Media Ownership (Radio and Cross-media) Order 2011 — Motion to Approve

– in the House of Lords at 1:30 pm on 9th June 2011.

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Moved By Baroness Rawlings

That the draft Order laid before the House on 14 February be approved. 17th Report from the Joint Committee on Statutory Instruments.

Photo of Baroness Rawlings Baroness Rawlings Lords Spokesperson (Department for Culture, Media and Sport), Baroness in Waiting (HM Household) (Whip) 1:36 pm, 9th June 2011

My Lords, many of us are hungry for news, so naturally local newspapers, radio stations and television services play a vital and nourishing role in communities across the country. Their ability to scrutinise and hold local institutions and officials to account is an essential part of a healthy democracy. This is why rules to protect the choice and variety of local media have long been a feature of the UK regulatory landscape-in particular, the securing of plurality of voice through media-specific ownership rules. I know that the House of Lords Communications Committee gave great consideration to these rules in its 2008 report The ownership of the news. While the committee concluded that there remained a strong case to continue controls over the ownership of news providers, it recommended that local cross-media ownership restrictions should be lifted and that the impact of local cross-media mergers could be examined through the application of the more flexible public interest test. Although differing views within our media remains important, we believe that some of the ownership rules currently in place are a barrier to choice as they are stifling innovation and competition. This is because they no longer reflect the markets to which they apply-specifically, the local media markets.

Recent years have seen a significant decline in the revenues of local radio stations and newspapers. Local and regional newspaper advertising revenues decreased by 5.4 per cent in the second quarter of 2010 and the Advertising Association forecast that their revenues may continue to drop throughout 2011. In addition to this challenging market, local media companies are facing increased competition driven by the growth of digital technologies. Consumers now have, in many cases, free access to a wide selection of digital content that is available whenever and wherever they are able to receive a mobile signal or access a broadband connection. The changes to the local media landscape in terms of declining profits and increased competition represent a permanent reshaping of these markets, and if they are to prosper, they will need to adapt and be given the flexibility to grow. The Government have made a commitment to help the market deal with these issues. In the coalition programme for government we made a commitment to enable:

"partnerships between local newspapers, radio and television stations to promote a strong and diverse local media industry".

It has always been the intention to keep under review the media ownership rules to make certain that they remain appropriate. This is why the Communications Act 2003 requires Ofcom to review media ownership rules every three years and assess the extent to which they remain relevant. The last such review was carried out in 2009 and concluded that significant liberalisation of the local ownership rules was desirable. Ofcom stated that such liberalisation could give the industry, and I quote,

"flexibility to respond to pressures and remove potential barriers", to the success of the local media sector. Ofcom's recommendations were also supported by the Culture, Media and Sport Committee. In fact, its report Future for Local and Regional Media, published in 2009, urged the Government to go further, pursuing, "more far-reaching reform". Taking account of Ofcom and the committee's recommendation, this draft order will remove all the current local cross-media ownership rules-local, not national. Under the deregulated regime to be created by the draft order before the House today, local newspapers, radio companies and owners of Channel 3 licences, subject to competition law, will be able to consolidate, reduce costs and build successful businesses that could otherwise face the possibility of closure.

We are of course conscious that such changes must not in turn have a significant impact on the plurality of local media. Therefore, it is important to note that the public interest test which the noble Lords in this House so vocally championed during the passage of the Communications Bill will still apply under this framework. The Secretary of State, too, retains the capacity to intervene in media mergers on plurality grounds where a merger could give rise to public interest concerns. I would also reassure noble Lords that the national cross-media ownership rules, which restrict the concentration of national newspapers and Channel 3 licences, will remain in place. These rules will continue to protect against the excessive influence of a national media and to safeguard a diversity of views and opinions across the most influential national voices.

