Cable and Broadcasting Bill [H.L.]

HL Deb 02 February 1984 vol 447 cc790-822

5.19 p.m.

The Parliamentary Under-Secretary of State, Home Office (Lord Elton)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Elton.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD NUGENT OF GUILDFORD in the Chair.]

Clause 15 [Power to give directions]:

Lord Howard of Henderskelfe moved Amendment No. 92: Page 14, line 31, at beginning insert (" (1) ")

The noble Lord said: In view of the usual vast number of amendments which appear in my name, noble Lords will perhaps be glad to hear that, consequent upon discussions which we had earlier in the proceedings, I do not intend to move all of them because they are consequential. However, I shall tell your Lordships when we reach them. Amendment No. 92 is a paving amendment for Amendment No. 94. Therefore, for the convenience of your Lordships it would probably be best if we take the two together.

Amendment No. 94: Page 14, line 40, at end insert— (" ( ) This section applies to any licensed service to the extent to which programmes are included otherwise than by the reception and immediate re-transmission of broadcasts made by a broadcasting authority.") This relates to the fact that the clause gives the Cable Authority very wide powers to give directions in relation to programmes. It is quite inappropriate that this clause should relate to the programmes which are carried under the "must carry" rule, and my amendment is designed to prevent this. If the authority has powers to give directions under this clause, then certain programmes or advertisements might be excluded, and the Cable Authority would be able to intrude into areas which are at present strictly the preserve of the broadcasting authorities. This overlap seems to be entirely unsatisfactory. Therefore, I beg to move.

Lord Elton

I entirely accept what the noble Lord, Lord Howard of Henderskelfe, has said. The Cable Authority's powers to give directions should not extend to programmes and advertisements included in licensed services by way of the simultaneous relay of the broadcast services. It would clearly be wrong for the authority to have any say over the broadcast services when they are relayed by cable. I am grateful to the noble Lord for drawing attention to the possibility that Clause 15 as drafted might be read as giving the authority some jurisdiction over these services. The wording in his own amendment may not quite do the trick, but if he would agree to withdraw it, I can happily undertake to have an appropriate amendment ready for Report stage. How lucky that we broke at this stage on the last day, so that we could start in this tone this day!

Lord Howard of Henderskelfe

I am delighted that we have started in this way. With the assurance given by the noble Lord the Minister, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Aylestone moved Amendment No. 93: Page 14, line 31, after ("directions") insert ("in addition to any order issued by the Secretary of State affecting the Independent Broadcasting Authority").

The noble Lord said: This amendment deals with the same clause and with the right of the Cable Authority to direct the licensees whether or not to accept certain types of advertisement. There is nothing new in this. I think that this applies equally to the IBA. For example, the IBA and the programme contractors, who are responsible to the IBA, do not advertise, for instance, the prospectus of a new company advertising for shareholders. That was done—and I think still is—by the Independent Broadcasting Authority.

However, if one looks back a few years one finds that the Independent Broadcasting Authority and its companies which are granted the franchises had quite a lucrative income from cigarette advertising. So far as I know, that advertising of cigarettes was not stopped by the authority at all but by an order from the Secretary of State at the time, or it may have been the Postmaster General.

My amendment is a probing amendment. It seeks to make quite sure that the restrictions placed upon the IBA concerning certain types of advertising, such as that of cigarettes, will apply equally to the Cable Authority. I beg to move.

Lord Elton

The noble Lord has mentioned cigarette advertising and, as he pointed out, the advertising of cigarettes and cigarette tobacco is ruled out by the IBA's advertising code. The ban originated with a direction made by the Postmaster General in 1965. The provisions in Clause 11(4) of this Bill mirror very closely those in Section 8(5) of the Broadcasting Act 1981, and the Cable Authority must consult the Home Secretary about types of advertisement and methods of advertising to be excluded from licensed services. The authority must give effect to his directions, either by making appropriate provisions in its advertising code, or if necessary by making directions of its own under Clause 15. I can give the Committee an assurance—which I think is what the noble Lord wants—that the Government have no intention of permitting cigarette advertising on licensed services and will be prepared to use his powers of direction to secure that. If in the future it becomes necessary for further categories of advertising to be precluded or in some way restricted, I can assure the noble Lord that if my right honourable and learned friend were considering making directions to the IBA I have no doubt that we would wish to consider carefully whether to make similar directions to the Cable Authority.

Lord Aylestone

In view of that assurance, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 94 not moved.]

Clause 15 agreed to.

Clause 16 [Power to require visual and sound records etc.]:

Lord Glanusk moved Amendment No. 95:

Page 14, leave out lines 41 and 42 and insert— (" . If the Authority has reasonable grounds for believing that a person authorised by a licence to provide a diffusion service has failed to comply with any condition of that licence or any direction given by the Authority, it may direct that person")

The noble Lord said: Clause 16(1)(a) empowers the authority to call for visual and sound records to be kept by the operator on any or all programmes transmitted. But it does not say why or when this order can be called into effect. Such an order will place a very large and expensive burden on the operator, involving video tape-recorders on each and every channel and the heavy administrative task of cataloguing and storing the records.

Therefore, I think that it is only reasonable to specify in the Bill the occasions on which the authority is able to issue such an order, although I clearly recognise the need in some circumstances for such an order. We therefore tabled Amendment No. 95 limiting these occasions to those when the authority has reason to believe that the operator is contravening either his licence or the advertising code. To put it briefly, this means that the operator knows that, if he is a good boy and keeps his nose clean, he will not be required to keep these arduous records. I beg to move.

Lord Elton

I am grateful to my noble friend for his explanation of his first amendment to this clause and hope that he will bear with me if, in some of my remarks, I allude to the subsequent amendments. His first amendment would mean that the Cable Authority could require a licensee to keep recordings only if it had reasonable grounds to believe that the condition of the licence had been broken. If it had no such grounds, there could be no such requirement.

I entirely understand and sympathise with my noble friend's anxiety to save the licensees from being buried under heaps of expensive tape. In fact, I hope to be able to give him a little help in this, but not I think in this particualar way. There are two reasons why I do not think that this is the best way to do it. The first is that it would open the way unnecessarily to litigation which could frustrate the authority in the swift and effective discharge of its duties, because it would be open to a licensee, whenever he received a direction under this clause, to respond with a claim that the authority either had no grounds to suspect a breach of conditions, or, in the alternative, that those grounds were not reasonable. The time taken to decide that issue could well prejudice the issue itself, as well as taking up a good deal of time and resources.

However, if that objection to the amendment were met or proved ill-founded, I am afraid it offers another drawback. It is quite simply this. The Cable Authority is to be the watchdog for the standards in the service, and we certainly do not expect it to have the capacity to monitor every channel or every system for every hour of every day and night. What it will do is to respond to complaints, and complaints can only be tested and either upheld or rejected in the light of a record of what is complained of.

Under my noble friend's amendment, if someone claimed that there had been an outrageous incident of indecency or biased news reporting on one of the very many channels, the only recourse the authority would have would be to say that the complaint gave it reasonable grounds to suspect a breach of the terms of the licence, and thenceforth the alleged offender must keep a record of what he sends out so that then the authority could keep an eye on it.

The Cable Authority is meant to be a watchdog, and this amendment would mean that it was a watchdog that was always asleep for the first burglary but growling loudly for the second. Even if my noble friend convinces me that that objection is misconceived, I have a more general one on similar lines. In order both to inform itself of what is going on on cable and to make it clear to the licensees that it is invigilating their observance of licence conditions, the authority ought, in our view, to have access as a matter of course to a record of any programme which has gone out for a reasonable period after it has done so.

My noble friend may not object, I hope, if I anticipate events by adding that that consideration also colours my view of his Amendment 96 wherein he seeks to reduce the shelf life of mandatorily required records from 3 months to 2 weeks. If he wants to address that point now, I am quite happy to sit down.

Lord Glanusk

No, thank you.

Lord Elton

I think this may be helpful. Two weeks does not, we believe, give the authority the scope it may need to choose and collect the material which it wishes to review.

My noble friend made some telling points at Second Reading and they did cause Her Majesty's Government to think very carefully about Clauses 16, 24 and 27. Clauses 24 to 27 contain the provisions about obscenity and incitement to racial hatred. We have considered in particular whether the Bill contains adequate provisions for their enforcement. In that respect we have had also to consider Clauses 31 and 32. These clauses contain provisions modelled on the Theatres Act 1968 relating to the treatment of scripts as evidence, and the power to take copies of scripts and records. We have come to the conclusion that while these provisions are necessary, they are not themselves fully adequate. A programme could be shown and, under the Bill as currently drafted, there would be no guarantee that the record would be available at all.

We intend to produce an amendment which will require licensees to ensure that recordings of programmes transmitted by them are available for inspection and reproduction within 14 days of transmission. I do not doubt that the Cable Authority would have wished to prescribe at least this period for its own purposes and my noble friend need not therefore feel that he has lost anything by the change.

In view of the implications for the enforceability of the provisions of the criminal law, we thought we had to put the matter beyond doubt. That said, I meant what I said in saying that we sympathise with my noble friend's concern for licensees. We realise that keeping recordings imposes a financial burden on cable companies, and we are therefore prepared to reduce the overall maximum period for which the Cable Authority may require licensees to ensure that recordings are available beyond the mandatory 14 days. We propose therefore that the period for which the authority should be able to direct that recordings should be available should be reduced from 3 months to two, and the 14 days would count against the two months' maximum.

