we face is not current. I can well envisage a time, 10 years from now, when I, among others, may say, "Come back, Rupert, all is forgiven", and we shall look upon today as the golden age of media plurality.

I want to talk about something a little more serious. In Prospect magazine of January 2003, John Lloyd wrote briefly about the government of Silvio Berlusconi. He said that it is,

"an affront to the democratic values which the nations of the European Union affirm as their most precious heritage. It ruthlessly manipulates the large majority it gained in both Houses of Parliament in the election of spring 2001 to pass legislation tailored for the Prime Minister's commercial benefit. It controls almost all of the nation's television channels. It is, in many respects, comparable with governments of post-Soviet states. Most worryingly, Berlusconi's form of politics may be showing us our own future.

Italy has often been in the vanguard of history. Berlusconi has brought to democratic government another novelty—a populist videocracy. Berlusconi symbolises the logic of modern media politics. He focuses on the present and on presentation. Contradictions disappear down a memory hole. It is a kind of soft version of 1984, where everything that is asserted now is true, and is capable at any time in the future of being declared false—or just forgotten.

The vast and delusive power of television is now linked to a politician who has shown that he has few scruples in its use. It may also be prompting other would-be tribunes of the people to think that they too can, with impunity, unite media and political power into one party or one person. Berlusconi in power is a danger to a great country, a danger to Europe's proclaimed ideas and a danger to a world in which the media have 'wrapped themselves around public life', and may, in the end, strangle it".

That is what the amendment attempts to achieve. It is a move towards making the "Berlusconi-isation" of British democracy an impossibility. That is what the issue over our future-proofing of the Bill is all about. The amendment is no luvvies' charter—far from it. Achieving a rigorous public interest plurality test is something that this House as a whole can, in my judgment, be very proud of.

In moving the amendment, I must put the following to the Minister. If the Government indicate today their intention to move amendments at Third Reading to extend the relevant Enterprise Act provisions to cover media plurality, I hope that my noble friend will be able to answer the following specific questions. First, can he give the House an assurance that such provisions will be brought into force before, or at the same time as, the lifting of restrictions on media ownership contained in the Bill? Secondly, can he indicate whether or not it is intended that the Secretary of State's powers of intervention under Sections 59 to 66 of the Enterprise Act will extend to the media plurality provisions, and, if not, why not? With my heart very slightly in my mouth, but full of hope, I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage) 4:45 pm, 2nd July 2003

My Lords, a number of people have suggested to me that it would help the House if I intervened now. I have no wish to curtail debate and certainly, with the leave of the House, I wish to respond before my noble friend Lord Puttnam concludes the debate. But I have things to say which I hope will be found helpful.

I want to deal, first, with the amendments before us and then make it clear that, although we cannot accept them in their current form, we nevertheless accept the principle behind them. I then want to outline our own plans to bring forward amendments for consideration at Third Reading.

I shall start with the amendments that we are discussing. We are supportive of the principle behind them that essentially we should safeguard plurality and diversity, or "the public voice", as my noble friend Lord Puttnam described it. But I have to be negative for a moment and say that we have grave doubts about the way that the drafting does not appear to distinguish adequately between broadcast media and newspapers.

We fear that the amendments would blur the distinction between the two in a way that would be damaging to both. For example, Amendment No. 189 refers to the need for "a wide range of voices". The word "voices" is further defined as,

"views and opinions represented to a significant degree in the media", rather than any sense of diversity as such. That confuses broadcast media, where there is already strong content regulation, with the print media, where there is none. The concept of "views and opinions" is completely alien to broadcast media. All licensed broadcasters are already required by law to ensure that news—I quote from Clause 312 of the Bill—is "presented with due impartiality" and "reported with due accuracy". Furthermore, all broadcasters must exclude from their programmes—I quote from the Broadcasting Act 1990

"all expressions of the views and opinions of the person providing the service on matters . . . which are of political or industrial controversy or relate to current public policy".

Broadcast media services, therefore, do not, and should not, have "views and opinions" in the same way as newspapers, quite rightly, have an editorial stance. Taken to one possible logical conclusion, the text of the amendment could have the effect of stopping broadcasters from being impartial and allowing them to have "views and opinions". I cannot believe, and would not want to argue, that that is the intention behind the amendments. But they would introduce uncertainty into the proper functions and role of broadcasters. That could be absolutely catastrophic for the integrity of British broadcasting.

The amendments would also seem to encourage the introduction of content regulation into newspapers. A free press is a cornerstone of democracy, and we tamper with it at our peril. That may not be the intention behind the amendments—indeed, knowing my noble friend Lord Puttnam as I do, I am sure that it is not—but it is how the need for,

"a balanced presentation of comment", for example, could be interpreted. For those reasons, we cannot accept the amendments as they stand.

With the technical points aside, I can be far more positive. I now want to turn to the subject of media ownership and plurality. Media plurality is important for a healthy and informed democratic society. The underlying principle is that it would be dangerous for any one person to control too much of the media because of his or her ability to influence opinions and set the political agenda. It is therefore essential to set limits on concentrations of ownership. Competition law will do that to some degree and may, in fact, be all that is needed in many cases. But there is no guarantee that that will always be so.

That is particularly true in the case of cross-media concentrations, where the competition authorities may well take the view that the markets are separate and that consequently there is no effect on competition. That is a completely proper conclusion as regards competition but it may not be sufficient to safeguard the appropriate level of plurality. That is why we have specific restrictions on media ownership which are additional to competition rules.

Plurality is a very subjective notion. It is not susceptible to the same kind of economic analysis as competition issues. It is very much a matter of judgment of what "feels" right. For this Bill, our approach has been to examine each media audience, including cross-media audiences, and to judge the level of plurality that we consider necessary. It is important to recognise that setting artificial limits on markets can make them economically less efficient. But we need to protect plurality and recognise that there is a minimum level of plurality below which we must never go.

However, it is important to recognise that more is not always better. A very fragmented industry is certainly a very plural industry, but small, weak players may not have the necessary resources or skills to produce high-quality programming. Greater consolidation which does not threaten plurality should improve services to viewers and listeners. High-quality, really memorable TV programmes are usually only possible because we have TV companies with the necessary resources to make them.

The purpose of the amendments before us is to introduce an additional level of protection to plurality by extending the public interest test in the Enterprise Act to enable a media plurality test to be carried out in the event of a qualifying media merger. A qualifying merger is one where enterprises cease to be distinct and either the United Kingdom turnover of the acquired enterprise exceeds £70 million or the new entity has at least a 25 per cent share of supply of goods or services of any description in the UK or in a substantial part of the UK.

We originally proposed the idea of a plurality test in the consultation document on media ownership, which we published in November 2001. The responses were generally unenthusiastic as it was felt that the test introduced an unhelpful degree of uncertainty into media mergers. However, the world has moved on since then and a number of our policies have changed and developed. We are now proposing a more liberal ownership regime for local radio. We are proposing removing the restrictions on foreign ownership and allowing a major national newspaper to own Channel 5. We have also listened carefully to the points made in this House and elsewhere. Indeed, no reader of the broadsheet press can have avoided this debate.

Two main arguments have been used in favour of a plurality test, both essentially about the need to "future-proof" the Bill. First, it is argued that a plurality test allows for the gradual dismantling of media ownership rules over time. As we move towards a digital, multi-channel future, the degree of choice available to us will make it increasingly difficult for any one person to have a dominant position in the media and may remove, or reduce, the need for ownership rules. Under these circumstances, a plurality test may be a sufficient safeguard of plurality.

Secondly, circumstances may change. We took the view that there were many good reasons for removing the restrictions on a major newspaper owning or controlling Channel 5. I shall not repeat the arguments now. However, it is possible that over time Channel 5 may become much more similar in size and reach to Channel 3. It is impossible to predict whether this will happen but, given the possibility, we must have a plurality regime flexible enough to react to changing circumstances.

I add a third argument in favour of a plurality test. I have already mentioned the rule which prevents a national newspaper with more than 20 per cent of the market, or a body in which such a paper has more than a 20 per cent interest, from holding a Channel 3 licence—sometimes referred to as the 20:20 rule. This rule has served us well, but it has a "cliff-edge", all or nothing, element to it. On the one hand, it makes an absolute distinction between a national newspaper with 19.9 per cent of the market and one with 20.1 per cent—a kind of Mr Micawber distinction. On the other hand, it makes no distinction between a newspaper with 20.1 per cent of the market and one with 35 per cent or 40 per cent or more. The rule is therefore somewhat arbitrary in its effect. A plurality test would, in principle, allow the Secretary of State to make a judgment on media mergers, based on the particular circumstances of the case. The Government are therefore persuaded that we should accept the principle behind these amendments, and bring forward government amendments at Third Reading to introduce a plurality test.

Let me outline how we think such a test would operate. We propose to extend the scope of the Enterprise Act so that qualifying mergers could be subject to a media plurality test. In these cases the Secretary of State will be able to intervene where she believes the merger would have a damaging effect on plurality. The test would not be, "Does the merger lessen plurality?". Any merger, by definition, reduces plurality to some extent. It will be for Ministers to determine whether the merger causes sufficient plurality concerns for it to be blocked, or for conditions to be attached. Similarly, the test must also recognise that there is a minimum level of plurality which must be maintained.

We propose that the power be wide enough to capture all media mergers, including cross-media mergers. We would intend as a matter of policy normally to apply the test in practice only to those areas where the current rules are being removed completely. This means that, usually, the Secretary of State would consider intervening on plurality grounds only in the following areas: national newspapers with more than 20 per cent of the market/Channel 5; national newspapers with more than 20 per cent of the market/national radio service, Channel 3; Channel 3/national radio; Channel 5/national radio; and national radio/national radio.

The noble Lord, Lord Puttnam, asked whether this test would "effectively rule out" a major national newspaper owning Channel 5. The answer is that the test will ensure that the Secretary of State can investigate any merger which threatens plurality. It will clearly prevent unacceptable levels of cross-media dominance. But it is inherent in the nature of a test that one cannot predict the outcome in advance in any individual case. It will be necessary to analyse and consider all the relevant circumstances at the time on a case-by-case basis.

This, of course, is in the nature of merger legislation. It is exactly the same approach as would have to be taken if the amendments tabled by the noble Lord, Lord Puttnam, were agreed. I do not believe that it would normally be sensible or desirable to intervene and apply the test to areas where there have never been media ownership restrictions, or to areas where there continue to be ownership rules, as the continuing rules will protect plurality.

In order to give the media industry some degree of certainty, the Government will publish guidance setting out in more detail the areas where the test will generally be applied and the factors that will be considered. It is not the Government's intention that the test should apply more widely. However, guidance obviously cannot fetter the Secretary of State's discretion or her ability to respond to changing market circumstances and we would not rule out its wider use in an extreme and rare case.

I believe that the plurality test should consider the number of owners in the relevant market. That will have resonance if one looks at the amendments before the House. The market would be a single medium or, in the case of a cross-media merger, a number of media markets. The test will also address—and again I ask noble Lords to look back at the test of the amendment before us—the need for a wide range of high-quality broadcasting calculated to appeal to a wide variety of tastes and interests, and the need for a genuine commitment to the issues covered in Ofcom's standards code set out in Clause 312 of the Bill, including the need for impartiality and accurate presentation of news. The plurality test would sit alongside the special newspaper regime, which would continue to consider newspaper-only mergers.

The noble Lord, Lord Puttnam, asked for an assurance that such plurality provisions will be brought into force before or at the same time as the lifting of restrictions on media ownership contained in the Bill. The answer is yes, I give him that assurance. He also asked whether it is intended that the Secretary of State's powers of intervention under Sections 59 to 66 of the Enterprise Act will extend to the media plurality provisions. The answer again is yes.

I hope that the assurances I have given about our intention to introduce a media plurality test, and my detailed explanation of how the test would operate, will persuade the House not to press the amendment before us. I shall be tabling government amendments for consideration at Third Reading before the end of the week. I shall also circulate the text of our amendments to every noble Lord who has expressed interest in the issue.

Photo of Lord Crickhowell Lord Crickhowell Conservative

My Lords, my name stands below that of the noble Lord, Lord Puttnam, on the amendment. I do not have to say much because we had an admirable introduction to the subject from the noble Lord. Those who heard his speech will understand why we who served on the Joint Scrutiny Committee came to admire his contribution so much.

He referred to the noble Lord, Lord Hussey of North Bradley, who I am pleased to hear is out of hospital. During the Committee stage, I was greatly influenced by his views on this topic. Before I reached a conclusion on the subject when we debated it, I specifically asked that he should give the Joint Scrutiny Committee his opinion. After hearing it, I came firmly behind him.

The Minister has made an important statement. The difficulty about statements of this kind during a Report stage, when deals have been done, is that we are put in a considerable difficulty. The issues are important and the amendments which will be tabled are complex. We cannot make final judgments on the nature of the deal that has been done until we see the amendments on the Marshalled List and have had an opportunity to examine them. Therefore, we must reserve judgment.

That is of particular significance when we come to consider the next group of amendments, about which I have a further word to say. However, I cannot resist picking up two of the Minister's phrases. The first is, "The world has moved on". If the world has moved on, it owes a great deal to the work of the noble Lord, Lord Puttnam, in applying pressure on the Government to consider the matter.

I also smiled, as I believe did the noble Lord, Lord Puttnam, when we were told that the scale of the activities of Channel 5 and Channel 3 might alter. That was a point made repeatedly in the Joint Committee to Ministers and one to which we received an unhelpful response at the time. However, again, I am glad that the point is now accepted and understood.

I have only one other remark at this stage. The noble Lord, Lord Puttnam, made some extremely pungent and effective remarks about the state of broadcasting in other parts of the world, in the United States and Italy in particular. The amendments will not have a significant impact one way or another on the question of foreign ownership; the pros and cons of that argument rest on different points. I shall develop that point when we come to debate that group of amendments.

I hope that those who heard the observations by the noble Lord, Lord Puttnam, about what is happening in other parts of the world and the activities of the conglomerates will perhaps stay to hear our debate on the important issue of foreign ownership. Clearly, there are powerful arguments on both sides. However, I believe that the issues are almost as important as those we are discussing on this amendment.

I thank the Government for listening to the views expressed, particularly by those of us who served on the Joint Committee. I hope that when I come to study the amendments at Third Reading I shall find that they wholly meet the requirements we have set for them.

Photo of Lord Borrie Lord Borrie Labour 5:00 pm, 2nd July 2003

My Lords, the House owes a tremendous debt to my noble friend Lord Puttnam and, indeed, to the scrutiny committee for the way in which on this and related issues they have persisted, especially in Committee, in pursuing this exceedingly important matter of cross-media ownership. The work of my noble friend Lord Puttnam has not been confined solely to chairmanship of that committee or, indeed, to speeches made in this House but included work behind the scenes. The outcome of that has been demonstrated to the House today. My compliments to my noble friend Lord Puttnam must be equalled by my compliments to the Minister. I listened to him with increasing admiration for the thoroughness with which he has "married" this Bill with the Enterprise Act and married the objectives and intentions of what I might call the Puttnam amendment to the Government's desire to ensure a practical, legally watertight system which will be successful and useful no doubt for many years to come.

It is difficult for us all to appreciate the full extent of the detail of the amendment which will now be tabled. It would be useless on my part or, if I may suggest, for other noble Lords to speculate too much about that today. We shall wait with tremendous interest but our final views will depend on a detailed study of that amendment. We have achieved a great deal today and I am grateful to the Minister.

Photo of Lord Fowler Lord Fowler Conservative

My Lords, I, too, congratulate the noble Lord, Lord Puttnam, on his success in winning this government concession, at which, self-evidently, he has worked so hard and for so long. We shall wait to see the final details of the amendment, but I agree with the comments of the Minister about the distinction between newspapers and the broadcast media. Clearly, as regards content, there is an important distinction.

As regards the amendment tabled by the noble Lord, Lord Puttnam, the "media plurality public interest" test is perhaps not the snappiest title the noble Lord has come up with in his career. It is some way from "Chariots of Fire". However, I believe it will have a tremendous impact.

I have one comment in support of the noble Lord, Lord Crickhowell. I am slightly puzzled as to why he should have removed his name from a later amendment on foreign ownership. It seems to me that, important as this concession has been, the noble Lord, Lord Crickhowell, is entirely right that it does not settle the issues on foreign ownership, in relation not only to his amendment but to other amendments too.

In practical terms, the test will include a group which already has major investments in the United Kingdom but may exclude a major group that has no investments at this point inside the United Kingdom. In normal circumstances I would not object to that. However, I would point out that a United States company can still take over ITV while no British company can take over even a United States radio station, let alone a major television company. We shall, very shortly, I hope, come to that.

However, at this stage I want to make the point that important as the government concession has been, it has by no means settled all the questions and important arguments there are on the Bill. I believe that the one I have just mentioned, subject to an amendment from the noble Lord, Lord Gordon, is one of the greatest importance. Having said that, like my noble friend I congratulate the noble Lord, Lord Puttnam, on his very substantial success.

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

My Lords, from the Back Benches of this corner of the House I join in the tributes paid first to all Members in all four quarters of the House who served on the pre-legislative scrutiny committee and prepared the ground for what we have just arrived at today, which is a remarkable and constructive achievement. I pay a special tribute to the noble Lord, Lord Puttnam, for his quiet leadership and the persistence with which he has brought about the situation we are in today.

