ITV Digital

HC Deb 26 April 2002 vol 384 cc594-606

11 am

The Secretary of State for Culture, Media and Sport (Tessa Jowell)

With permission, Madam Deputy Speaker, I would like to make a statement on ITV Digital. As the House knows, the ITV Digital administrator, Deloitte Touche, announced yesterday that it is preparing for the short-term sale of the business and its assets. This is an issue that has reverberations far beyond the boardroom of ITV Digital. It directly affects the million ITV Digital subscribers, the company's staff, its creditors, its programme suppliers and the clubs, fans and supporters of the Nationwide Football League.

The Government too, have a direct interest. We are concerned for those millions of people and hundreds of businesses who are watching closely to see whether they will be able to recover something from the sale of the company. That is why it was a great pity that ITV Digital was not able to come to a deal that was acceptable to the Football League, one of its biggest creditors. I have spent much of the last few weeks seeking to encourage all the parties to the talks on restructuring to keep the company going, to keep negotiating and to keep talking. But this week, time ran out for ITV Digital and its creditors, and now the usual commercial processes must take their course. As this is a complex and fluid situation, I want to make clear to the House my willingness to ensure that the House is updated in coming weeks.

I would like to set out for the House the next steps in what has been a confusing—and is still, in some respects, an uncertain—process. For the time being, ITV Digital subscribers are continuing to receive a service, including the free-to-view services enjoyed by all digital viewers. But the ITV Digital pay services will last only as long as the company's suppliers are willing to continue to supply their programmes and services. That will depend on negotiations currently under way between the suppliers and the administrators. It is possible that some suppliers will have no choice but to withdraw their programmes.

If and when the service for which the licences have been granted ceases to be provided, and the licensee no longer fulfils the terms of its licences, the Independent Television Commission will begin the process of revocation of the licences for the digital terrestrial multiplexes formerly used by ITV Digital. Having revoked the licences, the ITC will then re-advertise them in an accelerated process that is likely to take six weeks. In the meantime, the administrator is arranging for all existing subscribers to be kept informed of the position by on-air announcements and by personal letter. That is obviously vital. ITV Digital subscribers are innocent parties in this matter, and they deserve to be given all the advice and information possible while the administrator and others work to preserve their TV service for the future.

Looking to the end of this stage, I understand that the administrator remains confident that a sale of the business can be achieved. I have, of course, received representations from my hon. Friends the Members for Battersea (Martin Linton), for West Carmarthen and South Pembrokeshire (Mr. Ainger), for Preseli Pembrokeshire (Mrs. Lawrence) and for Plymouth, Sutton (Linda Gilroy), and from the Under-Secretary of State for Transport, Local Government and the Regions, my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson), relating to their concerns for the more than 1,500 members of staff affected. We all recognise that this is an anxious and uncertain time for the staff, but they are being extremely well served by the representations of their Members of Parliament. I am confident that the free-to-air services will remain in place without disruption, and it is important to remember that about 60 per cent. of the ITV Digital subscriber base take only free-to-air services.

I shall now turn to the situation facing football. As the House will be aware, ITV Digital entered into a contract with the Nationwide Football League. The TV rights to broadcast Football League matches were reported to have been sold to ITV Digital for £315 million. I understand that the Football League has so far received £137 million from the contract, and that £178 million therefore remains outstanding. It was an important object of the negotiations in recent weeks between the Football League and ITV Digital—and, subsequently, its administrators—to reach a settlement on this matter. Clearly, the failure of ITV Digital to meet its contract with the football clubs will be a further blow for the many clubs that are already facing financial difficulties.

I welcome the fact that the chief executive of the Football Association—the governing body for the game—will bring together the various organisations with the power to help to navigate football and the clubs through this difficult time. I have obviously been in contact with the chief executives of the FA, the Premier League and the Nationwide League. The Government will offer all support to the efforts of that FA-led group. Supporters Direct, established by the Government in 1998, has already helped 31 of the 72 Football League clubs by enabling supporters to invest through supporters' trusts. We expect that Supporters Direct will take a prominent role in helping to secure the future of clubs over the coming months.