However, this draft order will remove the unnecessary and complex local radio media ownership rules which were designed to make certain that listeners in a given area had access to a minimum of two commercial radio operators and the BBC. These restrictions were designed for an analogue world and do not take into account the emerging digital radio landscape. Nor do they reflect the growth of the community radio sector, with over 200 community stations operating in the UK. Listeners now have access to a wide range of radio stations at local, national and indeed global level. We believe seeking to regulate in micro-local markets no longer reflects the wealth of choice available to listeners.

Finally, and again in respect of digital radio, this draft order will remove the rule preventing the ownership of more than one national multiplex. This Government have been clear about their intention to support the radio industry in realising the potential of digital technologies. We believe that the removal of these rules will support the launch of a second national commercial multiplex, which will provide greater choice for listeners and opportunity for radio companies.

Collectively, these measures provide a possibility to promote a successful model for the future of local media and will encourage greater innovation, investment and security for the provision of media at the local level. I assure the House that we are satisfied that the order is compatible with the convention rights, and I commend it to the House.

Photo of Lord Fowler Lord Fowler Chair, HIV and AIDS Committee in the United Kingdom 1:45 pm, 9th June 2011

My Lords, I declare a past interest as chairman of the Culture, Media and Sport Committee to which the Minister has referred, and also a past interest as chairman of two regional newspaper groups, the Birmingham Post group and the Yorkshire Post group.

It always seemed strange to us in the regional press that intricately detailed regulations were set in place for local and regional press, compared with the position nationally where not only has one owner been able to control almost 40 per cent of national newspaper circulation but where the last Government suddenly changed the rules on the purchase of media companies in this country. For years the policy had been that United States companies were prevented from taking over television companies here until proper reciprocal arrangements were in place. Overnight that position was changed, and although there are no reciprocal arrangements and we are prevented from taking no more than 25 per cent of a company in the United States, a company in the United States can take control of a television company here.

The last Government would have done much better to have looked at the position of the regional and local press, which were then under very considerable pressure-and indeed still are. Its advertising has been hit by the internet, its readership has been impacted by the fact that young people are looking for their news elsewhere; and its circulations have been damaged by changes in social habits. Whereas once people brought back their evening newspaper almost automatically after work, now the regular hours of work have changed and habits have changed. Exactly the same thing has taken place in the United States, not only with their newspapers, which face exactly the same pressures, but with their once-dominant evening television programmes.

As far as this country is concerned, all this has been very much to the public harm. Regional newspapers have had to cut back and in my view the public have suffered as a result. I emphasise that regional newspapers have not been the phone hackers employing private detectives to pry illegally into private lives. The regional press has had a very different tradition; it has stood up for local communities and has guarded the public interest against councils and others who have abused their power. It is for that reason that all the opinion polls show that the regional press is in fact much more trusted than the national press.

The irony of all this has been that the regional press has had to fight the commercial battle for survival with one arm tied behind its back. We have all talked about the multimedia world and the fast-changing media, but regional newspapers have been prevented from adapting to that world. This is what this order allows now to happen, and it is for that reason that I strongly support what the Government are doing and what my noble friend Lady Rawlings has said.

My noble friend referred to the argument of no organisation having no more than 50 per cent of local share. No one wants to see local monopolies any more than national monopolies. My only question is whether that should be better ensured through what would be very complex ownership rules or in some other way. My Select Committee considered this very point and its recommendation was that the public interest test was a more flexible tool than blanket restrictions on local cross-media mergers. It proposed that Ofcom should monitor such mergers and that the competition authorities should examine each on a case-by-case basis. I am delighted that the Government have gone down that road and have accepted that. Indeed, there is a role of this kind in all media mergers: a role for an organisation like Ofcom or something similar to review not just mergers but also the existing position of ownership of media companies and to debundle those companies if that dominance has been too great. If we can do that for airports, we can also do it for media companies.

Finally, this is an entirely sensible, first-class reform. It will be widely welcomed certainly in the industry and is very much to the benefit of the public generally. I congratulate the Government on it.