As compliments are flying around, I too pay mine to the Minister for his speech, which we all need to read and carefully study. It was an important, analytical and also rather eloquent speech. I do not want to detract from the compliment in any way but his view of the state of the old but vitally important virtue of due impartiality in the broadcast media was a little romantic when one sees what happens on some of the channels these days. That applies equally, perhaps, to his view of the other side, the print media, if one looks back to the great dictum of CP Scott all those years ago and his model for print journalism that comment is free but facts are sacred. I am bound to say that one of the least obvious practitioners of that great golden rule of CP Scott is the modern Guardian. However, having said that, this has been an important stage in your Lordships' House today. We are all deeply indebted to the noble Lord, Lord Puttnam, and his colleagues, and to the response from the Minister.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop

My Lords, from these Benches perhaps I may add our congratulations to the noble Lords, Lord Puttnam and Lord McIntosh. It is heartening to know that the Government support the principle behind the plurality public interest test, to which the noble Lord, Lord Puttnam, spoke eloquently and effectively. On these Benches we believe it is important to have such a test for the common good; that economic regulation alone cannot provide it and that it is not sufficient to leave such matters to chance.

The way forward proposed by the noble Lord, Lord Puttnam, and to which the Government have given such a positive response today would avoid the more absurd consequences of over-reliance on market forces. If after further negotiation between the Government and the noble Lord a consensus is achieved, certainly we believe it would find felicitous and widespread support in a way that other proposals are unlikely to achieve.

Perhaps I may add a particular point of interest. We have here a potential solution to the question of religious ownership restrictions. That was voiced by the noble Lord, Lord Puttnam, in Committee and recorded in Hansard at cols. 1433 and 1434. It was also voiced in Committee in another place, where there was also cross-party support.

In Committee, the noble Lord, Lord Puttnam, referred to three aspects in favour of his proposed public interest test. Of the third, he said:

"The third aspect, which is very important, is that it could be used to address the knotty issue of religious ownership. Rather than banning all religious bodies from owning licences and then giving them exceptional leave to do so when there is no longer any evidence of spectrum scarcity, each case could be examined on its merits".—[Official Report, 5/6/03; col. 1433.]

As noble Lords know, I have been trying hard to find a solution to this sensitive issue of religious ownership restrictions. I very much want the interested parties to reach a consensus. Therefore, my hope is that the proposal of the noble Lord, Lord Puttnam, especially in Amendment No. 189, will either be accepted or—as government assurances indicate—renegotiated both as a way forward which strengthens plurality of ownership, broadcasting companies and competitive choice and as a potential means of meeting the Government's concerns about religious ownership.

Photo of Lord Lipsey Lord Lipsey Labour

My Lords, I, too, congratulate my noble friend Lord Puttnam on his success. I briefly reply to the point made by the noble Lord, Lord Fowler, among others, who said: "Yes, we will have this and then we will go on to debate foreign ownership and Channel 5". Of course we shall debate that, but the two issues are fundamentally linked. It is not a question of a deal—that is, the Government accept the public interest test and those of us who had doubts on the other issue will let them go.

Some of us were rather uncomfortable with the Bill in the form in which it arrived. It seemed to contain a difficult dilemma. On the one hand, we were not satisfied that purely economic competition regulation was a sufficient safeguard for the integrity and plurality of our media—we believe that—but, some were also uncomfortable with the argument being put on the other side for ownership restrictions. That seemed to say that it was absolutely fine for Signor Berlusconi to own large parts of British media, but that certain very reputable foreign owners—far too much focus has been on Rupert Murdoch as though he is the only one with all the vices and virtues that exist—must be ruled out. That seemed chauvinistic.

This breakthrough has removed that deplorable chauvinistic aspect but has preserved, and indeed put in lights, the public interest which is at the root. It will not be where you come from; it will not even particularly be what kind of chap you are; it will be whether your ownership is such that it endangers public interests by reducing plurality. Incidentally, plurality in media law is a concept that stretches much more widely than simply numbers, as was shown by the verdict of the regulatory authorities in the Bristol radio cases. That is why this is such a tremendous breakthrough and why some of us can now, with a song in our hearts, go through the government Lobby in the unfortunate event that there is a Division, for example, on foreign ownership.

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

My Lords, before the noble Lord, Lord Lipsey, sits down, I am intrigued. He said: "It won't in future be a question of what sort of chap you are"—I think those were his words—"it will be a question of whether you can reliably uphold the public interest in the manner indicated in the amendment". Surely, those two issues go together. If the nature of the proprietor is of, for example, a Berlusconi pattern, it will be directly relevant to the public interest.

Photo of Lord Lipsey Lord Lipsey Labour

My Lords, yes, I think that I misspoke there. I take the point made by the noble Lord.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, as noble Lords will know, the Cross Benches do not have a view, each one of us has an individual approach. From my viewpoint, and possibly from that of one or two other noble Lords who have followed the debate from the beginning, it is a huge relief to have this new concept of plurality and public interest test brought in. Whether in due course we can all be convinced that it applies to all the issues that still worry us, I think will need a little more explanation over time.

However, it is a very worthwhile beginning to this debate. Again, I most warmly congratulate the noble Lord, Lord Puttnam. Yet again we have more than one reason to be grateful to the noble Lord and his colleagues. Equally, I give my congratulations, along with those of everyone else, to the noble Lord, Lord McIntosh, who has spoken so eloquently and with such understanding.

Photo of Baroness Buscombe Baroness Buscombe Conservative 5:15 pm, 2nd July 2003

My Lords, will the noble Lord confirm that even if a public interest test were not included on the face of the Bill, the Secretary of State has the power under Section 59 of the Enterprise Act 2002 to introduce such a test at any time by order?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, I have confirmed that Clauses 59 to 66 of the Enterprise Act will be included in any provision that we make. Yes, of course there is an order-making power, but the House is demanding that we put the provision on the face of the Bill, and that in addition we set out not just a numbers test—because that could happen under the Enterprise Act—but the need for a wide range of high-quality broadcasting, which is calculated to appeal to a wide variety of tastes and interests. We propose to include that and the need for a genuine commitment to the standards objective. I doubt whether that would be possible under the Enterprise Act.

Photo of Lord Eatwell Lord Eatwell Labour

My Lords, I begin by declaring an interest as chairman of the Commercial Radio Companies Association. I add my congratulations to the universal congratulatory tone for my noble friend Lord Puttnam. He has sought to achieve something very important: that as many voices as possible provide many viewpoints and a wide diversity of programming throughout the media.

However, I confess that I am slightly worried by the belief that plurality will be a universal panacea to achieve those goals. I am also a little worried about the identity which has emerged in discussion between plurality and the public interest test. They do not seem necessarily to be the same thing.

When my noble friend introduced his amendment he pointed out that the plurality test was designed to apply across the board. Although most of the discussion has taken place with respect to television, perhaps I may be forgiven for reflecting for a moment on the impact on the radio industry.

First, a number of important qualifications were made by my noble friend Lord McIntosh with respect to the amendment of my noble friend Lord Puttnam. He made three points with which I agree completely. I shall list them without going into the arguments. First, he pointed out that there is some confusion in this discussion—a confusion which emerged in the contribution of the right reverend Prelate—between plurality and diversity. Plurality and diversity are not the same thing. A reduction in plurality may often increase diversity of programming and vice-versa. They are not the same thing.

I see some puzzlement on noble Lords' faces, so perhaps I should elaborate a little. Let us suppose that in a given area there are two owners of local music stations. In order to maximise their revenues their rational business strategy would be to play exactly the same kind of music—the most popular music in the area. If those two owners combined, their rational business strategy would be for the two stations to play different kinds of music and thereby maximise the coverage in the market. Therefore, the reduction in plurality would increase diversity and consumer choice.

There have been significant examples of that occurring in the radio industry. For example, the mergers which have taken place in London by Capital Radio have actually increased the diversity of programming across the radio stations taken over by it. So my noble friend the Minister was quite right: plurality and diversity are not the same thing.

Secondly, my noble friend pointed out that there is a degree of elision in the amendments between the newspaper industry and other media. They are not the same. The newspaper industry does not have content regulation, whereas, in this country, we have strict content regulation for broadcast media. Not only does the regulator apply content regulation but, in the radio industry, content regulation is strongly supported by the industry. That helps it to become much more effective.

The third point that my noble friend made with which I agree was that, with respect to the presentation of news, there are requirements on broadcast media to present a fair, balanced and impartial news coverage. That already exists in legislation.

There is a fourth point that my noble friend could have made about the impact in the United Kingdom on plurality issues that does not apply abroad. It is that commercial broadcasters in this country—commercial radio in particular—face a powerful and creative competitor in the form of the BBC. If commercial radio does not provide a wide variety of programming appealing to local tastes, it will inevitably lose its listeners to the BBC. The fact that the BBC is there forces improved performance by commercial radio. Indeed, the effect is reciprocal; they mutually reinforce one another.

I hope that those four elements will be taken into account when the Government draw up their plurality amendment. Those issues are important and mean, with respect to format regulation and the presence of a powerful BBC, that analogies based on Italy, Australia or America—which have been widely used in consideration of the matter—are not valid for the UK.

I draw the House's attention to a wider point. An important book dealing with the issues of media ownership, competition and plurality was published in 1997. It was entitled, The Undeclared War: the struggle for control of the world's film industry. One clear message of that book was the importance of scale in underpinning success in competitive media markets. As we all know, the author of that book was my noble friend Lord Puttnam.

It is therefore ironic that my noble friend's amendments could prevent British companies in other sectors of the media industry from achieving the competitive scale shown to be so important in the history of film. I am worried about that. One factor underlying the failure to build a successful commercial television company of world class in this country—there is not one—has been the fact that we have restricted the growth of commercial television companies and prevented them from competing on a suitable scale with foreign companies.

If we are so determined to force our media companies to be small, we must be sure that we are happy to hand all the long-term competitive advantage to companies based outside the UK. If we are prepared to accept the consequences of that, that is fine, but we should be aware that those are the consequences. In the long term, the consequence will be an ever weaker UK commercial broadcasting sector facing more and more powerful competition overseas. Therefore, the UK sector will be sustainable only by erecting larger and larger protective barriers.

With strong commercial companies overseas and weak commercial companies here, we could also face a BBC able to maintain its position only by getting into bed with those powerful foreign interests. That is happening already.

I am worried about the notion that plurality is a panacea. In drawing up their amendments, I hope that the Government seek to achieve a balance between the attempt to create an environment within which companies can grow and be strong and competitive on a world scale and the diversity of voices, programming and consumer choice that we all seek.

Photo of Lord Bragg Lord Bragg Labour

My Lords, I shall be brief, but I cannot let this moment pass without adding my congratulations to my noble friend Lord Puttnam whose work in this respect has been mighty, as I and several other noble Lords know, and to my noble friend the Minister for the intelligence and directness of his answer. It proves to me that the Government have listened to their supporters—to those of us who, in the words of the noble Lord, Lord McNally, want to make a good Bill better. The new clause sets out to do just that and I am very pleased that the Government have responded so carefully and so effectively to my noble friend's amendment.

Plurality and adversity—I mean diversity; I have been thrown a bit by my noble friend Lord Eatwell—applied to the spirit of my noble friend the Minister's remarks, should see us through—us being the British public— to preserving the public service interest at the heart of the Bill. We are much further forward after today.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, with the leave of the House, I want to avoid making a second speech and, with three very brief—the stopwatch starts—exceptions, I can do so. I shall respond to all the points about the relationship between plurality and foreign ownership when we deal with Amendment No. 193. I shall deal with the point about religious broadcasting when we reach the appropriate amendment.

Apart from that, I want only to correct something that I said to the noble Baroness, Lady Buscombe. In fact, under Section 58 of the Enterprise Act 2002, a public interest consideration may be added by an order subject to the affirmative resolution procedure. That would cover the two media plurality considerations that I cited. However, in the light of the debate, it has been generally agreed that it is advantageous to write the provision into the Bill.

Photo of Lord Puttnam Lord Puttnam Labour

My Lords, no Oscar speech, I promise. It goes without saying that I am enormously grateful to all noble Lords who have supported this endeavour—it has been an endeavour—for the past 14 months and have brought us to this point. There is one thing that I want to get off my chest. I am very conscious—and not at all comfortable with the fact—that I have been unable to extend to the noble Lords, Lord Crickhowell and Lord McNally, the loyalty that they extended to me. That troubles me.

It is hope fulfilled, I suppose, but I suspect that my heart will remain in my mouth for a few more years. Ofcom will find itself challenged—quite quickly, I suspect—and only then will we know if we have placed our trust in the right quarter. As a matter of fact, I have every confidence that we have.

There are a few people whom I should like to thank because they have been very much behind the scenes. The noble Lord, Lord Grabiner, who has, as it were, been "behind the behind the scenes", has steered me magnificently on the legal aspects of the conclusion at which we have arrived today. I know that my noble friend Lord McIntosh would join me in thanking the noble Lord for his help. The honourable Andrew Lansley—who, I believe, may well be in the Chamber, but I shall not look to find out—was in every respect the architect of this concept. The rest of us have been happy messengers. I hope that he feels that we have handled his child with sufficient care.

It is also well worth saying that 12 people from each party and from both Chambers have supported the concept from day one. If that is not an example of politics at its best, and of the way that scrutiny and cross-party relationships can bring about an excellent result, I am not sure that I shall ever live to see one. Without embarrassing her, perhaps I may also thank the noble Baroness, Lady Buscombe. She has been a model of consistency and common sense in the most difficult and trying of circumstances. I am not sure how I should have managed during the past week to 10 days if she had not been so utterly fair-minded and so genuinely helpful whenever she could be.

With that said, this has been a good day for the House and maybe—who knows?—a good day for the country. I beg to move.

Noble Lords:

Oh.

Photo of Lord Puttnam Lord Puttnam Labour

I knew that I should not get to the end of this properly. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 190 to 192 not moved.]

Photo of Lord Crickhowell Lord Crickhowell Conservative

moved Amendment No. 193:

Before Clause 340, insert the following new clause—

"INTERIM RETENTION OF CERTAIN RESTRICTIONS ON NON-EEA OWNERSHIP

(1) For paragraph 1(2) and (3) of Part 2 of Schedule 2 to the 1990 Act, there shall be substituted—

"(2) Sub-paragraph (1) shall apply in relation to any Broadcasting Act licence other than a licence to provide a Channel 3 service and a Channel 5 licence as if paragraphs (a) and (b) (and the reference to those paragraphs in paragraph (i)) were omitted."

(2) OFCOM shall carry out the initial review for the purposes of this section within a year of the coming into force of this section.

(3) OFCOM may carry out a subsequent review for the purposes of this section at any time during the period which commences a year after the completion of the initial review under subsection (2) and which concludes with the coming into force of the order made under subsection (7).

(4) A review under this section shall consider whether, in the opinion of OFCOM—

(a) the provisions of section 273, 274 and 280 to 284 are operating in such a manner as to provide for a fair and transparent programme supply market with respect to Channels 3 and 5;

(b) the relevant provisions of Chapter 4 of this Part are operating in such a manner as to provide for effective content regulation of Channel 3 and Channel 5 services;

(c) the provisions of sections 260 to 267 are operating in such a manner as to provide for a continuing significant contribution by Channel 3 and Channel 5 services towards the achievement of the purposes of public service television broadcasting in the United Kingdom specified in section 260;

(d) the provisions of sections 344 to 349 provide adequate additional safeguards in case of change of control of Channel 3 services or Channel 5; and

(e) the powers available to OFCOM under the Competition Act 1998 (c. 41), Part 4 of the Enterprise Act 2002 (c. 40) and sections 309 to 311 of this Act are adequate to promote effective competition in the broadcasting market in the United Kingdom.

(5) When, as a result of a review carried out in accordance with subsections (2) or (3), OFCOM consider that each condition specified in subsection (4) has been met, they shall make a report to that effect to the Secretary of State, giving reasons.

(6) The Secretary of State shall lay any report made to him under subsection (5) before Parliament.

(7) When a report has been laid before Parliament in accordance with subsection (6), the Secretary of State may by order repeal paragraph 1(1)(a) and (b) of Part 2 of Schedule 2 to the 1990 Act and make such consequential amendments to that Part of that Schedule or to other provisions of that Act or this Act as he thinks fit.

(8) No order is to be made containing provision authorised by subsection (7) unless a draft of the order has been laid before Parliament and approved by a resolution of each House."

Photo of Lord Crickhowell Lord Crickhowell Conservative

My Lords, we have just heard that the Government are to introduce very important amendments at Third Reading. However, nothing that the noble Lord, Lord Lipsey, said about the matter makes me change my mind and I do not believe that they are likely to make any difference to the issues covered by my amendment, Amendment No. 193.

The noble Lord, Lord Puttnam, need not feel any guilt. He has negotiated a deal that greatly improves the Bill. It is the nature of deals that something has to be given in return and the House will understand perfectly why he has now withdrawn his name from the amendment. However, the noble Lords, Lord McNally and Lord Hussey of North Bradley, and I have not been party to the negotiations and we feel that the arguments in favour of our amendment remain as strong as ever.

