§
Amendment proposed: No. 232, in page 113, line 28, at end insert—
`(ee) in the definition of "participant", after "means" there is inserted "(subject to sub-paragraph (5A))".'.—[Mr. Maclennan.]
§ Mr. Deputy Speaker (Mr. Michael Morris)With this, it will be convenient to discuss the followmg amendments: No. 230, in page 114, line 1, leave out `secure' and insert 'achieve the result'.
§
No. 231, in page 114, leave out lines 3 to 8 and insert—
`(c) he is a party to an arrangement (including any undertaking, expectation or understanding), whether or not legally binding, whereby parties to the arrangement, whether or not including himself, who hold or are beneficially entitled to 50 per cent. or more of the equity share capital of the body in aggregate or 50 per cent. or more of the voting power in it in aggregate make provision as to the manner or circumstances in which any voting power in the body possessed by any of them is to be exercised or not exercised either generally or in relation to any specified matters.'.
§
No. 233, in page 114, line 19, at end insert—
'(5A) After sub-paragraph (5) there is inserted
(5A) For the purposes of this Schedule a person shall not be regarded as a participant in relation to a body corporate by reason only that his interest in shares in that body is—
§ Mr. SproatGiven the marvellous brevity of the hon. Member for Caithness and Sutherland (Mr. Maclennan), I shall begin with some good news for the Opposition, which is good news for us on the Bill. Our legal advisers are of the opinion that there is little to choose between the current formulation, using the word "secure", and one that uses the words able to "achieve", as proposed by amendment No. 230. In legal and policy terms they produce the same result. In the light of the legal opinion that we have received, and given the continuing concern expressed by the regulators, the Government will not oppose amendment No. 230.
Amendment No. 231 would bolster the provisions inserted in the Bill in Committee that deal with "joint control" and "deadlocking". As it stands, the Bill will, without doubt, catch cases where two companies each have a 50 per cent. stake in the deadlocked company. However, concern has been expressed about a case where, for example, company A and company B each hold a 49 per cent. interest, while 1 per cent. is held by another company that can be relied on to follow the wishes of company A and 1 per cent. by a company that can be relied on to follow the wishes of company B. Such a case could be caught by the substituted paragraph 1(3)(c) on page 114 of the Bill, as amended in Committee, if the 1 per cent. shareholders could each be regarded as nominees within the meaning of part I to schedule 2 to the 1990 Act. Such a situation could also be caught by paragraph 1(3)(b) if it was thought likely—in the sense of "reasonable expectation"—that A and B would be acting in accordance with each other's wishes. This is because if A and B were acting together, it would be reasonable to expect that they would be able to secure that the company's affairs would be conducted in accordance with their joint wishes. The 2 per cent. part shareholding would be completely irrelevant in company law terms unless allied with A or B.
As it stands, amendment No. 231 would treat each of the parties to the arrangement as controlling the company. That could produce some unwelcome, and possibly even absurd, results. It would clearly be wrong to catch the many legitimate and commonplace arrangements that may be entered into among shareholders in private or family companies to secure their position within the company.
814 For example, if a 5 per cent. shareholder had entered into an agreement with other shareholders speaking for 51 per cent. of the voting power purely to safeguard his representation on the board of directors—which would be "any specified matter" within the meaning of the ITC's amendment—it would be contrary to principle and common sense to treat him as controlling the company. For those reasons, the Government will not accept amendment No. 231.
Amendments Nos. 232 and 233 would prevent those who simply hold shares on behalf of others from being caught by the ownership provisions in schedule 2. They would ensure that such shareholders are not caught by the definition of the participant that now appears in the Bill. However, in so far as that is the intention of amendment Nos. 232 and 233, I understand that they are technically defective. They carve out an exemption for the purpose of limiting stakes in licences, but they do not do so in other respects. If the amendments were passed, such nominee or custodian trustees could still be deemed to control licences for other purposes and to be connected persons or "associates" of licence holders. In lay terms, they would be excluded from some of the ownership restrictions, but would still be included in others. To accept the amendments as they are could be to subvert, albeit unintentionally, the scheme of schedule 2. For that reason, and as I have agreed to amendment No. 230, I hope that the hon. Gentleman will withdraw his other amendment.