Photo of Lord Gordon of Strathblane Lord Gordon of Strathblane Labour

My Lords, I, too, welcome the draft order. I have no current interest to declare, except membership of the Select Committee on Communications, but it would be wrong to conceal the fact that I was for 33 years chief executive and subsequently chairman of a group of radio stations. The commercial radio industry, which has recently gone through a fairly rough patch, welcomes this draft order. Advertising revenue is down, in common with most media. Some of it may be down permanently with the arrival of the internet and some of it may recover if there is an economic upturn.

At the moment, more than half of local radio stations are losing money. Well over half the industry is off the stock market and controlled by private companies, one of which is Global and the other being Bauer Media in the United States. That is propping up companies which otherwise would go bust. Worse still, audiences have slumped, partly because far too many radio stations have been created by the Radio Authority and, to a lesser extent, by Ofcom.

I think I can prove that point by taking the House back to 1994-98 when, with 120 stations, commercial radio had a 50 per cent-plus share of audience against the BBC. Let us fast forward to 2008 when there were three times the number of stations-another 250-and the commercial radio share of the audience had slumped to 41.1 per cent. The problem was that the extra stations did not increase commercial radio's share. It cannibalised commercial radio's share and nibbled away at the successful stations which then, in my view mistakenly, cut back on their local output, which was why they got their audience in the first place.

It is good fortune for the radio industry that this draft order gives the industry a chance to reshape itself and to get it right this time. Stations faced with declining revenue and the high costs of running two transmission systems, one analogue and one digital, made the mistake of cutting back on the variable-the local output. I am referring to chains of stations which perhaps owned stations in six cities. As regards local output, a combination of the accountants and the marketing people said, "Oh well, we could cut that out". They did that while forgetting, as the programme people could have told them, that that was what delivered the audience. The idea that local radio stations were superior in quality to the BBC is ludicrous. Yet even the smallest local radio station would wipe the floor with the BBC in terms of audience precisely because of its local output. Therefore, when the local radio industry lost or reduced its local output, it did a grave disservice to itself as well as to the public.

This draft order gives the radio industry a chance to regroup. It is permissive and not mandatory. No one has to do anything but if they want to do something they now can. I hope that my colleagues in the radio industry will realise that vertical chains do not make much sense for the public or themselves. Some station swaps will go on and there will be groups which own perhaps four stations in one town.

If you are one owner with four stations it is in your own interest to make those four stations different from each other, as do the BBC with Radio 1, Radio 2, Radio 3, Radio 4, Radio 5 and so on. At the moment, four separate owners all chase the same market and duplicate themselves. One owner would serve four markets, so already there is a gain to the public good. More importantly, with four revenue streams coming in, there would then be no excuse for not amortising the costs of local news provision over those four revenue streams. It can be required by Ofcom to return to the glory days of ILR when a first-class local news service was creating the audience.

There will be a gain for both the industry and the public because we are all concerned about the democratic deficit in terms of local news coverage. If we have local radio playing its full part as it once did in local news coverage, we have done something to reduce the democratic deficit. For that reason, I very warmly welcome the draft order.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I want to add the support of these Benches to the order. I do not have anything like the experience of my noble friend Lord Fowler in local newspapers or the noble Lord, Lord Gordon, in radio, but the importance of local media is obvious to all of us, whether it is radio, television or newspapers. Surprisingly, we are looking at this order rather late in the day. The other place looked at it in March and, in view of its importance, I do not understand why it has taken us quite so long to consider it.

It is clear that this is extremely evidence-based. As the Minister mentioned, we had the CMS report in April 2010 and the Ofcom report in August 2010. Although the noble Lord, Lord Fowler, did not refer to it, the Communications Committee, of which I declare current membership but was not at that time a member, looked at this whole area and was rather more prescient, strangely enough, than the Newspaper Society. The Newspaper Society's evidence was described as rather upbeat but the committee was rather more sceptical. It said that such figures which were produced by the Newspaper Society showing buoyant advertising revenue and so on can be deceptive. Of course, 2008-09, in terms of the dropping away of classified advertising revenue, readership and consumer habits in the recession, has been crucial and is why we are in the position that we are today.