Amendment No. 193 would delay the lifting of restrictions on non-EEA foreign ownership. The Joint Scrutiny Committee, of which we were all members, saw no immediate need for the lifting of the present restrictions. We concluded that to do so before Ofcom is firmly established and has the opportunity to review the state of the market and the way in which regulation is operating would put at risk some of the crown jewels of British broadcasting.

The amendment would require Ofcom to hold an initial review within a year and subsequent reviews as required. If, as a result of a review, it concluded that the restriction could safely be lifted, Ofcom would report that to the Secretary of State and Parliament. An appropriate order could then be laid to be approved by affirmative resolution.

The case in favour of lifting restrictions on foreign ownership now were summarised in Committee by the Minister then in charge of the Bill, the noble Baroness, Lady Blackstone, who said that it should lead to increased investment, productivity and efficiency, together with new skills and ideas. That argument had been advanced at Second Reading by my noble friend Lady Buscombe. My noble friend asked, "What is there to fear?" She told us that we should have more confidence in our culture and allow the consumer to choose. The Minister took a totally different line. She did not propose to leave it to unfettered consumer choice. Responding to what I and others had said about the state of broadcasting in the United States and the massive power of conglomerates, she said that the Government wholeheartedly understood and sympathised with the concerns that had been expressed. She argued that,

"the UK has strong content regulations which will maintain the quality and impartiality of our programming"—[Official Report, 5/6/03; col. 1474.]

Those who regard public service broadcasting as one of the greatest glories of British broadcasting may, like me, have more confidence that it would be better protected by effective legislation than it would by leaving it all to consumer choice. I shall return to the subject of consumer choice, but I wish first to examine the circumstances in which Ofcom will have to try to enforce regulation and compare them with the very different circumstances in which the rich culture of public service broadcasting was established and developed. Professor Michael Tracey of the University of Colorado, in his latest, remarkable contribution to the argument, reminds us that,

"the ITV system, while commercially funded, was not market driven. It was based on a monopoly of advertising in a given region, all based on the expectation that it would fulfil certain public service commitments. Channel 4 had a guaranteed income precisely so that it did not have to worry about the market".

As a former director of an ITV company, I can vouch for the fact that in those happy, far-off days, when the advertising revenue came in a rich flood, those of us with responsibility to our shareholders were immensely careful to obey in the minutest detail every regulatory command, and the regulators had no problem in enforcing their will. By the time I finally left the industry, the situation was rather different. A combination of large bids to retain licences and rapidly declining advertising revenue meant that the companies had to cut costs to survive and that the regulators had to relax their controls and respond with understanding to the financial realities of the market.

Ofcom will be taking over its responsibilities in circumstances that will make its task of enforcing regulation very difficult. As the Joint Scrutiny Committee pointed out, and as my noble friend Lady Buscombe observed last night, it will face an enormous range of challenges immediately after it assumes its functions. It will also be taking over at a time when the fall in advertising revenue for Channel 3 licence holders is so severe that it threatens the ability of some of them to fulfil existing commitments and maintain existing standards. In this situation Ofcom will have to use its powers with discretion or may find that the very existence of those companies is imperilled.

Some people might say, "Well, that's one reason why we need foreign investment". However, if foreign investment were to be made in those circumstances, it would not be to obtain the rich pickings from the advertisers' table, or in the expectation that the arrival of investment and ideas would suddenly boost advertising revenue. No, the aim of new owners would be to buy when share prices were depressed, cut costs—by reducing original drama output, for example—and to bring in as much existing material as possible already paid for by US sales on which margins would be large. At the same time, local content would increasingly be created with the object that it could be marketed to international audiences rather than with the particular aim of retaining local character and meeting local need.

In Committee, I referred to the large amount of evidence received in the Joint Committee that that was exactly what would happen. The noble Baroness, Lady Jay of Paddington, and the noble Lord, Lord Bernstein, reinforced the case on the basis of their own direct experience in the market. The usual challenge was thrown out that, if this was the case, why did European countries that have no restriction on their ability to buy British companies not take advantage of the situation and do the same? The fact is that they do not have vast existing libraries of English-speaking product waiting to be disposed of in that way.

I add only two more points before turning to the question of consumer choice and the alleged benefits to the UK of opening up our market. One of the principal benefits of attracting investment and ideas that has emerged in markets other than television is that it can be of great help in making possible sales to other countries, including the United States. Bizarrely, however, the proposal is that we open our markets without any reciprocal opening of the US market. That is one more good reason for not moving fast down the route proposed by the Government, and I warmly support Amendment No. 195 in the name of the noble Lord, Lord Gordon of Strathblane, and my noble friend Lord Fowler.

There are those who argue that because content regulation has been tightened up, there are now adequate controls to ensure that new overseas owners would have to behave themselves. As a regulator of a different industry, I learned that there is a huge difference between regulating the conduct of those who respect what the rules hope to achieve, and who are, by instinct, inclined to conform, and attempting to regulate those who have contempt for the rules and seek to avoid them for their own advantage. I remain to be convinced that Ofcom will find it easy to ensure compliance by a great international conglomerate.

Public service broadcasting is now comprehensively defined in Clause 260 in legislative language. We are talking about creativity, diversity and standards. Can we be confident that such matters will be what consumer choice will safeguard? I suspect that Hugh Carleton Greene, a great director general of the BBC, was right when he argued that what he called the "basic moral values" of truthfulness, justice, freedom, compassion and tolerance are constantly endangered species that one needs to breed and then protect.

In the competitive marketplace of the US, the demand of advertisers always to maximise audiences has led to a reduction in real news broadcasting, the decimation of children's broadcasting and the extraordinary success of reality TV. In a world where the consumer may have a hundred channels he can watch, there is plenty of scope for reality shows. Yes, we can and should have consumer choice, but we have got it, and there is no shortage of choice available to consumers. I am not arguing that there should be. I am arguing that if we value the standards that have been established for public service broadcasting, we cannot and must not leave those to consumer choice.

Speaking in this building on 26th June, Pat Mitchell, the president and CEO of PBS, the United States' public service broadcasting organisation, who has spent nearly 25 years in commercial media and the past three years with the only non-profit media organisation in the United States, warned of a further consolidation of power among a few global conglomerates. My noble friend Lady Buscombe says that we should allow the consumer to choose. Pat Mitchell says that we cannot have a democracy without having a healthy, democratic media system and that the media are too important to leave to the marketplace to control, or direct.

Public service broadcasting, as we know it in this country, is too important to be put at risk by rushing helter-skelter down the de-regulatory slope at a time when the new regulator is likely to be overstretched and relatively feeble, when market conditions make regulation hard to enforce and when the moguls may see an opportunity to exploit. My amendment would not shut the door for ever. It would provide time for Ofcom to establish itself and give it the opportunity to explore the validity of the arguments that we are considering today.

The Government, for reasons that are remarkably unconvincing, are trying to persuade Parliament to take a risky road. We should not allow them to do so, and I find it extraordinary that my Front Bench should be prepared to underwrite the Government's approach. When my noble friend the Chief Whip circulates a note saying that we are being watched closely—minute by minute and in detail—by the media and that the most careful consideration has been given to the issues by senior colleagues in both Houses, I know that those who tell me that heavy pressure has been applied by media moguls are right. My reaction is not to climb down in the face of such pressure but to feel even more strongly that the Bill needs strengthening, not weakening.

The Government and Opposition Whips will usher their flocks into the same Lobby. I hope that there will be many in all parts of the House, and a substantial number in my party, who will feel as I do and will insist on retaining effective safeguards for a system and for standards that are immensely valuable and need our protection. I beg to move.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour 5:45 pm, 2nd July 2003

My Lords, I speak to Amendment No. 195, which stands in my name and that of the noble Lord, Lord Fowler. I agree entirely with the remarks made in the previous debate by the noble Lords, Lord Crickhowell and Lord Fowler, to the effect that this is a separate issue from that of the public interest test and should not even be considered in the same breath.

I favour Amendment No. 194, the second of the noble Lord's amendments, rather more than I favour Amendment No. 193. It is not good enough just to give Ofcom breathing space. Amendment No. 194 takes out the disapproval altogether. My amendment is an attempt to achieve reciprocity: we will do it, if they do it. I freely concede that, frankly, if we achieve reciprocity, events will overtake us all, and it will happen automatically.

The man in the street would think that we had taken leave of our collective sense, if he heard that we had decided unilaterally to allow the Americans to own British media, without insisting that they grant a similar right to us. It is, after all, a fundamental principle of trade that it is bilateral. I welcome the removal of barriers. I concede that there are some concerns about United States ownership that, even if the barriers were down and we had reciprocity, might fall foul, in certain circumstances, of the public interest test proposed by the noble Lord, Lord Puttnam. But that is a separate matter.

Discussions go on constantly in GATT on the matter. The great irony is that this might happen at precisely the point at which America might consider it sensible to drop our media restrictions that stop anyone owning more than 20 per cent. I remind the House that one of our most able and talented Commonwealth citizens had to renounce his Australian citizenship, take a primary school test in American history and become an American citizen in order to own anything in the United States. That is how strict they are; that is how resistant they are, even to big media moguls. If progress is to be made, it will not help our negotiators if we give in in advance as regards precisely the prize upon which they might feel tempted to remove their own restrictions.

The reason that America might give in is that boundaries are becoming meaningless nowadays, anyway. Any of us could sit at home and watch al-Jazeera all day, if we wished. We can receive it through satellite. Likewise, in New York, the highest-rated radio programmes on the Internet are both British. I concede that there is an element of distortion of the market, in that expats probably use the Internet because they do not have access to British programmes any other way. However, television is now crossing frontiers—in fact, that is the title of a directive from Europe. To some extent, we can keep out ownership, but we cannot really keep out programmes. It is programmes and programming that influence the public. I am not trying to say, "Never"; I am simply saying, as a principle of trade, "Let us in, if we let them in".

I squirmed with embarrassment at the statement about how ridiculous it was that we were allowing the French, the Germans and the Italians to own but not the Americans, the Canadians and the Australians, as though, somehow, it had been a slip of the draftsman's pen. It is straight common sense. For all that we may dislike some of our European colleagues, particularly the media owners, the fact is that, at the moment, as part of our membership of the European Union, we have access to ownership of their media, and they have access to ownership of ours. Prior to that, Section 12(5)(a) of the Independent Broadcasting Authority Act 1973 insisted that British media must be owned by people who were British. It was only when we joined Europe that we extended it.

We have not felt the impact of Europe very much for the obvious reason that, because of language differences, there has not been the degree of vertical integration—sometimes called "dumping"—that there has been from the United States. That has not happened. It could happen with the United States, Canada or Australia. We must consider that—quite properly—under the public interest test. Even if we had reciprocity of ownership, it would be proper, under the public interest test, for the Secretary of State to say, "I know that we are treating you on all fours with European and UK media, but we think that the danger that you will unload your junk programmes is such that it is not in our interest". That would be fine. The only thing that would happen is that no media owner could be debarred simply because he was American. There might be other issues. That is where the public interest test is required, as well as the foreign ownership restriction. But one is not a substitute for the other.

I invite noble Lords to re-read paragraphs 247 and 248 of the report produced by the noble Lord, Lord Puttnam. I shall not go on about it, as I know that he feels embarrassed about it. In those paragraphs, he examines the arguments made for the benefits of foreign ownership. The noble Lord said that he found the arguments "variously lacking in force", which is a polite way of saying that they do not stand up to too much examination.

I am open-minded on whether we should follow the amendment tabled by the noble Lord, Lord Crickhowell—I prefer the second to the first—or, indeed, people might vote for mine. In the light of some amendments that the Government have tabled, which I do not quite understand, it might be appropriate for us to delay a Division until Third Reading. I do not want to heap up more trouble for Third Reading, but I believe that this is such an important matter that a Division is appropriate. I will support another amendment, if that is the preferred route, or invite others to support mine in the Division, which might be more appropriate at Third Reading.

Photo of Lord Fowler Lord Fowler Conservative

My Lords, as the other signatory to Amendment No. 195 with the noble Lord, Lord Gordon of Strathblane, I shall speak briefly to support what he said in an outstandingly succinct speech.

There are two points that I should like to make. First, in no way is this an anti-American amendment. I am strongly pro-American. In the media field, Mr Murdoch deserves great credit for what he has done in this country, particularly in the newspaper area, sweeping away some of the old restrictive practices that were moving a great number of our newspapers towards bankruptcy. He therefore deserves a great deal of credit for that.

Secondly, in no way is this anti-free trade. I am strongly in favour of free trade and of businesses competing with one another on a level playing field. In the case of television and broadcasting, the playing field being created by this Bill is anything but level. Basically, United States companies are being allowed to buy ITV in Britain without any reciprocal arrangement for British companies to do anything like the same in the United States.

With respect, the noble Lord, Lord Lipsey, consistently seems to miss the contrast with the position in the European Union, with which there are reciprocal arrangements. Here, we are introducing a new measure without any reciprocal arrangements. The noble Lord, Lord Gordon, and I find it quite inexplicable in pure business terms. I cannot understand why any country would want to do that.

I think that the arrangement is neither sensible nor in our national interest; apart from the noble Lord, Lord Lipsey, I have found few people who do. It is a complete mystery why the Government are introducing this change. Only a few months ago they, too, took my view. Going back to November 2001, the view of the Government was,

"Without reciprocal arrangements with other nations that will allow our own companies to expand into their markets, we do not feel we could justify lifting our ban at the present time".

That was the Government's own statement.

In Committee, I asked what factors had persuaded them to conduct this extraordinary U-turn in policy. Unfortunately, time was such that the Minister never got round to that point in her summing up. Perhaps the new Minister can say why there was this change of mind—after what consideration and after what meetings. Perhaps he can even say who lobbied for this change in legislation. The extraordinary thing is that the Government, apparently, still want reciprocal arrangements with the United States.

On the face of it, giving away one's strongest negotiating card before the negotiations have begun seems the most extraordinary negotiating tactic, if that is the case. Free trade does not mean simply rolling on one's back, kicking one's legs in the air and allowing the negotiations to be settled in that way.

Perhaps I may put it another way. For a moment let us imagine that we had reciprocal arrangements with the United States, but not with Germany and France. Nevertheless, without any reciprocal agreement, we allowed France and Germany to enter our market unchecked. It is perhaps just conceivable that attitudes therefore might be a little different. My Front Bench might be opposing this measure and not supporting it. Whips might be bussing in old friends of mine who I have scarcely seen in the first two years of my life here.

In the debate so far, I have not heard one argument—I have scarcely heard an argument of any kind—put by either Front Bench which even half persuades me to go along with the Bill on this issue. I strongly support the amendment proposed by the noble Lord, Lord Gordon, and will most certainly vote for it.

Photo of Baroness Cohen of Pimlico Baroness Cohen of Pimlico Labour

My Lords, I rise not exactly to support the amendment proposed by my noble friend Lord Gordon, because I suspect that the issue of reciprocity may be something of a red herring. I have some regret in saying that although my noble friend Lord Puttnam has taken his name off this amendment—as a fellow member of the committee, normally I support the noble Lord in everything—in this case I cannot go along with him. I do not believe that plurality regulation will amount to the same thing as an ownership restriction. Ownership restriction, which I unhesitatingly say must apply far more to any country which makes its programmes in English, I continue to believe is extremely important. I regret to divide the ranks of the committee further on this point but it is important.

I am not sure that reciprocity in the amendment is not a red herring. As I understand it, there are people in the DTI negotiating these kind of agreements through the General Agreement on Tariffs and Trade arrangements at the moment. For me, the real point is not reciprocity but the whole problem of ownership of channels.

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

My Lords, I believe that the United States is right in its policy. So many times it has been said that in dealing with cultural goods one is dealing with something completely different from virtually anything else. I am concerned that if we allow American investment in our television and radio channels, with the force of their wealth they might very easily and rather quickly invade the jewels of our own television and radio. Like the noble Baroness, Lady Cohen, I am not as sanguine as some may be that the Puttnam amendment—if I can call it that—will come to the aid of our own television and radio companies in those circumstances. I fear that one is moving into a legal minefield in that circumstance. I note that the noble Lord, Lord Puttnam, is gently nodding his head in agreement with my point.

The fact that we allow European Union members to have free access to ownership of our television and radio companies is a matter of history. Two wrongs do not make a right. In any event, there is a huge difference between the United States, with a common language and a parallel history, and European Union member countries, with no commonality of language and a lesser cultural commonality, if I can put it that way. For those and the many other reasons already expressed, I strongly support this group of amendments.

Photo of Lord Peyton of Yeovil Lord Peyton of Yeovil Conservative

My Lords, I warmly support what the noble Lord, Lord Phillips, said and what my noble friend said in his very eloquent moving speech. I shall do so with real, not merely promised, brevity. The whole passage of this very complicated Bill has been a powerful reminder to me of how difficult it is to sustain standards. Standards tend to fall, not to rise. Someone quoted Sir Denis Forman on the qualities that those who are responsible for standards would need to show for them even to be sustained, let alone to rise. Surely, this is not a time when we should think of diminishing the defences that we have. I can see absolutely no grounds for getting rid of the need for reciprocity before doing so.

