HC Deb 25 February 2003 vol 400 cc144-65

(1) Section 54 of the 1996 Act (conditions attached to radio multiplex licences) shall be amended as follows.

(2) For paragraph (h) of subsection (1) (conditions as to composition of service) there shall be substituted— (h) that, while the licence is in force, at least the required percentage of the digital capacity on the frequency or frequencies on which the service is broadcast is used, or left available to be used, for the broadcasting of services falling within subsection (1A).

(3) After that subsection there shall be inserted—

"(1A) The services falling within this subsection are—

  1. (a) digital sound programme services;
  2. (b) simulcast radio services;
  3. (c) programme-related services; and
  4. (d) relevant technical services."

(4) In subsection (2) (meaning of services referred to in paragraph (h) of subsection (1))—

  1. (a) for "paragraph (1)(h)" there shall be substituted "subsection (1A)"; and
  2. (b) in subparagraph (i), for the words from "(within" to "1990 Act" there shall be substituted "(within the meaning of section 240 of the Communications Act 2003)".

(5) After that subsection there shall be inserted—

"(2A) In subsection (1)(h), the reference to the required percentage is a reference to such percentage equal to or more than 80 per cent. as OFCOM—

  1. (a) consider appropriate; and
  2. (b) specify in the condition."

(6) In subsection (3) (power to vary percentage in subsection (1)(h))—

  1. (a) for "subsection (1)" there shall be substituted "subsection (2A)"; and
  2. (b) for "paragraph (h) of that subsection" there shall be substituted "that subsection".'—[Dr. Howells.]

Brought up, and read the First time.

1.47 pm
The Minister for Tourism, Film and Broadcasting (Dr. Kim Howells)

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Alan Haselhurst)

With this it will be convenient to discuss the following amendments: No. 158, page 265, line 12, [Clause 303], at end insert 'and'.

No. 159, in page 265, line 13 [Clause 303], at end insert `and music'.

No. 160, in page 265, line 16 [Clause 303], at end insert

'taking into account the way in which the existing range of programmes and music (taken as a whole) is calculated to appeal to a variety of tastes and interests'. No. 181, in page 266, line 6 [Clause 304], leave out from 'services' to end of line 8.

No. 182, in page 266 [Clause 304], leave out lines 20 to 30.

No. 162, in page 267, line 4 [Clause 304], after 'news', insert 'and music'.

Government amendment No. 65.

Government amendment No. 68.

Dr. Howells

I will deal first with new clause 3. At present, clause 239 allows the Secretary of State to set a minimum percentage of television multiplex capacity that must be devoted to broadcasting services and not, for instance, to data services. The Office of Communications may set a higher percentage in a particular licence, but not a lower one. There is a no similar provision for radio, and consequently any change in the percentage for broadcasting material on a radio multiplex can be made only by order.

We now think that it would be more sensible to bring these provisions into line by replicating the television provisions for radio multiplexes. This would allow Ofcom, rather than the Secretary of State acting through Parliament, to set a higher percentage for the minimum amount of broadcasting data that must be carried on a particular radio multiplex. The percentage set by the Secretary of State would still represent the lowest percentage that could be specified in a licence.

Amendment No. 65 corrects a minor omission from earlier drafting. Paragraph 3 of schedule 18 is a transitional provision to ensure that contracts and agreements between relevant parties are not terminated because the prevailing regime of licensing changes to one of general authorisations in cases where the contract or agreement depends on one or other of the parties holding a particular licence. Although it is mainly aimed at the holders of telecommunications licences, it also covers cases in which a Broadcasting Act licence may no longer be needed for a particular activity as a result of the Bill.

Paragraph 3(2) of schedule 18 defines "relevant licence" for the provisions of the paragraph. The list should also include satellite radio services as defined in section 84(2)(b) of the Broadcasting Act 1990. Such licences will be abolished and most services will be provided under radio licensable content service licences. However, it is conceivable that some services that currently need a satellite radio service licence might not need a radio licensable content service licence. That outcome will be made more likely because the Bill changes the jurisdiction rules. Our minor amendment rectifies that omission so that the list of licences to which the provisions apply is comprehensive.

Amendment No. 68 is to schedule 19 and repeals section 54(7) of the Broadcasting Act 1996 which is now superfluous.

Rosemary McKenna (Cumbernauld and Kilsyth)

I am interested in amendment No. 65. The Minister will be aware that many hon. Members, especially those in the cross-party music group, are concerned that local radio stations play the same music throughout the country and that there is no diversity. Will he reconsider our concerns and those of the industry and require Ofcom to ensure that local music is treated in the same way as news?

Dr. Howells

We discussed that at great length in Committee and will revisit it on Report. I know that my hon. Friend cares passionately about the subject. I assure her that we want to do all that we can to promote and strengthen the localness and regional identity—by which I mean the cultural identity as much as anything else—of areas. As music is such an important factor in the health of broadcasting, especially radio broadcasting, we will give her suggestion serious consideration.

Section 54(7) provides for section 94 of the 1990 Act to apply to radio multiplex services. Section 94 gives Ministers power to require radio broadcasters to include specified announcements in their services or to refrain from including specified matters in those services. The Bill reproduces section 94 in clause 326 and repeals it. The application of section 94 by section 54(7) of the 1996 Act is therefore no longer needed.

Mr. John Greenway (Ryedale)

New clause 3 seems sensible and will help to ensure that Ofcom has the flexibility to set higher percentages devoted to radio multiplexes which match the television arrangement, as the Minister said. However, as I said several times in Committee, we want a greater sense of urgency and a greater priority afforded to the roll-out of digital radio. The new clause would allow Ofcom to provide more digital radio opportunities if more of the multiplex was devoted to radio. I hope that the need to ensure a faster uptake of digital radio is well registered in the Minister's mind. We will need to consider his explanation of amendments Nos. 65 and 68, but we are happy to accept that they are minor drafting amendments.

I shall speak to amendments Nos. 181 and 182, which relate to the new provisions in the Bill now renumbered as clause 304, which seek to define localness for commercial radio stations. It is fair to say that the clause is the cause of deep resentment in the commercial radio industry. The clause was not included in the original draft Bill and was added after the Scrutiny Committee did its excellent work on the draft Bill, not as a result of anything that the Scrutiny Committee said about the original draft Bill, but as a result, we strongly suspect, of the decision by the Secretary of State—a decision that we wholly applaud—to change the original three-plus-one requirement to only two-plus-one.