In a sense, Ofcom was told to go away and do its homework again by the Secretary of State. I shall come to what I think the reasons are for that. Ofcom acceded to the argument to deregulate further than it originally thought it would on the basis that it thought that local TV, which is very much the brainchild of the Secretary of State, would impact positively on diversity and plurality. I suppose the other argument it gave, quite apart from the competition points that the Minister mentioned, was that the BBC will always be there to provide plurality, and it is very much to be hoped that the BBC will be there. But there is no doubt of the scale of the crisis or of the necessity, exactly in the way that the noble Lord, Lord Gordon, mentioned, to have cross-media businesses that really get to grips with the need for these organisations not to concentrate just in one area of media. In debate, I remember a positive speech made by the noble Lord, Lord Fowler, on free sheets. Perhaps it may have been rather over-regulatory as regards local authorities. Nevertheless, I am sure that the greater regulation of those free sheets from local authorities will help local media organisations, which would be a positive effect.

I move on briefly to the direction in which I think we are heading. The whole purpose of relaxing the cross-media rules is to allow investment in new forms of media, in particular in local television. I am rather more sceptical about this. I am probably somewhere along the lines set out in the Shott report, which was quite sceptical about the future. It said that advertising revenue would support the establishment of only something like 10 to 12 local television stations, but I see that Greg Dyke is rather more bullish about the possibility. In the end, however, this is probably not going to be digital terrestrial television, but local internet television, which is a lot more practical both in terms of the revenue it can raise and the delivery mechanisms. I hope very much that that is the direction in which many of the media groups, which will now be freed up to invest in other forms of media, will go. If the Minister has information on where we are headed in terms of local television and where the Secretary of State is planning to take us, I should like to hear it.

Finally, the question in all our minds is the definition of the public interest in these circumstances. If we are relying on general competition rules to make sure that we have plurality of local media, what is the public interest? What considerations will the Secretary of State, who now of course has all the powers of competition intervention necessary, take into account when looking at what is regarded as "sufficient plurality" in these circumstances, which is the other phrase on which Ofcom placed considerable reliance in its August 2010 report?

Photo of Lord Prescott Lord Prescott Labour 2:00 pm, 9th June 2011

My Lords, I cannot declare any interest in the radio, media or press. What a pity that they did not have less interest in me over the last 40 years. But I want to refer to the debate about the public interest. I read the Hansard report on the discussion in the Delegated Legislation Committee that dealt with this matter, and I want to address my remarks to those made by the Minister. I shall quote some of them. He said in introducing the order that,

"a vibrant media sector is an essential part of a healthy society".

I agree with that. He went on to say that the,

"principles of plurality and diversity have long underpinned the legislative and regulatory regimes that govern our media industry, and they remain relevant today".-[Official Report, Commons, Third Delegated Legislation Committee, 22/3/11; col. 3.]

The noble Baroness quoted those words today, and said when repeating the Statement regarding BSkyB that these principles would govern how they would make a judgment on whether to hand over or sell BSkyB to the Murdoch press. In reality and in my view, to achieve a vibrant media in a healthy society, plurality and diversity are not enough. There is the definition of public interest, and there is the issue of competition, which has been dealt with and referred to. The Minister claims that all these are just as relevant today.

I think not. It is not sufficient just to have those principles. Today we are witnessing criminal activity on a massive scale by our press. It involves thousands of our people, subject to criminal acts of phone hacking conducted by the press. It is a matter of major concern to us. It is worrying enough that our press feel that that they can conduct these criminal acts, and pay for information to sell papers. It is precisely what they have been doing. Indeed, they have admitted it today in the apology made by News International. It has said that it should not have asked for this information, it should not have paid for it, and it should not have printed it. That apology was made in regard to Sienna Miller. It is an apology by one of the major papers in this country, explaining what News International was doing at that time.