The amendments have not removed consumer choice from the high table at which it ordinarily sits these days: consumer choice has been told fairly firmly—not before time—that it does not own the high table; it has the privilege of sitting there.

It seems slightly unreal that we should leave this subject without referring to Mr Murdoch. I received a rather strange letter from News International, as did many of your Lordships. It told me one or two things which I knew before and something which I did not know before—that is, that Mr Murdoch did not intend to bid for Channel 5—but I was not quite sure what News International wanted of me. At this stage, I am left with the need to say that Mr Murdoch seems to me to have acquired a position of almost unparalleled influence over our affairs, and I see no possible reason for making it easier for him to expand on that.

I have said what I intended to say, and I have said it with all the conviction that I can muster. I warmly support my noble friend in his amendment and I would say to the noble Lord, Lord Gordon, only that I, too, prefer Amendment No. 194 to Amendment No. 193.

Photo of Lord Thomson of Monifieth Lord Thomson of Monifieth Liberal Democrat 6:00 pm, 2nd July 2003

My Lords, I warmly support the amendment moved by the noble Lord, Lord Crickhowell, and I support the views expressed by my colleague, the noble Lord, Lord Peyton.

This is not primarily a matter of economic reciprocity, although it is a useful device in the argument. This is not primarily an economic issue; rather, we are considering the whole character and quality of the broadcasting system of this country, one which is distinctively different from that which has grown up in the United States; it has a quite different history. If we were to open our marketplace to American broadcasting capital, I think that Ofcom would have an extremely difficult job trying to preserve the essential character of broadcasting in this country. I see no reason why we should put ourselves in that position, so I warmly endorse what has been said by the noble Lord, Lord Crickhowell.

Photo of Baroness Buscombe Baroness Buscombe Conservative

My Lords, I had thought of wearing a form of flak jacket in your Lordships' House today in order to debate these amendments, because I am going to stand four-square with the Government. Her Majesty's Opposition does not support these amendments. Indeed, we are entirely in favour of lifting restrictions on the ownership of national terrestrial broadcasting licences.

As I made quite clear at Second Reading, we believe that lifting the restrictions will open up the broadcasting media to new sources of investment and ideas. Foreign investment has already enabled cable and satellite television to grow in this country. The concern that liberalisation will lead to a flood of foreign content is, we believe, misplaced. Commercial companies operating in a commercial marketplace simply cannot afford to ignore consumer demand. Moreover, all the evidence suggests that domestic programming is popular in the United Kingdom and therefore any media company that wants to be successful in this country must provide the local content that people want or it will not survive. In essence, content is driven by consumer demand, not by ownership, and the two issues should not be confused.

My noble friend Lord Crickhowell was right to point out that I did say at Second Reading that we should have more confidence in our culture and allow the consumer to choose, but I take issue with his suggestion that, in a sense, I sought to take a different view from that of, as I recall, the noble Baroness, Lady Blackstone, on that occasion. I say that because we stand four-square with the Government in the light of the fact that, unlike the United States, we have already, and will continue to have, what has been set out so clearly on the face of the Bill: strong content regulation. That, we believe, makes all the difference.

I am not in the habit of standing at this Dispatch Box to support the Government, but this is one of those rare occasions.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, perhaps I may take the points in a different order from that in which they were debated and start by discussing reciprocity. I shall do so because a number of noble Lords have pointed out that reciprocity is a red herring in the major debate that we are having about foreign ownership. I have to say that I think that that is true.

We have been told that to remove restrictions on non-EEA countries owning UK broadcasting licences without reciprocity would be contrary to all the principles of negotiation and of free trade. I simply do not think that that is the case. First, I should say that it is not the case that there are no reciprocal arrangements with the United States, in particular for UK firms. There is not a complete ban on UK companies investing in US media. A UK company may own up to 20 per cent of a US company with a broadcast licence, and can also own up to 25 per cent of a company whose subsidiary company comes with a broadcast licence.

Secondly, it is not the case that we would be in an unusual situation for the European Union. A number of countries have taken this deregulatory step, including Germany, the Netherlands, Portugal, Spain, Denmark, Ireland, Finland, Belgium and Luxembourg, as well as New Zealand, without reciprocity—and we shall encourage others to do likewise. If it is right to liberalise trade, then our general approach within the World Trade Organisation—formerly GATT—is not to wait for reciprocity before liberalising trade. If it is a good thing to do, we do it. If we did not do it, there would be no progress whatsoever on globalisation and the liberalisation of world trade.

Photo of Lord Fowler Lord Fowler Conservative

My Lords, can the Minister explain why, in November 2001—which is not a long time ago—the Government took precisely the opposite view?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, for the past 18 months the Government have been listening to everyone who has taken part in this debate including, if I may say so, the Joint Committee. The Joint Committee agreed with me and has said that the issue of reciprocity was not pivotal to this debate, and I agree. It is a politer way of saying that it is a red herring, but I really do not think, when we are considering an issue of such importance as the liberalisation of world trade, that we should be diverted by the issue of reciprocity.

I shall now discuss the major issue; that is, whether we should maintain the ban on non-EEA countries. We propose to open up to foreign ownership for one very simple reason: that there is benefit in it for UK broadcasting. It is in our interests to open up.

The current rules are not coherent. I do not doubt that there are noble Lords who would wish to impose the same kind of ban on countries within the European Economic Area, but they know that they cannot do so because of European rules. Those noble Lords are not going to resign from the European Union for that purpose; I can say that with impunity because I see that the noble Lord, Lord Pearson, is not in his place. We are doing this because it is right to do so and because we have so much protection, including the additional protection that has been introduced in debate this afternoon and which will be brought forward by way of amendments tabled at Third Reading.

As a general rule, surely to open up the industry to foreign ownership will allow investment in UK broadcasting from a wider range of sources. No one has denied that point. In other industries, foreign investment has boosted new ideas and improved customer service both within individual companies as well as in that of their competitors. We have seen many examples of foreign investment in our industries, including those so close to the ones we are now discussing—the cable and satellite industries—and we have seen the benefits of such investment in both directions. Indeed, I would go so far as to say that our economy is in very large part dependent on it.

Amendment No. 193 proposes that Ofcom should test the content and competition rules in the Bill before changing the rules on foreign ownership. I take it that this is the ingenious way proposed by the noble Lord, Lord Crickhowell, of softening the difficult position he has in the opposition between himself and his own Front Bench. Of course he has had support, but not so much for Amendment No. 193 as for Amendment No. 194, which proposes a complete ban.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

My Lords, I intervene on behalf of the noble Lord, Lord Crickhowell. His amendment reflects what the Joint Committee recommended. It is the Joint Committee recommendation he is putting forward. I do not like it as much as his subsequent amendment but, to be fair to the noble Lord, it is not brought forward as an attempt to resolve the difficulties within the Conservative Party.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, I readily absolve the noble Lord, Lord Crickhowell, of that. I should never impute motives to anyone. I caught myself out by doing so. However, the noble Lord does have two amendments side by side which seek to do different things.

Let me make two points about this group of amendments as a whole—that is, Amendments Nos. 193, 194, 213 and 239. The first concerns the point made by the noble Baroness, Lady Buscombe, about content rules. The Bill protects content quality and any comparisons made with the United States system are bound to be misleading. We will have in place robust and wide-ranging public service remits—which Ofcom will strictly regulate—and the United States has no comparable system.

I have read in the broadsheets—as have we all— passionate articles by people we respect. In particular, I remember an article in the Guardian by Richard Hoggart, whom I not only respect but venerate. He argues against opening up and in favour of Amendments Nos. 193 and 194. But he does so on the false basis that this would overturn the content rules that we have in our broadcasting and that there is a comparability between the nature of content regulation in the United States and in this country. It could not be more different.

The Bill will put in place quotas for original production, EU production, regional and independent production. There will be flexibility in the content provisions. Ofcom will be able to renew the licence commitments on change of control to ensure that new owners maintain the standards of the old. In other words, any change of ownership to any owner from outside the European Economic Area will entail compliance with our content regulations. I do not know whether that is clear to those who argue about the dumbing down of British television as a result.

In radio, Ofcom will have to protect the local content of radio. It will also be able to vary the licence conditions when local licences change control in order to preserve the local character of the station and maintain the quality and range of the service.

Unlike the United States, we also have rules preventing broadcasters from using their companies to further their own political agenda. Broadcast news must be accurate and impartial and companies must not use television or radio in order to express their own views on politics or current public or industrial policy.

I do not know what motivated Rupert Murdoch when he went into the American market and took American citizenship to do so. Although I used to know him very well I have not met him for 50 years and so I am somewhat out of contact. But, whatever were his motivations, they could not apply here. If he was looking to do in this country what he has done with Fox, for example, in the United States, he could not do it. Our regulatory system makes it impossible.

The next matters I want to address concern the plurality amendments we propose to table at Third Reading and the plurality issue which was the subject of our previous debate. The noble Lord, Lord Crickhowell, opened his speech by saying that the plurality issue was irrelevant to this issue. The noble Lord, Lord Gordon, said that this is a totally separate issue and should not be considered in the same breath. That is simply not the case.

The government plurality test addresses the concerns expressed over foreign ownership. My noble friend Lord Puttnam has already acknowledged that case. The test will cover the need for a wide range of high-quality broadcasting calculated to appeal to a wide range of tastes and interests. It will cover the need for a genuine commitment to the standards objectives. Just like existing domestic players, foreign acquirers of UK media could be and will be judged against those tests. I stress that the tests would bite even if foreign companies had no existing UK assets.

Photo of Lord Phillips of Sudbury Lord Phillips of Sudbury Liberal Democrat 6:15 pm, 2nd July 2003

My Lords, I am grateful to the Minister for giving way. As he is now dealing with the amendment of the noble Lord, Lord Puttnam, does he not accept that that is posited on the basis of plurality of media owners? So it would scarcely be possible for objection to be raised if, for example, one of the big American combines were to purchase one of our television channels.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, as I said, we have considered changes to the Bill to introduce a plurality test. As I have explained, this test would allow us to look at a proposed foreign acquisition from the point of view of the number of owners in the relevant market—the noble Lord, Lord Phillips, is right, in some cases such an acquisition would not change the numbers—and it would enable us to look at a proposed foreign acquisition in the light of the need for a wide range of high-quality broadcasting which is calculated to appeal to a wide variety of tastes and interests, and the need for a genuine commitment to the Ofcom standards code.

Even if the numbers were not changed—and I acknowledge that that could happen—the other criteria in our test, which will be debated at Third Reading, will still apply. Therefore I flatly contradict the view that what we have done and what we have said to the noble Lord, Lord Puttnam, on the plurality test does not affect the issue of foreign ownership.

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

My Lords, I am grateful to the Minister for allowing me to intervene again. Is the noble Lord saying that the Government will go further than the amendment of the noble Lord, Lord Puttnam? There is no reference in that amendment to the "high quality" mentioned by the Minister. The only requirement in the amendment of the noble Lord, Lord Puttnam, is for balanced and impartial presentation of news and balanced presentation of comment. There is nothing about sufficiency of news or comment. It then goes on to refer to a wide range of voices. It mentions nothing about quality.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

Yes, my Lords. I am saying that we are going further than the amendment of the noble Lord, Lord Puttnam. I am saying that I have done my best in my contribution to the previous debate to set out the basis on which we will uphold the principles of plurality, with which we agree. I am saying that that is directly relevant to the issue of foreign ownership. A very much better argument needs to be brought forward for the paradoxical wish to retain national restrictions when these restrictions have to be shown to be damaging to the national interest.

I am saying to the House that it is in this country's national interest to have free trade. I am saying that it is in our interest to have investment to and from this country. I am saying that there is protection not only in the content regulations which are already part of the Bill, but there is additional protection in the amendments on plurality which will be introduced at Third Reading.

Photo of Lord McNally Lord McNally Liberal Democrat

My Lords, I appreciate the Minister's indignation, but the basic facts are that any of the American groups that will come calling—for example, Disney—would walk past the plurality test. If the Government tried to stop them, I suggest that the Prime Minister would be hauled over to Camp David and any objections would be removed.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, it is a good rhetorical trick to intervene into someone's peroration, is it not? A very good rhetorical trick.

I am saying that if Disney or Viacom or any such organisations want to enter this market they will have to meet the conditions we will set down in a plurality test, which will include the quality conditions and the commitment to a code of standards conditions. On that basis, I would argue that the House should not approve the amendment of the noble Lord, Lord Crickhowell, but should sustain the principle we unanimously supported in the previous debate on plurality.

Photo of Lord Crickhowell Lord Crickhowell Conservative

My Lords, I can be relatively brief because I am in the happy position that the Minister, for understandable reasons, prepared his speech before he heard mine. Virtually every point he made I had specifically dealt with in the course of my speech, except, perhaps, the last. On the last point, I can only say that I still do not believe it really makes a difference. If and when the company has passed the test and acquired, the question is whether regulation will be an effective weapon with which to defend one of the jewels in our broadcasting system.

I do not often find myself dealing with remarks made from my own Front Bench, but they are relatively easy here, too. My noble friend Lady Buscombe has simplified my task. She advanced only a single argument—one that she advanced at Second Reading—she did not speak in the Committee stage and she repeated her words from Second Reading this afternoon. I am not being difficult; they are useful words. I shall repeat them again so that we are all clear about them—

Photo of Baroness Buscombe Baroness Buscombe Conservative

My Lords, I am sorry to intervene, but I did speak in Committee. I confirmed and reaffirmed what I had said at Second Reading.

Photo of Lord Crickhowell Lord Crickhowell Conservative

Exactly, my Lords—my noble friend repeated what she had said at Second Reading. She said, in essence, that content is driven by consumer demand, not by ownership, and that because domestic programming is popular, it will be produced.

The noble Lord, Lord Bernstein, whose experience is probably second to none in this House, said something rather different in Committee:

"In the television world, the whole point of acquiring another company is distribution. If it increases distribution, it increases profits, as my noble friend Lady Jay of Paddington pointed out. If American companies bought English companies, we would get not greater inward investment but the sale of American programmes in this country".—[Official Report, 5/6/03; col. 1467.]

I share that view.

One sometimes wonders what to do when the Whips on both sides, and the principal opposition party, decide to march their troops into the Lobby with the Government. Should those who disagree with them press the issue to a vote? Perhaps it is inevitable that, in the face of those great forces, one will go down to defeat. I believe that I should press the amendment to a vote because I believe, for the reasons I have set out, that one of the greatest jewels of our broadcasting system is being put at risk. I think it is right that I should at least give those who, like me, feel that that is not something that we should support, the opportunity to express themselves. Therefore, I propose to press the amendment to a Division.

On Question, Whether the said amendment (No. 193) shall be agreed to?

Their Lordships divided: Contents, 116; Not-Contents, 127.

Division number 2 Private Parking: Ports and Trading Estates — Communications Bill

Aye: 114 Members of the House of Lords

No: 125 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Resolved in the negative, and amendment disagreed to accordingly.

Clause 340 [Modification of disqualification provisions]:

Photo of Lord Grenfell Lord Grenfell Other

My Lords, I should tell the House that if Amendment No. 194 is agreed to, I cannot call Amendments Nos. 195 or 195A.

[Amendments Nos. 194 and 195 not moved.]

Photo of Lord Tordoff Lord Tordoff Liberal Democrat

My Lords, I may be wrong, but I thought that the amendment had already been dealt with and put to the shout.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

moved Amendment No. 195A:

Page 295, line 8, leave out from "States);" to end of line 9 and insert "shall cease to have effect"

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

My Lords, in the communications White Paper, we proposed removing the ban on advertising agencies holding broadcasting licences. We did so on the grounds that we should prevent bodies from holding broadcasting licences only when there was a clear case for doing so. We took the view that any concerns that might arise could be met through the regulation of competition, including through the licensing regime and the operation of general competition legislation, such as the Competition Act 1998 and the Enterprise Act.

However, it is clear that many are concerned about that step and do not believe that sufficient safeguards exist to prevent abuse or, perhaps more importantly, the perception of a conflict of interest for an advertising agency that holds a broadcasting licence. We were particularly influenced by the recent correspondence that we have received from the Institute of Practitioners in Advertising—the IPA—which made it clear that the advertising industry itself is now opposed to the change.

We have considered all the representations carefully and have decided to amend the Bill through Amendments Nos. 193A, 195A and 238ZC, so as to restore the restrictions on advertising agencies holding broadcasting licences. In the light of our amendments, we consider Amendment No. 197 is unnecessary, but Amendment No. 241 completes the package. My noble friend Lord McIntosh has added his name to the amendment, and we shall be happy to accept it today. I beg to move.

Photo of Lord Grenfell Lord Grenfell Other

My Lords, I must warn your Lordships that if Amendment No. 195A is agreed to, I cannot call Amendments Nos. 196 or 197.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

My Lords, this may be out of order, and noble Lords may slap me down by all means, but I am not clear about the effect of Amendment No. 193A, since Amendments Nos. 193A and 195A are together. Amendment No. 193A says, "leave out line 6", which is the line that states that,

"the following shall cease to have effect".

If that line is being left out, the Government have restored the ban on foreign ownership.