§ Mr. MaclennanI am grateful to the Minister for explaining in some detail, as I think is appropriate, the Government's reasons for not wishing to accede entirely to the views of the ITC on the matter. I have no doubt that his legal advice will be studied with great care. I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Amendment made: No. 230, in page 114, line 1, leave out 'secure' and insert 'achieve the resulf.—[Mr. Sproat.]
§ Mr. SproatI beg to move amendment No. 22, in page 114, line 30, at end insert—
'(8) Any reference in this Schedule to a person who is over a particular age is a reference to a person who has attained that age.'.The amendment puts beyond any doubt the fact that any reference in schedule 2 to a person who is over a particular age means that a person has attained that age. If that formulation still mystifies hon. Members, perhaps they will give me another 10 seconds to say that the intention of that form of words is to remove an ambiguity in the current wording of paragraph 9 of part III to schedule 2, dealing with the calculation of radio points for the purposes of the 15 per cent. limit applying to the ownership of radio licences. The current wording could be interpreted as relating to persons who are not yet 16 years old, rather than to those who have reached their 15th birthday.
§ Amendment agreed to.
815§ Mr. SproatI beg to move amendment No. 8, in page 116, line 13, leave out from "Act)" to end of line 15 and insert—
- '(i) a licence to provide digital programme services, or
- (j) a licence to provide national or local digital sound programme services.'
§ Mr. Deputy SpeakerWith this, it will be convenient to discuss Government amendments Nos. 9 and 7.
§ Mr. SproatAmendment No. 8 honours the commitment given to my hon. Friend the Member for Hexham (Mr. Atkinson) in Committee to disapply the nationality restrictions in part II of schedule 2 to the 1990 Act in respect of the ownership of digital programme service licences.
§ Amendment agreed to.
§ Mr. SproatI beg to move amendment No. 92, in page 116, line 24, after 'BBC company' insert
', a Channel 4 company'.
§ Mr. Deputy SpeakerWith this, it will be convenient to discuss Government amendments Nos. 93 to 101.
§ Mr. SproatThe amendments fulfil our commitment to allow Channel 4 to create or participate in companies involved in broadcasting activities. This will allow Channel 4, like S4C and the BBC, to take full advantage of the opportunities of digital broadcasting.
We are allowing Channel 4 to establish or participate in companies anywhere in the world, provided that they are involved in activities that would be licensable by the ITC or the Radio Authority if they were taking place in the United Kingdom. We are also allowing it to be involved in holding companies. These extra powers have been added to those already granted to S4C.
Amendment No. 94 makes it clear that Channel 4 is able to broadcast its digital simulcast service throughout the United Kingdom, including Wales. On analogue, the Welsh fourth channel is, of course, the responsibility of S4C.
§ Amendment agreed to.
§
Amendment made: No. 9, in page 116, line 29, at end insert—
`() A BBC company is also a disqualified person in relation to any licence granted by the Authority to provide a national, local or restricted service within the meaning of Part III of this Act.'—[Mr. Sprout.]
§ Mr. SproatI beg to move amendment No. 23, in page 116, line 41, leave out 'paragraphs 9 and 17' and insert `paragraph 9'.
§ Mr. Deputy SpeakerWith this, it will be convenient to discuss Government amendments Nos. 35, 38, 41 and 42.
§ Mr. SproatThe amendments arise as a result of the new regime for limiting participation, short of control, in broadcasting licences. As a result of these changes, paragraphs 16 to 21 of part III to schedule 2 are largely redundant, and are therefore deleted by amendment No. 42.
The holder of a licence to provide a national channel 3 or Channel 5 service is currently limited to a maximum interest of 20 per cent. in a national radio service and vice 816 versa. The holder of a licence to provide local digital sound programme services or a local radio service is currently limited to a maximum interest of 20 per cent. in a regional channel 3 licence holder where each of the services covers an area that is to a significant extent the same, and vice versa.