But it is not only that, although it is bad enough in itself. We need to condemn it, and many inquiries are under way. What worries me is that it has polluted a number of our own institutions in this country in the process, and it is all connected to the hacking of phones. The first, of course, is the Metropolitan Police, which in the initial stages refused to accept the case, even though it had evidence to show that this had been going on. It was said constantly, for years, that it was a rogue reporter. We now know that to be untrue. Even the media themselves said that it was not true, saying that it was a rogue paper or a rogue reporter, and concentrated on the News of the World. But it was not true. Information was withheld by the Metropolitan Police from the proper authorities in that matter, and now another inquiry is under way. One inquiry having told me personally that my phone messages had not been tapped-that there was no evidence for it-the next inquiry comes along and tells me that it happened on 44 occasions. You cannot trust the police if they are in fact deliberately giving misleading information. But another inquiry is on the way, and I welcome that.

What then worries me is the role of the Crown Prosecution Service, which has actually played a part in this by agreeing with the Metropolitan Police, although knowing that the information was there and withholding it. Even today, there is more information, and the Crown Prosecution Service has not carried out its proper job. Not only is it bad enough that this concerns our main police force, the Metropolitan Police, but the Crown Prosecution Service has also actively been involved in the same process and is now reopening its inquiry.

The courts have been polluted by this process. Indeed, I did not believe the police in my own case and I wanted to go to judicial review. The first judicial review was refused. Why was that? It was because the police did not give up all the information that they had. It took another judge and another inquiry to overrule that first refusal and grant the review. What is worrying is that our police authorities can fail to give up information after all the offences that have gone on and allow a court to be kidded into thinking it was making a judgment. But not all the information was available. It took another judge to change that. In the circumstances, those are very serious charges.

We might talk about the Press Complaints Commission, a body that is there to hold the press to account of some kind. That is the job Parliament decided to give the commission, but it did not give it any powers to do it. Editors are allowed to appoint their own people. The chair of the commission, the noble Baroness, Lady Buscombe, is a Member of this House. Even the Press Complaints Commission failed to investigate anything to do with phone hacking, something which I believe it has the authority to do. Indeed, it is even worse than that because the chair was fined for libel and damages of £20,000 for being misleading, in libellous statements, about the inquiry that was going on into phone hacking.

That is the body that should have something to report. The police are meant to investigate. The Crown Prosecution Service is not doing its job properly. We are right to say that something is rotten in the state of England at present-that it is not an acceptable proposition. If you talk about a healthy democracy and a healthy media, you had better start doing something about the people who control it because they are in contempt. News International publishes the News of the World, whose owner is-can I say it?-Rupert Murdoch. Nobody wants to use his name; that is the scale of power in the way it is distributed at the moment. When he made that apology, Rupert Murdoch made it for the company. It is no longer just the News of the World; it is the company itself. He is making an apology for the criminal acts that his company was carrying out. This is the very man, when we talk about media ownership, to whom we propose possibly to pass over BSkyB. All the noble Baroness would say when we questioned her about it was: "plurality and diversity". Well, that is not enough. It does not put any fear into Mr Murdoch. He knows how to use and control that power. We should now be saying that.

For example, when we talk about the fair distribution of information, we are now all agreed that News International was involved in criminal acts. Just look at the papers. You get pages about it in the Independent and the Guardian-the one justification for our good media system is these two papers, which have exposed it years later. But if you look for the apology, where is it in the "Thunderer", the Times? I invite you to look for it. It is 11 lines stuck on a quarter of a page. Eleven lines about one of the most hideous criminal offences, carried out by the company, and it cannot even acknowledge it.