That could be said to have given rise to concern that there may be a greater concentration of ownership, but the question for the House is whether the change justifies the far-reaching and, some would say, draconian powers given to Ofcom in respect of clause 304. The clause has been described by the Commercial Radio Companies Association as an astonishing leap from a proposed duty to protect output to a recipe for interfering in microregulation. The CRCA is also critical of the fact that the clause makes no reference to the views of listeners. It is surely more important to base judgments on localness—on what the listeners think—than on the entirely subjective judgment of Ofcom, notwithstanding the requirement for it to consult with persons whom it thinks may have a view.

Mr. Nick Hawkins (Surrey Heath)

As my hon. Friend knows, I have a long-standing interest both in communications, having served on the Committee that considered the previous Bill when we were in government, and in commercial radio. I endorse my hon. Friend's comments about the concerns of commercial radio companies, and urge him to press the Government hard. It would be hugely damaging if the regulator had powers that were so draconian, yet could not take account of the views of local people. That is the crucial point.

Mr. Greenway

I am grateful to my hon. Friend for his intervention. I hope that by the time I sit down, he will think that I have pressed the Government sufficiently hard on the matter. He intervenes at an extremely interesting point. I was about to explain to the House how we approached the issue in Committee. I commend the debates in Committee on the matter, particularly the comments of my hon. Friend the Member for Chelmsford and East Maldon—sorry, Maldon and East Chelmsford (Mr. Whittingdale). We had seven weeks to get that right, but I still got it wrong.

In Committee, we sought to persuade the Minister to drop the clause. If I recall correctly, we even had a vote—quite a rare vote—in the Committee—[Interruption.] which the hon. Member for Ellesmere Port and Neston (Mr. Miller) says we lost. That is correct. We were not able to persuade the Minister. He insisted that the clause should be retained.

Not only did we win the argument, but with the help of my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), we tried to persuade the Minister to make the provisions of the clause more akin to a longstop power for Ofcom to intervene, but to allow a self-regulatory approach, which is a key objective for Ofcom. Again, the Minister was unmoved, so today we are suggesting another approach which, although we do not agree with it, acknowledges that the clause might have some value. Let us take that as a base and assume that the clause has some value. We want to remove the elements that we and the commercial radio industry believe to be potentially the most damaging, and for which no real justification has been made—namely, the power of Ofcom to interfere in the day-to-day running of a local radio station to the extent that the station must employ local people, provide local training and development, and use "premises within the area or locality" served by the station.

2 pm

We are in complete agreement with the general objective that local commercial radio stations should provide a local service. The vast majority thrive because that is precisely what they do. Since serving on the Committee, I have had the opportunity to visit Scotland. I went to Radio Clyde, and I commend a visit to it to the Minister. Everyone there would be very pleased to see him, and I am sure that they would apply to him the same arguments that they applied to me. At the end of our discussion, however, it was clear that we agreed with them, whereas, at present, the Minister would not.

Some years ago, Radio Clyde invested heavily in substantial new premises in Clydebank, and it runs its two radio stations from those excellent studios. The programming that it offers has huge appeal to local listeners, and provides the most popular radio stations for the two age groups: Clyde 1 for the younger generation, and Clyde 2 for the older generation. I asked the presenter of a lunchtime programme why they were so popular, and why people listened to them and not to Virgin Radio, Radio 1 or other BBC stations. The answer was, "We relate to the local community. Our output relates to it, and the nature of our whole programme is local. We talk about things that people are talking about locally, rather than nationally." Notwithstanding that, the main item for discussion on the news that day was the fact that there were tanks at Heathrow airport, although I did not see any when I was there.

John Robertson (Glasgow, Anniesland)

As someone who lives only a mile and a half away from the studios that the hon. Gentleman visited, I hope that he drove through Glasgow, Anniesland and that he enjoyed that. May I ask him to cast his mind back to when we were discussing these matters in Committee? The great fear was that commercial radio would leave itself open to takeover by concerns outside this country. Working on the basis of what had happened to radio in America, it was felt that it would become centralised but still have a localness about it. Radio Clyde has been so successful owing to the fact that it is a west of Scotland radio station—or stations, as the hon. Gentleman rightly says that caters for local people. This American import, which could happen—I am not saying that it will, but it could—would get rid of stations such as Radio Clyde.

Mr. Greenway

There is so much that one could say in response to the hon. Gentleman's intervention. Yes, I did enjoy my visit to Glasgow. I particularly enjoyed going to Hampden Park for the Scotland-Ireland match, although not many locals enjoyed the result. The point that I would make to him, however, is that the Radio Authority does not have such powers now, so why is it thought necessary to give them to Ofcom? The Radio Authority has not found it necessary to intervene in this way. The idea that some gabby cabby in New York could have a 10-minute phone-in to Radio Clyde because it was now being transmitted from the United States of America is complete nonsense. Radio stations will be able to provide a local service only by using people on the ground locally. The issue is whether we should be asking Ofcom to micro-manage what the commercial radio stations do to such an extent as is provided for in the Bill, or whether we should point out that local radio stations have been hugely successful and that the most successful are those that provide the most local service. Why do the measures need to extend so far?

Mr. John Grogan (Selby)

Is not the simple reason for tighter regulation that media ownership rules are loosening? Does not the hon. Gentleman fear the experience in the United States, where Clear Channel has removed most concepts of localness from many of its stations?

Mr. Greenway

No. There are real dangers in trying to predetermine what commercial radio stations may need to do. The issue for the regulator is content, to which the licence granted relates. That is the most important issue and the Bill provides for the powers that are needed. I urge the hon. Gentleman to read the three or four sentences that we seek to omit, which relate only to micro-managing of employees, training and premises.

Pete Wishart (North Tayside)

I am encouraged by the hon. Gentleman's knowledge of the radio stations of Scotland. I am sure that Radio Clyde is listening carefully to his remarks. As to local content, the hon. Gentleman seems to be referring only to the spoken word. Does he not agree that music is also important and that local acts should be included?

Mr. Greenway

I agree with the hon. Gentleman's sentiment and will mention music later. It should not come as a surprise to any hon. Member that a Conservative party spokesman is familiar with the United Kingdom as a whole because we believe in precisely that.