Amendment No. 35 replaces these restrictions with restrictions on common control, but does not impose restrictions on the extent of participation below the level of control. It therefore harmonises these restrictions with the restrictions on participation that were agreed in Committee.
Amendments Nos. 23, 38 and 41 make consequential adjustments to part III of schedule 2.
§ Amendment agreed to.
7.45 pm§ Mr. SproatI beg to move amendment No. 24, in page 116, line 42, leave out 'sixteen' and insert 'seventeen'.
§ Mr. Deputy SpeakerWith this, it will be convenient to discuss Government amendments Nos. 25, 26, 36, 37 and 158.
§ Mr. SproatAmendments Nos. 24, 25 and 26 enable the Secretary of State, by order, to include the new category of restricted service television licences within the categories of licence that are subject to the 15 per cent. total television audience share limit.
Amendments Nos. 36 and 37 allow the Secretary of State to limit, by order, the number of such licences that may be held by any one person.
Amendment No. 158 allows the Secretary of State to make an order imposing restrictions on cross-ownership of restricted service television licences and newspaper companies, and to apply the public interest test to them, should this prove appropriate in the future.
§ Amendment agreed to.
§
Amendment made: No. 25, in page 116, line 45, at end insert—
'(aa) restricted services (within the meaning of Part I of this Act);'.—[Mr. S'proat.]
§
Amendment proposed: No. 220, in page 117, line 24, leave out from beginning to end of line 26, and insert
`No person shall at any one time—'.—[Mr. Austin Mitchell.]
§ Mr. Deputy SpeakerWith this, it will be convenient to discuss the following amendments: No. 237, in page 117, line 25, leave out '15' and insert '10'.
§ No. 234, in page 117, line 26, after 'not', insert 'subject to sub-paragraph (3B)'.
§ No. 131, in page 117, leave out lines 44 to 49.
§ No. 249, in page 117, line 46, leave out '15' and insert `10'.
§ No. 221, in page 117, leave out from beginning of line 50 to end of line 14 on page 118.
§ No. 235, in page 117, line 50, after 'Or, insert 'and subject to sub--paragraph (3A)'.
§ No. 132, in page 118, leave out lines 1 to 4.
§ No. 133, in page 118, line 7, leave out '1(2)(b)' and insert '1(2)(a), (b)'.
817
§
No. 134, in page 118, line 9, leave out
'more than a 20 per cent.'
and insert 'a qualifying'.
§ No. 135, in page 118, leave out lines 11 and 12.
§
No. 236, in page 118, at end insert—
`(3A) For the purposes of calculating a person's audience time in respect of any period in accordance with sub-paragraph (3):
- (a) there shall be included the audience time attributable in respect of that period to each service referred to in that sub-paragraph in respect of which, on the date upon which the calculation of his audience time for the purposes of sub-paragraph (1) is made, he holds the licence, is a participant in the body corporate which holds the licence, or which he provides (as the case may be), irrespective of whether he held the licence, or was a participant in the body corporate which holds the licence or provided the service at any time during the period; and
- (b) there shall (for the avoidance of doubt) be excluded the audience time attributable in respect of that period to each service referred to in sub-paragraph (3) in respect of which, prior to the date upon which the calculation of his audience time for the purposes of sub-paragraph (1) is made, he has ceased to hold the licence, or to be a participant in the holder of the licence, or to provide the service (as the case may be).
(3B) Sub-paragraph (1) shall not prevent a person from continuing to hold any licence, or to be a participant in a body corporate which holds any licence, or from continuing to provide any service (as the case may be) if and to the extent that arrangements made by him after the end of period in respect of which his audience time exceeds 15 per cent of total audience time would cause his audience time calculated so as to take into account the effect of those arrangements, not to exceed 15 per cent of total audience time.'.
§ No. 222, in page 118, leave out from beginning of line 23 to end of line 13 on page 119.
§
No. 136, in page 118, line 27, at end insert—
`(6) In this paragraph "qualifying interest" means an interest of more than 20 per cent.
(7) The Secretary of State may by order amend sub-paragraph (6)—
Government amendment No. 27.