In many communities, football clubs are a powerful force for good. They are a source of local identity and of local pride. Many of them run successful programmes to get people involved in the sport and to help them to develop their talent. Many also use the sport to attract young people into education and positive involvement in the community. The anti-racist and social cohesion work through the football in the community and the playing for success schemes, run in conjunction with the Department for Education and Skills, are two powerful examples of the way in which this works in practice.

It is important to be clear that football has not asked the Government to bail it out financially, but we want to do all that we can to offer clubs support at this difficult time. As I have mentioned, I have been in regular contact with representatives of the various relevant football organisations, and we will continue to offer help to clubs in terms of support to players and staff who find themselves out of a job. Just this week, my right hon. Friend the Minister for Sport had a very positive discussion with the football authorities and Sport England to ensure that the resources are provided to secure the future of the football youth development programme.

I shall now outline the circumstances facing digital television in the wake of the collapse of ITV Digital. Yesterday's announcement represents the collapse of a brave commercial enterprise to launch an entirely new digital platform. The business made commercial judgments that have turned out to be unsuccessful. Of course, there is always a risk in such ventures, especially in relation to markets built on new technology. This is, however, essentially a private matter between the company and its creditors. The Government's role is to protect the wider public interest. Apart from regular contact with the companies concerned, I have been in day-by-day contact with the Independent Television Commission, whose responsibility it is to regulate the commercial broadcasters. My aim in all this has been to keep a discussion going, and to keep the parties talking about how to maintain a service for digital terrestrial viewers.

More broadly, the Government have helped to create a very good climate for digital TV in the UK. Twice the number of UK homes have access to digital television as the European average. We should be proud of that. Thanks to Government action, digital TV has grown faster in this country than the take-up of mobile phones, the internet and even colour television.

We have created an excellent regulatory framework for digital television, and ITV Digital in particular. Our digital action plan provides the route map to digital switchover by 2010, bringing together industry, broadcasters and consumers—the key players, who will make switchover happen.

All material obstacles to improving the power of transmission, and thereby the quality, have been removed, subject to the need to prevent interference with existing analogue signals.

Carlton and Granada, the owners of ITV Digital, were assisted by a rebate on the tax levy on their analogue Channel 3 licences for every household to which they provided digital services. This rebate—the digital dividend—is worth tens of millions of pounds. In addition, our settlement for the BBC licence fee has enabled the BBC to expand its output of digital television services.

As a result, digital television in the United Kingdom has grown faster than in any comparable country and is received by 40 per cent. of UK households. No country in the world has done more to nurture the digital revolution, and no country has seen such success as a result. Britain is a world leader in digital technology and digital reach.

We have very good reasons, even at this difficult time, to be positive about the future as new cheap set-top boxes come on to the market and scope increases for improved picture and reception quality. We expect to see these roll out as soon as the current uncertainty is resolved. As I have made clear, I expect that uncertainty to be resolved within a few weeks.

The hard truth is that this is a failure of a company, not a technology. New entrants will deal with a better understood technology and an established infrastructure. My contact with the industry suggests that established and new industry players want to have a go at making this proposition work. They will either go forward to the administrator or firm up their expressions of interest as part of any ITC re-tendering of the licences.

I also commend the work of the administrator, who has acted throughout with forbearance and professionalism.

In conclusion, the Government have always made it clear that the switchover process must be driven by consumer demand. In any new technology, there are bumps on route, and this has been one. However, I agree with the Consumers Association that the most important thing is to restore certainty and predictability for customers so that they can make their own, informed choices.

It is clear that digital terrestrial television has an important role to play in the digital future. It is a natural migration path for analogue viewers who are accustomed to receiving their television services through their aerials and it is potentially universal in its availability. This platform must continue, to ensure that all viewers have a full range of options in a competitive and dynamic environment.