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

My Lords, I assume that we will agree with the Government's proposal, but it is extraordinary to have that proposal without any explanation about how the Government came to put themselves in that position. There would have been total astonishment if anyone had suggested, before we started on this Bill, that the Government would propose that advertising agencies could own commercial television franchises. However, the Minister said that the advertising industry had decided that it did not want that.

The advertising industry never wanted the measure and was totally astonished that it was being put in. It came to the conclusion that it would produce great complications with conflicts of interest for the industry. That was an amazing mistake for the Government to make. Sometimes they get the bit between their teeth in the marketplace and forget about the consequences.

Photo of Baroness Buscombe Baroness Buscombe Conservative

My Lords, I shall be brief. I very much welcome these amendments. However, as I did not say anything on this point at Second Reading or in Committee, I am surprised that the Government have brought forward the proposal. As one who worked at the IPA some years ago, I was fully aware that members of the IPA are not allowed to have interests in the media. If they had such an interest they would have to resign. An important point about institutes such as the IPA is that they underpin self-regulation in the advertising industry. I therefore believe that to remove that restriction could be to erode that very important self-regulatory aspect of the advertising industry.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

My Lords, we accept the strictures of the noble Lord, Lord Thomson. However, there was a very full discussion in Committee, where it was generally felt that that was not a good thing to do. We took it away, thought about it and took further advice. We have now come back, and noble Lords have heard our position. I find that wholly admirable.

If I may, I shall write to the noble Lord, Lord Gordon, and try to clear up that issue—if there is an issue—well before Third Reading.

On Question, amendment agreed to.

Photo of Lord Grenfell Lord Grenfell Other

My Lords, as Amendment No. 195A is agreed to I cannot call Amendments Nos. 196 or 197. Is Amendment No. 198 not moved?

Photo of Baroness Buscombe Baroness Buscombe Conservative

My Lords, may I intervene at this point? It was made very clear to me this morning that we had tabled Amendment No. 196A so as to avoid any possibility of pre-emption.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, the manuscript amendment before us is Amendment No. 198A, in place of Amendment No. 198. Amendments Nos. 196 and 197 are indeed pre-empted.

Photo of Baroness Buscombe Baroness Buscombe Conservative

I apologise, my Lords.

[Amendment No. 198 not moved.]

Photo of Baroness Buscombe Baroness Buscombe Conservative 6:45 pm, 2nd July 2003

moved Amendment No. 198A:

Page 295, line 10, leave out subsections (2) and (3) and insert—

"( ) Paragraph 2 of that Part (disqualification for religious bodies) shall cease to have effect."

Photo of Baroness Buscombe Baroness Buscombe Conservative

My Lords, I apologise also for the late tabling of manuscript Amendment No. 198A, which is effectively a redraft of Amendment No. 196. It has been tabled to allow us to debate this extremely important issue, which would not otherwise have been possible following the acceptance of the previous group of amendments.

One of the most extraordinary and unwelcome elements of the Bill comes with the stance taken by the Government on religious broadcasting, as set out in Clause 340. Amendments Nos. 196, 198, 198A and 199—which we tabled and I shall speak to now—seek to remedy the blatant injustice found on the face of the Bill.

I am sure that over the course of this debate we shall hear many excellent arguments as to why religious groups should not be excluded as they currently are, and I shall not attempt to cover all the points here. The Minister knows as well as I do many of the issues concerning human rights, competition law, spectrum scarcity and unfulfilled demand, to name just a few, but I should simply like to tease out a few details to bring to his attention in the hope that it may generate a favourable response.

I begin with a quote from Mark Fisher in another place, former Parliamentary Under-Secretary of State in what was then the Department of National Heritage, now the Department for Culture, Media and Sport. He said:

"As Minister with responsibility for broadcasting, I was not satisfied with my officials' changing answers when I investigated the Christian broadcasters' disqualification. I believed in their democratic freedom to broadcast to the third of a million people who wrote and petitioned the Department, asking to be allowed to listen. The consumer need could easily have been met, if officials had allowed the Christian music broadcasters to use the additional national radio frequency from the Isle of Man.

"It was never a technical matter when I was Minister, I don't believe it is a matter of spectrum now. I believed then, and I believe now, that religious broadcasters should bid for national and local licences on a level playing field with other applicants".

The quote touches on a number of points on which I should appreciate responses from the Minister. Does the Minister appreciate that there is unfulfilled demand for religious broadcasting, and that by disqualifying religious groups, many would-be consumers are denied the right to appreciate the broadcast media that they demand? As Mr Fisher commented, a third of a million people petitioned the department on this issue. People want to listen to religious radio stations, but the Bill prevents them from doing so. An example will illustrate this.

Liberty AM Women's Radio, in London, is owned by religious people, resulting in its being disqualified from applying for a digital DAB licence. So, unlike other local radio licensees in the UK, it was denied an automatic rollover of its analogue licence. That resulted in its analogue licence being put out to tender last year. Liberty lost its licence, and this month it is having to shed the last of about 30 full-time jobs in east London. London is losing its only women's radio station. Therefore, Premier Radio is London's only remaining religious radio station. However, it faces a new hurdle, which is digital AM, or DRM.

I should like to ask the Minister whether Premier will be allowed to continue broadcasting on a 1305 DRM multiplex with, say, a gospel music programme, a classical and easy listening contemporary Christian music programme and a current affairs and phone-in live local talk station? Or will some of Premier's AM frequencies be a new casualty of the religious disqualification on DRM, just like Liberty on DAB?

The human rights aspect is ongoing. I wish to make only one brief point on that aspect of the debate. At Committee stage there was reference to a Mr Abdelfattah Amor, a rapporteur on religious freedom in the UN Human Rights Commission. The noble Lord, Lord Avebury, questioned why Mr Amor had not done something about the representations made to the commission by the United Nations Association, if he thought that the representations were valid. Subsequent to that remark, Mr Amor has been contacted and is requesting copies of all the UNA papers about the UK's disqualification of religious persons in broadcasting law. We wait and see what his conclusions shall be.

Mr Fisher also refers to the fact that, with better spectrum management, new spectrum could be made available so that the scarcity argument no longer applies. I understand that the Minister has received a copy of the Report on UK Radio Broadcasting Spectrum Availability from the Centre for Justice and Liberty, which persuasively sets down the opportunities available to the Government for making additional spectrum available and which is endorsed by a number of radio communications experts. Although I am unable to boast their level of expertise and experience in this field, as I understand it, several options are open to the Government which would create new spectrum availability.

Mr Fisher referred to the Isle of Man, which would have been the location of a transmitter site for an additional independent analogue frequency at 279 kHz, and has yet to be brought into use. Additionally, 225 kHz has been allocated to the United Kingdom as another possible national independent radio station. Moreover, technological advances make way for a host of opportunities. I am thinking in particular of Digital Radio Mondiale—DRM—which could double or even triple radio services on AM. The list goes on.

The long and the short of it seems to be that the Government's arguments on spectrum scarcity are severely flawed. What little water is held at present by this logic will certainly be eliminated in the future due to technological advances. As "future-proofing" is something we are striving to do with this Bill, I do not see why it should not apply here.

While I certainly do not believe that spare spectrum should automatically be allocated to religious broadcasters, surely they deserve the opportunity to bid for the licence alongside everyone else. Importantly, Ofcom could then exercise its discretion as to whether the bid has sufficient merit to warrant full consideration. It would be a level playing field for applications. Putting a disqualification on the face of the Bill is therefore both short-sighted, as spectrum scarcity is not a long-term problem, and draconian, as there are more than enough safeguards in place.

As we discussed at length in Committee, the Bill as it stands already ensures that fanatical organisations or those that are otherwise unfit to broadcast are prevented from being granted a licence, or have it removed if they broadcast unsuitable material. Indeed, if, following today's proceedings, we have included in the legislation a public interest test—effectively an additional layer—then to continue with a religious disqualification with that additional safeguard in place might underpin the claim that it could never be in the public interest to have religious broadcasting, and that is surely not the case.

It now seems doubly unacceptable to exclude religious groups and I hope that the Government will reconsider their stance in the light of this. The point is a matter of principle. As such it is not a matter of entering into negotiation on which type of licences religious groups should or should not be disqualified from. Religious groups should not have been disqualified from any type of licence, and the Government should now seek to rectify that.

I gather that the noble Lord, Lord Brennan, has not arrived. I suspect that he may not arrive in time given that he is in court in the Midlands. The noble Lord contacted me and other noble Lords to confirm that he continued to support the amendment notwithstanding that he was not able to be present. Noble Lords will recall that the noble Lord, Lord Brennan, made a very powerful speech in Committee which we believe was valid then and is valid now. The noble Lord talked much about democratic choice. Noble Lords might like to remember that as that is what the matter comes down to. It is about democratic choice and seeking a level playing field, at least as regards applications for licences. I beg to move.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop

My Lords, I support the amendments to which the noble Baroness, Lady Buscombe, spoke with such eloquence and conviction. I spoke in some detail on Second Reading and in Committee on the issues that the amendments raise. I shall not, therefore, repeat what I said in those debates save to emphasise that I recognise the constructive contribution and potential of the independent religious broadcasting industry.

As the noble Baroness, Lady Buscombe, indicated, independent religious broadcasters find themselves disadvantaged by the means of controlling licence allocation, which I suggest could be achieved in other ways. For example, there are strong content regulations which could be even further strengthened, as the committee chaired by the noble Lord, Lord Puttnam, recommended. Some of the more damaging and possibly unintended consequences could then be avoided, thereby removing the necessity for current disqualifications.

The Church has expressed concerns over several areas of the Bill and throughout its progress I have sought to bridge the gap in those areas between the Churches, the Government and the broadcasters. Indeed, I led a cross-party delegation to the Secretary of State to find a way forward on these religious issues. I have encouraged my colleagues to negotiate a solution and to find a consensus but up to now on this particular issue there has been no success. I am disappointed about that. But even though there may be a Vote on the amendment tonight, I still very much hope that the door will not be closed to further negotiations in the future. Indeed, I hope that such negotiations will have been made more possible by the debate we had earlier on the public interest plurality test. It is all the more necessary because independent religious broadcasters will now face yet another hurdle of regulation in the Bill under the public interest test.

In supporting the amendment, I look for the Minister's assurance that he will engage in discussions in the hope—this is my deep hope—that a solution may be brought to Third Reading.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, I, too, support the amendments in the group in the name of the noble Baroness, Lady Buscombe. Like the right reverend Prelate the Bishop of Manchester I had hoped—indeed, I still hope—that we would find an agreed solution to the issue of the remaining prohibitions on media licence ownership by those with a religious background. I hope that that can be achieved before Third Reading.

I had hoped that the acceptance in principle by the Government of the plurality public interest test would mean a preparedness by the Minister to accept the amendments of the noble Baroness, Lady Buscombe. If that had been the case, any potential applicants with a faith background would, in addition to the plurality public interest test, also have to abide by an additional religious regulation as to what form of religious broadcasting would or would not be acceptable. In other words a double hurdle would already be in place, and rightly so for those who wish to avoid the more extreme kinds of religious broadcasting sometimes found, for example, in the United States. But unless the Government accept the amendments of the noble Baroness, Lady Buscombe, those with a faith background applying for a licence would indeed face a triple jeopardy: public interest plurality test; specific religious requirements; and the prohibitions to licence ownership remaining in the Bill.

Surely that would mean there would be an even greater risk of human rights infringement than might have existed previously—notably those indicated by the pre-legislative scrutiny committee, the Joint Committee on Human Rights and the religious advisory committee of the UNA.

I had very much hoped that the noble Lord, Lord Brennan, would speak this evening. We have received a note expressing his sadness that he cannot be here. One of the points he wanted to stress that he still believed was that this continued disqualification is a breach of human rights.

In 1999 or 2000, I think, the then DCMS broadcasting Minister, Janet Anderson, was pleased to claim credit for the White Paper's commitment to allow religious broadcasters to apply for national analogue radio licences. One can well understand the frustration—indeed, the resentment—that those still prohibited must feel when that promise never materialised. They were never even invited to the consultations on the subject. If you add that to the fact that, as we have heard, considerable doubt has now been cast on the Government's fall-back argument—using the scarcity of spectrum availability as an excuse for not removing these restrictions—it must be clear that those still prohibited and the considerable potential audience who want to hear their programmes are being denied a right to practise their profession. As we know, they can apply for licences in other EU countries and, if granted, their programmes can often be heard in the UK. The only difference is that neither the licences nor those programmes are subject to the same rigorous public service broadcasting regulation that would be applied had they been allowed to practise their profession over here.

I very much hope that the Government will either change their mind or announce that they have always been of the same mind. I hope that they will remove these quite unnecessary restrictions on those with a religious faith background.

Photo of Lord Bragg Lord Bragg Labour

My Lords, I am very sympathetic to what the noble Baroness, Lady Buscombe, said, but I am rather puzzled by it. It seems to me that the religious voices in this country are very important indeed. They are massively important for many young people I know in terms of their own spirituality, whether or not they are churchgoers—and most of them are not. They are massively important for an enormous number of people who have faith, and that cannot be judged just by people who go to church on Sundays. People of very different religious faiths adhere to them extremely strongly.

It seems to me that in many areas of this country at the moment discussions are taking place through religion. It is unfortunate sometimes to use anecdotal evidence, but I heard a perfectly sensible BBC local radio programme the other morning. It lasted for about an hour. It was a phone-in about attitudes towards Muslims in this country, with a sensible young man taking the calls. It was all expressed in terms of religion. I was crying out for religious people on the programme or a religious channel where the matter could be expressed more fully and more richly and challenged in a way that would satisfy the people who were phoning in, most of whom were seeking information and enlightenment and not the argy-bargy which, sadly, occurred.

Religion is still one of the principal ways for many people to manage their lives. For many people in groups, communities and the country as a whole, it is a way to manage how they think that the community should go. Simply because we see some appalling examples in the United States of America, it does not mean that we should go that way. We do not go that way in many other areas of our broadcasting. The spectrum will be available soon, as the noble Baroness, Lady Buscombe, pointed out. Will the Minister give us some assurance that he will think again about the issue? As the right reverend Prelate the Bishop of Manchester said, the opening of the door would be extremely welcome.

We are dealing with something about which we are rather diffident in this country. We deal with it in subterraneous ways, but it is very important to us. We are dealing with a democracy of ideas, and are in danger of excluding a huge area and body of ideas that informs many people, some very consciously, some very effortfully, some unconsciously but it is still around. It would be dangerous, and a denial of their freedom to express their ideas, were we to shut the door firmly at this time. I hope that we can have some assurance that the matter will be looked at again.

Photo of Lord Chan Lord Chan Crossbench 7:00 pm, 2nd July 2003

My Lords, I also support the amendment. There are no local Christian radio licences granted outside London, and I would certainly like to tune into Christian radio in Liverpool and elsewhere on Merseyside. That is very important. The current disqualification on religious broadcasting, particularly Christian radio companies, means that there is a definite disadvantage to those of us who want to listen to Christian radio.

More than 70 per cent of people in the 2001 national census declared that they were Christian. Another 5.5 per cent declared that they were followers of other faiths. That is the majority of the country, so the matter is particularly important. I, too, am very puzzled as to why the disqualification has continued in regard to Christian radio stations applying for licences.

A large number of people—I understand that the number is 276,000—have sent petitions to the department asking for Christian broadcasting. Over many years, many constituency petitions have been laid before Parliament in another place, including those from the constituencies of the Prime Minister and other Cabinet Ministers. That shows at least some unmet public demand from people such as me throughout the country. If regulators or market conditions frustrate our quite legitimate demands for such services, this is the opportunity to put an end to that in Parliament. The Government could lift the ban.

In other countries in Europe, such as the Netherlands, religious radio stations have no difficulty at all applying for licences and receiving licences. Further afield, in New Zealand, a country with a much smaller population, there are several radio stations broadcasting with a Christian background. I hope that the Minister will accept the amendment.

Photo of Lord Elton Lord Elton Conservative

My Lords, back in the 1980s, I was for a time the Minister with responsibility at the Home Office for radio regulatory affairs. I am entirely persuaded that the argument on spectrum is short term and will rapidly fail. For the purposes of this debate, it should therefore be disregarded. However, a much bigger and more important issue is the way in which our society and the media that serve it developed over the previous century and into the current century. We have become an increasingly materialist and secularised society. That has been very much helped by the media.

Our children have lived through a whole series of revolutions, none of which were even on the horizon when I was a child. They lived through the credit card revolution. Noble Lords will remember that very damaging slogan:

"Take the waiting out of wanting", something that is a lesson and strikes a very valuable chord. Then we had the drugs revolution, which introduced a whole spectrum of new temptations against which children need to be armed not by humanist considerations, but by spiritual considerations. As the pressures have grown, so the availability of a spiritual dimension in our media has diminished.

The Bill is relegating, for the first time, any religious applicants for licence to a second class. There are the first-class secular applicants and the second-class spiritual applicants, which must be unacceptable not only from the spiritual point of view, but from the equality point of view of which I had hitherto thought that the Government were so very well seized.

It is a question of democratic choice, not only of Christian wishes. I speak as a Christian, and I am very open to that argument, but the question is about the whole range of spiritual belief. Other religions should not be locked out of this forum, thus making them in another respect minorities in our society. The proposal in the Bill is wholly bad, therefore.