We are also prepared to frame both requirements—that is the mandatory 14 days' requirement and the maximum two months' requirement—in terms of the licensee ensuring that recordings are available, rather than having in all cases to make the recording themselves. That I think—and I apologise for straying so far, but it does bring all the issues together—meets the gist of Amendment 97.

The licence condition will still have to apply to the licensee because it could not, as Amendment No. 97 would seem to suggest, be directed against a third party, but the licensee can meet it by satisfying himself that the recording is available rather than necessarily having made it himself. That obviously makes sense when a service is being distributed from a central point to a number of different operators.

Finally, we also agree that there is no need to oblige cable companies to provide recordings of relayed broadcast programmes, and we therefore propose to introduce an exemption from the requirements of Clause 16 for the simultaneous retransmission of broadcast programmes. I realise that we shall not meet all that my noble friend wants, but I hope on reflection he will consider we have gone quite a long way to help him.

Lord Mottistone

I think that my noble friend on the Front Bench has gone a long way towards meeting these amendments in which I am supporting my noble friend, particularly if he is going to produce these sorts of amendments himself at the next stage. It is still going to mean quite a hefty burden, I think, and I would have thought—I do not know what my noble friend thinks about this—that we will want to consider very carefully what my noble friend the Minister has to produce for the next stage. I wonder if he could be early with his amendment before the Report stage so that if we need to we can have a bash at that.

Lord Elton

I cannot say how overwhelmed with delight I am to hear my noble friend Lord Mottistone asking me to table amendments early. May I ask all Members of your Lordships' Committee to comply with that admirable advice. I shall certainly do my best.

Earl De La Warr

I think the noble Lord the Minister really means me.

Lord Glanusk

I am most grateful to my noble friend on the Front Bench. He has gone a long way to meet us, and I think in view of his assurances I am more than willing to withdraw Amendment No. 95.

Amendment, by leave, withdrawn.

[Amendments Nos. 96 to 98 not moved.]

On Question, Whether Clause 16 shall stand part of the Bill?

Lord Winstanley

I wonder if I might ask the noble Lord the Minister to clarify something which arose in part out of the amendments which the noble Lord, Lord Glanusk, has not moved. Under Clause 16(3)(a): the Authority may direct that person— to provide the Authority in advance with such scripts and particulars of the programmes (including advertisements) as may be specified in the direction. Subsection 3(a) relates to the circumstances at the beginning of the subsection: If the Authority are satisfied that, at any time during the period specified in a notice…the person concerned has failed to comply with any conditions of the licence— et cetera. Would I be right in reading into that that the authority do not have the power to require the cable operator to provide scripts in advance unless the cable operator has in some way committed some infringement as under subsection (3)?

Lord Elton

I think I can confidently agree with the noble Lord's interpretation. The intention of Clause 16(1) is to give the authority a power to give a direction to take the recordings if necessary. The intention of subsection (3) is to require the provision of copies of material to them in one form or another to verify, or otherwise, their suspicion that an offence has been committed. There is no question of their building up a free library, as it were, of scripts for the delectation of the members; it is merely in pursuit of their supervisory role that the power is in the Bill.

Lord Winstanley

I am sorry to pursue it, but I am still not entirely clear. There is clearly here a power for the authority to insist on the cable operator providing them in advance with certain scripts of programmes. That only arises if the cable operator has offended in some way and the authority has reason to believe that they have done this, that or the other. I was merely wondering whether in this clause, or in any other clause of the Bill, the Cable Authority has the power to require the cable operators to present scripts of programmes in advance of transmission.

Lord Elton

Clause 16(3) means exactly what it says: "If the authority are satisfied at any time", et cetera, then they can direct as the noble Lord suspects. There has to be a satisfaction that an offence has been committed before they can use the power.

Clause 16 agreed to.

Lord Howard of Henderskelfe moved Amendment No. 99: After Clause 16, insert the following new clause:

("Power of Secretary of State to give directions

. The Secretary of State may give directions to the Authority with respect to the transmission standard to be used in providing diffusion services and, if any such directions are given, the Authority shall direct all such persons as are authorised by a licence to provide a diffusion service to comply with those directions.").

The noble Lord said: I beg to move the new clause which stands in my name. On Thursday, 19th January, the Government reaffirmed by an Answer from the Home Secretary to Sir Peter Emery that there was a commitment to C-MAC—I am sorry for using these abbreviations which no doubt have become familiar to most Members of your Lordships' Committee—as a standard for DBS and left open the question of the system which would be suitably applicable to cable. I understand—and I hope that I may be wrong—that the specifications of the transmission system for cable in the telecommunication licence will be granted, but provided the cable itself will come under the Telecommunications Bill, and that they will be the people who will actually say what that specification is to be.

My amendment is designed to ensure that that power of specification of what the transmission standard should be should remain in the hands of the Secretary of State rather than be in the hands of Oftel, or the Cable Authority, or anybody else. On occasion those interests may conflict. At a later stage this evening we may come to some rather more forthright language about the way in which those standards may conflict as a result of this Bill not being the result of a single parent family. I shall perhaps have some other things to say about that later.

At the moment the reason why it obviously cannot be satisfactory that C-MAC might be certified for DBS whereas PAL might be specified for cable is that this would mean that the costs to the subscriber of additional equipment for C-MAC would be a great deal more expensive than that of the subscriber to cable, and would put the subscriber to DBS in a disadvantageous position, and thus also the supplier of the signal to the DBS, whoever he might be.

It must make sense for the two to use the same system. Quite apart from anything else, until we get a way in which the conversion does not happen at all at the set but happens entirely at the cable head—until in other words we get fully-interactive cable—it will mean that the person who is deriving his signal from DBS will be having to buy a piece of equipment which will be made in lesser numbers than it would be if the cable provider were also to have to adopt the same standard, and would therefore be more expensive. There will be fewer of them, and the number of subscribers to DBS would thus be fewer. It might turn out that the Government's ambitions to see a DBS service, already postponed by these difficulties for 1987, might not be fulfilled for many years, or not fulfilled in the ways in which they had hoped.

I fear that the Government have been grossly misled as to the extra cost of providing a relatively small number of converters from C-MAC to enable them to operate with ordinary sets, and I fear therefore that the extra cost in the case of DBS signals, unless there is a common standard, will be very large indeed. I therefore beg to move.

Lord Elton

The Government accept that the question of transmission standards is an important one, particularly in relation to the relay of DBS services over cable, and that is the noble Lord's concern together with the question of compatibility. The technical standards by which programme services are transmitted relate to the running of a cable system and not to the content of a programme service. It would not therefore be appropriate for this power to be included in this Bill because this Bill is not concerned with the running of systems.

However, the noble Lord will find in Clause 7(3) of the Telecommunications Bill the provision which enables the Secretary of State to include conditions in the licences that he issues under Clause 7(1). The Secretary of State will be able to use this power to require a particular transmission standard to be used over all cable systems, and we therefore do not see a case for introducing an equivalent power into the Cable and Broadcasting Bill merely to duplicate it.

Lord Howard of Henderskelfe

I am still not entirely happy that there may not be a conflict of interest. The Telecommunications Bill itself says under Clause 7(1)(a): A licence may be granted—(a) by the Secretary of State after consultation with the Director", and so on. It refers to the director. It is really thinking much more about telecoms—not British Telecom but telecommunications in general—than about the interests of the consumer. This may be denied by the Government, but I have my suspicions on this. We require to look at this again and have further discussions.

Lord Elton

May I add to what I said before? The power to issue telecommunications licences and thus to specify transmission standards resides with the Secretary of State. Oftel can be delegated the power to issue telecommunications licences but there is no question of Oftel being in a position to take a different view from that of the Secretary of State. If therefore I heard overtones of mistrust in what the noble Lord said about Oftel which did not reach as far as the Secretary of State, or his part of the Government, I hope that this will help him to be a little more reassured when he looks at this between now and Report.

Lord Howard of Henderskelfe

I should like to read in Hansard what the noble Lord has said; but it sounds rather more reassuring than I had hoped. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 17 [Power to revoke licences]:

5.47 p.m.

Baroness Trumpington moved Amendment No. 100:

Page 15, line 42, leave out ("if—(a)") and insert ("(a) if").

The noble Baroness said: We are taking Amendments Nos. 101 and 102 with Amendment No. 100.

Amendment No. 101: Page 16, line 2, leave out from ("interest") to ("the") in line 4 and insert— ("(b) where the licence authorises the provision of a diffusion service, if").

Amendment No. 102: Page 16, line 5, at end insert ("or (c) where that person is a body corporate, if any change affecting the nature or characteristics of the body corporate, or any change in the persons having control over or interests in the body corporate, takes place after the granting of the licence which, if it had occurred before the granting of the licence, would have induced the Authority to refrain from granting the licence.").

When we debated this Bill on Second Reading the right reverend Prelate the Bishop of Wakefield referred to the need for the Cable Authority to be able to prevent the ownership of a licensed company changing hands without their permission. My noble friend Lord Elton expressed on that occasion the Government's belief that Clause 4(6), which enables the authority to include in licences any conditions which they consider requisite or expedient having regard to all their duties under the Bill, was sufficient to enable them to take appropriate steps against undesirable changes in company ownership arrangements after a licence was granted.