Digital television has the potential to bring enormous opportunities and benefits to families all over the country. Digital households enjoy a wide range of channels and a wide range of additional benefits including interactive programming, information services that provide education and entertainment and even access to the internet.

The success of DTT should not be equated with the position of one commercial operator. The fact that ITV Digital has not succeeded will not deflect the Government, consumers and the broadcasting industry from making a reality of the digital future. Digital television, and the promise it holds, is more than ITV Digital.

Mr. Tim Yeo (South Suffolk)

I am grateful to the Secretary of State for her statement and for making it available to me before she delivered it to the House. I also welcome her assurance that she will continue to update Parliament in the coming weeks as this crisis evolves.

I entirely share the right hon. Lady's concern for ITV Digital subscribers—I happen to be one—the company's employees, the creditors and suppliers and, of course, the football clubs and millions of football fans.

The truth is that nobody emerges from this ghastly mess with credit. Carlton and Granada are walking away from a problem that they are partly responsible for creating, and the unrealistic expectations of the Football League leave many football clubs facing a bleak future. Above all, the Government, who must decide when their stated goal of digital switchover will occur, cannot continue shrugging off all responsibility for the crisis. Complacent self-congratulation of the sort that we have just heard about the Government's role in promoting digital television is no substitute for the actions that are urgently needed. Everybody in the industry has known for months that this crisis has been brewing, yet the Government have so far done nothing to address the problem or lay the foundations for a solution. The result of that failure is that Britain's leadership of the digital television revolution is at risk. Our chance of dominating one of the 21st century's most promising industries is in danger of being thrown away.

If digital switchover is to be achieved by 2010, or indeed by a later date, it is essential that a viable digital terrestrial television platform operates alongside the satellite and cable platforms. Only in that way can the public interest be properly served and protected. Unless a replacement for ITV Digital is found quickly, public confidence in digital terrestrial television will drain away. Indeed, the Government's slowness in tackling the problem of poor-quality digital terrestrial television reception by increasing the strength of the signal has already seriously damaged public confidence.

Furthermore, many consumers are confused about digital television. Nearly all new television sets sold this year are analogue, yet the Government have done nothing to educate the public about what is happening. Instead, they allow consumers to go on buying equipment that the Government's stated policies will render obsolete within eight years, without any warning given to the consumer at the point of sale.

The Secretary of State has been in post for more than 10 months, long enough to have thought carefully about the important issues involved. I should like her to answer some simple questions that were not addressed in her statement. First—and this is regardless of the outcome of the present negotiations—will she publish a clear timetable setting out, step by step, when and how the existing digital terrestrial television signal will be strengthened and its geographical reach increased? Secondly—again, regardless of the outcome of the present crisis—will she mount a public information campaign to ensure that all consumers understand the difference between analogue and digital television and between satellite, cable and terrestrial television and that they are aware of the implications of Government policy when it comes to the television sets that they own and those they are thinking of buying?

Thirdly, to assist the present talks to a successful outcome as quickly as possible, will the right hon. Lady make it clear whether she believes that digital terrestrial television should consist exclusively of free-to-air channels or a mixture of free-to-air and pay television? In that context, does she recognise that many people cannot and probably never will be able to access satellite or cable television for various reasons and will therefore depend on digital terrestrial television to enjoy the wider choice of channels that are available to people willing to subscribe?

Since the end of the consultation period following publication of the Government's document just before Christmas, they have been notably silent on how they will apply the rules on media and cross-media ownership. Will the right hon. Lady explain how she intends to apply those rules in finding a replacement for ITV Digital as soon as possible? Will she say whether she believes that the ITC should re-allocate the multiplexes that ITV Digital surrenders as a single package or individually? Will she say how she thinks that the process of re-allocating the multiplexes relates to the sale of ITV Digital's assets?