Given the track record of local commercial radio stations such as Radio Clyde and Radio Forth, it is something of an insult—at the very time when the Government are promising a light-touch regulatory future—to give Ofcom such far-reaching powers as would allow it to question and determine who a station employs, how much and where employees are trained, and how premises are used. Those issues are not central to whether or not a station can be defined as providing a local service—which is determined by reference to content and the relationship between a station and its listeners. Those are matters that the broadcasters themselves should be allowed to determine. As long as a broadcaster provides content output that listeners believe to be local, that should be the test when determining whether or not a station meets the local content requirement.

In Committee, members of the Front Benches across parties agreed that Government and Parliament must be careful not to impose regulatory requirements on commercial television and radio broadcasters that may not be capable of being resourced in future. I understand the point made by the hon. Members for Selby (Mr. Grogan) and for North Tayside (Pete Wishart) that a greater concentration of ownership may mean that some studios may not be as local as now. However, given the harsh commercial realities under which many stations operate, surely that is for them to determine. They will not be successful in providing a local service unless they have local people on the ground. Interestingly, Radio Clyde—having moved to Clydebank—would now like a studio in Glasgow city centre, as that is where many of the people they want to interview are based. Scottish Television makes great use of its studio in Edinburgh for interviewing MSPs for local news and current affairs opt-outs. It seems physically impossible to provide a local service without a local presence but that is for the broadcasters to sort out, not a matter for interference by the regulator.

Mr. Hawkins

Does my hon. Friend agree that in the early days of successful local commercial radio the commercial freedoms that he has argued for both on Report and in Committee made smaller stations most effective? He has given examples from Scotland, and I would point to a station that I knew well in the past—Radio Wave in Blackpool, which was successful because it had the very freedoms that would now be micro-managed, as proposed by the Government. We are opposed to that.

Mr. Greenway

As ever, my hon. Friend is extremely helpful and has added to my argument.

Commercial radio is not hugely profitable. To make money, it has to be extremely successful. Success is achieved by offering something different—the local service. We should give broadcasters more credit for what they have achieved and ensure that the obligations—the longstop powers for Ofcom—agreed in the Bill are proportionate and necessary. The provisions in clause 304 are too prescriptive and give Ofcom too much power to micro-manage the workings of individual radio stations. As I have already said, I know of no difficulty experienced by the Radio Authority in ensuring localness in the past, and no case has been made for Ofcom to have such powers of interference in future. We therefore urge the Government to think again. I believe that they will encounter difficulty in relation to the clause in the other place, and it would be helpful if the Minister could signal his willingness to reconsider the matter, especially as the clause, as I have already said, was not subject to pre-legislative scrutiny.

Turning briefly to amendments Nos. 158 to 160, and amendment No. 162, I sympathise with hon. Members who are concerned about the interests of the music industry, especially about local music. Local bands feature prominently on local radio, more so on commercial radio than on the BBC as a matter of fact. I hope that Ofcom will keep in mind the views of the House when assessing and judging the quality of local service provision. It is unthinkable that "local material"—the definition used in clause 304—should be interpreted to exclude local music. Putting it more positively, music is the mainstay of much radio content, to answer the point made by the hon. Member for North Tayside in his intervention. Local music contributes greatly to the local material on local radio.

Dr. Howells

It does not.

Mr. Greenway

Perhaps it needs to feature more, but I would be surprised if the Minister said that local material, as defined in the Bill, should not include music—it should. Whether the word "music" needs to be added to that definition is a matter for the House to determine when it has heard the arguments that are about to be made by the hon. Member for Glasgow, Anniesland (John Robertson). However, we have considerable sympathy with the concerns of the music industry. As I have already said, in my experience, commercial radio stations—clause 304 applies to them, not to the BBC—are doing more to promote local music than the BBC.

John Robertson

I should like to draw the House's attention to my entry in the Register of Members' Interests. May I also add that British Music Rights gave me a ticket to last Thursday's Brit awards, which helped me to compile the information that I am about to use? I had an excellent time.

May I tell the hon. Member for Ryedale (Mr. Greenway) that while he was enjoying the Scotland-Ireland game in Glasgow, I was in my office in London enjoying the England-Australia game on television? I know that he would get back to me if I did not mention that.

2.15 pm

I wish to speak to amendments Nos. 158 to 160, and amendment No. 162, which I tabled with my hon. Friend the Member for Gloucester (Mr. Dhanda), who unfortunately cannot be here as he is away on constituency business. The Bill could damage British music creators if it is not amended. A letter, which was also sent to me, has appeared in theFinancial Times. In it, Mr. Tony Hadley, who used to be the lead singer of Spandau Ballet, said: Looking at the music business now, I realise how lucky we were when we started Spandau Ballet in the early eighties. We found our audience through a vibrant live music scene and through national and local radio stations playing music which, like ours at the time, was outside the mainstream. Musicians today have far fewer opportunities, and the Government's approach to the Communications Bill threatens them still further when it should instead be a great opportunity.

Michael Fabricant

Will the hon. Gentleman go further back in time and acknowledge the role of stations such as Radio Caroline and Radio London, without which we would never have heard of the Who or even the Beatles?

John Robertson

The hon. Gentleman is all too familiar with those radio stations. I could mention Radio Scotland, which was based somewhere in the Irish sea, and Stuart Henry, who was a great DJ from our parts. I agree with the hon. Gentleman, and commend those stations.

Mr. Hadley continued:

Opening up our radio market to US competitors"— I alluded to that in my intervention on the hon. Member for Ryedale—

when the US does not grant the same rights to European operators is just foolish. US operators will do here what they have done in their home market—buy up stations, merge their operations, centralise and computerise their programming, and generate their playlists entirely from computers. I expressed concern about that in my intervention. Mr. Hadley concluded:

UK artists will undoubtedly lose out to US artists and both musical diversity and local character will also suffer. Fewer operators means fewer stations, fewer types of records played, fewer opportunities and lower earnings for UK performers. All for absolutely no corresponding benefit whatever for UK music or audiences. A letter inThe Guardian today signed by 29 professional artists says:

The government's proposed changes to the radio sector make it all the more crucial that the BBC deliver on its local and regional remit to support the arts. The current bill offers a great opportunity for the government to do something. Yet it seems deaf so far to our pleas.