An extraordinary product of the regime that we have already is that there is only one local religious Christian broadcasting company, and that is in the metropolis. Why should the South East be particular in that way? Why should a third hurdle be put up, as the noble Baroness, Lady Howe, eloquently put it, on the course over which any applicant has to go to get a licence?

The provision is targeted against an interest that it would benefit this country to encourage. I ask the noble Lord to think again about it. If not, I shall gladly go into the Lobby with my noble friend in support of her amendment.

Photo of Lord Puttnam Lord Puttnam Labour

My Lords, I shall briefly break my purdah to support the arguments that I have been hearing, particularly that of the noble Lord, Lord Elton. Successive governments have hidden behind spectrum scarcity as a way of not getting their heads around a difficult but very important issue.

I was on the "Today" programme this morning. I happened to be speaking immediately after the right reverend Prelate the Bishop of Southwark. I heard myself say on air, and I certainly believe it, that I had very little to add to what Tom Butler had just said because it made total sense. There are many mornings when, as I am in shower, I wish that the whole of the "Today" programme were "Thought for the Day", because it makes a lot more sense than anything that precedes or follows it.

We are talking about a marketplace of ideas. It would be extremely nice to think that the marketplace of ideas built around faith had as important a role to play as any other marketplace in the media spectrum.

Photo of Lord Hylton Lord Hylton Crossbench

My Lords, I apologise for not having been able to take part in earlier stages of the Bill. Of course, I am well aware that religious broadcasting in the United States has quite often earned itself a bad name. I do not think that the same phenomena are likely to repeat themselves in this country, given the very different nature of our religious culture and of the various faiths and religious groups here. I would have thought that there was a very strong case for further experiments in religious local radio broadcasts. The human rights case for them has been mentioned, and it seems to me to rest on freedom of expression as well as freedom of belief and religion. There should of course be ample opportunities for humanists to put their point of view, just as for religious believers. In today's world situation, many conflicts are raging or are liable to break out and inter-faith dialogue is particularly needed. I should have thought that religious broadcasting would provide a good opportunity for inter-faith dialogue to take place on the radio in a reasonably public manner. The right reverend Prelate the Bishop of Manchester made excellent points about content regulation and public interest tests. On all those grounds, I ask the Government to think again, perhaps to convene a working party on the subject and to explore the way forward.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, we have heard some passionate speeches about religion and religious broadcasting and the need for religion in our society. It so happens that, as an unbeliever, I do not agree with them but that is really not the point. The amendments and this part of the Bill are not about religious broadcasting; they are about a very limited restriction on the ownership of channels.

The fundamental point is that the Bill has—in direct contrast to what the noble Lord, Lord Elton, said—enormously increased the ability of religious organisations to operate radio and television channels. I am sure that the right reverend Prelate the Bishop of Manchester will confirm that, from our debates yesterday and with universal agreement, we refined and expanded the requirement on public service broadcasters to cover religious matters in their programming.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop

My Lords, I am indeed happy to confirm that I warmly welcomed that aspect of the religious remit within public service broadcasting and I recognise also that there has been a relaxation of the regulations in the area that we are debating. Other issues of course remain and the amendments seek to raise them.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

Indeed, my Lords, and I am trying to address those issues. I make it clear that the debate is not about religion or religious broadcasting; it is about a residual restriction on the ownership of certain—a very limited number of—channels, where there is still spectrum scarcity in relation to religious organisations.

Photo of Lord Elton Lord Elton Conservative

My Lords, I apologise for interrupting because I should probably know the answer but, when new channels become available, am I right in believing that they will not be subject to those restrictions?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, I am coming to the end of my speech rather than at its beginning but, yes, where there is no spectrum scarcity, licences are already available to religious organisations. When new spectrum becomes available, we can remove the ban by order. I believe that I could sit down on that point, couldn't I?

Photo of Baroness Buscombe Baroness Buscombe Conservative

That is fine, my Lords, because it foreshortens my response. This is a matter of principle. It is rather like the ITN debate, which involved saying, "It is okay in future but not quite right now". As the noble Lord, Lord Hylton, said, this matter is about freedom of expression, freedom of belief and democratic choice. If that were the case, why is there not discrimination in relation to other bodies on the grounds of spectrum scarcity?

I support all noble Lords who took part in this debate; all of them made such powerful speeches. I refer in particular to the right reverend Prelate the Bishop of Manchester, the noble Lords, Lord Bragg, Lord Chan, Lord Hylton and Lord Puttnam, the noble Baroness, Lady Howe, and my noble friend Lord Elton. Each of them supported the amendment, for which I am very grateful. We must agree to disagree with the Government. I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 198A) shall be agreed to?

Their Lordships divided: Contents, 115; Not-Contents, 99.

Division number 3 Private Parking: Ports and Trading Estates — Communications Bill

Aye: 113 Members of the House of Lords

No: 97 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Resolved in the affirmative, and amendment agreed to accordingly.

[Amendment No. 199 not moved.]

Clause 342 [Relaxation of licence-holding restrictions]:

[Amendment No. 199A not moved.]

Schedule 14 [Media ownership rules]:

Photo of Lord McNally Lord McNally Liberal Democrat 7:25 pm, 2nd July 2003

had given notice of his intention to move Amendment No. 200:

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 McNally Lord McNally Liberal Democrat

My Lords, in the light of the very important statement made by the Minister today about plurality and its effect on the Bill, I shall not move this amendment.

[Amendment No. 200 not moved.]

Photo of Lord Eatwell Lord Eatwell Labour

moved Amendment No. 201:

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

Photo of Lord Eatwell Lord Eatwell Labour

My Lords, in moving the amendment, I remind noble Lords of the declaration of interest that I made some time ago. I retabled the amendments that I first tabled in Committee because, sadly, there has been no response from the Government to the arguments made at that time.

Perhaps I may place the amendments in context. They concern the ownership of local digital multiplexes—the transmission platforms for the new local digital radio stations. Noble Lords will be aware that the Government regard digital radio as the medium of the future and have encouraged the commercial sector to invest heavily in transmission facilities, new stations and new programming. The commercial radio industry has responded by investing more than £100 million in those facilities, covering 85 per cent of the country. In contrast, the BBC's digital radio system covers only 65 per cent of the country.

Now that the industry has fulfilled the Government's policy goals, the Government have decided to kick it in the teeth by imposing a tighter regulatory regime than was the case when those investments were made. At present, there are no numerical limits on the number of multiplex licences that any one person may hold. The Government have produced no evidence whatever to suggest that that has been in any way against the public interest, yet they propose that a person may own only one local multiplex in a local coverage area.

As was pointed out in Committee, that fails to take account of an existing overlap between the multiplex serving Kent and the multiplex in London, which could prevent Capital Radio owning the multiplex in Kent, where it owns the heritage local radio service. The noble Lord, Lord Davies of Oldham, dismissed that case as "an anomaly" and, indeed, rested most of his argument on that. He declared that it was a,

"unique situation [that only affects London] . . . and is unlikely to be repeated".—[Official Report, 5/6/03; col. 1527.]

I regret to say that the noble Lord was wrong. Exactly the same situation holds in Scotland. The multiplexes in Ayr and Glasgow—both owned by the same company, which is also the heritage local radio company—also overlap. What does the noble Lord intend to do about this Scottish anomaly and any further anomalies that will occur once one looks far more carefully at the structure of the industry and, indeed, as more local multiplexes are licensed?

However, it is not the noble Lord's mistake in Committee on which this case rests. The questions relating to anomalies are not really the issue; it is the logic of the noble Lord's argument that is faulty. He argued that the Government sought to sustain plurality by restricting the ownership of transmission systems, in particular, in London. Referring to London, with our three local multiplexes, he declared:

"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".—[Official Report, 5/6/03; col. 1527.]

That was the noble Lord's argument. But he seems to have forgotten that the Government have already agreed that the restriction on local radio station ownership will obey the formula of 2 plus 1—that is, a minimum of two commercial owners in any one area, the "plus 1" being the BBC. Thus, the Government have accepted that there could be two providers of local programming and that that would ensure plurality. Yet the noble Lord wants three owners of transmission mechanisms; I repeat: two stations producing the programmes and three owners of transmission mechanisms. Why? That is a nonsense. It is the programming that matters and not the transmission systems, but the noble Lord wants more transmission systems than local owners.

My amendments would allow any one owner to own up to two multiplexes in one area. In other words, I entirely accept a restriction in the currently unrestricted environment, but it is one that applies to two owners in one area. Remarkably, this simple amendment solves at one stroke both the anomaly in Kent and London and that north of the Tweed, and it makes the regulation of transmission ownership consistent with the regulation of station ownership. Acceptance of my amendments would also suggest that the Government are not reneging on their previous commitment to invest in digital services.

I hope that the noble Lord will now see the logic of accepting my amendments or, at the very least, that he will agree to meet me before Third Reading to discuss these matters. I beg to move.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 7:30 pm, 2nd July 2003

My Lords, it goes without saying that if I fail to persuade my noble friend to agree with the argument I am about to present—and I start in a non-too-optimistic vein—I shall be delighted to meet him after the completion of this stage of the Bill in order to see if we can make further progress. However, I hope that I can explain to him and to the House better than I appear to have done in Committee why the Government take the position they do.

I readily acknowledge the strength of my noble friend's case in stating that there has been a significant investment in the industry; £100 million to date. I paid due tribute on the previous occasion and I agree that with that investment the UK leads the world in this area. That is a real achievement and we would not want in any way, shape or form to put that investment in jeopardy or to deter further investment.

We support further investment in digital radio in the UK. With his great knowledge of the industry, my noble friend will have recognised that we have amended the Bill so as to extend by four years the period during which a multiplex licence can be automatically renewed. That is a recognition of the investment that has been made. But the main support has been through the significant changes we are introducing to the analogue radio market. The industry has frequently, and rightly, pointed out that it can only support the development of digital radio through its profits from its analogue services. As everyone is aware, we have taken enormous steps to liberalise the ownership rules for local and national radio. This should enable consolidation, better services, greater efficiencies and greater profits. This, in turn, enables the industry to increase the necessary digital investment.

However, the support for further development must also be balanced with the need to ensure that there are adequate ownership rules, so as to encourage plurality. This is as important for multiplexes as it is for the radio services themselves.

A local radio multiplex is the means by which terrestrial digital radio services are broadcast to an area and can carry up to 10 programme services. The multiplex owner is the gatekeeper. He plays a crucial role, as he is entirely responsible for selecting which services the multiplex carries, subject to the requirement not to discriminate between service providers. It is a position of considerable influence.

In addition to this, we propose to bring forward an order made under Schedule 14 to the Bill under which the multiplex operator would be able to own up to 55 per cent of the services broadcast on a multiplex—five services on a multiplex of 10—regardless of whether he owned the multiplex in question.

The media ownership rules are concerned with plurality, and a need to avoid too much influence falling into too few hands. We clearly need some plurality rules in this area. The question—and it is the issue between us—is what is an appropriate level of intervention. We have aimed to make the rules as light as possible consistent with the need to maintain a minimum level of plurality. We have therefore decided that there should be no limits to the total number of local radio multiplexes in the United Kingdom that any one person can hold. There is only one restriction on local multiplex ownership—that no one can hold two overlapping multiplexes, although I recognise the point which my noble friend made in respect of the Kent and London overlap.

The licences in Scotland have already been awarded under the existing rules and we are introducing those rules for the future and can amend them by order in the future. The situation will not arise again under the current rollout of digital. I acknowledge that on the previous occasion I quoted the single English exception to the position. My noble friend has rightly drawn to my attention that, in all honesty, I ought to have mentioned the fact that it was an exception in Scotland.

As regards intervention, we are making the rules as light as possible. We therefore maintain that if circumstances change the Bill allows us to change the ownership rules. My noble friend will recognise that we are in the early phase of the digital rollout. I can assure him that in no other case will three multiplexes be licensed to one owner. If more spectrum is made available for digital radio, it is unlikely to be earlier than 2007. I believe that the introduction of new spectrum would be the appropriate time to consider relaxing the multiplex ownership rules, but not now.

My noble friend, with his usual eloquence, has made a powerful case. I realise that he still has points of difference with the Government over this matter. I am merely saying that, within the framework of the Bill, we will have flexibility to adjust the situation in future, but we are striking a balance between the need for the necessary investment and the needs of the wider community for proper plurality.

Photo of Lord Eatwell Lord Eatwell Labour

My Lords, before my noble friend sits down, will he answer the point that in London the Government have already agreed that there can be a minimum of two owners of radio stations, ensuring plurality, yet he wants there to be three multiplex owners? How does the fact that there are three transmission systems add to the plurality when you can have two owners of programmes?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, it looks as though my noble friend is no more enthusiastic about the argument I have presented on this occasion than he was in Committee. I therefore unreservedly acknowledge the fact that we have some issues to discuss and I should be pleased to hold that meeting with him before Third Reading.

Photo of Lord Eatwell Lord Eatwell Labour

My Lords, I am grateful to my noble friend for his reply. It is not quite what I hoped for. I hoped that the irrefutable logic of my arguments would penetrate the Government's carapace of defence. However, we will have a meeting about the issue when I hope that his attempt to defend the indefensible will be effectively exposed and the Government will realise that they have made a bit of a mess of this issue.

In the meantime, looking forward to that meeting, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 202 not moved.]

Clause 343 [Restrictions relating to nominated news providers]:

[Amendments Nos. 203 and 204 not moved.]

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

[Amendment No. 205 not moved.]

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendment No. 205A:

Page 305, line 9, at end insert—

"( ) The matters to which OFCOM must have regard in determining for the purposes of this section the character of a local sound broadcasting service, include, in particular, the selection of spoken material and music in programmes included in the service."

On Question, amendment agreed to.

[Amendments Nos. 206 and 207 not moved.]

Clause 350 [Meaning of "control"]:

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, in moving Amendment No. 207A I refer also to the other amendments in this group. We had a substantive debate on these issues in Committee. I beg to move.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

My Lords, having moved an amendment in Committee, I very much welcome the fact that the Government have withdrawn these two subsections which were, for me at least, the ones which were causing a problem. Therefore, I am grateful to the Government.

Photo of Lord Eatwell Lord Eatwell Labour

My Lords, I repeat the declaration of interest I gave earlier. Noble Lords have no idea what pleasure it gives me to say how pleased I am to support this government amendment. I am grateful that the Government have removed the burdensome subsections which previously existed in Clause 350.

Perhaps I may raise one issue with the Minister. All the weight now falls on subsection (4), which states that Ofcom is required to,

"publish guidance setting out their intentions concerning the inclusion of particular matters in the matters that they will take into account when determining whether a person has control of a body".

Given that we do not know what Ofcom may settle on as matters that it will take into account, can the Minister confirm that it is the Government's intention that the onerous conditions previously contained in subsections (2) and (3), which the Government rightly want to delete, could not be reinstated by Ofcom in the form of its guidance in future?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, Ofcom will have due regard to our deliberations at various stages during the passage of the Bill. It is also the case that it will recognise that statements and concessions made in the Chamber are there to govern the nature of the code which they must develop. Earlier today I desperately sought, unsuccessfully, to avoid an amendment to the Bill on the very grounds that Ofcom would have regard to the nature of the code which it would draw up, and that also applies in this case.

I am grateful for the support of my noble friends and for the re-establishment of old relationships in the passage of the Bill.

Photo of The Countess of Mar The Countess of Mar Crossbench

My Lords, I must apologise to the House. I should have informed the House that if Amendment No. 207A is agreed to, I cannot call Amendments Nos. 208 and 209.

On Question, amendment agreed to.

[Amendments Nos. 208 and 209 not moved.]

Clause 351 [Annual factual and statistical report]:

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage) 7:45 pm, 2nd July 2003

moved Amendment No. 209A:

Page 307, line 37, at end insert—

"( ) the extent to which any guidance given by OFCOM under section 307 has been followed during that period;"

On Question, amendment agreed to.

Clause 352 [Grants to access radio providers]:

Photo of Viscount Falkland Viscount Falkland Liberal Democrat

moved Amendment No. 210:

Leave out Clause 352 and insert the following new Clause—

"GRANTS TO COMMUNITY MEDIA

(1) OFCOM shall make such payments as they consider appropriate to a fund established under this section, to be known as the Community Media Fund.

(2) The Fund shall be under the management of a body established for the purposes of this section, which shall be called the Community Media Foundation.

(3) The Community Media Foundation shall consist of—

(a) a chairman appointed by OFCOM, and

(b) such number of other members appointed by OFCOM, not being less than four nor more than eight, as they may from time to time determine.

(4) The Fund may be applied by the Foundation in the making of grants for—

(a) the establishment and development of community media,

(b) the making of programmes to be carried by community media,

(c) the training of persons connected with community media,

(d) the provision of support services to community media,

(e) other related purposes.

(5) When making any grant out of the Fund in pursuance of subsection (4) the Foundation may impose such conditions as they think fit, including conditions requiring the grant to be repaid in certain circumstances.

(6) The Foundation shall perform their functions under this section with respect to the making of grants out of the Fund in such manner as they consider will secure a range and diversity of community media throughout the United Kingdom, taking account of the greater needs of areas and localities which are economically disadvantaged.

(7) OFCOM shall so exercise their power under subsection (3) to appoint the members of the Foundation as to secure that a majority of the members are persons who appear to them to represent a broad range of knowledge and experience of community media.