Will the right hon. Lady review the Government's timetable to achieve the goal of digital switchover by 2010? Does she agree that some of the potential benefits of digital television will be lost if the set-top boxes that convert sets from analogue to digital cannot accommodate a pay-television upgrade option? Does she share the concerns of some people that, if the BBC or Sky were to emerge as the dominant player in the new digital terrestrial television platform, excessive power would be concentrated in the hands of organisations whose market dominance is already considerable? Will she explain how the BBC charter and her agreement as Secretary of State with the BBC may affect the BBC's role in helping to find a solution to the present crisis?

On the future of football, fans will study the right hon. Lady's statement with interest, but in vain for anything other than warm words and expressions of sympathy. Will she confirm therefore that the Government do not intend to take any practical steps to assist football clubs, even those that may now face bankruptcy?

The broadcasting industry and all those who believe that the future lies with digital television will have been disappointed by today's statement—the uncertainty continues and the Government's lack of leadership and commitment remain as stark as ever.

Tessa Jowell

Let me work my way through the Opposition spokesman's questions, and provide answers. The hon. Gentleman's questions reveal an extraordinary degree of ignorance of the crisis about which he claims to be so concerned. First, most of the information that he seeks is set out in the digital action plan—the route map that identifies the roles of the Government, broadcasters, consumers and the industry between now and the point at which switchover is achieved, subject to meeting the tests that have been clearly set out. Secondly, as part of the digital action plan, the market preparation group is promoting information material for consumers, working with consumer organisations. We will be led by their judgment on when is the right to moment to launch a public information campaign.

In relation to the digital terrestrial platform, yes, the Government's position is to promote competition between platforms to develop consumer choice and therefore to enable the possibility that each platform has a combination of free-to-air and pay services. The general expectation is that, as digital television develops, each platform will develop a different identity, depending on consumer preference and consumer choice, but the intention is that DTT should be a free-to-air and a pay platform.

If the hon. Gentleman had bothered to check, he would have been able to clarify the points about the extent of light-touch regulation in relation to multiplex ownership, the regulation of which was considerably lightened by my predecessor, my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith). Multiplex ownership does not involve any restrictions in relation to cross-media or non-European ownership, so multiplex ownership is not constrained in the way that other aspects of the media are subject to media ownership rules.

The hon. Gentleman often makes the point about the transmission signal. Again, that is a pity; he betrays his ignorance. The responsibility for turning up the signal and determining the level sits with the ITC, which approves the increases, and the broadcasters, which are responsible for the transmission network. The broadcasters, rather than the Government, are responsible for the transmission network because the Government whom he supported were responsible for privatising the network under their 1996 legislation.

Having said that, the first stage of power increase has already been established, benefiting 25 per cent. of the population. Approval has now been given for broadcasters to proceed with a further increase in power to cover 50 per cent. of the population, but that involves a highly technical set of judgments given the fact that, as a Government, we decided very early on in announcing the digital switchover policy that the interests of analogue viewers had to be protected as the digital technology rolls out. So the position is clear: the signal strength has been increased. There is absolutely no regulatory obstacle to the success and survival of the digital terrestrial platform.

The hon. Gentleman's final point related to football clubs. Again, in addition to ITV Digital subscribers, there are very large numbers of innocent victims. The Government will work alongside football to provide practical help, largely through grassroots organisations and Supporters Direct, which has been very successful in establishing fans' trusts as a better way to manage clubs and in helping clubs that recently and before this crisis suffered difficulty. So I am proud of the Government's record, which is one of innovation, progressive action and, most importantly, practical action to protect the interests of consumers and football fans throughout the country, rather than that of the Opposition's uninformed carping on the sidelines.

Mr. Adrian Sanders (Torbay)

This is a sorry state of affairs not only for the subscribers, but for professional football and the technology industry, especially digital platforms. It is also a sorry state of affairs for those communities that have lost jobs, most notably Plymouth,. That will have an impact on the south-west economy.