Mr. Hawkins

I have been listening carefully to the hon. Gentleman. What he has just said about the BBC and its responsibility for its remit leads me to ask whether he has received letters from his constituents complaining bitterly that the BBC is dumbing down and chasing ratings, and that we are losing the best public service aspects that used to be the hallmark of the BBC? I am receiving lots of letters like that—is he?

John Robertson

I have received letters. If they were only about the BBC, I would not be so concerned, as we could tackle that, but they are about problems across the board, including those experienced by commercial radio stations. However, the hon. Gentleman is correct.

The letter inThe Guardian continues:

An NOP opinion poll in January found that 68 per cent. of 15 to 24-year-olds want to hear a wider variety of music played on general radio stations, and some 72 per cent. of people would support measures to encourage local radio stations to cover local music. It is time this government started listening. Following my contribution today, I hope that that will be addressed.

The Bill may have been amended to provide reassurance to other creators, primarily independent television producers, but the introduction of relatively stiff content regulation has not been extended to cover music. Given the Government's deregulatory approach to foreign ownership and consolidation, particularly in relation to the radio sector, the omission of any consideration of, or means of redress for, music creators isworrying. If one asks people what single thing has had the biggest influence or effect on them, most would say music. The young in particular are influenced by the music industry. At a time when politics is not, shall we say, high on their list of priorities, is it any wonder that they switch off when we cannot even be bothered to consider their favourite pastime?

The amendments to clauses 303 and 304 are intended to counteract the potential for consolidation in the local radio market undermining musical diversity and local character. They are intended to act as a vital counterbalance to the power that the regulation will give the larger players to control access to, and thereby access within, the UK music market. The Bill defines a local radio operator as one who broadcasts to a specific locality or region within the United Kingdom, not nationwide. Given the technology that exists even now in both digital and internet radio, enabling people to listen to some so-called local stations from anywhere in the country, that premise is surely outdated before even being introduced. No matter how we seek to define it, for music creators local radio is a crucial route to national exposure.

My amendments are important for two reasons. They would provide support for music at grass-roots level, encouraging local stations to cover local musicians and musical events and, more crucially, to support the British repertoire. The more airplay our artists are given, the more likely they are to succeed in the United Kingdom, in Europe, in—importantly—the United States and, indeed, in the world as a whole, and the more likely they are to contribute to the UK economy.

I stress that this is not about setting quotas, as the French do. It is simply about giving our artists a better chance of breaking through. As was pointed out by the living legend Tom Jones, whom I saw at the Brit awards last week, "If you don't get played you don't have a career—it's as simple as that."

Amendments Nos. 158, 159 and 160 are intended to enable Ofcom to prevent the diversity of music from being diminished. Diversity of service results from careful approval of a range of programme applications.

Pete Wishart

I, too, had the good fortune to attend the Brit awards on Thursday night; it was indeed a very enjoyable event. When I listen to local radio stations. however, I struggle to detect much local character and content, and presumably more foreign investment and ownership will cause local programming to decline further. Can the hon. Gentleman suggest any ways of encouraging local radio stations to include much more local content in their schedules?

John Robertson

The hon. Gentleman is a former member of Runrig, a band whose compact discs I have in my house. I enjoyed his music, along with that of his fellow artists.

It is difficult to force people to play certain music, and some would say that we were misusing our power if we did so. Last night I was present at a meeting with a telecom group, attended by the new chair of Ofcom. He agreed that local music must be given a chance, and said he would look favourably on any complaint that that was not happening. Perhaps the Minister will consider that when reports are produced on the extent of diversity among radio stations throughout the country. Who knows? Perhaps one day a private Member's Bill will be presented here with the aim of bringing about what the hon. Member for North Tayside (Pete Wishart) wants.

My amendments are intended to tighten the conditions that an applicant must meet in order to secure Ofcom's approval of mid-term changes in the character of a programme service. That would mean a requirement for Ofcom, before approving any mid-term licence changes, to be satisfied that the departure would not narrow the range of programmes and music available, by way of relevant independent radio services, to persons living in the area or locality for which the service was to be provided. Service providers should honour their licence commitments in regard to diversity, unless Ofcom is genuinely satisfied that all the conditions under clause 303(3) have been taken into account in a properly balanced way.

Clause 304 gives Ofcom a general duty to promote and protect the local content and character of local radio, specifically news broadcasts. However, the current definition of local material regrettably fails to provide the crucial safeguard for musical creativity and diversity. It is interesting to compare the conclusions of recent research carried out by commercial radio companies that want the clause removed—the hon. Member for Ryedale mentioned that—with those of the music industry, which wants it amended to mention music specifically. I wholeheartedly agree with that proposal.

The radio industry survey revealed that most young people no longer consider radio to be an important source of news. As I said earlier, however, an NOP world poll found that 68 per cent. of those aged between 15 and 24 would like to hear a wider variety of music on the radio. Perhaps if we supplied that variety the young would see radio stations in a different light, and as well as making local music available to young listeners we politicians might become accessible to them.

Michael Fabricant

Having implicitly criticised the BBC Light programme when I mentioned Radio Caroline and Radio London, I wonder whether the hon. Gentleman agrees that Radio 1 is performing a valuable role in broadcasting more experimental and less mainstream music than many independent stations.

John Robertson

I shall have to take the hon. Gentleman's word for that. I have now reached the age at which the music broadcast by Radio 2 becomes more one's kind of music. Radio 1's slot on the dial is sadly ignored these days: I am obviously getting very old. I understand what the hon. Gentleman means, however. I do not share the fears apparently felt by some of his colleagues about the BBC; I quite enjoy its coverage. My greatest fear is that it will be dumbed down, and will become a national rather than a local and regional service—covering, of course, not just regions but nations. That is intended for my nationalist colleagues on the Opposition Benches.

While music may be given appropriate recognition by Ofcom as material relevant to the definition in clause 304, I do not think the clause properly reflects the significance that music clearly has for the public—particularly younger audiences—in the context of local radio services. For the avoidance of doubt, Ofcom should be specifically required to take account of local music when drawing up guidance for radio stations on local material.

In amendment No. 161, which unfortunately was not selected, and in amendment No. 162, which was, I have sought to incorporate a safeguard for local jobs and skills in the music sector. The employment or use of local people is one of the determining factors in the requirement for local links to have been observed, but it is also important for that to reflect the way in which local radio provides a vital platform for the performance of local musicians and new bands that are establishing local fan bases.