§
No. 223, in page 119, line 13, at end insert—
'3A. Provided that any proposal by a person who holds a licence to provide a service falling within any category specified in paragraph 1 (2)(a), (b), (c), (d) or (g) to acquire a further licence to provide one of the services so specified shall not take effect unless the Commission have examined the proposal and satisfied themselves that its terms are conducive to the public interest.'.
§ Mr. Robert G. Hughes (Harrow, West)I have been asked to table amendments Nos. 132 to 135 by Carlton Television. They are technical amendments that change the so-called audience attribution system introduced in Committee by the Government.
The purpose of the Government's system is to take some account of holdings in television stations that are significant but fall short of overall control. If a company holds more than 20 per cent. of a television station but not enough to have control, it has to add one half of that 818 station's audience share to. its overall total. The amendments' purpose is to ensure that all such minority stakes in television stations are treated the same.
Under the Bill as drafted, stakes over 20 per cent. in television stations trigger the audience attribution system, except in the case of channel 3, where the trigger is set at 15 per cent. I do not see a case for treating channel 3 stakes differently. It could lead to some serious anomalies.
If, for example, the consortium running Channel 5 is made up of five companies holding 20 per cent. each, none of them would incur any extra audience share. Yet a 20 per cent. holding in a channel 3 licence, such as the one Carlton, Scottish and Granada hold in GMTV, would incur extra percentage points.
The amendments make the system a little more balanced and give the Secretary of State the power to alter the trigger threshold should the need arise in future.
§ Mr. SproatAmendments Nos. 220 to 223 and 249 seek to remove the scheme whereby holdings in television are regulated against a 15 per cent. audience share limit. We chose audience share as a way of regulating television ownership because it relates directly to plurality. Limits based on the number of licences are no longer appropriate because licences are not a balanced unit of measure and do not reflect the ability of a media owner to influence opinion.
Amendment No. 237 is an alternative that would reduce the general limit on the holding of television licences from 15 per cent. of the total television audience to 10 per cent. But a 10 per cent. threshold would discourage companies from moving into digital broadcasting, particularly some of the larger players that would be well placed to make such investments. We therefore oppose those amendments.
Government amendment No. 27 introduces an order-making power, subject to the affirmative resolution procedure, whereby sub-paragraphs (1), (3) and (6) of paragraph 2 of part HI of schedule 2 can be amended to reflect any significant change in audience measurement practices of the television industry.
We have reflected further on the calculation of audience share and we are prepared to accept amendments Nos. 234, 235 and 236, and I hope that Opposition Front Benchers will enjoy my saying that. I am grateful to my hon. Friend the Member for Harrow, West (Mr. Hughes) for his cogent explanation.
§ Mr. MaclennanI rise briefly to thank the Minister for accepting amendments Nos. 234, 235 and 236: no doubt that will give satisfaction to the ITC, which submitted the amendments.
§ Mr. Austin MitchellI beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Amendment made: No. 234, in page 117, line 26, after `not', insert 'subject to sub-paragraph (3B)'.—[Dr. Moonie.]
§ Amendment made: No. 131, in page 117, leave out lines 44 to 49.—[Mr. Robert G. Hughes.]
§ Amendment made: No. 235, in page 117, line 50, after `(1)', insert 'and subject to sub-paragraph (3A)'.—[Mr. Maclennan.]
819§ Amendments made: No. 132, in page 118, leave out lines 1 to 4.
§ No. 133, in page 118, line 7, leave out `1(2)(b)' and insert `1(2)(a), (b)'.
§ No. 134, in page 118, line 9, leave out 'more than a 20 per cent.' and insert 'a qualifying'.
§ No. 135, in page 118, leave out lines 11 and 12.—[Mr. Robert G. Hughes.]