In advance of this statement, several news reports in the last 24 hours have mentioned the contribution that BSkyB has made to the difficulties that ITV Digital has experienced. I should like to ask the Secretary of State when she expects the Office of Fair Trading to make a decision on the alleged behaviour of BSkyB in relation to competition law.

We have been very fortunate in some respects in having more than one digital platform in this country. I wonder whether the right hon. Lady can point to any other country in the world with two commercially viable digital platforms. I also wonder whether our expectations—or at least the time scales of those expectations—have been too optimistic thus far. Does not this episode demonstrate that the only likely success of digital television in the future is as a free-to-air platform? Will she encourage the BBC, ITV, Channel 4 and Channel 5 to get together perhaps to consider the viability of providing such a platform? In the light of this latest information, what is her advice to anyone perhaps considering buying a digital television this weekend?

The Government have placed enormous importance on football as an engine for economic regeneration in many communities, some of which are particularly disadvantaged. For many years, many professional football teams have run at a deficit. It is often a hand-to-mouth exercise depending on one benefactor, which is not ideal. I applaud the Government's work on helping supporters' trusts to get off the ground, but they are on a small scale and money is limited. Football clubs in many communities fear that they may not appear on the fixture list next season.

The Government have a role to play, if not in funding, in acting as a broker between football clubs and television companies, and between the Nationwide Football League clubs and the Premiership. For too long, far too many of the resources available to football have been sucked up by the premier division, and now the Nationwide League clubs are in dire straits. Perhaps some of the resources in the Premiership should be directed towards the Nationwide League. The Government should have a role in trying to ensure that the money in football is more equitably distributed.

Mr. Dennis Skinner (Bolsover)

More spending from the Liberals.

Tessa Jowell

Yes, I spotted the spending commitments.

I thank the hon. Member for Torbay (Mr. Sanders) for making those points. I expect the OFT to reach a conclusion on its considerations soon.

On the DTT platform, it is the Government's clear intention to maintain the policy of encouraging three platforms with competition between them—therefore, platform neutrality—to promote the range of choice for consumers. The circumstances facing ITV Digital are a good justification for that policy, which gives my constituent or the hon. Gentleman's constituent who wants to buy a digital television set this weekend the choice of two other platforms if they do not want to take a short-term risk with DTT.

On football, we will work closely with the FA-led group that is considering football's position following the collapse of ITV Digital. I welcome the leadership that football is showing, because the hon. Gentleman is right that the financial base of many clubs is unsustainable—their commitment to their players' wages bills is not matched by their income. Football recognises that problem, and must address it and the other problems that he identifies.

We shall provide support through the efforts of Supporters Direct, which was introduced by the Government and is supported by my predecessor, my right hon. Friend the Member for Islington, South and Finsbury, and by my right hon. Friend the Minister for Sport. It is doing excellent work to link fans more directly with the financial security and future of their clubs.

Mr. Chris Smith (Islington, South and Finsbury)

On football, I strongly endorse my right hon. Friend's comments about the work of Supporters Direct. In this crisis that faces Nationwide League clubs, will she ensure that modest additional resources are made available to Supporters Direct to enable it to assist fans in clubs around the country that may be affected?

On the future of digital broadcasting, does she agree that the most important objective is to ensure that the digital terrestrial platform survives and thrives into the future? Without that, the overall change from analogue to digital that we hope will occur within the next few years will have no chance of success.

To assist in that, will she encourage a consortium of public service broadcasters and subscription broadcasters to come together to consider the possibilities as regards bidding for a re-advertised franchise for the multiplexes? Will she particularly encourage them not to contest head to head with satellite broadcasting, but to put forward a more modest programme of channels and programmes that are available to viewers at a more modest cost? That might become a serious financially viable proposition.

Tessa Jowell

I thank my right hon. Friend for those comments.

We will keep under close review the ability of Supporters Direct to do the job that football desperately needs it to do. Obviously, it will be closely involved in the discussions within the FA.

It is of course vital that DTT survives in future, for all the reasons that I have given.