(8) In this section— "community media" means communications services provided primarily for the benefit of members of the public in a defined geographical locality or in a particular community and not operated by the BBC or for commercial purposes.

(9) In subsection (8)— "communications services" includes—

(a) radio and television broadcasting;

(b) electronic communications networks and services; and

(c) content services carried by services falling within paragraphs (a) or (b)."

Photo of Viscount Falkland Viscount Falkland Liberal Democrat

My Lords, Amendment No. 210 deals with community media services and the funding thereof and sets out a new clause to put the community media fund into the Bill as a primary legislative provision. That would give the fund a similar status to that of the Gaelic media service.

As noble Lords will realise, an important principle of any funding of community media should be at arm's length from Government and from the regulator in order to maintain editorial independence. That is necessary to avoid any funding mechanism becoming an additional tool of regulatory intervention. The arrangements in the amendment are the same as for the Gaelic media service. It proposes five purposes to which the fund should or could be applied:

"(a) the establishment and development of community media,

(b) the making of programmes to be carried by community media,

(c) the training of persons connected with community media,

(d) the provision of support services to community media,

(e) for other related purposes.

There is considerable experience now in various countries of funds of this kind, which play a vital role in sustaining and developing community media services without being the sole source of finance. Community media in those cases benefit from funding from a variety of sources which include local business, groups of listeners and public sources. These approaches have been shown to be successful in many of the regulatory environments in the world, which include Canada, the United States, Australia and so forth.

The advice that we are given is that the fund would contribute to up to 40 per cent of the cost, depending upon the need and size of the operation. The fund will be available for development costs, which include capital costs, and perhaps operating costs at a later stage as we see the emergence of various media services. When they begin to settle down one will see a shift from development costs to operating costs.

One of the challenges of a cross-media community fund is to strike the right balance of support between the different kinds of media service. Conventional wisdom at present is that television costs for community purposes are about three or four times higher than for radio. However, this whole area of communication involving electronics moves very quickly, as many noble Lords who may have invested in such areas will know, either to their benefit or their cost.

Evidence is now before us that developments recently in community television have brought the costs down to a level comparable to that of community radio. Indeed, I received a letter from a director of a community radio organisation who stated that 2.4 GHz technology is being used in universities and various small communities because the range is limited in that particular part of the spectrum. They have provided work experience for many people, in particular graduates, who as a result have moved on to employment in the broader industry. They have devised the means to communicate effectively in television as cheaply as radio.

This is an important amendment which deals not just with the situation as it exists now but takes account of the changes which are taking place and are likely to take place. I beg to move.

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

My Lords, the amendment would replace the existing clause concerning grants for access radio with a new clause that would establish a community media fund to be administered by a foundation appointed by Ofcom. The foundation would make grants to support community media projects, giving particular priority to economically disadvantaged areas.

We have already discussed similar amendments. We cannot support the extension of the access fund to all community media projects. We all know that running a television channel is much more expensive than running a radio station. If we fund radio, television and Internet with the same pot of money it is unlikely that we would be able to secure sufficient grants for each project. The result of spreading our resources so thinly could well be that we fail to gain any benefit from the scheme.

In addition, I hardly think that the sums of money likely to be available will justify the degree of bureaucracy that the amendment would entail. In order to maximise the proportion of the available funds that reach the stations and avoid frittering them away on excessive administration, it is better for Ofcom to administer any funds directly.

As we have made clear throughout our debate on the subject, the Government view the growth of local media operations as a positive and important development, but it is one that must be managed carefully. Let us try to secure sufficient funds to make a success of access radio before we consider what should be the next step. I hope that the noble Viscount, Lord Falkland, will withdraw his amendment.

Photo of Viscount Falkland Viscount Falkland Liberal Democrat

My Lords, I thank the Minister for his thorough reply and understand what he said. That will be disappointing to many who are working hard to develop community television, in particular. They will feel that the ability to fund those developments is not running apace with their technology. I understand the Minister's view, and will return to those who briefed us on the amendments, who will clearly have something to say. They will read carefully what the Minister said. I reserve the right to return to the matter at the next stage, if necessary. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 15 [Amendments of Broadcasting Acts]:

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendments Nos. 210A and 210B:

Page 437, line 12, leave out from "fees)," to end of line 16 and insert "the words from "and the amount" onwards shall be omitted."

Page 447, line 10, leave out from "fees)," to end of line 14 and insert "the words from "and the amount" onwards shall be omitted."

On Question, amendments agreed to.

[Amendments Nos. 211 and 212 not moved.]

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendment No. 212A:

Page 458, line 18, at end insert—

"( ) In paragraph 1(6) of Part 1 (meaning of "more than a 20 per cent. interest"), for "20 per cent.", wherever occurring, there shall be substituted "5 per cent."."

On Question, amendment agreed to.

[Amendment No. 213 not moved.]

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendments Nos. 213ZA, 213A and 213B:

Page 461, line 12, leave out from "fees)," to end of line 16 and insert "the words from "and the amount" onwards shall be omitted."

Page 463, line 36, at end insert—

"( ) for "a multiplex licence", in each place, there shall be substituted "a television multiplex service or a general multiplex service";

( ) for "the multiplex service to which the licence relates", in each place, there shall be substituted "that multiplex service";"

Page 464, line 40, at end insert "; and

(b) for "a multiplex licence" there shall be substituted "a television multiplex service or a general multiplex service"."

On Question, amendments agreed to.

[Amendments Nos. 214 to 216 not moved.]

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendments No. 216ZA, 216A, 216B, 216C and 216D:

Page 471, line 6, leave out sub-paragraph (4) and insert—

"( ) In subsection (2), sub-paragraph (ii) of paragraph (b) and the word "or" immediately preceding it shall be omitted.

( ) In subsection (3) (fixing of fees), the words from "and the amount" onwards shall be omitted."

Page 474, line 28, leave out paragraph 116 and insert—

"116 (1) Section 56 of the 1996 Act (multiplex revenue) shall be amended as follows.

(2) In subsection (1)—

(a) for "section 55(1)" there shall be substituted "this Part";

(b) for "the holder of a national radio multiplex licence" there shall be substituted "the person who is the multiplex provider in relation to a national radio multiplex service";

(c) in paragraph (a)(i), "to which the licence relates" shall be omitted;

(d) in paragraphs (c) and (d), for "the holder of the radio multiplex licence" there shall be substituted "the multiplex provider".

(3) In subsections (2) to (8)—

(a) for "the holder of the radio multiplex licence", "the licence holder" and "the holder of the multiplex licence", wherever occurring, there shall be substituted, in each case, "the multiplex provider"; and

(b) for "the Authority", wherever occurring, there shall be substituted "OFCOM".

(4) In subsection (9)—

(a) for "a national radio multiplex licence", in each place, there shall be substituted "a national radio multiplex service";

(b) for "the radio multiplex service to which the licence relates", in each place, there shall be substituted "that radio multiplex service";

(c) after the definition of "additional services provider" there shall be inserted—

"'multiplex provider'—

(a) in relation to a national radio multiplex service for which a person holds a licence under this Part, means the licence holder; and

(b) in relation to a national radio multiplex service which is not licensed under this Part, means the person who provides that service.""

Page 474, line 32, leave out paragraph 117 and insert—

"117 (1) Section 57 of the 1996 Act (attribution of radio multiplex revenue) shall be amended as follows.

(2) In subsection (1)—

(a) for "the holder of a national radio multiplex licence" there shall be substituted "the person who is the multiplex provider in relation to a national radio multiplex service"; and

(b) for "the holder of the national radio multiplex licence" there shall be substituted "the multiplex provider".

(3) In subsection (2), for "the holder of the radio multiplex licence", wherever occurring, there shall be substituted "the multiplex provider".

(4) In subsection (3)—

(a) for "the Authority" there shall be substituted "OFCOM"; and

(b) for "the holder of the national radio multiplex licence" there shall be substituted "the multiplex provider".

(5) In subsection (4)—

(a) after "'additional services provider'" there shall be inserted ", 'multiplex provider'"; and

(b) for "a national radio multiplex licence" there shall be substituted "a national radio multiplex service"."

Page 476, line 7, at end insert—

"( ) In subsection (4), for the words from "national radio multiplex service" onwards there shall be substituted "relevant multiplex service, means the last accounting period of the multiplex provider".

( ) In subsection (5)—

(a) for "national radio multiplex service" there shall be substituted "relevant multiplex service";

(b) for "holder of the national radio multiplex licence" there shall be substituted "multiplex provider"; and

(c) for "the radio multiplex service" and "that radio multiplex service" there shall be substituted "that relevant multiplex service".

( ) After subsection (5A) (inserted by Schedule 13) there shall be inserted—

"(5B) For the purposes of this section, a service is a relevant multiplex service if it is—

(a) a national radio multiplex service;

(b) a television multiplex service; or

(c) a general multiplex service.

(5C) In this section, "multiplex provider"—

(a) in relation to a national radio multiplex service, means the multiplex provider within the meaning of section 56; and

(b) in relation to a television multiplex service or a general multiplex service, means the multiplex provider within the meaning of section 14.""

Page 476, line 31, at end insert—

"( ) In subsection (4), for "national radio multiplex service" there shall be substituted "relevant multiplex service".

( ) In subsection (5), for the words from "national radio multiplex service" onwards there shall be substituted "relevant multiplex service, means the last accounting period of the multiplex provider".

( ) In subsection (6)—

(a) for "national radio multiplex service" there shall be substituted "relevant multiplex service";

(b) for "holder of the national radio multiplex licence" there shall be substituted "multiplex provider"; and

(c) for "the radio multiplex service" and "that radio multiplex service" there shall be substituted "that relevant multiplex service".

( ) After subsection (6A) (inserted by Schedule 13) there shall be inserted—

"(6B) For the purposes of this section, a service is a relevant multiplex service if it is—

(a) a national radio multiplex service; or

(b) a general multiplex service.

(6C) In this section, "multiplex provider"—

(a) in relation to a national radio multiplex service, means the multiplex provider within the meaning of section 56; and

(b) in relation to a general multiplex service, means the multiplex provider within the meaning of section 14.""

On Question, amendments agreed to.

Clause 354 [Meaning of "available for reception by members of the public"]:

Photo of Baroness Buscombe Baroness Buscombe Conservative

moved Amendment No. 217:

After Clause 354, insert the following new clause—

"REVIEW OF OFCOM'S DECISIONS UNDER PART 3

(1) It shall be the duty of OFCOM to establish a procedure for the review of its decisions made—

(a) under sections 211, 212, 213, 214, 216, 217, 218, 219, 229, 224, 225, 232, 233, 234, 235, 236, 247, 249, 250, 251, 322 and 325;

(b) pursuant to the procedures set out in section 318 for the handling of complaints about the observance of standards set out under section 312;

(c) under Part 5 of the Broadcasting Act 1996 (c. 55).

(2) Before establishing a procedure under subsection (1) OFCOM must publish, in such manner as they think fit, a draft of the proposed procedure.

(3) After publishing the draft procedure, and before establishing it as the review procedure for those decisions mentioned in subsection (1), OFCOM must consult every person who holds a relevant licence and such of the following as they think fit—

(a) persons appearing to OFCOM to represent the interests of those who watch television programmes;

(b) persons appearing to OFCOM to represent the interests of those who make use of teletext service; and

(c) persons appearing to OFCOM to represent the interests of those who listen to sound programmes.

(4) If it appears to OFCOM that a body exists which represents the interests of a number of the persons who hold relevant licences, they may perform their duty under subsection (3) of consulting such persons, so far as it relates to the persons whose interests are so represented, by consulting that body.

(5) Where OFCOM establishes a procedure under subsection (1) they must publish the procedure 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 procedure." .

Photo of Baroness Buscombe Baroness Buscombe Conservative

My Lords, Amendment No. 217 would insert a new clause after Clause 354 requiring Ofcom to establish an internal review procedure for certain decisions that it makes under Part 3. As the Bill stands, no appeal or review mechanism exists in respect of Part 3 decisions, except where Ofcom exercises any of its Broadcasting Act 1996 powers for a competition purpose—in which case there may be an appeal to the Competition Appeals Tribunal. That is despite the fact that a statement was made in the communications White Paper promising,

"appropriate review procedures within the regulator", in respect of such decisions.

Broadcasters and consumers are therefore left with judicial review as their only route of appeal or review of Part 3 decisions. That is unsatisfactory, primarily because of the limited grounds on which decisions can be judicially reviewed. Unlike appeals to the Competition Appeal Tribunal under Part 2, which can revisit the merits of the decision, judicial review considers only the way in which decisions were made.

The Joint Committee on Human Rights expressed reservations in its fourth report of 2002–03 about possible breaches of Article 6 of the European Convention on Human Rights in the procedures set out for the making of Part 3 decisions. It stated that judicial review was unlikely to provide an effective remedy, because the subjective nature of Ofcom's judgment would make it difficult to assess the quality of the decision unless it was wholly irrational. Furthermore, judicial review proceedings are extremely expensive, and therefore inaccessible to many affected parties, even where judicial review might otherwise be appropriate.

In Committee, the noble Lord, Lord Davies of Oldham, confirmed the Government's view that the matter should be resolved in the High Court under judicial review and not by an independent appeals tribunal, drawing a distinction between Part 2 and Part 3 decisions. That was a disappointing response. Hence, we have tabled an amendment proposing a statutory commitment on Ofcom to consult on and establish an internal review procedure for dealing with appeals. A review of Ofcom's decisions by an internal Ofcom panel, as envisaged by the White Paper, would obviously also lack the necessary independence and impartiality to satisfy Article 6 requirements, but has the considerable advantage that it would be far cheaper and faster than proceedings in the High Court, and would therefore be a more accessible remedy for broadcasters and consumers alike.

The Government wrongly believe that the general statutory obligations on Ofcom as a regulator to act efficiently and transparently, coupled with the requirements of the European Convention on Human Rights, should be sufficient. Although accepting that Ofcom will need to move towards the establishment of an internal review process of sorts over time, the amendment is intended to ensure that there is a statutory, and therefore orderly and transparent, process for its introduction in the Bill. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, decisions under Part 5 of the Broadcasting Act 1996 relating to complaints about fairness and privacy require Ofcom to adjudicate on complaints. There is no statutory provision for review or appeal. For the review procedure in the amendment to operate, it would be necessary to make it clear where that fits in to the procedures set out in detail in the 1996 Act. Indeed, an appropriate mechanism would need to be devised in relation to each of the provisions listed in the amendment. Some of those already include procedures to ensure that broadcasters have a full opportunity to make representations.

Clause 236, for example, dealing with action against licence holders who incite crime or disorder, requires Ofcom to serve notice on the broadcaster of its intention to revoke the licence, detailing the reasons. A period of 21 days is then allowed before the licence can be revoked and the licence holder must be informed of his right to make representations. The notice of revocation then requires a further period of at least 28 days before it can take effect. That seems a very fair process. Introducing an element of internal review of the decision would need to be woven into that procedure and could not effectively be achieved using the blanket approach of the amendment.

Similarly, in relation to complaints about standards, we expect broadcasters to have in place appropriate arrangements for handling complaints, as required under Clause 318(1)(b). Although Ofcom has yet to establish its own procedures for handling complaints, as required under Clause 312(2), the opportunity of complaining to Ofcom or an Ofcom-appointed body if a viewer or listener is not satisfied with the broadcaster's response, or if the matter is serious, already offers a second tier of consideration. A further tier by way of internal review, as proposed in the amendment, is likely in most cases to be a waste of time and money—that is broadcasters' money.

I shall not examine each of the clauses referred to in the amendment, some of which do not in fact involve executive decisions by Ofcom at all. I do not deny that there may be cases where some form of internal review would be appropriate. That can be established without specific statutory provision—for example, by Ofcom adopting the procedure, in appropriate cases, of indicating that it is minded to reach a certain decision and providing for further representations, perhaps to a separate internal committee. I understand that such a procedure is already under consideration by Ofcom in relation to fairness and privacy complaints. We believe that treating the matter case by case is the best approach.

Very able people have been appointed to Ofcom. They have experience of regulation from both the industry and the regulator's perspective. They are perfectly able to recognise the need to be seen to be acting fairly and be willing, when appropriate, to reconsider matters before reaching a final decision. The need to ensure that Ofcom's decisions are legally robust—when rights are engaged under Article 6 of the ECHR, for example—is also an important consideration for them.

In short, these amendments would not achieve their aim and, fundamentally, the requirements for such a wide-ranging internal review of Ofcom's decisions could turn out to be a disproportionate and unnecessary exercise in many cases. This matter should not be included in primary legislation and I hope that the amendment will not be pressed.

Photo of Baroness Buscombe Baroness Buscombe Conservative 8:00 pm, 2nd July 2003

My Lords, I thank the Minister for his response. I found some of his comments comforting. I entirely accept what he said about the competence of Ofcom, and those who have been appointed to the board of Ofcom, to deal with important and serious issues. The Government have offered a helpful example: that they are already minded to set up some form of ad hoc committee to consider certain issues.