There is something wrong in the judgment of people who have a large share of our media. If we want healthier media, people should be able to trust them. I therefore put it to the House that the present situation is unacceptable. A healthy democracy does not mean simply diversity and plurality; we now have to do something more about it. We need an independent public inquiry; we need to know what the facts are. If anyone is in doubt about that, they should look at the settlement with Sienna Miller. It said, "We settle; we did wrong; we should not have printed it; we should not have paid for it". But how did they do it? The settlement means that she will be told in private how the company did it. There is no open court situation exposing it. We listen to all the hypocrisy from the press about super-injunctions. They tell us that we should have open courts and should be given the information, but when it comes to a criminal act, they do not want an open court; they settle with money; they settle with power; and they settle with an agreement not to tell the public how they did it. That is unacceptable; that is not the force and influence that create a democratic society.

We know that there is a delay in the takeover of BSkyB; I hope that that is a good sign that we are not going to give it to News International. I do not know whether the Minister can tell us any more about what is going on with the inquiry, but I ask her to pass on the message that this Government must now consider an independent public inquiry for the health of our own democracy and the media. That is what we should be debating, because that is the issue that the public are concerned about. Let us have that open public inquiry so that we can get to the bottom of this matter and prevent it happening again.

Photo of Baroness Howe of Idlicote Baroness Howe of Idlicote Crossbench

My Lords, as one of those who had the pleasure of serving under the chairmanship of the noble Lord, Lord Fowler, on the Communications Select Committee and contributing to the report that we have had referred to, I add my welcome to the order. It is a dramatically important step forward. Certainly, at a few meetings that I have attended recently, it has been indicated that new plans are in hand to provide back-up for companies in facilitating more independent, local programmes in both radio and television. That is all to the good.

I should like to take up one point about the public interest. Controls exist in the form of Ofcom and the Competition Commission intervening as and when necessary. Although I quite accept that the previous speaker does not think that that goes far enough, it will be of some reassurance to us. The question has been asked as to what the public interest is. Is it really to ensure standards and quality in what is put over? Are we to be certain, for example, that a few eyes will be kept on some of the extremely bad taste which has crept into a great deal of broadcasting, both before and after the watershed? Then if we look at what has happened with children's broadcasting, we see that the BBC has rather dropped out of it in a number of areas, particularly in radio. Organisations such as Sound Start will be particularly pleased, I am sure, if we have rather more children's content coming in. Children should be able to draw their own imaginative pictures of what they are listening to, something of which my generation and most of your Lordships' generation certainly had plenty of experience. Nowadays, there seems to be rather less of it for the young child growing up. With those questions, I should like to be reassured by the Minister that a high standard will be set for "public interest" in the output that we are going to expect.

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport) 2:15 pm, 9th June 2011

My Lords, I thank the Minister for her very helpful introduction to the order. We have debated media plurality before in the context of the national media, and she will know that it is an issue about which many noble Lords across your Lordships House have voiced concerns. In many ways, the fundamental issues remain the same: in a vibrant democracy, it is not in our interests to allow a monopoly of news and opinion to dominate media outlets. Consumers need a guarantee of choice and diversity.

That is why Ofcom, quite rightly, has been cautious in its advice on this matter when it has been sought by Ministers. I have read the advice issued by it on local media rules both in 2009 and 2010. It appears that it is only with some reluctance that it is recommending a further step towards the liberalisation of the remaining rules of local ownership. We understand that reluctance because, whatever the immediate circumstances might be that force us to go along with a more laissez-faire approach, it remains the case that once the rules of ownership are relaxed it is difficult to backtrack should an unhealthy monopoly develop. We have to be satisfied that the Secretary of State remains committed to the fundamental principles of plurality, is alive to any threats and is prepared to intervene under their remaining powers if necessary.