On my right hon. Friend's final point, it is highly likely that the shape of the offering on the DTT platform will become more distinctive than it has been to date. Competition and other factors make the case for that argument. However, I am sure that he understands that it is not my role to act as a broker for potential bidders. If and when the licences are advertised and re-tendered, it is the role of the ITC, as regulator, to consider those bids within the clear regulatory framework that has been established. That healthy environment was created partly as a result of the efforts of my right hon. Friend, whose vision and commitment when he was Secretary of State established the framework for our country's digital policy.

Mr. Laurence Robertson (Tewkesbury)

It is ironic that this statement takes place in the middle of a debate about local communities. As the Secretary of State rightly says, football clubs throughout the land are vital to communities, and this is a sad situation.

The Secretary of State touched on the future of football but, perhaps understandably, concentrated on the overall impact on the digital service. Will she return to football and give a few more details of how exactly she is working with the FA to try to rescue the clubs? Will that involve the renegotiation of contracts with players or trying to get commercial support for football clubs?

Tessa Jowell

The discussions with the FA, the Premier League and the Nationwide League are just beginning, so it would be premature for me to set out in detail the contribution that the Government intend to make. As I said, my right hon. Friend the Minister for Sport had a meeting this week to discuss the future of programmes for young people, and I have already explained the important role of Supporters Direct. We shall keep in close contact with the football authorities in the coming weeks.

It is important never to forget that football is very resilient because of the love and support of the fans of clubs all over the country. Football has faced severe financial difficulties on previous occasions—for example, following the Taylor report and the Bosman ruling—and we should have confidence that with the leadership that has been offered it will negotiate this difficulty.

Kate Hoey (Vauxhall)

Has my right hon. Friend had any formal or informal discussions with the chairman of Carlton or the chairman of Granada who, ultimately, no matter what they say, are ultimately responsible for this break of contract and lack of faith? In particular, does she find it a little bit difficult that the chairman of Granada, Charles Allen, is the chairman of the Commonwealth games, and is going round asking people to give money to promote those games while he heads a company that has reneged on its contract and done football down? I accept, of course, as many hon. Members have said, that football itself must bear some of that responsibility.

Tessa Jowell

I thank my hon. Friend for that question. Yes, I have met the chairmen and chief executives of Carlton and Granada as part of the series of meetings that I have had over the past weeks. Obviously, all the commercial aspects of the consequences of the decision to sell ITV Digital are now a matter between them and the administrator and, in relation to regulatory issues, the ITC.

I hope and believe that the Commonwealth games will be a great success, and Charles Allen has made a very important contribution to that. I hope that I have made it clear to the House today that I recognise the difficulties facing Carlton and Granada and the consequences of those difficulties. However, no one should doubt the part that Charles Allen will have played in delivering a successful Commonwealth games.

Mr. Robert Syms (Poole)

The history might have been different had BSkyB been part of the original consortium, but competition law, of course, precluded it from being so. Given the changed situation, is BSkyB still precluded from having an impact on the future of ITV Digital in receivership?

In the Budget the Government cracked down on tax relief on films, because television companies were using it extensively to make programmes. The Treasury now expects to take £500 million, principally from the television industry, over the next three years. Does the Secretary of State consider that that will have any impact on the financial background of television companies and their ability to sort out this situation?

Tessa Jowell

As I am sure that the hon. Gentleman understands, who bids in the event that the licences are re-advertised, or who bids for the new licences, or who buys the company are matters for the ITC and the administrator, with reference to the Competition Commission as necessary, so I have nothing to add to that. In relation to the tax changes announced by my right hon. Friend the Chancellor in the Budget, we are in discussion with Treasury Ministers about their application and in discussion with the industry, as the hon. Gentleman would expect.