I commend what the Government have done and the scrutiny of the pre-legislative Committee. Along with many Members on both sides of the House, however, I was disappointed by the omission of music. Music is singularly the most important thing in most people's lives, as I have said. We think that it is nice to talk about politics, but then again, we would, wouldn't we? Fortunately, I doubt whether there is a single Member of this House who does not regard music as one of the greatest influences in their lives, particularly during their formative years.

I hope that the Minister will take on board what I have said about our amendments, and that he will examine the issue and ensure that the word "music" appears in the Bill, and that musicians and local radio stations are encouraged to ensure that we develop a strong and vibrant music industry.

2.30 pm
Mr. Richard Allan (Sheffield, Hallam)

I rise to express sympathy with the amendments moved by the hon. Member for Glasgow, Anniesland (John Robertson), and to express our view that the amendments on local commercial radio moved by the hon. Member for Ryedale (Mr. Greenway) should be resisted. As it stands, clause 304 provides quite a good arrangement for Ofcom's powers in respect of local radio. The hon. Member for Ryedale was right to point out that these discussions are continuations of those that began in Committee.

The hon. Member for Glasgow, Anniesland was right to point out that news may no longer be the principal item of local interest on radio stations. He put me in mind of a report that I read yesterday on the transition that is taking place in South Korea, where younger people in particular are turning to the internet as their primary source of news media, and a similar shift may well occur in the UK. As we write legislation, we must be aware that if we define local content in terms of news, even though people are no longer turning to radio stations to look for news, we may be missing the point. That strengthens the hon. Gentleman's argument that local music may be a primary determining factor in people saying that they want a local service, rather than a national one. They know that on a local radio station, they will get the local music content that they may not get anywhere else.

The hon. Member for Selby (Mr. Grogan) rightly mentioned the fear of the worst-case scenario—of what might happen if these powers are not given to Ofcom and that is why we want to resist the amendments moved by the Conservatives. In a sense, we have to return to the underlying principle, which is that a radio spectrum broadcasting licence is a privilege. There is a limited supply of such licences, and conditions can be associated with the awarding of them that express certain public goods that go beyond those that the market alone might provide. Indeed, where the market alone does provide local radio stations that use local people, work from local premises, provide local music content, and so on, there is no reason for Ofcom to intervene. However, we have a legitimate fear, based on the experience of other countries, that that might not always remain the case. Owners of radio stations could seek to break down the local infrastructure, which is why provisions that extend the public good beyond mere content by referring to other requirements are significant.

The hon. Member for Ryedale said that we should talk only about content, but we disagree. In other areas, particularly local television production, we are going beyond the field of content by saying that a licence can have associated conditions that go beyond mere content of the material put out by referring to the media infrastructure. The awful phrase "media ecology" was used in Committee—I do not know whose fault it was; I certainly do not want to claim ownership of it—but it is true that elements such as the skill bases in local media and the associated training take a very long time to build up.

As I said in Committee, I am particularly sensitive to this issue. I come from Sheffield, which has quite a good media environment. A couple of local universities—Sheffield and Sheffield Hallam—have great media schools, but we are not the regional capital. The regional capital is Leeds, and even a reduction in local content that moved everything up to Leeds would be significantly to our disadvantage. As a result, a young Sheffielder who wanted to get into music. the media or broadcasting could be discouraged, because there would be nothing on his or her doorstep. It is essential that we retain localness, and 1 hope that we can keep clause 304 as it is. We hope that these powers will not have to be used in any significant way, and that Ofcom can adopt a very light touch. The media environment will be such that local radio licence holders will in any case want to do all the right things. However, we have to be prepared to use back-stop powers in situations where owners decide to do things differently and seek to withdraw local services for financial reasons. I do not believe that Ofcom would be so silly as to realise the fear that has been expressed by making the conditions so onerous that they put everybody out of business. That would be a nonsense. The reality is that there are plenty of bidders for limited spectrum local licences that are, as I said, in effect privileges. It is entirely right that we have a regulating public body that ensures that, in return for that privilege, we extract certain public goods that the market on its own may not deliver in all circumstances.

Mr. Andrew Lansley (South Cambridgeshire)

I want to offer a word of support for my hon. Friend the Member for Ryedale (Mr. Greenway), who spoke to amendments Nos. 181 and 182, and to speak briefly about the other amendments. The hon. Member for Glasgow, Anniesland (John Robertson) advanced a very good argument for the inclusion of music in material for local radio broadcasting, and I do not disagree with the desirability of that. Of his various amendments, I hope that the House and the Government will incline towards amendment No. 162, so as to make it clear that music is comprised especially within the definition of local material. I cannot go along with him on amendment No. 160, however. If we start to litter the Bill with references to the desirability of appealing

to a variety of tastes and interests", one wonders why that objective was elevated to a general duty in clause 3. If that duty is included in clause 3, it should be one of Ofcom's strongest considerations in taking into account a range of other matters. I therefore see no need to repeat the provision in clause 303.

My hon. Friend the Member for Ryedale put forward a very strong argument concerning the manner in which Ofcom should regulate the local content and character of services. Given the desire expressed in clause 6 to maintain only those regulatory burdens that are necessary, it seems entirely inconsistent for Ofcom to be asked elsewhere in the Bill not only to pursue a purpose—the maintenance of local programming and content—but to specify precisely how that is to be achieved. My hon. Friend is seeking to remove from the Bill not the purpose of local programming, but Ofcom's effective obligation to specify training, employment, premises, and so on. In setting up Ofcom, it is clear that we must try to move away from that, and try instead to extend commercial freedom in terms not only of ownership, but of the manner in which such stations are run.

The hon. Member for Glasgow, Anniesland will recall from our deliberations in Committee examples such as 'Clear Channel', in Australia. It may have set out with a commercial desire and an imperative to cut costs that led to centralisation, but in so far as the result was a reduction in localness, it proved to be a commercial danger and a handicap to those services. The argument rests on the commercial imperative of localness as part of local radio stations. In the absence of it, any amount of legislation will not lead to localness. If it exists, we do not need to legislate for it to happen. If we pursue local content as a purpose, Ofcom will be able to regulate with a very light touch, because it will discover that that is what the radio stations themselves are setting out to achieve.