§
Amendment made: No. 236, in page 118, at end insert—
`(3A) For the purposes of calculating a person's audience time in respect of any period in accordance with sub-paragraph (3):
(3B) Sub-paragraph (1) shall not prevent a person from continuing to hold any licence, or to be a participant in a body corporate which holds any licence, or from continuing to provide any service (as the case may be) if and to the extent that arrangements made by him after the end of period in respect of which his audience time exceeds 15 per cent of total audience time would cause his audience time calculated so as to take into account the effect of those arrangements, not to exceed 15 per cent of total audience time.'.—[Dr. Moonie.]
§
Amendment made: No. 26, in page 118, line 27, at end insert—
'() The Secretary of State may by order amend subparagraphs (1)(a), (3)(a) and (c) by adding a reference to relevant services falling within the category specified in paragraph 1(2)(aa).'—[Mr. Sproat.]
§
Amendment made: No. 136, in page 118, line 27, at end insert—
'(6) In this paragraph "qualifying interest" means an interest of more than 20 per cent.
(7) The Secretary of State may by order amend sub-paragraph (6)—
§
Amendment made: No. 27, in page 119, line 13, at end insert—
`(7) If it appears to the Secretary of State that there has been a significant change in the audience measurement practices prevailing in the television industry, the Secretary of State may, after consulting the Commission, make such amendments of sub-paragraphs (1), (3) and (6) as he considers appropriate for the purpose of taking account of that change.'.—[Mr. Knapman.]
§ Mr. SproatI beg to move amendment No. 28, in page 119, line 41, leave out 'for any numerical limit' and insert 820
`or percentage for any numerical limit or percentage'.Amendment No. 28 enables the Secretary of State to vary the percentage interest short of control that a person may have in licences to provide television multiplex services.
§ Amendment agreed to.
§ Mr. SproatI beg to move amendment No. 29, in page 120, line 24, leave out from first 'services' to second `services' and insert
`by means of two or more television multiplex services if the number of points attributable to those digital programme'.
§ Mr. Deputy SpeakerWith this, it will be convenient to discuss Government amendments Nos. 30, 31, 147 and 32.
§ Mr. SproatIn the start-up phase of digital terrestrial television, a broadcaster may wish to provide several services on one multiplex. We do not want to prevent that, but the ownership points system would have done so. The amendment would allow the points system to operate only where a broadcaster is providing services on more than one multiplex. Amendment No. 29 gives digital terrestrial television a better chance of a successful launch and ensures that we can safeguard plurality of voice in its initial stages, before the overall 15 per cent. audience limit can bite.
Amendment No. 32 allows the Secretary of State to vary elements in the digital points system set out in paragraph 7 of schedule 2.
We do not yet know precisely how digital television will develop. Therefore, the ownership regime must be able to cope with unforeseen developments.
The radio points system, which is set out in paragraphs 8 to 10 of schedule 2, already provides for the variation of elements within that system. Amendment No. 32 extends a similar flexibility to the digital points system.
Amendment No. 147 is a minor technical amendment that clarifies the drafting of paragraph 7(8).
§ Amendment agreed to.
§ Amendments made: No. 30, in page 120, line 32, leave out 'broadcast' and insert 'provided'.
§ No. 31, in page 120, line 33, leave out 'broadcast' and insert 'provided'.
§
No. 147, in page 121, line 26, leave out from 'licence' to 'to' in line 29 and insert
`but who does not control that body, shall be taken'.
§
No. 32, in page 121, leave out lines 30 to 32 and insert—
`(9) The Secretary of State may by order amend this paragraph—
§ Mr. SproatI beg to move amendment No. 148, in page 121, line 43, at end insert 'or have been awarded'.
§ Mr. Deputy SpeakerWith this, it will be convenient to discuss Government amendment No. 149.
§ Mr. SproatAmendments Nos. 148 and 149 make it clear that, for the purposes of the 15 per cent. total radio ownership points limit, points will be allocated to the company concerned when a licence is awarded. In other words, the Radio Authority will not wait until the company is broadcasting.
§ Amendment agreed to.
§ Amendments made: No. 149, in page 121, line 51, after `force' insert 'or have been awarded'.
§
No. 150, in page 124, line 45, at end insert—
`(5A) This paragraph has effect subject to paragraph 12A.'
§ No. 151, in page 125, line 3, at end insert—