Mrs. Jackie Lawrence (Preseli Pembrokeshire)

My right hon. Friend mentioned in her statement the fact that 1,000 people in Pembrokeshire will lose their jobs unless an alternative buyer is found to operate digital pay TV. Will she please impress on the ITC the need to speed up the licence transfer process to encourage another buyer to come forward, in the hope that we can preserve those jobs? Will she, in her discussions, bear it in mind that the 1,000 jobs in west Wales and 700 jobs in Plymouth and the livelihoods of those people are far more important than the bleating of a few wealthy football chairmen, whose intransigence and stubbornness seems to have brought this situation to crisis point?

Tessa Jowell

I pay tribute to my hon. Friend for her unstinting efforts on behalf of her constituents to mitigate the effects of a very difficult and uncertain time for them. That difficulty and uncertainty is likely to continue for days and possibly weeks, but I recognise what she says about the importance of a speedy resolution. For that reason, the ITC has said that if the licences have to be re-advertised and re-tendered, that will happen within an accelerated time scale of about six weeks. Obviously, everyone involved needs some certainty—not least my hon. Friend's constituents, who are wondering whether they will have a job in two weeks.

Martin Linton (Battersea)

I thank my right hon. Friend for her statement. As she mentioned, 150 employees at the headquarters in Battersea were made redundant on Monday, along with about 80 field staff, but there are still about 250 at the headquarters, and I spoke to some of them this morning. They are very grateful for the period of grace that they still have, and for any attempts to find a buyer or a consortium that can take over the company.

The football contract is certainly seen by everyone as a very important element in precipitating the crisis, but is my right hon. Friend aware that the company regards the fundamental issues as being technical and competitive? They are technical in the sense that, despite the Government's best efforts, the reach of the transmitters has still been much less than expected and the strength of the signal has been an enormous problem. It is about 20 times higher in Australia, even after all the efforts that have been made. The company would ascribe to those technical factors the fact that it had 1.2 million customers instead of about 2 million.

There were also competitive problems. Sky is of course required to make its platform available, but ITV has been paying more than the retail price for that and that extra cost has been a huge element in the crisis. In many other countries, such an arrangement would be regarded as predatory pricing. I understand that a complaint has been lodged with the OFT. There is also a lawsuit in the United States over the switchcard.

The Secretary of State may not be able to comment on those issues, but those to whom I spoke this morning earnestly hope that further action is taken on those that are essential to the future of the whole digital platform, not just the future of ITV Digital, and those over which the regulator and Government have power.

Tessa Jowell

My hon. Friend has made great efforts to explain the uncertainty felt by his constituents who are employed by ITV Digital, arising from its collapse. He also mentioned two important issues to which we have already referred, the first being the need to improve the technology by increasing signal strength. I have made the position clear on that. The second issue is the need to extend coverage so that viewers can get a picture of equally high quality whether they are watching the commercial channels or the public service broadcasting channels, particularly the BBC. The need to address those requirements is being driven by the ITC as regulator. The importance of those issues is why those regulatory and technical obstacles in a new and emerging technology have been addressed with such success.

Finally, my hon. Friend was absolutely right when he referred to the various aspects that touch on the role of the competition authority. They sit fairly and squarely with the authority and he understands that it would not be right for me to comment.

Mr. Dennis Skinner (Bolsover)

Does not the Minister find it reprehensible that those television companies that in the past 20 or 30 years or more have been making money hand over fist—they have had a licence to print money—can engage in a contract and then blithely walk away when it does not suit them because they are going to lose money? What steps can we take as a Government to ensure that they foot the bill, especially in regard to the 1,700 people who are bound to lose their jobs?

In the absence of any proposals from the Tories, who just had 10 questions, or the Liberals, who had a few spending commitments but no proposals, will the Minister consider the unthinkable? Is there any legal, financial or economic impediment to the BBC's stepping in as a rescue act, not to line the pockets of football chairmen or anyone else but to ensure that some or all of these jobs are saved?