However, we are also sensitive to the difficult commercial environment currently challenging local media. I say to my noble friend Lord Prescott that, on this issue, we differentiate between trends at local and national level, because it is true that local advertising revenues are down and many local newspapers are struggling to survive. As we have heard, those that do survive are cutting back on quality and local reportage. Meanwhile, the pressure of competition from multimedia outlets across a wide spectrum of platforms is damaging the economic viability of local radio. Those services still have a valuable customer base, but are in danger of becoming commercially untenable. The noble Lord, Lord Fowler, and my noble friend Lord Gordon both made powerful cases for strengthening the role of the regional press and local radio in delivering diversity in local media output. We therefore recognise that if the Government were to maintain too strong a grip on the issues of local plurality, it might be at the expense of the very services we are seeking to protect. So, along with our undeniable caution, there is a case for some pragmatism.

As the noble Lord, Lord Clement-Jones, reminded us and as Ofcom pointed out, we are protected from a complete monopoly at a local level by the continuing strength of BBC local radio. But, as we know, the BBC is reviewing the scope of its output in many areas in response to the licence fee cut. Can the Minister update the House on any discussions held between her department and the BBC about its continuing commitment to and resourcing of local radio?

The Government have also created great publicity around their plans for local television. While we are not yet convinced of the commercial viability of these proposals, we nevertheless acknowledge that if they were to be realised, local TV could provide new players in the market locally and thereby increase the diversity of media outlets. However, this would be the case only if the plurality rules were applied to ensure that one proprietor could not own local TV, local radio and local newspapers in the area. In other words, what would stop one person controlling all the commercial radio and TV output in, for example, Manchester? Can the Minister guarantee to the House that, should the order be agreed, the liberalisation of the rules would not be extended to local TV? It would be helpful if she could update us on progress in this regard.

If we approve the order today the last backstop preventing local media monopoly is the Secretary of State and his residual powers to apply the public interest test. So far his track record in this regard is not good. His handling of the debacle of Murdoch's proposed takeover of BSkyB, which he has continued to support against a barrage of criticism from the public, politicians and media competitors, shows a callous failure to defend the principles of media plurality. My noble friend Lord Prescott has, quite rightly, again raised concerns about the credibility of the Murdoch empire in going forward and seizing further control of national media.

What reassurance can the Minister give the House today that the Secretary of State understands the strong demand for diverse media outlets in this country as part of a vibrant democracy and that he is prepared to actively intervene to prevent media barons' creating monopolies at a local level? There is a crisis of confidence in his role and we still need convincing that he remains ready to stand up for these principles. On this issue I share the comment of the noble Baroness, Lady Howe, that a robust restatement of the role and status of public interest would be helpful.

There remains a residual protection against the development of unfair monopolies in that the Government give a commitment in the Explanatory Memorandum to reviewing the new measures a year after they come into effect. Can the Minister give some clarification as to the nature of that review and how it will be reported back to Parliament?

I hope, with suitable reassurances on these points, we will be able to support the order today.

Photo of Baroness Rawlings Baroness Rawlings Lords Spokesperson (Department for Culture, Media and Sport), Baroness in Waiting (HM Household) (Whip)

My Lords, I thank all noble Lords who have contributed to this interesting and lively debate. I am grateful, too, to those noble Lords who have given the order their support.

I appreciate that the order may raise some concerns about the need to protect a wide variety of opinions and views in our media; equally, we acknowledge the argument that greater consolidation at a local level could lead to a reduction in locally made content. However, we believe that the draft order strikes the right balance between recognising that the local media markets have changed and the need to protect consumers' interests and needs. The best way to secure high-quality local content and diversity is by creating a framework in which local media businesses can thrive, innovate and compete.

It is these principles which underpin the Government's current proposals for local television, which will add to choice and balance at the local level. Television is a powerful and trusted medium and local television has the potential to offer many social and democratic benefits to communities and economic benefits to the local media industry. As I said earlier, the rules that this order removes have always been in addition to general competition rules and the public interest test. These remain in place to make sure that there is proper choice to protect against undue concentration.