The Minister took us briefly through new clause 3 at the beginning of his comments, but I must confess that I am still unsure about the purpose of it. The Broadcasting Act 1996 provides for a 90 per cent. prescribed percentage for digital multiplex services. In 1998, that was reduced to 80 per cent. by way of statutory instrument. The nature of the argument is how far can one go while still retaining the necessary digital capacity to ensure not only the provision of services, but the CD quality of digital audio broadcasting, and the bit rate available for it. Those matters are quite technical, and it can happen over time that the parameters change, not only commercially but technically.

Section 54 of the Broadcasting Act made it possible for the Secretary of State to come to Parliament to change the percentage up or down, but the Minister is asking us to remove the ability to take that percentage below 80 per cent. I cannot construct an argument for why it would be necessary to go below 80 per cent., but changes in technology could mean that the requisite quality for digital audio broadcasting could be achieved with a lower bit rate and, at the same time, the simulcast of television services was considered desirable. It does not automatically follow that because something is broadcast on television, there is no demand to listen to it. For example, some people like to listen to news programmes from the television and others are happy to listen to soaps, perhaps with additional commentary, but not to watch them. Such services are not included in the list. It does not automatically follow that 80 per cent. is now and for all time the minimum percentage of capacity on the digital multiplex that is required for those particular services. I am, therefore, slightly concerned that the Minister is attempting to remove that flexibility.

Michael Fabricant

One of the attractions of the Bill was the light touch that it would give to Ofcom, so I am a little concerned that there will now be a little too much prescription. Hon. Members have made some interesting points. I especially liked the comments from the hon. Member for Glasgow, Anniesland (John Robertson), who mentioned the need for experimentation in music. It is its unique funding—as the BBC would call it—that enables Radio 1 to support that, and it is to be congratulated on it. Other, commercially funded, radio stations are attempting to do the same. However, it would be wrong for the Government or Ofcom to try to prescribe programming policy.

Ofcom makes the decision when it issues the licensing agreement in the first place. Once the agreement is made, it must be up to the independent radio broadcaster to decide for itself how to maximise its audience. As my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) said, the imperative for independent broadcasters is to be commercial. Ofcom can legislate as much as it likes, but it will do no good if a radio station goes out of business—as has happened with Centre FM, which was based in Leicester, and Gwent Broadcasting in Wales. The old Independent Broadcasting Authority tried to prescribe too much the sort of programming that those radio stations should put out. As a consequence, their overheads were too high and the advertising revenues they received were not enough to sustain cashflow and allow the stations to broadcast.

Mr. Simon Thomas (Ceredigion)

The hon. Gentleman is making an important point about the commercial aspect of radio broadcasting, but that is only one side of the coin. The spectrum is owned by the nation and sold or licensed to those who wish to make profits from it. That is an effective use of the market to deliver a service to a wide number of people, but we must acknowledge an ongoing public service remit throughout all aspects of broadcasting. It is stronger in the BBC and weaker in commercial radio, but still present. We must ensure that the Bill contains a framework sufficient to ensure the relevance of local broadcasting, whether commercial or not.

Michael Fabricant

The hon. Gentleman raises an interesting point. It is almost a philosophical question. One could argue that if a radio station is popular and pulling in a large audience, it is providing a public service. One could also argue that if a radio station is broadcasting in the Reithian tradition of programmes that people ought to hear but it has no listeners, it is not providing a public service. As in all things, it is a question of balance. The thrust of the hon. Gentleman's question is right. There is a duty of care, including the need to ensure that the spectrum, which is one of the nation's assets, is used wisely. That includes the content of programming, such as music and news, and its localness—or indeed its Welshness, as the hon. Gentleman would have it.

If a radio station is solely funded through the sale of advertising time, it must be popular. It is not for Ofcom to impose conditions that would force the station into bankruptcy, because it would provide no public service if that happened.

2.45 pm
John Robertson

We need a balance between what is local and what is popular. I am concerned that the popular takes over and the local is forgotten. Therefore, we need someone who oversees the matter and Ofcom will be in an excellent position to do that. It will have a light touch, but it is necessary. One of the great successes of the local radio stations that have survived is their identification of local audiences. The radio stations that fell by the wayside made the mistake of trying to be too popular.

Michael Fabricant

I disagree with the hon. Gentleman when he draws a distinction between local and popular as though they were mutually exclusive. They are not. As my hon. Friend the Member for South Cambridgeshire pointed out, Clear Channel in Australia—if not in the United States—discovered that a more centralised programming format, with all its output coming from Melbourne, proved to be unpopular. The whole point is that local can be popular. Ofcom should be a regulator, but it should have a light touch. The House would be right to resist anything that would mean Ofcom could interfere in the day-to-day programming of radio or television broadcasting.

Dr. Howells

I wish to set the hon. Member for Sheffield, Hallam (Mr. Allan) straight on the origin of the appalling phrase "broadcasting ecology". I suspect that it was born on the media pages ofThe Guardian, but it was nurtured on the south-facing slopes of the Rhondda by the hon. Member for Lichfield (Michael Fabricant), who took an inordinate interest in that ecology. The hon. Gentleman reminded us of the great difficulties in trying to balance the question of localness and the worthy Reithian principle, with the hard realities of broadcasting in a commercial world. I congratulate him on having done that with great clarity.

Amendments Nos. 158 to 160 were tabled by my hon. Friend the Member for Glasgow, Anniesland (John Robertson). Among other things, clause 303 sets out the factors that Ofcom must take into account before agreeing to a request for changes to the character of a licensed radio service. A licence will contain conditions that are appropriate to securing that the character of a licensed service, as proposed by the licence holder when making his or her application, is maintained. Ofcom will be able to vary those conditions if, and only if, the departure would not substantially alter the character of the service or narrow the range of programmes available, which is an important consideration. The departure in the case of local licences would need to be conducive to maintaining or promoting fair competition or require evidence of significant local support for the change.

The final two elements added by the new clause are new factors for Ofcom to consider. The Government accept the case for some further relaxation to make it easier for licence holders to respond to local audience expectations and demand. In well-developed major markets, Ofcom will now also be able to allow format changes in mainstream stations to facilitate competition. That could result in stations going head to head, where it is felt that that would be beneficial to competition and to listeners.