Tessa Jowell

My hon. Friend makes points that many people will sympathise with. However, the facts are that the demise of this commercial company is a matter for the company, its creditors and the administrator. It is the Government's role to provide assistance with the consequences, not to intervene directly in what is a commercial contract between Carlton and Granada and the Football League, or in the relationship between Carlton and Granada and the creditors of ITV Digital. However, I am sure that companies facing these circumstances and the resulting damage understand the importance of their reputation and the way in which they conduct themselves in these very difficult times.

At the moment, the BBC is clearly one of the contributors to the digital terrestrial platform, and we expect that to continue. If and when the licences are re-advertised, we hope that bids will come from a very wide range of potential providers of programme services on that platform, and the ITC will be looking for such bids.

Mr. Clive Betts (Sheffield, Attercliffe)

My right hon. Friend has rightly drawn attention to the fact that in the general sense, football clubs and football itself are at least partly the author of their own misfortunes, given the unsustainable salaries that clubs have been paying. However, in this case it was probably not unreasonable for clubs to enter into contracts beyond the end of this season, given the basis of the Football League's contract with ITV Digital. In keeping with the comments of my hon. Friend the Member for Bolsover (Mr. Skinner), whatever the legal arguments, is it not unacceptable for companies of the status of Carlton and Granada to stand idly by and watch communities in fear of the loss of their football clubs? Have not these companies at least a moral obligation? Is it right for them to reap the benefit of the digital dividend, while at the same time seeking to wash their hands of the consequences for football of the collapse of a company of which they were joint owners?

Tessa Jowell

As the Government, we have to operate within the constraints of the legal contract as it stands. My hon. Friend expresses a frustration that will be reflected by football fans and clubs up and down the country, but the fact is that the contract between ITV Digital and the Football League existed. The matter may be the subject of litigation, so it would be unwise of me—even on the Floor of the House—to say any more than the fact that it is a great pity that a resolution was not achieved, and that football is so very heavily out of pocket.

Lawrie Quinn (Scarborough and Whitby)

Having listened closely to the Secretary of State's statement, Members will know that discussions have taken place with the management of football clubs. Has any contact been made with the Professional Footballers Association, however, particularly given that the lion's share—a suitable phrase in English terms—of the costs associated with football are generated by the players' wage bills?

Tessa Jowell

I refer my hon. Friend to my earlier remarks about the football authorities' welcome recognition of the need to address the financial insecurity that many clubs now face. Although that insecurity was in part created by the immediate crisis arising from the failure of ITV Digital, it is more deep rooted and long standing than that. Obviously, the PFA will be an important party to any successful resolution of those discussions.

Kevin Brennan (Cardiff, West)

Will my right hon. Friend confirm that Carlton and Granada have refused to fund an orderly transfer and sale to new owners, thus pulling the plug not just on football clubs—including non-English clubs such as Cardiff City, which is in this weekend's play-offs—but on the 1,000 jobs to which my hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence) referred? Indeed, the loss of those jobs will also affect the constituency of my hon. Friend the Member for West Carmarthen and South Pembrokeshire (Mr. Ainger).

Tessa Jowell

Obviously, the more orderly the sale of the company, the better for everybody, but it is not for me to comment on the conduct of negotiations between the administrator, Carlton and Granada, and ITV Digital.

Geraint Davies (Croydon, Central)

My right hon. Friend will be aware that, if a consumer buys a holiday in good faith and the company goes bust, they get their money back. Holiday companies must hold a bond or insurance, because the regulator—the Civil Aviation Authority—requires it. Will she and her colleagues from the Department of Trade and Industry at least consider establishing a bonding regime in this fast-growing, high-risk and competitive marketplace, so that consumers who subscribe to services in good faith can have some protection from the private operators that take big risks at their expense?

Tessa Jowell

Without making a particular judgment on my hon. Friend's proposal, I can assure the House that, in the weeks ahead, all those with an interest in securing the future of the digital terrestrial platform, its consumers and employees will be looking at the lessons that can be learned from the events of the past two weeks surrounding the collapse of ITV Digital. Those lessons will be studied closely, and applied where relevant.