I turn now to the specific questions asked by noble Lords who have contributed to the debate. I accept the vast knowledge of my noble friend Lord Fowler on this subject and I agree that the regional press are greatly trusted. I thank him for his support, especially in regard to the public interest test. He asked about competition rules, an issue which I suggest should be considered by the communications review. DCMS recently published an open letter inviting responses to high-level questions related to the communications review. Responses to these questions will inform our approach to a communications Green Paper, due to be published at the end of this year, which will in turn be followed by a full consultation and White Paper. I encourage all noble Lords to contribute.

On the question of local newspapers and their ownership, I was interested to read that over 80 per cent of local and regional titles in the United Kingdom are owned by six publishing groups-Archant, Associated News, Johnston Press, Newsquest, Northcliffe and Trinity Mirror Group-which have made some progress despite the downturn over the past two or three years.

I thank the noble Lord, Lord Gordon of Strathblane, for his constructive intervention. With his long experience, he is always interesting when speaking on this subject and I support what he said.

My noble friend Lord Clement-Jones asked why the order took so long. It was due to parliamentary business, the Easter recess and the recess we have just had. He asked about public interest and sufficient plurality, as did the noble Lord, Lord Prescott. I assure the noble Lords that plurality can still be maintained through competition law and, where appropriate, the public interest test. Plurality means giving citizens access to a variety of sources of news, an essential part of a democratic society resulting in a healthy media sector.

On the issue of emerging local television and the possibility of investing in further local television, the Government believe that one of the barriers preventing commercially sustainable local television from emerging in the UK was the restrictions around media ownership. With the removal of the rules for local media, which are now no longer necessary, local media companies will be free to affiliate and develop cost-effective local television service models, benefitting from syndication of resources, journalists and technical expertise, much as mentioned by the noble Lord, Lord Gordon.

The noble Lord, Lord Prescott, returned to the Sky debate and his concern about hacking. On the merger of BSkyB and where it has got to, this is not the subject of today's debate. However, I can confirm that the Secretary of State is now considering the responses made to the consultation and will make a statement as soon as possible. This merger is being considered under the public interest rules and I can confirm to the House that these rules will remain untouched by this order. The Secretary of State is following a quasi-judicial process and this is a matter for him. I am sure the House will appreciate that I can discuss only the process. The Secretary of State has followed a very transparent process and has published even more than is required by legislation. As to the phone hacking mentioned by the noble Lord, Lord Prescott, as I have said before, these are serious allegations-but they are matters for the criminal courts and not for this debate today.

In answer to the points made by the noble Baroness, Lady Howe, who knows so much about the press and public interest, the public interest takes account of the need for those,

"persons carrying on media enterprises ... to have a genuine commitment to the attainment in relation to broadcasting of the standards objectives set out in ... the Communications Act 2003"- which she probably knows well.

The noble Baroness, Lady Jones, asked on behalf of the Opposition about the removal of the last rule, reluctantly agreed by Ofcom. A strong local media sector that can invest in new content and in high-quality news provision is essential and Ofcom have reported that local media businesses are operating in difficult market conditions. In their report from August 2010, Ofcom said removing all these restrictions was a matter of judgment for Government and Parliament. Removal of these unnecessary rules would allow local media companies to move to new platforms and develop new cost-effective business models and partnerships. Plurality can still be maintained through competition law and the public interest test, wherever appropriate.

The proposals to remove Ofcom's duty to renew the media ownership rules for every three years-which I think was mentioned-is part of the Government's deregulatory agenda. It reduces the need to undertake unnecessary reviews and will bring back powers to the Secretary of State. Most importantly, the Secretary of State will have the power to ask Ofcom to undertake a review of media ownership rules as he sees fit.

I believe the noble Baroness also asked about local television and the BBC. The BBC agreed in October 2010, as part of the licence fee settlement, to support local TV by providing capital start-up costs of up to £25 million, and up to £5 million per annum for three years to acquire content. Decisions around the level of provision of the BBC's own local radio and news services are a matter for the BBC.

I hope I have responded to most of the points today. If I have missed any of the details of noble Lords' questions, I will of course write to them. I commend the order to the House.

Motion agreed.

Sitting suspended.