Amendment No. 160 proposes that Ofcom should take into account the effect of any proposed changes on the range of programmes and music offered by a service. I have sympathy with the intention behind the amendment. It is clearly important that Ofcom takes into account the effect of any changes on the range of a station's music output. However, that in essence is what Ofcom will have to do under the new clause as drafted, as its purpose is to guide Ofcom in its consideration of changes to the character of commercial radio services.

We all know that commercial radio is about music. It would be impossible for Ofcom to consider the effect of a change in the range of programmes without also considering the range of music on offer. In this context, the two are virtually synonymous, and I do not consider that the amendment would add anything substantial or usable to Ofcom's range of powers. However, I fully expect that, in considering these issues, Ofcom will consider the implications for music.

I congratulate my hon. Friend the Member for Glasgow, Anniesland on raising a matter on which discussion of the Bill has been slow to touch. However, I spend much time travelling around the country, as do many hon. Members. I always listen to my car radio, and there is an incredible sameness and blandness about the music on offer everywhere.

I recently attended the biggest meeting of representatives from the music industry that I have ever attended. They banged their gums about the need to protect local music on radio. I asked what they meant by the term "local music", and no one came up with a clear answer. Does it mean British music or European music? Wherever I go, I hear the same sort of music on the radio.

I have great respect for the hon. Member for Ryedale (Mr. Greenway), but I got lost when he compared the BBC and commercial stations, which have different set-ups. Classic FM is an exception among commercial stations, as I think it was bailed out by American money when no British money was available. I think of Radio 3, and my hon. Friend the Member for Glasgow, Anniesland—who is getting old and past it—has talked about Radio 2. The subject of music and creativity is often discussed on Radio 4, which also some very good arts programmes. I do not see that variety in commercial radio in general. Indeed, I have gone on record with my disappointment about what has happened to Jazz FM. There is an incredible blandness through the day. It still has some decent jazz after 7 pm, thank God, but it disappoints people looking for variety in music, and for specialist music on some channels.

Mr. John Whittingdale (Maldon and East Chelmsford)

I was also present at last week's Brit awards, which demonstrate what British music is capable of. The BBC has a duty to promote different sorts of music. Radio 1 is a good example, but commercial stations, in the end, are obliged to attract listeners. This debate is more a commentary on the sad state of British music, a lot of the blame for which I attach to programmes such as "Pop Idol" and the various reality TV shows. London has a number of good commercial stations, such as XFM. It provides a very different type of non-chart music and is an example of how a commercial station can provide opportunities that are not always available on the BBC, let alone any other station.

Dr. Howells

I agree, and I know that the hon. Gentleman is an avid listener to contemporary music on the radio, as he told us so in Committee. His analysis is broadly correct, and I was careful to say that, in general, the commercial stations around the country to which I listen have a sameness about them. However, the hon. Gentleman is right to say that there are exceptions, and they prove the rule.

Mr. Simon Thomas

I should like to mention one such exception. I listen to Radio 1 on my way back to my constituency on a Thursday evening, because it opts out and becomes a Welsh station. Bethan Elfyn's two-hour programme covers the Welsh music scene. The programme is very popular, with live bands, reports and reviews and so on. It shows that the BBC can do such things, in contradiction of the contention from the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale). Commercial radio could act in the same way.

Dr. Howells

Yes, indeed. I shall take no more interventions on the matter, as I am sure that many stations could be mentioned, but the hon. Gentleman is right: the programme is excellent and a real innovation. I hope that the policy of BBC Wales to nurture local bands and talent will continue, and that it will be replicated around the country. That is happening in some areas.

I note that it has been stated that the amendment would also ensure that Ofcom must be satisfied that all conditions are fulfilled before agreeing to any changes in licences. That is not so, but let us look at the intention. The proposed change would be more restrictive than the current legislation. I have heard no convincing reason why we should take such a retrograde step, which would mean that there could be no departure from the character of a station, even if a change would promote competition, or if there was evidence that people in an area would significantly support that change.

The hon. Member for Ceredigion (Mr. Thomas) gave an example of a programme that has a cult following in Wales. If it were a commercial station, and the amendment were accepted, would we say that the change was not in the original licence condition? We must be very careful and flexible about such matters, so that we do not tie ourselves down to a regime that would not allow the degree of flexibility and innovation that the hon. Gentleman described. If there is considerable local demand for a change, why should the regulator be prevented from agreeing to it? That would be self-evidently wrong.

The hon. Member for Ryedale moved amendments Nos. 181 and 182. We discussed the issues involved at some length in Committee. There is no difference of opinion between me and the hon. Gentleman about the importance of local radio to the community that it serves, nor about the overriding need for local radio to be genuinely local. We do not disagree either about the need for a code to safeguard localness—at least, I do not recall any such disagreement in Committee. We agreed that the code should be designed to ensure that programmes consisting of local material would be included in local services.

I am pleased that the importance and desirability of such a code is widely recognised. That should go a long way towards protecting the vital localness of local radio, regardless of who owns it. That very important point was stressed by the hon. Member for Ryedale, as that localness is what we have to protect. The disagreement hinges on what else the code should contain. We agree that it should cover outputs, but not about whether it should also cover what we call inputs. I want to concentrate on the nub of the disagreements—the importance of inputs—as all the rest is broadly agreed.

First, I shall explain what I mean by the terms "inputs" and "outputs". A station's output is essentially what one hears coming out of the speakers—the music, the news, the travel and weather updates and local information, and everything else that one hears on switching to a local radio station. We all agree that such material should have a genuine local flavour and relevance. We believe that the code will ensure that.

The inputs are the things that happen on the other side of the speakers. They are not necessarily heard directly, but they contribute to a station's distinctive character and give it a vital, physical presence at the heart of its community. I was perplexed by the example given by the hon. Member for Ryedale. He is right to stress how important it is that Radio Clyde feels that it should be right in the middle of the city—that it should be part of the public that it serves. That is why we have to consider carefully the inputs, which are the vital elements he talked about. They have a good effect on the character of a radio service and are good for the community that it serves.

3 pm

Michael Fabricant

Just for clarification, what are the inputs? The Minister defined output as being that which comes out of the loudspeakers, but what does he mean by the inputs?

Dr. Howells

The hon. Gentleman has such a vital and energetic brain that he is leaping ahead.

Clause 304 identifies a number of possible inputs that could be covered by the code, namely locally made programmes and local advertising, local employment opportunities, local training opportunities and the use of premises in the area. The amendment would remove some of the items from the code. The code should be able to include local employment opportunities, local training opportunities and the use of premises in the area. I stress the words "be able to". The code does not have to include them—the clause merely allows Ofcom to include them if it considers it appropriate to do so. That is an important proviso, because whether they are included is very much in the hands of the industry. The code should be able to include those matters for two reasons. First, local radio stations get their spectrum for free, as the hon. Member for Ceredigion reminded us, and therefore have an obligation to the local communities they serve that goes beyond simply playing popular music. Secondly, those factors can have a perhaps unquantifiable, but not insignificant, effect on the character and ultimately the sound of a station.

On the first point, local radio stations are awarded licences by the Radio Authority on the basis of a beauty contest based largely on their ability to appeal to the tastes and interests of those in the area, to broaden local choice and in recognition of the degree of local support for their proposals. Unlike national licences, those licences are awarded for free—apart from the application costs, which can be hefty. In those circumstances, it is not unreasonable that certain requirements should be placed on licensees. Those stations have, in a less explicit way than TV, certain public service broadcasting obligations, and it is reasonable to expect them to have a physical presence and to provide employment opportunities and training in the locality from which, after all, they generate their profits.

Michael Fabricant

Does the Minister accept that smaller radio stations may find that to be a particular burden? Although he is right to say that a local radio station should have a presence, it may be based out on an industrial estate—and why not, because the outputs that he spoke about will be just the same? Does he recognise that if the burdens are too tough the radio station's output will become nil, because it will not survive?

Dr. Howells

I entirely agree. That is why I stressed that Ofcom will have to take those issues into account when it considers particular radio stations. As both the hon. Gentleman and the hon. Member for Ceredigion have said, there are two sides to the coin—a tightrope has to be walked, and it is not easy.

It is not unreasonable to expect local stations to be genuinely, not virtually, local. I take the hon. Gentleman's point about being stuck out on an industrial estate, as many stations are. However, they often employ local people and despite the fact that they are on an industrial estate they are nevertheless regarded as part of the infrastructure of the community. In my experience, those are important elements.

On my second point, real links with the local community can have a subtle impact on the quality of stations. In other words, the more physically local a station is, and the more roots that it has in its community, the better it will reflect the community's needs and wishes. It has long been recognised in broadcasting regulation that inputs have a clear and definite effect on outputs. To quote the Commercial Radio Companies Association in another context, "You are what you eat." That is why we have quota requirements for public service broadcasting in terms of television and regional production.

The industry has argued that localness is its bread and butter—its unique selling proposition—and that it does not need the regulator or the Government to tell it how to be local. However, the fact that the industry is opposed to the code including inputs shows that its view of localness is narrower than ours. We are about to enter a new world for radio, as my hon. Friend the Member for Selby (Mr. Grogan) said. The ownership rules have been and are being radically overhauled. We listened to representations from the industry and relaxed our original proposals, which were tighter than our latest proposals, and which already represented an enormous liberalisation so as to allow for the possibility—I hope that it does not come to pass—of two large radio groups dominating the UK market. If we do not take steps to prevent it, that level of concentration could lead to a drift away from localness. Many local radio stations strive to be more local. The hon. Member for Sheffield, Hallam gave an important example when he pointed out that there is an enormous difference between the idea of localness if one lives in the city of Sheffield and the idea of localness if one regards Leeds as the most vibrant commercial centre of the region—in effect, its capital.

Localness is the most expensive part of programming, so there is arguably a commercial incentive to do as little as one can consistent with maintaining audiences at a viable level. We have already seen nationwide playlists for local stations, the removal of local station managers in favour of national brand managers and extensive computer-driven automation of services. That has not been mentioned, but it is up and running. In the situation of a national near-duopoly, there could be a further drift away from the parts of programming that are expensive. One may think that if the other side is doing it, it is better from a business point of view to do the same and to cut costs accordingly, especially if one believes that local listeners are mainly interested in music—in international music, if I might use that expression. We need a localness code to prevent that from happening.

That brings me to an important aspect of the code. It does not have to include factors to which Opposition Members object, but it can. The extent of its coverage will depend largely on the actions of the radio industry itself. I am already on record as having said that the code should, as far as possible, be co-regulatory. That is also the view of the industry and the regulator. Clause 6 will place Ofcom under a duty to review regulatory burdens and it will have to have regard to the extent to which its duties can be secured or furthered by effective self-regulation.

Amendment No. 162 would make it clear that music should be specifically included in the definition of local material. I have a great deal of sympathy with that sentiment. Music is central to the output of any local radio station, and a degree of local music would be desirable in any station's output, if we are to believe the rhetoric that is put out by the commercial radio station owners. They say that localness is very important to them, so there should be no problem with their wanting to play local music. There is nothing in the Bill to prevent Ofcom from including music in the definition of local material—the hon. Member for Ryedale rightly made that point—and I would be rather surprised if it did not do so. Among other things, that would guard against playlists being concentrated in too few hands, with the result that it becomes difficult for new bands to be heard on the radio. The question turns on whether we need to put the point beyond doubt by making provision in the Bill.

There is always a danger that the more aspects that are specified in the definition, the greater the presumption that those that are not mentioned are excluded. That is the problem, although I have a great deal of sympathy with the point. I know fanatical members of the Cabinet, whom I could ring any time, night or day, when I worked with them, but never on a Sunday evening when they listened to "Poetry Now" on Radio 4. I never rang them at that time.

Mr. Greenway

Local sport constitutes a good illustration of the Minister's case. I am sure that he would not want to miss local commentary on Pontypridd.

Dr. Howells

Pontypridd is a great place.

John Robertson

I have never heard of it. I understand my hon. Friend's point about music, but his argument could apply to politics and news. Why include those subjects in the Bill? Why not simply refer to "programmes"? We believed that the definition should include news and politics. I believe that music should also be included. "Music" covers an enormous range. It could not be interpreted to exclude something because it encompasses so much. I implore my hon. Friend to reconsider and include the word "music" somewhere in the Bill.

Dr. Howells

I understand my hon. Friend's point. However, I am not convinced that music should be included and I am wary of over-prescription. There is no need to specify music, although I support the sentiment behind my hon. Friend's amendments. I repeat my hope and expectation that Ofcom will consider music to be an important element of local material.

I hope that hon. Members will not press their amendments.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

Forward to