It remains true that the authority will have a wide measure of discretion to insert conditions into licences under Clause 4(6) but we have given further consideration to the particular point which the right reverend Prelate made, and we have come to the conclusion that there would in fact be advantage in giving the authority an explicit power in respect of changes in the ownership or characteristics of a company after a licence has been issued. These amendments are designed to achieve that end.

They add to Clause 17 a further set of circumstances in which the authority may revoke a licence, namely where the ownership, control, nature or characteristics of a company change after the licence has been issued with the result that had they occurred before the licence was granted the authority would not have granted it. This means that the authority's power to revoke is not restricted to circumstances in which the change brings the company within one of the formal disqualifications set out in Clause 7 of the Bill. If, for example, the authority granted a licence following the normal consultation procedure and one of the unsuccessful applicants then attempted to buy out the successful company, the authority might well consider that this was undesirable, particularly if there were other unsuccessful applicants who were as good as, or better than, the one planning the take-over.

I should add that the new provision is based on Section 20(5) of the Broadcasting Act 1981. That provision gives the IBA an analogous power in relation to its contracts with ITV and ILR companies if there is an unacceptable change in the company's ownership arrangements after the contract has been awarded. I beg to move.

Lord Mishcon

The principle of this amendment is one that would be generally accepted by the Committee. The only doubt I have—I say this with great deference—is whether the Government have properly, fully and comprehensively covered the situation they intend to cover, and have done it with a sense of fairness. There may be a change in the shareholding control of a company and, as a result, the authority may wish to use the power contained in the amendment. But there is no provision in the amendment or in any part of the Bill about which I know—I may be wrong about that—which calls upon the company to give notice to the authority of a proposed change and have prior approval for it, in which case the clause would not apply.

Nor is there any provision that I can see in the amendment which would cover the situation which is not covered under the Broadcasting Act. The Broadcasting Act does not have the position where, under the broadcasting authority, whoever that may be, a series of contracts are entered into with members of the public, with operators of programmes, which may be automatically cancelled because the authority suddenly finds that it does not like the colour of the new shareholders. Thus there is no provision in the amendment where there is a procedure for giving notice of change of control, where the authority can then say "Yes" or "No" and the operator concerned can decide, in the event of "No", that there will not be that change or that there will be a change which satisfies the authority.

Secondly, there is the position where the authority can arbitrarily decide that a licence will be revoked, and thus the position is completely uncovered, with all the contracts that would have existed, one imagines, with an operator who has taken it for granted that he is entitled to do so because he has a licence for X years still unexpired.

I should be grateful if these points could be dealt with by the noble Minister. I am sorry I was unable to give notice of my intention to raise these points on the amendment, and if the Minister would like further time within which to consider this then we still have Report stage to come and I should not unfairly press for an answer now; but perhaps the answers can be given.

Lord Campbell of Alloway

May I from across the Floor support what the noble Lord, Lord Mishcon, has said? It is plain that these provisions could work a substantial injustice. I would have thought that some form of application procedure should have been built in and that this matter has not been thought out in appropriate depth.

Lord Howard of Henderskelfe

I speak in semi-support of Lord Mishcon, but not for the same reasons. My reasons are that the clause in the 1981 Act is obscure and that that obscurity has been carried over by using virtually the same words in the Bill. Nobody knows in this context what the word "change" means. Does it mean a change in the identity of the shareholders, so that the clause will only bite when A sells his shares to B? Does it mean a change of any kind whatsoever in the shareholders' nature, so that the clause would bite if shareholder A diversifies his business into new fields or there was a change in the identity of the shareholders, for example?

In the past, I understand, the lawyers who have been advising some of the commercial companies have had extreme difficulty in giving advice on just what the provision in the 1981 Act means. This has led to a great deal of uncertainty and to real practical difficulties, as we have seen in some of the changes in the franchises which have taken place at various intervals over the last 18 to 20 years. What we need to do is to consider the provision in the Broadcasting Act 1981 as well as here to see whether there cannot be a more definite statement of what the Government intend the authority to do and, as has been suggested, a fairer system of implementing whatever the authority then decides to do.

Baroness Trumpington

I have listened with great interest to the remarks of the noble Lord, Lord Mishcon, and I am grateful to him for saying that he does not necessarily expect to receive a full answer now. I have also listened with interest to my noble friend Lord Campbell of Alloway and to the noble Lord, Lord Howard of Henderskelfe. I would add two points. The authority's general powers to include conditions in its licences under Clause 4(6) will enable it, if it judges it necessary, to require licensees to notify shareholdings. The second point is that the word "change" has to be read with the rest of the provision. The test is whether the authority would have refrained from granting the licence had the new situation obtained before it was first issued.

Lord Mishcon

The noble Baroness the Minister has been extemely courteous in her answers to the points raised, first by myself and then supported by other noble Lords. May I make my position perfectly clear? I only realised the points that I made while she was explaining the meaning of and reason for the amendment; otherwise, I hope she will realise that I would have been courteous enough to have given her advance notice of the points I intended to make.

The noble Baroness has not (and it was unfair to expect that she might) dealt with the principal points that I endeavoured to raise, and which other noble Lords have raised. That is understandable, and I hope that between now and Report stage, possibly by correspondence, we can clarify the points that have been made and deal with them. We shall then know whether further amendments will have to be put down at Report stage. The issues that have been raised in this discussion are of great importance.

Baroness Trumpington

Everything that has been said in debate here during the discussion on these three amendments will be carefully studied and noted, and we shall see what happens at the next stage.

Lord Mishcon

Before the noble Baroness finally sits down, she said that the matters will be considered. I have suggested that there should be correspondence among all those involved in this debate.

Baroness Trumpington

Yes, indeed. I thank the noble Lord, Lord Mishcon, for his courtesy throughout this exchange.

Lord Winstanley

The matter is of some importance, and there are others who have not spoken in the debate who would be interested in precisely what takes place in the correspondence between the noble Baroness and the noble Lord in trying to resolve this problem. There are others who would like to follow these negotiations, apart from those who have spoken in the debate.

Baroness Trumpington

There are many people who are not in the Chamber at the moment who would be interested. I do not know what I can do about that.

On Question, amendment agreed to.

Lord Elton moved Amendment No. 101:

[Printed earlier.]

The noble Lord said: We have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Elton

I beg formally to move Amendment No. 102.

[Printed earlier.]

Lord Mishcon

I wonder whether, having regard to the nature of the points that have been made, the noble Baroness or the noble Lord would not consider withdrawing this amendment—and I have waited to make this observation until the main item came forward—until the matter has been clarified, bringing it back at Report stage if that was felt to be important. I would not like the Committee, with the obvious gaps in this amendment, to leave it as though it had been passed "on the nod".

Baroness Trumpington

I agree with the suggestion made by the noble Lord, Lord Mishcon, that the amendment should come back when we have had regard to what has been said today. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.1 p.m.

Lord Mishcon moved Amendment No. 103:

Page 16, line 8, at end insert ("or suspend it for such period as the Authority shall think fit").

The noble Lord said: With the Committee's permission, I should like to include Amendments Nos. 104 and 105 in what I shall say to your Lordships. Amendment No. 104: Page 16, line 8, at end insert ("or impose such penalty by way of fine as the Authority shall think fit and which shall be recoverable by the Authority as a civil debt"). Amendment No. 105: Page 16, line 9, after ("revoking") insert ("or suspending"). May I also make it perfectly clear from the outset that these are purely probing amendments. I would have thought that anybody who had studied them would realise that by virtue of two matters; certainly anyone schooled in the law would immediately recognise it. First, in talking about alternative penalties—and I will give the reasons for saying that they must be in the Bill—I have not provided for any appeal procedure under the Bill; and those much more learned than I would also realise that when you talk in terms of "recoverable as a civil debt" there has to be a determined amount before you can recover as a civil debt. That has to be as a result of contract, and therefore there may be difficulties in that connection.

The reason for the probing amendment is that all Members of the Committee, I am sure, will be concerned to see that conditions imposed in a licence are observed. That ought to be, especially when we are dealing with an unknown quantity and possibly, in some instances, a dangerous quantity of cable television. We must be sure that the authority has the teeth with which to bite if indeed a cable operator behaves negligently or in a way which is not serious. That must involve the use by the authority of its power under this clause to revoke the licence.

I cannot think of a more serious step for an authority to take than that of revoking a licence. As I mentioned in the previous debate, the revocation of a licence means by way of consequence the breaking of possibly very important contracts—quite apart from the contracts with the public—to give the programmes and the service of the cable operator. So one can take it for granted that this is almost the ultimate sanction to be used by the authority for a very serious breach or perhaps a continuance of a series of serious breaches of conditions of a licence.

What is the sanction given to the authority under this Bill by way of an alternative to the revocation of a licence? It is contained in the previous clause, which we dealt with very briefly. It is that if the authority has reason to think that under Clause 16 there have been breaches of the conditions of the licence, it may impose some regulations in regard to seeing programmes before they go out, and matters of that kind. That, your Lordships may think, would be because of a fairly trivial breach of conditions and not a very serious one. Indeed, your Lordships can immediately imagine that there can be breaches of the conditions of a licence which may have nothing to do with the showing of programmes at all. But there are other serious conditions imposed on the licensee of which he may be in breach, and the gap in this Bill is that there are no other sanctions between the minor one I have just described and the terribly severe penalty of the revocation of the licence.

It may be difficult in a matter of this kind for an authority to impose fines unless it be that Parliament gives that right. If it did, of course, it would have to see to it that the fines were notified presumably on some scale or other in the conditions of the licence. The licensee would have to be warned that fines could be imposed with certain maxima, or perhaps the Bill could provide for certain maxima—we obviously cannot leave the matter of fines at large—and in fairness there would have to be an appeals procedure so that there would be a full right for the licensee to make representations to the authority either against the imposition of the fine or against the severity of the fine imposed. That obviously must be done.

The alternative or the additional penalty I put here is one of suspension, which has not been mentioned in the Bill, where it is revocation or nothing: the licence either goes or it continues; there is no right given to the authority by way of sanction to suspend. I can well imagine that suspension of a licence can be extremely difficult for many people, again in regard to contracts and in regard to members of the public who may suffer and in respect of whom, presumably, alternative arrangements would have to be made during the suspension period.

Here again, obviously, one walks into difficulties; and the difficulties I found when I attempted to draft these amendments do not exclude by any means that there is this very substantial gap. There is this very big lacuna in the Bill, unless, as I said, it be a very minor matter or a very major matter; and the minor matter may not cover the condition that has been breached, because Clause 16 relates purely to programmes. This is something which ought to be looked at, and therefore, with my noble friends, I have introduced this amendment to open the debate on this matter so that perhaps wiser minds than mine (and they would not be too difficult to find) can think in terms of the solution of a problem which has to be faced. I beg to move.

Lord Winstanley

I am fully aware that the noble Lord, Lord Mishcon, has spoken of his amendments as probing amendments but, having probed, he has elaborated his arguments in favour of the amendments fairly fully and I shall be interested to hear the reply from the Front Bench opposite. I think it is fair to say that on these Benches we have some misgivings about these amendments.

I say nothing about the question of fines, which is a complicated matter, but the introduction of suspension is rather different. If we look at the Bill as a whole—and the noble Lord, Lord Mishcon, is entirely right to say that revocation is the final and ultimate penalty; one accepts that—and if one looks at Clauses 16 and 17 together, it is clear that before any revocation takes place the authority has to go through a whole variety of procedures. Representations will have to be made by the cable operator and there will be various discussions, and time is allowed for a whole lot of steps which will have to be taken before the ultimate sanction is finally applied.

I have a faint suspicion that if we give the authority the right of suspension, it almost tempts the authority to use that power of suspension during the period in which negotiations and discussions are taking place. If that happened it would be regrettable, because the way in which the Bill spells out the procedure at the moment would be preferable. At the end of the day, while revocation is the ultimate sanction it might well be that there are companies which prefer to have their contracts revoked rather than to have them suspended, which could be very damaging indeed.

Earl De La Warr

Before I make my contribution, I must do what I have done before and declare my interest in—I think your Lordships know what. I was interested in the thoughts that the noble Lord has had. I agree with him that there seems to be a lacuna here, and one should think about the halfway house solution while trying to sort things out. Nevertheless, let us remember that during a period of suspension no alternative arrangements can be made. You are suspending the public, too; you are suspending all the customers. That, perhaps, would be the trouble. If, as the noble Lord, Lord Winstanley, said, there were to be a question of revocation, then presumably there would be no lack of continuity in the programmes, because the operator would go on until another one had been found and appropriate arrangements had been made, so that there was no gap in the programmes, Nevertheless, if we can get over that objection this idea of having a halfway house is interesting, and I hope that the Government will think about it and we can discuss it further.

On the question of fines, I do not think I can go along with the noble Lord. Let us remember that when we are talking about the Cable Authority we are talking about a quango only, and I am not sure—I am no lawyer—that we are on very safe ground here in putting into the hands of a quango the power to fine people. But, as I said, I am grateful for both suggestions, particularly the first.

Lord Ardwick

There seems to be agreement that some kind of remedy, some kind of halfway house—

Lord Elton

If the noble Lord is moving efficiently on to a winding-up speech, perhaps I may intervene before he does so because I do not regard it as such an easy matter as I think he is going to suggest. I may be wrong. The noble Lord, Lord Mishcon, raised a very interesting concept. It is one that is already in use with independent television. Provisions for the suspension of the contracts of ITV and ILR companies are included in Section 21 of the Broadcasting Act 1981. But the position there is rather different. It is the IBA who transmit the ITV and ILR programmes, and it is therefore itself in a position to provide to viewers a service during the period of suspension.

If the Cable Authority suspended a licence, it would mean that for the period of suspension the customer, who had entered into a contractual relationship with the cable company, would be deprived of his service. My noble friend Lord De La Warr touched on this point. The Cable Authority cannot possibly provide a service itself; and who else will pick up that function when they know that they will have to drop it again as soon as the suspension expires with the reactivation of the licence? We think it very unlikely that it would find anybody else who was willing to provide a service during a period of suspension. It was that consideration which led us to decide that the otherwise rather attractive sanction, suggested to us rather persuasively by the noble Lord, Lord Mishcon, was not acceptable. The victim would be the innocent customer, just as much as the guilty operator.

We realise, of course, that licences can be revoked under Clause 17 and that that could create a somewhat similar breach in service, but revocation is very different from suspension. It is not only an ultimate sanction which the authority may never have to use. If it is used, the practical difficulties about continuity of service will be less acute, because the person who is thinking of taking up a service in place of the man who has now been banished from the cable has no prospect of being driven off the cable-head when the period of banishment expires, because revocation is revocation and that is the end of the matter, so it is a question of having a new licence granted.

Those are the reasons which we have considered and which have persuaded us that, although there may appear to be a lacuna here, it is not one that can be conveniently filled—at least, by the means which the noble Lord has suggested. There are, of course, intermediate sanctions below revocation in the Bill—public warnings and the pre-vetting process—of which I do not suppose I need to remind your Lordships, because we have touched on them already.

If I may turn now to the noble Lord's second amendment—

Lord Mottistone

If my noble friend will allow me, am I to understand that under Clause 17, as unamended, there is still a possibility that the poor unfortunate customer may be deprived of a service for even a period? Is that still so?

Lord Elton

The provisions in Clause 17, in its somewhat embarrassing condition, will, when it is restored to the full symmetry of proper legislation, certainly allow the authority to revoke a licence. It would not have to revoke it overnight. It would revoke it, I imagine, after the intermediate sanctions, such as pre-vetting, and it would be up to the authority to establish how the revocation could be brought to a successful conclusion in such a way as least to harm the customers who have an interest, about which my noble friend is quite properly sensitive.

Lord Winstanley

Before the noble Lord sits down, he told your Lordships' Committee that the IBA had the power to suspend in relation to both ITV and independent radio. Will he confirm that the IBA has never, in fact, used that power?

Lord Elton

Yes, indeed I will, and that may be some reassurance to my noble friend.

Lord Mishcon

I am afraid that I am rather unhappy with the reply of the noble Lord, the Minister. He sometimes leaves me in that condition—not always—and I am afraid that on this occasion he has done so. He has admitted that there is possibly a gap in the period of time between the revocation and the service to the customers—a point raised by the noble Lord, Lord Mottistone—and has answered it by saying that there is not a provision in the Bill but the authority, one imagines, would allow a licensee to continue until other arrangements had been made. There may be such a dreadful, wicked licensee that that would be an impossible position for the authority to face, but there is nothing in the Bill which deals with that intermediate period. But the graver gap—although that is quite a grave one—is the very matter that I tried to point out. There is nothing between the penalties under the Bill, to which the noble Lord briefly referred. It may be irrelevant to the condition which is being breached, and I repeat that it may have nothing to do with programmes.

I have told the Committee that this is a probing amendment. I have humbly said that I have tried very hard to think of penalties that are relevant, and of a fair way of imposing them, and I could not do better than these amendments, of which I am not particularly proud for the reasons which I gave to the Committee. But the situation has been put to the Government in a way which your Lordships may feel should compel them to think very deeply about this matter and to deal with it between Committee and Report stages. I am continually getting the impression that we are dealing with an unknown future and we are not dealing with it in a very tidy, thought-out way.

Lord Elton

Before the noble Lord sits down, may I say that an offending cable operator will not be dealing with an unknown future. He will, if the order is revoked, be dealing with bankruptcy. It is therefore to be expected that he will do everything within his power to fulfil the conditions of the licence. I cannot conceive that he will start putting out defamatory or indecent programmes, secure in the knowledge that the authority will wish to keep something going into people's living rooms until somebody else can put something preferable in its place.

Therefore in considering this probing amendment I hope that the noble Lord will bear in mind that what we have provided will, I believe, adequately cover all the circumstances. When I said that there might be a lacuna I was using a term of debate. It seemed to us that there might be a lacuna. We looked at it and decided that what we had provided would meet all foreseen circumstances and any unforeseen circumstances, and that therefore there was nothing to fit the shape of the hole, because in the end we do not think there is a hole there.

Lord Mishcon

I must not prolong the debate. I sense that there is a feeling in the Committee—I hope I am not being impertinent in saying this—that there are gaps here which ought to be looked at. Perhaps therefore we ought to come back to it at the Report stage. I make only one observation. The noble Lord the Minister took it for granted, I believe, in earlier discussions that the authority would be careful to ensure the financial strength of the cable operator. In view of his assurance that this would happen, I was rather distressed to hear that the revocation of a licence would make a company go into liquidation or an individual become bankrupt. It was not the kind of cable operator that I thought we were looking at.

Lord Elton

I resumed my seat rather early, but I have not dealt with fines. I hope that the noble Lord wishes me to say a word to the Committee about fines. My noble friends have not heard it—nor, indeed, has he. The noble Lord's second amendment would enable the authority to impose fines on licensees who breach the terms of their licences or who do not comply with the authority's direction. It does not seem to us to be appropriate to provide for a fine where a licensee falls foul of Clause 7, because the ultimate sanction of revocation is available in these cases. Against that background, the authority will no doubt want and will be able to persuade the licensee to reorganise his affairs so that the ownership arrangements become acceptable. But I suspect that this is not the noble Lord's principal intention, and it is with that intention that we are principally concerned.

When considering his amendments we discussed the sanctions which are available to the authority, short of revocation, in cases where licence conditions are breached or directions ignored. It would be fairer to say that we mentioned them. Revocation is the ultimate sanction and one which we hope the authority will not use. But there are others. Clause 16 enables the authority to issue a public warning to a licensee who transgresses. It may then for a period require the licensee to submit part or all of his output for approval by the authority before it is shown. I am sure that my noble friend Lord Glanusk, who is greatly concerned with the difficulties of maintaining and producing records, will be aware that this is a considerable threat to a licensee who misconducts himself. In addition, the authority can direct that particular programmes shall be excluded from the licensee's service—that is, after they have done the pre-vetting. This is perhaps something we should have referred to in discussing the last amendment—we wrote this on the assumption that they would be taken differently—because it enables the authority, short of suspending the whole service, to direct that certain unacceptable parts should be removed.

It is worth adding that if the authority were to issue a direction to a licensee and find that he did not intend to comply with it, it would be open to the authority to apply to the courts in the normal way for an injunction requiring him to comply with the direction. Failure to observe an injunction issued by the court would place the licensee in contempt and thus liable to finance penalties. There is a gradation which my noble friends were looking at to reassure them that there would not suddenly be a headless chicken in the form of a cable, with no company operating it. Both the report of the inquiry chaired by the noble Lord, Lord Hunt of Tanworth, and the Government, in preparing their White Paper, came to the conclusion that it would not be appropriate to give the authority a power to impose financial penalties directly, as many of the judgments to be made by the authority, particularly in the area of programmes; are essentially subjective ones.

I think I have said enough to explain why I believe that fines are even less appropriate than the noble Lord's previous proposal.

Lord Mishcon

The problem still remains. The proper procedure for me to adopt is to ask for leave to withdraw the amendment, in the hope that more consideration can be given by the noble Lord the Minister to the problem we have discussed. It will give an opportunity to those noble Lords who are members of the Committee, and to those noble Lords who have not attended the proceedings this evening, to read the Official Report and to come forward with better alternatives than I have been able to provide. Nevertheless, I repeat that this matter has to be covered in one way or another. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 104 and 105 not moved.]

On Question, Whether Clause 17, as amended, shall stand part of the Bill?

Lord Elton

Your Lordships will be aware that because of the great courtesy and co-operation of my noble friend, we have moved and carried into the Bill either one or two of a group of three amendments and have not brought into the Bill the third. The Committee will be aware, therefore, that we are placing before the public, but gladly not on the statute book, a clause which does not make sense. I hope that those of your Lordships who attend the debate will be aware, in looking at the print when it comes to us at Report, of what has happened and will read the reprint of the Bill with it in one hand and the Marshalled List in the other, so that the missing parts of the clause will be in everybody's mind and noble Lords will know what is the intention of the Government at the Report stage. That is all I wish to say, except to thank your Lordships for what I hope I can say is the good progress we are making with the Bill.

Clause 17, as amended, agreed to.

Clause 18 [Finances of Authority]:

6.27 p.m.

Lord Aylestone moved Amendment No. 106:

Page 16, line 32, at end insert— ("( ) The Authority shall not be required to pay any excess of revenue under subsection (3) until all advances under section 19(1) have been repaid.")

The noble Lord said: The Cable Authority, having been appointed, from the very first day will be involved in expense—expense of salary, rental and a number of other things—and will have very little revenue with which to meet it. Almost from the beginning there may be a small amount of revenue from those cable licensees who have already been appointed. But the Government in their wisdom, and because it is necessary, have agreed to provide a certain sum of money—£2 million—to the authority to enable it to carry out its job.

Under the provisions of Clause 18, at the end of any financial year in which the Cable Authority has a surplus of revenue over its requirements the Secretary of State may, if he wishes, take the whole of it into the Consolidated Fund. On the other hand, he may take none of it, or only part of it. That is precisely the same position as with the IBA and independent local radio. But the difference here is that the Cable Authority will be functioning on almost no revenue, or on a very small amount of revenue, for a number of years and will be paying interest to the Government during that period on a loan. My amendment seeks to suggest to the generous Secretary of State that at the end of a financial year in which there is an excess of revenue the amount which is taken into the Consolidated Fund should be used to pay off part of the £2 million debt. I beg to move.

Lord Elton

The Cable Authority will depend for its income on the fees which Clause 4(6)(b) empowers it to charge in respect of the licences that it grants. In its early days its income from that source will not be sufficient to meet its expenses. For that reason, Clause 19 provides for the Home Secretary, whom the noble Lord has kindly described as generous, to make advances to the authority for use as working capital. Under the clause, he has to determine, subject to Treasury approval and after consulting the authority's chairman, the terms and conditions under which the loans are to be repaid. Subsections (2) and (3) of Clause 18 to which the amendment relates are framed to meet a situation in which the Cable Authority's income in any financial year exceeds its outgoings. The Home Secretary is empowered to direct how the excess should be applied and may require that it should be paid into the Consolidated Fund.

The amendment is designed to safeguard the Cable Authority against Government depredations. It seeks to relate these two separate provisions by preventing the Home Secretary from directing the payment of the authority's excess revenues into the Consolidated Fund until such time as it has repaid any loans made to it. In practice such a direction is unlikely to be considered during the period while the authority is still supported by loan finance. We hope that this will not be for long and that the authority will be wholly self-supporting, having paid back any loans, within a short period of being set up.

It is, however, impossible to foresee all eventualities at this stage and it would be undesirable for the Bill to be unnecessarily rigid. We believe it is right for the Home Secretary to retain the discretion to direct all or part of the authority's excess revenues to be paid into the Consolidated Fund. Such a direction would not be automatic, and it would be made having regard to all relevant circumstances at the time.

Lord Aylestone

I gathered from the noble Lord's remarks that at the end of the year, when there is an excess of revenue, the Home Secretary is hardly likely to take the whole of that excess or even part of it until such time as the loan has been repaid. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 agreed to.

Clauses 19 and 20 agreed to.

Clause 21 [Annual reports]:

Lord Nugent of Guildford moved Amendment No. 107:

Page 18, line 2, at end insert— ("( ) a report of complaints received regarding the content and timing of programmes as provided for in sections 9 and 10 above and the action taken")

The noble Lord said: This subject is very familiar to my noble friend on the Front Bench. The amendment has the intention of requiring the new authority to have a similar obligation to that which has eventually been accepted by both the corporation and the IBA. Clause 21 makes reference only to financial matters in the annual report and, curiously enough, to an obligation under Clause 9(1) (d) that there are included in the programmes proper proportions of recorded and other matter which originates in the European Economic Community". That is admirable, but it seems to be rather narrow, in these circumstances, in regard to what should specifically be in the annual report.

Amendment No. 107 will ensure that the annual report should include particulars of complaints on contents and timing, as set out very well in Clauses 9 and 10. There the obligations are very fully set out, but we want to make sure that complaints made to the authority are taken notice of and that the authority shall have an obligation to report what complaints are received and how it deals with them.

Our experience of dealing with this particular problem in regard to complaints made to the corporation and the IBA has shown that there is some reluctance to have such information included in annual reports. The Committee may remember that such an obligation was accepted and an undertaking given by both the corporation and the IBA following the debates we had in 1980. It has been a matter of rather sticking to that undertaking and of reminding both the corporation and the authority that such particulars should be in their annual reports. They have adhered to that undertaking in their last two annual reports, but not without there being public complaint in this House on more than two occasions.

Given all the circumstances, it seems to me that we should ask the new authority to include similar particulars in its reports, and that we should have it on the face of the Bill so that we may avoid the hassle we have experienced with the existing corporation and authority. Then everyone will know what complaints have been made and how they have been dealt with. The amendment is a very simple one, and I feel sure that my noble friend, with his customary sympathy with these matters, will find it acceptable. I beg to move.

Lord Elton

The Cable Authority's annual report, which the Bill requires to be prepared and submitted to the Home Secretary, will be the means by which the authority will account to Parliament and the public for the way it carries out its work. It is therefore fitting, as noble Lords have recognised, that the authority should provide in the report as full an account as possible of its whole range of activities.

The maintenance of programme standards is at the heart of its responsibilities, and an area of undoubted interest will concern the way in which it meets the obligations imposed by Clauses 9 and 10. One of them relates to the inclusion of proper proportions of EEC material in programmes, and Clause 21(2)(b) specifically requires the authority to include in its annual report an account of the way in which it has discharged that duty. That is the only matter picked out for special mention in the clause, but the duty laid on the authority to prepare a general report of its proceedings is itself in wide terms.

My noble friend Lord Nugent of Guildford seeks by this amendment to single out complaints to the authority about programme standards and the action taken to deal with them as another specific matter to be covered in the annual report. He has reminded your Lordships that when the Broadcasting Bill—later, the Broadcasting Act 1980—was before your Lordships' House, the BBC and the IBA gave an undertaking to provide similar information in their annual reports—an undertaking which he will never allow them to forget.

Having listened to my noble friend, I am persuaded of the acceptability in principle of his proposal. It will ensure that the report covers a matter of very natural and proper public interest. When it comes to the actual wording, the formulation proposed by my noble friend will not exactly do as it stands. If he will agree to withdraw his amendment, I can undertake to bring forward at Report stage an amendment having the effect which he intends.

Lord Howard of Henderskelfe

I hope that the format is not laid down in too rigid a form. I do not quarrel with the noble Lord's proposition that there should be the fullest information about complaints and the way in which they are met. When I was filling that post, I did my best to achieve that objective. The trouble is that this is not a matter which can possibly be dealt with on a statistical basis. Numbers alone mean almost nothing and therefore the wording must be very carefully considered. I am not in any way opposing the amendment but merely suggesting that the wording must allow for a certain fluidity in the reporting.

Lady Saltoun

The complaints section of the BBC's annual report does not of course reflect the true state of dissatisfaction or otherwise of the public regarding the content and timing of programmes. That is because people often do not complain because they feel they will get nowhere if they do and it will be a waste of time, or they telephone at once in a fury, then feel better, and take the complaint no further. Still, it is a step towards preventing complaints being suppressed.

Perhaps I may say that if there are any deficiencies in the wording of the amendment, the blame must be laid entirely at my door because I put it down. I should not like the noble Lord, Lord Nugent of Guildford, to take the blame.

Lord Nugent of Guildford

I thank my noble friend Lord Elton for his generous reception to the purpose of the amendment. As both my noble friend and the noble Baroness must well know, no form of amendment proposed by a Back-Bencher is ever accepted by the Front Bench; but if its substance is accepted, then that is more than welcome. I should like to thank also the noble Lord, Lord Howard of Henderskelfe, for his generous comments, as he was on the receiving end of some of my complaints and letters. I thank him for accepting that the amendment is right in principle. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 21 agreed to.

6.40 p.m.

Lord Glanusk moved Amendment No. 108: After Clause 21, insert the following new clause:

("Consultation between OFTEL and Cable Authority. Telecommunications Systems

. After section 7(11) of the Telecommunications Act 1984 the following subsection shall be inserted— ( ) Before deciding to grant a licence for the running of a telecommunications system upon any conditions which would permit the telecommunications system to be run by the grantee for the purposes of conveying sounds or visual images included a cable programme service (as defined in section 2 of the Cable and Broadcasting Act 1984), the grantor shall consult with the Cable Authority for the purposes of that Act and shall take into account the opinions of the Cable Authority regarding the term of any such licence and regarding any matters falling within section 3(2)(a)—(h) of this Act, to the extent that the same are in the opinion of the Cable Authority relevant to the grant of any licence under the Cable and Broadcasting Act 1984 to provide a licensable service, as defined in that Act, the provision of which would in whole or part be by means of the said telecommunications system." ").

The noble Lord said: I beg to move Amendment No. 108 standing in my name and that of the noble Earl, Lord De La Warr. A cable consortium starting out to establish and run a cable system must first obtain two licences, as most of us know, one from Oftel for the installation of what we loosely call the hardware, and the other one from the Cable Authority for the software. But no provision has been made in the Bill, nor in the Telecommunications Bill, for these two authorities to consult together over the granting of the two licences to one consortium or one person. The Government clearly recognised in the White Paper that the Cable Authority was the more important, being the body most in touch with the customer, to whom we are all trying to give a reasonable programme. The White Paper, at page 28, paragraph 57, states: In the Government view, the key decision must be that of the award of a franchise by the Cable Authority, and the presumption will therefore be that an application to the Secretary of State for Industry by the franchisee or his nominee will be successful provided that the proposed system meets the necessary general technical specification and such other licence conditions as the Secretary of State for Industry, in consultation with Oftel as appropriate, may require.

The importance of these requirements for the two bodies to co-ordinate over the granting of licences is, first, to ensure that the hardware licence runs at least as long as the Cable Authority's licence for the software; secondly, if two competing applicants apply for a franchise in the same area there is a danger at present, as the Bill is drafted, that Oftel could prefer the technical solution of applicant A, whereas the Cable Authority could much prefer the proposals regarding programmes from applicant B.

For this reason, I should like to see written into the Telecommunications Bill that Oftel, when granting a hardware licence for a telecommunications system which includes the ability to run a cable system, must consult with the Cable Authority first before granting that licence. As I said, I think the Cable Authority is the body which knows the market and knows the customers, and from the customer's point of view it is the programme he is interested in rather than the technical method of delivering it to his sitting room. I beg to move.

Lord Ardwick

I have a good deal of sympathy with this amendment. It really is an extraordinary situation; you have one set of companies, cable operators, who provide the programmes to the public; you have a set of companies called cable providers, and each of these kinds of company has to apply to different ministries for licences to work the system. But of course this is further complicated by the fact that many cable operators or would-be cable operators have also ambitions to become cable providers. It was these circumstances, where you have competition between several companies who aspire to both these aims going to the authorities, and one authority opting for one company and the other authority opting for another, that led the White Paper to say that there must be a priority, and the priority must be for the cable operating company, which is actually going to provide the services. The White Paper was very clear on the subject and the Notes on Clauses were even clearer.

One would have thought it was possible to put provisions into legislative form, but as far as I can see the only reference to the kind of co-operation that must take place between Oftel and the Cable Authority is contained in Clause 5(4); that, it seems, is done in a rather perfunctory way, and there is no attempt anywhere in the Bill to spell out these very necessary provisions.

Lord Campbell of Alloway

I am indeed grateful to my noble friend Lord Glanusk for moving this amendment, for it is concerned with an attempt to bridge the gap between Oftel and the Cable Authority, to which I adverted on Amendment No. 1. It is the division of the indivisible; it is the division of the indivisible conceptual distinction between the facility and desire to send a message, which the authority deals with, and its actual conveyance by cable, which is under Oftel. The means of implementation—this proposed bridging operation—are in a sense two which come to the same thing: mandatory consultation and the taking into account of opinions. But no procedure is laid down. The applicant has no right to make representations or even to know the reasons on which a licence is granted, varied or refused. There is no requirement for any reasoned decision, and there is no safeguard by any appellate process. The amendment then cannot achieve its desired object; it lacks legal efficacy. It is not appropriate that words of mere exhortation should appear in a statute. It is sought in Amendment No. 108B, which I propose to move in due course, to put before your Lordships for your Lordships' consideration procedural measures of safeguard which could give effect to the spirit behind this amendment.

Lord Mottistone

If I may intervene, as a neutral figure in this argument—neutral on this side. My noble friend Lord Campbell having given his version a run, which he will come to later, all I say is that I hope that the Government take the point, which noble Lords opposite have also made that there can be a difference of opinion. I am not concerned about the details because it is the principle which is at stake here. The White Paper had not just one paragraph but four going over this ground. There is not provision within the legislation to take care of the point that my noble friend Lord Glanusk made, that Oftel might prefer a particular provider of the cable and the Cable Authority might prefer a different provider of the programmes. As far as I can see, this particular difficulty is not resolved in either of the two Bills currently before your Lordships' House. It ought to be because in the long run, if not the short run, if the greater clarification which we seek is not written into the Bill it will lead to quite unnecessary confusion. We have these Bills and can sort them out.

Where it goes into the Bill and what the wording is I do not think is as important as getting it in somewhere, and the best people to do that are the Government. So I hope the outcome will be that my noble friend the Minister will say, "Yes, we agree with you in principle. We will take it away and come back with a spiffing amendment on Report which embodies all the bright ideas you have put to us". That is what I hope we get.

Lord Howard of Henderskelfe

I rise to support what has just been said. I do not think that either Amendment No. 108 or Amendment No. 108B satisfactorily deals with what is a very difficult problem. It has a genesis—although I do not want to go into the history of all this—and has arisen from the fact that we have two quite separate departments, each having separate motivations and introducing two separate Bills which do not appear properly to interact. I believe that it is time they sat down again and thought about what on earth they want to do.

Undoubtedly within the department of the Secretary of State responsible for home affairs there is a desire—I am not neutral in this—to continue with the excellence of broadcasting. Undoubtedly within the other department dealing with this there is a desire to get on, for commercial reasons. Commercial reasons are often, as we have seen, entirely reconcilable with excellence. But the kind of confused and muddled thinking which has arisen both inside and outside Government over cable and broadcasting generally, and their relationship over the years, has led to very considerable difficulties.

I, for one, remain committed to excellence in broadcasting, and that includes cable; in other words, the programmes which come down the wire. Therefore, I do not declare myself neutral. What I do say is that if we are to have an authority which is truly to act as an authority and which, although obviously not controlling every single programme that comes down the wire, nevertheless has the most important say-so on what happens with cable, then it must have the final say subject to the technical standards which Oftel will require being adhered to. I do not think it is good enough to say that those concerned must consult each other. I think that at the end of the day there must be someone who makes a decision.

Earl De La Warr

It is very clear from all sides of the Committee that there is considerable alarm about this whole business of dual control, particularly of a sunrise and high-risk industry into which a lot of money is being put without too much certainty of what will be the outcome. My noble friend Lord Glanusk dealt very concisely with the question of the potential muddle over the granting of a licence. I entirely agree. But I draw your Lordships' attention to the fact that this dichotomy of control will run right through the life of the licence and the life of the industry. Both authorities have power to vary or to modify. Both have power to terminate, either for offences or at the end of the period, when the criteria that they might use for granting a new licence could possibly differ. In short, this is an administrative muddle of a very serious nature.

I drew attention to this at some length in July, in the debate on the White Paper. However, I have to say that I took the view that the way it was being done was, under the circumstances, inevitable because I knew, and some of your Lordships may know, a great deal about the inter-departmental struggle, which raged long before my noble friend took his particular hot seat, between the Home Office and the Department of Industry, as it was then, on where control over broadcasting should lie. I do not think it would be particularly relevant to give a view about that. The arguments on both sides are very weighty; but I have a feeling—I had it then, and then perhaps it was relevant—that with the accelerating rate of increase in the technology of telecommunications, there is an inevitability that one day broadcasting and all the other aspects associated with data and the use of the television screen will come together under one department.

It was perhaps because of that feeling that I accepted the need to take things as they are now and accept that this was the only way it could have been done. Moreover, having read the White Paper very carefully, and in particular the sentences which my noble friend quoted, I took the view that there was a chance that this mechanism, arising out of a compromise, might succeed; but only on the basis set out in the White Paper, which quite clearly makes the Cable Authority in these matters the primus inter pares.

I could not believe my eyes when the Bill was published to find no reference, other than a little sentence referred to by the noble Lord, Lord Ardwick, to cross-fertilization between the two authorities. There was a universal blank. Having referred to this little bit in Clause 5(4) which requires the broadcasting authority to refer to Oftel, I would say that even that is the wrong way round. That is not what we are after. We are after something which makes it obligatory, as the White Paper promised it would, for Oftel to consult and at least take account of the views of the broadcasting authority on everything it does which is related to cable.

I feel very strongly about this, and I am very heartened to find that we have so much support in your Lordships' Committee. I am looking forward to the further aspects of this matter which my noble friend Lord Campbell of Alloway will advance at greater length later. I am sure that we shall be extremely interested in hearing him deal with the matter from a legal point of view.

I must just say this to my noble friend Lord Elton. We are demanding from him—that is a harsh word to use in a friendly series of debates but, in fairness, that is the right word—that he gives us assurances that the Government will take on board the fact that they have absolutely failed to live up to what was promised in paragraph 57 of the White Paper, and in doing so they have left the Cable Authority and cable operators to a large extent naked. This we cannot have and must have changed. I hope that my noble friend has taken those words to heart and that he will be able to say that he accepts some of what we have said and without any shadow of a doubt will go back, think about it, and come back with something which satisfies us.

7.1 p.m.

Lord Winstanley

May I ask the noble Lord the Minister whether in his reply he will consider one aspect of the matter which has not been raised in the speeches on the amendment? On these Benches we all entirely agree that there must be adequate consultation and close co-operation between Oftel and the Cable Authority and that the difficulty of arriving at a uniformity of decision has to be resolved. We support noble Lords who say that the situation cannot be left entirely as it is. The noble Lord, Lord Howard of Henderskelfe, argued convincingly that the Cable Authority should have more authority than the other authority, as that was the way to ensure the maintenance of broadcasting standards. The noble Earl, Lord De La Warr, said that the Cable Authority should have the overriding control.

However, it seems to me that there may be circumstances in which it could prove to be in the public interest that the cable provider should be the cable provider for a substantial area which may embrace two or more areas and contain a number of different cable operators. It might be economically or commercially advantageous for the cable provider to cover a region in which a number of different franchise holders operated cable broadcasting services. In those circumstances, Oftel might perhaps have the final say. It is a difficulty which could arise if the Cable Authority were made the total controller. Perhaps the noble Lord the Minister will deal with that point.

Lord Elton

The relationship between this Bill and the Telecommunications Bill is a matter of very general interest. I rather think that I heard the noble Lord, Lord Howard of Henderskelfe, refer to this Bill as the child of a one-parent family. Under the circumstances it is a good thing that we disposed of the Matrimonial and Family Proceedings Bill earlier this evening.

This is a matter of general interest. Your Lordships will recall that the noble Lady, Lady Saltoun, decided not to move an amendment to Clause 3 in anticipation of this discussion. My noble friend Lord Mottistone, before this evening, has drawn our attention to the difficulties that he foresees in ensuring that the two Bills interlink satisfactorily. I should explain how we expect the relationship between the two licensing authorities to work in practice. I shall try to give your Lordships a little detail, as this issue is of great importance. After all, the licensing arrangements will be successful only if the two Bills complement each other.

Perhaps at the beginning I could say a word about the length of licences. I hope that your Lordships will bear that in mind as I elaborate on the context in which what I shall now say will operate. We recognise the need to ensure some compatibility between the length of the two licences. That is why we have said that the telecommunication licences will be for 12 or 20 years, depending on the technology used, and Cable Authority licences for 12 years in the first instance and eight thereafter. It would not be desirable to write particular periods into the Telecommunications Bill, because telecommunication licences can cover a very wide range of systems, many of which have nothing to do with cable whatsoever. There has to be flexibility.

To start writing in the periods for some types of licence but not for others would be inconsistent. Moreover, once a licence is issued, the Secretary of State cannot revoke or vary it at will. The Government are satisfied therefore that the licence periods will stay in step without the need for any further statutory provision. I hope that my noble friends will bear that undertaking in mind when they consider the merits of the rest of the effects of their amendments.

Under the present division of responsibilities between the Cable of Authority and the Secretary of State, both licensing authorities will have independent functions which are precisely defined by statute and which they must carry out guided by different criteria. On the one hand, the Secretary of State and the Director General of Telecommunications are responsible for licensing the running of telecommunication systems and authorising the provision of telecommunication services over them. I can tell the noble Lord, Lord Winstanley, that there will be nothing to prevent a cable provider from having a telecom licence for a number of areas. No amendment to either Bill is necessary to ensure that. That is the telecommunication system.

On the other hand, the Cable Authority is responsible for licensing the provision of programme services. Both these licensing functions are necessary to enable a cable enterprise to get off the ground, and both licensing bodies will have what effectively amounts to a right of veto in any particular case. The Cable Authority, for instance, may be approached by a company wanting to provide a programme service to a particular area. The authority is then under two sets of obligations. The first is set out in Clause 5 and the second in Clause 6. Clause 5 deals principally with its obligation to publish information about licensing and to provoke and listen to local comments on the subject. But it also requires the authority to consult with what are there termed: the licensing authorities for the purposes of Part II of the 1983 Act". but which are, in plain English, the Secretary of State for Trade and Industry and Oftel. So the first link between the two authorities is already in the Bill at Clause 5.

Whatever the Cable Authority's decision about who shall send out the programmes over the cable, the Cable Authority will make it in full knowledge of the views of those who decide who shall provide the cable over which the programmes are to go out. That may not seem to your Lordships to be enough. I am sure that mutters of, "Hear, hear", were delivered but they did not reach my ears. My noble friends may argue that consultation is one thing but agreement is another. The Cable Authority's prime concern is with the service. Perhaps a company may offer the prospects of a glittering service but propose to have it delivered over a system which falls short of the technical standards which my right honourable friend and Oftel would expect. Well and good. I accept that proposition, and so do the Government. Let us pursue our example a little further.

Having taken note of the reservations of Oftel during the proceedings which it is obliged to carry out under Clause 5, the Cable Authority next turns to discharge its obligations under Clause 6. This involves considering all matters that appear to be relevant and particularly those set at out in subsection (2) paragraphs (a) to (e). It may find that the range and diversity of programmes is so immense and the proportion of EEC material so high, that they include so much educational material, appeal so strongly to local tastes and interests and involve so many local people in the conception and production, that the related services will be so innovative, that all this quite outweighs any shortcomings which from their different perspectives Oftel and my right honourable friend might perceive in the system and telecommunication services.

At that point the authority could if it wished grant a licence to provide the programme, but what it could not do would be to grant a licence to provide the cable. That is for Oftel and the DTI. If it is a single company that seeks to do both things, it must satisfy both authorities, because it is two different things that it seeks to do, and the evaluation of each of them requires different skills and different resources of the licensing authorities. For such applicants this is a dual-key system. Quite frankly, I do not think that the consultation system will fail in the way that I have described, but supposing it did, there is no way that the Cable Authority could put a dud or dubious cabling company into business by by-passing the Secretary of State and Oftel.

The same is true the other way round. Sometimes there may be two companies working closely together. One will tackle Oftel about cables and culverts, and the other will tackle the Cable Authority about programmes. In other cases, as with some of the private projects, there will be a single consortium which comes together to do both. But the Bill is designed to ensure that the Cable Authority will grant a licence for the provision of a diffusion service only in cases where the Secretary of State is also prepared to license the running of the associated cable system. What this means in practice is that, wherever it is intended to use a cable system for the purposes of conveying programme services, consultations will always take place between the authority on the one hand and the Secretary of State and Oftel on the other.

My noble friend's anxieties as expressed in his amendment do not concern so much the possibility that the Cable Authority will not consult Oftel, but rather the other way round: that my right honourable friend and Oftel will not consult the Cable Authority. But it takes two to make a consultation, and what I have already said must, I hope, have made it clear that wherever it is intended to use cable for putting out a diffusion service, both parties will of necessity be engaged in consultation of a very close and thorough kind. The fact that they do so at the initiative of the Cable Authority rather than of Oftel is something which I think may appeal to the noble Lord, Lord Howard of Henderskelfe, but need not I think be of prime concern. In practical terms it will not make any difference to what happens. If cable is not intended as a vehicle for diffusion services, the Cable Authority has no reason to be consulted.

What I have tried to do—I hope with not too much excitement, nor at too great a length—is to explain to your Lordships' Committee what will actually inevitably happen under the Bill as it is drafted, and I am sure that it is what is going to happen under the Bill that concerns my noble friends and your Lordships round the House. What I have said coincides I think both with what they wish and what is set out in paragraph 57 of the White Paper, so aptly quoted by my noble friend. I shall not repeat the quotation, but the key decision is a dual-key decision and it is inevitably both fingers that are consulted.

Lord Mottistone

Why does my noble friend resist putting consultation into the relevant Acts? It seems to me strange. Why must we rely on the fact that those involved will naturally consult? Why can we not have that provided for in the legislation?

Lord Elton

I do not resist any such thing; it is already in the legislation, in Clause 5(4). That has been regarded as de minimis by my noble friends and I think the noble Lords opposite who have referred to it. It is no such thing. It covers the whole procedure. It means that the consultation must take place, because it is in the statute; and that is what my noble friend wants.

Earl De La Warr

I do not want to become involved in semantics, but I heard my noble friend say very clearly—he emphasised it—that this is a dual decision. Well, maybe it is. But at that moment I happened to be looking at the wording of the paragraph and I saw the words, In the Government's view…the key decision must be…the award of the franchise by the Cable Authority". It seems to me that those are the key words, too, in what we are talking about; and my noble friend seemed to dodge that point.

Lord Elton

I did not intend to dodge it; I was trying not to dodge dinner for too long. But since my noble friend draws my attention to the point, let me reassure him that our proposals do not contradict the key decision concept in the White Paper. Although cable is about much more than simply cable television, it is quite clear that at least for the foreseeable future it is with the programme services that the finances of cable stand or fall. In practice therefore it is the Cable Authority's choice of who is to provide those services which will be crucial to the way in which cable develops in any particular area.

All I have sought to reassure your Lordships on is that there is no prospect of it going out under defective technical arrangements because of ignorance of what Oftel and the DTI, with their different expertise, may already know. Equally, because they must be approached by the Cable Authority whenever there is a diffusion programme to go out over cable, Oftel and the DTI will always know, when they are making their decision, what is in the minds of the other licensing authority. Each of them can grant a licence; without both licences the programme cannot go out.

Lord Glanusk

I think that my noble friend on the Front Bench said that there will always be consultation between the two authorities. If that is so, why can we not put that in the Telecommunications Bill and make it quite clear to the Director General that he must consult? However—

Lord Elton

The answer to that question is that we are actually debating a different Bill. If my noble friend wishes to consider doing something else, at another time, and on another piece of legislation, that is of course open to him. But I can now tell him what will be the answer from my noble friend when he stands at this Dispatch Box. He will say that it is not necessary because whenever there is a diffusion service to go out over cable, Oftel and the DTI will have to be consulted by the Cable Authority. So the cosultation is there already in this Bill, and it works both ways.

Lord Campbell of Alloway

I should like very briefly to ask my noble friend the Minister whether that was an example of dual-key consultation?

Lord Elton

Whether we are dealing with typewriters or cruise missiles, perhaps the phrase that I chose is not one that lends itself to brevity in debate.

Lord Mishcon

Perhaps I may briefly deal with the noble Lord's point which he put with clarity but, so far as I was concerned, if I may say so, not with conviction. I can well understand that if one is able to point to two Bills and to say that there is an equal duty of consultation, one gets equality of treatment even if one does not get what the White Paper proposed; namely, the ascendancy, the primus inter pares, as one learned Member of the Committee put it, of the Cable Authority.

When there is a one-sided arrangement under which someone has to be subservient, it is usual to stipulate in a Bill that that party must consult almost his lord and master before doing anything. One gets duality and mutuality when there is laid down in two Bills an equal duty to consult. The noble Lord the Minister said that he thought he could anticipate the reply of his noble friend. The noble Lord the Minister is a wise man, and possibly a prophet, and so we must take it for granted that the comment will be that in the Telecommunications Bill there is a duty for the Cable Authority to consult the Part II authority, and that that means mutuality. It means nothing of the kind. What it means is that in one Bill there is a duty to consult, in the other Bill there is no duty to consult, and therefore there is a complete lack of mutuality. It is not the primus inter pares of the Cable Authority; it is then the primus inter pares of the Part II authority under the Telecommunications Bill. If I may say so, that is the difficulty that the noble Lord the Minister has not faced up to.

Lord Elton

In his usual charming and courteous way, the noble Lord, Lord Mishcon, has made various charges. If there was a lack of conviction, it was not on my part, but on his. I am sorry to hear of it because I am quite convinced of what I am saying, and I find it very difficult to speak with such enthusiasm when I am not. As to the question of primacy, a principal ingredient in primacy is cash, and your Lordships know that the financing of cable is to come out of entertainment, and entertainment is to go out as programme services through diffusion over cable. That is the first leg of primacy.

Secondly, there is a requirement on the Cable Authority to consult Oftel whenever it proposes to license somebody to put out programmes over cable. So Oftel cannot be in ignorance of such a proposal. There will always be consultation when cable is to be used for this purpose. If it is to be used for other purposes, it is nothing to do with the Cable Authority. So Oftel can always count on knowing when cable is to be used for putting out programmes. That is not one-sided, except in one sense, which I think is a very trivial sense. I suppose that it might be thought courteous to have a reciprocal requirement in the Telecommunications Bill, but it would bring about the same effect. This is what I want to be understood. There is in the Bill a requirement to consult. It cannot be evaded if ever a cable is to be used by a licensee of the Cable Authority, and that licensee will not become a licensee until the Cable Authority, Oftel, and the DTI have been fully consulted.

I can give no further assurances. I wish that I could be more friendly to my noble friends, because I always like to yield. I like the rumble of—I regret to say—"surprised" sympathy when I say that I will take something away and they always assume that I will come back with what they want. The fact is that I would be misleading them if I did yield, because in my view thay have got what they want in the Bill. It is not put in such grandiose language; there are not so many lines of print; and the type is not so heavy as perhaps they would like to see. But the impact of it is there. I hope that your Lordships will agree with me, because we ought perhaps to move further down the Order Paper fairly soon.

Lord Mishcon

And I hope we will, because I hope that the noble Lord will be able at least to concede something, having regard to this debate. I was brought up on the principle that if you produce the same result, first, by being discourteous or, in the alternative, by being courteous, the thing to do is to be courteous. Therefore, I use the noble Lord's argument when he said that possibly a courtesy would produce the same result. I should like to ask him at least to pass on to his noble friend—because I am not the mover of the amendment but merely supporting it—a request for the courtesy that he has mentioned, a request that there should be a similar provision in the Telecommunications Bill. To use his own words, that would have precisely the same effect as if it were not there, but it would be a courtesy. That would go some way towards satisfying members of this Committee.

Lord Elton

I would not wish to prejudice anything that my noble friend would want to say on another Bill; nor would I wish to elevate the request that the noble Lord has made into a difficulty. I will certainly ask my noble friend to add to his considerable preparatory labours by reading the exchanges which have occurred across this Table.

Lord Glanusk

I am most grateful to all members of the Committee who have supported me so nobly, and rather surprisingly. I do not agree with my noble friend on the Front Bench. I cannot see really why this cannot be put into the Telecommunications Bill via this clause. But I would rather read what has been said this evening and reserve the right to come back at the Report stage. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Denham

My Lords, I think that this is probably a suitable moment to adjourn this Committee stage for the dinner adjournment. But before I move that the House do now resume, perhaps it would be helpful to those noble Lords who are interested in this Bill, to say that we will not resume consideration of this Committee stage until 8 o'clock? I am in your Lordships' hands, but this is a Thursday evening and there are quite a few amendments left.

Lord Graham of Edmonton

Perhaps ten past eight?

Lord Denham

Until ten past eight, then. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.