Perhaps a case-by-case approach is a good thing but, on the other hand, there is a real concern that unless a statutory safeguard is included in the Bill the concerns of some individuals may too easily be overridden. In that case, the only real resort at the end of the day would be to judicial review, which, as I said when I spoke to the amendment, would frankly be too expensive and too difficult. If I can be so bold, a lot of people would not have the confidence to seek a judicial review. It would deter most individuals from seeking recompense for what they believe to be a real grievance.

I want to consider carefully what the Minister has said today, and also to talk to those with whom we have been in discussion about the matter—including the CBI. I will reserve my thoughts about whether we should return to this matter on Third Reading, but for now, I beg leave to withdraw the amendment.

Photo of The Bishop of Manchester The Bishop of Manchester Bishop

My Lords, before the noble Baroness, Lady Buscombe, sits down, perhaps I may be allowed to add to the CBI, which she mentioned. The Churches are also deeply concerned about this matter. I am very sorry that I was not here for the beginning of the debate. I was enjoying a Lancashire hotpot as befits the Bishop of Manchester.

Photo of Baroness Buscombe Baroness Buscombe Conservative

My Lords, I am very grateful to the right reverend Prelate the Bishop of Manchester. Indeed, I was upstairs on the telephone to my children and almost missed the amendment altogether because time and the business are moving on.

Amendment, by leave, withdrawn.

Clause 355 [Interpretation of Part 3]:

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendments Nos. 218 to 221:

Page 310, line 45, leave out "(except in the expression "digital additional sound service")"

Page 311, line 14, at end insert—

""the BBC Charter and Agreement" means the following documents, or any one or more of them, so far as they are for the time being in force—

(a) a Royal Charter for the continuance of the BBC;

(b) supplemental Charters obtained by the BBC under such a Royal Charter;

(c) an agreement between the BBC and the Secretary of State entered into (whether before or after the passing of this Act) for purposes that include the regulation of activities carried on by the BBC."

Page 314, line 13, leave out "or"

Page 314, line 14, at end insert—

"(g) a digital additional television service or a digital additional sound service,"

On Question, amendments agreed to.

Photo of Lord McNally Lord McNally Liberal Democrat

moved Amendment No. 222:

After Clause 365, insert the following new clause—

"DUTY TO ESTABLISH AND MAINTAIN COMPETITION PANEL

(1) It shall be the duty of OFCOM, in accordance with the following provisions of this section, to exercise their powers under paragraph 14 of the Schedule to the Office of Communications Act 2002 (c. 11) (committees of OFCOM) to establish and maintain a committee to be known as "the Competition Panel".

(2) The Competition Panel shall have such functions as OFCOM, in exercise of their powers under the Schedule to the Office of Communications Act 2002, may confer on the Panel.

(3) The functions conferred on the Panel must include, to such extent and subject to such restrictions and approvals as OFCOM may determine—

(a) to advise OFCOM on the exercise of its functions under section 364,

(b) to give an opinion to OFCOM on guidelines and decisions which OFCOM propose to adopt in the exercise of OFCOM's functions under section 364, including as to whether OFCOM or the Office of Fair Trading should investigate.

(4) The Competition Panel shall as soon as practicable after the end of each calendar year make to the chairman of OFCOM a report on its activities during that year which shall be published by OFCOM.

(5) The Competition Panel shall consist of—

(a) a chairman appointed by OFCOM; and

(b) such number of other members appointed by OFCOM as OFCOM think fit.

(6) The chairman of the Competition Panel must be a non-executive member of OFCOM but is not to be the chairman of OFCOM.

(7) In appointing a person for the purposes of subsection (2)(b), OFCOM must have regard to their expertise in the area of competition law or economics (or both).

(8) The Competition Panel must include at least one member who is a member of the Board of the Office of Fair Trading.

(9) Before appointing a person to be the chairman or another member of the Competition Panel, OFCOM must satisfy themselves that he will not have any financial or other interest which would be likely prejudicially to affect the carrying out by him of any of his functions as chairman or member of the Competition Panel.

(10) A person is not to be taken to have such an interest by reason only that he is or will be a member or employee of OFCOM.

(11) Every person whom OFCOM propose to appoint to be the chairman or another member of the Competition Panel, shall, whenever requested to do so by OFCOM, furnish OFCOM with any information they consider necessary for the performance of their duty under subsection (9)."

Photo of Lord McNally Lord McNally Liberal Democrat

My Lords, my noble friend Lord Razzall was approached by Freeserve, which is the UK's largest Internet service provider with close to 2.7 million customers. It is a wholly-owned subsidiary of Wanadoo, the Internet services division of France Telecom.

It felt hard done by by Oftel, which it believed had not been particularly robust in applying competition law in the telecoms and related industries. Therefore, Freeserve lobbied my noble friend who, rather than staying to put the amendment to the Minister, has gone off to a delicious dinner.

This is a probing amendment. It would not add another bauble to the Ofcom tree or any more expense to Ofcom's operation. However, there is a serious point here: that large and important company felt that Oftel had failed to apply its powers under the Competition Act and therefore argued strongly that Ofcom should be much more on the ball in such matters. One of the reasons why it felt that Oftel had been slack was that it had failed to generate sufficient knowledge and expertise among its own staff. Freeserve therefore put forward the idea of a competition panel for Ofcom, furnishing it with both the internal expertise and the external advice it needed to act in those areas in a way that it felt that its previous regulator, Oftel, had failed to do. I beg to move.

Photo of Baroness Buscombe Baroness Buscombe Conservative

My Lords, there is a real risk that, without due care and attention, the interests of the business community, without whom we would not have televisions, mobile phones or radios, will be overlooked by Ofcom, which will have to juggle and prioritise a large number of voices competing to have their case heard. Many of those voices have institutionalised representation in Ofcom, on the consumer panel or content board, but the same cannot be said of business.

However, I am not convinced that creating a whole new tier of bureaucracy is the answer. Will the Minister assure us that that will not be necessary? What guarantees are there that, when push comes to shove and Ofcom must make a decision that will have an impact on business competitiveness, it will not be swayed by the overwhelming presence of non-business points of view within its own walls? What hope can we give to the business community that Ofcom will do what it can to promote competition for its own sake, and not just when the consumer panel deems it necessary?

We on these Benches have tabled a number of amendments in Committee and on Report that would ensure that business—the providers of our services—will not be overlooked. Measures can be taken to reach a compromise that will be just as effective in ensuring that the voice of business is heard, without having to go to the length of building a new arm of Ofcom.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

My Lords, I have no wish to intervene in any dispute between Oftel and Freeserve, still less one between Oftel and Wannado.

I start by reminding the House that the Joint Committee chaired by the noble Lord, Lord Puttnam, considered in great detail the need for Ofcom to have additional panels or boards to deal with the various issues that have been raised. The committee concluded that there was no rationale for an economic or competition board with executive functions. It also concluded, in the context of the question of an economic advisory panel, that it did not favour a further fettering of Ofcom's internal structures by placing a requirement for such an advisory body in the Bill. We accepted that advice wholeheartedly. It is just as relevant to the question of whether the Bill should require Ofcom to have a competition panel of the kind specified in the amendment or at all.

The aim of the amendment appears to be to ensure that Ofcom gives due priority to competition in its decisions. The noble Baroness, Lady Buscombe, confirmed that that was an important consideration, as it is for us. It aims also to ensure that Ofcom obtains appropriate specialised economic and legal advice on competition matters and that it liaises closely with the OFT over the exercise of concurrent powers under the Competition Act 1998. We agree with all of that; that is what will happen.

Arrangements that we have laid down in the Bill and which Ofcom is already making in its preparatory activities provide fully for that, without adding unnecessary complication to the structure and operation of Ofcom by requiring the creation of additional formal components, as proposed in the amendment. In any case, the main board consists of people such as the noble Lord, Lord Currie, who is an economist, and David Edmonds, the Director General of Telecommunications. For such people, competition issues have been meat and drink for much of their working life. They have a proper, independent and well informed perspective on the issues, as does the executive team that has been appointed.

There is no shortage of external specialist advice. Existing regulators such as Ofcom can and do obtain specialist advice from academic and other authorities, and they carry out research. There is no need for what is proposed in the amendment.

I hope that, with the admirable aim—recognised by the noble Lord—of not adding more baubles to the Christmas tree, the noble Lord, Lord McNally, will not press the amendment.

Photo of Lord McNally Lord McNally Liberal Democrat

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Photo of Lord Wakeham Lord Wakeham Conservative

moved Amendment No. 222A:

Page 324, line 33, leave out ", Sunday or local (other than daily or Sunday)" and insert "or Sunday"

Photo of Lord Wakeham Lord Wakeham Conservative

My Lords, when I raised the question of whether the arrangements under the Bill amounted to deregulation of the bureaucracy imposed on newspapers, the Minister gave me a courteous answer, and I said that I would consider his response. Since that, he has also written me a long and detailed letter, for which I am grateful. The facts are now common ground. The Newspaper Society and I agreed with the facts that the Minister set out, but we do not accept that the totality of the changes produce a deregulatory result for smaller newspapers. I shall explain why.

The Minister pointed out that, to an extent, the new regime removes the need for prior consent, criminal penalties and automatic referral to the Competition Commission. However, that is not a substantial deregulatory outcome. The new regime extends the special newspaper controls and the complex regulatory process to the smaller newspaper transactions that were not caught by the special Fair Trading Act controls. Because of the new criterion, practically any deal made by a regional or local newspaper publisher will be subject to special newspaper plurality scrutiny, not just those that would have controls triggered by a 500,000 circulation threshold. That is not deregulation; it is an extension of government control. The regional newspaper industry and the Newspaper Society are simply asking that weekly local newspapers be removed from the Bill's special extended public interest test, which examines plurality issues only.

Contrary to the Minister's suggestion in his courteous letter to me, it is hard to see that past cases point to a continuing need for Ministers to be able to take action against local weekly newspapers to protect freedom of expression, accurate presentation of news, and plurality of views. The Government's consultation paper stated:

"In no case has the Competition Commission found that the acquisition of purely local newspapers would be against the public interest on freedom of expression grounds".

In only four cases since 1989 have freedom of expression concerns been raised in conjunction with competition grounds. In those cases, daily newspapers, not weekly newspapers, were the real objects of concern. In any event, the Government do not want to just keep their powers of control; they want to extend them.

The Minister's letter refers to the Joint Committee on the draft Communications Bill. Unfortunately, the letter omits the last five words. It was after hearing evidence from the Newspaper Society that the Committee stated:

"We agree that the issue of newspaper ownership is sufficiently important".

I shall not read it all, because it is in the letter. However, the bit that the Minister missed out about deregulation outcome was,

"especially as regards local newspapers".

Hence, the newspaper industry and I are seeking for this amendment to achieve a deregulatory outcome for local weekly newspapers that would otherwise be liable to greater intervention. This amendment would remove local weekly newspapers from the extended public interest jurisdiction. The regulatory authorities would still be able to examine other regional and local newspaper transactions on both competition and plurality grounds.

Will the Minister look again at this relatively small point about the smallest of our newspapers? If he were able to accept it now or later, it would save the Government or Ofcom money in having to investigate these tiny newspapers. It would save the newspapers a considerable amount of expense, which is not required on all perfectly reasonable competition grounds that the Government seek to insist upon. I beg to move.

Photo of Baroness Buscombe Baroness Buscombe Conservative 8:15 pm, 2nd July 2003

My Lords, I strongly support Amendment No. 222A moved by my noble friend Lord Wakeham. By excluding smaller newspapers from the definition in Clause 369 they would, as my noble friend said, be freed from what could otherwise threaten to become a considerable regulatory burden. It would be unnecessary and may add considerable cost to the local press to be subject to an OFT report. We welcome an amendment that would avoid this situation.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, we had a most interesting debate at a previous stage when the noble Lord, Lord Wakeham, pressed his amendments in his most articulate fashion. Of course, he has done so again today with regard to this amendment. I am obviously disappointed that my attempt to reply significantly to the issues which he raised in Committee in the form of a letter has not totally reassured him about the Government's case. He has expressed an anxiety that has been current throughout the Bill in its discussions in both this House and another place. It is alleged that the proposed regime places too heavy a burden on such titles, that the proposals extend scrutiny to the smallest of acquisitions that would have escaped scrutiny under the current special newspaper merger regime and that there have never been adverse public interest findings relating to local weekly titles alone.

I do not propose going through all those arguments again as the hour is a little late. We gave some of them a fair airing in our previous discussion. The definition of "newspaper" used in the Bill is the same as that used under the current Fair Trading Act regime. It applies to all daily and Sunday titles (whether national or local) and to local periodical newspapers, most of which are weekly. There is therefore no extension of the regime to titles not previously subject to scrutiny, although I hear what the noble Lord, Lord Wakeham was emphasising—that is, the paucity of cases in which small weekly titles have been involved in these issues.

Far from increasing burdens on the industry, in the letter which I sent to the noble Lord, to which he generously referred, I attempted to indicate that we thought that we had established some significant steps in deregulation with regard to the newspaper industry. In particular, the requirement to seek prior written consent of the Secretary of State, on pain of criminal sanctions, for all transfers of newspapers or newspaper assets where the jurisdictional criteria are met—no matter how small the title involved—will be removed. Instead, intervention by the Secretary of State will be discretionary and targeted at those cases raising genuine concerns about the effect of the merger on accurate presentation of news, free expression of opinion or plurality of views in newspapers.

The smallest acquisitions will not be subject to scrutiny on public interest grounds as they will not involve the acquisition of a newspaper enterprise with a turnover in excess of £70 million or involve a newspaper with at least a 25 per cent share of supply in at least a substantial part of the UK.

The nub of the discussion between myself and the noble Lord, Lord Wakeham, is why the regime should include local weekly newspapers at all. I trust that noble Lords do not need to be reminded of the important role played by local newspapers in the communities in which they circulate. Certainly they would not have to have recourse very far afield to be all too well aware of the regard in which local newspapers are held by Members of another place.

It is important that a mechanism is in place to protect the public interest of such communities in the accuracy of news reporting, the free expression of opinion and the plurality of views, where necessary. It is also important for such protection to extend to local weekly titles and not only to daily or Sunday titles, as proposed in the amendment.

Although I am not unsympathetic to the concerns expressed by the noble Lord as regards the desirability of deregulation—indeed, our proposals as set out in the Bill are designed broadly to deliver a deregulatory outcome—discretionary intervention in cases where genuine concerns have been raised represents the best balance between protecting the public interest and ensuring that regulation is not excessive. We believe strongly that such a public interest in the accurate presentation of news, free expression of opinion and plurality of views in newspapers exists in relation to national and local newspapers. The simple fact is that the vast majority of local titles are weekly. To exclude such titles from the protections offered by the proposals would amount to a grave disservice to local communities.

Given that my letter to the noble Lord did not give him the full reassurances that I had hoped to convey, I shall look at it again and, if necessary, write to him further on these matters. In the light of his remarks today, if there are matters that could be cleared up, I shall deal with them. However, I hope that I have been able sufficiently to reassure him that we are seeking to strike a balance between a broadly deregulatory measure and one that offers guarantees for the service that our local weeklies provide. On that basis, I hope that the noble Lord will feel able to withdraw his amendment.

Photo of Lord Wakeham Lord Wakeham Conservative

My Lords, I do not know whether the noble Lord is more charming when he is wrong than when he is right, but he has certainly given me a very courteous answer. However, before he writes to me again, let me write to him with a detailed commentary on his long letter so that he can see the small but quite important part for our local newspapers. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 222B and 222C not moved.]

Clause 385 [Penalties imposed by OFCOM]:

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendments Nos. 223 and 224:

Page 334, line 22, at end insert—

"( ) References in this section to penalties imposed by OFCOM under provisions contained in this Act include references to penalties which the BBC is liable to pay to OFCOM by virtue of section 195(3)." .

Page 341, line 23, at end insert—

"( ) References in this section to penalties imposed by OFCOM under Part 3 of this Act include references to penalties which the BBC is liable to pay to OFCOM by virtue of section 195(3)."

On Question, amendments agreed to.

[Amendment No. 224A not moved.]

Clause 396 [Regulations and orders made by OFCOM]:

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

moved Amendment No. 225:

Page 344, line 20, leave out "a time before" and insert "no earlier than"

Photo of Lord Evans of Temple Guiting Lord Evans of Temple Guiting Government Whip, Government Whip

My Lords, this amendment has been tabled to correct an error in Clause 396. The clause sets out the procedure for Ofcom to make orders and regulations under provisions in this Bill and provisions inserted by the Bill into other Acts.

The intention of subsection (6) of this clause was always to provide for a period of at least one month for representations to be made on any proposal by Ofcom to make an order or regulation. This is to ensure that Ofcom provides an appropriate period for consultation on its proposals.

The effect of the current wording of subsection (6), however, is that the consultation period within which representations could be made must be less than one month. The adjustment we have proposed will correct this error and require a period of not less than one month, as we had intended. I beg to move.

On Question, amendment agreed to.

Schedule 17 [Minor and Consequential Amendments]:

[Amendments Nos. 226 and 226A not moved.]

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary (Department for Culture, Media and Sport) (Media and Heritage)

moved Amendment No. 226B:

Page 526, line 39, leave out "cover" and insert "enable OFCOM to meet"

On Question, amendment agreed to.

Schedule 18 [Transitional Provisions]: